Document:

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                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

      This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
December 16, 2004, is made by and among QSound Labs, Inc., a corporation
organized under the laws of Alberta, Canada (the "COMPANY"), and the undersigned
(together with their affiliates, the "INITIAL INVESTORS").

                                   BACKGROUND

      A.    In connection with that certain Securities Purchase Agreement of
even date herewith by and among the Company and the Initial Investors (the
"SECURITIES PURCHASE AGREEMENT"), the Company has agreed, upon the terms and
subject to the conditions contained therein, to issue and sell to the Initial
Investors (i) shares of the Company's Common Stock, no par value (the "COMMON
STOCK"), (ii) Series A Warrants (the "SERIES A WARRANTS") to acquire shares of
Common Stock; and (iii) Series B Warrants (the "SERIES B WARRANTS") to acquire
units consisting of shares of Common Stock and Series C Warrants (the "SERIES C
WARRANTS") to acquire additional shares of Common Stock. The Series A Warrants
and the Series B Warrants are referred to herein as the "INITIAL WARRANTS," and
the shares of Common Stock issuable upon exercise of the Initial Warrants are
referred to herein as the "INITIAL WARRANT SHARES." The shares of Common Stock
issuable upon exercise of the Series C Warrants are referred to herein as the
"SERIES C SHARES." The Initial Warrants and the Series C Warrants are referred
to herein as the "WARRANTS" and shares of Common Stock issuable upon exercise of
the Warrants are referred to herein as the "WARRANT SHARES."

      B.    To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, and to consummate the transactions contemplated
thereby, the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "SECURITIES ACT"), and
applicable state securities laws.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investors, intending to be legally bound, hereby agree as follows:

1.    DEFINITIONS.

      (a)   As used in this Agreement, the following terms shall have the
following meanings:

            (i)   "INITIAL REGISTRABLE SECURITIES" means (a) the Common Stock,
(b) the Initial Warrant Shares, and (c) any shares of capital stock issued or
issuable, from time to time, as a distribution on or in exchange for or
otherwise with respect to any of the foregoing, whether as default payments, on
account of anti-dilution or other adjustments or otherwise.

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            (ii)  "INVESTOR" means the Initial Investors and any transferees or
assignees who agree to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.

            (iii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("RULE 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").

            (iv)  "REGISTRABLE SECURITIES" means all Initial Registrable
Securities and, upon issuance of the Series C Warrants, all Secondary
Registrable Securities.

            (v)   "REGISTRATION STATEMENT" means a registration statement of the
Company under the Securities Act.

            (vi)  "SECONDARY REGISTRABLE SECURITIES" means (a) the Series C
Warrant Shares and (b) any shares of capital stock issued or issuable, from time
to time, as a distribution on or in exchange for or otherwise with respect to
any of the Series C Warrants, whether as default payments, on account of
anti-dilution or other adjustments or otherwise.

      (b)   Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.

2.    REGISTRATION.

      (a)   First Mandatory Registration. The Company shall prepare promptly and
file with the SEC as soon as practicable, but in no event later than the
twentieth (20th) day following the date hereof (the "FIRST FILING DATE"), a
Registration Statement on Form F-3 (or, if Form F-3 is not then available, on
such form of Registration Statement as is then available to effect a
registration of all of the Initial Registrable Securities, subject to the
consent of the Initial Investors) covering the resale of at least 125% of the
Initial Registrable Securities (the "FIRST REGISTRATION STATEMENT"). The First
Registration Statement, to the extent allowable under the Securities Act and the
Rules promulgated thereunder (including Rule 416), shall state that the First
Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon exercise of the Initial
Warrants to prevent dilution resulting from stock splits, stock dividends or
other transactions as more specifically provided therein. The Initial
Registrable Securities included on the First Registration Statement shall be
allocated among the Investors as set forth in Section 11(k) hereof. The First
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to (and
subject to the approval of) the Initial Investors and their counsel prior to its
filing or other submission.

      (b)   Second Mandatory Registration. The Company shall prepare promptly
and file with the SEC as soon as practicable following the exercise of Series B
Warrants and resulting issuance of Series C Warrants, but in no event later than
the twentieth (20th) day following the earlier of (i) the exercise of all Series
B Warrants and (ii) the Termination Date (as defined in the

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Series B Warrants) (the "SECOND FILING DATE"), a Registration Statement on Form
F-3 (or, if Form F-3 is not then available, on such form of Registration
Statement as is then available to effect a registration of all of the Secondary
Registrable Securities, subject to the consent of the Initial Investors)
covering the resale of at least 125% of the Secondary Registrable Securities.
(the "SECOND REGISTRATION STATEMENT"). Notwithstanding the foregoing, the
Company shall have no obligation to file the Second Registration Statement if no
Investor exercises any Series B Warrant. The Second Registration Statement, to
the extent allowable under the Securities Act and the Rules promulgated
thereunder (including Rule 416), shall state that such Second Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon exercise of the Series C Warrants to prevent
dilution resulting from stock splits, stock dividends or similar transactions.
The Secondary Registrable Securities included on the Second Registration
Statement shall be allocated among the Investors as set forth in Section 11(k)
hereof. The Second Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided to (and subject to the approval of) the Investors and their counsel
prior to its filing or other submission.

      (c)   Payments by the Company.

      (i)   The Company shall use its best efforts to cause the First
Registration Statement hereof to become effective as soon as practicable, but in
no event later than the ninetieth (90th) day following the filing date of the
First Registration Statement (the "FIRST REGISTRATION DEADLINE"). At the time of
effectiveness, the Company shall ensure that the First Registration Statement
covers at least 125% of the Initial Registrable Securities (without giving
effect to any limitations on exercise contained in the Initial Warrants),
including, if necessary, by filing an amendment prior to the effective date of
the Initial Registration Statement to increase the number of Initial Registrable
Securities covered thereby.

      (ii)  The Company shall use its best efforts to cause the Second
Registration Statement to become effective as soon as practicable, but in no
event later than the ninetieth (90th) day following the filing date of the
Second Registration Statement (the "SECOND REGISTRATION DEADLINE"). At the time
of effectiveness, the Company shall ensure that the Second Registration
Statement covers at least 125% of the Secondary Registrable Securities (without
giving effect to any limitations on exercise contained in the Series C
Warrants), including, if necessary, by filing an amendment prior to the
effective date of the Secondary Registration Statement to increase the number of
Secondary Registrable Securities covered thereby.

      (iii) If (i) (A) the First Registration Statement is not filed with the
SEC prior to the First Filing Date or declared effective by the SEC on or before
the First Registration Deadline, or (B) the Second Registration Statement is not
filed with the SEC prior to the Second Filing Date or declared effective by the
SEC on or before the Second Registration Deadline, or (C) any Registration
Statement required to be filed pursuant to Section 3(b) hereof is not declared
effective by the SEC on or before the seventy-fifth (75th) day following the
applicable Registration Trigger Date (as defined in Section 3(b) below), or (ii)
if, after any such Registration Statement has been declared effective by the
SEC, sales of any of the Registrable Securities required to be covered by such
Registration Statement (including any Registrable Securities required to be
registered pursuant to Section 3(b) hereof) cannot be made pursuant to such
Registration Statement (by reason of a stop order or the Company's failure to
update the Registration Statement or for any other reason outside the control of
the Investors) or (iii) the

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Company's common stock is not listed or included for quotation on the Nasdaq
SmallCap Market (the "SMALLCAP MARKET"), the Nasdaq National Market (the
"NATIONAL MARKET"), the New York Stock Exchange (the "NYSE"), or the American
Stock Exchange (the "AMEX") at any time after the First Registration Deadline
hereunder, then the Company will make payments to each Investor in such amounts
and at such times as shall be determined pursuant to this Section 2(c) as
partial relief for the damages to the Investors by reason of any such delay in
or reduction of their ability to sell such Registrable Securities (which remedy
shall not be exclusive of any other remedies available at law or in equity).

            The Company shall pay to each Investor an amount equal to the
product of (i) the number of shares of Common Stock acquired pursuant to the
Securities Purchase Agreement and then held by such Investor, multiplied by the
per Unit purchase price under the Securities Purchase Agreement, multiplied by
(ii) one hundredth (.01) for the first thirty day period (or portion thereof)
and two hundredths (.02) for each additional 30 day period (or portion thereof)
(A) after the First Filing Date and prior to the date the First Registration
Statement is filed with the SEC, (B) after the First Registration Deadline and
prior to the date the first Registration Statement is declared effective by the
SEC, (C) after the sixtieth (60th) day following a Registration Trigger Date and
prior to the date the Registration Statement filed pursuant to Section 3(b)
hereof is declared effective by the SEC, and (D) during which sales of any
Initial Registrable Securities cannot be made pursuant to any such Registration
Statement after the Registration Statement has been declared effective or the
Common Stock is not listed or included for quotation on the SmallCap Market, the
National Market, NYSE, or AMEX.

            In addition, the Company shall pay to each Investor an amount equal
to the aggregate exercise price paid by such Investor upon exercise of Series B
Warrants, multiplied by one hundredth (.01) for the first thirty day period (or
portion thereof) and two hundredths (.02) for each additional 30 day period (or
portion thereof) (A) after the Second Filing Date and before the Second
Registration Statement is filed with the SEC, (B) after the Second Registration
Deadline and prior to the date the Second Registration Statement is declared
effective by the SEC, and (C) during which sales of any Secondary Registrable
Securities cannot be made pursuant to any Registration Statement after the
Registration Statement has been declared effective or the Common Stock is not
listed or included for quotation on the SmallCap Market, the National Market,
NYSE, or AMEX.

