Document:

***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.
================================================================================

                                                                   EXHIBIT 10.34

                           CONVERTIBLE LOAN AGREEMENT

     This  Convertible  Loan  Agreement   ("Agreement"  including  all  annexes,
exhibits  and  schedules  hereto,  and as from time to time  amended,  restated,
supplemented or otherwise  modified) is made as of March 8, 2002, among Infowave
Software, Inc., a British Columbia corporation (together with its successors and
permitted assigns  hereinafter  referred to as the "Borrower") and Compaq Cayman
Islands  Investment  Company,  a  Cayman  Islands  company  (together  with  its
successors,   permitted  assigns  and  Affiliates  are  referred  to  herein  as
"Compaq").

                              PRELIMINARY STATEMENT

     A. The Borrower is entering into a Strategic  Alliance and Sales  Agreement
(the "Strategic  Alliance and Sales Agreement"  including all annexes,  exhibits
and schedules thereto, and as from time to time amended, restated,  supplemented
or otherwise modified) contemporaneously herewith which sets forth certain terms
related to the ongoing business relationship between the Borrower and Compaq.

     B. In  conjunction  with  the  increased  business  relations  between  the
Borrower and Compaq,  Compaq has agreed to provide the Borrower with a revolving
loan as provided for in this Agreement and that certain  Convertible  Promissory
Note (the "Note") which the Borrower shall issue in the name of Compaq  pursuant
to the terms of this  Agreement  in  substantially  the same  form as  Exhibit A
wherein the Borrower promises to pay to Compaq the principal amount  outstanding
thereunder and interest thereon.

                                    AGREEMENT

     In  consideration  of the  promises  of  the  parties  set  forth  in  this
Agreement, and intending to be legally bound, the parties agree as follows:

                                   ARTICLE 1

                          DEFINITIONS AND USE OF TERMS

1.1   DEFINITIONS

     As used in this  Agreement,  the  following  terms shall have the following
respective meanings:

     "1933 Act" means the Securities Act of 1933.

     "1934 Act" means the Securities Exchange Act of 1934.

     "Accounts" has the meaning set forth in the PPSA.

     "Account  Debtor"  means a Person  with an Account  due to, or owing to, or
obligated upon such Account to the Borrower.

<PAGE>

     "Affiliate"  means, with respect to any Person: (i) each other Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary,  five percent (5%) or more of the securities having
ordinary  voting power for the  election of directors of such Person;  (ii) each
other Person that  controls,  is controlled  by or is under common  control with
such Person or any  Affiliate  of such  Person;  or (iii) each of such  Person's
officers,  directors,  joint  venturers  and  partners.  For the purpose of this
definition,  "control"  of a Person  shall  mean  the  possession,  directly  or
indirectly,  of the power to direct or cause the direction of its  management or
policies,  whether  through the  ownership of voting  securities,  by control or
otherwise.

     "Agreement"  means this Convertible Loan Agreement,  including all annexes,
exhibits  and  schedules  hereto,  and as from time to time  amended,  restated,
supplemented or otherwise modified.

     "Annual Budget" means with respect to any fiscal year of the Borrower,  the
consolidated  capital and operating  expense budgets,  cash flow projections and
income and loss  projections for the Borrower and its Subsidiaries in respect of
such fiscal year,  all itemized in  reasonable  detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing.

     "Articles" means the articles of the Borrower.

     "Board" means the Board of Directors of the Borrower.

     "Borrower  Intellectual  Property"  means all  patents,  trademarks,  trade
names,  service  marks,  trade dress,  Internet  domain names and world wide web
addresses,  copyrights,  industrial  designs and any  licenses,  renewal  rights
therefore, mask works, schematics, technology, manufacturing processes, supplier
lists,  trade  secrets,  know-how,  Software,  technical  documentation  of  the
Software,  registrations and applications for any of the foregoing and all other
tangible or intangible  proprietary  information  or materials  that are or have
been used in (including in the  development  of) the  Borrower's,  including its
Subsidiaries',  business  and/or  in any  product,  technology  or  process  (a)
currently  being  manufactured,  published  or marketed  by the  Borrower or any
Subsidiary,   or  (b)   currently   under   development   for  possible   future
manufacturing,  publication,  marketing  or  other  use by the  Borrower  or any
Subsidiary.

     "Borrower   Representative"   means  any   employee,   officer,   director,
independent contractor,  consultant, agent and representative of the Borrower or
its Subsidiaries.

     "Borrowing  Availability"  shall have the meaning assigned to it in Section
2.1(a).

     "Borrowing  Base" shall mean,  from time to time,  an amount  calculated as
follows:

     (a)  from the Closing  Date until the earlier of December  31, 2002 and the
          Commitment  Termination Date, (i) all cash and Cash Equivalents of the
          Borrower  (representing  at least  150% of the  outstanding  principal
          balance  outstanding under the Note from time to time),  together with
          all Invoiced

                                       2
<PAGE>

          Advances from Compaq less (ii) any accounts payable by the Borrower to
          Compaq including, without limitation, the amount of the Obligations of
          Borrower   to  Compaq   and  less  (iii)  any   borrowings   from  The
          Toronto-Dominion  Bank  to the  extent  the  same  constitutes  a lien
          referred  to  in  subsection   (l)  of  the  definition  of  Permitted
          Encumbrance hereunder; and

     (b)  from  January  1, 2003  until the  Commitment  Termination  Date,  the
          Working Capital of the Borrower.

     "Borrowing Base Certificate" means the certificate to be duly completed and
attached to each Notice of Credit Advance,  substantially in the form of Exhibit
B attached hereto.

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

     "Cash Equivalents" shall mean:

     (i) bonds, or other evidence of indebtedness of or fully  guaranteed by the
Government of Canada or any Province of Canada,  payable in Canadian  Dollars or
US Dollars and rated A (or the then equivalent grade) or higher by Dominion Bond
Rating  Service  Limited  (DBRS) and having a maturity not in excess of one year
from the date of purchase;

     (ii)  instruments  of deposit or bankers'  acceptances  of or guaranteed or
accepted by any Schedule 1 Canadian Charter Bank;

     (iii)  instruments of deposits or commercial  paper rated R-1 mid or higher
by DBRS with a maturity date of 91 days or less; and

     (iv) any other  instruments  agreed to by Compaq,  in its sole  discretion,
from time to time,

each to the  extent  that they are not  subject  to a right of  set-off or other
claim by or security interest of any Person other than Compaq.

     "Canadian Dollars" or "Cdn$" shall mean lawful currency of Canada.

     "Chattel Paper" shall have the meaning set forth in the PPSA.

     "Closing" is defined in Section 2.7.

     "Closing Date" is defined in Section 2.7.

     "Code" means the Internal Revenue Code of 1986.

     "Code Escrow Agent" means DSI Technology Escrow Services Inc.

                                       3
<PAGE>

     "Code Escrow  Agreement" means the Code Escrow Agreement to be entered into
among the Borrower, Compaq and Code Escrow Agent, in the form attached hereto as
Exhibit C.

     "Collateral"  means the assets in which the Borrower  has granted  Compaq a
security interest pursuant to the Security Agreement.

     "Commission" means the British Columbia Securities Commission.

     "Commitment  Termination Date" shall mean the earliest of (a) March 7, 2005
or such later date as may be in effect if  extended  by Compaq,  (b) the date of
termination of Compaq's  obligations to make Advances or to permit the Revolving
Loan to remain outstanding,  and (c) the date of indefeasible prepayment in full
by Borrower of the Revolving Loan.

     "Common  Stock"  means  the  common  shares  in the  share  capital  of the
Borrower.

     "Compaq Sales" is defined in Section 2.2.

     "Conversion  Securities"  means the  shares of Common  Stock or such  other
securities as are from time to time  issueable  upon the conversion of the Note,
or which have been so issued.

     "Credit Limit" is defined in Section 2.1.

     "Default" shall mean any event which, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.

     "Default  Rate" means the rate of interest  chargeable  under the Note upon
the occurrence of an Event of Default.

     "Disclosure  Schedule" means that schedule  setting forth certain facts and
exceptions to the representations and warranties of the Borrower attached hereto
and made a part of this Agreement as Schedule I.

     "Eligible Accounts" shall have the meaning assigned to it in Section 2.4.

     "Eligible Inventory" shall have the meaning assigned to it in Section 2.5.

     "Employee   Benefit  Plan"  means   collectively,   each  bonus,   deferred
compensation, incentive compensation, stock purchase, stock option, severance or
termination pay, health or other medical,  life,  disability or other insurance,
supplemental   unemployment  benefit,  profit  sharing,   pension,   retirement,
supplemental  retirement or other employee benefit plan,  program,  agreement or
arrangement,  whether  written or unwritten,  formal or informal,  maintained or
contributed to or required to be contributed to by any person for the benefit of
any  employee or former  employee of the  Borrower  or its  affiliates  or their
dependants or beneficiaries,  as well as the compensation practices and policies
regarding  vacations,  sick  leaves,  leaves of absence and all  perquisites  of
employment other than

                                       4
<PAGE>

those  mandated  by any  legal  requirement  and  shall  include  to the  extent
applicable to Borrower, without limitation, "Employee Pension Benefit Plans" (as
defined in Section 3(2) of ERISA),  "Employee  Welfare Benefit Plan" (as defined
in Section 3(1) of ERISA) and "Multi-employer Plan" (as defined in section 3(37)
of ERISA) or under any applicable  Canadian federal or provincial pension or tax
legislation.

     "Encumbrances" means all security interests, pledges, mortgages, hypothecs,
liens,  claims,  charges  or other  encumbrances  of  whatever  kind or  nature,
regardless  of form and whether  consensual  or arising by law,  that secure the
payment of any indebtedness or liability or the performance of any obligation.

     "Environmental   Law"  means  any   present  or  future   federal,   state,
territorial,  provincial,  municipal and local statute, law, by-law, regulation,
ordinance, directives, rule, judgment, administrative or judicial order, decree,
direction,  approval,  permit, grant, licenses,  agreements,  policy, guideline,
code,  standard,  criteria or other  governmental  restrictions  of Canada,  its
provinces,  and of  all  applicable  municipalities  thereof,  or of  any  other
jurisdiction relating to the environment,  any environmental activity or, to the
extent  related  to an  environmental  activity,  health  and  safety and health
protection.

     "Escrow Agent" means HSBC Trust Company (Canada).

     "Escrow  Agreement" means that certain escrow  agreement  entered into even
date herewith between the Borrower, Compaq and the Escrow Agent.

     "Equivalent Amount" shall mean, on any date of determination,  with respect
to obligations or valuations denominated in one currency (the "first currency"),
the amount of another  currency (the "second  currency") which would result from
the  conversion  of the relevant  amount of the first  currency  into the second
currency at the 12:00 noon rate quoted on the Reuters  Monitor Screen (Page BOFC
or such other Page as may replace such Page for the purpose of  displaying  such
exchange  rates) on such date or, if such  date is not a  Business  Day,  on the
Business Day immediately preceding such date of determination,  or at such other
rate as may have been agreed in writing between the Borrower and Compaq.

     "Event of Default" shall have the meaning assigned to it in Section 6.1.

     "Financing  Lease"  means,  at any  time,  any lease of  property,  real or
personal,  moveable  or  immovable  (whether  or not such lease is  intended  as
security),  in  respect  of  which  the  present  value  of the  minimum  rental
commitment  would, in accordance  with Canadian  Generally  Accepted  Accounting
Principles, be capitalized on a balance sheet of a lessee.

     "Financial  Statements"  means to the extent that the Company  continues to
file reports with the US SEC as required under the 1934 Act, those quarterly and
annual  financial  statements of the Borrower  contained in the Borrower's  most
recent  annual  report  on Form  10-K  and any  amendments  on  Form  10-KA  and
subsequent quarterly reports on Form 10-Q or Form 10-QA (or any successor forms)
and any  amendments  thereto,  and to the  extent  the  Company  is no  longer a
reporting  company  under the 1934

                                       5
<PAGE>

Act, a reporting issuer pursuant to the reporting requirements of the Securities
Act or to the extent the  Company is no longer  required  to file its  financial
statements  with  British  Columbia   Securities   Commission  pursuant  to  the
Securities Act, the Company's  consolidated  audited financial  statements as of
and for the 12 month period  ended as of the most recent  fiscal year end of the
Company and the consolidated  interim financial  statements as of and for the as
of the end of and for the  period  to date  ended as of the most  recent  fiscal
quarter end.

     "Governmental Body" means any: (a) nation,  region,  state,  county,  city,
town, village, district, or other jurisdiction;  (b) federal, provincial, state,
local,   municipal,   foreign  or  other   government;   (c)   governmental   or
quasi-governmental  authority of any nature (including any governmental  agency,
branch,  department,  or other  entity  and any  court or other  tribunal);  (d)
multinational  organization;  (e) body exercising,  or entitled to exercise, any
administrative,  executive, judicial, legislative, policy, regulatory, or taxing
authority or power of any nature; and (f) official of any of the foregoing.

     "Hazardous Substances" means any substance listed, classified or defined as
hazardous,  radioactive or toxic or a pollutant or contaminant under or pursuant
to any  Environmental  Laws and any  admixture  or solution  thereof  including,
without  limitation,  oil  and  petroleum  products,  asbestos,  polychlorinated
biphenyls, and urea formaldehyde.

     "Indemnified Liabilities" is defined in Section 8.1.

     "Indemnitee" is defined in Section 8.1.

     "Invoiced  Advances" means,  from time to time, the aggregate sum of unpaid
invoices for goods and services  purchased by Compaq from Borrower ending on the
last Business Day of each fiscal month,  provided that Invoiced  Advances  shall
include the base invoice  price for the goods and  services  purchased by Compaq
and shall exclude any Taxes relating  thereto or shipping,  freight or insurance
costs  payable in  connection  with such  purchases or any amounts  representing
returned or rejected goods or reserves for returns or rejections.

     "IRS" means the U.S. Internal Revenue Service.

     "Inventory" shall have the meaning set out in the PPSA.

     "License  Agreement" means the License  Agreement  entered into between the
Borrower and Compaq of even date herewith.

     "Loan Account" is defined in Section 2.9.

     "Marketing and  Distribution  Agreement"  means that certain  marketing and
distribution  agreement  dated  January  3, 2002  made  between  Compaq  and the
Borrower.

     "Material Adverse Effect" an event or condition would be considered to have
a  "Material  Adverse  Effect" on the  Borrower if it (i)  materially  adversely
affects  the  financial  or other  condition,  results  of  operations,  assets,
liabilities,  equity,  business  or'

                                       6
<PAGE>

prospects  of  the  Borrower  and  any of its  Subsidiaries  (considered  in the
aggregate),  (ii) materially  impedes the ongoing operations of the Borrower and
any of its Subsidiaries,  (iii) significantly adversely affects a material asset
of the Borrower and any of its  Subsidiaries  (considered in the aggregate),  or
(iv) materially adversely affects the value of, or rights accompanying, the Note
or the Conversion Securities.

     "Material  Agreements" means each of the following  agreements to which the
Borrower is a party or by which it or its assets are bound:  (i) all  contracts,
agreements and  instruments  that involve a commitment by the Borrower in excess
of $100,000;  (ii) all stock purchase agreements;  (iii) all loan, lease or debt
agreements  in excess of  $100,000;  (iv) all  agreements  pursuant to which the
Borrower  has  agreed to  guarantee  or act as a surety for the  obligations  of
another Person; (v) all agreements pursuant to which the Borrower has pledged or
granted  a  security  interest  in  any  of  its  assets;  (vi)  all  employment
agreements;  (vii) all collective  bargaining or other agreements with any labor
union;  (viii) all  confidentiality  agreements;  (ix) all agreements  where the
Borrower has limited or restricted its right to compete with any Person; (x) all
licenses of any patent,  trade secret or other  proprietary right to or from the
Borrower;   (xi)  any  existing  or  currently   effective  plan,   contract  or
arrangement,  whether written or oral, providing for bonuses, pensions, deferred
compensation,  severance pay or benefits, retirement payments, profit-sharing or
the like; (xii) all voting trust,  shareholders'  registration  rights,  pledge,
buy-sell,  repurchase,  co-sale,  first refusal, or preemptive rights agreements
relating to any  securities  of the Borrower;  and (xiii) any other  existing or
currently  effective  agreement,  contract or commitment that is material to the
Borrower.

     "Memorandum" means the memorandum of association of the Borrower, in effect
from time to time.

     "Note" is defined in the recitals to this Agreement.

     "Notice of Credit Advance" has the meaning set forth in Section 2.1(a).

     "Obligations"   means  any  and  all  present   and  future   indebtedness,
liabilities  and  obligations,  of whatever kind,  nature and  description,  now
existing or hereafter arising,  due or to become due, of the Borrower to Compaq,
whether  direct  or  indirect,  primary  or  secondary,   secured  or  unsecured
(including overdrafts), absolute or contingent, joint or several, arising out of
or relating to this Agreement,  the Note or the Security  Agreement or any other
Transaction Document, or any other agreement,  document or instrument between or
among the Borrower and Compaq executed and delivered  pursuant thereto;  and any
and all  obligations  of the  Borrower to Compaq to perform acts or refrain from
performing  acts  arising out of or relating to this  Agreement,  the Note,  the
Security  Agreement or any other  Transaction  Document or any other  agreement,
document or  instrument  between or among the Borrower  and Compaq  executed and
delivered pursuant thereto,  and any expenses  (including  reasonable  auditing,
accounting, inspection and legal fees) incurred by Compaq, its receiver or agent
in the enforcement of security or other  agreements held by Compaq in respect of
such Obligations.

