Document:

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                                                                    Exhibit 4.32

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

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

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

             COMPENSATION WARRANTS TO PURCHASE UP TO 89,594 UNITS OF

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

                                   VOID AFTER
                                 MARCH 23, 2005

         THIS CERTIFIES that, for value received, GMP Securities Ltd. (the
"HOLDER"), is the registered holder of 89,594 compensation warrants (the
"COMPENSATION WARRANTS") each of which entitle the holder, subject to the terms
and conditions set forth in this Compensation Warrant Certificate, to purchase
from Spectrum Signal Processing Inc. (the "CORPORATION"), one unit (a "UNIT"),
at any time until 5:00 p.m. (Toronto time) on March 23, 2005, at which time this
Compensation Warrant shall become wholly void and the unexercised portion of the
subscription right represented hereby will expire and terminate (the "TIME OF
EXPIRY") on payment of $1.50 per unit (the "EXERCISE PRICE"). Each Unit shall
consist of one common share in the capital of the Corporation (a "COMPENSATION
WARRANT SHARE") and one-half of one Common Share purchase warrant. Each whole
warrant (a "BROKER WARRANT") is exercisable at any time until that date which is
18 months following the date hereof for one common share in the capital of the
Corporation (a "BROKER WARRANT SHARE") at an exercise price of $1.50 per share.
The number of Compensation Warrant Shares which the Holder is entitled to
acquire upon exercise of the Compensation Warrants and the Exercise Price are
subject to adjustment as hereinafter provided.

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1. EXERCISE OF COMPENSATION WARRANTS

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

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

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

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

         (e)      Corporate Changes.

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

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

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

         (f)      Subdivision or Consolidation of Common Shares.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         (m)      Issue Tax. The issuance of certificates for Compensation
                  Warrant Shares and Broker Warrants upon the exercise of
                  Compensation Warrants shall be made without charge to the
                  Holder for any issuance tax in respect thereto, provided that
                  the Corporation shall not be required to pay any tax which may
                  be payable in respect of any transfer involved in the issuance
                  and delivery of any certificate in a name other than that of
                  the Holder.

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

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

2.       REPLACEMENT

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

3.       EXPIRY DATE

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

4.       COVENANT.

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

5.       DEFINED TERMS

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

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6.       GOVERNING LAW

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

7.       SUCCESSORS

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

8.       GENERAL

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

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

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

                           [INTENTIONALLY LEFT BLANK]

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

         DATED as of March 23rd, 2004.

                                     SPECTRUM SIGNAL PROCESSING INC.

                                     Per: /s/ Brent Flichel
                                          --------------------------------------
                                          Authorized Signing Officer

                                       9
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                                  SCHEDULE "1"

                              ELECTION TO EXERCISE

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

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

         (b)  Number of Units to be Acquired:                      ____________

         (c)  Exercise Price per Unit:                            $____________

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

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

         DATED this ______ day of ____________, 200__ .

                                     [NAME OF HOLDER]

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

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

                                     Name of Registered Holder:

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

                                     Address of Registered Holder:

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

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

<PAGE>

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

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

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

             COMPENSATION WARRANTS TO PURCHASE UP TO 9,955 UNITS OF

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

                                   VOID AFTER
                                 MARCH 23, 2005

         THIS CERTIFIES that, for value received, Dlouhy Merchant Group Inc.
(the "HOLDER"), is the registered holder of 9,955 compensation warrants (the
"COMPENSATION WARRANTS") each of which entitle the holder, subject to the terms
and conditions set forth in this Compensation Warrant Certificate, to purchase
from Spectrum Signal Processing Inc. (the "CORPORATION"), one unit (a "UNIT"),
at any time until 5:00 p.m. (Toronto time) on March 23, 2005, at which time this
Compensation Warrant shall become wholly void and the unexercised portion of the
subscription right represented hereby will expire and terminate (the "TIME OF
EXPIRY") on payment of $1.50 per unit (the "EXERCISE PRICE"). Each Unit shall
consist of one common share in the capital of the Corporation (a "COMPENSATION
WARRANT SHARE") and one-half of one Common Share purchase warrant. Each whole
warrant (a "BROKER WARRANT") is exercisable at any time until that date which is
18 months following the date hereof for one common share in the capital of the
Corporation (a "BROKER WARRANT SHARE") at an exercise price of $1.50 per share.
The number of Compensation Warrant Shares which the Holder is entitled to
acquire upon exercise of the Compensation Warrants and the Exercise Price are
subject to adjustment as hereinafter provided.

