Document:

EXHIBIT 10.3

                                AGENCY AGREEMENT

November 23, 2001

Infowave Software, Inc.
4664 Lougheed Highway,
Suite 200
Burnaby, British Columbia
V5C 5T5

Attention:  Todd Carter, Chief Financial Officer

Dear Sir:

     Canaccord  Capital  Corporation  (the  "Agent")  understands  that Infowave
Software,  Inc. (the "Corporation") proposes to offer for sale in the Qualifying
Provinces (as hereinafter  defined) and to "accredited  investors" in the United
States (as hereinafter  defined) by way of private placement (the "Offering") up
to  US$5,000,000  of  special  warrants  of the  Corporation  (each,  a "Special
Warrant"  and  collectively,  the  "Special  Warrants")  at a price (the  "Offer
Price") being the lower of: (a) Cdn$0.69;  and (b) eighty-five  percent (85%) of
the weighted average trading price of the  Corporation's  common shares (each, a
"Common  Share" and  collectively,  the "Common  Shares")  on The Toronto  Stock
Exchange  (the "TSE") for the five (5) trading days  preceding  the Closing Date
(as hereinafter  defined) per Special  Warrant.  The Agent also understands that
Commonwealth  Associates  LLP  ("Commonwealth")  has  agreed  to act as agent on
behalf  of  the  Corporation  in  connection  with  a  concurrent   offering  to
"accredited  investors"  in the United  States of a minimum of  US$5,000,000  of
Special Warrants and a maximum of  US$10,000,000  (which may be increased by the
amount not sold by the Agent  under this  Offering)  of special  warrants on the
same  terms as the  Special  Warrants  at the  Offer  Price  (the  "Commonwealth
Offering").

     Each Special  Warrant shall entitle the holder  thereof,  upon exercise and
without payment of any additional consideration,  to be issued one unit (each, a
"Unit" and collectively, the "Units") comprised of one Common Share and, subject
to the usual  adjustment  provisions,  one-half  of one  Common  Share  purchase
warrant (each, a "Purchase Warrant" and collectively, the "Purchase Warrant") at
any time prior to 4:00 p.m.  (Vancouver time) (the "Expiry Time") on the earlier
of (the "Expiry Date"): (a) the third business day following the date on which a
receipt has been issued by the last of the securities regulatory  authorities in
the Qualifying  Provinces (as hereinafter  defined),  where Special Warrants are
sold,  for a final  prospectus  (the  "Prospectus")  qualifying the issue of the
Units underlying the Special Warrants (the "Prospectus Qualification");  and (b)
the date which is 12 months following the Closing Date (as hereinafter defined).

     Each whole  Purchase  Warrant shall entitle the holder  thereof to purchase
one Common  Share at a price equal to one hundred and thirty  percent  (130%) of
the Offer Price until the date (the "Purchase Warrant Expiration  Date"),  which
is the earlier of: (a) three years from the Closing Date;  and (b) 30 days after
the Corporation gives written

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                                      -2-

notice (the  "Notice")  that the closing  trading price for the Common Shares on
the TSE  had  equalled  or  exceeded  at  least  Cdn.$9.00  for a  period  of 20
consecutive  trading  days ending  within  five (5) days of the  delivery of the
Notice,  provided the Common  Shares are at the time trading on the TSE, the New
York Stock Exchange,  the American Stock Exchange, the Nasdaq SmallCap market or
Nasdaq  National market and the Common Shares  underlying the Purchase  Warrants
are not  subject to any lock-up  provisions  imposed by the  Corporation  or the
Agent.  The  Purchase  Warrants  shall also  provide  for a method of  "cashless
exercise", which shall allow the holder to exchange a Purchase Warrant, in whole
or in part,  for that  number  of Common  Shares  (rounded  to the next  highest
integer)  equal to (a) the  number  of Common  Shares  specified  by the  holder
thereof (the "Total  Number")  less (b) the number of Common Shares equal to the
quotient  obtained  by  dividing  (x) the  product  of the Total  Number and the
existing exercise price of the Purchase Warrants by (y) the current market value
of a Common  Share.  This formula  shall apply only when the  prevailing  market
price is higher than the exercise price of the Purchase  Warrants and results in
the  Corporation  issuing  fewer  Common  Shares  while the  holder of  Purchase
Warrants obtains the same economic value.  The Corporation  shall use reasonable
commercial  efforts  to take  all  steps  and  proceedings  necessary  to file a
preliminary   prospectus  (the  "Preliminary   Prospectus")  in  the  Qualifying
Provinces  as soon as  practicable  after the Closing  Date.  In  addition,  the
Corporation  shall use its  reasonable  commercial  efforts  to file and  obtain
receipts for the  Prospectus,  in a form acceptable to the Agent, in each of the
Qualifying  Provinces as soon as possible  but not later than the  Qualification
Deadline (as hereinafter defined).

     The Special  Warrants and the Units are being  offered in the United States
in accordance with Section 4(2) of the 1933 Act and Rule 506 of Regulation D and
outside the United States in accordance with Regulation S.

     The  Corporation  upon and  subject to the terms and  conditions  contained
herein,  hereby appoints the Agent as its exclusive Canadian agent and the Agent
hereby accepts the  appointment  and agrees to act as Canadian agent, to use its
commercially  reasonable efforts to solicit,  on a best efforts basis, offers to
purchase up to US$5,000,000 of Special Warrants. The Agent may form and manage a
group of Canadian  investment  dealers to offer the Special Warrants for sale on
such terms as the Agent may  determine,  and the term  "Dealers"  as used herein
means the Agent together with any such other Canadian  investment dealers. It is
understood  and agreed that no Dealer is under any  obligation  to purchase  any
Special  Warrants,  although any Dealer may subscribe  for and purchase  Special
Warrants if it so desires.

     Thirty  percent (30%) of the proceeds from the Offering  shall be placed in
escrow at Closing  with the  Computershare  Trust  Company of Canada (the "Trust
Agent") and such proceeds,  plus interest accrued thereon,  shall be held by the
Trust Agent and shall be released to the  Corporation  at the Expiry Time on the
Expiry Date.

     In addition, the Corporation,  upon and subject to the terms and conditions
contained herein, hereby appoints the Agent as fiscal agent (the "Fiscal Agent")
of the

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                                      -3-

Corporation  and the Agent hereby  agrees to act as Fiscal  Agent in  connection
with the preparation and filing of the Preliminary Prospectus and the Prospectus
together with any Prospectus Amendment required to be filed in consideration for
which,  the Fiscal  Agent shall  receive a cash fee of  US$100,000  (the "Fiscal
Advisor Fee"),  plus  applicable  taxes,  payable on the Closing Date out of the
working capital of the Corporation.  In addition, the Agent shall receive on the
Closing Date a special broker's option (the "Fiscal Advisor Option") exercisable
into, for no additional  consideration,  Fiscal Advisor Warrants to acquire that
number of units  (each a "Fiscal  Advisor  Unit" and  collectively,  the "Fiscal
Advisor  Units")  equal to one and  one-half  percent  (1.5%)  of the  number of
Special  Warrants  sold  pursuant  to the  Offering,  on the  same  terms as the
Broker's Options as set forth below. Each Fiscal Advisor Unit shall be comprised
of one Common Share and one half of one Common Share  purchase  warrant  (each a
"Fiscal Advisor Purchase Warrant" and collectively, the "Fiscal Advisor Purchase
Warrants").  Each whole Fiscal Advisor Purchase Warrant shall entitle the holder
thereof to purchase  one Common Share at a price equal to one hundred and thirty
percent  (130%) of the Offer  Price until the date which is three years from the
Closing Date. Any Fiscal Advisor Fee paid or Fiscal  Advisor  Warrants  issuable
shall be  credited  against  any Agency  Fee (as  hereinafter  defined)  paid or
Broker's Option issuable under Section 2.1 hereof.

     As  additional  consideration  for  services  rendered,  the Agent shall be
entitled to receive at Closing:

     (i)  a fee for services  rendered in connection  with the Offering equal to
          seven  percent (7%) of the aggregate  gross  proceeds of the Offering;
          and

     (ii) the Broker's Option (as hereinafter  defined) exercisable into, for no
          additional  consideration,  the Compensation  Warrants to acquire that
          number of Units  equal to seven  and  one-half  percent  (7.5%) of the
          number  of  Special  Warrants  sold  pursuant  to the  Offering.  Each
          Compensation  Warrant shall entitle the holder  thereof to acquire one
          Compensation  Unit (as  defined in  Section  2.2 below) at a price per
          Compensation  Unit  equal to the  Offer  Price  divided  by 0.85 for a
          period of 36 months  (or 24 months  if  otherwise  required  by law or
          applicable securities regulatory authorities or the TSE) following the
          Closing Date.

     The issuance of the  Compensation  Warrants and the Fiscal Advisor Warrants
shall  be  qualified  pursuant  to  the  Prospectus  qualifying  the  securities
underlying the Special  Warrants to the maximum  extent  permitted by law or the
rules and policies of any applicable  regulatory authority (provided that if the
total number of Compensation  Warrants and Fiscal Advisor  Warrants are to be so
limited,  they shall be limited on a pro rata basis between Commonwealth and the
Agent,  provided  that in no event  shall the Agent have less than 2/3rds of its
Fiscal Advisor  Warrants  qualified under the Prospectus).  Notwithstanding  the
foregoing,  the Agent shall be entitled,  at a minimum, to the Agency Fee as set
forth in Section 2.1 hereof and the Broker's  Option as set forth in Section 2.2
hereof.

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                                      -4-

     The Agent shall not offer or sell the Fiscal Advisor Option or the Broker's
Option or any securities  issued directly or indirectly upon exercise thereof in
the United States to a U.S. Person without  registration  under the 1933 Act and
applicable  state  securities  laws unless an  exemption  from  registration  is
available.

     All actions to be undertaken  in the United  States in connection  with the
matters  contemplated  herein,  shall be  undertaken  by the Agent  through  its
affiliate Canaccord Capital Corporation (USA) Inc.

                                   DEFINITIONS

In addition to the terms defined above, in this Agreement:

"accredited  investor" means an accredited investor as defined in Rule 501(a) of
Regulation D;

"affiliate",     "distribution",    "material    change",    "material    fact",
"misrepresentation",  and "subsidiary"  means,  with respect to circumstances to
which the  Canadian  Securities  Laws of a  particular  jurisdiction  apply,  an
affiliate,  distribution,  material change, material fact, misrepresentation and
subsidiary  defined under the Canadian  Securities Laws of such Province and, if
not so defined,  an affiliate,  distribution,  material  change,  material fact,
misrepresentation  and  subsidiary  as defined in the  Securities  Act  (British
Columbia);

"Agency Fee" means a cash fee equal to seven percent (7%) of the gross  proceeds
realized by the Corporation  from the sale of Special  Warrants,  payable to the
Agent pursuant to Section 2.1;

"Agreements"  means this Agreement,  the Subscription  Agreements,  the Purchase
Warrant Indenture and the Special Warrant  Indenture,  and the agreements and/or
certificates  representing  the Special  Warrants,  the Purchase  Warrants,  the
Broker's Option,  the Compensation  Warrants,  the Fiscal Advisor Option and the
Fiscal Advisor Warrants, as the case may be;

"Broker's Option" has the meaning given to it in Section 2.2;

"Broker Unit Shares" has the meaning given to it in Section 2.2;

"Broker Warrants" has the meaning given to it in Section 2.2;

"Broker Warrant Certificate" has the meaning given to it in Section 2.2;

"Business  Day" means a day which is not a Saturday,  a Sunday or a statutory or
civic holiday in the Province of British Columbia;

"Closing"  means the completion of the issue and sale by the Corporation and the
purchase  by the  Purchasers  of  Subject  Securities  as  contemplated  in this
Agreement;

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                                      -5-

"Closing  Date" in  respect  of the  issue,  purchase  and  sale of the  Subject
Securities,  means  the  date  of the  initial  Closing,  as the  Agent  and the
Corporation may agree, and the date of any subsequent Closings, as the Agent and
the Corporation  may agree,  and, in the event of any subsequent  Closings,  all
provisions of this Agreement shall apply mutatis mutandis. However, for purposes
of the expiry date of any  securities  issued  pursuant to this  Agreement,  the
Closing Date shall be the date of the initial Closing;

"Closing Time" means 8:30 a.m.  (Toronto time) on the Closing Date or such other
time as the Corporation and the Agent may agree;

"Compensation Options" has the meaning given to it in Section 2.2;

"Fiscal Agent" means Canaccord Capital Corporation;

"Fiscal Advisor Warrants" has the meaning given to it in Section 2.3;

"Fiscal Advisor Fee" means a cash fee equal to US$100,000 plus applicable  taxes
payable to the Fiscal Agent;

"Foreign Issuer" means a foreign issuer as defined in Regulation S;

"Information Record" means any statement, other than a statement relating solely
to or provided by the Agent,  contained in any press  release,  material  change
report,  financial statement or other document of the Corporation which has been
or is publicly  disseminated  pursuant to any Securities Laws or U.S. securities
laws prior to the Closing Time;

"Intellectual Property" means, collectively, all intellectual property rights of
whatsoever nature, kind or description including:  (i) all trade-marks,  service
marks,  trade-mark and service mark  registrations,  trade-mark and service mark
applications, trade names and any other trade-mark and service mark rights; (ii)
all copyrights and applications  therefor,  including all computer  software and
rights related thereto; (iii) all inventions,  patents,  patent applications and
patent rights  (including any patents  issuing on such  applications or rights);
(iv) all trade secrets and proprietary  and  confidential  information;  (v) all
industrial designs and registrations thereof and applications therefor; (vi) all
renewals, modifications,  developments and extensions of any of the items listed
in clauses (i) through  (vi)  above;  and  (vii)all  patterns,  plans,  designs,
research data, other  proprietary  know-how,  processes,  drawings,  technology,
inventions,   formulae,   specifications,   performance  data,  quality  control
information,  unpatented  blue prints,  flow sheets,  equipment and parts lists,
instructions,  manuals, records and procedures, and all licenses, agreements and
other contracts and commitments relating to any of the foregoing;