                                       7
<PAGE>

     "Permitted  Encumbrances" shall mean the following encumbrances:  (a) liens
for taxes or assessments or other governmental  charges not yet due and payable;
(b) pledges or deposits of money securing  statutory  obligations under worker's
compensation,  unemployment insurance,  social security or public liability laws
or similar legislation (excluding liens under ERISA); (c) pledges or deposits of
money securing bids, enders,  contracts (other than contracts for the payment of
money)  or  leases  to which  the  Borrower  is a party as a lessee  made in the
ordinary course of business; (d) inchoate and unperfected workers' mechanics' or
similar liens arising in the ordinary course of business,  so long as such liens
attach only to  Equipment,  Fixtures  and/or Real  Estate;  (e) rights of unpaid
suppliers  under Section 81.1 of the  Bankruptcy  and Insolvency Act (Canada) or
any  similar   legislation   under  any  other   jurisdiction;   (f)  carriers',
warehousers', suppliers' or any other similar possessory liens (other than those
referred to in subsection (e) above) arising in the ordinary  course of business
and securing  liabilities  in an outstanding  aggregate  amount not in excess of
$500,000 or the equivalent  amount thereof in any other currency at any time, so
long as such liens attach only to Inventory;  (g) deposits securing,  or in lieu
of,  surety,  appeal or customs bonds in  proceedings to which the Borrower is a
party;  (h) any  attachment  or judgment lien not  constituting  a Default or an
Event of Default under Section 6.1; (i) zoning restrictions, easements, licenses
or  other   restrictions   on  the  use  of  any  Real  Estate  or  other  minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially  impair the use, value or  marketability  of such Real Estate;
(j)  presently  existing or  hereinafter  created  liens in favour of the Escrow
Agent, on behalf of Compaq; (k) liens expressly permitted under any other clause
in this Agreement;  (l) Purchase Money Mortgages or Financing  Leases in respect
of equipment  which has an  acquisition  cost of less than  Cdn$100,000  and the
aggregate  acquisition  cost of all such  equipment  subject to  Purchase  Money
Mortgages and Financing  Leases incurred or created in any financial year of the
Borrower,  after  giving  effect  to the  proposed  acquisition,  is  less  than
Cdn$500,000 (which amount shall not be cumulative from one financial year of the
Borrower to another financial year of the Borrower); and (m) liens in connection
with matters described in clause (a)(iii) of the definition of Borrowing Base up
to a maximum  amount not  exceeding  the  amount  owing by the  Borrower  to The
Toronto-Dominion  Bank on the date  hereof  pursuant to the terms of the TD Loan
Agreement, that sum being the aggregate sum of Cdn$139,000 and US$260,000.

     "Person" shall have the meaning set forth in the Securities Act.

     "PPSA" means Personal Property Security Act (British  Columbia) adopted and
amended  from  time to  time,  and  includes  all  regulations,  amendments  and
substitutions thereto.

     "Premises" is defined in Section 3.17.

     "Prime   Rate"   shall  mean  the  rate  of  interest   announced   by  The
Toronto-Dominion  Bank  from  time to  time as its  prime  commercial  rate,  or
equivalent,  as in  effect  on such  day,  with any  change  in the  Prime  Rate
resulting from a change in said prime  commercial rate to be effective as of the
date of the relevant change in said prime commercial rate.

                                       8
<PAGE>

     "Proceeds" has the meaning set forth in the PPSA.

     "Public Record Documents" is defined in Section 3.4.

     "Purchase  Money  Mortgages"  means any lien  given,  whether or not to the
transferor,  assumed  or arising by  operation  of law after the date  hereof to
provide or secure or to provide the  obligor  with funds to pay the whole or any
part of the  consideration  for the  acquisition of property where the principal
amount of such lien is not in excess of the cost to the obligor of the  property
encumbered  thereby and is secured  only by the property  being  acquired by the
obligor and includes the renewal,  extension or refinancing of any such lien and
of the indebtedness represented thereby upon the same property provided that the
indebtedness  secured  thereby  and the  security  therefor  are  not  increased
thereby.

     "Regulation S" means Regulation S under the 1933 Act.

     "Revolving Loan" is defined in Section 2.1.

     "Revolving Loan Advances" shall have the meaning  assigned to it in Section
2.1(b).

     "Sales Threshold" is defined in Section 2.2(b).

     "Securities Act" means Securities Act (British  Columbia),  as amended from
time to time.

     "Security  Agreement" means that certain  Security  Agreement being entered
into concurrently herewith between the Company and Compaq.

     "Software" means computer software programs or applications (in both source
and object code form) which are developed, owned or licensed by the Borrower.

     "Specified  Person"  means  those  persons  set out in  Exhibit B  appended
hereto, and their Affiliates.

     "Strategic  Alliance and Sales  Agreement" has the meaning set forth in the
preliminary statement of this Agreement.

     "Subsidiary" means, as to the Borrower, any corporation, limited liability,
company, partnership, joint venture, trust or other Person with respect to which
the  Borrower  either  directly  or  indirectly  through  one  or  more  of  its
subsidiaries,  owns or controls  over 50% of the economic or voting power rights
associated with ownership of such Person  (irrespective of whether or not at the
time, stock of any other class or classes of such Person will have or might have
voting power by reason of the happening of some future event).

     "Taxes" means sales, use, value added, property,  capital,  income or other
taxes of  whatever  nature  or kind,  including  without  limitation,  goods and
services taxes, Quebec

                                       9
<PAGE>

sales taxes, harmonized sales taxes and applicable state taxes, provincial sales
taxes, and duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto,  excluding taxes imposed on or measured by the
net income of Compaq.

     "TD Loan Agreement" means the operating line of credit agreement dated June
11,  2001,  as amended  June 25, 2001 and as amended  pursuant  to the  amending
agreement  dated  December  19, 2001 and  accepted  January 18, 2002 between the
Company and The Toronto-Dominion Bank.

     "TSE" means the Toronto Stock Exchange.

     "Third-Party  Software" means any Software used or licensed by the Borrower
which the Borrower does not own.

     "Transaction  Documents"  mean  this  Agreement,  together  with the  Note,
Security  Agreement,  the  Strategic  Alliance and Sales  Agreement,  the Escrow
Agreement,  the Code  Escrow  Agreement,  the License  Agreement  and each other
agreement, document or instrument to be delivered at the Closing or otherwise as
contemplated by or incorporated  into this Agreement,  the Note or the Strategic
Alliance and Sales Agreement.

     "US Dollar" or "US$" or "$" shall mean lawful currency of the United States
of America.

     "US Dollar Amount" shall mean,  for any amount on any particular  date, the
aggregate of:

          (b)  the portion, if any, of the amount denominated in US Dollars; and

          (c)  the  Equivalent  Amount in US  Dollars  (determined  on such date
               unless otherwise specified herein) of the portion, if any, of the
               amount denominated in another currency.

     "US SEC" means the United States Securities and Exchange Commission.

     "Working Capital" shall mean, from time to time, an amount equal to (i) the
sum of:  (A)  cash  and  Cash  Equivalents,  (B) 80% of the  book  value  of the
Borrower's  Eligible  Accounts,  and (C) 80% of the book value of the Borrower's
Eligible Inventory less (ii) accounts payable and short-term  liabilities (which
shall include all Obligations under the Note), provided that for the purposes of
valuing the Borrower's  Eligible Accounts and Eligible Inventory  denominated in
Canadian Dollars,  the amount of such Eligible  Accounts and Eligible  Inventory
shall be converted into the Equivalent  Amount thereof in US Dollars on the last
Business Day of each month unless Compaq has notified Borrower that, in light of
reasoned or expected  currency  fluctuations,  the conversion shall be made on a
more current basis.

                                       10
<PAGE>

1.2  CONSTRUCTION

     Any reference in this Agreement to an "Article" or "Section"  refers to the
corresponding Article or Section of this Agreement, unless the context indicates
otherwise.  The headings of Articles  and Sections are provided for  convenience
only and do not affect the construction or interpretation of this Agreement. All
words used in this Agreement should be construed to be of such gender or number,
as the  circumstances  require.  The terms  "include"  or  "including"  indicate
examples of a foregoing  general  statement and not a limitation on that general
statement.  Any reference to a statute refers to the statute,  any amendments or
successor legislation, and all regulations promulgated under or implementing the
statute,  as in effect as of Closing.  Any  reference to any  agreement or other
document  means the agreement or document as amended,  supplemented  or modified
from time to time.

                                   ARTICLE 2

                                    THE LOANS

2.1  THE LOANS

     Subject to the terms,  conditions and limitations hereof, and provided that
no Default or Event of Default has occurred and  continues  uncured the Borrower
may borrow from Compaq and Compaq  shall loan or extend  credit to the  Borrower
(the "Revolving  Loan") of up to the aggregate  principal amount of US$2,000,000
(the "Credit Limit") under the following credit facilities:

          (a) Revolving  Loan.  Compaq shall make available to the Borrower from
and after  Closing  and  against  delivery  of the  Transaction  Documents,  the
aggregate  sum of Two Million US Dollars  (US$2,000,000)  which  amount shall be
deposited  by Compaq with the Escrow  Agent  pursuant to the terms of the Escrow
Agreement.  The  aggregate  US  Dollar  Amount of  advances  on  account  of the
Revolving Loan (the "Revolving Loan Advances")  outstanding  shall not exceed at
any time the lesser of (the "Borrowing Availability"): (A) the Credit Limit; and
(B) the Borrowing Base. Until the Commitment  Termination Date, the Borrower may
from time to time borrow,  repay and reborrow  under this Section  2.1(a).  Each
Revolving  Loan  Advance  shall be made on notice by the  Borrower to Compaq and
Escrow  Agent.  Those  notices must be  delivered to Compaq,  to such person and
address  as Compaq  shall  instruct  from time to time,  no later  than (i) noon
(Vancouver  time) at least  three  (3)  Business  Days  prior to the date of the
requested  Revolving  Loan  Advance (a "Notice  of Credit  Advance").  Each such
Notice of Credit  Advance  must be given in writing (by  telecopy  or  overnight
courier)  substantially  in  the  form  of  Exhibit  B  and  shall  include  the
information  required  by  such  Exhibit,  and  such  other  information  as may
reasonably be required by Compaq.

          (b)  Notice  of Credit  Advance.  Compaq  and  Escrow  Agent  shall be
entitled to rely upon, and shall be fully  protected in relying upon, any Notice
of Credit Advance (and the  information  contained  therein)  believed by any of
them to be genuine. Compaq

                                       11
<PAGE>

and Escrow  Agent may assume  that each Person  executing  and  delivering  such
notice was duly authorized by Borrower to do so.

          (c) Note. The Borrower shall execute and deliver to Compaq the Note to
evidence the principal  amount  outstanding  under the Revolving  Loan. The Note
shall  represent the  obligation of the Borrower to pay the principal  amount of
the Revolving Loan together with accrued and unpaid interest thereon. The entire
unpaid principal amount outstanding under the Note and interest thereon shall be
immediately  due and  payable  in full in  immediately  available  funds  on the
Commitment Termination Date.

          (d)  Termination  of Loan by  Borrower.  Provided  that  there  are no
amounts due and owing to Compaq from the  Borrower  under this  Agreement or the
Note, the Borrower may at any time terminate this Agreement.

2.2  MANDATORY PREPAYMENTS

          (a) If at any time  including,  without  limitation,  as a  result  of
exchange rate  fluctuations  or the  outstanding  balance of the Revolving  Loan
exceeds the Borrowing  Availability,  the Borrower  shall,  on the next Business
Day,  make a  payment  against  the  outstanding  Revolving  Loan  necessary  to
eliminate such excess.

          (b) In the event Compaq's  sales as measured by Compaq's  purchases of
Infowave software licences and related support,  maintenance and other technical
services  ("Compaq  Sales")  fails to achieve  the Sales  Threshold  (as defined
below) for any calendar year,  the Borrower  shall repay the entire  outstanding
principal and interest balance of the Revolving Loan and all interest,  fees and
reimbursable  expenses  of Compaq  and  Escrow  Agent  within 30 days of written
notice  from  Compaq to  Borrower.  Compaq  Sales for each  calendar  year shall
surpass the following minimum thresholds ("Sales Thresholds"):

             Year                             Sales Threshold (in US$)
             ----                             ------------------------
             2002                                     $***
             2003                                     $***
             2004                                     $***

          (c) Within 60 days after the end of a calendar  year,  representatives
of Compaq and Borrower shall mutually agree as to the amount of Compaq Sales for
the previous  calendar year. If Compaq and Borrower are unable to agree upon the
amount of Compaq  Sales  within  60 days  after  good  faith  investigation  and
discussions,  such amount shall be determined pursuant to the dispute resolution
mechanism set out in Section 9.22 hereof. Compaq Sales shall be calculated on an
accrual  basis and shall not include  amounts  attributable  to (i) products and
services  of Compaq or other  Persons  than the  Borrower,  direct or  indirect,
wholly-owned  Subsidiaries  or (ii) taxes,  shipping  costs,  insurance or other
prepaid costs.

------------------------------
***Confidential  portions omitted and submitted separately to the Securities and
Exchange  Commission.   An  application  for  confidential  treatment  has  been
submitted  pursuant to Rule 24b-2 under the Securities  Exchange Act of 1934, as
amended.

                                       12
<PAGE>

          (d) Except as  otherwise  provided  herein,  any  prepayments  made by
Borrower  pursuant to Sections 2.2(a) and (b) above shall be applied as follows:
first, to any fees and  reimburseable  expenses of Compaq;  second,  to interest
then due and payable pursuant to the Note;  third, to the outstanding  principal
balance of the  Revolving  Loan  Advances in such order as  determined by Compaq
until the same shall have been paid in full.

2.3  INTEREST RATE

     Borrower shall pay interest on the principal amount  outstanding  under the
Note at the following  rate: the Prime Rate plus 3.25% per annum,  that interest
shall be calculated and compounded quarterly in advance and payable on the first
Business Day of each fiscal  quarter on the principal  amount  outstanding  from
quarter to quarter,  with the first  payment of accrued  interest  being due and
payable on April 1, 2002. All  calculations  of interest shall be made by Holder
on the basis of a three hundred and sixty-five  (365) day year, in each case for
the actual  number of days  occurring  in the period for which such  interest is
payable. Upon a default in the payment of interest or any other amount due under
this  Agreement  or the Note,  the Company  shall pay  interest on such  overdue
amount,  both  before  and after  judgment,  at a rate per  annum  equal to five
percent  (5%) per annum in excess of the rate that would apply in the absence of
such default.  In no  contingency  or event  whatsoever  shall the interest rate
charged hereunder exceed the highest rate permissible under any law that a court
of competent  jurisdiction  shall,  in a final  determination,  deem  applicable
hereto.

2.4  ELIGIBLE ACCOUNTS

     In determining whether a particular Account constitutes an Eligible Account
for the purposes of  calculating  the  Borrowing  Base,  the Borrower  shall not
include any such  Account to which any of the  exclusionary  criteria  set forth
below applies.  Eligible Accounts ("Eligible  Accounts") are all Accounts of the
Borrower, but shall not include any Account of the Borrower:

          (a) which does not arise from the sale of goods or the  performance of
services by the Borrower in the ordinary course of its business;

          (b) upon  which (i) the  Borrower's  right to  receive  payment is not
absolute or is contingent  upon the  fulfillment of any condition  whatsoever or
(ii) as to which the Borrower is not able to bring suit or otherwise enforce its
remedies  against the Account Debtor through judicial  process,  or (iii) if the
Account  represents a progress billing  consisting of any invoice for goods sold
or used or  services  rendered  pursuant  to a contract  under which the Account
Debtor's obligation to pay that invoice is subject to the Borrower's  completion
or further performance under such contract or is subject to the equitable lien;

          (c) to the extent that any defense,  counterclaim,  set-off or dispute
is asserted by the Account Debtor as to such Account;

                                       13
<PAGE>

          (d) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for goods sold to or services rendered and
accepted by the applicable Account Debtor;

          (e) that (a) is not owned by the  Borrower  or (b) is  subject  to any
right, claim, security interest (or applicable  equivalent) or other interest of
any other Person other than Compaq;

          (f) that arises from a sale to any director,  officer,  other employee
or  Affiliate  of  the  Borrower,  or,  unless  such  sale  is on  arm's  length
commercially  reasonable  terms,  to any entity which has any common  officer or
director with the Borrower;

          (g) that is the  obligation of an Account  Debtor located in a foreign
country other than the United States of America or Canada;

          (h) to the extent the Borrower or any Subsidiary thereof is liable for
goods sold or services rendered by the applicable Account Debtor to the Borrower
or any Subsidiary thereof but only to the extent of the potential offset;

          (i) that is in default by the Account Debtor:  provided that,  without
limiting the generality of the foregoing,  an Account shall be deemed in default
upon the occurrence of any of the following:

               (i) it is not paid within the  earlier  of:  sixty days (60) days
following its due date or ninety (90) days following its original invoice date;

               (ii) if any Account Debtor  obligated upon such Account  suspends
business,  makes a general  assignment  for the benefit of creditors or fails to
pay its debts as they generally come due; or

               (iii) if any  assignment  or  petition is filed by or against any
Account Debtor  obligated upon such Account under any laws generally  applicable
to insolvency matters;

          (j) unless  Compaq  otherwise  approves in writing with respect to any
particular  Account,  which is the  obligation  of an  Account  Debtor  if fifty
percent (50%) or more of the dollar amount of all Accounts  owing by the Account
Debtor are ineligible under the other criteria set forth in this Section 2.4;

          (k) as to which any of the representations or warranties pertaining to
Accounts set forth in this Agreement is untrue;

          (l) to the  extent  that such  Account  is  evidenced  by a  judgment,
investment or Chattel Paper;

                                       14
<PAGE>

          (m) to the extent that such Account,  together with all other Accounts
owing by such Account Debtor and its Affiliates as of any date of  determination
exceeds thirty percent (30%) of all Eligible Accounts;

          (n) that is payable in any currency other than Canadian  Dollars or US
Dollars;

          (o) if that  Account  represents  more than ten  percent  (10%) of the
dollar amount of all Accounts that is an obligation of an Account Debtor that is
the  Canadian  Government  (Her  Majesty  the  Queen in Right  of  Canada)  or a
political subdivision thereof, or any province or territory, or any municipality
or department,  agency or instrumentality  thereof, or that is the United States
government or a political  subdivision  thereof, or any state or municipality or
department, agency or instrumentality thereof; or

          (p) in respect of which Compaq has given the Borrower one (1) Business
Day prior notice that such Account is  unacceptable  to Compaq in its reasonable
credit judgment.