<PAGE>

1.       EXERCISE OF COMPENSATION WARRANTS

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

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

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

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

         (e)      Corporate Changes.

                  (i)      Subject to paragraph 1(e)(ii) hereof, if, after March
                           23, 2004 and prior to the Time of Expiry, the
                           Corporation shall be a party to any reorganization,

                                       2

<PAGE>

                           merger, dissolution or sale of all or substantially
                           all of its assets, whether or not the Corporation is
                           the surviving entity, the Compensation Warrants
                           evidenced by this certificate shall be adjusted so
                           that the holder hereof shall be entitled to acquire
                           the same number and type of securities to which the
                           holder of that number of Compensation Warrant Shares
                           of the Corporation subject to the unexercised
                           Compensation Warrants would have been entitled by
                           reason of such reorganization, merger, dissolution or
                           sale of all or substantially all of its assets (the
                           "EVENT"), and the Exercise Price shall be adjusted to
                           be the amount determined by multiplying the Exercise
                           Price in effect immediately prior to the Event by the
                           number of Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants immediately prior
                           to the Event, and dividing the product thereof by the
                           number of securities to which the holder of that
                           number of Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants would have been
                           entitled to by reason of such Event.

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

         (f)      Subdivision or Consolidation of Common Shares.

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

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

                                       3
<PAGE>

                           adjustment by the number of Compensation Warrant
                           Shares which may be acquired hereunder immediately
                           prior to such adjustment and dividing the product
                           thereof by the Exercise Price resulting from such
                           adjustment.

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

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

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

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

                                       4
<PAGE>

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

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

         (m)      Issue Tax. The issuance of certificates for Compensation
                  Warrant Shares and Broker Warrants upon the exercise of
                  Compensation Warrants shall be made without charge to the
                  Holder for any issuance tax in respect thereto, provided that
                  the Corporation shall not be required to pay any tax which may
                  be payable in respect of any transfer involved in the issuance
                  and delivery of any certificate in a name other than that of
                  the Holder.

                                       6
<PAGE>

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

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

2.       REPLACEMENT

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

3.       EXPIRY DATE

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

4.       COVENANT

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

5.       DEFINED TERMS

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

                                       7
<PAGE>

6.       GOVERNING LAW

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

7.       SUCCESSORS

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

8.       GENERAL

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

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

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

                           [INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>

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

         DATED as of March 23rd, 2004.

                                     SPECTRUM SIGNAL PROCESSING INC.

                                     Per: /s/ Brent Flichel
                                          --------------------------------------
                                          Authorized Signing Officer

                                       9
<PAGE>

                                  SCHEDULE "1"

                              ELECTION TO EXERCISE

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

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

         (b)  Number of Units to be Acquired:                      ____________

         (c)  Exercise Price per Unit:                            $____________

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

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

         DATED this ______ day of ____________, 200__ .

                                         [NAME OF HOLDER]

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

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

                                         Name of Registered Holder:

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

                                         Address of Registered Holder:

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

                                         ---------------------------------------<PAGE>

     EXHIBIT 10.7

                                  DOUGLAS ELLIS

                              CONTRACT FOR SERVICES

         THIS SERVICES AGREEMENT (the "Agreement") is made and entered into this
1st day of May, 2003, by and between International Absorbents, Inc., a British
Columbia corporation (the "Company"), and Douglas Ellis operating under the firm
name and style of Current Systems, an individual proprietorship which is
resident in the Province of British Columbia, Canada, and Current Systems offers
expertise and services to International Absorbents, Inc.

                                   WITNESSETH:

         WHEREAS Current Systems has knowledge in the manufacture, sales,
marketing, and management of specialty fiber products businesses and has a
desire to offers this expertise as a services to the Company.