            Notwithstanding the foregoing payment provisions, for purpose of
calculating the payment amount owed to any given Investor, there shall be
excluded from each such period any delays which are solely attributable to
changes required by such Investor in the Registration Statement with respect to
information relating to such Investor, including, without limitation, changes to
the plan of distribution (other than any corrections of Company mistakes with
respect to information previously provided by such Investor). All such amounts
required to be paid hereunder shall be paid in cash within five days after the
end of each period that gives rise to such obligation, provided that, if any
such period extends for more than thirty (30) days, interim payments shall be
made for each such 30 day period.

      (d)   Piggy-Back Registrations. If, at any time prior to the expiration of
the Registration Period (as defined in Section 3(a) below) the Company shall
file with the SEC a Registration Statement relating to an offering for its own
account or the account of others under

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the Securities Act of any of its equity securities (other than on Form S-4 or
Form S-8 or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans), the Company shall send to each Investor written notice of such filing,
and if, within 15 days after the date of such notice, such Investor shall so
request in writing, the Company shall include in such Registration Statement all
or any part of the Registrable Securities such Investor requests to be
registered. Notwithstanding the foregoing, in the event that, in connection with
any underwritten public offering, the managing underwriter(s) thereof shall
impose a limitation on the number of shares of common stock which may be
included in the Registration Statement because, in such underwriter(s)'
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include
in such Registration Statement only such limited portion of the Registrable
Securities with respect to which such Investor has requested inclusion hereunder
as the underwriter shall permit; provided, however, that (i) the Company shall
not exclude any Registrable Securities unless the Company has first excluded all
outstanding securities, the holders of which are not contractually entitled to
inclusion of such securities in such Registration Statement or are not
contractually entitled to pro rata inclusion with the Registrable Securities,
(ii) after giving effect to the immediately preceding proviso, any such
exclusion of Registrable Securities shall be made pro rata among the Investors
seeking to include Registrable Securities and the holders of other securities
having the contractual right to inclusion of their securities in such
Registration Statement by reason of demand registration rights, in proportion to
the number of Registrable Securities or other securities, as applicable, sought
to be included by each such Investor or other holder, and (iii) no such
reduction shall reduce the amount of Registrable Securities included in the
registration below twenty-five (25%) of the total amount of securities included
in such registration. No right to registration of Registrable Securities under
this Section 2(d) shall be construed to limit any registration required under
Section 2(a) or Section 2(b) hereof. If an offering in connection with which an
Investor is entitled to registration under this Section 2(d) is an underwritten
offering, then each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering.

      (e)   Eligibility for Form F-3. The Company represents and warrants that
it meets the requirements for the use of Form F-3 for registration of the sale
by the Initial Investors and any other Investor of the Registrable Securities
and the Company shall file all reports and statements required to be filed by
the Company with the SEC in a timely manner so as to thereafter maintain such
eligibility for the use of Form F-3.

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3.    OBLIGATIONS OF THE COMPANY.

      In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:

      (a)   The Company shall respond promptly to any and all comments made by
the staff of the SEC to any Registration Statement required to be filed
hereunder, and shall submit to the SEC, before the close of business on the
business day immediately following the business day on which the Company learns
(either by telephone or in writing) that no review of such Registration
Statement will be made by the SEC or that the staff of the SEC has no further
comments on such Registration Statement, as the case may be, a request for
acceleration of the effectiveness of such Registration Statement to a time and
date as soon as practicable. The Company shall keep such Registration Statement
effective pursuant to Rule 415 at all times until such date as is the earlier of
(i) the date on which all of the Registrable Securities have been sold and (ii)
the date on which all of the Registrable Securities may be immediately sold to
the public without registration or restriction pursuant to Rule 144(k) under the
Securities Act or any successor provision (the "REGISTRATION PERIOD"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein and all documents incorporated by reference
therein) (A) shall comply in all material respects with the requirements of the
Securities Act and the rules and regulations of the SEC promulgated thereunder
and (B) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein not misleading. The financial statements of the Company
included in any such Registration Statement or incorporated by reference therein
(x) shall comply as to form in all material respects with the applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto, (y) shall be prepared in accordance with
Canadian generally accepted accounting principles, consistently applied during
the periods involved (except as may be otherwise indicated in such financial
statements or the notes thereto or, in the case of unaudited interim statements,
to the extent they may not include footnotes or may be condensed on summary
statements) and (z) fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
immaterial year-end adjustments).

      (b)   The Company shall (i) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to any Registration
Statement required to be filed hereunder and the prospectus used in connection
with any such Registration Statement as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and (ii) during the Registration Period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by any such Registration Statement until such time as all of
such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the event the number of shares available under a
Registration Statement filed pursuant to this Agreement is, for any three (3)
consecutive trading days (the last of such three (3) trading days being the
"REGISTRATION TRIGGER DATE"), insufficient to cover 125% of the Registrable
Securities (assuming full excise of all Warrants and without giving effect to
any limitations on exercise contained in the Warrants), the Company shall
provide each

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Investor written notice of such Registration Trigger Date within three business
days thereafter and shall amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover 125% of the Registrable Securities (assuming full excise of
all Warrants and without giving effect to any limitations on exercise contained
in the Warrants) as of the Registration Trigger Date, in each case, as soon as
practicable, but in any event within 15 days after the Registration Trigger
Date. The Company shall cause such amendment(s) and/or new Registration
Statement(s) to become effective as soon as practicable following the filing
thereof. In the event the Company fails to obtain the effectiveness of any such
Registration Statement within 75 days after a Registration Trigger Date, each
Investor shall thereafter have the option, exercisable in whole or in part at
any time and from time to time by delivery of a written notice to the Company (a
"MANDATORY REDEMPTION NOTICE"), to require the Company to redeem for cash such
number of the Investor's shares of the Common Stock at a price per share of
Common Stock equal to 6.90 (the "REDEMPTION AMOUNT") such that, following such
redemption, the total number of Registrable Securities included on the
Registration Statement for resale by such Investor is at least equal to 125% of
the Registrable Securities (assuming full exercise of all Warrants and without
giving effect to any limitation on exercise contained in the Warrants). If the
Company fails to pay any holder the Redemption Amount within five business days
after its receipt of a Redemption Notice, then the Investor entitled to
redemption shall be entitled to interest on the Redemption Amount at a per annum
rate equal to the lower of twenty-four percent (24%) and the highest interest
rate permitted by applicable law from the date on which the Company receives the
Redemption Notice until the date of payment of the Redemption Amount hereunder.
In the event the Company is not able to redeem all of the shares of Common Stock
subject to Redemption Notices delivered prior to the date upon which such
redemption is to be effected, the Company shall redeem shares of Common Stock
from each Investor pro rata, based on the total number of shares of Common Stock
outstanding at the time of redemption included by such Investor in all
Redemption Notices delivered prior to the date upon which such redemption is to
be effected relative to the total number of shares of Common Stock outstanding
at the time of redemption included in all of the Redemption Notices delivered
prior to the date upon which such redemption is to be effected.

      (c)   The Company shall furnish to each Investor whose Registrable
Securities are included in a Registration Statement and such Investor's legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC or received by the Company, as applicable, one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto, and, in the case of the
Registration Statements required to be filed pursuant to Section 2(a) and
Section 2(b), each letter written by or on behalf of the Company to the SEC or
the staff of the SEC (including, without limitation, any request to accelerate
the effectiveness of the Registration Statement or amendment thereto), and each
item of correspondence from the SEC or the staff of the SEC, in each case
relating to the Registration Statement (other than any portion thereof that
contains information for which the Company has sought confidential treatment),
(ii) on the date of effectiveness of the Registration Statement or any amendment
thereto, a notice stating that the Registration Statement or amendment has been
declared effective, and (iii) such number of copies of a prospectus, including a
preliminary prospectus, all amendments and supplements thereto and all such
other documents as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor.

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      (d)   The Company shall use its best efforts to (i) register and qualify
the Registrable Securities covered by any Registration Statement under such
other securities or "blue sky" laws of such jurisdictions in the United States
and Canada as each Investor who holds Registrable Securities being offered
reasonably requests, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (A) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (B) subject itself to general taxation in any such
jurisdiction, (C) file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause the Company undue expense
or burden, or (E) make any change in its Certificate of Incorporation or Bylaws,
which in each case the Board of Directors of the Company reasonably determines
to be contrary to the best interests of the Company and its stockholders.

      (e)   As promptly as practicable after becoming aware of such event, the
Company shall (i) notify each Investor by telephone and facsimile of the
happening of any event, as a result of which the prospectus included in any
Registration Statement that includes Registrable Securities, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (ii) promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
such number of copies of such supplement or amendment to each Investor as such
Investor may reasonably request.

      (f)   The Company shall use its best efforts (i) to prevent the issuance
of any stop order or other suspension of effectiveness of any Registration
Statement that includes Registrable Securities, and, if such an order is issued,
to obtain the withdrawal of such order at the earliest practicable moment
(including in each case by amending or supplementing such Registration
Statement), and (ii) to notify each Investor who holds Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof (and if
such Registration Statement is supplemented or amended, deliver such number of
copies of such supplement or amendment to each Investor as such Investor may
reasonably request).

      (g)   The Company shall permit a single firm of counsel designated by the
Initial Investors to review any Registration Statement required to be filed
hereunder and all amendments and supplements thereto a reasonable period of time
prior to its filing with the SEC, and not file any document to which such
counsel reasonably objects.

      (h)   The Company shall make generally available to its security holders
as soon as practicable, but in no event later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement. The Company will be

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deemed to have complied with its obligations under this Section 3(h) upon the
Company's filing, on an appropriate form, the appropriate report of the Company
as required by the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"EXCHANGE ACT").