2.5  ELIGIBLE INVENTORY

     In determining whether any Inventory of the Borrower  constitutes  Eligible
Inventory for the purposes of calculating the Borrowing Base, the Borrower shall
not include any such  Inventory  to which any of the  exclusionary  criteria set
forth below applies. Eligible Inventory ("Eligible Inventory") are all Inventory
of the Borrower, but shall not include any Inventory of the Borrower that:

          (a) is not owned by Borrower free and clear of all lien, right, claim,
security  interest  (or  applicable  equivalent)  or  encumbrance  of any nature
whatsoever  (including the rights of a purchaser that has made progress payments
and the rights of surety that has issued a bond to assure Borrower's performance
with  respect to that  Inventory),  or is subject to any other  interest  of any
other Person other than Compaq or a Permitted Encumbrance;

          (b) is (i) not  located on Premises  owned/leased  by Borrower or (ii)
located at any site if the aggregate book value of Inventory at such location is
greater than $100,000  (unless a satisfactory  bailee letter or landlord waiver,
as the case may be, for such premises or storage  location has been delivered to
Compaq);

          (c)  is,  in  Compaq's  reasonable  determination,  excess,  obsolete,
unsalable, seconds, damaged or unfit for sale;

          (d)  consists of display  items or  packaging  or shipping  materials,
manufacturing supplies,  componentry or work-in-progress inventory to the extent
that the aggregate value of such Inventory exceeds $100,000; and

          (e)  consists of goods which have been  returned  and are  unsaleable,
damaged, defective or otherwise unfit for sale.

                                       15
<PAGE>

2.6  CONVERSION

     The  principal  due  under the Note and any  accrued  and  unpaid  interest
thereon shall be convertible,  at any time at Compaq's  option,  into Conversion
Securities pursuant to the terms set forth in the Note.

2.7  CLOSING

     The closing of the  transactions  contemplated  by this Agreement will take
place after the  satisfaction  of the  conditions  set forth in Article 7 and at
such location,  date and time as the parties  mutually agree (such closing being
called the "Closing" and such date and time being called the "Closing Date"). At
the Closing, the Borrower shall issue and deliver to Compaq the Note in the name
of Compaq or its nominee. On the Closing Date, Compaq will deliver to the Escrow
Agent,  by check  representing  good  same  day  funds  or by wire  transfer  of
immediately  available  funds,  the  aggregate  sum of Two  Million  US  Dollars
(US$2,000,000)  to be made  available  pursuant to the  Revolving  Loan facility
described in Section 2.1.

2.8  APPLICATION AND ALLOCATION OF PAYMENTS

     So long as no  Default  or Event of  Default  shall  have  occurred  and be
continuing,  (a)  voluntary  prepayments  shall be applied as  determined by the
Borrower; and (b) mandatory prepayments shall be applied as set forth in Section
2.2(d).  As to all payments  made when a Default or Event or Default  shall have
occurred and be continuing or following the  Commitment  Termination  Date,  the
Borrower  hereby  irrevocably  waives the right to direct the application of any
and all payments  received from or on behalf of the  Borrower,  and the Borrower
hereby irrevocably agrees that Compaq shall have the continuing  exclusive right
to apply and reapply any and all such payments against the Obligations as Compaq
may deem advisable  notwithstanding any previous entry by Compaq or Escrow Agent
in the Loan Account or any other books and records. In the absence of a specific
determination  by Compaq  with  respect to such  payments  as referred to in the
previous sentence,  payments shall be applied to amounts then due and payable in
the following  order:  (A) to fees,  costs of enforcement  and other charges and
expenses incurred with the negotiation,  documentation of this Agreement and the
Transaction Documents,  and any amendments thereto, the monitoring and servicing
of  the  Revolving  Loan  hereunder   (including  the  Escrow  Agents  fees  and
reimbursable  expenses)  and the  enforcement  of this  Agreement  and the other
Transaction  Documents (B) to interest due and payable under the Revolving Loan;
(C) to  principal  payments  on  the  Revolving  Loan;  and  (D)  to  all  other
Obligations including expenses of Compaq to the extent reimbursable.

     Compaq is hereby authorized to, and at its sole election may, charge to the
Revolving  Loan balance on behalf of the Borrower and cause to be paid all fees,
costs of enforcement and other charges and expenses incurred with the monitoring
and servicing of the Revolving Loan hereunder  (including the Escrow Agents fees
and  reimbursable  expenses) and the enforcement of this Agreement and the other
Transaction  Documents,  interest on the Revolving Loan and if and to the extent
the  Borrower  fails to pay any such

                                       16
<PAGE>

amounts promptly as and when due, even if such charges would cause the aggregate
balance of the Revolving Loan to exceed the Borrowing Availability.  At Compaq's
option and to the extent  permitted by law, any charges so made shall constitute
part of the Revolving Loan hereunder.

2.9  LOAN ACCOUNT AND ACCOUNTING

     Compaq and Escrow Agent shall maintain a loan account (the "Loan  Account")
on its books to record:  all Revolving Loan  Advances;  all payments made by the
Borrower  and all other  debits and credits as provided in this  Agreement  with
respect to the  Revolving  Loans (and such  debits and credits in respect of the
principal  amount  outstanding  under the  Revolving  Loan shall be  recorded by
Compaq as set forth in the Note).  All entries in the Loan Account shall be made
in accordance  with Compaq's  customary  accounting  practices as in effect from
time to time.  The balance in the Loan  Account,  as  recorded on Compaq's  most
recent  printout or other written  statement,  shall,  absent manifest error, be
presumptive  evidence of the  amounts  due and owing to Compaq by the  Borrower;
provided that,  any failure to so record or any error in so recording  shall not
limit or otherwise  affect the Borrower's  duty to pay the  Obligations.  Within
three Business Days of the beginning of each month, Escrow Agent shall render to
the Borrower a monthly  accounting of transactions with respect to the Revolving
Loan of the prior month setting forth the balance of the Loan Account,  and such
other  shorter  periods  as Compaq  may  require  from time to time.  Unless the
Borrower  notifies  Compaq in writing of any  objection  to any such  accounting
(specifically  describing  the basis for such  objection),  within  twenty  (20)
Business  Days after the date  thereof,  each and every such  accounting  shall,
absent error,  be deemed final,  binding and conclusive upon the Borrower in all
respects  as to all  matters  reflected  therein.  Only  those  items  expressly
objected to in such notice shall be deemed to be disputed by the Borrower.

2.10 INVOICED ADVANCES

     Compaq  shall  maintain  or shall cause  Escrow  Agent to maintain a ledger
account (in such form and on such media as Compaq may determine is  appropriate)
reflecting the balance of the Invoiced Advances. Said ledger shall be updated on
the last  Business  Day of each  fiscal  month by Compaq  with  respect  to each
invoice  received  during such month for a Compaq purchase of goods and services
from the Borrower and for payments made on account of any Invoiced Advances from
time to time by Compaq to Escrow  Agent,  and which ledger shall be  presumptive
evidence of the  Invoiced  Advances  and shall be prima facie  accurate,  absent
manifest error, as to the matters set forth therein.

2.11 TAXES

     Any  and  all  payments  by the  Borrower  hereunder  or  under  the  other
Transaction  Documents (except the Strategic Alliance and Sales Agreement) shall
be made free and clear of, and  without  deduction  for,  any and all present or
future  Taxes,  (excluding  Taxes  imposed on or  measured  by the net income or
capital of Compaq by the  jurisdictions  under the laws of which it is organized
or is resident or carries on business through a permanent  establishment located
therein  or any  political  subdivisions  thereof).  If the

                                       17
<PAGE>

Borrower  shall be required by law to deduct any Taxes from or in respect of any
sum  payable  hereunder  or under any other  Transaction  Document  (except  the
Strategic Alliance and Sales Agreement)  (excluding Taxes imposed on or measured
by the net income or capital of Compaq),  by the jurisdictions under the laws of
which it is organized or is resident or carries on business  through a permanent
establishment  located therein or any political  subdivisions thereof, or if the
Borrower  shall be required by law to deduct any Taxes from or in respect of any
sum  payable  hereunder  or under any other  Transaction  Documents  (except the
Strategic Alliance and Sales Agreement)  (excluding Taxes imposed on or measured
by the net income or capital  of Compaq by the  jurisdictions  under the laws of
which it is organized or is resident or carries on business  through a permanent
establishment located therein or any political  subdivisions  thereof),  (i) the
sum  payable  shall be  increased  as much as shall be  necessary  so that after
making all required  withholdings  and deductions  (including  withholdings  and
deductions  applicable  to  additional  sums payable  under this Section  2.11),
Compaq shall  receive an amount  equal to the sum it would have  received had no
such  withholdings  or deductions  been made;  (ii) the Borrower shall make such
deductions;  and (iii) the  Borrower  shall pay the full amount  deducted to the
relevant  taxing or other  authority in accordance  with  applicable law. Within
thirty  (30) days after the date of any  payment of Taxes,  the  Borrower  shall
furnish to Compaq  the  original  or a  certified  copy of a receipt  evidencing
payment thereof.

     In addition,  the  Borrower  agrees to pay any present or future Taxes that
arise from any payment made under this Agreement or under any other  Transaction
Documents  (except  the  Strategic  Alliance  and Sales  Agreement)  or from the
execution,  sale,  transfer,  delivery or  registration  of, or  otherwise  with
respect  to,  this  Agreement,  the  other  Transaction  Documents  (except  the
Strategic Alliance and Sales Agreement) and any other agreements and instruments
contemplated  hereby or thereby  (except for Taxes imposed on or measured by the
net income or capital of Compaq by the jurisdictions  under the laws of which it
is  organized  or is  resident  or  carries  on  business  through  a  permanent
establishment  located therein or any political  subdivisions  thereof).  Compaq
agrees that, as promptly as reasonably practicable after it becomes aware of any
circumstances  referred to above which would result in additional payments under
this Section, it shall notify the Borrower thereof.

     The  Borrower  shall  indemnify  Compaq  for the full  amount  of the Taxes
referred to in this Section 2.11 (except for Taxes imposed on or measured by the
net income or capital of Compaq by the jurisdictions  under the laws of which it
is  organized  or is  resident  or  carries  on  business  through  a  permanent
establishment located therein or any political subdivision thereof),  including,
without limitation,  any Taxes imposed by any jurisdiction on amounts payable by
the Borrower under this Section 2.11 paid by Compaq and any liability (including
penalties,  interest and expenses)  arising  therefrom or with respect  thereto,
whether  or  not  such  Taxes  were   correctly   or  legally   asserted.   This
indemnification  shall be made within ten (10) days after the date Compaq  makes
written demand therefor.

                                       18
<PAGE>

     Without  prejudice to the  survival of any other  agreement of the Borrower
under this Agreement,  the agreements and obligations of the Borrower  contained
in this Section 2.11 shall survive the Commitment Termination Date.

2.12 SINGLE LOAN

     All Loans to the Borrower and all of the other  Obligations of the Borrower
arising under this  Agreement and the other  Transaction  Documents  (except the
Strategic  Alliance and Sales Agreement) shall constitute one general obligation
of  the  Borrower  secured,  until  the  Commitment  Termination  Date,  by  the
Collateral.

2.13 CURRENCY MATTERS

     Principal, interest, reimbursement obligations, fees, and all other amounts
payable under this Agreement and the other Transaction Documents to Compaq shall
be payable in the currency in which such  Obligations  are  denominated.  Unless
stated otherwise, all calculations,  comparisons, measurements or determinations
under  this  Agreement  shall be made in US  Dollars.  For the  purpose  of such
calculations,  comparisons, measurements or determinations,  amounts denominated
in other currencies shall be converted into the Equivalent  Amount of US Dollars
on the date of calculation.

                                   ARTICLE 3

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

     For the  purposes of this  Article 3,  unless  otherwise  specified  or the
context requires, the term "Borrower" shall include the Borrower and each of its
Subsidiaries.

     Except as set forth in the  Disclosure  Schedule  with  reference as to the
specific  representation  or  warranty  to which such  disclosure  applies,  the
Borrower hereby represents and warrants to Compaq as follows:

3.1  ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER

          (a) The Borrower is a corporation amalgamated, validly existing and in
good  standing  under the laws of the  Province of British  Columbia and is duly
licensed or  qualified  to  transact  business  and is in good  standing in each
jurisdiction  in  which  the  nature  of the  business  transacted  by it or the
character of the  properties  owned or leased by it requires  such  licensing or
qualification.  The Borrower has the requisite  corporate power and authority to
own and hold its properties and to carry on its business as now conducted and as
currently  proposed  to be  conducted,  to  execute,  deliver  and  perform  its
Obligations under this Agreement and each Transaction  Document to which it is a
party,  to issue,  sell and deliver the Note, to repay the amounts due under the
Note, to grant the security interests in the Collateral and to issue and deliver
the Conversion Securities as and when required.

          (b) Except as set forth on Section 3.1(b) of the Disclosure  Schedule,
the Borrower  has no  Subsidiaries.  The Borrower  does not (i) own of record or
beneficially,

                                       19
<PAGE>

directly  or  indirectly,   (A)  any  shares  of  capital  stock  or  securities
convertible into capital stock of any other corporation or (B) any participating
interest  in any  partnership,  joint  venture or other  non-corporate  business
enterprise or (ii) control, directly or indirectly, any other entity.

          (c) Section 3.1(c) of the  Disclosure  Schedule sets forth the form of
entity  and  jurisdiction  of  incorporation  or  organization  for  each of the
Subsidiaries.  Each of the Subsidiaries is duly organized, validly existing and,
with respect to corporate  Subsidiaries,  in good standing under the laws of its
respective  jurisdiction of  incorporation  or formation and is duly licensed or
qualified to transact  business as a foreign  entity and is in good  standing in
each  jurisdiction  in which the nature of the business  transacted by it or the
character of the  properties  owned or leased by it requires  such  licensing or
qualification.  Each of the  Subsidiaries has the power and authority to own and
hold its  properties  and to  carry  on its  business  as now  conducted  and as
currently proposed to be conducted. Except as set forth on Section 3.1(c) of the
Disclosure Schedule,  all of the outstanding  ownership interests of each of the
Subsidiaries  are owned  beneficially  and of record by the  Borrower and one or
more of its other wholly owned Subsidiaries,  in each case free and clear of any
liens,  charges,  restrictions  claims or encumbrances of any nature whatsoever,
and there  are no  outstanding  subscriptions,  warrants,  options,  convertible
securities or other rights,  including contingent rights,  pursuant to which any
of the Subsidiaries is or may become obligated to issue any of its capital stock
to any Person other than the Borrower or one of its wholly owned Subsidiaries.

          (d) The Borrower and each of its  Subsidiaries  are in compliance with
all of the terms and  provisions of its  Memorandum and Articles as the same may
be amended. The Borrower and each of its Subsidiaries have not breached any term
of their  Memorandum  and  Articles  which breach has not been cured or may give
rise to a right on behalf of any shareholder,  director, officer or other Person
to rescind any purchase of securities or contract entered into with the Borrower
or  Subsidiary,  invalidate  any action  previously  taken as ultra  vires or to
enforce rights or make claims against the Borrower.