         WHEREAS, the Company desires to retain this expertise through Current
Systems, and the Current systems desires to be retained by the Company for the
term of this Agreement and each wants the terms and conditions as set out
herein;

         NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Company and the Executive,
intending to be legally bound, hereby agree as follows:

1.       CONTRACT TERMS. The Company hereby retains the Current Systems and
Current Systems accepts the assignment and agrees to provide expertise and
guidance to the Company, subject always to such resolutions as are established
from time to time by the Board of Directors of the Company, for the period and
upon the other terms and conditions set forth in this Agreement.

2.       TERM. The term of the services commitment hereunder shall be for a
period of two (2) years, commencing on the date of this Agreement. The term of
the services agreement hereunder is not subject to earlier termination for any
reason without the full pay out of all fees due through the end of the full
contract term.

3.       EXPENSES. In accordance with the Company's policies established from
time to time, the Company will pay or reimburse Current Systems all reasonable
and necessary out-of-pocket expenses incurred by him in the performance of his
services under this Agreement, subject to the presentment of appropriate
vouchers.

4.       COMPENSATION AND PAYMENT. The Company agrees to pay Current Systems
$2,500.00 (twenty five hundred dollars) per month 24 (twenty four) consecutive
months through the term of this contract. All payments required to be made by
the Company to Current Systems pursuant to this Section 4 and shall be paid in
full on or before the last day of each month.

5.       DISABILITY. The Company agrees that should the businessman Doug Ellis
become incapacitated, and totally disabled to such an extent that he is not able
to perform the services to provided under this Agreement, the Company agrees to
continue paying Current Systems for the term then remaining but no further sums.

6.       NON COMPETITION. Current Systems agrees that during the term of this
Agreement, he will not, directly or indirectly, assist or encourage any other
person in carrying out, directly or indirectly, any activity that would be
prohibited by the above provisions of this Section, if such activity were
carried out by the Current Systems, either directly or indirectly, and in
particular the Current Systems agrees that he will not, directly or indirectly,
induce any employee of the Company to carry out, directly or indirectly, any
such activity.

7.       TERMINATION WITHOUT CAUSE. The Company may terminate Current Systems
services without cause upon written notice to the Current Systems subject to
conditions of clause #222.

8.       BREACH OF CONTRACT FOR LACK OF PAYMENT. If full payment is not made
within thirty days of the due date Current Systems shall notify the Company in
writing and the Company shall have three working days to make full payment. If
full payment is not made by the end of this period then the company shall be in
breach of contract and this agreement will be considered to be terminated by the
Company without cause and Current Systems shall be entitled to full
compensation.

<PAGE>

9.       ASSIGNMENT. This Agreement shall not be assignable, in whole or in part
by either party.

10.      INDEMNIFICATION. The Company shall indemnify Current Systems as
provided in the Company's Bylaws.

11.      GOVERNING LAW. This Agreement is made under and shall be governed by
and construed in accordance with the laws of the Province of British Columbia.

         11.1 AMENDMENTS. No amendment or modification of this Agreement shall
         be deemed effective unless made in writing signed by the parties
         hereto.

         11.2 NO WAIVER. No term or condition of this Agreement shall be deemed
         to have been waived nor shall there be any estoppel to enforce any
         provisions of this Agreement, except by a statement in writing signed
         by the party against whom enforcement of the waiver or estoppel is
         sought. Any written waiver shall not be deemed a continuing waiver
         unless specifically stated, shall operate only as to the specific term
         or condition waived and shall not constitute a waiver of such term or
         condition for the future or as to any act other than that specifically
         waived.

         11.3 SEVERABILITY. To the extent any provision of this Agreement shall
         be invalid or unenforceable, it shall be considered deleted here from
         and the remainder of such provision and of this Agreement shall be
         unaffected and shall continue in full force and effect. In furtherance
         and not in limitation of the foregoing, should the duration or
         geographical extent of, or business activities covered by any provision
         of this Agreement be in excess of that which is valid and enforceable
         under applicable law, then such provision shall be construed to cover
         only that duration, extent or activities which may validly and
         enforceable be covered. Current Systems acknowledges the uncertainty of
         the law in this respect and expressly stipulates that this Agreement
         shall be given the construction which renders its provisions valid and
         enforceable to the maximum extent (not exceeding its express terms)
         possible under applicable law.