"Notice" has the meaning given to it in Section 21;

"Prospectus Amendment" means any amendment to the Preliminary Prospectus and the
Prospectus;

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                                      -6-

"Prospectus  Qualification" means the filing of the Prospectus in the Qualifying
Provinces and the obtaining of receipts therefor from the Securities Commissions
prior to the Qualification Deadline;

"Purchase Warrant Agent" means Computershare Trust Company of Canada, as warrant
agent of the Purchase Warrants, pursuant to the Purchase Warrant Indenture; and

"Purchase  Warrant  Indenture"  means the Purchase  Warrant  indenture dated the
Closing  Date,  to be entered  into  between the  Corporation  and the  Purchase
Warrant Agent;

"Purchasers"  means all purchasers of Special  Warrants offered for sale or sold
as contemplated herein;

"Qualification Deadline" means the 90th day following the Closing Date;

"Qualifying  Provinces"  means the  provinces of Ontario,  British  Columbia and
Alberta and elsewhere in Canada where agreed between the Agent;

"Regulation D" means Regulation D adopted by the SEC under the 1933 Act;

"Regulation M" means Regulation M adopted by the SEC under the 1934 Act;

"Regulation S" means Regulation S adopted by the SEC under the 1933 Act;

"SEC" means the United States Securities and Exchange Commission;

"Securities  Commissions"  means the securities  commissions or other securities
regulatory authorities in the Qualifying Provinces;

"Selling Jurisdictions" means the Qualifying Provinces and the United States;

"Securities Law" means all applicable  securities laws in each of the Qualifying
Provinces and the respective regulations and rules under such laws together with
applicable published policy statements,  notices,  blanket orders and rulings of
the  securities  regulatory  authorities  in the  Qualifying  Provinces  and all
applicable federal and state securities laws of the United States;

"Special Warrant Agent" means  Computershare Trust Company of Canada, as warrant
agent of the Special Warrants pursuant to the Special Warrant Indenture;

"Special  Warrant  Indenture"  means the  Special  Warrant  indenture  dated the
Closing Date, to be entered into between the Corporation and the Special Warrant
Agent;

"Subject Securities" means the Special Warrants;

"Subscription  Agreement" means a subscription agreement executed by a Purchaser
in the form agreed upon between the Agent and the Corporation;

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                                      -7-

"Subsidiary" means Infowave USA Inc.;

"Supplementary  Materials" means all amended or supplemental statements or other
documents  required  to be  filed  by the  Corporation  under  the  laws  or the
Securities  Law of the Qualifying  Provinces and of any Prospectus  Amendment or
other document required to be filed under Section 7 of this Agreement;  all in a
form and substance satisfactory to the Agent and its counsel;

"Transaction Documents" means this Agreement, the Purchase Warrant Indenture and
the Special Warrant Indenture,  and the respective certificates for the Broker's
Option,  the Fiscal  Advisor  Option,  the  Compensation  Warrant and the Fiscal
Advisor Warrant;

"Transfer Agent" means  Computershare  Trust Company of Canada, as registrar and
transfer agent of the common shares of the Corporation;

"TSE" means The Toronto Stock Exchange;

"Underlying Securities" means the Common Shares and Purchase Warrants underlying
the Special Warrants;  the Compensation Warrants underlying the Broker's Option;
the Fiscal Advisor Warrants underlying the Fiscal Advisor Option; and the Common
Shares and  Compensation  Purchase  Warrants  (as  defined in Section 2.2 below)
underlying  the  Compensation  Warrants  and Fiscal  Advisor  Purchase  Warrants
underlying the Fiscal  Advisor  Warrants;  and the Common Shares  underlying the
Purchase  Warrants,  Compensation  Purchase  Warrants  and  the  Fiscal  Advisor
Purchase Warrants;

"United  States"  means  the  United  States of  America,  its  territories  and
possessions, any state of the United States, and the District of Columbia;

"U.S. Person" means any person as defined in Rule 902(k) of Regulation S;

"Year-End Statements" has the meaning given to it in Section 7.1(q);

"1933 Act" means the United States Securities Act of 1933, as amended; and

"1934 Act" means the United States Securities Exchange Act of 1934, as amended.

                              TERMS AND CONDITIONS

1.   Sale on an Exempt Basis

     1.1  The Agent shall offer for sale and sell the Special Warrants:

          (i)  only in the  Qualifying  Provinces,  the United  States and other
               foreign  jurisdictions  which  have been  agreed to  between  the
               Corporation and the Agent, acting reasonably,  in compliance with
               all applicable Securities Laws and the applicable securities laws
               of such other jurisdictions; and

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                                      -8-

          (ii) only to such  Purchasers and in such manner so that,  pursuant to
               the  provisions of applicable  Securities  Laws or the securities
               laws of such  other  jurisdictions,  no  prospectus  or  offering
               memorandum need be filed or delivered in connection therewith and
               no  continuous  disclosure  obligations  arise on  behalf  of the
               Corporation.

     1.2  The  Corporation  undertakes to file or cause to be filed all forms or
          undertakings  required to be filed by the  Corporation  in  connection
          with  the  purchase  and  sale of the  Special  Warrants,  so that the
          placement  of the Special  Warrants  may  lawfully  occur  without the
          necessity  of filing a  prospectus  or an offering  memorandum  in the
          United States or Qualifying  Provinces (but on terms that shall permit
          the Common Shares and Purchase  Warrants acquired by the Purchasers in
          the Qualifying  Provinces to be sold by such Purchasers at any time in
          the Qualifying Provinces subject to applicable Securities Laws and the
          Agent shall use commercially reasonable efforts to cause Purchasers to
          complete any forms required by applicable  Securities Laws ). All such
          filings  shall  be made by the  Corporation  on  behalf  of the  party
          legally  responsible  to  file  the  same  and  all  fees  payable  in
          connection  with  such  filings  shall be at the sole  expense  of the
          Corporation.

     1.3  Neither the Corporation nor the Agent shall (i) provide to prospective
          purchasers  any document or other  material  that would  constitute an
          offering  memorandum within the meaning of applicable  Securities Laws
          other than the federal and state securities laws of the United States;
          or (ii) cause the sale of the  Special  Warrants to be  advertised  in
          printed  media  of  general  and  regular  paid  circulation,   radio,
          television,  the  Internet  or any other form of  electronic  media or
          otherwise.

2.   Agency Fee

     2.1  The  Corporation  agrees to pay to the Agent at the  Closing  Time the
          Agency Fee in  consideration  of the  services  to be  rendered by the
          Agent in connection with the Offering, which services shall include:

          (a)  endeavoring to arrange for Purchasers for the Subject Securities;

          (b)  assisting  in  the   preparation  of  the  form  of  subscription
               agreements  to be entered into by the  Purchasers  of the Special
               Warrants;

          (c)  assisting in the  preparation of the Purchase  Warrant  Indenture
               and the Special Warrant Indenture; and

          (d)  otherwise advising the Corporation with respect to the Offering.

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     2.2  In  addition  to the Agency Fee,  the  Corporation  shall issue to the
          Agent at the Closing Time: (a) special broker's options (the "Broker's
          Option")   exercisable   into,   for  no   additional   consideration,
          compensation  warrants  (the  "Compensation  Warrants")  entitling the
          Agent  to  acquire,  in the  aggregate,  that  number  of  units  (the
          "Compensation  Units") equal to seven and one-half  percent  (7.5%) of
          the  number of  Special  Warrants  sold by the Agent  pursuant  to the
          Offering.  Each Compensation  Warrant shall entitle the holder thereof
          to  acquire  one  Compensation  Unit at a price per Unit  equal to the
          Offer Price  divided by 0.85 for a period of 36 months  following  the
          Closing  Date.  Each  Compensation  Unit shall be comp warrant (each a
          "Compensation  Purchase Warrant" and  collectively,  the "Compensation
          Purchase  Warrants").  Each whole Compensation  Purchase Warrant shall
          entitle  the holder  thereof to purchase  one Common  Share at a price
          equal to one  hundred  and thirty  percent  (130%) of the Offer  Price
          until the date which is 36 months from the Closing  Date The  issuance
          of the  Compensation  Warrants  and the Fiscal  Advisor  Warrants  (as
          defined  in Section  2.3 below)  shall be  qualified  pursuant  to the
          Prospectus  qualifying the securities  underlying the Special Warrants
          to the maximum extent  permitted by the applicable  Securities Laws of
          any applicable  Qualifying Province (provided that if the total number
          of  Compensation  Warrants and Fiscal Advisor  Warrants (as defined in
          Section 2.3 below)  which may be  qualified  is to be so  limited,  it
          shall be  limited  on a pro rata  basis  with any  similar  limitation
          applicable to Commonwealth,  provided that in no event shall the Agent
          have  less  and  two  thirds  (2/3)  of its  Fiscal  Advisor  Warrants
          qualified under the Prospectus).  Notwithstanding  the foregoing,  the
          Agent shall be entitled,  at a minimum, to the Agency Fee as set forth
          in Section 2.1 and the  Broker's  Option as set forth in this  Section
          2.2.

     2.3  The  Corporation  shall pay to the Fiscal Agent the Fiscal Advisor Fee
          at the Closing  Time.  In addition,  the Fiscal Agent shall receive on
          the  Closing  Date a special  broker's  option  (the  "Fiscal  Advisor
          Option")   exercisable   into,   for  no   additional   consideration,
          compensation  warrants (the "Fiscal Advisor Warrants") to acquire that
          number of units (the "Fiscal Advisor Units") equal to one and one-half
          percent (1.5%) of the number of Special  Warrants sold pursuant to the
          Offering,  on the same terms of the  Broker's  Options as set forth in
          Section 2.2. Any Fiscal Advisor Fees paid, or Fiscal Advisor  Warrants
          issuable  under this Section 2.3 shall be credited  against any Agency
          Fee paid under Section 2.1 or Broker's  Option  issuable under Section
          2.2.

     2.4  Whether or not the Offering is completed,  the  Corporation  shall pay
          all fees, disbursements,  expenses and any applicable taxes thereon in
          connection  with or  incidental  to the  Offering  including,  without
          limitation, the reasonable out-of-pocket expenses of the Agent and the
          reasonable fees and expenses of counsel for the Agent.

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                                      -10-

3.   Prospectus

     3.1  The  Corporation  shall as soon as  practicable  following the Closing
          Date, use its reasonable commercial efforts to prepare and file in the
          Qualifying  Provinces  the  Preliminary   Prospectus   qualifying  the
          distribution of the Common Shares and Purchase  Warrants issuable upon
          exercise of the Special  Warrants and, to the maximum extent permitted
          by law and, in accordance  with Section 2.2 hereof,  the  Compensation
          Warrants  issuable upon exercise of the Broker's Option and the Fiscal
          Advisor  Warrants  issuable upon exercise of the Fiscal Advisor Option
          and the underlying  securities thereof.  The Corporation shall use its
          reasonable commercial efforts to obtain a receipt for such Preliminary
          Prospectus promptly following such filing.

     3.2  The  Corporation  shall  deliver  draft copies of all documents to the
          Agent and its counsel  sufficiently  in advance of any filing so as to
          allow the Agent and its counsel to review such  documents  and provide
          comments.  The  Agent  shall  be  under  no  obligation  to  sign  the
          certificate page of the Preliminary Prospectus, Prospectus, Prospectus
          Amendment or any Supplementary Material unless it is satisfied, in its
          sole discretion, that the applicable Securities Laws has been complied
          with.

     3.3  The Corporation shall use its reasonable commercial efforts to:

          (i)  resolve and satisfy all comments and  deficiencies  raised by the
               Securities  Commissions in the Qualifying Provinces in respect of
               the Preliminary Prospectus;

          (ii) as  soon  as  possible   thereafter,   but  not  later  than  the
               Qualification  Deadline prepare and file and obtain a receipt for
               the Prospectus  qualifying the  distribution of the Common Shares
               and  Purchase  Warrants  issuable  upon  exercise  of the Special
               Warrants  and,  to the maximum  extent  permitted  by  applicable
               Securities Law other than the state and federal  securities  laws
               of the United States,  the  Compensation  Warrants  issuable upon
               exercise of the Broker's  Option and the Fiscal Advisor  Warrants
               issuable  upon  exercise of the Fiscal  Advisor's  Option and the
               underlying securities thereof; and

          (iii)fulfill  and comply  with,  to the  satisfaction  of the  Agent's
               counsel,  acting reasonably,  all applicable Securities Law to be
               fulfilled  or  complied  with by the  Corporation  to enable  the
               Common Shares and Purchase Warrants issuable upon exercise of the
               Special Warrants to be lawfully  distributed to the public in the
               Qualifying  Provinces.  The Corporation  shall use its reasonable
               commercial

<PAGE>
                                      -11-

               efforts to ensure that such requirements  (including the issuance
               of the final receipt by each of the Securities Commissions) shall
               be fulfilled on or before the Qualification Deadline.

4.   Delivery of Prospectus and Related Documents

     4.1  The  Corporation  shall  deliver or cause to be delivered to the Agent
          and the Agent's  counsel the documents set out below at the respective
          times indicated:

          (a)  prior  to  the  filing  of the  Prospectus  with  the  Securities
               Commissions,   signed  copies  of  the  Prospectus  in  form  and
               substance satisfactory to the Agent at the addresses specified in
               Section  21 and,  without  charge  to the  Agent,  on the  second
               Business  Day  following  as  many   commercial   copies  of  the
               Prospectus   (together   with  any  documents   incorporated   by
               reference),  as the case may be, in such  cities  in the  Selling
               Jurisdictions as the Agent may reasonably request; and

          (b)  signed copies of any other documents  required to be filed by the
               Corporation  under  the  laws  of  the  Qualifying  Provinces  in
               compliance with Securities Law applicable therein; and

          (c)  at the time of delivery to the Agent of the Prospectus, a comfort
               letter  from  KPMG  LLP,  dated  the date of the  Prospectus  and
               addressed to the board of directors  of the  Corporation  and the
               Agent, in form and substance  satisfactory  to the Agent,  acting
               reasonably,  relating to the  verification  of the  financial and
               accounting  information in respect of the  Corporation  and other
               numerical data  contained in the Prospectus  which comfort letter
               shall be based on a review by KPMG LLP  having a cut-off  date of
               not more than two Business  Days prior to the date of such letter
               and shall be in  addition to any  comfort  letters  which must be
               filed with Securities Commissions pursuant to applicable Canadian
               Securities Laws.