      (i)   The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with United States federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement that
includes such Investor's Registrable Securities, (iii) the release of such
information is ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction, (iv) such information has been made
generally available to the public other than by disclosure in violation of this
or any other agreement, or (v) such Investor consents to the form and content of
any such disclosure. The Company shall, upon learning that disclosure of any
information concerning an Investor is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to
such Investor prior to making such disclosure, and cooperate with the Investor,
at the Investor's expense, in taking appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.

      (j)   The Company shall use its best efforts to cause all of the
Registrable Securities covered by any Registration Statement to be promptly
listed or designated for quotation on the SmallCap Market, the National Market,
the NYSE, or the AMEX, and on each additional national securities exchange or
automated quotation system on which securities of the same class or series
issued by the Company are then listed or quoted, if any, if the listing or
quotation of such Registrable Securities is then permitted under the rules of
such exchange or automated quotation system, and in any event, without limiting
the generality of the foregoing, to arrange for or maintain at least two market
makers to register with the National Association of Securities Dealers, Inc.
(the "NASD") as such with respect to the Registrable Securities.

      (k)   The Company shall provide a transfer agent and registrar, which may
be a single entity, for the Registrable Securities not later than the effective
date of the Registration Statement required to be filed pursuant to Section 2(a)
hereof.

      (l)   The Company shall cooperate with any Investor who holds Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be offered
pursuant to any Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, and registered in such names,
as such Investor or the managing underwriter or underwriters, if any, may
reasonably request. Without limiting the generality of the foregoing, within
three business days after any Registration Statement that includes Registrable
Securities is declared effective by the SEC, the Company shall cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to any Investor whose Registrable Securities
are included in such Registration Statement), an opinion of such counsel in the
form attached hereto as Exhibit A.

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      (m)   At the request of any Investor, the Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to any Registration Statement required to be filed hereunder and the
prospectus used in connection with such Registration Statement as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.

      (n)   The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith
(including, without limitation, the Securities Act and the Exchange Act and the
rules and regulations thereunder promulgated by the SEC.)

      (o)   From and after the date of this Agreement, the Company shall not,
and shall not agree to, allow the holders of any securities of the Company to
include any of their securities which are not Registrable Securities in the
Registration Statement required to be filed pursuant to Section 2(a), 2(b) or
3(b) hereof without the consent of the holders of a majority in interest of the
Registrable Securities.

      (p)   The Company shall make available for inspection by (i) each
Investor, (ii) any underwriter participating in any disposition pursuant to any
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investors, and (iv) one firm of attorneys
retained by all such underwriters (collectively, the "INSPECTORS") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "RECORDS"), as shall be reasonably deemed
necessary by each Inspector to enable such Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure (except to an Investor) of
any Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(A) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (B) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or (C) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other agreement. Nothing herein shall be deemed to
limit any Investor's ability to sell Registrable Securities in a manner that is
otherwise consistent with applicable laws and regulations.

      (q)   In the case of an underwritten public offering, at the request of
any Investor, the Company shall furnish, on the date of effectiveness of the
Registration Statement (i) an opinion, dated as of such date, from counsel
representing the Company addressed to any such Investor and in form, scope and
substance as is customarily given in an underwritten public offering and (ii) a
letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and any such Investor.

                                       10
<PAGE>

4.    OBLIGATIONS OF THE INVESTORS.

      In connection with the registration of the Registrable Securities, each
Investor shall have the following obligations:

      (a)   It shall be a condition precedent to the obligations of the Company
to effect the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five trading days
prior to the first anticipated filing date of a Registration Statement, the
Company shall notify each Investor of the information the Company requires from
each such Investor.

      (b)   Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement required to be filed hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

      (c)   Upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e) or 3(f) with respect to any
Registration Statement including Registrable Securities, each Investor shall
immediately discontinue disposition of Registrable Securities pursuant to such
Registration Statement until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Sections 3(e) and 3(f), as
applicable, and, if so directed by the Company, such Investor shall deliver to
the Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's possession
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice. Notwithstanding the foregoing or anything to the
contrary in this Agreement, but subject to compliance with applicable laws, the
Company shall cause the transfer agent for the Registrable Securities to deliver
unlegended shares of common stock to a transferee of an Investor in accordance
with the terms of the Common Stock and Warrants in connection with any sale of
Registrable Securities with respect to which any such Investor has entered into
a contract for sale prior to receipt of such notice and for which any such
Investor has not yet settled.

      (d)   No Investor may participate in any underwritten distribution
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 5 below, and (iv) complies with all applicable laws
in connection therewith. Notwithstanding anything in this Section 4(d) to the
contrary, this Section 4(d) is not intended to limit any Investor's rights under
Sections 2(a), 2(b) or 3(b) hereof.

                                       11
<PAGE>

5.    EXPENSES OF REGISTRATIONS.

      All expenses incurred by the Company or the Investors in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3 above
(including, without limitation, all registration, listing and qualification
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company and the fees and disbursements of one counsel selected by the
Investors (but in the case of the counsel selected by the Investors, only to the
extent that the fees and distributions of such counsel are covered under the
Expense Cap as set out in Section 4(o) of the Securities Purchase Agreement),
and any underwriting discounts and commissions) shall be borne by the Company.
In addition, the Company shall pay each Investor's costs and expenses (including
reasonable legal fees) incurred in connection with the enforcement of the rights
of such Investor hereunder.

6.    INDEMNIFICATION.

      In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

      (a)   To the extent permitted by law, the Company shall indemnify, hold
harmless and defend (i) each Investor who holds such Registrable Securities, and
(ii) the directors, officers, partners, members, employees and agents of each
such Investor and each person, if any, who controls each such Investor within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, an "INVESTOR INDEMNIFIED PERSON"), against any joint or several
losses, claims, damages, liabilities or expenses (collectively, together with
actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, "CLAIMS") to
which any of them may become subject insofar as such Claims arise out of or are
based upon: (A) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make the
statements therein not misleading, (B) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, or (C) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act or any other law (including, without
limitation, any state securities law), rule or regulation relating to the offer
or sale of the Registrable Securities (the matters in the foregoing clauses (A)
through (C), collectively, "VIOLATIONS"). Subject to the restrictions set forth
in Section 6(c) with respect to the number of legal counsel, the Company shall
reimburse each Investor and each other Investor Indemnified Person, promptly as
such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (x) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Investor Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof or
supplement thereto; (y) shall not apply

                                       12
<PAGE>

to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (z) with respect to any preliminary prospectus, shall
not inure to the benefit of any Investor Indemnified Person if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented, if such corrected prospectus was timely made available by the
Company pursuant to Section 3(c) hereof, and the Investor Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to the use
giving rise to a Violation and such Investor Indemnified Person, notwithstanding
such advice, used it. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Investor Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9 hereof.

      (b)   In connection with any Registration Statement in which an Investor
is participating, (i) each such Investor shall, severally and not jointly,
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement, its employees and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and any other stockholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder within the meaning of the
Securities Act or the Exchange Act (each, a "COMPANY INDEMNIFIED PERSON"),
against any Claims to which any of them may become subject insofar as such
Claims arise out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and (ii)
subject to the restrictions set forth in Section 6(c), such Investor shall
reimburse the Company Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim; provided, however, that the indemnification obligations contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; and provided, further, that the
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds actually
received by such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Company Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investor pursuant to Section 9 hereof. Notwithstanding
anything to the contrary contained herein, the indemnification obligations
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Company Indemnified Person if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.

      (c)   Promptly after receipt by any party entitled to indemnification
under this Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a Claim in respect
thereof is to made against any indemnifying party under this Section 6, deliver
to the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the

                                       13
<PAGE>

indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the indemnified party;
provided, however, that such indemnifying party shall not be entitled to assume
such defense and an indemnified party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the indemnified party and the indemnifying
party would be inappropriate due to actual or potential conflicts of interest
between such indemnified party and any other party represented by such counsel
in such proceeding or the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying party and
any such indemnified party reasonably determines that there may be legal
defenses available to such indemnified party that are in conflict with those
available to such indemnifying party. The indemnifying party shall pay for only
one separate legal counsel for the indemnified parties, and such legal counsel
shall be selected by Investors holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim relates (if
the parties entitled to indemnification hereunder are Investor Indemnified
Persons) or by the Company (if the parties entitled to indemnification hereunder
are Company Indemnified Persons). The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 6, except to the extent that the
indemnifying party is actually prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.

7.    CONTRIBUTION.

      To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party shall make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, with respect to the Violation giving rise to the
applicable Claim; provided, however, that (a) no contribution shall be made
under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6, (b) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of such fraudulent misrepresentation,
and (c) contribution (together with any indemnification or other obligations
under this Agreement) by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities.

8.    REPORTS UNDER THE EXCHANGE ACT.

      With a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:

                                       14
<PAGE>

      (a)   file with the SEC in a timely manner and make and keep available all
reports and other documents required of the Company under the Securities Act and
the Exchange Act so long as the Company remains subject to such requirements and
the filing and availability of such reports and other documents is required for
the applicable provisions of Rule 144; and

      (b)   furnish to each Investor so long as such Investor holds Common
Stock, Warrants or Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit such Investor to sell such securities under Rule
144 without registration.

9.    ASSIGNMENT OF REGISTRATION RIGHTS.

      The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assignable by each Investor to any transferee of all or any
portion of the Common Stock, the Warrants or the Registrable Securities if: (a)
the Investor agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company after such
assignment, (b) the Company is furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state and provincial securities laws, (d) the transferee or assignee agrees in
writing for the benefit of the Company to be bound by all of the provisions
contained herein, and (e) such transfer shall have been made in accordance with
the applicable requirements of the Securities Purchase Agreement and the
Warrants, as applicable. In addition, and notwithstanding anything to the
contrary contained in this Agreement, the Securities Purchase Agreement or the
Warrants, the Securities (as defined in the Securities Purchase Agreement) may
be pledged, and all rights of the Investor under this Agreement or any other
agreement or document related to the transactions contemplated hereby may be
assigned, without further consent of the Company, to a bona fide pledgee in
connection with an Investor's margin or brokerage account.