          (e) The  Borrower  is a  "qualifying  issuer"  within  the  meaning of
Multilateral   Instrument  45-102  ("MI  45-102")  of  the  Canadian  Securities
Administrators and there are no facts of which the Borrower is aware which would
jeopardize this status or call it into question.

3.2  AUTHORIZATION OF AGREEMENTS, ETC.

          (a) The  execution  and  delivery by the  Borrower of the  Transaction
Documents,  the performance by the Borrower of its Obligations  thereunder,  the
issuance,  sale and delivery of the Note to Compaq and the issuance and delivery
of the Conversion Securities:

               (i)  have each been duly  authorized by all  requisite  corporate
                    and stockholder action; and

                                       20
<PAGE>

               (ii) will not  violate  any  provision  of law,  any order of any
                    court or other  agency of  government,  the  Memorandum  and
                    Articles,  or any provision of any  indenture,  agreement or
                    other  instrument  to  which  the  Borrower  or  any  of its
                    properties or assets is bound, or conflict with, result in a
                    breach of or constitute (with due notice or lapse of time or
                    both) a default under any such indenture, agreement or other
                    instrument,  or result in the creation or  imposition of any
                    lien,  charge,  restriction,  claim  or  encumbrance  of any
                    nature; and

          (b) This Agreement  constitutes a legal,  valid and binding obligation
of the Borrower,  and is  enforceable  in accordance  with its terms.  The other
Transaction  Documents,  when  executed and  delivered in  accordance  with this
Agreement, will constitute legal, valid and binding obligations of the Borrower,
and are enforceable in accordance with their respective terms.

          (c) The  Note  will be  validly  issued  with  no  personal  liability
attaching  to the  ownership  thereof,  and will be free and clear of all liens,
restrictions,  claims and encumbrances imposed by or through the Borrower except
as set forth  herein  and in the other  Transaction  Documents.  The  Conversion
Securities have been duly reserved for issuance upon conversion of the Note and,
when  so  issued,  will be duly  authorized,  validly  issued,  fully  paid  and
nonassessable shares of Common Stock with no personal liability attaching to the
ownership thereof and will be free and clear of all liens, restrictions,  claims
and  encumbrances  imposed by or through the Borrower except as set forth in the
Transaction Documents.

          (d) Except for the notice (the  "Notice")  required to be given to the
TSE and the accompanying  additional listing application (the "Application") and
the filing of a BCF 45-902F - Report of Exempt Distribution. The Borrower is not
under any obligation, contractual or otherwise, to request or obtain the consent
of any  person,  and no permits,  licences,  certifications,  authorizations  or
approvals  of, or  notifications  to, any  Governmental  Body are required to be
obtained by the Borrower in  connection  with the  execution and delivery by the
Borrower of this  Agreement  and the Note,  or the  issuance  of the  Conversion
Securities  upon the conversion of the Note, the  performance by the Borrower of
its  obligations  hereunder  or  thereunder,  or  the  completion  of any of the
transactions  contemplated  herein,  apart  from  acceptance  of the  Notice and
conditional approval of the Application by the TSE.

          (e)  The  Conversion  Securities  will  upon  issuance  be free of any
contractual  or other  restrictions  on their sale or  disposition in Canada and
through  the  facilities  of the TSE,  except  for the  restrictions  imposed by
Section 2.5(2) of MI 45-102 and an undertaking to be given to the TSE.

          (f)  Neither  the  issuance,  sale or  delivery  of the  Note  nor the
issuance or delivery of the  Conversion  Securities is subject to any preemptive
right or right of first refusal in favor of any Person.

                                       21
<PAGE>

3.3  AUTHORIZED CAPITAL STOCK

          (a) The  authorized  capital  stock of the Borrower  immediately  upon
Closing  will  consist of  200,000,000  shares of Common  Stock.  As of the date
hereof,  before  giving  effect  to the  issuance  of the Note at  Closing,  the
Borrower has outstanding not greater than 89,500,000 common shares calculated on
a  fully-diluted  basis (not  taking  into  account  rights  issuable  under the
Borrower's shareholder rights plan). All of the outstanding securities have been
duly authorized, validly issued and are fully paid and nonassessable. All of the
outstanding  securities  of the  Borrower  were  issued in  compliance  with all
applicable  federal  and  provincial  securities  laws,  have not been issued in
violation  of and are not subject to any  preemptive  rights which have not been
duly and validly  waived,  and no  stockholder  has a right of  rescission  with
respect to such securities.

          (b) The designations,  powers,  preferences,  rights,  qualifications,
limitations and  restrictions in respect of the authorized  capital stock of the
Borrower are as set forth in the  Charter,  and all such  designations,  powers,
preferences,  rights,  qualifications,  limitations and  restrictions are valid,
binding and enforceable and in accordance with all applicable laws.

          (c) Section 3.3(c) of the Disclosure  Schedule contains a complete and
accurate  list,  including  the number of securities  held of record,  or to the
knowledge of the Borrower, beneficially by each Specified Person of all:

               (i)  outstanding shares of Common Stock;

               (ii) subscriptions, warrants, options, convertible securities, or
                    other rights  (including  contingent  rights) to purchase or
                    otherwise acquire equity securities of the Borrower; and

               (iii)commitments by the Borrower to issue shares,  subscriptions,
                    warrants,  options,  convertible  securities,  or other such
                    rights or to  distribute  to  holders  of any of its  equity
                    securities any evidence of indebtedness.

          (d)  Except  as  provided  for in the  Memorandum  or as set  forth on
Section  3.3(d) of the  Disclosure  Schedule,  the  Borrower  has no  obligation
(contingent or other) to purchase, redeem or otherwise acquire any of its equity
securities  or any  interest  therein or to pay any  dividend  or make any other
distribution  in respect  thereof.  Except as set forth on Section 3.3(d) of the
Disclosure Schedule or as contained in the Transaction  Documents,  there are no
voting  trusts  or  agreements,  shareholders'  agreements,  pledge  agreements,
buy-sell  agreements,  rights of first  refusal,  preemptive  rights or  proxies
relating to any  securities  of the  Borrower  (whether or not the Borrower is a
party thereto).

3.4  FINANCIAL CONDITION - SEC REPORTING

          (a) The Borrower has filed all reports,  schedules,  forms, statements
and  other  documents  required  to be filed by it with  each of the  securities
commissions of the

                                       22
<PAGE>

jurisdictions  in which the  Borrower is a  "reporting  issuer"  pursuant to the
reporting  requirements  of the Securities  Act, and with the US SEC pursuant to
the reporting requirements of the 1934 Act, (together with all exhibits included
therein  and  financial   statements   and   schedules   thereto  and  documents
incorporated by reference  therein the "Public Record  Documents").  As of their
respective dates, the Public Record Documents  complied in all material respects
with the  requirements of the Securities Act and the 1934 Act  respectively  and
the rules and  regulations of the Commission and US SEC  promulgated  thereunder
applicable  to the  Public  Record  Documents,  and  none of the  Public  Record
Documents,  at the time  they  were  filed  with the  Commission  or the US SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  As of their  respective  dates,  the  financial  statements  of the
Borrower  included  in the Public  Record  Documents  complied as to form in all
material respects with applicable  accounting  requirements of the Commission or
US SEC with respect  thereto.  Such financial  statements  have been prepared in
accordance with Canadian generally accepted accounting principles,  consistently
applied,  during the periods involved (except (i) as may be otherwise  indicated
in such  financial  statements  or the  notes  thereto,  or (ii) in the  case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and fairly present in all material respects the
financial  position of the  Borrower as of the dates  thereof and the results of
its operations and cash flows for the periods then ended  (subject,  in the case
of unaudited statements, to normal year-end audit adjustments).

          (b) Since  September  30, 2001,  and except as set forth in the Public
Record Documents,  no event has occurred which has had, or will likely have with
the passage of time, a Material  Adverse  Effect on the Borrower,  and except as
set forth in the Public  Record  Documents  or on Section 3.4 of the  Disclosure
Schedule, or other than in the ordinary course of business, the Borrower has not
(i) issued any stock, bond or other corporate security, (ii) borrowed any amount
or incurred or become subject to any liability (absolute, accrued or contingent)
in excess of $100,000 in the aggregate,  (iii)  discharged or satisfied any lien
or  encumbrance  or  incurred or paid any  obligation  or  liability  (absolute,
accrued or contingent),  in excess of $100,000 (iv) declared or made any payment
or  distribution  to  shareholders  or  purchased  or redeemed  any share of its
capital stock or other security, (v) mortgaged, pledged, encumbered or subjected
to lien any of its  assets,  tangible  or  intangible,  (vi) sold,  assigned  or
transferred any of its tangible  assets,  (vii) sold,  assigned,  transferred or
granted any exclusive  license with respect to any of the Borrower  Intellectual
Property,  (viii)  suffered  any  loss  of  property  or  waived  any  right  of
substantial  value,  or change  the  manner of  business  or  operations  of the
Borrower,  (ix) entered into any  transaction  with any  shareholder or officer,
director or employee of the Borrower except as otherwise contemplated under this
Agreement,  (x) entered into any material transaction other than in the ordinary
course of business,  or (xi) entered into any binding commitment  (contingent or
otherwise) to do any of the foregoing. Except as set forth in Section 3.4 of the
Disclosure  Schedule,  the  Borrower has no material  liabilities  of any nature
except for liabilities reflected or reserved against in the Financial Statements
and current  liabilities  incurred in the ordinary  course of business since the
date thereof.

                                       23
<PAGE>

3.5  MATERIAL AGREEMENTS

     All of the Material  Agreements  are in full force and effect and are valid
and binding obligations upon the Borrower, and to the knowledge of the Borrower,
the other  parties  thereto.  The Borrower is not in default and is not aware of
any default by another party, either pending or threatened,  with respect to the
Material Agreements.  As of the date of this Agreement,  no customer or supplier
has  terminated,  materially  reduced or  threatened  to terminate or materially
reduce its purchases  from or provision of products or services to the Borrower,
as the case may be which  termination or reduction would have a Material Adverse
Effect.  No Material  Agreement has been amended to increase the amount  payable
by, or otherwise increase the obligations of the Borrower,  or otherwise provide
any  benefit to any other  party  thereunder  in order to obtain any  consent or
waiver  required  in  connection  with  the  transactions  contemplated  by this
Agreement.

3.6  TITLE TO PROPERTIES

          (a)  The  Borrower  has  good,  clear  and  marketable  title  to  its
properties  and assets  reflected on the Financial  Statements or acquired by it
since the date of the Financial  Statements  (other than  properties  and assets
disposed of in the  ordinary  course of  business  since the date of the Interim
Balance Sheet).  All such properties and assets are free and clear of mortgages,
pledges,  security interests,  liens,  charges,  claims,  restrictions and other
encumbrances  (including  easements  and  licenses),  except  for the  rights of
lessors  and  licensors  under any lease or license to which the  Borrower  is a
party as lessee or licensee,  except for  Permitted  Encumbrances.  Liens for or
current taxes not yet due and payable and minor  imperfections of title, if any,
are not  material  in nature or amount and do not  materially  detract  from the
value or impair the use of the property subject thereto or impair the operations
or proposed  operations  of the  Borrower  (including  without  limitation,  the
ability of the Borrower to secure  financing using such properties and assets as
collateral).

          (b)  To  the  Borrower's   knowledge,   there  are  no   condemnation,
environmental,   zoning  or  other  land  use  regulation  proceedings,   either
instituted or planned to be instituted,  which would adversely affect the use or
operation of the Borrower's  properties and assets for their respective intended
uses and  purposes,  or the value of such  properties,  and the Borrower has not
received notice of any special  assessment  proceedings  which would affect such
properties and assets.

3.7  FILINGS AND FINANCING STATEMENTS

          (a) All filings, registrations and recordings necessary or appropriate
to create,  preserve,  protect and perfect the security interests granted by the
Borrower to Compaq  pursuant to this  Agreement have been  accomplished  and the
Security  Interests  granted to Compaq  pursuant to this Agreement in and to the
Collateral constitute perfected Security Interests therein superior and prior to
the rights of all other Persons therein.

                                       24
<PAGE>

     There is no financing  statement  (or similar  statement or  instrument  of
registration  under the law of any  jurisdiction)  now on file (other than those
filed in connection with this Agreement or the other  Transaction  Documents) or
registered  with any  Governmental  Body  covering  or  purporting  to cover any
interest of any kind in the  Collateral,  other than the Permitted  Encumbrances
listed in Section 3.7(b) of the Disclosure Schedule.

3.8  LEASEHOLD INTERESTS

     Each lease or  agreement to which the Borrower is a party or under which it
is a  lessee  of any  property,  real  or  personal,  is a  valid  and  existing
agreement, duly authorized and entered into, without any default of the Borrower
thereunder and, to the Borrower's  knowledge,  without any default thereunder of
any other party thereto. No event has occurred and is continuing which, with due
notice or lapse of time or both,  would constitute a default or event of default
by the  Borrower  under  any  such  lease or  agreement  or,  to the  Borrower's
knowledge,  by any  other  party  thereto.  The  Borrower's  possession  of such
property has not been disturbed and, to the Borrower's  knowledge,  no claim has
been  asserted  against  the  Borrower  adverse to its rights in such  leasehold
interests.

3.9  INTELLECTUAL PROPERTY RIGHTS

          (a)  Section  3.9(a) of the  Disclosure  Schedule  contains a true and
complete  list  of all of the  Borrower  Intellectual  Property,  including  the
Borrower's patents,  patent applications,  trademarks,  trademark  applications,
trade names,  service marks,  service mark applications,  Internet domain names,
copyrights and copyright  registrations  and applications made or taken pursuant
to federal, provincial, state, local and foreign laws by the Borrower to protect
its interests in the Borrower Intellectual Property.

          (b) The Borrower  Intellectual  Property  consists solely of items and
rights which (i) the Borrower owns or (ii) the Borrower and its successors  have
the right to use pursuant to valid licenses.  The Borrower has all rights in the
Borrower Intellectual Property necessary to carry out the Borrower's business as
previously, currently and proposed to be conducted in the reasonable foreseeable
future  (except that in order to conduct its business as reasonably  foreseeable
in the  future,  the  Borrower  may be required  to license  from third  parties
additional software for distribution  directly or indirectly to customers or for
development purposes);  provided that, with respect to Third-Party Software, the
foregoing shall apply only to the Borrower's knowledge.

          (c) Except as set forth on Section 3.9(c) of the Disclosure  Schedule,
no claims (i)  challenging  the  validity,  effectiveness  or  ownership  by the
Borrower of any of the  Borrower  Intellectual  Property,  or (ii) to the effect
that the use,  distribution,  licensing,  sublicensing  or sale by the Borrower,
infringes on any intellectual  property or other proprietary right of any Person
have been asserted or, to the knowledge of the Borrower,  are  threatened by any
Person,  nor, to the knowledge of the Borrower,  are there any valid grounds for
any  bona  fide  claim of any such  kind;  provided  that  with  respect  to the
Third-Party  Software,   the  foregoing  shall  apply  only  to  the  Borrower's
knowledge.   To  the

                                       25
<PAGE>

Borrower's   knowledge,   there  is  no   unauthorized   use,   infringement  or
misappropriation  of any of the  Borrower  Intellectual  Property  by any  third
party, employee or former employee.

          (d) Except as set forth on Section 3.9(d) of the Disclosure  Schedule,
there are no royalties,  fees or other  payments  payable by the Borrower to any
Person or entity by reason of the ownership,  development, use, license, sale or
disposition of the Borrower Intellectual Property, other than salaries and sales
commissions  paid to  employees  and  sales  agents  in the  ordinary  course of
business.

          (e)  All  personnel,  including  employees,  agents,  consultants  and
contractors,  who have  contributed  to or  participated  in the  conception and
development  of the  Borrower  Intellectual  Property on behalf of the  Borrower
either (i) have been a party to a "work-for-hire" arrangement or agreements with
the Borrower in accordance  with applicable  national,  provincial and state law
that has accorded the Borrower full, effective, exclusive and original ownership
of all tangible and intangible  property thereby arising,  or (ii) have executed
appropriate  instruments of assignment in favor of the Borrower as assignee that
have conveyed to the Borrower effective and exclusive  ownership of all tangible
and intangible property thereby arising.

          (f) The  Borrower  has  previously  delivered  to  Compaq  a true  and
complete  list  of  all  of  the   Borrower's   Software,   excluding   standard
"off-the-shelf"  Software  for  which  the  Borrower  has not  paid and does not
anticipate  paying more than $50,000 in license fees or royalties.  The Borrower
owns full and  unencumbered  right and good,  valid and marketable  title to the
Software owned by it, free and clear of all mortgages,  pledges, liens, security
interests, conditional sales agreements, encumbrances or charges of any kind.

          (g) Except as set forth in Section 3.9(g) of the Disclosure  Schedule,
the source code and source code documentation  relating to the Software (i) have
at all times been maintained in confidence reasonably consistent with its nature
and  appropriate  business use, (ii) have been disclosed by the Borrower only to
employees who have had a "need to know" the contents  thereof in connection with
the  performance  of  their  duties  to  the  Borrower  and  who  have  executed
appropriate nondisclosure  agreements,  and (iii) have not been disclosed to any
third party.