         11.4 SURVIVAL. Sections 2 and 4 shall survive termination of this
         Agreement.

         11.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
         understanding and agreement between Current Systems and Company with
         respect to the transactions contemplated herein and supersedes any and
         all prior or contemporaneous oral or written communications with
         respect to the subject matter hereof, all of which are merged herein.
         It is expressly understood and agreed that, there being no expectations
         to the contrary between the parties hereto no usage of trade or other
         regular practice or method of dealing between the parties hereto shall
         be used to modify, interpret, supplement or alter in any manner the
         express terms of this Agreement or any part hereof. This Agreement
         shall not be modified, amended or in any way altered except by an
         instrument in writing signed by both of the parties hereto.

IN WITNESS WHEREOF, the parties have executed and sealed this Agreement as of
the day and year set forth above.

INTERNATIONAL ABSORBENTS, INC.

By: /s/ GORDON L. ELLIS
   ----------------------------

Title: President

By: /s/ DOUGLAS ELLIS
   ----------------------------
DOUGLAS ELLIS

<PAGE>

                                  EXHIBIT 10.8

                                  SHAWN DOOLEY

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this 18th
day of December, 2003, and by and between Absorption Corp., a Nevada Corporation
(the "Company"), and Shawn Dooley, and individual resident of the State of
Washington, USA (the "Executive").

                                   WITNESSETH:

WHEREAS, the Executive has heretofore been serving as Vice President for Sales
and Marketing of the Company and has the experience to provide services;

WHEREAS, the Company desires to retain the services of the executive, and the
Executive desires to be employed by the Company for the term of this Agreement
and each wants the terms and conditions as set out herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Company and the Executive, intending to be
legally bound, hereby agree as follows:

1.       EMPLOYMENT

         The Company hereby employs the Executive as Vice President for Sales
         and Marketing and the Executive accepts such employment and agrees to
         perform services for the Company, subject always to such resolutions as
         are established from time to time by the Board of Directors of the
         Company, for the period and upon the other terms and conditions set
         forth in this Agreement.

2.       RETIREMENT

         It is further understood that at the age of 60 years the contract shall
         be renewable each year automatically if neither party gives 90 days
         written notice to the other of their intention to terminate this
         agreement. The term of the Executive's employment hereunder is subject
         to earlier termination as hereafter specified save and except that
         there will be no severance pay or benefits that extends beyond the age
         of 65 years.

3.       POSITION AND DUTIES

         3.1      SERVICE WITH THE COMPANY

                  During the term of this Agreement, the Executive agrees to
                  perform the duties of the Vice President for Sales and
                  Marketing including such executive employment duties as the
                  Company's Board of Directors (the "Board") shall assign to him
                  from time to time, and is customary for a similar position
                  within the Company's industry.

         3.2      NO CONFLICTING DUTIES

                  During the term hereof, the Executive shall devote his time,
                  effort and skill to the operation of the Company, and will
                  offer any directly relevant business opportunity he encounters
                  to the Company. The Executive hereby confirms that he is under
                  no contractual commitments inconsistent with his obligations
                  set forth in this Agreement, and that during the term of this
                  Agreement, he will not render or perform services, or enter
                  into any contract to do so, for any other corporation, firm,
                  entity or person which are inconsistent with the provisions of
                  this Agreement.

<PAGE>

4.       COMPENSATION

         4.1      BASE SALARY

                  As compensation for all services to be rendered by the
                  Executive under this Agreement, the Company shall pay to the
                  Executive a base annual salary of $10,000.00 per month (the
                  "Base Salary") which shall be paid commencing on February 1,
                  2002 on a regular basis in accordance with the Company's
                  normal payroll procedures and policies together with all the
                  Company's benefits.

         4.2      BONUS

                  The Board of Directors of the Corporation shall set and
                  determine each year how bonuses will be awarded based on a
                  criteria agreed to by the Executive and the corporation. The
                  bonus to be distributed will be determined by the Compensation
                  Committee in consultation with such persons as are necessary
                  as soon as possible after the financial results from the year
                  are available. It will be based primarily upon the target
                  criteria as set at the beginning of the fiscal year.