5.   Delivery Constitutes Representation and Consent

     5.1  Delivery of the Preliminary Prospectus, the Prospectus, any Prospectus
          Amendment   or  any   Supplemental   Material   shall   constitute   a
          representation  and warranty by the  Corporation  to the Agent that at
          the time of delivery:

          (a)  all information and statements (except information and statements
               relating  solely to or provided by the Agent)  contained  therein
               are true in all  respects  at the time of  delivery  thereof  and
               contain no misrepresentation  and constitute full, true and plain
               disclosure of

<PAGE>
                                      -12-

               all material  facts relating to the  Corporation  and the Subject
               Securities,  the Broker's  Option,  the Fiscal Advisor Option and
               the Underlying Securities;

          (b)  no  material  fact or  information  has been  omitted  from  such
               document  which is required to be stated  therein or is necessary
               to make the  statements  or  information  contained  therein  not
               misleading in light of the circumstances in which they were made;
               and

          (c)  such document  complies with the  requirements  of the Securities
               Laws  other  than the state and  federal  securities  laws of the
               United States.

     5.2  Such deliveries shall also constitute the consent and authorization of
          the Corporation to the use by the Agent of the Preliminary Prospectus,
          the  Prospectus,   any  Prospectus  Amendment,  and  any  Supplemental
          Material  in  connection  with  the  distribution  of  the  securities
          contemplated   in  this  Agreement  to  be  in  compliance  with  this
          Agreement.

6.   Representations and Covenants of the Agent

     6.1  The Agent shall:

          (a)  comply with all applicable Securities Laws in connection with the
               Offering and the Prospectus Qualification;

          (b)  not offer or sell Special Warrants so as to require  registration
               thereof,  filing of a prospectus  with respect thereto or require
               the   Corporation   to  become   subject  to  ongoing   reporting
               requirements  under the laws of any jurisdiction  other than that
               of the Qualifying  Provinces or those to which the Corporation is
               already subject or as otherwise agreed with the Corporation; and

          (c)  as  soon  as  practicable  upon  the  Corporation  obtaining  the
               necessary receipts for the Prospectus  relating to the Prospectus
               Qualification  from  the  Securities  Commissions  in each of the
               Qualifying   Provinces,   deliver  one  copy  of  the  Prospectus
               (together with any Prospectus  Amendment required to be provided)
               to each Purchaser of the Special Warrants.

     6.2  The Agent hereby represents and warrants that:

          (a)  the Special Warrants,  Units,  Purchase Warrants,  Fiscal Advisor
               Purchase  Warrants and Compensation  Purchase Warrants and all of
               the  underlying  Common  Shares  issuable  upon  exercise of such
               securities (the "Securities") have not been and will not be

<PAGE>
                                      -13-

               registered  with the SEC under the 1933 Act and that the  Special
               Warrants are being offered and sold in reliance upon an exemption
               from registration  provided by Regulation S in the case of offers
               and sales  outside the United  States,  and in the case of offers
               and sales by the Agent or any selected dealer of the Agent in the
               United  States,  by the exemption from  registration  provided by
               Rule 506 of Regulation D;

          (b)  the Agent,  any selected dealer of the Agent,  if applicable,  or
               any of their  respective  affiliates (A) have not engaged or will
               not engage in any "Directed  Selling  Efforts" within the meaning
               of  Regulation S with respect to the  Securities,  (B) other than
               offers and sales in accordance with Section 6.2(e), have not made
               or will  not make (x) any  offer  to sell or  solicitation  of an
               offer to buy any of the  Securities to any person or (y) any sale
               of the  Securities to any person unless (1) the offer is not made
               to any  person  in the  United  States,  (2) the  seller  of such
               Securities  and  any  person  acting  on  its  behalf  reasonably
               believes  that at the  time  such  person  placed  the  order  to
               purchase Securities such person was outside the United States and
               (3) such sale is  otherwise  in  compliance  with the  applicable
               requirements of Regulation S, (C) have not taken or will not take
               any action which would constitute a violation of Regulation M, or
               (D) have not  solicited  or will not solicit  offers for, or have
               not made or will not make offers to sell, the Securities by means
               of any form of general  solicitation  or general  advertising (as
               those terms are used in Regulation D) or in any manner  involving
               a public offering within the meaning of the 1933 Act;

          (c)  all offers and sales of the  Securities in the United States have
               been and will be made in compliance  with all  applicable  United
               States  federal and state laws with  respect to the  registration
               and conduct of securities brokers and dealers;

          (d)  the Agent has caused or will promptly cause each selected  dealer
               of the Agent to  acknowledge  in  writing  its  awareness  of and
               agreement to be bound by and shall use its best efforts to ensure
               that each selected dealer complies with the  representations  and
               warranties  contained in this  Agreement in  connection  with all
               offers and sale of the Securities;

          (e)  the  Securities  have been and shall be  offered  and sold by the
               Agent  and  selected   dealers  in  the  United  States  only  in
               compliance with all applicable state securities ("blue sky") laws
               of  the  United   States  and  in  a   transaction   exempt  from
               registration  requirements of the 1933 Act,  pursuant to Rule 506
               of Regulation D, to persons that

<PAGE>
                                      -14-

               are "accredited  investors"  within the meaning of Rule 501(a) of
               Regulation D; and

          (f)  the  Agent  has  not  entered,  and  will  not  enter,  into  any
               contractual  arrangement without the prior written consent of the
               Company with respect to the placement of the  Securities,  except
               (i)  with  its  affiliates;  or (ii)  with  selected  dealers  in
               accordance with the certificate attached hereto as Schedule "C".

7.   Material Change During Distribution

     7.1  Commencing on the date hereof and until the completion of distribution
          of the Common Shares,  the Corporation shall promptly notify the Agent
          in writing of:

          (a)  any change  (actual,  anticipated,  contemplated  or  threatened,
               financial or  otherwise) in the  business,  affairs,  operations,
               assets, liabilities (contingent or otherwise), capital or control
               of the  Corporation or its  Subsidiary  that would be material to
               the Corporation and its Subsidiary taken as a whole, and

          (b)  any  change  in any  material  fact  or any  misstatement  of any
               material  fact  contained  in  the  Preliminary  Prospectus,  the
               Prospectus or any Prospectus  Amendment,  or the existence of any
               new material  fact not disclosed in the  Preliminary  Prospectus,
               the Prospectus or any Prospectus Amendment,

               which change, misstatement or new material fact is, or may be, of
               such a  nature  as to  render  the  Preliminary  Prospectus,  the
               Prospectus or any  Prospectus  Amendment  misleading or untrue or
               would  result in a  misrepresentation  therein or would result in
               the  Preliminary  Prospectus,  the  Prospectus or any  Prospectus
               Amendment not complying with any  Securities  Laws other than the
               state and federal  securities  laws of the United States,  as the
               case may be, or which change,  misstatement  or new material fact
               would  reasonably  be expected  to have an adverse  effect on the
               market price or value of the common shares of the Corporation.

     7.2  The Corporation shall promptly, and in any event within any applicable
          time limitation,  comply,  to the satisfaction of the Agent,  with all
          applicable  filings and other  requirements  under the Securities Laws
          and the rules and by-laws of the TSE and, if applicable, United States
          securities  laws as a  result  of  such  change,  misstatement  or new
          material  fact   referred  to  in  Section  7.1,   provided  that  the
          Corporation shall not file any Prospectus  Amendment or other document
          relating  to  the  Subject  Securities  without  first  obtaining  the
          approval of the Agent,  after consultation with the Agent with respect
          to  the  form  and  content  thereof,  which  approval  shall  not  be
          unreasonably withheld or delayed. The

<PAGE>
                                      -15-

          Corporation  shall in good faith discuss with the Agent any such fact,
          misstatement or new material fact (actual, contemplated or threatened,
          financial  or  otherwise)  which  is of such a  nature  that  there is
          reasonable  doubt  whether  written  notice  need be given  under this
          paragraph.  The Corporation  shall allow the Agent to conduct all "due
          diligence"  investigations  which,  in the  reasonable  opinion of the
          Agent,  are required in order to responsibly  execute any  certificate
          required to be executed by the Agent in any Prospectus Amendment.  The
          Corporation  shall  promptly  deliver or cause to be  delivered to the
          Agent and the  Agent's  counsel a copy of each  Prospectus  Amendment,
          signed as required by applicable  Securities Laws by all parties other
          than the Agent,  as well as opinions  and letters with respect to each
          such  Prospectus  Amendment to the same effect as those referred to in
          Section 4 and dated the date of such Prospectus Amendment.

     7.3  The delivery to the Agent of a Prospectus Amendment shall constitute a
          representation  and  warranty  to the  Agent by the  Corporation  with
          respect to the Preliminary  Prospectus or the Prospectus,  as the case
          may  be,  as  amended,  modified  or  superceded  by  such  Prospectus
          Amendment and by each Prospectus Amendment previously delivered to the
          Agent as aforesaid,  to the same effect as set forth in Sections 4 and
          5. Such delivery shall also  constitute the consent and  authorization
          of the  Corporation to the use of the Preliminary  Prospectus,  or the
          Prospectus,  as the  case  may be,  as so  amended,  by the  Agent  in
          connection with the distribution of the Common Shares and the Purchase
          Warrants  underlying the Special Warrants,  the Compensation  Purchase
          Warrants  underlying  the  Broker's  Options  and the  Fiscal  Advisor
          Warrants   underlying   the  Fiscal  Advisor  Option  in  the  Selling
          Jurisdictions.

     7.4  The  Corporation  shall deliver or cause to be delivered to the Agent,
          as soon as possible,  without charge, as many commercial copies of any
          Prospectus  Amendment in such cities in the Selling  Jurisdictions  as
          the Agent may request.

8.   Representations and Warranties of the Corporation

     8.1  The  Corporation  represents and warrants to the Agent and each of the
          Purchasers,  and  acknowledges  that each of the Purchasers is relying
          upon such representations and warranties, that:

          (a)  each of the Corporation and its Subsidiary is a corporation  duly
               incorporated and organized and validly existing under the laws of
               its jurisdiction of incorporation,  is duly qualified to carry on
               its  business  and is in good  standing in each  jurisdiction  in
               which the conduct of its  business or the  ownership,  leasing or
               operation of its property and assets requires such qualification,
               and has all requisite  corporate  power and authority to carry on
               its business, to own,

<PAGE>
                                      -16-

               lease and operate its property and assets and to execute, deliver
               and perform its obligations under this Agreement;

          (b)  the Corporation, either directly or indirectly, beneficially owns
               all of the issued and  outstanding  shares of the Subsidiary free
               and clear of all mortgages,  liens,  charges,  pledges,  security
               interests, encumbrances, claims or demands of any kind whatsoever
               (except   for   security   granted   to   Thomas   Koll   or  the
               Toronto-Dominion  Bank),  all  of  such  shares  have  been  duly
               authorized and validly  issued and are  outstanding as fully paid
               and non-assessable shares and no person has any right,  agreement
               or option,  present or future,  contingent  or  absolute,  of any
               right capable of becoming a right,  agreement or option,  for the
               purchase  from the  Corporation  of any  interest  in any of such
               shares or for the issue or allotment  of any  unissued  shares in
               the capital of the Subsidiary or any other  security  convertible
               into or exchangeable for any such shares;

          (c)  each of the Corporation  and the  Subsidiary,  holds all material
               licences,  certificates,   registrations,  permits,  consents  or
               qualifications  required by the  appropriate  state,  provincial,
               municipal or federal  regulatory  agencies or bodies necessary in
               order to enable its  business  to be carried on as now  conducted
               and all  such  licences,  certificates,  registrations,  permits,
               consents and  qualifications are valid and subsisting and in good
               standing  and do not contain any  unusual  burdensome  provision,
               condition or limitation  which has a material  adverse  effect on
               the  operation  of  the  business  of  the   Corporation  or  the
               Subsidiary,  taken as a whole,  as now  conducted or as presently
               proposed to be conducted and the Corporation has not received any
               notice of proceedings  relating to the revocation or modification
               of  any  such  licenses,  certificates,  registrations,  permits,
               consents,   or  qualifications   which,  if  the  subject  of  an
               unfavourable  decision,  ruling or finding would adversely affect
               the conduct of the business,  operations,  financial condition or
               income or future  prospects of the Corporation and the Subsidiary
               (taken as a whole);

          (d)  no   reorganization,   amalgamation,   merger,   acquisition   or
               disposition  of assets not in the ordinary  course of business by
               the  Corporation  or other change in the business,  operations or
               capital  of  the   Corporation   (other  than  the   transactions
               contemplated   herein)  is  pending  which  could  reasonably  be
               expected to have a material adverse effect on the market price or
               value of the Common Shares;

<PAGE>

                                      -17-

          (e)  the  Corporation  has  full  corporate  power  and  authority  to
               undertake  the Offering,  the  Prospectus  Qualification  and all
               other transactions contemplated herein;

          (f)  the  Transaction  Documents have been or shall be duly authorized
               and have  been,  or  shall  be,  executed  and  delivered  by the
               Corporation,  as applicable,  and constitute, or shall constitute
               upon execution and delivery, legal, valid and binding obligations
               of  the  Corporation   enforceable  against  the  Corporation  in
               accordance with their terms subject to bankruptcy, insolvency and
               other laws  affecting  the  rights of  creditors  generally,  the
               qualification  that equitable remedies may be granted only in the
               discretion of a court of competent  jurisdiction  and that rights
               to  indemnity  and  waiver  of  contribution  may be  limited  by
               applicable law;