          (h) Except  with  respect to  demonstration  or trial  copies,  to the
Borrower's  knowledge  no Software  contains,  nor will the  Borrower  knowingly
introduce,  any "back door," "time bomb,"  "Trojan  horse,"  "worm,"  "drop dead
device," "virus" or other software routines or hardware  components  designed to
permit unauthorized access, to disable or erase software earlier than the end of
any applicable license term, or to perform any other such actions.

          (i) The Borrower has taken in the past reasonable security measures to
protect the Borrower Intellectual Property.

                                       26
<PAGE>

          (j) Except as set forth on Section 3.9(j) of the Disclosure  Schedule,
each  consultant  to and employee of the  Borrower,  if any,  who has  authored,
created or contributed to any the Borrower  Intellectual Property has executed a
confidentiality  and proprietary rights agreement  restricting the disclosure of
proprietary  information of the Borrower,  and sufficient to transfer and assign
any  rights  of  such  Persons  in the  Borrower  Intellectual  Property  to the
Borrower.  The  Borrower  is not aware that any of its  employees,  officers  or
consultants is in violation of any agreement with the Borrower.

3.10 PROPRIETARY INFORMATION OF THIRD PARTIES

          (a)  Except  as  disclosed  in the  Public  Record,  to the  Company's
knowledge,  no third party has claimed or has a  reasonable  basis to claim that
any Borrower  Representative  has (i)  violated or may be  violating  any of the
material  terms  or  conditions  of his or her  employment,  non-competition  or
non-disclosure  agreement  with  such  third  party,  (ii)  disclosed  or may be
disclosing  or  utilized or may be  utilizing  any trade  secret or  proprietary
information or  documentation of such third party, or (iii) interfered or may be
interfering in the employment  relationship  between such third party and any of
its present or former employees.  To the Company's knowledge, no third party has
requested information from the Borrower that suggests that such a claim might be
contemplated.

          (b) To the Borrower's knowledge,  none of the execution or delivery of
this  Agreement,  or the carrying on of the business of the Borrower by Borrower
Representatives,  or the  conduct or  proposed  conduct of the  business  of the
Borrower,  will conflict with or result in a breach of the terms,  conditions or
provisions of or constitute a default under any contract, covenant or instrument
under which any such Borrower Representative is obligated and which could have a
Material Adverse Effect on the Borrower.

3.11 EMPLOYMENT AGREEMENTS AND COMPENSATION PLANS

     Except as set forth on Section 3.11 of the Disclosure Schedule, neither the
Borrower nor any Affiliate maintained, sponsored, adopted, made contributions to
or  obligate  itself to make  contributions  to or to pay any  benefits or grant
rights under or with respect to any "Employee  Pension  Benefit  Plan",  whether
written,  oral,  voluntary or pursuant to a collective  bargaining  agreement or
law, which could give rise to or result in the Borrower or such Affiliate having
any debt, liability, claim or obligation of any kind or nature, whether accrued,
absolute,  contingent, direct, indirect, known or unknown, perfected or inchoate
or otherwise  and whether or not due or to become due and except as set forth on
Section  3.11 of the  Disclosure  Schedule  the Borrower has no knowledge of the
existence of any such debt, liability, claim or obligation.

3.12 TRANSACTIONS WITH AFFILIATES

     Except as set forth on Section  3.12 of the  Disclosure  Schedule or as set
forth  in the  Public  Record  Documents,  no  director,  officer,  employee  or
shareholder  of the Borrower,  or member of the family of any such other Person,
or any  corporation,

                                       27
<PAGE>

partnership, trust or other entity in which any of the foregoing Persons, or any
member of the  family of any such  person,  is an  officer,  director,  trustee,
partner or holder of more than 5% of the outstanding capital stock thereof, is a
party to any transaction with the Borrower, including any contract, agreement or
other  arrangement  providing for the employment of,  furnishing of services by,
rental of real or personal property from or otherwise  requiring payments to any
such Person, other than  employment-at-will  arrangements in the ordinary course
of business.

3.13 LOANS AND ADVANCES

     Except as set forth on Section  3.13 of the  Disclosure  Schedule or as set
forth in the Public Record Documents, the Borrower does not have any outstanding
loans or advances to or for the  benefit of any Person and is not  obligated  to
make any such loans or advances, except, in each case, for advances to employees
of the Borrower in respect of reimbursable  business expenses  anticipated to be
incurred  by them in  connection  with their  performance  of  services  for the
Borrower.  Except as set forth on Section 3.13 of the Disclosure  Schedule or as
set  forth  in the  Public  Record  Documents,  the  Borrower  has not  assumed,
guaranteed,  endorsed or otherwise become directly or contingently liable on any
indebtedness of any other Person (including,  without  limitation,  liability by
way of agreement,  contingent or  otherwise,  to purchase,  to provide funds for
payment,  to supply funds to or otherwise invest in the debtor,  or otherwise to
assure the creditor  against  loss),  except for  guaranties by  endorsement  of
negotiable  instruments  for deposit or  collection  in the  ordinary  course of
business.  Except as set forth on Section 3.13 of the  Disclosure  Schedule,  no
Person has  assumed,  guaranteed,  endorsed  or  otherwise  become  directly  or
contingently  liable on any  indebtedness of the Borrower,  including such items
and excepting such matters as are set forth in the preceding sentence.

3.14 INSURANCE

     The  Borrower  holds  valid  policies  of  insurance  as to its  respective
properties and business, with financially sound and reputable insurers,  against
such  casualties and  contingencies  and of such types and in such amounts as is
customary for companies similarly situated,  and is deemed by the Borrower to be
sufficient.

3.15 TAXES

          (a) The  Borrower  has filed  all tax  returns,  federal,  provincial,
state,  county and local,  whether domestic or foreign,  required to be filed by
it, and the  Borrower has paid all taxes shown to be due by such returns as well
as all other Taxes,  assessments and governmental  charges which have become due
or  payable,  including  without  limitation  all Taxes  which the  Borrower  is
obligated  to withhold  from amounts  owing to  employees,  creditors  and third
parties. All material Tax elections of any type that the Borrower has made as of
the date hereof are set forth in Section 3.15 of the Disclosure Schedule.

          (b) The Canadian  Customs and Revenue  Agency,  the  Internal  Revenue
Service (IRS) or any similar domestic or foreign authority has never audited the
income tax returns of the Borrower.  No deficiency assessment with respect to or
proposed

                                       28
<PAGE>

adjustment of the Borrower's Federal, provincial,  state, county or local taxes,
whether  domestic  or  foreign,  is  pending  or, to the  Borrower's  knowledge,
threatened.

          (c) There is no tax lien (other than for current taxes not yet due and
payable),  whether imposed by any federal,  provincial,  state,  county or local
taxing authority,  whether domestic or foreign,  outstanding against the assets,
properties  or  business  of the  Borrower  other  than liens for  current  real
property taxes payable in arrears and not yet due and payable.

          (d)  Since  its  date of  incorporation  the  Borrower  has not been a
"United  States  real  property  holding  corporation",  as  defined  in Section
897(c)(2)  of the Code and in Section  1.897-2(b)  of the  Treasury  Regulations
issued  thereunder,  and the Borrower has filed with the IRS all statements,  if
any, with its United States income tax returns which are required  under Section
1.897-2(h) of the Treasury Regulations.

3.16 LITIGATION; COMPLIANCE WITH LAW

          (a) Except as set forth in Disclosure Schedule 3.16 or as set forth in
the Public Record Documents,  there is no (i) action, suit, claim, proceeding or
investigation  pending or, to the Borrower's  knowledge  threatened,  against or
affecting the Borrower,  at law or in equity,  or before or by any  governmental
department,  commission,  board,  bureau,  agency  or  instrumentality,  whether
domestic or  foreign,  (ii)  arbitration  proceeding  relating  to the  Borrower
pending  under  collective   bargaining   agreements  or  otherwise,   or  (iii)
governmental inquiry pending or, to the Borrower's knowledge, threatened against
or affecting the Borrower  (including  without  limitation any inquiry as to the
qualification of the Borrower to hold or receive any license or permit),  and to
the Borrower's knowledge there is no reasonable basis for any of the foregoing.

          (b) The Borrower has not received any opinion or  memorandum  or legal
advice  from  legal  counsel  to the  effect  that it is  exposed,  from a legal
standpoint,  to any  liability  or  disadvantage  which may be  material  to its
business, prospects, financial condition,  operations,  property or affairs. The
Borrower is not in default with respect to any order, writ, injunction or decree
known to or served upon the Borrower of any court or of any federal, provincial,
state, municipal or other governmental  department,  commission,  board, bureau,
agency or  instrumentality,  whether domestic or foreign.  There is no action or
suit by the Borrower pending, threatened or contemplated against others.

          (c) The Borrower has complied in all material  respects with all laws,
rules,   regulations  and  orders   applicable  to  its  business,   operations,
properties,  assets,  products and  services,  the  Borrower  has all  necessary
permits,  licenses and other authorizations  required to conduct its business as
conducted and as proposed to be conducted,  and the Borrower has been  operating
its business  pursuant to and in compliance  with the terms of all such permits,
licenses and other authorizations.

          (d) There is no  existing  law,  rule,  regulation  or order,  and the
Borrower is not aware of any proposed law,  rule,  regulation or order,  whether
domestic or foreign,

                                       29
<PAGE>

which would  prohibit or restrict the  Borrower  from,  or otherwise  materially
adversely affect the Borrower in, conducting its business in any jurisdiction in
which it is now conducting business or in which it currently proposes to conduct
business.

3.17 ENVIRONMENTAL PROTECTION

          (a) The Borrower  has not caused or allowed,  or  contracted  with any
party for, the generation, use, transportation,  treatment,  storage or disposal
of any Hazardous  Substances in connection with the operation of its business or
otherwise.  To the  Borrower's  knowledge,  the  Borrower,  the operation of its
business,  and any real  property  that the Borrower  owns,  leases or otherwise
occupies or uses  ("Premises")  are in material  compliance  with all applicable
Environmental  Laws and orders or  directives  of any  governmental  authorities
having   jurisdiction  under  such  Environmental   Laws,   including,   without
limitation,  any Environmental  Laws or orders or directives with respect to any
cleanup  or  remediation  of any  release  or threat  of  release  of  Hazardous
Substances.

          (b) The Borrower has not received any citation,  directive,  letter or
other communication,  written or oral, or any notice of any proceeding, claim or
lawsuit,  from any Person  arising out of the  ownership  or  occupation  of the
Premises, or the conduct of its operations, and the Borrower is not aware of any
basis  therefor.  The Borrower has obtained and is maintaining in full force and
effect  all  necessary   permits,   licenses  and  approvals   required  by  all
Environmental  Laws  applicable  to the  Premises  and the  business  operations
conducted thereon (including  operations  conducted by tenants on the Premises),
and is in compliance with all such permits, licenses and approvals. The Borrower
has not caused or allowed a release,  or a threat of release,  of any  Hazardous
Substance unto, at or near the Premises.

3.18 OFFERING OF THE NOTE AND CONVERSION SECURITIES

     Neither the Borrower nor any Person  authorized or employed by the Borrower
as agent, broker, dealer or otherwise in connection with the offering or sale of
the Note or any  securities of the Borrower  similar to the Note has offered the
Note or  Conversion  Securities  or any such  similar  security  for sale to, or
solicited any offer to buy the Note or Conversion Securities or any such similar
security from, or otherwise  approached or negotiated with respect thereto with,
any Person or Persons,  and neither the  Borrower  nor any Person  acting on its
behalf has taken or will take any other action (including,  without  limitation,
any offer,  issuance or sale of any security of the Borrower under circumstances
which might  require the  integration  of such  security with Note or Conversion
Securities  under  the  Securities  Act  or the  rules  and  regulations  of the
Commission thereunder),  in either case so as to subject the offering,  issuance
or sale of the Note or issuance of the  Conversion  Securities  to Compaq to the
registration provisions of the Securities Act.

     During the period in which the Note and Conversion  Securities were offered
for sale, neither the Borrower nor any of its Affiliates, nor any Persons acting
on its behalf has made or will make any Direct Selling  Efforts (as such term is
defined  in  Regulation  S) in the  United  States or has taken or will take any
action that would cause the

                                       30
<PAGE>

exemption registration afforded by Regulation S to be unavailable for offers and
sales of the Note and Conversion Securities.

3.19 FOREIGN CORRUPT PRACTICES ACT

     The  Borrower  has not  taken  any  action  which  would  cause it to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any rules
and regulations thereunder, or any similar laws of any foreign jurisdiction.  To
the  Borrower's  knowledge,  there is not now,  and there has  never  been,  any
employment by the Borrower of, or  beneficial  ownership in the Borrower by, any
governmental or political official in any country in the world.

3.20 BROKERS

     Except  as set  forth  on  Section  3.20 of the  Disclosure  Schedule,  the
Borrower  does not have any  contract,  arrangement  or  understanding  with any
broker, finder or similar agent with respect to the transactions contemplated by
this Agreement.

3.21 DISCLOSURE

     None of the  Transaction  Documents,  nor any  Schedule  or  Exhibit to any
Transaction  Document or any other documents delivered by the Borrower to Compaq
in anticipation of the investment made hereunder contains an untrue statement of
a  material  fact or omits a  material  fact  necessary  to make the  statements
contained herein or therein not misleading.  None of the statements,  documents,
certificates or other items prepared or supplied by the Borrower with respect to
the transactions  contemplated hereby contains an untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
not  misleading.  There is no fact that the Borrower has not disclosed to Compaq
and their  counsel in writing  and of which the  Borrower  is aware which has or
could have a Material Adverse Effect.

3.22 SURVIVAL OF REPRESENTATIONS AND WARRANTIES

     All  agreements,  representations,  warranties  and  covenants  made by the
Borrower in this Agreement are material,  will be considered to have been relied
on by Compaq and will survive the  execution  and delivery of this  Agreement or
any investigation made at any time by or on behalf of Compaq and any disposition
or payment of the Obligations  under the Note until repayment and performance in
full of the  Obligations  under the Note and  termination  of all  rights of the
Borrower that, if exercised,  would result in the existence of Obligations under
the Note.

                                   ARTICLE 4

                    REPRESENTATIONS AND WARRANTIES OF COMPAQ

     Compaq represents and warrants to the Borrower that:

                                       31
<PAGE>

          (a) it has the full power and authority to enter into and perform this
Agreement  and the  Transaction  Documents to which it is a party in  accordance
with their terms and to  consummate  the  transactions  contemplated  hereby and
thereby;

          (b)  it has  duly  executed  and  delivered  this  Agreement  and  the
Transaction  Documents to which it is a party and such agreements constitute the
valid and binding  obligations of Compaq  enforceable  in accordance  with their
respective terms;

          (c) it has not been formed  specifically  for the purpose of investing
in the Borrower;

          (d) the aggregate purchase price for the Note is in excess of $97,000;

          (e) it has not received any offering memorandum in connection with the
transactions contemplated in this Agreement

          (f) the  Note  being  purchased  by it is being  acquired  for its own
account  for the  purpose  of  investment  and not with a view to or for sale in
connection  with any  distribution  thereof  except  as may be  permitted  under
applicable laws;

          (g) it does not have any contract,  arrangement or understanding  with
any  broker,   finder  or  similar  agent  with  respect  to  the   transactions
contemplated by this Agreement;

          (h) Compaq  recognizes  that the investment  involves a high degree of
risk as more fully set forth in the  Borrower's  filings with the US SEC and the
Commission;

          (i) Compaq has been  independently  advised as to the applicable  hold
period imposed in respect of the Conversion Securities by securities legislation
in the jurisdiction in which it resides and confirms that no representation  has
been made respecting the applicable  hold periods for the Conversion  Securities
and is aware of the risks and other characteristics of the Conversion Securities
and of the fact that Compaq may not be able to resell the Conversion  Securities
except in accordance with the applicable  securities  legislation and regulatory
policy;

          (j) Compaq has not become aware of any advertisement of the investment
in the Note or the Conversion  Securities,  including,  without  limitation,  in
printed  media of general and regular paid  circulation,  radio,  television  or
otherwise  with  respect  to the  distribution  of the  Note  or the  Conversion
Securities;

          (k) Compaq (or others for whom it is  contracting  hereunder) has been
advised to consult its own legal and tax  advisors  with  respect to  applicable
resale  restrictions  and tax  considerations,  and it (or others for whom it is
contracting  hereunder) is responsible  for compliance  with  applicable  resale
restrictions and applicable tax legislation;

          (l) Compaq  acknowledges that the Note and Conversion  Securities have
not been  registered  under the 1933 Act and may not be  offered  or sold in the
United

                                       32
<PAGE>

States  unless  registered  under  the 1933 Act and the  securities  laws of all
applicable  states of the United States or an exemption  from such  registration
requirements  is  available,  and that the Borrower has no obligation or present
intention of filing a  registration  statement  under the 1933 Act in respect of
any of such securities; and

          (m)  Compaq  agrees  that if Compaq  shall  decide  to offer,  sell or
otherwise  transfer any of the Note or  Conversion  Securities,  Compaq will not
offer,  sell  or  otherwise  transfer  any  of  such  securities,   directly  or
indirectly,  unless the sale is made (a) to the Borrower, (b) in accordance with
Rule 144 or Rule 144A under the 1933 Act, if  available,  (c) outside the United
States  in  accordance  with  Rules  903 or 904  of  Regulation  S , or (d) in a
transaction that does not otherwise require  registration  under the 1933 Act or
any applicable  state  securities  laws if an opinion of counsel,  of recognized
standing  reasonably  satisfactory  to the  Borrower,  has been  provided to the
Borrower to that effect.