10.   AMENDMENT OF REGISTRATION RIGHTS.

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company, each of the Initial
Investors (to the extent such Initial Investor or its affiliates still owns
Common Stock, Warrants or Registrable Securities) and the Investor(s) who hold a
majority in interest of the Registrable Securities or, in the case of a waiver,
with the written consent of the party charged with the enforcement of any such
provision; provided, however, that (a) no amendment hereto which restricts the
ability of an Investor to elect not to participate in an underwritten offering
shall be effective against any Investor which does not consent in writing to
such amendment; (b) no consideration shall be paid to an Investor by the Company
in connection with an amendment hereto unless each Investor similarly affected
by such amendment receives a pro rata amount of consideration from the

                                       15
<PAGE>

Company; and (c) unless an Investor otherwise agrees, each amendment hereto must
similarly affect each Investor. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company.

11.   MISCELLANEOUS.

      (a)   A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

      (b)   Any notices required or permitted to be given under the terms of
this Agreement shall be in writing and sent by certified or registered mail
(return receipt requested) or delivered personally, by nationally recognized
overnight carrier or by confirmed facsimile transmission, and shall be effective
five days after being placed in the mail, if mailed, or upon receipt or refusal
of receipt, if delivered personally or by nationally recognized overnight
carrier or confirmed facsimile transmission, in each case addressed to a party
as provided herein. The initial addresses for such communications shall be as
follows, and each party shall provide notice to the other parties of any change
in such party's address:

            (i)   If to the Company:

                  QSound Labs, Inc.
                  400 - 3115 12th Street NE
                  Calgary, AB T2E 7J2
                  Telephone: (403) 291-2492
                  Facsimile: (403) 250-1521
                  Attention: David Gallagher

                  with a copy to Joanna Varvos, Esq.
                  as above

            (ii)  If to any Investor, to such address as such Investor shall
have provided in writing to the Company.

      (c)   Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

      (d)   This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in the State of Delaware. The Company irrevocably consents to the
jurisdiction of the United States federal courts and the state courts located in
the County of New Castle, State of Delaware in any suit or proceeding based on
or arising under this Agreement and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The

                                       16
<PAGE>

Company further agrees that service of process upon the Company, mailed by first
class mail shall be deemed in every respect effective service of process upon
the Company in any such suit or proceeding in such forum. Nothing herein shall
affect any Investor's right to serve process in any other manner permitted by
law. The Company agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.

      (e)   This Agreement and the other Transaction Documents (including any
schedules and exhibits hereto and thereto) constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the other
Transaction Documents supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.

      (f)   Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

      (g)   The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

      (h)   This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

      (i)   Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

      (j)   Unless otherwise expressly provided herein, all consents, approvals
and other determinations to be made by the Investors pursuant to this Agreement
shall be made by the Investors holding a majority in interest of the Registrable
Securities (determined as if all Warrants then outstanding had been converted
into or exercised for Registrable Securities) held by all Investors.

      (k)   The initial number of Registrable Securities included on any
Registration Statement filed pursuant to Section 2(a), 2(b) or 3(b), and each
increase to the number of Registrable Securities included thereon, shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time of such establishment or increase,
as the case may be. In the event an Investor shall sell or otherwise transfer
any of such holder's Registrable Securities, each transferee shall be allocated
a pro rata portion of the number of Registrable Securities included on a
Registration Statement for such transferor. Any shares of Common Stock included
on a Registration Statement and which remain allocated to any person or entity
which does not hold any Registrable Securities shall be allocated to the

                                       17
<PAGE>

remaining Investors, pro rata based on the number of shares of Registrable
Securities then held by such Investors. For the avoidance of doubt, the number
of Registrable Securities held by any Investor shall be determined as if all
Warrants then outstanding were converted into or exercised for Registrable
Securities.

      (l)   Each party to this Agreement has participated in the negotiation and
drafting of this Agreement. As such, the language used herein shall be deemed to
be the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction will be applied against any party to this
Agreement.

      (m)   For purposes of this Agreement, the term "business day" means any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law, regulation or
executive order to close, and the term "trading day" means any day on which the
principal national securities exchange, automated quotation system or other
trading market where the Company's common stock is then listed, quoted or
traded, is open for trading.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

                                       18
<PAGE>

      IN WITNESS WHEREOF, the undersigned Initial Investor and the Company have
caused this Agreement to be duly executed as of the date first above written.

QSOUND LABS, INC.

By: __________________________________
Name:
Title:

INITIAL INVESTOR:

__________________________________________________
        (Print or Type Name of Purchaser)

By:  _____________________________________________
Name:
Title:

                [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

<PAGE>

                                                                       EXHIBIT A

[Date]

[Transfer Agent]

RE:   QSOUND LABS, INC.

Ladies and Gentlemen:

We are counsel to QSound Labs, Inc., a corporation organized under the laws of
the State Alberta, Canada (the "COMPANY"), and we understand that [Name of
Investor] (the "HOLDER") has purchased from the Company (i) shares of the
Company's common stock, no par value (the "COMMON STOCK"), and (ii) warrants to
acquire shares of Common Stock. Pursuant to a Registration Rights Agreement,
dated as of December 16, 2004, by and among the Company and the signatories
thereto (the "REGISTRATION RIGHTS AGREEMENT"), the Company agreed with the
Holder, among other things, to register the Registrable Securities (as that term
is defined in the Registration Rights Agreement) under the Securities Act of
1933, as amended (the "SECURITIES ACT"), upon the terms provided in the
Registration Rights Agreement. In connection with the Company's obligations
under the Registration Rights Agreement, on [_____________ ___, ____], the
Company filed a Registration Statement on Form F-___ (File No. 333-
_____________) (the "REGISTRATION STATEMENT") with the Securities and Exchange
Commission (the "SEC") relating to the Registrable Securities, which names the
Holder as a selling stockholder thereunder. The Registration Statement was
declared effective by the SEC on _____________, ____.

In connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered into an order declaring the
Registration Statement effective under the Securities Act at [time of
effectiveness] on [date of effectiveness], and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC.

Based on the foregoing, we are of the opinion that the Registrable Securities
are available for resale under the Securities Act pursuant to the Registration
Statement.

Very truly yours,

[NAME OF COUNSEL]

cc:   [Name of Investor]<PAGE>

                                                                     EXHIBIT 4.3

      VOID AFTER 5:00 P.M., NEW YORK CITY
      TIME, ON JUNE 16, 2009
      (UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)

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

                                           Right to Purchase 139,130 Shares of
                                          Common Stock, no par value per share

Date: December 16, 2004

                                SERIES A WARRANT

                            TO PURCHASE COMMON STOCK

                                       OF

                                QSOUND LABS, INC.

      THIS CERTIFIES THAT, for value received, Capital Ventures International,
or its registered assigns, is entitled to purchase from QSound Labs, Inc., a
corporation organized under the laws of Alberta, Canada (the "COMPANY"), at any
time or from time to time during the period specified in Section 2 hereof,
139,130 fully paid and nonassessable shares (the "WARRANT SHARES") of the
Company's common stock, no par value per share (the "COMMON STOCK"), at an
exercise price per share (the "EXERCISE PRICE") equal to $9.12. The number of
Warrant Shares and the Exercise Price are subject to adjustment as provided in
Section 4 hereof. The term "WARRANT" and all references thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented,
including all Warrants issued upon transfer or exchange of this Warrant as
provided herein, and the term "WARRANTS" means this Warrant and the other
warrants of the Company issued pursuant to that certain Securities Purchase
Agreement, dated as of December 16, 2004, by and among the Company and the other
signatories thereto (the "SECURITIES PURCHASE AGREEMENT").

<PAGE>

      This Warrant is subject to the following terms, provisions and conditions:

1.    Exercise of Warrant.

      (a)   Subject to the provisions hereof, including, without limitation, the
limitations contained in Section 10 hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this Warrant, together
with a completed exercise agreement in the form attached hereto (the "EXERCISE
AGREEMENT"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by written notice to the holder hereof), and upon
(i) payment to the Company in cash, by certified or official bank check or by
wire transfer for the account of the Company, of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement or (ii) if the holder is
effectuating a Cashless Exercise (as defined in Section 9 hereof), delivery to
the Company of a written notice of an election to effect a Cashless Exercise for
the Warrant Shares specified in the Exercise Agreement.

      (b)   The Warrant Shares purchased upon exercise of this Warrant in
accordance with this Section 1 shall be deemed to be issued to the holder hereof
or the holder's designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered, the
completed Exercise Agreement shall have been delivered, and payment shall have
been made for such shares as set forth above or, if such date is not a business
day, on the next succeeding business day. The Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof or the holder's designee within a
reasonable time, not exceeding three business days, after this Warrant shall
have been so exercised (the "DELIVERY PERIOD"). If the Company's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer program, and so long as the certificates therefor do not
bear a legend (pursuant to the terms of the Securities Purchase Agreement) and
the holder is not obligated to return such certificate for the placement of a
legend thereon (pursuant to the Securities Purchase Agreement), the Company
shall cause its transfer agent to electronically transmit the Warrant Shares so
purchased to the holder or the holder's designee by crediting the account of the
holder or the holder's designee or its respective nominee with DTC through its
Deposit Withdrawal Agent Commission system ("DTC TRANSFER"). If the
aforementioned conditions to a DTC Transfer are not satisfied, the Company shall
deliver to the holder or the holder's designee physical certificates
representing the Warrant Shares so purchased. Notwithstanding the foregoing, the
holder or the holder's designee may instruct the Company to deliver to the
holder or such designee physical certificates representing the Warrant Shares so
purchased in lieu of delivering such shares by way of DTC Transfer. Any
certificates so delivered shall be in such denominations as may be reasonably
requested by the holder hereof or the holder's designee, shall be registered in
the name of the holder or such other name as shall be designated by the holder
and, following the date on which the Warrant Shares have been registered under
the Securities Act pursuant to that certain Registration Rights Agreement, dated
as of December 16, 2004, by and among the Company and the other signatories
thereto (the "REGISTRATION RIGHTS AGREEMENT") or otherwise may be sold by the
holder pursuant to Rule 144 promulgated under the Securities Act (or a successor
rule), shall not bear any restrictive legend. If this Warrant shall have been
exercised only in part, then the Company shall, at its expense, at the time of
delivery

                                     - 2 -
<PAGE>

of such certificates, deliver to the holder a new Warrant representing the
number of shares with respect to which this Warrant shall not then have been
exercised.