          (g)  the authorized capital of the Corporation consists of 200,000,000
               Common  Shares of which  23,411,003  Common  Shares  are  validly
               issued and  outstanding  as fully paid and  non-assessable  as at
               November  23,  2001,  and no  person  or  other  entity  has  any
               agreement,  option,  right or privilege  (whether  pre-emptive or
               contractual) capable of becoming an agreement for or the right to
               purchase  any  of  the  issued  or  unissued  securities  of  the
               Corporation except as disclosed in Schedule A;

          (h)  the  Corporation is not in default under or in breach of, and the
               execution,   delivery,  performance  of  and  compliance  by  the
               Corporation with the terms of the Transaction  Documents and, the
               issuance,  sale and  delivery of the Subject  Securities  and the
               Underlying  Securities shall not result in a breach of, and shall
               not create a state of facts which,  after notice or lapse of time
               or both, shall result in a breach of, and shall not conflict with
               (i) any of the terms,  conditions or provisions of the constating
               documents or by-laws of the Corporation (or its Subsidiary), (ii)
               any material  indenture,  agreement  (written or oral),  contract
               lease  or  other  instrument  to which  the  Corporation  (or its
               Subsidiary)  is a  party  or by  which  the  Corporation  (or its
               Subsidiary) is or shall be contractually  bound as of the Closing
               Time, (iii) any law,  statute,  rule or regulation  applicable to
               the  Corporation  (or its  Subsidiary),  and (iv)  any  judgment,
               decree or order binding the  Corporation  (or its  Subsidiary) or
               the property or assets of the Corporation (or its Subsidiary);

          (i)  no legal or governmental proceedings (including in respect of any
               class   action)  are  pending  or,  to  the   knowledge   of  the
               Corporation,  are threatened to which the Corporation  and/or its
               Subsidiary is a party or to which the property of the Corporation
               and/or its

<PAGE>
                                      -18-

               Subsidiary  is subject that would result  individually  or in the
               aggregate  in any  adverse  material  change  in the  operations,
               business or  condition  of the  Corporation  and its  Subsidiary,
               taken as a whole;

          (j)  except as described in Schedule B, there are no actions, suits or
               proceedings  pending or  affecting  or, to the  knowledge  of the
               Corporation,  threatened  against the Corporation in any court or
               before  or  by  any  federal,  provincial,   municipal  or  other
               governmental department, commission, board or agency, domestic or
               foreign,  the  outcome of which  would  have a  material  adverse
               effect  on  the   business,   assets,   operations  or  condition
               (financial or otherwise) of the  Corporation  or which affects or
               may affect the  distribution  of the  Subject  Securities  or the
               Underlying  Securities  and the  Corporation  is not aware of any
               existing  ground on which  any such  action,  suit or  proceeding
               might be commenced with any reasonable likelihood of success;

          (k)  each of the  Corporation and its Subsidiary has good title to all
               of its assets and  undertakings  (for the purpose of this clause,
               the foregoing is referred to as the  "Interest") and its Interest
               is free and clear of adverse claims,  except for security granted
               to Thomas Koll or the Toronto-Dominion Bank and for those arising
               in the ordinary course of business;

          (l)  the  proceeds   received   from  the   Offering   shall  be  used
               substantially  in the  manner  that  shall  be  disclosed  in the
               Preliminary   Prospectus,   the  Prospectus  and  any  Prospectus
               Amendment;

          (m)  Computershare  Trust Company of Canada,  at its principal offices
               in the  City of  Vancouver  and the City of  Toronto  is the duly
               appointed  Transfer Agent of the Common Shares and  Computershare
               Trust  Company of Canada  shall at the  Closing  Time be the duly
               appointed   Purchase  Warrant  Agent  of  the  Purchase  Warrants
               pursuant to the Purchase Warrant Indenture and as Special Warrant
               Agent of the Special  Warrants  pursuant  to the Special  Warrant
               Indenture;

          (n)  the audited annual financial  statements of the Corporation as at
               and for  the  year  ended  December  31,  2000  contained  in the
               Corporation's annual report for the year ended December 31, 2000:

               (i)  have been prepared in  accordance  with  generally  accepted
                    accounting  principles  applied on a basis  consistent  with
                    those of preceding fiscal periods;

<PAGE>

                                      -19-

               (ii) representfully, fairly and correctly the assets, liabilities
                    and financial  condition of the  Corporation  as at December
                    31, 2000 and the results of its  operations  and the changes
                    in its financial position for the year then ended;

               (iii)are  in  accordance  with  the  books  and  records  of  the
                    Corporation; and

               (iv) contain and reflect all necessary  adjustments  for the fair
                    presentation  of the results of operations and the financial
                    condition of the business of the  Corporation for the period
                    covered thereby;

          (o)  the unaudited  consolidated  interim financial  statements of the
               Corporation  and its  Subsidiary  as at and for the  nine  months
               ended September 30, 2001:

               (i)  have been prepared in  accordance  with  generally  accepted
                    accounting  principles  applied on a basis  consistent  with
                    those of preceding periods;

               (ii) represent  fully,  fairly  and  correctly  the  consolidated
                    assets,   liabilities   and   financial   condition  of  the
                    Corporation  as at September  30, 2001 and the  consolidated
                    results of its  operations  and the changes in its financial
                    position for the period then ended;

               (iii)are  in  accordance  with  the  books  and  records  of  the
                    Corporation; and

               (iv) contain and reflect all necessary  adjustments  for the fair
                    presentation  of the results of operations and the financial
                    condition of the business of the  Corporation for the period
                    covered thereby,

                    and there has not been any  material  adverse  change in the
                    financial  position  of the  Corporation,  or its  business,
                    assets,  liabilities  or  undertaking  (absolute,   accrued,
                    contingent or otherwise) since September 30, 2001 other than
                    as publicly disclosed;

          (p)  KPMG LLP, the auditors of the Corporation, are independent public
               accountants as required under Securities Law other than the state
               and federal  securities  laws of the United  States and there has
               not been any disagreement  (within the meaning of National Policy
               Statement  No.  31) with the  present or former  auditors  of the
               Corporation other than as disclosed in the Information Record;

<PAGE>

                                      -20-

          (q)  there  are  no  outstanding  issues  or  disagreements  with  the
               auditors of the  Corporation  in  connection  with the  financial
               statements  of the  Corporation  for the year ended  December 31,
               2000 (the "Year-End  Statements") or any fact or issue that would
               or could lead to a disagreement with the auditors;

          (r)  to the knowledge of the Corporation, there are no facts or issues
               relating to the  Corporation  that would  require the auditors to
               provide  a  qualified  report  in  connection  with the  Year-End
               Statements;

          (s)  the  Corporation  does not intend to have any write  downs or any
               write-offs  with respect to any of the  Corporation's  assets for
               the year ended December 31, 2001;

          (t)  the Corporation is not aware of any liability for which a reserve
               has not been previously made;

          (u)  since  September  30,  2001,  (i) there has not been any material
               change or a change in a material fact in the  business,  affairs,
               financial position, operations, business prospects, undertakings,
               assets,  liabilities or  obligations,  contingent or otherwise or
               capital  of  the   Corporation,   and  (ii)  there  has  been  no
               transaction entered into by the Corporation,  other than those in
               the ordinary  course of business or those that have been publicly
               disclosed;

          (v)  the  Corporation  is  a  "reporting  issuer"  in  the  Qualifying
               Provinces  and is not in  default  under  Securities  Laws in the
               Qualifying  Provinces.   In  particular,   without  limiting  the
               foregoing,  the Corporation is in compliance with its obligations
               to make timely  disclosure of all material changes relating to it
               and since  September 30, 2001 no such disclosure has been made on
               a confidential  basis and there is no material change relating to
               the Corporation  which has occurred and with respect to which the
               requisite material change report has not been filed;

          (w)  no   portion   of   the    Information    Record    contained   a
               misrepresentation as at its date of public dissemination;

          (x)  the Special Warrants,  Broker's Option,  Fiscal Advisor Option or
               any  Underlying  Securities of the  Corporation do not constitute
               "foreign  property"  within  the  meaning  of the  Income Tax Act
               (Canada),  or any amendments  thereto  publicly  announced by the
               Minister of Finance prior to that time;

          (y)  the Corporation is a Foreign Issuer and reasonably  believes that
               there is no substantial U.S. market interest (as defined in

<PAGE>

                                      -21-

               Regulation S) in the Securities,  and neither the Corporation nor
               any of its affiliates or any person acting on its or their behalf
               has engaged or will  engage in any  activity  undertaken  for the
               purpose  of, or that could  reasonably  be  expected  to have the
               effect of,  conditioning  the market in the United States for the
               Securities and shall include,  without limitation,  the placement
               of any advertisement in a publication with a general  circulation
               in the United  States that refers to the placement of the Special
               Warrants  ("Directed  Selling  Efforts"  within  the  meaning  of
               Regulation S). The Corporation is not, and agrees to use its best
               efforts  not to become  at any time  prior to the  expiration  of
               three years after the Closing  Date, an  "investment  company" as
               defined in the United States  Investment  Company Act of 1940, as
               amended.  Neither the  Corporation  nor any of its affiliates has
               taken or will take any action  which would  cause the  exemptions
               afforded by  Regulation S or Regulation D to be  unavailable  for
               the offer and sale of the  Securities  pursuant to this Agreement
               or which would  constitute a violation of  Regulation  M. Neither
               the  Corporation,  its  affiliates  nor any person  acting on its
               behalf has (i)  within  the last six  months  offered or sold any
               Common Shares or any securities  convertible into or exchangeable
               for Common Shares by means of any form of general solicitation or
               general  advertising  within the meaning of Rule 502(c) under the
               1933 Act or in a  transaction  which  violated  the  registration
               requirements  of the 1933 Act,  or (ii)  offered or will offer to
               sell the Securities by means of any form of general  solicitation
               or general  advertising (as those terms are used in Regulation D)
               or in any manner  involving a public  offering within the meaning
               of the 1933 Act;

          (z)  the offer,  offer for sale, and sale of the Special  Warrants and
               Units and the Common  Shares  issuable  upon the  exercise of the
               Purchase  Warrants have not been  registered  under 1933 Act. The
               Special  Warrants  and Units are to be offered,  offered for sale
               and sold in reliance upon the  exemptions  from the  registration
               requirements  of Section 5 of the 1933 Act.  The Company will use
               its best efforts to conduct the Offering in  compliance  with the
               requirements  of  Regulation  D, and the  Company  will  file all
               appropriate notice of offering with the SEC;

          (aa) assuming  (i) the  accuracy  of the  information  provided by the
               respective  Subscribers in the Subscription Agreement and related
               documents,  and (ii) that the Agent has  complied in all material
               respects with the provisions of Regulation D and this  Agreement,
               the offer and sale of the Special Warrants and the Units pursuant
               to the  terms of this  Agreement  are  exempt  from  registration
               requirements of the 1933 Act and the rules and regulations

<PAGE>

                                      -22-

               promulgated thereunder.  The Company is not disqualified from the
               exemption under  Regulation D by virtue of the  disqualifications
               contained  in  Rule   505(b)(2)(iii)   or  Rule  507  promulgated
               thereunder;

          (bb) neither the  Corporation  nor its Subsidiary is in default in the
               observance  or  performance  of  any  term  or  obligation  to be
               performed by it under any contract  entered into and no event has
               occurred  which  with  notice  or  lapse  of time  or both  would
               directly or  indirectly  constitute  such a default,  in any such
               case which default or event would have a material  adverse effect
               on its assets or  properties,  business,  results of  operations,
               prospects or condition (financial or otherwise);

          (cc) the  outstanding  Common Shares of the Corporation are listed and
               posted  for  trading  on the TSE  and  the TSE has  conditionally
               approved the listing of the Common Shares  issuable upon exercise
               of the Special Warrants, Purchase Warrants, Compensation Warrants
               and Fiscal Advisor Warrants, subject to satisfaction of customary
               conditions;

          (dd) other than the Agent,  there is no person acting or purporting to
               act at the  request of the  Corporation,  who is  entitled to any
               brokerage  or fee in  connection  with  the  sale of the  Subject
               Securities;

          (ee) the books and records of the  Corporation  made  available to the
               Agent,  or their counsel,  in connection with their due diligence
               investigations  for the periods  from their  respective  dates of
               creation,  incorporation  to the date of examination  thereof are
               the  original  books and records of the  Corporation  and contain
               copies of all  proceedings  (or certified  copies thereof) of the
               shareholders,  the board of directors  and all  committees of the
               board of directors of such  entities and there have been no other
               meetings,  resolutions or proceedings of the shareholders,  board
               of  directors  or any  committee of the board of directors to the
               date of review of such  records and books not  reflected  in such
               books and other records;

          (ff) the Special  Warrants,  Broker's Option and Fiscal Advisor Option
               shall be duly and validly  authorized  and created,  and shall be
               duly  and  validly  issued  as  fully  paid  and   non-assessable
               securities of the Corporation,  at the Closing Time; the Purchase
               Warrants,  the  Compensation  Purchase  Warrants  and the  Fiscal
               Advisor Purchase Warrants shall be duly and validly authorized at
               the Closing Time and shall be duly and validly created and issued
               as fully paid and  non-assessable  securities of the  Corporation
               upon the exercise of the Special  Warrants in accordance with its
               terms;  the  Compensation  Warrants and Fiscal  Advisor  Warrants
               issuable

<PAGE>

                                      -23-

               upon the  exercise  of the  Broker's  Option and  Fiscal  Advisor
               Option,  respectively,  have been duly and validly authorized and
               upon their  issuance in accordance  with their terms;  the Common
               Shares shall be duly and validly authorized and created and shall
               be duly  and  validly  issued  as fully  paid and  non-assessable
               securities  of the  Corporation  upon the exercise of the Special
               Warrants, Purchase Warrants,  Compensation Warrants, Compensation
               Purchase Warrants, Fiscal Advisor Warrants and the Fiscal Advisor
               Purchase Warrants;