         4.3      STOCK OPTIONS

                  The Company agrees to maintain a stock option and/or a stock
                  plan which provides for shares under the rules and policies of
                  the applicable governing securities exchange rules for the
                  stock of International Absorbents, the Company's parent
                  company. Such options and/or stock shall be offered at the
                  lowest price as options and/or stock are issued to any other
                  Executives at that time.

         4.4      PARTICIPATION IN BENEFIT PLANS

                  The Executive shall be included to the extent eligible
                  thereunder in any and all plans of the Company providing
                  general benefits for the Company's Executives, including but
                  not limited to Group Life Insurance, Hospitalization,
                  Disability, Medical, Dental, Pension, Profit Sharing, Savings
                  and Stock Bonus Plans. The Executive's participation in any
                  such plan or program shall be subject to the provisions, rules
                  and regulation applicable thereto. If for any reason the
                  Executive cannot participate in such program, his compensation
                  will be adjusted in the cash equivalent.

         4.5      EXPENSES

                  In accordance with the Company's policies established from
                  time to time, the Company will pay or reimburse the Executive
                  for all reasonable and necessary out-of-pocket expenses on a
                  basis consistent with prior practice incurred by him in the
                  performance of his duties under this Agreement, subject to the
                  presentment of appropriate vouchers.

         4.6      VACATION TIME

                  Executive shall be entitled to take paid vacation time of up
                  to four (4) weeks per year, in addition to the normal holidays
                  when the business is closed.

5.       COMPENSATION UPON THE TERMINATION OF THE EXECUTIVE'S EMPLOYMENT

         The Executive commenced working with the company on August 11, 1992 and
         has been continuously employed to this date.

<PAGE>

         5.1      SEVERANCE WAGES

                  The Executive is to receive severance compensation and
                  benefits under the terms of this Agreement, the compensation
                  and bonus shall be defined as 2 months per year up to 24
                  months calculated from the date the Executive started his
                  employment with the Company with a minimum of 6 months salary
                  as defined in Section 4 of this Agreement and any amendment to
                  this Agreement as approved by the parties. The bonus
                  calculation shall be based on the previous 2 year average.

         5.2      SEVERANCE BENEFITS

                  In the event of termination of the Executive and his
                  entitlement to severance wages is provided in 5.1. The
                  Executive shall be entitled to receive the same severance
                  benefits that went along with his salary for the length of
                  time set out in paragraph 5.1.

         5.3      DISABILITY BENEFITS

                  In the event the Executive is terminated pursuant to Section
                  8.1 (disability) and is entitled to receive benefits from a
                  plan to which the Company contributed and such disability
                  benefits cease prior to the time set out in paragraph 5.1.
                  Then the Company will continue to pay the Executive his salary
                  for the balance of the time remaining as set out in 5.1
                  together with his benefits that may still be applicable and
                  not being covered by the disability insurance. If the
                  benefits are not covered in the disability plan or the
                  disability plan term has run out prior to the time set out in
                  5.1 then the Company will pay the same directly to the
                  Executive or pursuant to the Executive's direction to the
                  provider of such coverage. Any options shall continue until
                  they expire or such shorter period of time as is required
                  under securities legislation in Washington State and The
                  United States of America.

         5.4      SEVERANCE ON DEATH.

                  In the event the Executive's employment is terminated pursuant
                  to Section 8.2 (death), the Executive's beneficiary or a
                  beneficiary designated by the Executive in writing to the
                  Company, or in the absence of such beneficiary, the
                  Executive's estate, shall be entitled to receive the Group
                  Life Insurance which are part of the Company benefits and in
                  the absence of any group life insurance or other life
                  insurance benefits contributed to or organized by the Company
                  then the estate of the executive shall receive the amounts set
                  out in 5.1 and those that may be payable to the estate under
                  5.2. Any options shall continue to their expiry date or such
                  shorter period of time as is required under securities
                  legislation in Washington State and The United States of
                  America.