      (c)   If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason (other than the reasons
contemplated by Section 10 hereof) to deliver, on or prior to the fifth business
day following the expiration of the Delivery Period for such exercise, the
number of shares of Common Stock to which the holder is entitled upon such
exercise (an "EXERCISE DEFAULT"), then the Company shall pay to the holder
payments ("EXERCISE DEFAULT PAYMENTS") for an Exercise Default in the amount of
(i) (N/365), multiplied by (ii) the amount by which the Market Price (as defined
in Section 11 hereof) of the Common Stock on the date the Exercise Agreement
giving rise to the Exercise Default is transmitted in accordance with this
Section 1 (the "EXERCISE DEFAULT DATE") exceeds the Exercise Price in respect of
such Warrant Shares, multiplied by (iii) the number of shares of Common Stock
the Company failed to so deliver in such Exercise Default, multiplied by (iv)
..24, where N equals the number of days from the Exercise Default Date to the
date that the Company effects the full exercise of this Warrant which gave rise
to the Exercise Default. The accrued Exercise Default Payment for each calendar
month shall be paid in cash and shall be made to the holder by the fifth day of
the month following the month in which it has accrued. Nothing herein shall
limit the holder's right to pursue actual damages for the Company's failure to
maintain a sufficient number of authorized shares of Common Stock as required
pursuant to the terms of Section 3(b) hereof or to otherwise issue shares of
Common Stock upon exercise of this Warrant in accordance with the terms hereof,
and the holder shall have the right to pursue all remedies available at law or
in equity (including a decree of specific performance and/or injunctive relief).

2.    Period of Exercise. This Warrant shall be exercisable at any time or from
time to time during the period (the "EXERCISE PERIOD") commencing on June 16,
2005 and ending at 5:00 p.m., New York City time, on December 16, 2009. The
Exercise Period shall automatically be extended by one day for each day on which
(a) the Company does not have a number of shares of Common Stock reserved for
issuance upon exercise hereof at least equal to the number of shares of Common
Stock issuable upon exercise hereof or otherwise fails to deliver shares of
Common Stock in the names set forth in Section 1 hereof upon exercise hereof, or
(b) the Warrant Shares are not then otherwise registered for resale as required
pursuant to the terms of the Registration Rights Agreement.

3.    Certain Agreements of the Company. The Company hereby covenants and agrees
as follows:

      (a)   Shares to be Fully Paid. All Warrant Shares shall, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid and
non-assessable and free from all taxes, liens, claims and encumbrances.

      (b)   Reservation of Shares. During the Exercise Period, the Company shall
at all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise in full of this Warrant (without giving effect to the
limitations on exercise set forth in Section 10 hereof).

                                     - 3 -
<PAGE>

      (c)   Listing. The Company shall promptly secure the listing or quotation
of the shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated or electronic quotation system, if
any, upon which shares of Common Stock are then listed or quoted or become
listed or quoted (subject to official notice of issuance upon exercise of this
Warrant) and shall maintain, so long as any other shares of Common Stock shall
be so listed or quoted, such listing or quotation of all shares of Common Stock
from time to time issuable upon the exercise of this Warrant; and the Company
shall so list or apply for quotation on each national securities exchange or
automated or electronic quotation system, as the case may be, and shall maintain
such listing or quotation of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the
same class shall be listed or quoted on such national securities exchange or
automated or electronic quotation system.

      (d)   Certain Actions Prohibited. The Company shall not, by amendment of
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the economic benefit inuring to the holder hereof
and the exercise privilege of the holder of this Warrant against dilution or
other impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) shall not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) shall take all such
actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.

      (e)   Successors and Assigns. This Warrant shall be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all of the Company's assets.

      (f)   Blue Sky Laws. The Company shall, on or before the date of issuance
of any Warrant Shares, take such actions as the Company shall reasonably
determine are necessary to qualify the Warrant Shares for, or obtain exemption
for the Warrant Shares for, sale to the holder of this Warrant upon the exercise
hereof under applicable securities or "blue sky" laws of the states of the
United States and the provinces of Canada, and shall provide evidence of any
such action so taken to the holder of this Warrant prior to such date; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(f), (ii)
subject itself to general taxation in any such jurisdiction or (iii) file a
general consent to service of process in any such jurisdiction.

                                     - 4 -
<PAGE>

4.    Antidilution Provisions. During the Exercise Period, the Exercise Price
and the number of Warrant Shares issuable hereunder shall be subject to
adjustment from time to time as provided in this Section 4.

      (a)   Stock Splits, Stock Dividends, Etc. If, at any time during the
Exercise Period, the number of outstanding shares of Common Stock is increased
by a stock split, stock dividend, combination, reclassification or other similar
event, the Exercise Price in effect immediately prior to such increase shall be
proportionately reduced, or if the number of outstanding shares of Common Stock
is decreased by a reverse stock split, combination, reclassification or other
similar event, the Exercise Price in effect immediately prior to such decrease
shall be proportionately increased.

      (b)   Merger, Consolidation, Etc. If, at any time during the Exercise
Period, there shall be (i) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), (ii) any consolidation or merger of the Company with any other
entity (other than a merger in which the Company is the surviving or continuing
entity and its capital stock is unchanged), (iii) any sale or transfer of all or
substantially all of the assets of the Company or (iv) any share exchange or
other transaction pursuant to which all of the outstanding shares of Common
Stock are converted into other securities or property (each of (i) - (iv) above
being a "CORPORATE CHANGE"), then the holder hereof shall thereafter have the
right to receive upon exercise of this Warrant, in lieu of the Warrant Shares
otherwise issuable, such shares of stock, securities and/or other property as
would have been issued or payable in such Corporate Change with respect to or in
exchange for the number of Warrant Shares which would have been issuable upon
exercise had such Corporate Change not taken place (without giving effect to the
limitations contained in Section 10), and in any such case, appropriate
provisions (in form and substance reasonably satisfactory to the holder hereof)
shall be made with respect to the rights and interests of the holder to the end
that the economic value of this Warrant is in no way altered by such Corporate
Change and that the provisions hereof (including, without limitation, in the
case of any such consolidation, merger or sale in which the successor entity or
purchasing entity is not the Company, an immediate adjustment of the Exercise
Price and Warrant Shares so that the Exercise Price and Warrant Shares
immediately after the Corporate Change reflects the same relative value as
compared to the value of the surviving entity's common stock that existed
between the Exercise Price and the Warrant Shares and the value of the Company's
Common Stock immediately prior to such Corporate Change) shall thereafter be
applicable, as nearly as may be practicable in relation to any shares of stock
or securities thereafter deliverable upon the exercise thereof. The Company
shall not effect any Corporate Change unless (A) the holder hereof has received
written notice of such transaction at least 45 days prior thereto, but in no
event later than 15 days prior to the record date for the determination of
stockholders entitled to vote with respect thereto, (B) if required by Section
4(g) of the Securities Purchase Agreement, the consent of the Purchasers (as
such term is defined in the Securities Purchase Agreement) shall have been
obtained in accordance with such Section 4(g), and (C) the resulting successor
or acquiring entity (if not the Company) assumes by written instrument (in form
and substance reasonable satisfactory to the holder hereof) the obligations of
the Company under this Warrant. The above provisions shall apply regardless of
whether or not there would have been a sufficient number of shares of Common
Stock authorized and available

                                     - 5 -
<PAGE>

for issuance upon exercise hereof as of the date of such transaction, and shall
similarly apply to successive reclassifications, consolidations, mergers, sales,
transfers or share exchanges.

      (c)   Distributions. If, at any time during the Exercise Period, the
Company shall declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock as a partial liquidating
dividend, by way of return of capital or otherwise (including any dividend or
distribution to the Company's stockholders in cash or shares (or rights to
acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a
"DISTRIBUTION"), then the holder hereof shall be entitled, upon any exercise of
this Warrant after the date of record for determining stockholders entitled to
such Distribution (or if no such record is taken, the date on which such
Distribution is declared or made), to receive the amount of such assets which
would have been payable to the holder with respect to the Warrant Shares
issuable upon such exercise (without giving effect to the limitations contained
in Section 10) had the holder hereof been the holder of such Warrant Shares on
the record date for the determination of stockholders entitled to such
Distribution (or if no such record is taken, the date on which such Distribution
is declared or made).