          (gg) the  Corporation  is the  absolute  owner  or has  the  sole  and
               exclusive  right  to use,  or is the  licensee,  sub-licensee  or
               franchisee, as the case may be, of all Intellectual Property used
               by the  Corporation  and which is material to the  Corporation in
               the operation of its business  without  making any payment to any
               person or granting any rights to any person in exchange therefor,
               other  than in  accordance  with the  terms of any such  license,
               sub-license  or  franchise  arrangement.  No event  has  occurred
               during  the  registration  or  filing  of,  or  during  any other
               proceeding  relating to such  Intellectual  Property owned by the
               Corporation that would make invalid or  unenforceable,  or negate
               the right to issuance or use of any of such Intellectual Property
               owned by the  Corporation.  Except as otherwise  disclosed to the
               Agent, there is no Intellectual  Property of any person which, to
               the  knowledge of the  Corporation,  impairs or prevents,  in any
               material respect, the development, manufacture, use, sale, lease,
               license  and  service  of   products,   now   existing  or  under
               development by the Corporation;

          (hh) the  execution,  delivery  and  performance  of  the  Transaction
               Documents and the consummation of the  transactions  contemplated
               thereby shall not breach, violate or conflict with any instrument
               or agreement  governing any of the Intellectual  Property used by
               the  Corporation in the operation of its business,  and shall not
               cause the  forfeiture or  termination  or give rise to a right of
               forfeiture or termination of any of such Intellectual Property or
               in any way  impair  the right of the  Corporation  to use,  sell,
               license or dispose of or to bring any action for the infringement
               of any of such Intellectual Property or portion thereof;

          (ii) all appropriate employees of, and consultants to, the Corporation
               have entered into  agreements  with the  Corporation  pursuant to
               which all Intellectual  Property  developed by them in the course
               of  their  relationships  with  the  Corporation  belong  solely,
               without  any  restrictions  or  obligations  whatsoever,  to  the
               Corporation.   The  Corporation  has  taken  all  reasonable  and
               practical steps  (including,  without  limitation,  entering into
               confidentiality and non-disclosure

<PAGE>

                                      -24-

               agreements with all  appropriate  employees of the Corporation or
               consultants,  third party  developers  or any other  persons with
               access  to  or  knowledge  of  the   Corporation's   Intellectual
               Property)  sufficient  to safeguard  and maintain the secrecy and
               confidentiality  of,  and  proprietary  rights  in,  all  of  the
               Corporation's material Intellectual Property;

          (jj) except  as  otherwise   disclosed  to  the  Agent,  none  of  the
               development,  manufacture, marketing, license, sale or use of any
               product  currently sold by the Corporation or its Subsidiaries or
               currently under  development  violates,  in any material respect,
               any contract to which the  Corporation or its  Subsidiaries  is a
               party  or  knowingly  infringes,  in any  material  respect,  any
               Intellectual  Property  of  any  person.   Without  limiting  the
               generality of this paragraph (jj) hereof,  except as disclosed to
               the Agent,  there are no pending  and,  to the  knowledge  of the
               Corporation,  no  threatened,  proceedings,  litigation  or other
               adverse  claims  affecting,  or with  respect to, any part of the
               material  Intellectual  Property used by the  Corporation  in the
               operation  of  its  business   and,  to  the   knowledge  of  the
               Corporation,   no  person  is   infringing   upon  such  material
               Intellectual Property of the Corporation;

          (kk) except for  temporary  trading halts  pending  announcements,  no
               order  ceasing  or  suspending   trading  in  securities  of  the
               Corporation  or  prohibiting   the  sale  of  securities  by  the
               Corporation  has  been  issued  and,  to  the  knowledge  of  the
               Corporation,   no   proceedings   for  this   purpose  have  been
               instituted, are pending, contemplated or threatened;

          (ll) since  September 30, 2001 the  Corporation  has not,  directly or
               indirectly, declared or paid any dividend or declared or made any
               other   distribution  on  any  of  its  common  shares  or  other
               securities  or,  directly or indirectly,  redeemed,  purchased or
               otherwise  acquired any of its common shares or other  securities
               or agreed to do any of the foregoing;

          (mm) there is not in the constating documents of the Corporation or in
               any  agreement,  mortgage,  note,  debenture,  indenture or other
               instrument or document to which the  Corporation is a party,  any
               restriction  upon or impediment to the  declaration or payment of
               dividends by the directors of the  Corporation  or the payment of
               dividends by the Corporation to the holders of its common shares;

          (nn) except for Thomas Koll,  the  Corporation  does not owe any money
               to, nor has the Corporation any present loans to, or borrowed any
               monies from, or is otherwise  indebted to any officer,  director,
               employee,  shareholder  or any person not dealing  "arm's length"
               (as

<PAGE>

                                      -25-

               such term is defined in the  Income  Tax Act  (Canada))  with the
               Corporation;

          (oo) the  Corporation  is  in  compliance  with  all  laws  respecting
               employment  and  employment  practices,  terms and  conditions of
               employment, pay equity and wages;

          (pp) the  Corporation  is not a party to any contract  with any labour
               union or employee association or made commitments to or conducted
               negotiations  with any labour union or employee  association with
               respect  to any  future  agreement  and to the  knowledge  of the
               Corporation   there  are  no  current  attempts  to  organize  or
               establish any labour union or employee association,  nor is there
               any  certification  of any such union with regard to a bargaining
               unit;

          (qq) the  assets  of the  Corporation  and its  Subsidiary  and  their
               business and operations  are insured  against loss or damage with
               responsible   insurers  on  a  basis  consistent  with  insurance
               obtained  by  reasonably   prudent   participants  in  comparable
               businesses,  and such  coverage is in full force and effect,  and
               the  Corporation  has not failed to  promptly  give any notice or
               present any claim thereunder;

          (rr) the  Corporation  is not aware of any  legislation,  or  proposed
               legislation  which it  anticipates  shall  adversely  affect  the
               business, affairs, operations, assets, liabilities (contingent or
               otherwise) or prospects of the  Corporation  and the  Subsidiary,
               taken as a whole;

          (ss) all taxes  (including  income tax,  capital tax,  payroll  taxes,
               employer health tax, worker's compensation  payments,  custom and
               land  transfer  taxes),  duties,   royalties,   levies,  imposts,
               assessments,   deductions,   charges  or  withholdings   and  all
               liabilities  with  respect  thereto  including  any  penalty  and
               interest payable with respect thereto (collectively, "Taxes") due
               and payable by the  Corporation  and the  Subsidiaries  have been
               paid.  All tax  returns,  declarations,  remittances  and filings
               required to be filed by the Corporation and the Subsidiaries have
               been filed with all appropriate  governmental authorities and all
               such returns, declarations,  remittances and filings are complete
               and  accurate  and no  material  fact or facts have been  omitted
               therefrom which would make any of them misleading. No examination
               of any tax return of the  Corporation or any of the  Subsidiaries
               is  currently  in  progress  and there are no issues or  disputes
               outstanding with any governmental  authority respecting any taxes
               that have been paid, or may be payable, by the Corporation or any
               of the Subsidiaries, in any case

          (tt) no person has any right,  agreement or option, present or future,
               contingent or absolute, or any right capable of becoming a right,

<PAGE>

                                      -26-

               agreement or option, for the purchase from the Corporation of any
               interest in any common shares or any other  security  convertible
               into or exchangeable for any such shares,  except as set forth in
               Schedule "A" hereto,  or to require the  Corporation to purchase,
               redeem or  otherwise  acquire  any of the issued and  outstanding
               securities of the Corporation;

          (uu) the  Corporation  has conducted and is conducting its business in
               compliance in all material  respects,  with all applicable  laws,
               statutes,  by-laws, rules and regulations of each jurisdiction in
               which its business is carried on and holds all material licenses,
               registrations,  permits,  consents or qualifications  required in
               order to enable its  business to be carried on as now  conducted,
               and all  such  licenses,  registrations,  permits,  consents  and
               qualifications  are valid and  subsisting and in good standing in
               all respects;

          (vv) the Corporation has not: committed an act of bankruptcy nor is it
               insolvent,  proposed a compromise or arrangement to its creditors
               generally,  had a petition  for a receiving  order in  bankruptcy
               filed  against  it, made a voluntary  assignment  in  bankruptcy,
               taken  any   proceedings   with  respect  to  a   compromise   or
               arrangement,  taken  any  proceedings  to  have  itself  declared
               bankrupt,  wound-up or dissolved, taken any proceedings to have a
               receiver appointed to any of its property or had any execution or
               distress  become  enforceable  or become  levied  upon any of its
               properties;

          (ww) the  Corporation's  equipment is adequate and  sufficient for the
               conduct of its business as presently conducted;

          (xx) the books and records of the Corporation are true and complete in
               all material respects;

          (yy) to the  knowledge  of the  Corporation,  none  of the  directors,
               officers or principal  shareholders  of the  Corporation (or such
               shareholders'  respective principals) is or has ever been subject
               to any prior  regulatory,  criminal or  bankruptcy  proceeding in
               Canada or elsewhere;

          (zz) except for Thomas Koll,  the  Corporation  does not owe any money
               to, nor has the Corporation any present loans to, or borrowed any
               monies from, or is otherwise  indebted to any officer,  director,
               employee, shareholder or any person not dealing at "arm's length"
               (as such term is defined in the Income Tax Act (Canada)) with the
               Corporation   except  for  usual  employee   reimbursements   and
               compensation  paid  in the  ordinary  and  normal  course  of the
               business of the Corporation;

<PAGE>

                                      -27-

          (aaa)except for Thomas  Koll,  the  Corporation  is not a party to any
               material  contract,  agreement or understanding with any officer,
               director,  employee,  shareholder or any other person not dealing
               at arm's length with the Corporation;

          (bbb)no  officer  of  the  Corporation  and  no  entity  which  is  an
               affiliate or associate or any one or more of the foregoing  owns,
               directly  or   indirectly,   any  interest   (except  for  shares
               representing less than 5% of the outstanding  shares of any class
               or series of any  publicly  traded  company),  or is an  officer,
               director,  employee or consultant  of, any person which is, or is
               engaged in, a business competitive with the Corporation;

          (ccc)to the  knowledge  of the  Corporation,  after  due  enquiry,  no
               present or former officer,  director,  employee or shareholder of
               the  Corporation  has  any  cause  of  action,   or  other  claim
               whatsoever,  against,  or owes any amount to, the  Corporation in
               connection  with the  Corporation  except  for any  claims in the
               ordinary  and normal  course of the  business of the  Corporation
               such as for accrued  vacation pay and accrued  benefits under any
               employee plans;

          (ddd)all  material  accruals  for unpaid  vacation  pay,  premiums for
               unemployment insurance,  health premiums,  pension plan premiums,
               accrued wages, salaries and commissions and employee benefit plan
               payments  have been  reflected  in the books and  records  of the
               Corporation;

          (eee)there  have not been and there  are not  currently  any  material
               disagreements or other difficulties with any of the Corporation's
               employees,  or former employees,  which is adversely affecting or
               could reasonably  adversely  affect,  in a material  manner,  the
               carrying on of the Corporation's business; and

          (fff)the  Corporation  has not  received  notice  nor is it  otherwise
               aware that its business  relationship  with any of its  principal
               customers,  suppliers and project  and/or joint venture  partners
               and/or  participants  shall  terminate  in the next  twelve  (12)
               months  other  than  pursuant  to the  terms  of  the  respective
               agreements between the parties.

9.   Covenants of the Corporation

     9.1  The Corporation hereby covenants to and with the Agent and each of the
          Purchasers that:

<PAGE>

                                      -28-

          (a)  it  shall  prior  to the  Prospectus  Qualification,  obtain  all
               necessary  regulatory  consents  from the TSE to the  Offering on
               such terms and conditions as are mutually acceptable to the Agent
               and the Corporation, acting reasonably;

          (b)  it shall prior to the Closing, use reasonable  commercial efforts
               to arrange for the conditional  listing for trading of the Common
               Shares  issuable  upon  exercise  of the  Special  Warrants,  the
               Purchase Warrants,  the Compensation  Warrants,  the Compensation
               Purchase  Warrants,  the Fiscal  Advisor  Warrants and the Fiscal
               Advisor  Purchase  Warrants  on the  TSE,  subject  to the  usual
               conditions.  The Corporation  further covenants and agrees to use
               reasonable  commercial  efforts  to  cause  such  approval  to be
               obtained prior to the Closing Date;

          (c)  it shall  use  reasonable  commercial  efforts  to  maintain  the
               listing of the Common  Shares on the TSE,  or on such other stock
               exchange  or  quotation  system  acceptable  to the Agent and its
               status as reporting  issuer in good  standing and its  equivalent
               under the securities  legislation of the Qualifying Provinces for
               the  period  of  36  months  from  the  date  of  the  Prospectus
               Qualification;

          (d)  it shall take all steps  necessary to authorize the execution and
               delivery of the Agreements and to duly and punctually perform all
               obligations to be performed by it under the Agreements;

          (e)  it shall at all times allow the Agent and its  representatives to
               conduct all due diligence which the Agent may reasonably  require
               to  be  conducted  in  order  to  fulfill  its   obligations   as
               "underwriter"  under  Securities  Law  other  than the  state and
               federal  securities  laws of the  United  States  and in order to
               enable the Agent to responsibly execute any certificate  required
               to be executed in connection with a Prospectus, and it shall be a
               condition  precedent to the Agent's  execution of any certificate
               in any  Prospectus  that the Agent and its counsel be  satisfied,
               acting reasonably, as to the form and content of such Prospectus;

          (f)  the  Common  Shares  shall,  upon  issuance,  be duly  issued  as
               fully-paid  and  non-assessable  shares  in  the  capital  of the
               Corporation,  and  shall  have  attributes  corresponding  in all
               material  respects to the description  therefore set forth in the
               Agreements, as the case may be;