                                   ARTICLE 5

                            COVENANTS OF THE BORROWER

5.1  RESTRICTION ON SECURITY ISSUANCE

     The Borrower  agrees that for so long as any principal or interest  balance
remains  outstanding  on the  Note,  this  Agreement  remains  in  effect or the
Strategic  Alliance and Sales Agreement remains in effect,  neither the Borrower
nor  any of its  Subsidiaries  shall:  (i)  other  than  upon  the  exercise  or
conversion of any currently  outstanding security convertible into,  exercisable
for or other rights to acquire  equity  securities  of the  Borrower,  issue any
equity or debt  security  to or incur any other  indebtedness  to any  Specified
Person;  (ii) neither  issue nor invest in any equity or debt  security to form,
create or  participate  in any  partnership,  joint  venture or other  corporate
business  enterprise  with any  Specified  Person;  (iii)  allow  any  director,
officer,  employee,  agent or other  representative  of any Specified  Person to
attend meetings of the Borrower's Board or any  Subsidiary's  board of directors
or any  committee  thereof or any  advisory  committee  of the  Borrower  or any
Subsidiary as a non-director representative;  and (iv) vote or cause to be voted
any of its  securities  having the power to vote in the  election  of  directors
("Voting  Securities")  in  favor  of the  election  of any  director,  officer,
employee,  agent or other representative of a Specified Person to the Borrower's
Board or any  Subsidiary's  board of  directors.  The  Borrower  represents  and
warrants  that neither it, nor to the best of its knowledge any holder of Voting
Securities, intends to vote or cause to be voted any of its Voting Securities in
favor  of the  election  of any  director,  officer,  employee,  agent  or other
representative of a Specified Person to the Borrower's Board or and Subsidiary's
board of directors.

5.2  BOARD OBSERVER RIGHTS

     For so long as any principal or interest balance remains outstanding on the
Note,  this  Agreement  remains in effect or the  Strategic  Alliance  and Sales
Agreement  remains  in  effect,  the  Borrower  shall  permit  one  non-director
representative of Compaq to attend

                                       33
<PAGE>

each meeting of the Board,  and to  participate in all  discussions  during each
such meeting (but not to vote on any  matter).  The Borrower  shall send to such
representative  notice of the time and place of each  meeting in the same manner
and at the same time as it sends such notice to its directors,  and the Borrower
shall provide to such  representative  complete copies of all notices,  reports,
minutes, consents and other documents at the same time and in the same manner as
they are  provided  to its  directors,  provided,  however,  that  the  Borrower
reserves  the right to  exclude  such  representative  from any  meeting  or any
portion thereof, and deny access to any such material,  if and to the extent the
Borrower  believes  that such  exclusion  or  denial  of  access  is  reasonably
necessary to preserve the attorney-client privilege where legal advice is sought
or offered or there are discussions  which may,  directly or indirectly,  affect
Compaq;  provided,  further, that such representative will be excluded only from
that part of the  meeting  or denied  access to that part of such  materials  to
which the foregoing clause applies.

5.3  FINANCIAL INFORMATION

     For so long as any amounts are due and payable  under the  Revolving  Loan,
the  Borrower  will furnish to Compaq,  the  following  reports:

          (a) As soon as  practicable  after the end of each fiscal year, and in
any event within 120 days thereafter, audited consolidated balance sheets of the
Borrower and its  subsidiaries,  if any, as of the end of such fiscal year,  and
audited consolidated statements of income and cash flows of the Borrower and its
Subsidiaries,  if any,  for such year,  prepared in  accordance  with  generally
accepted  accounting  principles  and setting forth in each case in  comparative
form the figures for the previous  fiscal  year,  all in  reasonable  detail and
certified by independent public accountants of national standing selected by the
Borrower,  however,  for so long as the  Borrower  and its  Subsidiaries  remain
subject to (i) the reporting  requirements of the Securities Act, the Borrower's
timely filing with the Commission of its annual report on the form prescribed by
Securities  Act or  (ii)  the  reporting  requirements  of  the  1934  Act,  the
Borrower's  timely  filing  with  the  United  States  Securities  and  Exchange
Commission  of its annual report on Form 10-K and any  amendments  thereto shall
satisfy the Borrower's obligations under this Section 5.3(a);

          (b) As soon as practicable  after the end of each quarter,  and in any
event within 60 days after each quarter, an unaudited quarterly report including
a balance sheet,  profit and loss statement and cash flow analysis  (prepared in
accordance  with  generally  accepted  accounting   principles  other  than  for
accompanying  notes  and  subject  to  changes  resulting  from  year-end  audit
adjustments)  as of the end of and for the year to date and  quarter  ending  on
such period  end,  however,  for so long as the  Borrower  and its  Subsidiaries
remain  subject to (i) the reporting  requirements  of the  Securities  Act, the
Borrower's  timely  filing with the  Commission of its annual report on the form
prescribed by the Securities Act or (ii) the reporting  requirements of the 1934
Act, the Borrower's timely filing with the United States Securities and Exchange
Commission  of its  interim  report  for  such  quarter  on  Form  10-Q  and any
amendments thereto;  shall satisfy the Borrower's obligations under this Section
5.3(b);

                                       34
<PAGE>

          (c)  Within  ten (10) days  after the end of each  month,  an aging of
Borrower's  Accounts  at the end of such  month,  including  a  listing  of each
individual  Account  Debtor and an aggregation of the total Accounts owed by any
individual Account Debtor and its Affiliates.

5.4  OPERATING PLAN AND BUDGET

     For so long as the any amounts  are due and payable  under the Note or this
Agreement remains in effect, as soon as practicable upon approval or adoption by
the Borrower's Board, but not later than 60 days prior to the Borrower's current
fiscal year end, the Borrower  will furnish  Compaq with the  Borrower's  Annual
Budget.

5.5  INSPECTION

     For so long as any principal or interest balance remains outstanding on the
Revolving Loan, the Borrower will permit Compaq, at Compaq's  expense,  to visit
and  inspect  the  Borrower's  properties,  to examine  its books of account and
records and to discuss the  Borrower's  affairs,  finances and accounts with its
officers, all at such reasonable times as may be requested by Compaq;  provided,
however,  that the  Borrower is not  obligated  pursuant to this  Section 5.5 to
provide access to any  information  which it reasonably  considers to be a trade
secret or similar  confidential  information  unless  Compaq agrees to keep such
information confidential.

5.6  INSTRUCTIONS TO TRANSFER AGENT

     The  Borrower  shall upon receipt of due  conversion  of all or part of the
Note issue  irrevocable  instructions to its transfer agent,  and any subsequent
transfer agent, to issue  certificates,  registered in the name of Compaq or its
respective  nominee(s),  for  the  Conversion  Securities  in  such  amounts  as
specified from time to time by the Holder to the Company upon  conversion of all
or part of the Note.  The  Borrower  warrants  it will not give any  instruction
other than the  irrevocable  transfer  agent  instructions  referred  to in this
Section 5.6, to its transfer  agent with respect to the  Conversion  Securities.
Nothing in this  Section 5.6 shall affect in any way Compaq's to comply with all
securities laws applicable to the resale of the Conversion Securities.

5.7  OTHER AFFIRMATIVE COVENANTS

     Without limiting any other covenants and provisions  hereof, for so long as
the any amounts are due and payable under the Note the Borrower will perform and
observe the following covenants and provisions,  and will cause each Subsidiary,
if any, to perform and observe such of the following covenants and provisions as
are applicable to such Subsidiary:

          (a) Pay and discharge all taxes,  assessments and governmental charges
or levies imposed upon it or upon its income,  profits or business,  or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims which,  if unpaid,  might become a lien or charge upon any
properties of the Borrower or any Subsidiary;  provided,  however,  that neither
the  Borrower  nor  any  Subsidiary  will  be

                                       35
<PAGE>

required to pay any such tax,  assessment,  charge, levy or claim which is being
contested in good faith and by  appropriate  proceedings  if the Borrower or any
Subsidiary will have set aside on its books  sufficient  reserves,  if any, with
respect thereto.

          (b) Pay and cause each  Subsidiary  to pay, when due, or in conformity
with customary trade terms, all lease obligations, all trade debt, and all other
indebtedness  incident to the  operations  of the Borrower or its  Subsidiaries,
except such as are being  contested in good faith and by proper  proceedings  if
the Borrower or Subsidiary concerned will have set aside on its books sufficient
reserves, if any, with respect thereto.

          (c) Preserve and maintain, and, unless the Borrower deems it not to be
in its best  interests,  cause each  Subsidiary  to preserve and  maintain,  its
corporate  existence,  rights,  franchises and privileges in the jurisdiction of
its incorporation,  and qualify and remain qualified,  and cause each Subsidiary
to qualify and remain qualified,  as a foreign  corporation in each jurisdiction
in which such  qualification  is  necessary or desirable in view of its business
and operations or the ownership or lease of its properties.

          (d) Give Compaq a copy of all notices sent to holders of the Company's
Common  Stock  and at least 20 days'  notice  of any  proposed  merger,  sale of
substantially   all  of  the  assets  or  shares  of  the  Company,   any  other
reorganization or  recapitalization  of the Company and any proposed issuance of
rights,  warrants or other convertible securities of the Borrower to its holders
of Common Stock.

          (e) Preserve and maintain its listing as a listed company on TSE.

          (f) Preserve and maintain its status as a "qualifying  issuer"  within
the meaning of MI 45-102.

          (g)  Secure,  preserve  and  maintain,  and cause each  Subsidiary  to
secure, preserve and maintain, all licenses and other rights to use the Borrower
Intellectual  Property owned or possessed by it and deemed by the Borrower to be
necessary to the conduct of its business and the businesses of its Subsidiaries,
taken as a whole.

          (h) Comply, and cause each Subsidiary to comply, with the requirements
of all applicable laws, rules, regulations and orders of any Governmental Body.

          (i) Keep, and cause each Subsidiary to keep adequate records and books
of account in which complete  entries will be made in accordance  with generally
accepted accounting principles  consistently  applied,  reflecting all financial
transactions of the Borrower and any Subsidiary,  and in which,  for each fiscal
year, all proper reserves for depreciation,  depletion,  returns of merchandise,
obsolescence,  amortization,  taxes,  bad debts and other purposes in connection
with its business will be made.

          (j) Maintain and preserve,  and cause each  Subsidiary to maintain and
preserve,  all of its properties and assets  necessary for the proper conduct of
its business,  in good repair,  working order and  condition,  ordinary wear and
tear excepted.

                                       36
<PAGE>

          (k) Comply, and cause each Subsidiary to comply, with all laws, rules,
and  regulations  applicable to any Employee  Benefit Plans and with all minimum
funding requirements applicable to any pension and Employee Benefit Plan.

          (l) Cause all technological  developments,  patentable or unpatentable
inventions,  discoveries or improvements  by the Borrower's or any  Subsidiary's
officers or  employees  to be  documented  in  accordance  with the  appropriate
professional standards and, where possible and commercially appropriate, to file
and  prosecute   Canadian,   United  States  and  foreign  patent  or  copyright
applications  relating  to and  protecting  such  developments  on behalf of the
Borrower or any Subsidiary.

5.8  NEGATIVE COVENANTS

     For so long as the any amounts are due and payable under the Revolving Loan
and this Agreement remains in effect the Borrower may not:

          (a)  sell,  convey,  or  otherwise  dispose  of  or  encumber  all  or
substantially  all of its assets or business,  or merge into or consolidate with
any other  corporation  (other than a wholly-owned  subsidiary  corporation)  or
effect any transaction or series of related  transactions in which more than 50%
of the voting power of the Borrower is disposed of;

          (b) sell,  convey,  grant an  exclusive  license  with  respect  to or
otherwise  dispose  or  create  a  security  interest  in any  of  the  Borrower
Intellectual  Property except such Borrower  Intellectual  Property which is not
material to the conduct of the  Borrower's  business as  currently  conducted or
contemplated to be conducted; or

          (c) make any material change in the nature of the business  carried on
by the Borrower.

5.9  POSTPONEMENT OF DELIVERABLES

     Notwithstanding anything herein to the contrary Compaq shall be entitled to
deliver to the  Borrower,  from time to time, a notice (the  "Delivery  Notice")
requiring  Borrower  to stop the  delivery of reports,  notices,  documents  and
information,  whether  written  or  oral,  otherwise  required  to be  delivered
pursuant to any Transaction  Document for such period of time or times specified
in the Delivery Notice. Borrower hereby covenants and agrees that it shall abide
by the terms and  conditions set out in the Delivery  Notice,  and that it shall
resume  the  delivery  to  Compaq  of  all  reports,   notices,   documents  and
information,  whether  written or oral,  after the expiry of the time period set
out in any Delivery Notice.

                                       37
<PAGE>

                                   ARTICLE 6

                                EVENTS OF DEFAULT

6.1  EVENTS OF DEFAULT

     The occurrence of any of the following  events shall be an Event of Default
under this  Agreement,  the Note and the other  Transaction  Documents  (each an
"Event of Default"):

          (a)  Failure to Pay.  The  Borrower  shall fail to pay any  principal,
interest or any other amount  required  under the terms of this  Agreement,  the
Note,  any other  Transaction  Document when due and payable or declared due and
payable whether by acceleration or otherwise; or

          (b) Failure to Repay Other Obligations. The Borrower shall fail to pay
any Obligation to Compaq other than those  described in subsection (a) above and
such  failure to pay shall  continue  uncured for a period of ten (10)  Business
Days; or

          (c) Breaches of Covenants.  The Borrower or any Subsidiary  shall fail
to observe or perform any covenant, obligation, condition or agreement contained
in this  Agreement  which failure shall  continue  uncured for ten (10) Business
Days; or

          (d)  Breaches of Note and Other  Transaction  Documents.  The Borrower
shall  fail to  observe  or  perform  any  covenant,  obligation,  condition  or
agreement  contained in the Note or any other Transaction  Document or any other
event which  constitutes  a default by the Borrower  under the Note or any other
Transaction  Document  shall  occur,  which  failure or default  shall  continue
uncured for the longer of ten (10) Business Days or any  applicable  cure period
set forth in the Note or such other Transaction Document;  provided, that, there
shall be no cure period with respect to any default under Section 7.1(a) hereto;
or

          (e)  Representations  and Warranties.  Any  representation or warranty
made  by the  Borrower  to  Compaq  in  this  Agreement  or in any of the  other
Transaction Documents shall be untrue in any material respect when made; or

          (f) Voluntary Bankruptcy or Insolvency Proceedings. The Borrower shall
(i) apply for or consent to the appointment of a receiver,  trustee,  liquidator
or custodian of itself or of all or a substantial part of its property,  (ii) be
unable,  or admit in writing its inability,  to pay its debts  generally as they
mature,  (iii) make a general  assignment  for the  benefit of its or any of its
creditors,  (iv) be  dissolved  or  liquidated  in full or in part,  (v)  become
insolvent  (as such term may be  defined  or  interpreted  under any  applicable
statute),   (vi)  commence  a  voluntary  case  or  other   proceeding   seeking
liquidation,  reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the  appointment of or taking  possession of
its  property  by any  official  in an  involuntary  case  or  other  proceeding
commenced  against it, or (vii) take any action for the purpose of effecting any
of the foregoing; or

                                       38
<PAGE>

          (g) Involuntary Bankruptcy or Insolvency Proceedings.  Proceedings for
the appointment of a receiver,  trustee, liquidator or custodian of the Borrower
or of all or a substantial part of the property thereof,  or an involuntary case
or other proceedings  seeking  liquidation,  reorganization or other relief with
respect to the Borrower or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such  proceeding  shall not be dismissed or discharged  within
thirty (30) days of commencement; or

          (h) Perfection of Security Interest.  The Security Agreement shall for
any reason (other than pursuant to the terms hereof) cease to create a valid and
perfected  security interest in the Collateral  purported to be covered thereby;
or

          (i) Other Liens.  Other than with respect to a Permitted  Encumbrance,
any notice of lien, levy or assessment is filed of record with respect to all or
any part of the Collateral by any Person; or

          (j) Lack of Enforceability.  Any provision of this Agreement, the Note
or any of the other Transaction Documents shall for any reason cease to be valid
and binding on or  enforceable  against the Borrower,  as a consequence of which
the  rights  of  Compaq  would  be  materially  and  adversely  affected  in its
reasonable judgment; or

          (k)  Injunction  or  Attachment.  There is an injunction or attachment
issued  against any of the  Borrower's  property or materially  restricting  the
operation of the Borrower's business; or

          (l)  Acceleration  of  Indebtedness.  Any event  which  results in the
acceleration  of the maturity of the  indebtedness  of the Borrower to others in
excess of US $100,000  under any  indenture,  note,  agreement  or other form of
undertaking; or

          (m)  Other  Defaults.  The  Borrower  defaults  in the  observance  or
performance of any provision  relating to the Borrower's  indebtedness in excess
of  US$100,000  to any  creditor  other than  Compaq and  thereby  enables  such
creditor to demand payment of such indebtedness.