      (d)   Convertible Securities and Purchase Rights. If, at any time during
the Exercise Period, the Company issues any securities or other instruments
which are convertible into or exercisable or exchangeable for Common Stock
("CONVERTIBLE SECURITIES") or options, warrants or other rights to purchase or
subscribe for Common Stock or Convertible Securities ("PURCHASE RIGHTS") pro
rata to the record holders of any class of Common Stock, whether or not such
Convertible Securities or Purchase Rights are immediately convertible,
exercisable or exchangeable, then the holder hereof shall be entitled, upon any
exercise of this Warrant after the date of record for determining stockholders
entitled to receive such Convertible Securities or Purchase Rights (or if no
such record is taken, the date on which such Convertible Securities or Purchase
Rights are issued), to receive the aggregate number of Convertible Securities or
Purchase Rights which the holder would have received with respect to the Warrant
Shares issuable upon such exercise (without giving effect to the limitations
contained in Section 10) had the holder hereof been the holder of such Warrant
Shares on the record date for the determination of stockholders entitled to
receive such Convertible Securities or Purchase Rights (or if no such record is
taken, the date on which such Convertible Securities or Purchase Rights were
issued). If the right to exercise or convert any such Convertible Securities or
Purchase Rights would expire in accordance with their terms prior to the
exercise of this Warrant, then the terms of such Convertible Securities or
Purchase Rights shall provide that such exercise or convertibility right shall
remain in effect until 30 days after the date the holder receives such
Convertible Securities or Purchase Rights pursuant to the exercise hereof.

      (e)   Dilutive Issuances.

            (i)   Adjustment Upon Dilutive Issuance. If, at any time the Company
issues or sells, or in accordance with Section 4(e) is deemed to have issued or
sold, any shares of Common Stock for no consideration or for a consideration per
share less than the Exercise Price in effect on the date of issuance or sale (or
deemed issuance or sale) (a "DILUTIVE ISSUANCE"), then effective immediately
upon the Dilutive Issuance, the Exercise Price shall be adjusted in accordance
with the following formula:

                                     - 6 -
<PAGE>

            AEP = C x O+P/C
                      -----
                      CSDO

where:

      AEP   = the adjusted Exercise Price;

      C     = the Exercise Price on (a) for purposes of any private sale of
securities exempt from registration under Section 3(b) or 4(2) of the Securities
Act, the date that the Company enters into legally binding definitive agreements
for the issuance of such Common Stock, and (b) for purposes of any other such
issuance of Common Stock, the date of issuance thereof;

      O     = the number of shares of Common Stock outstanding immediately prior
to the Dilutive Issuance;

      P     = the aggregate consideration, calculated as set forth in Section
4(e)(ii) hereof, received by the Company upon such Dilutive Issuance; and

      CSDO  = the total number of shares of Common Stock actually outstanding
(after giving effect to the Dilutive Issuance, and not including shares of
Common Stock held in the treasury of the Company), plus (a) in the case of any
adjustment required by this Section 4(e)(i) due to the issuance of Purchase
Rights, the maximum total number of shares of Common Stock issuable upon the
exercise of the Purchase Rights for which the adjustment is required (including
any Common Stock issuable upon the conversion of Convertible Securities issuable
upon the exercise of such Purchase Rights), and (y) in the case of any
adjustment required by this Section 4(e)(i) due to the issuance of Convertible
Securities, the maximum total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of the Convertible Securities for which the
adjustment is required, as of the date of issuance of such Convertible
Securities, if any.

            (ii)  Notwithstanding the foregoing, no adjustment shall be made to
this Section 4 if such adjustment would result in an increase in the Exercise
Price.

            (iii) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under clause (i) of this Section 4(e),
the following will be applicable:

                  (1)   Issuance of Purchase Rights. If the Company issues or
sells any Purchase Rights, whether or not immediately exercisable, and the price
per share for which Common Stock is issuable upon the exercise of such Purchase
Rights (and the price of any conversion of Convertible Securities, if
applicable) is less than the Exercise Price in effect on the date of issuance or
sale of such Purchase Rights, then the maximum total number of shares of Common
Stock issuable upon the exercise of all such Purchase Rights (assuming full
conversion, exercise or exchange of Convertible Securities, if applicable)
shall, as of the date of the issuance or sale of such Purchase Rights, be deemed
to be outstanding and to have been issued and sold by the Company for such price
per share. For purposes of the preceding sentence, the "price per share for
which Common Stock is issuable upon the exercise of such Purchase Rights" shall
be determined by dividing (A) the total amount, if any, received or receivable
by the Company as

                                     - 7 -
<PAGE>

consideration for the issuance or sale of all such Purchase Rights, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Purchase Rights, plus, in the case of
Convertible Securities issuable upon the exercise of such Purchase Rights, the
minimum aggregate amount of additional consideration payable upon the
conversion, exercise or exchange thereof (determined in accordance with the
calculation method set forth in clause (ii)(2) of this Section 4(e)) at the time
such Convertible Securities first become convertible, exercisable or
exchangeable, by (B) the maximum total number of shares of Common Stock issuable
upon the exercise of all such Purchase Rights (assuming full conversion,
exercise or exchange of Convertible Securities, if applicable). No further
adjustment to the Exercise Price shall be made upon the actual issuance of such
Common Stock upon the exercise of such Purchase Rights or upon the conversion,
exercise or exchange of Convertible Securities issuable upon exercise of such
Purchase Rights.

                  (2)   Issuance of Convertible Securities. If the Company
issues or sells any Convertible Securities, whether or not immediately
convertible, exercisable or exchangeable, and the price per share for which
Common Stock is issuable upon such conversion, exercise or exchange is less than
the Exercise Price in effect on the date of issuance or sale of such Convertible
Securities, then the maximum total number of shares of Common Stock issuable
upon the conversion, exercise or exchange of all such Convertible Securities
shall, as of the date of the issuance or sale of such Convertible Securities, be
deemed to be outstanding and to have been issued and sold by the Company for
such price per share. If the Convertible Securities so issued or sold do not
have a fluctuating conversion or exercise price or exchange ratio, then for the
purposes of the preceding sentence, the "price per share for which Common Stock
is issuable upon such conversion, exercise or exchange" shall be determined by
dividing (A) the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion, exercise or exchange thereof (determined in
accordance with the calculation method set forth in this clause (ii)(2) of this
Section 4(e)) at the time such Convertible Securities first become convertible,
exercisable or exchangeable, by (B) the maximum total number of shares of Common
Stock issuable upon the exercise, conversion or exchange of all such Convertible
Securities. If the Convertible Securities so issued or sold have a fluctuating
conversion or exercise price or exchange ratio (a "VARIABLE RATE CONVERTIBLE
SECURITY"), then for purposes of the next preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion, exercise or
exchange" shall be deemed to be the lowest price per share which would be
applicable (assuming all holding period and other conditions to any discounts
contained in such Variable Rate Convertible Security have been satisfied) if the
conversion price of such Variable Rate Convertible Security on the date of
issuance or sale thereof was seventy-five percent (75%) of the actual conversion
price on such date (the "ASSUMED VARIABLE MARKET PRICE"), and, further, if the
conversion price of such Variable Rate Convertible Security at any time or times
thereafter is less than or equal to the Assumed Variable Market Price last used
for making any adjustment under this Section 4(e) with respect to any Variable
Rate Convertible Security, the Exercise Price in effect at such time shall be
readjusted to equal the Exercise Price which would have resulted if the Assumed
Variable Market Price at the time of issuance of the Variable Rate Convertible
Security had been seventy-five percent (75%) of the actual conversion price of
such Variable Rate Convertible Security existing at the time of the adjustment
required by this sentence. No further adjustment to the

                                     - 8 -
<PAGE>

Exercise Price shall be made upon the actual issuance of such Common Stock upon
conversion, exercise or exchange of such Convertible Securities.

                  (3)   Change in Option Price or Conversion Rate. If there is a
change at any time in (A) the amount of additional consideration payable to the
Company upon the exercise of any Purchase Rights; (B) the amount of additional
consideration, if any, payable to the Company upon the conversion, exercise or
exchange of any Convertible Securities; or (C) the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for Common Stock
(in each such case, other than under or by reason of provisions designed to
protect against dilution), the Exercise Price in effect at the time of such
change shall be readjusted to the Exercise Price which would have been in effect
at such time had such Purchase Rights or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion, exercise or exchange rate, as the case may be, at the time initially
issued or sold.

                  (4)   Calculation of Consideration Received. If any Common
Stock, Purchase Rights or Convertible Securities are issued or sold for cash,
the consideration received therefor will be the amount received by the Company
therefor, after deduction of all underwriting discounts or allowances in
connection with such issuance, grant or sale. In case any Common Stock, Purchase
Rights or Convertible Securities are issued or sold for a consideration part or
all of which shall be other than cash, including in the case of a strategic or
similar arrangement in which the other entity will provide services to the
Company, purchase services from the Company or otherwise provide intangible
consideration to the Company, the amount of the consideration other than cash
received by the Company (including the net present value of the consideration
expected by the Company for the provided or purchased services) shall be the
fair market value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Company will be the Market Price thereof as of the date of receipt. In case
any Common Stock, Purchase Rights or Convertible Securities are issued in
connection with any merger or consolidation in which the Company is the
surviving corporation, the amount of consideration therefor will be deemed to be
the fair market value of such portion of the net assets and business of the
non-surviving corporation as is attributable to such Common Stock, Purchase
Rights or Convertible Securities, as the case may be. Notwithstanding anything
else herein to the contrary, if Common Stock, Purchase Rights or Convertible
Securities are issued or sold in conjunction with each other as part of a single
transaction or in a series of related transactions, the holder hereof may elect
to determine the amount of consideration deemed to be received by the Company
therefor by deducting the fair value of any type of securities (the "DISREGARDED
SECURITIES") issued or sold in such transaction or series of transactions. If
the holder makes an election pursuant to the immediately preceding sentence, no
adjustment to the Exercise Price shall be made pursuant to this Section 4(e) for
the issuance of the Disregarded Securities or upon any conversion, exercise or
exchange thereof. For example, if the Company were to issue convertible notes
having a face value of $1,000,000 and warrants to purchase shares of Common
Stock at an exercise price equal to the Market Price of the Common Stock on the
date of issuance of such warrants in exchange for $1,000,000 of consideration,
the fair value of the warrants would be subtracted from the $1,000,000 of
consideration received by the Company for the purposes of determining whether
the shares of Common Stock issuable upon conversion of the convertible notes
shall be deemed to be issued at a price per share below Exercise Price and, if
so, for purposes of determining any

                                     - 9 -
<PAGE>

adjustment to the Exercise Price hereunder as a result of the issuance of the
convertible notes. The Company shall calculate, using standard commercial
valuation methods appropriate for valuing such assets, the fair market value of
any consideration other than cash or securities; provided, however, that if the
holder hereof does not agree to such fair market value calculation within three
business days after receipt thereof from the Company, then such fair market
value shall be determined in good faith by an investment banker or other
appropriate expert of national reputation selected by the Company and reasonably
acceptable to the holder, with the costs of such appraisal to be borne by the
Company.