         5.5      SEVERANCE ON TERMINATION FOR CAUSE

                  In the event that the Executive's employment is terminated
                  pursuant to Sections 8.3 (termination for cause), then he
                  shall not be entitled to any compensation other than his
                  current Base Salary which has accrued and any benefits set out
                  in 5.2 calculated only to the date of termination. In the
                  event that Executive's employment is terminated pursuant to
                  Section 8.4 (resignation), he shall be entitled to his then
                  current Base Salary, any benefits to the date of termination
                  only and any bonus, if such, is accrued or calculated monthly
                  through to the date of termination.

         5.6      SEVERANCE ON TERMINATION WITHOUT CAUSE

                  In the event the Executive is terminated by the Company
                  pursuant to Section 8.5 (Termination without Cause), the
                  Executive shall receive severance as defined in Section 5 of
                  this Agreement.

<PAGE>

         5.7      PAYMENT OF SEVERANCE

                  All payments required to be made by the Company to the
                  Executive pursuant to this Section 5 shall be paid in the
                  manner and at the times specified in Section 4.1 hereof. Any
                  notice given to the Executive pursuant to Section 8 shall be
                  counted as part of the time calculated and the payments of
                  benefits.

6.       CONFIDENTIALITY INFORMATION.

         Except as permitted or directed by the Company's Board, the Executive
         shall not during the term of his employment under this Agreement or at
         any time thereafter divulge, furnish, disclose or make accessible
         (other than in the ordinary course of the business of the Company) to
         anyone for use in any way, any confidential or secret knowledge or
         information of the Company which the Executive has acquired or become
         acquainted with or will acquire or become acquainted with during the
         period of his employment by the Company (including employment by the
         Company prior to the date of this Agreement), whether developed by
         himself or by others, concerning any trade secrets, confidential or
         secret designs, processes, formulae, software or computer programs,
         plans, devices or material (whether or not patented or patentable,
         copyrighted or copyrightable) directly or indirectly useful in any
         aspect of the business of the Company, any confidential customer or
         supplier lists of the Company, any confidential or secret development
         or research work of the Company, price lists, know how, forecasts, or
         any other confidential, secret or non-public aspects of the business of
         the Company. The Executive acknowledges that the above-described
         knowledge or information constitutes a unique and valuable asset of the
         Company acquired a great time and expense by the Company, and that any
         disclosure or other use of such knowledge or information other than for
         the sole benefit of the Company would be wrongful and would cause
         irreparable harm to the Company. Both during and after the term of this
         Agreement, the Executive will refrain form any acts or omissions that
         would reduce the value of the use of such knowledge or information to
         the Company. The foregoing obligations of confidentiality, however,
         shall not apply to any knowledge or information which is now published
         or which subsequently becomes generally publicly known, other that as
         direct or indirect result of the breach of this Agreement by the
         Executive.

7.       NON COMPETITION

         The Executive agrees that during the term of this Agreement, he will
         not, directly of indirectly, assist or encourage any other person in
         carrying out, directly or indirectly, any activity that would be
         prohibited by the above provisions of this Section, if such activity
         were carried out by the Executive, either directly or indirectly, and
         in particular the Executive agrees that he will not, directly or
         indirectly, induce any employee of the Company to carry out, directly
         or indirectly, any such activity.

         7.1      The Executive agrees not to directly or indirectly or
                  otherwise assist, encourage any person to be involved in any
                  manner to invest or promote any business or activity of a
                  similar nature if the Executive has terminated this Agreement
                  pursuant to Sections 8.1, 8.4 or 8.6 of this Agreement for a
                  period of ONE (1) YEAR or for the length of the severance pay,
                  whichever is the longer, from the date of termination.

8.       TERMINATION

         8.1      DISABILITY

                  The Executive's employment shall terminate upon the
                  Executive's becoming totally or permanently disabled for a
                  period of six (6) months or more for purposes of this
                  Agreement, the term "totally or permanently disabled" or
                  "total or permanent disability" means Executive's inability on
                  account of sickness or accident whether or not job-related, to
                  engage in regularly or to perform adequately his assigned
                  duties under this Agreement. The Board of Directors shall
                  determine, acting reasonably and bona fide, whether the
                  Executive can engage in regularly or perform adequately his
                  assigned duties using

<PAGE>

                  the reports of doctors and such other information as may be
                  helpful. The Board may seek such advice as it deems necessary
                  to make such determination.