6.2  REMEDIES.

          (a) Generally. Upon the occurrence and continuation of a Default or an
Event of Default, any and all Obligations  represented by the Note shall, at the
option of Compaq,  become  immediately due and payable WITHOUT DEMAND, OR NOTICE
OF  DEMAND,  PRESENTMENT,  PROTEST,  NONPAYMENT  OR  DISHONOR  ALL OF WHICH  ARE
EXPRESSLY  WAIVED BY THE  BORROWER,  and Compaq  shall have,  in addition to any
other rights and remedies  provided for in the Note,  the Security  Agreement or
any other  Transaction  Document,  all of the rights and  remedies  of a secured
creditor  under  the  PPSA,  and any  other  applicable  statute,  or  otherwise
available to Compaq at law or in equity.  Without limiting the generality of the
foregoing,  Compaq shall have the  following  rights,  remedies and  obligations
after the occurrence of an Event of Default:

                                       39
<PAGE>

               (i) Compaq  shall be entitled  to,  without  notice,  suspend the
Revolving Loan with respect to further  Revolving  Loan  Advances,  increase the
rate of interest  applicable to the  Obligations  represented by the Note to the
Default  Rate,  and  declare  any or all  Obligations  due  under the Note to be
immediately due and payable.

               (ii) In addition to and not in limitation of all rights of offset
that  Compaq  may have  under  applicable  law,  Compaq  shall have the right to
appropriate  and apply to the payment of and to set-off  against the  Borrower's
Obligations any and all balances,  credits,  deposits,  accounts or money of the
Borrower then or thereafter received or held by or under the control of Compaq.

               (iii) The remedies of Compaq  hereunder  are  cumulative  and the
exercise of any one or more of the remedies provided for herein, under any other
Transaction Document or under the PPSA shall not be construed as a waiver of any
of the other remedies of Compaq,  so long as any part of the  Obligations  shall
remain unsatisfied.

          (b)  Continuing  Right to Convert.  No  declaration of a Default or an
Event of  Default,  acceleration  of the  amounts  due and  payable  under  this
Agreement,  the Note or any other  Transaction  Document  nor any other  actions
taken by Compaq to collect the amounts due and payable under this Agreement, the
Note or any other  Transaction  Document  shall prevent Compaq or any subsequent
permitted  assignee of the Note from converting any unpaid principal or interest
balance due under the Note at any time into equity securities of the Borrower in
accordance with the provisions of the Note.

          (c) Enforcement Expenses.  The Borrower shall reimburse Compaq for and
Compaq shall be entitled to collect as additional indebtedness due hereunder all
costs,  expenses  and fees  incurred  by the Compaq in the  enforcement  of this
Agreement and/or the Transaction  Documents and collection of the Note including
but not limited to all reasonable attorneys fees and expenses.  Any and all such
costs, expenses and fees shall be deemed additional  Obligations of the Borrower
under the Note.

          (d) Waiver of Remedies.  Compaq shall not (by act, delay,  omission or
otherwise) be deemed to have waived any of its rights or remedies hereunder,  or
any provision hereof, unless such waiver is in writing signed by Compaq, and any
such  waiver  shall be  effective  only to the  extent  specifically  set  forth
therein; and a waiver by Compaq of any right or remedy under this Agreement, the
Note  or any  other  Transaction  Document  on any  one  occasion  shall  not be
construed  as a bar to or waiver of any such  right or remedy  which the  Compaq
would otherwise have had on any future  occasion.  The Borrower gives consent to
Compaq to extend time,  accept partial payments,  to compound,  release or delay
enforcement of rights against any party liable under this Agreement, the Note or
any other Transaction Document or against the Collateral or any other security.

          (e) Injunctive Relief.  The Borrower  acknowledges that a breach by it
of its Obligations  hereunder will cause irreparable harm to Compaq and that the
remedy at law for any such  breach may be  inadequate.  The  Borrower  therefore
agrees that, in the event

                                       40
<PAGE>

of any such breach or threatened breach,  Compaq 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.

          (f) Rights of Compaq; Limitations on Compaq's Obligations.

               (i) Limitations on Compaq's Liability.  Compaq will not be liable
to the Borrower or any other Person for any failure or delay in  exercising  any
of the rights of the Borrower  under this  Agreement  (including  any failure to
take possession of, collect, sell, lease or otherwise dispose of any Collateral,
or to preserve  rights against prior  parties).  Neither Compaq nor any agent of
Compaq (including,  in Alberta or British Columbia,  any sheriff) is required to
take, or will have any liability for any failure to take or delay in taking, any
steps  necessary or advisable to preserve rights against other Persons under any
Collateral  in its  possession.  Compaq  will not be  liable  for  any,  and the
Borrower  will bear the full  risk of all,  loss or damage to any and all of the
Collateral  (including  any  Collateral  in the  possession  of  Creditor or any
receiver  or  receiver-manager)  caused  for any  reason  other  than the  gross
negligence or wilful misconduct of Compaq.

               (ii) Release of Information.  The Borrower  authorizes  Compaq to
provide a copy of this Agreement and such other  information as may be requested
of Compaq by Persons entitled  thereto  pursuant to any applicable  legislation,
and otherwise with the consent of the Borrower.

                                   ARTICLE 7

                            CONDITIONS TO THE CLOSING

7.1  CONDITIONS OF CLOSING

     The  obligation of Compaq to loan monies and advance credit to the Borrower
is, at its option,  subject to the satisfaction,  on or before the Closing Date,
of the following conditions:

          (a) Opinion of the Borrower's  Counsel.  Compaq shall have received an
opinion  dated the Closing  Date from each of (i) Blake,  Cassels & Graydon LLP,
British Columbia  counsel for the Borrower,  (ii) Wedge  Information  Technology
Lawyers,  technology  counsel for the  Borrower  and (iii) Dorsey & Whitney LLP,
United States counsel for the Borrower,  each in form and scope  satisfactory to
Compaq and their counsel,  in  substantially  the form of the opinions  attached
hereto as Exhibit D.

          (b)  Representations  and  Warranties  to be  True  and  Correct.  The
representations  and warranties  contained in Article 3 shall be true,  complete
and correct on and as of the  Closing  Date with the same force and effect as if
they had been made on such date.

          (c)  Performance.  The Borrower shall have performed and complied with
all agreements  contained herein required to be performed or complied with by it
before or at the Closing Date,

          (d) All Proceedings to be Satisfactory. All corporate action and other
proceedings  to be taken by the  Borrower in  connection  with the  transactions
contemplated  hereby and all  documents  incident  thereto  shall be in form and
substance reasonably  satisfactory to Compaq and its counsel, and Compaq and its
counsel shall have received all such counterpart facsimile or certified or other
copies of such documents as they reasonably may request.

          (e) Supporting  Documents.  Compaq and its counsel shall have received
copies of the following documents:

               (i) (A) the  Memorandum  certified as of a recent date  preceding
the Closing Date by the Registrar of Companies for British  Columbia,  and (B) a
certificate  of  said  Secretary  dated  as  of a  recent  date  as to  the  due
incorporation and good standing of the Borrower and the payment of all taxes due
and owing by the Borrower;

               (ii) a certificate of an executive  officer of the Borrower dated
the  Closing  Date and  certifying:  (A)  that  attached  thereto  is a true and
complete  copy of the  Articles of the Borrower as in effect on the date of such
certification;  (B) that  attached  thereto is a true and  complete  copy of all
resolutions adopted by the Board or the shareholders of the Borrower authorizing
the  execution,  delivery and  performance  of the  Transaction  Documents,  the
issuance,  sale and delivery of the Note and the  reservation  of the Conversion
Securities,  and that all such  resolutions are in full force and effect and are
all the resolutions adopted in connection with the transactions  contemplated by
the  Transaction  Documents;  (C) that the Memorandum has not been amended since
the date of the last amendment referred to in the certificate delivered pursuant
to clause (i)(B) above; and (D) to the incumbency and specimen signature of each
officer of the Borrower executing any of the Transaction Documents, the Note and
any certificate or instrument  furnished pursuant hereto, and a certification by
another  officer of the  Borrower  as to the  incumbency  and  signature  of the
officer signing the certificate referred to in this clause (ii);

               (iii) a certificate of an executive  officer of the Borrower that
all of the conditions set forth in this Article 7 have been satisfied; and

               (iv) such additional  supporting  documents and other information
with  respect to the  operations  and  affairs of the  Borrower as Compaq or its
counsel reasonably may request.

          (f) Security Agreement. The Borrower shall have executed and delivered
the Security Agreement.

          (g) Code  Escrow  Agreement.  The  Borrower  shall have  executed  and
delivered the Code Escrow Agreement.

                                       42
<PAGE>

          (h) Strategic  Alliance and Sales  Agreement.  The Borrower shall have
executed and delivered the Strategic Alliance and Sales Agreement.

          (i) License Agreement.  The Borrower shall have executed and delivered
the License Agreement.

          (j)  Discharge.  All  prior  registrations  of any  Security  Interest
against the  Borrower  other than the ones listed as Permitted  Encumbrances  in
Section  3.7(b) of the  Disclosure  Schedule  shall have been  discharged and an
acknowledgement,  in form and substance  satisfactory to Compaq, shall have been
executed and delivered by The  Toronto-Dominion  Bank that its security interest
relates only to cash  collateralized  accounts of the Borrower with an aggregate
value not exceeding Cdn$139,000 and US$260,000, on or prior to the Closing.

          (k) Preemptive  Rights.  All  shareholders  of the Borrower having any
preemptive,  first  refusal or other  rights with respect to the issuance of the
Note or the  Conversion  Securities  shall have  irrevocably  waived the same in
writing.

          (l)  Fees  of  Compaq's  Counsel.  The  Borrower  shall  have  paid in
accordance  with the  provisions  of Section  9.1,  its  portion of the fees and
disbursements  of Baker &  McKenzie,  special  counsel  to  Compaq  invoiced  at
Closing.

     All such documents  shall be  satisfactory  in form and substance to Compaq
and its counsel.

                                   ARTICLE 8

                                 INDEMNIFICATION

8.1  INDEMNIFICATION OBLIGATIONS OF THE BORROWER AND KEY PERSONS

          (a) Indemnity.  The Borrower hereby agrees to indemnify,  pay and hold
Compaq  and  its  officers,   directors,   employees,   agents,  and  affiliates
(collectively,  the  "Indemnitees")  harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims,  costs,  expenses  and  disbursements  of any kind or nature  whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such  Indemnitees in connection with any  investigative,  administrative  or
judicial proceeding commenced or threatened, whether or not such Indemnitees are
designated  parties  thereto)  that may be imposed on,  incurred by, or asserted
against  the  Indemnities,  in any manner  relating  to or  arising  out of this
Agreement,  the Note,  any other  Transaction  Document  (except  the  Strategic
Alliance and Sales  Agreement) or any other  agreement or document  executed and
delivered by the Borrower in connection  herewith or therewith (the "Indemnified
Liabilities");  provided, however, that the Borrower shall have no obligation to
an Indemnitee hereunder with respect to Indemnified Liabilities arising from the
negligence or willful misconduct of such Indemnitee.

                                       43
<PAGE>

          (b) Unenforceability. To the extent that the undertaking to indemnify,
pay and hold  harmless  set forth in this Section may be  unenforceable  because
such  undertaking  violates  any  law  or  public  policy,  the  Borrower  shall
contribute  the maximum  portion that it is  permitted to pay and satisfy  under
applicable law to the payment and  satisfaction of all  Indemnified  Liabilities
incurred by the Indemnities or any of them.

          (c) Indemnity  Obligation  Secured by Collateral.  Any amounts paid by
any  Indemnitee  hereunder  as  to  which  such  Indemnitee  has  the  right  to
reimbursement shall constitute Obligations secured by the Collateral.

          (d)  Survival.  The  provisions  of this  Section,  other than Section
8.1(c), shall survive the termination of this Agreement and the discharge of the
other Obligations.

                                   ARTICLE 9

                                  MISCELLANEOUS

9.1  EXPENSES

     Each  party  hereto  will  pay its own  expenses  in  connection  with  the
transactions  contemplated  hereby,  whether or not such  transactions  shall be
consummated, provided, however, that the Borrower shall pay: (i) 50% of the fees
and disbursements of Baker & McKenzie,  special counsel to Compaq, in connection
with  the  due  diligence,   negotiation,   drafting  of,  and  Closing  of  the
transactions contemplated by, this Agreement and the other Transaction Documents
up to a maximum of  US$15,000;  (ii) before or after the Closing  shall pay such
fees and  disbursements of Compaq's  attorneys in connection with any subsequent
amendment,  waiver or consent of any of the Transaction Documents (excluding the
Strategic  Alliance and Sales  Agreement)  or any related  document or agreement
requested by the  Borrower;  and (iii) after the Closing shall pay such fees and
disbursements of Compaq's attorneys in connection with any enforcement of any of
the Transaction Documents or any related document or agreement.

9.2  SURVIVAL OF AGREEMENTS

     All covenants,  agreements,  representations  and warranties made in any of
the Transaction  Documents or any certificate or instrument  delivered to Compaq
pursuant to or in connection with any of the Transaction Documents shall survive
the execution and delivery of all of the  Transaction  Documents,  the issuance,
sale and delivery of the Note and the  issuance  and delivery of the  Conversion
Securities,  and all statements contained in any certificate or other instrument
delivered by the Borrower under or in connection with the Transaction  Documents
shall  be  deemed  to  constitute  representations  and  warranties  made by the
Borrower.

                                       44
<PAGE>

9.3  PARTIES IN INTEREST

     All  representations,  covenants  and  agreements  contained  in any of the
Transaction  Documents  by or on behalf of any of the parties  hereto shall bind
and  inure to the  benefit  of the  respective  successors,  assigns,  heirs and
representatives  of the parties  hereto  whether so  expressed  or not.  Without
limiting the generality of the  foregoing,  all  representations,  covenants and
agreements  benefiting  Compaq  shall  inure  to  the  benefit  of any  and  all
subsequent  holders  from  time to time of Note or  Conversion  Securities.

9.4  NOTICES

     All  notices,  consents,  waivers,  and  other  communications  under  this
Agreement  must be in  writing  and will be  deemed  given  to a party  when (a)
delivered  to the  appropriate  address  by  hand  or by  nationally  recognized
overnight courier service (costs prepaid);  (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting  equipment;  or (c) received or
rejected by the addressee,  if sent by certified mail, return receipt requested;
in each case to the following  addresses,  facsimile numbers or e-mail addresses
and marked to the  attention  of the  individual  (by name or title)  designated
below (or to such other address,  facsimile number, e-mail address or individual
as a party may designate by notice to the other parties):

                (a)  if to Compaq, at:

                     Compaq Cayman Islands Investment Company
                     P.O. Box 265GT
                     Walker House,
                     Georgetown, Grand Cayman
                     Cayman Islands

                     with a copy to:

                     Compaq Computer Corporation
                     20555 SH 249
                     Houston, Texas 77070, USA
                     Attn: Ben K. Wells
                     Facsimile No. (281) 514-8381
                     E-mail Address:  Ben.K.Wells@Compaq.com
                     Attn: William Gervais
                     Facsimile No. (281) 514-4529
                     E-mail Address:

or at such other address as such Compaq shall have furnished to the Borrower in
writing in accordance with this Section 9.4, with a copy to:

                                       45
<PAGE>

                     Baker & McKenzie
                     One Prudential Plaza
                     130 East Randolph Drive
                     Chicago, Illinois 60601
                     Attention: Michael J. Fieweger
                     Facsimile No.:   (312) 861-2899
                     E-mail Address:Michael.J.Fieweger@Bakernet.com

                     and a copy to:

                     Baker & McKenzie BCE Place 181 Bay Street, Suite 2100
                     Toronto, ON M5J 2T3
                     Attention: Charles M. Magerman
                     Facsimile No.:   (416) 863-6275
                     E-mail Address:Charles.M.Magerman@Bakernet.com

                (b)  if to the Borrower:

                     Infowave Software, Inc.
                     4664 Lougheed Highway
                     Suite 200
                     Burnaby, British Columbia
                     V5C 5T5
                     Attention: Chief Financial Officer
                     Facsimile No.: (604) 473-3699
                     E-mail Address: cfo@infowave.com

                     with a copy to:

                     Blake, Cassels & Graydon LLP
                     Three Bentall Centre, Suite 2600
                     595 Burrard Street, PO Box 49314
                     Vancouver, BC V7X 1L3
                     Attention: Geoffrey Belsher
                     Facsimile No.:    (604) 631-3309
                     E-mail Address: geoff.belsher@blakes.com

9.5  DELAYS OR OMISSIONS

     Except as expressly  provided in this Agreement or in any other Transaction
Document,  no delay or omission to exercise any right,  power or remedy accruing
to any party to this Agreement or such  Transaction  Document upon any breach or
default of any other party under this  Agreement or such  Transaction  Document,
shall  impair any such right,  power or remedy of such  nondefaulting  party nor
shall it waive any such breach or default or waive any similar breach or default
thereafter occurring; nor shall any waiver

                                       46
<PAGE>

of any single breach or default waive any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval on the part of any
party of any breach or default  under this  Agreement  or any other  Transaction
Document, or any waiver on the part of the Borrower, any party of any provisions
or conditions of this Agreement or any Transaction Document,  must be in writing
and  shall  be  effective  only to the  extent  specifically  set  forth in such
writing.  All  remedies,  either under this  Agreement or any other  Transaction
Document,  or by law or otherwise afforded to any party to this Agreement or any
other Transaction Document, shall be cumulative and not alternative.