          (g)  it  shall   appoint  and   maintain   the  due   appointment   of
               Computershare  Trust Company of Canada,  or any successor trustee
               which may be appointed in accordance with the Special Warrant

<PAGE>

                                      -29-

               Indenture  and Purchase  Warrant  Indenture,  as Special  Warrant
               trustee and Purchase Warrant trustee, respectively;

          (h)  without  the written  approval of the Agent,  it shall not issue,
               agree to issue or announce the  issuance of any Common  Shares or
               any  securities  convertible  into or  exchangeable,  directly or
               indirectly,  for or exercisable to acquire Common Shares or other
               equity  securities of the  Corporation,  other than in connection
               with the exercise of convertible securities outstanding as of the
               date  hereof,  for a period  commencing  on the date  hereof  and
               ending on the date that is the earlier of 120 days  following the
               Closing Date or 30 days  following the  Prospectus  Qualification
               (the "Restrictive Period") without the prior written agreement of
               the Agent,  such agreement not to be unreasonably  withheld,  the
               Closing  Date,  other  than:  (a) as  part  of  the  Commonwealth
               Offering;  (b) the  issuance  of options  which may be granted to
               consultants,   directors,  officers  and  employees  pursuant  to
               existing  stock option  plans;  (c) Common Shares to be issued to
               satisfy  consultant,   employee  or  director  stock  options  or
               instruments;  (d)  the  issuance  of  warrants  which  have  been
               publicly  disclosed but not issued pending  receipt of regulatory
               approval;  (e)  Common  Shares to be issued to  satisfy  existing
               warrants and those  warrants  which have been publicly  disclosed
               but not issued pending  receipt of regulatory  approval;  (f) the
               issuance of any securities  contemplated as part of the Offering;
               (g)  the  issuance  of  any  securities  in  connection  with  an
               acquisition  of any  company,  business  or other  entity  or the
               licence of any technology;  (h) the issuance of any securities in
               connection with an amalgamation,  merger,  arrangement or sale of
               the  Corporation;  or  (i)  the  issuance  of any  securities  in
               connection with a takeover bid defence by the Corporation;

          (i)  it shall ensure that at the Closing,  the Common Shares,  Special
               Warrants,   Purchase  Warrants,   Broker's  Option,  Compensation
               Warrants,  Compensation Purchase Warrants, Fiscal Advisor Option,
               Fiscal Advisor Warrants and Fiscal Advisor  Purchase  Warrants do
               not  constitute  "foreign  property"  within  the  meaning of the
               Income  Tax  Act  (Canada)  or any  amendments  thereto  publicly
               announced by the Minister of Finance from time to time;

          (j)  it shall use the net proceeds of the  Offering for purposes  that
               shall be set forth in the Prospectus or any Prospectus Amendment;

          (k)  it shall  deliver a copy of the  Preliminary  Prospectus  and the
               Prospectus (and any Prospectus  Amendment thereto) to all holders
               of Special  Warrants and ensure  compliance with the requirements
               of applicable  securities  legislation in respect of the offering
               for sale

<PAGE>

                                      -30-

               and  sale  of  the  Special  Warrants,  the  distribution  of the
               securities  underlying  the  Special  Warrants  and the issue and
               distribution  of the  Broker's  Option  and  the  Fiscal  Advisor
               Warrants and the Common Shares and Compensation Purchase Warrants
               underlying  the  Compensation  Warrants and the Common Shares and
               Fiscal Advisor  Purchase  Warrants  underlying the Fiscal Advisor
               Warrants, respectively, and, without limitation to the foregoing,
               the completion and filing of the  Preliminary  Prospectus and the
               Prospectus;

          (l)  it shall enter into the Purchase  Warrant  Indenture  and Special
               Warrant  Indenture  with the Purchase  Warrant  Agent and Special
               Warrant Agent, respectively, in a form satisfactory to the Agent,
               by the Closing Time;

          (m)  prior to the  Closing  Time,  it shall have  created  the Special
               Warrants,   the  Broker's  Option,  the  Fiscal  Advisor  Option;
               authorized for issuance:  the Purchase Warrants issuable upon the
               exercise  of the  Special  Warrants;  the  Compensation  Warrants
               issuable upon exercise of the Broker's Option; the Fiscal Advisor
               Warrants issuable upon the exercise of the Fiscal Advisor Option,
               the Compensation  Purchase Warrants issuable upon exercise of the
               Compensation  Warrants and the Fiscal Advisor  Purchase  Warrants
               issuable  upon  exercise  of the  Fiscal  Advisor  Warrants;  and
               reserved and allotted  for  issuance the Common  Shares  issuable
               upon  exercise of the Special  Warrants,  Compensation  Warrants,
               Compensation Purchase Warrants,  Fiscal Advisor Warrants,  Fiscal
               Advisor Purchase Warrants and Purchase Warrants,  as the case may
               be, and obtained all necessary  approvals in connection  with the
               creation and issuance of the Special  Warrants,  Broker's  Option
               and Fiscal  Advisor  Option  and the  Underlying  Securities,  as
               applicable,  so that the Special  Warrants,  Broker's  Option and
               Fiscal  Advisor  Option and the  Underlying  Securities  shall be
               issued  as  fully-paid  and  non-assessable   securities  of  the
               Corporation;

          (n)  it shall complete all filings as may be necessary or desirable or
               as  may  be  requested  by  the  Agent,  acting  reasonably,   in
               connection with the Offering; and

          (o)  any press  release  relating to the Offering  shall be drafted in
               accordance with the requirements suggested by U.S. counsel to the
               Company  for the purpose of  ensuring  compliance  with Rule 135c
               under the 1933 Act.

<PAGE>

                                      -31-

10.  Due Diligence

     10.1 The Agent shall have the right to conduct due diligence, inquiries and
          investigations  on all matters it  considers  necessary  or  desirable
          prior to the filing of the Preliminary Prospectus,  the Prospectus and
          any Prospectus  Amendment,  and the Corporation  shall  facilitate the
          Agent's  ability to do so. The  completion  of the  Offering,  and the
          Agent's approval of the Preliminary Prospectus, the Prospectus and any
          Prospectus  Amendment,  shall  be  conditional  upon the  Agent  being
          completely satisfied with the results of such due diligence, inquiries
          and   investigations   and  receipt  of  all  opinions,   certificates
          (including,  without limitation,  as to representations and warranties
          relating to the  Corporation  and the Offering),  comfort  letters (of
          auditors  and  otherwise)  and other  documents  as the Agent,  or its
          counsel,  may  consider  necessary  or  desirable,  in all such cases,
          acting reasonably.

11.  Closing

     11.1 The Closing  shall occur at the Closing Time at the offices of Cassels
          Brock & Blackwell  LLP, 2100 - 40 King Street West,  Toronto,  Ontario
          M5H 3C2, or at such other place as the  Corporation  and the Agent may
          agree to in  writing.  At the  Closing  Time,  the  Corporation  shall
          deliver to the Agent:

          (a)  certificates  representing the Subject  Securities  registered in
               such  manner as the  Agent  shall  direct  not less than 24 hours
               prior to Closing;

          (b)  a direction  to deduct the Agency Fee and Fiscal  Advisor Fee and
               expenses as set forth in Section 2 hereof,  from the  proceeds of
               the  sale  of the  Subject  Securities  purchased  by  the  Agent
               hereunder at the Closing Time,  which the  Corporation  agrees to
               pay to the Agent for its services in connection with the issuance
               and sale of the Special  Warrants from the gross  purchase  price
               for the Special  Warrants owing to the  Corporation by the Agent;
               and

          (c)  such further documentation as may be contemplated herein.

12.  Closing Conditions

     12.1 The Agent's  obligations  under this  agreement  and each  Purchaser's
          obligation  to purchase the Subject  Securities  at the Closing  Time,
          shall be conditional upon the fulfillment of the following conditions,
          which  conditions  are for the sole  benefit  of the  Agent and may be
          waived  in  writing  in  whole  or in part by the  Agent  in its  sole
          discretion:

<PAGE>

                                      -32-

          (a)  prior to the Closing Date, the Corporation shall have made and/or
               obtained  the   necessary   filings,   approvals,   consents  and
               acceptances  required to be made or  obtained by the  Corporation
               under Securities Law other than the state and federal  securities
               laws of the United States (including the receipt of all approvals
               from the TSE) in  connection  with the  offering  of the  Subject
               Securities  and the  Underlying  Securities  on terms  which  are
               acceptable to the Corporation and the Agent, acting reasonably;

          (b)  all  authorizations and approvals shall have been obtained by the
               Corporation, for the execution,  delivery and performance by such
               parties of the Transaction  Documents and for the issuance of the
               Subject  Securities,  the Broker's  Option and the Fiscal Advisor
               Option  and  the  Underlying  Securities;  including  shareholder
               approval,  all  authorizations  and  approvals  shall  have  been
               obtained  by the  Corporation  for the  execution,  delivery  and
               performance by the Corporation of the Transaction Documents;

          (c)  the Corporation  shall deliver to the Agent, at the Closing Time,
               a separate  certificate  dated the Closing Date  addressed to the
               Agent and signed by the President and the Chief Financial Officer
               of the  Corporation  or any  two  other  senior  officers  of the
               Corporation   acceptable   to  the  Agent,   acting   reasonably,
               certifying  for and on behalf of the  Corporation  to the  effect
               that:

               (i)  the  Corporation  has complied  with all the  covenants  and
                    satisfied all the terms and  conditions of this Agreement to
                    be complied  with and  satisfied  at or prior to the Closing
                    Time;

               (ii) the   representations  and  warranties  of  the  Corporation
                    contained  herein  are true and  correct  as at the  Closing
                    Time, with the same force and effect as if made on and as at
                    the Closing Time;

               (iii)no  order,  ruling or  determination  having  the  effect of
                    ceasing the trading of the Common Shares of the  Corporation
                    or the Subject  Securities,  the Broker's Option, the Fiscal
                    Advisor Option or Underlying  Securities,  or suspending the
                    sale thereof,  has been issued and no  proceedings  for such
                    purpose  have  been  instituted  or are  pending  or, to the
                    knowledge of such officers, contemplated or threatened;

               (iv) the  Commonwealth  Offering  shall have been completed for a
                    minimum of US$5 million;

<PAGE>

                                      -33-

               (v)  no failure or default on the part of the  Corporation or the
                    Subsidiary exists under any law or regulation  applicable to
                    them or  under  any  licence,  permit  or  other  instrument
                    granted or issued to them or under any  contract,  agreement
                    or other  instrument  to which  they are a party or by which
                    they are bound,  which may in any way  materially  adversely
                    affect the Corporation or the Subsidiary taken as a whole or
                    the execution,  delivery and  performance of the Transaction
                    Documents or the  allotment,  issue and sale, as applicable,
                    of  the  Subject  Securities,  Broker's  Option  and  Fiscal
                    Advisor Option or the Underlying Securities shall not result
                    in any such default;

               (vi) the Corporation  has complied with all terms,  covenants and
                    conditions of this Agreement on the Corporation's part to be
                    complied with up to the Closing Time; and

               (vii)such  other   matters  as  the  Agent  or  its  counsel  may
                    reasonably require,

                    and all such matters shall in fact be true and correct as at
                    the Closing Time;

          (d)  all actions required to be taken by the Corporation including the
               passing of all requisite  resolutions  and all requisite  filings
               with governmental authorities, shall have occurred at or prior to
               the Closing Time so as validly to  authorize  the  execution  and
               delivery of the Transaction  Documents and the performance of the
               transactions contemplated hereby;

          (e)  the Corporation shall have delivered to the Agent executed copies
               of the Purchase Warrant Indenture and Special Warrant  Indenture,
               in form and substance  satisfactory to the Agent and its counsel,
               acting reasonably;

          (f)  the Corporation  shall have caused a favourable  legal opinion to
               be delivered by its counsel  addressed to the Agent in a form and
               substance  satisfactory  to the Agent,  acting  reasonably,  with
               respect  to such  matters  as the Agent may  reasonably  request,
               including  as to matters  relating to  corporate  matters and the
               distribution of the Subject Securities,  Broker's Option,  Fiscal
               Advisor  Option  and  Underlying   Securities.   In  giving  such
               opinions,  counsel to the Corporation  shall be entitled to rely,
               to the extent appropriate in the circumstances,  upon opinions of
               local counsel  acceptable to the Agent,  acting  reasonably,  and
               shall  be  entitled  to rely  to the  extent  appropriate  in the
               circumstances  as to the matters of fact upon a certificate of an
               officer of the Corporation;

<PAGE>

                                      -34-

          (g)  the Corporation  shall deliver to the Agent, at the Closing Time,
               a separate  certificate  dated the Closing Date  addressed to the
               Agent  and  signed  by  the  Chief   Financial   Officer  of  the
               Corporation  or any  other  senior  officer  of  the  Corporation
               acceptable to the Agent, acting reasonably, certifying for and on
               behalf of the Corporation its constating documents, including all
               resolutions   of  the  board  of   directors   relating   to  the
               transactions   contemplated  hereunder  and  the  incumbency  and
               specimen signatures of signing officers;

          (h)  the Agent  shall  deliver to the  Corporation  and its counsel an
               executed  certificate  dated as of the  Closing  Date in the form
               attached as Schedule "C";

          (i)  the Agent shall have  received  all such other  documentation  in
               form and substance  satisfactory to the Agent, acting reasonably,
               as the Agent may reasonably request;

          (j)  Computershare  Trust Company of Canada has been duly appointed as
               Special Warrant  Trustee under the Special Warrant  Indenture and
               the  Purchase   Warrant   Trustee  under  the  Purchase   Warrant
               Indenture; and

          (k)  such other  matters as the Agent or its  counsel  may  reasonably
               require.