         8.2      DEATH OF EXECUTIVE

                  The Executive's employment shall terminate immediately upon
                  the death of the Executive

         8.3      TERMINATION FOR CAUSE

                  The Company may terminate the Executive's employment at any
                  time for "Cause" (as hereinafter defined) immediately upon
                  written notice to Executive. Such written notice shall set
                  forth with reasonable specificity the Company's basis for such
                  termination. As used herein, the term "Cause" shall mean that
                  the Executive shall have (i) reasonable judgment of the Board
                  of Directors committed a criminal act or an act of fraud,
                  embezzlement, breach of trust or other act of gross
                  misconduct, (ii) willfully violated written corporate policy
                  or rules of the Company, (iii) in the reasonable judgment of
                  the Board of Directors, has willfully refused to follow the
                  reasonable written directions given by the Board of Directors
                  from time to time or breached any covenant or obligation under
                  this Agreement or other agreement with the Company or (iv) has
                  acted in such a manner that his actions constitute gross
                  dereliction of his duties as set out by the Company from time
                  to time.

         8.4      RESIGNATION

                  The Executive's employment shall be terminated on the earlier
                  of the date that is one (1) month following the written
                  submission of the Executive's resignation to the Board or the
                  earlier date such resignation is accepted by the Board.

         8.5      TERMINATION WITHOUT CAUSE

                  The Company may terminate the Executive's employment without
                  cause upon written notice to the Executive. Termination
                  "without cause" shall mean termination of employment on any
                  basis other than termination of Executive's employment
                  hereunder pursuant to Sections 8.1, 8.2. 8.3 or 8.4. Notice by
                  the Company that this Agreement shall not be renewed as
                  defined in Section 2 herein, shall be defined as termination
                  without cause entitling the Executive to compensation as
                  defined in Section 5.1 and 5.2 and with the further proviso
                  that an y severance and benefits shall cease as set out in
                  sections 5.1 and 5.2 or at age 65 whichever occurs first..

         8.6      SALE OF COMPANY OR INTERNATIONAL ABSORBENTS INC.. Should the
                  Company's assets be sold or more than 51% of the capital stock
                  of the Company be sold or should the control of International
                  Absorbents Inc. (the owner of 100% of the issued and out
                  standing shares of the Company) change such that sixty (60 %)
                  percent of the then present Board changes and not because of
                  retirement, incapacity, sickness or voluntary resignation
                  causing a change in management practice of the Company then
                  the Executive shall be entitled to receive all options or
                  stock grants made subject to the provisions of the option plan
                  or stock grant plan in force with the Company at the time and
                  any additional incentive packages granted, but which have not
                  vested immediately upon the sale of the Company or change of
                  control being completed and all such compensation shall be
                  dealt with in the same manner as for all other Executives of
                  the Company, unless such Executive has different terms to
                  his/her contract.

                  Should the management change the Executive's duties or make
                  the execution of the duties such that the Executive would have
                  the right to claim constructive dismissal then the executive
                  shall have the right to claim severance as if he had been
                  terminated without cause. Should the Executive be successful
                  in such claim then the Executive shall be entitled to all
                  reasonable lawyer's costs and disbursements that he has
                  incurred in prosecuting such suit including any other costs
                  that were necessary.

<PAGE>

         8.7      SURRENDER OF RECORDS AND PROPERTY

                  Upon termination of his employment with the Company, the
                  Executive shall deliver promptly to the Company all records,
                  manuals, books, blank forms, documents, letters, memoranda,
                  notes, notebooks, reports, data, tables, calculations or
                  copies thereof, which are the property of the Company and
                  which relate in any way to the business, products, practices
                  or techniques of the Company, and all other property, trade
                  secrets and confidential information of the Company,
                  including, but not limited to, all documents which in whole or
                  in part contain any trade secrets or confidential information
                  of the Company, which in any of these cases are in his
                  possession or under his control.