                  (5)   Issuances Pursuant to Existing Securities. If the
Company issues (or becomes obligated to issue) shares of Common Stock pursuant
to any antidilution or similar adjustments (other than as a result of stock
splits, stock dividends and the like) contained in any Convertible Securities or
Purchase Rights outstanding as of the date hereof but not included in Section
3(c) of the Disclosure Schedule to the Securities Purchase Agreement, then all
shares of Common Stock so issued shall be deemed to have been issued for no
consideration. If the Company issues (or becomes obligated to issue) shares of
Common Stock pursuant to any antidilution or similar adjustments contained in
any Convertible Securities or Purchase Rights included in Section 3(c) of the
Disclosure Schedule to the Securities Purchase Agreement as a result of the
issuance of the Units (as that term is defined in the Securities Purchase
Agreement) or Warrants pursuant to the Securities Purchase Agreement and the
number of shares that the Company issues (or is obligated to issue) as a result
of such initial issuance exceeds the amount specified in Section 3(c) of the
Disclosure Schedule to the Securities Purchase Agreement, such excess shares
shall be deemed to have been issued for no consideration.

                  (6)   Exceptions to Adjustment of Exercise Price.
Notwithstanding the foregoing, no adjustment to the Exercise Price shall be made
upon (A) this issuance of Common Stock upon the exercise or conversion of any
Convertible Securities or Purchase Rights outstanding on the date hereof and
described in Section 3(c) of the Disclosure Schedule to the Securities Purchase
Agreement in accordance with the terms of such Convertible Securities and
Purchase Rights as of such date; (B) the grant of options to purchase Common
Stock, with exercise prices not less than the closing price of the Common Stock
on the Nasdaq SmallCap Market (or such other exchange or quotation service where
the Common Stock may then be listed or quoted) on the date of grant, which are
issued to employees, officers, directors or consultants of the Company for the
primary purpose of soliciting or retaining their employment or service pursuant
to an equity compensation plan approved by the Company's Board of Directors, and
the issuance of shares of Common Stock upon the exercise thereof; (C) exercise
of the Warrants, (D) the issuance of securities in connection with strategic
business partnerships or joint ventures, the primary purpose of which, in the
reasonable judgment of the Board of Directors, is not to raise additional
capital, or (E) the issuance of securities pursuant to any equipment financing
from a bank or similar financial or lending institution approved by the Board of
Directors.

      (f)   Other Action Affecting Exercise Price. If, at any time during the
Exercise Period, the Company takes any action affecting the Common Stock that
would be covered by Section 4(a) through (e), but for the manner in which such
action is taken or structured, which would in any way diminish the value of this
Warrant, then the Exercise Price shall be adjusted in such

                                     - 10 -
<PAGE>

manner as the Board of Directors of the Company shall in good faith determine to
be equitable under the circumstances.

      (g)   Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 4, the number of shares of
Common Stock issuable upon exercise of this Warrant at each such Exercise Price
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant at such Exercise Price immediately prior
to such adjustment and dividing the product so obtained by the adjusted Exercise
Price.

      (h)   Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment or readjustment of the Exercise Price or change in
number or type of stock, securities and/or other property issuable upon exercise
of this Warrant, then, and in each such case, the Company shall give notice
thereof to the holder hereof, which notice shall state the Exercise Price
resulting from such adjustment or readjustment and any change in the number of
type of stock, securities and/or other property issuable upon exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the chief financial officer of the Company.

      (i)   No Fractional Shares. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

      (j)   Other Notices. In case at any time:

            (i)   the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution (other
than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;

            (ii)  the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

            (iii) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all of its assets to, another
corporation or entity; or

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

then, in each such case, the Company shall give to the holder of this Warrant
(A) notice of the date or estimated date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation

                                     - 11 -
<PAGE>

or winding-up and (B) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable estimate thereof by the Company)
when the same shall take place. Such notice shall also specify the date on which
the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least thirty (30)
days prior to the record date or the date on which the Company's books are
closed in respect thereto. Failure to give any such notice or any defect therein
shall not affect the validity of the proceedings referred to in clauses (i),
(ii), (iii) and (iv) above. Notwithstanding the foregoing, the Company shall
publicly disclose the substance of any notice delivered hereunder prior to
delivery of such notice to the holder hereof.

5.    Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company 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 the holder of this Warrant.

6.    No Rights or Liabilities as a Shareholder. This Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

7.    Transfer, Exchange, Redemption and Replacement of Warrant.

      (a)   Restriction on Transfer. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Sections 7(f) and 10 hereof and to the provisions of
Section 5 of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Section 8 hereof are assignable only in accordance with the provisions of the
Registration Rights Agreement.

      (b)   Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase the number of shares of Common Stock which may be purchased hereunder,
each of such new Warrants to represent the right to purchase such number of
shares (at the Exercise Price therefor) as shall be designated by the holder
hereof at the time of such surrender.

                                     - 12 -
<PAGE>

      (c)   Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      (d)   Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder of this
Warrant or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 7. The Company
shall indemnify and reimburse the holder of this Warrant for all losses and
damages arising as a result of or related to any breach of the terms of this
Warrant, including costs and expenses (including legal fees) incurred by such
holder in connection with the enforcement of its rights hereunder.

      (e)   Warrant Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

      (f)   Transfer or Exchange Without Registration. If, at the time of the
surrender of this Warrant in connection with any transfer or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder) shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer or exchange may be made without registration under the Securities
Act and under applicable state securities or blue sky laws (the cost of which
shall be borne by the Company if the Company's counsel renders such an opinion,
and up to $1,000 of such cost shall be borne by the Company if the holder's
counsel is required to render such opinion), (ii) that the holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an "ACCREDITED
INVESTOR" as defined in Rule 501(a) promulgated under the Securities Act;
provided, however, that no such letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.

8.    Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in the Registration Rights
Agreement, including the right to assign such rights to certain assignees, as
set forth therein.

                                     - 13 -
<PAGE>

9.    Cashless Exercise. If at any time during the Exercise Period any of the
Warrant Shares are not registered pursuant to the terms of the Registration
Rights Agreement (such period being referred to as a "REGISTRATION FAILURE
PERIOD"), then, during such Registration Failure Period, this Warrant may be
exercised by presentation and surrender of this Warrant to the Company at its
principal executive offices with a written notice of the holder's intention to
effect a cashless exercise, including a calculation of the number of shares of
Common Stock to be issued upon such exercise in accordance with the terms hereof
(a "CASHLESS EXERCISE"). In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of Warrant
Shares to which it would otherwise be entitled by a fraction, the numerator of
which shall be the difference between the then current Market Price of a share
of the Common Stock on the date of exercise and the Exercise Price, and the
denominator of which shall be the then current Market Price per share of Common
Stock.

10.   Additional Restrictions on Exercise and Transfer. The exercise and
transfer of this Warrant shall be subject to the following limitations (each of
which limitations shall be applied independently):

      (a)   Cap Amount. If the Company is prohibited by Rule 4350(i) of the
National Association of Securities Dealers, Inc. ("NASD"), or any successor or
similar rule, or the rules or regulations of any other securities exchange on
which the Common Stock is then listed or traded, from issuing a number of shares
of Common Stock upon exercise of this Warrant (together with any shares of
Common Stock issued pursuant to other securities issued pursuant to the
Securities Purchase Agreement or other agreements entered in connection
therewith) in excess of a prescribed amount (the "CAP AMOUNT") (without
stockholder approval or otherwise), then the Company shall not issue shares upon
any such exercise in excess of the Cap Amount. Assuming solely for purposes of
this Section 10(a) that such Rule 4350(i) or similar rule is applicable, the Cap
Amount shall be 19.99% of the Common Stock outstanding immediately prior to the
date hereof. The Cap Amount shall be allocated pro rata to the holders of
Warrants (and the holders of such other securities issued pursuant to the
Securities Purchase Agreement or other agreements entered in connection
therewith) as provided in Section 12(h). In the event that the Company is
prohibited from issuing shares of Common Stock upon any exercise of this Warrant
as a result of the operation of this Section 10(a), the Company shall
immediately notify the holder hereof of such occurrence and the holder shall
thereafter have the option, exercisable in whole or in part at any time and from
time to time, by delivery of written notice to such effect (a "REDEMPTION
NOTICE") to the Company, to require the Company to redeem for cash, at an amount
per share equal to the Redemption Amount (as defined below), a portion of this
Warrant such that, after giving effect to such redemption, the then unissued
portion of the holder's Cap Amount is at least equal to one hundred percent
(100%) of the total number of shares of Common Stock issuable upon exercise of
this Warrant in full. If the Company fails to redeem such portion of this
Warrant within five business days after its receipt of such Redemption Notice,
then the holder hereof shall be entitled to interest on the Redemption Amount at
a per annum rate equal to the lower of twenty-four percent (24%) and the highest
interest rate permitted by applicable law from the date on which such Redemption
Amount is required to be paid hereunder until the actual date of payment of the
Redemption Amount hereunder. For purposes of this Section 10(a), the "REDEMPTION
AMOUNT" equals (i) the value of that portion of the Warrant being so redeemed
derived using the Black-Scholes formula (using Bloomberg) as

                                     - 14 -
<PAGE>

of the date on which the holder gives the Redemption Notice, assuming the
volatility of the Company's Common Stock equals 60% and the risk-free interest
rate equals 3% per annum, multiplied by (ii) 105%.