9.6  FURTHER ASSURANCES

     The parties  agree (a) to furnish  upon  request to each other such further
information,  (b) to execute and deliver to each other such other documents, and
(c) to do such  other acts and  things,  all as the other  party may  reasonably
request for the purpose of carrying out the intent of this Agreement.

9.7  ENTIRE AGREEMENT AND MODIFICATION

     This  Agreement  supersedes  all prior  agreements  among the parties  with
respect  to its  subject  matter and  constitutes  (along  with the  Transaction
Documents  delivered  pursuant  to this  Agreement)  a  complete  and  exclusive
statement of the terms of the agreement  between the parties with respect to its
subject  matter.  This Agreement may not be amended,  supplemented  or otherwise
modified except by a written agreement of the Borrower and Compaq.

9.8  INCORPORATION OF SCHEDULES

     The  Schedules  identified  in this  Agreement,  including  the  Disclosure
Schedule,  are  incorporated  herein  by  reference  and  made  a part  of  this
Agreement.

9.9  DISCLOSURE SCHEDULE

          (a) The  statements  in the  Disclosure  Schedule,  and  those  in any
supplement  thereto,  relate  only  to  the  provisions  in the  section  of the
Agreement to which they expressly relate and not to any other provision.

          (b) In the event of any  inconsistency  between the  statements in the
body of this  Agreement  and those in the  Disclosure  Schedule  (other  than an
exception expressly set forth as such in the Disclosure Schedule with respect to
a specifically  identified  representation  or warranty),  the statements in the
body of this Agreement will control.

9.10 TIME OF ESSENCE

     With regard to all dates and time  periods set forth or referred to in this
Agreement, time is of the essence.

                                       47
<PAGE>

9.11 SEVERABILITY

     If any  provision of this  Agreement or any other  Transaction  Document is
held invalid or unenforceable by any court of competent jurisdiction,  the other
provisions of this Agreement or such other  Transaction  Document will remain in
full  force  and  effect.  Any  provision  of this  Agreement  held  invalid  or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable;  provided that no such severance shall
be effective if it materially  changes the economic benefit of such Agreement to
any party thereto.

9.12 ASSIGNMENTS, SUCCESSORS, AND NO THIRD PARTY RIGHTS

     No party may assign any of its rights or  delegate  any of its  obligations
under this  Agreement  without  the prior  written  consent of the other  party,
except  that  Compaq  may  assign,  sell and  transfer  this  Agreement  and the
respective rights and obligations hereunder and/or under the Note in whole or in
part to Compaq Computer  Corporation,  or to one or more corporations the shares
of  which  are  beneficially,  directly  or  indirectly,  owned  by  it,  or any
subsequent  acquirer  of the  Note  or  Conversion  Securities.  Subject  to the
preceding  sentence,  this  Agreement  will apply to, be binding in all respects
upon,  and inure to the benefit of the  Borrower's  and Compaq's  successors and
permitted  assigns.  Nothing  expressed or referred to in this Agreement will be
construed  to give any  Person,  other than the parties to this  Agreement,  any
legal or  equitable  right,  remedy,  or claim  under  or with  respect  to this
Agreement or any provision of this  Agreement  except such rights as shall inure
to a successor or permitted assignee pursuant to this Section.

9.13 ENFORCEMENT OF AGREEMENT

     The  Borrower   acknowledges  and  agrees  that  Compaq  could  be  damaged
irreparably  if any of the  provisions  of this  Agreement  are not performed in
accordance  with the specific terms and that any breach of this Agreement by the
Borrower could not be adequately  compensated  in all cases by monetary  damages
alone. Accordingly,  the Borrower agrees that, in addition to any other right or
remedy to which  Compaq  may be  entitled,  at law or in  equity,  they shall be
entitled  to enforce any  provision  of this  Agreement  by a decree of specific
performance  and to temporary,  preliminary and permanent  injunctive  relief to
prevent  breaches  or  threatened  breaches  of any of the  provisions  of  this
Agreement, without posting any bond or other undertaking.

                                       48
<PAGE>

9.14 WAIVER

     The rights and remedies of the parties to this Agreement are cumulative and
not  alternative.  Neither any failure nor any delay by any party in  exercising
any right,  power,  or privilege  under this  Agreement or any of the  documents
referred to in this Agreement will operate as a waiver of such right,  power, or
privilege,  and no single or  partial  exercise  of any such  right,  power,  or
privilege will preclude any other or further  exercise of such right,  power, or
privilege  or the  exercise of any other  right,  power,  or  privilege.  To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this  Agreement or any of the  documents  referred to in this  Agreement  can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing  signed by the other party;  (b) no waiver that
may be given by a party will be applicable  except in the specific  instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any  Obligation of that party or of the right of the party giving
such  notice  or  demand  to take  further  action  without  notice or demand as
provided in this Agreement or the documents referred to in this Agreement.

9.15 JURISDICTION & SERVICE OF PROCESS

     Any  proceeding  arising  out  of or  relating  to  this  Agreement  or any
Transaction  Document  may be brought in the courts of the  Province  of British
Columbia, City of Vancouver,  and each of the parties irrevocably submits to the
non-exclusive jurisdiction of each such court in any such Proceeding, waives any
objection  it may now or  hereafter  have to venue or to  convenience  of forum,
agrees  that all  claims  in  respect  of the  Proceeding  shall  be  heard  and
determined  only in any such  court,  and  agrees  not to bring  any  Proceeding
arising out of or relating to this Agreement or any Transaction  Document in any
other court.  The parties  agree that any or all of them may file a copy of this
Section  with any  court as  written  evidence  of the  knowing,  voluntary  and
bargained  agreement between the parties  irrevocably to waive any objections to
venue or to convenience of forum.  Process in any Proceeding referred to in this
Section may be served on any party anywhere in the world.

     Nothing in this Agreement or any Transaction Document shall preclude Compaq
from  bringing  suit or taking other legal action in any other  jurisdiction  to
protect or realize on the  Collateral or any other security or Obligations or to
enforce a judgment or other court order.

9.16 ADVICE OF COUNSEL

     Each of the  parties  represents  to each other  party  hereto  that it has
discussed this Agreement with its counsel.

9.17 NO STRICT CONSTRUCTION

     The  parties  hereto  have  participated  jointly  in the  negotiation  and
drafting of this  Agreement.  In the event an ambiguity or question of intent or
interpretation  arises,  this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or  disfavoring  any party by virtue of

                                       49
<PAGE>

the authorship of any provisions of this Agreement.

9.18 DOLLAR REFERENCES

     Unless  otherwise  specified,  all  references  to dollar  amounts  in this
Agreement shall mean US Dollars.

9.19 JUDGMENT CURRENCY

     If, for the purpose of obtaining or enforcing judgment against the Borrower
in any court in any jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 9.19 referred to
as the "Judgment  Currency") an amount due under any Transaction Document in any
currency  (the  "Obligation  Currency")  other than the Judgment  Currency,  the
conversion shall be made at the rate of exchange  prevailing on the Business Day
immediately  preceding the date of actual payment of the amount due, in the case
of any  proceeding  in the courts of the  Province of Ontario or in the court of
any other  jurisdiction  that will give effect to such conversion  being made on
such  date,  or the date on which  the  judgment  is  given,  in the case of any
proceeding in the courts of any other  jurisdiction  (the  applicable date as of
which such conversion is made pursuant to this Section 9.19 being hereinafter in
this Section 9.19 referred to as the "Judgment Conversion Date").

     If, in the case of any proceeding in the court of any jurisdiction referred
to in Section 9.19, there is a change in the rate of exchange prevailing between
the Judgment Conversion Date and the date of actual receipt of the amount due in
immediately  available funds, the Borrower shall pay such additional  amount (if
any,  but in any event not a lesser  amount) as may be  necessary to ensure that
the amount  actually  received in the Judgment  Currency,  when converted at the
rate of exchange  prevailing on the date of payment,  will produce the amount of
the  Obligation  Currency  which  could have been  purchased  with the amount of
Judgment  Currency  stipulated in the judgment or judicial  order at the rate of
exchange  prevailing on the Judgment  Conversion  Date.  Any amount due from the
Borrower  under  Section  9.19 shall be due as a separate  debt and shall not be
affected  by  judgment  being  obtained  for any other  amounts  due under or in
respect of any of the Transaction Documents.

     The term "rate of exchange" in this Section 9.19 means the rate of exchange
at which  Compaq  would,  on the relevant  date at or about 12:00 noon  (Toronto
time),  be  prepared  to sell  the  Obligation  Currency  against  the  Judgment
Currency.

9.20 GOVERNING LAW

     This  Agreement  will be  governed by and  construed  under the laws of the
Province of British Columbia,  and the Federal law of Canada applicable therein,
without  regard  to  conflicts  of  laws   principles  that  would  require  the
application of any other law.

                                       50
<PAGE>

9.21 COUNTERPARTS

     This  Agreement may be executed in one or more  counterparts,  including by
facsimile, each of which will be deemed to be an original copy of this Agreement
and all of which, when taken together,  will be deemed to constitute one and the
same agreement.

9.22 DISPUTE RESOLUTION

     In the event of a dispute or claim of any kind arising under this Agreement
("Dispute"), then upon written request by either party, each of the parties will
appoint a business  executive  that was not  directly  involved  in the  Dispute
("Executive") to negotiate a good faith resolution.  The Executives will meet as
often as reasonably  necessary to gather and furnish relevant information to the
other that the parties  believe to be  appropriate.  Any  Dispute  not  resolved
within  ten (10)  business  days of the  written  request  may be  submitted  to
non-binding mediation,  which will be held in Toronto, Ontario. The parties will
agree upon a mediator who shall be a retired judge of the Ontario Superior Court
of Justice (or any  predecessor  court) on the roster of mediators  with the ADR
Chambers,  located in Toronto,  Ontario,  Canada and shall  participate  in good
faith in such  mediation  process.  If the  parties  are  unable to agree on the
mediator, they shall apply to the Ontario Superior Court of Justice for an order
appointing  one  with  the  cited  qualifications  from  the  ADR  Chambers.  No
litigation of the Dispute may be commenced until the thirtieth  (30th) day after
mediation begins; provided however; nothing in this section shall prevent either
party from  seeking  emergency  equitable  relief as  necessary  to preserve the
status quo or other rights.

     The parties have executed and delivered this  Convertible Loan Agreement as
of the date indicated in the first sentence of this Agreement.

                                     INFOWAVE SOFTWARE, INC.

                                     By: ______________________________
                                     Name:
                                     Its:

                                     Compaq CAYMAN ISLANDS COMPANY

                                     By: ______________________________
                                     Name:
                                     Its:EXHIBIT 10.54

"THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  AND ANY  SECURITIES  ISSUED
PURSUANT TO AN  EXERCISE OF THESE  WARRANTS  ARE  RESTRICTED  AND ARE SUBJECT TO
LIMITATIONS ON THEIR TRANSFER.  "THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
AND ANY  SECURITIES  ISSUED  PURSUANT TO AN EXERCISE OF THESE  WARRANTS HAVE NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES  SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT").  THESE SECURITIES MAY BE OFFERED,  SOLD, PLEDGED OR
OTHERWISE  TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN
COMPLIANCE  WITH RULE 904 OF  REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE
WITH THE EXEMPTION FROM THE REGISTRATION  REQUIREMENTS UNDER THE 1933 ACT AND IN
ACCORDANCE WITH APPLICABLE  STATE  SECURITIES LAWS, OR (D) IN A TRANSACTION THAT
DOES NOT REQUIRE  REGISTRATION  UNDER THE 1933 ACT OR ANY APPLICABLE  STATE LAWS
AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES,  AND THE HOLDER HAS,
PRIOR  TO SUCH  SALE,  FURNISHED  TO THE  COMPANY  AN  OPINION  OF  COUNSEL,  OF
RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION,  REASONABLY SATISFACTORY TO
THE COMPANY."

WARRANT NO. ECOM - P1-2002-001

                     NON-TRANSFERABLE SHARE PURCHASE WARRANT

                                E*COMNETRIX INC.
            (Incorporated under the Canada Business Corporations Act)

This is to  certify  that,  for value  received,  Mark M.  Smith  (the  "Warrant
Holder"),  of 220  South  Rock  Road #9,  Reno,  Nevada  89502  has the right to
purchase from E*Comnetrix  Inc. (the  "Company'),  upon and subject to the terms
and conditions  hereinafter  referred to, 1,000,000 common shares (the "Shares")
of the Company  exercisable on or before 5:00 pm (U.S. Pacific Standard Time) on
March 1, 2007, at a price of USD$0.05 per Share.

The right to purchase  the Shares  herein  granted may only be  exercised by the
Warrant Holder within the time hereinbefore set out by:

a) duly  completing  and executing the  subscription  form attached  hereto (the
"Subscription Form") in the manner therein indicated; and

b) delivering the Subscription Form and this warrant to the Company; and

c) paying the appropriate purchase price for the Shares subscribed for either in
cash, wire money transfer or by certified cheque payable at par to the Company.

Within three business days of receiving the Subscription  Form, this Warrant and
the appropriate purchase price, the Company will deliver to the Warrant Holder a
certificate  evidencing  the  Shares  subscribed  for.  If  the  Warrant  Holder
subscribes  for a lesser number of Shares than the number of Shares  referred to
in this  Warrant,  the Company  shall  forthwith  cause to be  delivered  to the
Warrant  Holder a warrant in respect of the Shares  referred to in this  Warrant
but not subscribed for.

In the event of any  subdivision  of the  common  shares of the  Company as such
shares are  constituted  on the date  hereof,  at any time while this Warrant is
outstanding, into a greater number of common shares, the Company will thereafter
deliver at the time or times of purchase of Shares hereunder, in addition to the
number of Shares in respect of which the right to purchase  is being  exercised,
such  additional  number of Shares as result from such  subdivision  without any
additional payment of other consideration therefore.

<PAGE>

In the event of any  consolidation  of the common  shares of the Company as such
shares are  constituted  on the date  hereof,  at any time while this Warrant is
outstanding,  into a lesser  number  of  common  shares,  the  number  of Shares
represented  by this Warrant shall  thereafter be deemed to be  consolidated  in
like  manner and any  subscription  by the Warrant  Holder for Shares  hereunder
shall be deemed to be a subscription for Shares of the Company as consolidated.

In the event of any  reclassification of the common shares of the Company at any
time this Warrant is outstanding,  the Company shall  thereafter  deliver at the
time of purchase  of Shares  hereunder  the number of shares of the  appropriate
class resulting from the  reclassification as the Warrant Holder would have been
entitled  to receive in  respect  of the number of Shares so  purchased  had the
right to purchase been exercised before such reclassification.

If the Company at any time while this Warrant is outstanding shall pay any stock
dividend  upon the common shares of the Company in respect of which the right to
purchase is herein given,  the Company shall  thereafter  deliver at the time of
purchase of Shares  hereunder  in addition to the number of Shares in respect of
which the right to purchase is then being  exercised,  the additional  number of
Shares so  purchased  if they had been  outstanding  on the record  date for the
payment of the stock dividend.

Nothing  contained  herein shall confer any right upon the Warrant Holder or any
other person to subscribe  for or purchase any Shares at any time  subsequent to
5:00 pm (Pacific  Standard  Time) on March 1, 2007, and from and after such time
this Warrant and all rights hereunder shall be void and of no value.

The holding of this Warrant shall not  constitute the Warrant Holder as a member
of the Company.

Time shall be of the essence hereof.

IN WITNESS WHEREOF  E*COMNETRIX INC. has caused this Warrant to be signed by its
duly authorized signing officers as of February 25, 2002.

E*COMNETRIX INC.

/s/ J. Erik Mustad
------------------------------
By: J. Erik Mustad, Director

/s/ Stuart Rogers
------------------------------
By: Stuart Rogers, Director

<PAGE>

                                SUBSCRIPTION FORM

E*COMNETRIX INC.
2000 Powell St., Ste. 1205
Emeryville, Ca 94608

Attention: TREASURY DEPARTMENT

Dear Sirs,

The undersigned hereby exercises the right to purchase and hereby subscribes for

________________ common shares in the capital stock of E*Comnetrix Inc. referred
to in the attached warrant according to the conditions hereof and herewith makes
payment of the purchase price in full for the shares.

Please issue the certificate in the name of the undersigned for the shares being
purchased.

Please deliver a warrant in respect of the common shares referred to in the
attached warrant but not presently subscribed for to the undersigned.

DATED this __________ day of _________________, 200____.

By: Mark Smith

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

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