9.       ASSIGNMENT

         This Agreement shall not be assignable, in whole or in part, by either
         party without the written consent of both parties, except for a Change
         in Control as defined in Paragraph 8.6. Upon such assignment by the
         Company, the Company shall obtain the Assignees' written agreement
         enforceable by Executive to assume and perform, from and after the date
         of such assignment the terms, conditions and provisions imposed by the
         Agreement upon the Company. After any such assignment by the Company
         and such written agreement by the Assignee, the Company shall be
         discharged from all further liability hereunder and such assignee shall
         thereafter be deemed to be the Company for the purposes of all
         provisions of this Agreement including the Section 9. It is agreed by
         both parties to this Agreement that in the case of a change of control
         of the Company as defined in Section 8.6 of this Agreement, that this
         Agreement shall be automatically assigned to the new controlling
         entity.

10.      INDEMNIFICATION

         The Company shall indemnify Executive as provided in the Company's
         Bylaws.

         10.1     DIRECTORS AND OFFICERS INSURANCE

                  The Company shall maintain Directors and Officers insurance as
                  decided by the Board of Directors from time to time required
                  to protect the Executive from claims made against him as a
                  result of his duties and performance of his employment with
                  the Company.

11.      GENERAL PROVISIONS

         11.1     GOVERNING LAW

                  This Agreement is made under and shall be governed by and
                  construed in accordance with the laws of the State of
                  Washington.

         11.2     WITHHOLDING TAXES

                  The Company may withhold from any benefits payable under this
                  Agreement all federal, provincial, state, city or other taxes
                  as shall be required pursuant to any law or governmental
                  regulation or ruling.

         11.3     AMENDMENTS

                  No amendment of modification of this Agreement shall be deemed
                  effective unless made in writing signed by the parties hereto.

         11.4     NO WAIVER

                  No term or condition of this Agreement shall be deemed to have
                  been waived nor shall there be any estoppel to enforce any
                  provisions of this Agreement, except by a statement in writing
                  signed by the party against whom enforcement of the waiver or
                  estoppel is sought. Any written waiver shall not be deemed a
                  continuing waiver unless specifically stated, shall operate
                  only as to the specific term or condition waived and shall not
                  constitute a waiver of such term or condition for the future
                  or as to any act other than that specifically waived.

<PAGE>

         11.5     SEVERABILITY

                  To the extent any provision of this Agreement shall be invalid
                  or unenforceable, it shall be considered deleted here from and
                  the remainder of such provision and of this Agreement shall be
                  unaffected and shall continue in full force and effect. In
                  futherance and not in limitation of the foregoing, should the
                  duration or geographical extent of, or business activities
                  covered by any provision of this Agreement be in excess of
                  that which is valid and enforceable under applicable law, then
                  such provision shall be construed to cover only that duration,
                  extent or activities which may validly and enforceably be
                  covered. The Executive acknowledges the uncertainty of the law
                  in this respect and expressly stipulated that this Agreement
                  shall be given the construction which renders its provisions
                  valid and enforceably to the maximum extent (not exceeding its
                  express terms) possible under applicable law.

         11.6     SURVIVAL

                  Sections 6, 7, 8.7 and 9 shall survive termination of this
                  Agreement.

         11.7     ENTIRE AGREEMENT

                  This Agreement constitutes the entire understanding and
                  agreement between Executive and Company with respect to the
                  transactions contemplated herein and supersedes any and all
                  prior or contemporaneous oral or written communications with
                  respect to the subject matter hereof, all of which are merged
                  herein. It is expressly understood and agreed that, there
                  being no expectations to the contrary between the parties
                  hereto no usage of trade or other regular practice or method
                  of dealing between the parties hereto shall be used to modify,
                  interpret, supplement or alter in any manner the express terms
                  of this Agreement or any part hereof. This Agreement shall not
                  be modified, amended or in any way altered except by an
                  instrument in writing signed by both of the parties hereto.

IN WITNESS WHEREOF, the parties have executed and sealed this Agreement as of
the day and year set forth above.

ABSORPTION CORP

BY: /s/ GORDON L. ELLIS
----------------------------
Title: Chairman

SHAWN DOOLEY

/s/ SHAWN DOOLEY
----------------------------

ATTEST:

____________________________

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