      (b)   Additional Restrictions on Exercise and Transfer. In no event shall
the holder hereof have the right to exercise any portion of this Warrant for
shares of Common Stock or to dispose of any portion of this Warrant to the
extent that such right to effect such exercise or disposition would result in
the holder and its affiliates together beneficially owning more than 9.99% of
the outstanding shares of Common Stock. For purposes of this Section 10(b),
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder.
The restriction contained in this Section 10(b) may not be altered, amended,
deleted or changed in any manner whatsoever unless the holders of a majority of
the outstanding shares of Common Stock and the holder hereof shall approve, in
writing, such alteration, amendment, deletion or change.

11.   Certain Definitions. For purposes of this Warrant, the following
capitalized terms shall have the respective meanings assigned to them:

      (a)   "BUSINESS DAY" means any day, other than a Saturday or Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law, regulation or executive order to close.

      (b)   "MARKET PRICE" means, for any security as of any date, the lesser of
(i) the volume weighted average price of such security for the five trading days
immediately preceding such date, or (ii) the volume weighted average price of
such security on such date, in either case on the principal trading market where
such security is listed or traded as reported by Bloomberg Financial Markets (or
a comparable reporting service of national reputation selected by the Company
and reasonably acceptable to the holder hereof if Bloomberg Financial Markets is
not then reporting closing sales prices of such security) (in any case,
"BLOOMBERG"), or if the foregoing does not apply, the last reported sales price
of such security on a national exchange or in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
such price is reported for such security by Bloomberg, the average of the bid
prices of all market makers for such security as reported in the "pink sheets"
by the National Quotation Bureau, Inc., in each case for such date or, if such
date was not a trading day for such security, on the next preceding date which
was a trading day. If the Market Price cannot be calculated for such security as
of either of such dates on any of the foregoing bases, the Market Price of such
security on such date shall be the fair market value as reasonably determined by
an investment banking firm selected by the Company and reasonably acceptable to
the holder hereof, with the costs of such appraisal to be borne by the Company.

      (c)   "TRADING DAY" means any day on which principal United States
securities exchange or trading market where the Common Stock is then listed or
traded, is open for trading.

                                     - 15 -
<PAGE>

12.   Miscellaneous.

      (a)   Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in the County of New Castle, State of Delaware, in any
suit or proceeding based on or arising under this Warrant and irrevocably agrees
that all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives the defense of an inconvenient forum to
the maintenance of such suit or proceeding in such forum. The Company further
agrees that service of process upon the Company mailed by first class mail shall
be deemed in every respect effective service of process upon the Company in any
such suit or proceeding. Nothing herein shall affect the right of the holder to
serve process in any other manner permitted by law. The Company agrees that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.

      (b)   Construction. Whenever the context requires, the gender of any word
used in this Warrant includes the masculine, feminine or neuter, and the number
of any word includes the singular or plural. Unless the context otherwise
requires, all references to articles and sections refer to articles and sections
of this Warrant, and all references to schedules are to schedules attached
hereto, each of which is made a part hereof for all purposes. The descriptive
headings of the several articles and sections of this Warrant are inserted for
purposes of reference only, and shall not affect the meaning or construction of
any of the provisions hereof.

      (c)   Severability. If any provision of this Warrant shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Warrant or the
validity or enforceability of this Warrant in any other jurisdiction.

      (d)   Entire Agreement; Amendments. This Warrant contains the entire
understanding of the Company and the holder hereof with respect to the matters
covered herein. Subject to any additional express provisions of this Warrant, no
provision of this Warrant may be waived other than by an instrument in writing
signed by the party to be charged with enforcement, and no provision of this
Warrant may be amended other than by an instrument in writing signed by the
Company and the holder.

                                     - 16 -
<PAGE>

      (e)   Notices. Any notices required or permitted to be given under the
terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally, by nationally recognized overnight
carrier or by confirmed facsimile transmission, and shall be effective five days
after being placed in the mail, if mailed, or upon receipt or refusal of
receipt, if delivered personally or by nationally recognized overnight carrier
or confirmed facsimile transmission, in each case addressed to a party. The
initial addresses for such communications shall be as follows, and each party
shall provide notice to the other parties of any change in such party's address:

            (i)   If to the Company:

                  QSound Labs, Inc.
                  400 - 3115 12th Street NE
                  Calgary, AB T2E 7J2
                  Telephone: (403) 291-2492
                  Facsimile: (403) 250-1521
                  Attention: David Gallagher

                  with a copy to Joanna Varvos, Esq.
                  as above

            (ii)  If to the holder, at such address as shall be set forth in the
Warrant Register from time to time.

      (f)   Successors and Assigns. This Warrant shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Except as
provided herein, the Company shall not assign this Warrant or its obligations
hereunder. The holder hereof may assign or transfer this Warrant and such
holders rights hereunder in accordance with Section 7 hereof.

      (g)   Equitable Relief. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder by vitiating
the intent and purpose of this Warrant. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations hereunder will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Warrant, that the holder shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.

      (h)   Allocation of Cap Amount. The initial Cap Amount shall be allocated
pro rata among the holders of the Warrants (and the holders of such other
securities issued pursuant to the Securities Purchase Agreement or other
agreements entered in connection therewith) based on the number of Warrant
Shares issuable upon exercise of the Warrants (and such other securities) issued
to each such holder. Each increase to the Cap Amount shall be allocated pro rata
among the holders of the Warrants (and the holders of such other securities
issued pursuant to the Securities Purchase Agreement or other agreements entered
in connection therewith) based on the number of Warrant Shares issuable upon
exercise of the Warrants (and such other securities) held by each holder at the
time of the increase in the Cap Amount. In the event the holder shall

                                     - 17 -
<PAGE>

sell or otherwise transfer any of the holder's Warrants (or any such other
securities), each transferee shall be allocated a pro rata portion of such
transferor's Cap Amount. Any portion of the Cap Amount which remains allocated
to any person or entity which does not hold any Warrants (or any such other
securities) shall be allocated to the remaining holders of the Warrants (and the
holders of such other securities issued pursuant to the Securities Purchase
Agreement or other agreements entered in connection therewith), pro rata based
on the number of Warrant Shares issuable upon exercise of the Warrants (and such
other securities) then held by such holders.

                [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

                                     - 18 -
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                      QSOUND LABS, INC.

                                      By:__________________________________
                                      Name:
                                      Title:

                      [SIGNATURE PAGE TO SERIES A WARRANT]

<PAGE>

                           FORM OF EXERCISE AGREEMENT

         (TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE THE WARRANT)

To:   QSound Labs, Inc.
      400 - 3115 12th Street NE
      Calgary, AB T2E 7J2
      Facsimile: (403) 250-1521
      Attention: Chief Executive Officer

      The undersigned hereby irrevocably exercises the right to purchase
_____________ shares of the Common Stock of QSound Labs, Inc., a corporation
organized under the laws of Alberta, Canada, (the "COMPANY"), evidenced by the
attached Warrant, and herewith [makes payment of the Exercise Price with respect
to such shares in full][elects to effect a Cashless Exercise (as defined in
Section 9 of such Warrant)], all in accordance with the conditions and
provisions of said Warrant.

      The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.

      The undersigned represents, warrants and certifies as follows (one (only)
of the following must be checked):

            [ ] The undersigned is an "accredited investor" (as that term is
            defined under Rule 501(a) as promulgated under Regulation D of the
            United States Securities Act of 1933, as amended, is exercising this
            warrant on its own behalf and not for the account or benefit of any
            other person and the representations and warranties made to the
            Company in connection with the acquisition of this warrant remain
            true and correct.

            [ ] The undersigned has delivered to the Company an opinion of
            counsel or such other evidence (which will not be sufficient unless
            it is satisfactory to the Company) to the effect that an exemption
            from the registration requirements of the 1933 Act and applicable
            state securities laws is available.

      Check one of the following:

            [ ] The undersigned requests that the Company cause its transfer
            agent to electronically transmit the Common Stock issuable pursuant
            to this Exercise Agreement to the account of the undersigned or its
            nominee (which is _________________) with DTC through its Deposit
            Withdrawal Agent Commission System ("DTC TRANSFER"), provided that
            such transfer agent participates in the DTC Fast Automated
            Securities Transfer program.

            [ ] In lieu of receiving the shares of Common Stock issuable
            pursuant to this Exercise Agreement by way of DTC Transfer, the
            undersigned hereby requests that the Company cause its transfer
            agent to issue and deliver to the undersigned physical certificates
            representing such shares of Common Stock.

<PAGE>

The undersigned requests that a Warrant representing any unexercised portion
hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered to the undersigned at the address set forth below:

Dated:_________________                    _____________________________________
                                                    Signature of Holder

                                           _____________________________________
                                                   Name of Holder (Print)

                                                   Address:
                                           _____________________________________
                                           _____________________________________
                                           _____________________________________

<PAGE>

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

<TABLE>
<CAPTION>
Name of Assignee               Address                      No. of Shares
----------------               -------                      -------------
<S>                            <C>                          <C>
</TABLE>

, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated: _____________________, ____

In the presence of

_____________________

                                     Name:______________________________________

                                     Signature:_________________________________
                                     Title of Signing Officer or Agent (if any):

                                     ___________________________________________

                                     Address:___________________________________
                                             ___________________________________
                                             ___________________________________

                                     Note: The above signature should correspond
                                           exactly with the name on the face of
                                           the within Warrant.

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