13.  Termination

     13.1 The Agent may at any time terminate this Agreement by providing notice
          in writing to the Corporation at any time if:

          (a)  there is, in the sole opinion of the Agent, a material  change or
               a change in a material  fact or a new material  fact shall arise,
               not previously  disclosed to the public,  which would be expected
               to  have  an  adverse   effect  on  the   business,   affairs  or
               profitability  of the Corporation or in the market price or value
               of the common shares of the Corporation;

          (b)  there should develop,  occur or come into effect any event of any
               nature, including without limitation,  accident, governmental law
               or regulation,  which in the sole opinion of the Agent  adversely
               affects  or may  adversely  affect the  financial  markets or the
               business, affairs or profitability of the Corporation;

          (c)  the state of the  financial  markets  is such  that,  in the sole
               opinion of the Agent, the Subject Securities cannot be profitably
               marketed or sold;

<PAGE>

                                      -35-

          (d)  except as previously disclosed to the public, there is an inquiry
               or investigation  (whether formal or informal) in relation to the
               Corporation, or any one of the Corporation's directors,  officers
               or principal shareholders or the Corporation;

          (e)  any order to cease trade in the securities of the  Corporation is
               made by a competent securities regulatory authority; or

          (f)  the Corporation is in breach of a term,  condition or covenant of
               this  Agreement or any  representation  or warranty  given by the
               Corporation is or becomes false.

     13.2 All terms and  conditions  of this  Agreement  shall be  construed  as
          conditions,  and any breach or failure  by the  Corporation  to comply
          with any of such  terms  and  conditions  shall  entitle  the Agent to
          terminate  its  obligations  under  this  Agreement  by notice to that
          effect given to the  Corporation  at or prior to the Closing Time. The
          Agent  may  waive,  in  whole  or in  part,  or  extend  the  time for
          compliance with, any of such terms and conditions without prejudice to
          its rights in respect of any other of such terms and conditions or any
          other or subsequent breach or non-compliance;  provided, however, that
          to be binding  on the Agent any such  waiver or  extension  must be in
          writing and signed by the Agent.

     13.3 The  rights  of  termination  contained  in  this  Section  13  may be
          exercised  by the Agent  and are in  addition  to any other  rights or
          remedies the Agent may have in respect of any default,  act or failure
          to act or  non-compliance  by the Corporation in respect of any of the
          matters   contemplated  by  this  Agreement.   In  the  event  of  any
          termination,  there shall be no further  liability  on the part of the
          Agent  to the  Corporation  or on the part of the  Corporation  to the
          Agent, except in respect of any liability which may have arisen or may
          thereafter arise under paragraphs 14 and 15.

14.  Indemnity

     14.1 The  Corporation  covenants  and agrees to indemnify and hold harmless
          the Agent,  the affiliates and their respective  directors,  officers,
          employees,  partners,  agents and  shareholders  (each an "Indemnified
          Party") to the full extent lawful, from and to the full extent lawful,
          from  and  against  any  and all  losses,  claims,  actions,  damages,
          liabilities,  costs, actions or expenses, joint or several, (including
          the  aggregate  amount paid in  reasonable  settlement of any actions,
          suits, proceedings,  investigations or claims, and the reasonable fees
          and expenses of their  counsel  that may be incurred in advising  with
          respect  to  and/or   defending  any  actions,   suits,   proceedings,
          investigations  or claims that may be made or  threatened  against any
          Indemnified  Party but not  including  any  amount  for lost  profits)
          caused or incurred by reason of:

<PAGE>

                                      -36-

          (a)  any  statement  or  information   contained  in  the  Preliminary
               Prospectus,  the Prospectus or any Prospectus  Amendment that may
               be filed on behalf of the Corporation  under Securities Law other
               than the state and federal  securities  laws of the United States
               or any other  document or material  filed or  delivered  pursuant
               hereto (other than any statement or information  relating  solely
               to or  provided  by the  Agent)  containing  or being  alleged to
               contain  a  misrepresentation  or being or  being  alleged  to be
               untrue,  false or  misleading  in the light of the  circumstances
               under which it was made;

          (b)  any  statement  (other  than a  statement  relating  solely to or
               provided by the Agent) contained in the Information  Record which
               at the time and in the light of the circumstances  under which it
               was  made,   contained   or  is  alleged  to  have   contained  a
               misrepresentation  or being or being alleged to be untrue,  false
               or misleading;

          (c)  any order made or inquiry, investigation or proceeding (formal or
               informal)  commenced or  threatened by any officer or official of
               any securities regulatory authority or by any competent authority
               based upon the circumstances described in clause 13.1 above which
               operates to prevent or restrict trading in or distribution of the
               Subject  Securities,  the  Broker's  Option,  the Fiscal  Advisor
               Option and the  Underlying  Securities  in any of the  Qualifying
               Provinces (except in so far as it relates to a restriction on the
               number of Compensation  Warrants or Fiscal Advisor Warrants which
               may be qualified under the Prospectus);

          (d)  the breach of any representations, warranties or covenants by the
               Corporation  contained in the  Transaction  Documents,  delivered
               pursuant hereto;

          (e)  the  Corporation not complying with any requirement of Securities
               Law in  connection  with  the  transactions  contemplated  by the
               Transaction Documents; or

          (f)  otherwise caused by, resulting from, arisen out of or based upon,
               directly or indirectly,  the performance of professional services
               rendered by an Indemnified Party, pursuant to this Agreement,

               provided  that  this  indemnity  may  not be  relied  upon by any
               Indemnified  Party in respect of any losses which result from any
               negligence,  bad  faith,  willful  misconduct  or  fraud  by  any
               Indemnified Party.

     14.2 If any action or claim shall be asserted against an Indemnified  Party
          in  respect  of which  indemnity  may be sought  from the  Corporation
          pursuant

<PAGE>

                                      -37-

          to the provisions  hereof,  or if any potential claim  contemplated by
          this Section 14.2 shall come to the knowledge of an Indemnified Party,
          the Indemnified Party shall promptly notify the Corporation in writing
          of the nature of such action or claim (provided that any failure to so
          notify  shall  not  affect  the  Corporation's  liability  under  this
          paragraph unless such delay has prejudiced the defence to such claim).
          The Corporation shall be entitled, at its own expense, but not obliged
          to participate  in or assume the defence  thereof,  provided,  however
          that the defence  shall be through  legal  counsel  acceptable  to the
          Indemnified  Party,  acting reasonably.  In addition,  the Indemnified
          Party shall also have the right to employ separate counsel in any such
          action  and  participate  in the  defence  thereof,  and the  fees and
          expenses  of such  counsel  shall be borne by the  Indemnified  Party,
          unless (i) the employment thereof has been specifically  authorized in
          writing  by the  Corporation;  (ii)  the  Indemnified  Party  has been
          advised by counsel  acceptable to the Corporation,  acting reasonably,
          that  representation  of the Corporation and the Indemnified  Party by
          the same  counsel  would be  inappropriate  due to actual or potential
          differing  interests between them; or (iii) the Corporation has failed
          within a  reasonable  time  after  receipt of such  written  notice to
          assume  the  defence of such  action or claim.  It is  understood  and
          agreed that the Corporation  shall not, in connection with any suit in
          the same  jurisdiction,  be liable for the legal fees and  expenses of
          more  than  one  separate  legal  firm to  represent  the  Indemnified
          Parties.  Neither party shall effect any settlement of any such action
          or claim or of any action,  proceeding  or  investigation  or make any
          admission of liability without the written consent of the other party,
          such consent not to be unreasonably withheld or delayed. The indemnity
          hereby  provided  for shall  remain in full force and effect and shall
          not be limited to or affected by any other indemnity in respect of any
          matters  specified in this section  obtained by the Indemnified  Party
          from any other person.

     14.3 If  for  any  reason  (other  than  determinations  as to  any  of the
          following  events:  a  court  of  competent  jurisdiction  in a  final
          judgment  that has become  non-appealable  shall  determine  that such
          expenses,  losses, claims, actions, damages or liabilities (except for
          loss of profits in connection with the sale of the Subject Securities)
          to which the Indemnified Party may be subject were primarily caused by
          the  negligence,  bad faith or willful  misconduct of the  Indemnified
          Party),  the foregoing  indemnification is unavailable to the Agent or
          any other  Indemnified  Party or insufficient to hold the Agent or any
          other Indemnified Party, harmless, the Corporation shall contribute to
          the amount paid or payable by the Agent or the other Indemnified Party
          as a result of such expense,  loss, claim, action, damage or liability
          in such  proportion as is appropriate to reflect not only the relative
          benefits  received by the Corporation on the one hand and the Agent or
          any other  Indemnified  Party on the other hand but also the  relative
          fault of the Corporation, the Agent or any other Indemnified Party

<PAGE>

                                      -38-

          as well as any relevant  equitable  considerations;  provided that the
          Corporation  shall in any event  contribute any amount paid or payable
          by the  Agent or any  other  Indemnified  Party  as a  result  of such
          expense, loss, claim, action, damage or liability which exceeds in the
          aggregate  the  amount of the fees  received  by the Agent  under this
          Agreement.

     14.4 The Corporation hereby agrees that, in respect of any matter for which
          indemnity  may  be  sought  against  the  Corporation,   in  case  any
          proceeding  shall be brought against the Corporation  and/or the Agent
          or any  other  Indemnified  Party by any  governmental  commission  or
          regulatory  authority  or any stock  exchange or other  entity  having
          regulatory  authority,   either  domestic  or  foreign,  or  any  such
          authority shall  investigate  the Corporation  and/or the Agent or any
          other  Indemnified Party and the Agent or such other Indemnified Party
          shall be  required  to testify  in  connection  therewith  or shall be
          required to respond to  procedures  designed  to discover  information
          regarding,  in connection  with, or by reason of this  Agreement,  the
          engagement of the Agent thereunder, or the performance of professional
          services  rendered to the  Corporation  by the Agent  thereunder,  the
          Agent or such other  Indemnified  Party shall have the right to employ
          its own counsel in connection  therewith,  and the reasonable fees and
          expenses of such counsel as well as the  reasonable  costs  (including
          any amount to reimburse the Agent for time spent by its, or any of its
          affiliates,   directors,   officers,  employees,  partners  or  agents
          (collectively, "Personnel") in connection therewith, and out-of-pocket
          expenses  incurred by its Personnel in connection  therewith  shall be
          paid by the Corporation as they occur.

     14.5 Promptly  after  receiving  notice of an action,  suit,  proceeding or
          claim against the Agent or any other  Indemnified  Party or receipt of
          notice  of the  commencement  of any  investigation  which  is  based,
          directly  or   indirectly,   upon  any  matter  in  respect  of  which
          indemnification may be sought from the Corporation and the Agent shall
          notify the  Corporation in writing of the particulars  thereof,  shall
          provide copies of all relevant  documentation  to the Corporation and,
          unless  the  Corporation   participates  in  the  defense  thereof  as
          contemplated  herein,  shall  keep  the  Corporation  advised  of  the
          progress thereof and shall discuss all significant  actions  proposed.
          The  omission  so to notify  the  Corporation  shall not  relieve  the
          Corporation  of any liability  which the  Corporation  may have to the
          Agent or any other  Indemnified  Party  except only to the extent that
          any  such  delay in or  failure  to give  notice  as  herein  required
          prejudices  the defense of such  action,  suit,  proceeding,  claim or
          investigation  or results in any  material  increase in the  liability
          which the  Corporation  would  otherwise have under this indemnity had
          the  Agent  not  delayed  in or  failed  to give the  notice  required
          hereunder.

<PAGE>

                                      -39-

     14.6 The  indemnity  and   contribution   obligations  of  the  Corporation
          hereunder  shall be in addition to any liability which the Corporation
          may otherwise have, shall extend upon the same terms and conditions to
          the  Indemnified  Parties,  shall be  binding  upon  and  inure to the
          benefit  of any  successors,  permitted  assigns,  heirs and  personal
          representatives  of the  Corporation  and  the  Agent  and  any  other
          Indemnified   Party.  The  foregoing   provisions  shall  survive  the
          completion of professional  services  rendered under this agreement or
          any  termination  of  such  services  pursuant  to the  terms  of this
          Agreement.

     14.7 To the  extent  that  any  Indemnified  Party  is not a party  to this
          Agreement  the Agent  shall  obtain and hold the right and  benefit of
          this section in trust for and on behalf of such Indemnified Party.

     14.8 The Corporation  hereby waives its right to recover  contribution from
          the Agent with respect to any liability of the  Corporation  by reason
          of  or  arising  out  of  any   misrepresentation   contained  in  the
          Preliminary Prospectus, the Prospectus or in any Prospectus Amendment;
          provided,  however,  that such  waiver  shall not apply in  respect of
          liability  caused  or  incurred  by reason  of or  arising  out of any
          misrepresentation  which is based  upon or  results  from  information
          relating  solely  to or  provided  by  the  Agent  contained  in  such
          document.

     14.9 The Corporation  hereby consents to personal  jurisdiction and service
          and  venue in any  court in  which  any  claim  which  is  subject  to
          indemnification   hereunder  is  brought  against  the  Agent  or  any
          Indemnified Party and to the assignment of the benefit of this section
          to any Indemnified Party for the purpose of enforcement  provided that
          nothing  herein  shall  limit the  Corporation's  right or  ability to
          contest the appropriate jurisdiction or forum for the determination of
          any such claims.

15.  Expenses

     15.1 Whether  or  not  the  Offering  is  completed,  all  expenses  of  or
          incidental  to  the  Offering,   including  without  limitation,   the
          preparation and filing of the Preliminary Prospectus,  the Prospectus,
          or any  Prospectus  Amendment,  listing  fees,  filing fees,  printing
          expenses, costs relating to the preparation of video productions,  the
          cost of any  road  shows  and  the  Agent's  reasonable  out-of-pocket
          expenses  (including  the  reasonable  fees and  disbursements  of the
          Agent's counsel), shall be borne by the Corporation and payable at the
          Closing Time.

16.  Severability

     16.1 If any  provision  of  this  Agreement  is  determined  to be  void or
          unenforceable in whole or in part, it shall be deemed not to affect or

<PAGE>

                                      -40-

          impair the validity of any other  provision of this Agreement and such
          void  or   unenforceable   provision  shall  be  severable  from  this
          Agreement.

17.  Survival of Indemnities, Representations and Warranties

     17.1 All  representations,  warranties,  covenants  and  agreements  of the
          Corporation  herein  contained or  contained  in  documents  submitted
          pursuant to this  agreement  and in connection  with the  transactions
          contemplated herein shall survive the purchase and sale of the Subject
          Securities and the termination of this Agreement and shall continue in
          full  force and  effect  for the  benefit of the Agent and each of the
          Purchasers,  regardless of any  subsequent  disposition of the Subject
          Securities or any investigation by or on behalf of the Agent or any of
          the  Purchasers  with  respect  thereto  for a period of two (2) years
          following the date hereof.

18.  Time of the Essence

     18.1 Time shall be of the essence of this Agreement.

19.  Governing Law

     19.1 This Agreement  shall be governed and construed in accordance with the
          laws of the  Province  of  British  Columbia  and the  laws of  Canada
          applicable  therein and shall be treated in all  respects as a British
          Columbia  contract.  Each  party  hereby  irrevocably  submits  to the
          exclusive  jurisdiction of the courts of British Columbia with respect
          to any matter arising hereunder or related hereto.

20.  Funds

     20.1 All funds referred to in this Agreement shall be in Canadian dollars.

21.  Notice

     21.1 Unless otherwise  expressly provided in this Agreement,  any notice or
          other  communication  to be given under this  Agreement  (a  "Notice")
          shall be in writing addressed as follows:

          if to the Corporation:

          Infowave Software, Inc.
          4664 Lougheed Highway,
          Suite 200
          Burnaby, British Columbia
          V5C 5T5

          Attention:       Mr. Todd Carter, Chief Financial Officer
          Telecopier Number:        (604) 473-3799

<PAGE>

                                      -41-

          with a copy to:

          Blake, Cassels & Graydon LLP
          Barristers & Solicitors
          Suite 2600, Three Bentall Centre
          P. O. Box 49314
          595 Burrard Street
          Vancouver, B.C.
          V7X 1L3

          Attention:       Mr. Geoff Belsher
          Telecopier Number:        (604) 631-3309

          or if to the Agent:

          Canaccord Capital Corporation
          2200-609 Granville Street
          Vancouver, BC
          V7Y 1H2

          Attention:       Mr. Jamie Brown
          Telecopier Number: (604) 643-7606

          with a copy to:

          Cassels Brock & Blackwell LLP
          Barristers & Solicitors
          Scotia Plaza
          40 King Street West, Suite 2100
          Toronto, Ontario  M5H 3C2

          Attention:       Mr. Norman Findlay
          Telecopier Number: (416) 350-6944,

          or to such other address as any of the parties may designate by Notice
          given to the others.

          Each Notice shall be personally  delivered to the addressee or sent by
          fax to the addressee  and (i) a Notice which is  personally  delivered
          shall,  if  delivered  on a  Business  Day,  be deemed to be given and
          received on that day and, in any other case, be deemed to be given and
          received on the first  Business Day  following  the day on which it is
          delivered;  and (ii) a Notice  which is sent by fax shall be deemed to
          be given and received on the first  Business Day  following the day on
          which it is sent.

<PAGE>
                                      -42-

22.  Counterparts and Facsimiles

     22.1 This  Agreement  may be  executed by any one or more of the parties to
          this Agreement in any number of  counterparts  and may be delivered by
          facsimile,  each of which shall be deemed to be an  original,  but all
          such  counterparts   shall  together   constitute  one  and  the  same
          instrument.

23.  Successors and Assigns

     23.1 This  Agreement  shall enure to the benefit of and be binding upon the
          parties and their  respective  successors  (including any successor by
          reason of amalgamation or statutory arrangement) and permitted assigns
          and upon the heirs, executors,  legal representatives,  successors and
          permitted assigns of the Agent.  Neither party shall assign any of its
          rights or obligations hereunder without the consent of the other party
          hereto.

24.  Entire Agreement

     24.1 This Agreement  constitutes the entire  agreement  between the parties
          concerning  the subject  matter hereof and cancels and  supercedes any
          prior  understandings  and agreements  between the parties hereto with
          respect thereto,  including the engagement  letter between the parties
          dated July 30, 2001. There are no representations,  warranties, terms,
          conditions,  undertakings or collateral agreements, expressed, implied
          or statutory, between the parties other than as expressly set forth in
          this Agreement.

     If the above is in  accordance  with your  understanding,  please  sign and
return to the Agent a copy of this Agreement,  whereupon this Agreement and your
acceptance shall constitute a binding  Agreement between the Corporation and the
Agent.

                               CANACCORD CAPITAL CORPORATION

                               Per: --------------------------------------------
                                    Jamie Brown

     The above offer is hereby accepted and agreed to as of the date first above
written.

                               INFOWAVE SOFTWARE, INC.

                               Per: --------------------------------------------
                                    Todd Carter

<PAGE>

                                   SCHEDULE A

              OUTSTANDING OPTIONS, RIGHTS, WARRANTS OR OBLIGATIONS

                 Share Capital Structure as at November 23, 2001

Common Shares
-------------

Authorized:                                                 200,000,000
Issued & Outstanding:                                        23,411,003
Free-Trading                                                 23,411,003

<TABLE>
Warrants                                                                        Price       Expiry
--------                                                                        -----       ------
<S>                                                           <C>               <C>        <C>
Agents' Warrants                                                 46,200         $32.50     04/13/02
Unit Warrants                                                 1,136,364          $7.15     08/22/02
Agents' Warrants                                                113,636          $5.50     02/13/02
Agents' Warrants                                                 56,818          $7.15     02/13/02
Koll Warrants                                                 3,510,455          $1.10     07/24/04
------------------------------------------------------------------------
Total Warrants Outstanding                                    4,863,473
</TABLE>

Stock Options
-------------

Outstanding:                                                  6,610,289

Combined Securities
-------------------

Fully Diluted:                                               34,884,765
--------------

<PAGE>

                                   SCHEDULE B

                               LITIGATION MATTERS

The  Corporation  has  received  a letter  on  behalf  of  Geoworks  Corporation
("Geoworks")  asserting that it holds a patent on certain  aspects of technology
which are part of the Wireless Access Protocol ("WAP") standard.  Certain of the
Corporation's   products  use  or  operate  in  conjunction  with  WAP-compliant
technology.  After an internal investigation based upon the description provided
by Geoworks of its purportedly  patented  technology,  the Corporation  believes
that its products do not include implementation of the Geoworks technology.

The  Corporation  has  received  a  letter  from  Glenayre   Electronics,   Inc.
("Glenayre")  informing  Infwoave  that  Glenayre  may require  indemnity  under
certain  agreements the  Corporation  has with  Glenayre.  The  Corporation  has
developed and supplied technology to Glenayre.  After an internal  investigation
based upon the description provided by Glenayre in relation to its possible need
for indemnity,  the  Corporation  believes that the  technology the  Corporation
developed and supplied to Glenayre does not infringe the  intellectual  property
rights of any third party and therefore,  that the Corporation  does not need to
indemnify Glenayre.

<PAGE>

                       Form of Placement Agent Certificate

          Canaccord   Capital   Corporation   (the  "Placement   Agent")  hereby
represents  and warrants to Infowave  Software,  Inc.  (the  "Company")  that in
connection with the private  placement of the Company's  securities  pursuant to
the Agency Agreement dated November 23, 2001 between the Placement Agent and the
Company  (the  "Agreement")  as follows  (all  capitalized  terms not  otherwise
defined herein having the meanings set forth in the Agreement):

     1. the  Placement  Agent  acknowledges  that the Special  Warrants,  Units,
Purchase Warrants and all of the underlying Common Shares issuable upon exercise
of such securities (the  "Securities")  have not been and will not be registered
with the SEC under the 1933 Act and that the Special  Warrants are being offered
and sold in reliance upon an exemption from registration  provided by Regulation
S in the case of offers and sales outside the United States,  and in the case of
offers and sales by the  Placement  Agent or by  selected  dealers in the United
States, by the exemption from registration provided by Rule 506 of Regulation D;

     2. the Placement  Agent, or any selected dealer,  if applicable,  or any of
their  respective  affiliates  (A) have not  engaged  or will not  engage in any
Directed  Selling Efforts within the meaning of Regulation S with respect to the
Securities,  (B) other than offers and sale made in accordance with Paragraph 5,
have not made or will not make (x) any offer to sell or solicitation of an offer
to buy any of the  Securities to any person or (y) any sale of the Securities to
any person unless (1) the offer is not made to any person in the United  States,
(2) the seller of such Securities and any person acting on its behalf reasonably
believes  that at the time such person  placed the order to purchase  Securities
such  person was  outside the United  States and (3) such sale is  otherwise  in
compliance with the applicable  requirements of Regulation S, (C) have not taken
or will not take any action which would  constitute a violation of Regulation M,
or (D) have not  solicited  or will not solicit  offers for, or have not made or
will not make  offers to sell,  the  Securities  by means of any form of general
solicitation  or general  advertising  (as those terms are used in  Regulation D
under the 1933 Act) or in any  manner  involving  a public  offering  within the
meaning of the 1933 Act;

     3. all offers and sales of the  Securities  in the United  States have been
and will be made in compliance  with all  applicable  United States  federal and
state laws with respect to the  registration  and conduct of securities  brokers
and dealers;

     4. the  Placement  Agent has caused or will  promptly  cause each  selected
dealer of the  Placement  Agent to  acknowledge  in writing its awareness of and
agreement  to be bound by and shall use their best  efforts to ensure  that each
selected dealer complies with the  representations  and warranties  contained in
this Certificate in connection with all offers and sale of the Securities;

<PAGE>

     5. the Securities  have been and shall be offered and sold by the Placement
Agent and its selected  dealers in the United States only in compliance with all
applicable  state  securities  ("blue  sky") laws of the United  States and in a
transaction exempt from the registration  requirements of the 1933 Act, pursuant
to Rule 506 of Regulation D, to persons that are "accredited  investors"  within
the meaning of Rule 501(a) of Regulation D; and

     6. the  Placement  Agent  has not  entered,  and will not  enter,  into any
contractual  arrangement  without the prior written  consent of the Company with
respect to the placement of the Securities,  except (i) with their affiliates or
(ii) with its selected dealers in accordance with this Certificate.

                                         CANACCORD CAPITAL CORPORATION

                                         By:  ----------------------------------

                                         Its: ----------------------------------

     CANACCORD CAPITAL  CORPORATION  (USA), INC., the Placement Agent's selected
dealer for  placement of the  Securities  with  persons in the United  States of
America, hereby agrees to be bound by and to use its best efforts to comply with
the representations  and warranties  contained in this Certificate in connection
with its offer and sale of the Securities.

                                       CANACCORD CAPITAL CORPORATION (USA), INC.

                                        By:  ----------------------------------

                                        Its: ----------------------------------Exhibit 4.2

                                TRUST CERTIFICATE

No.       1                        $31,000,000              CUSIP NO. 740434840
    -------------

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL CERTIFICATES REPRESENTED HEREBY, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO CEDE & CO. OR BY CEDE & CO. TO DTC OR TO
ANOTHER NOMINEE OF DTC OR BY DTC OR CEDE & CO. TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

                  THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN
THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE DEPOSITED ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

                  THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PRINCIPAL PAYMENTS IN RESPECT OF THE UNDERLYING SECURITIES. THE REGISTERED
HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL LOOK SOLELY TO THE
DEPOSITED ASSETS (TO THE EXTENT OF ITS RIGHTS THEREIN) FOR DISTRIBUTIONS
HEREUNDER.

<PAGE>

                        PREFERREDPLUS TRUST SERIES LMG-2

          1,240,000 PREFERREDPLUS 8.50% TRUST CERTIFICATES SERIES LMG-2

                  $31,000,000 STATED AMOUNT TRUST CERTIFICATES
                    ($25 STATED AMOUNT PER TRUST CERTIFICATE)

evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of $31,000,000
aggregate principal amount of 8.50% Debentures (the "Underlying Securities") of
Liberty Media Corporation, a Delaware corporation (the "Underlying Securities
Issuer"), and all payments received thereon, deposited in trust by Merrill Lynch
Depositor, Inc. (the "Depositor").

                  THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the PreferredPLUS
Trust Series LMG-2 formed by the Depositor. Under the Trust Agreement, the
Certificateholders are entitled to receive on each Distribution Date until July
15, 2029, the distributions, if any, received on the Underlying Securities,
which will represent distributions at a rate of 8.50% per annum on the Stated
Amount of the Certificates.

                  The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of February 20, 1998 (the "Standard Terms"), between the
Depositor and The Bank of New York, as successor to United States Trust Company
of New York, a New York corporation, as Trustee (the "Trustee") and as
securities intermediary (the "Securities Intermediary"), as supplemented by the
PreferredPLUS Trust Series LMG-2 Supplement, dated as of December 7, 2001 (the
"Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee and the Securities Intermediary. This
Certificate does not purport to summarize the Trust Agreement and reference is
hereby made to the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee with respect hereto. A
copy of the Trust Agreement may be obtained from the Trustee by written request
sent to the Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.

                  This Certificate is one of the duly authorized Certificates
designated as the "PreferredPLUS 8.50% Trust Certificates Series LMG-2" (herein
called the "Certificates"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. Further, subject to the terms,
provisions and conditions of the Trust Agreement, the Trust will issue Call
Rights, which will be sold in one or more privately negotiated transactions. The
rights of the Certificateholders under the Trust Agreement and this Certificate
are limited by the terms, provisions and conditions of the Trust Agreement and
the Warrant Agreement with respect to the exercise of Call Rights by the holders
of Call Rights. The Certificateholders, by their acceptance of the Certificates,
covenant and agree to tender any and all Certificates to the Warrant Agent upon
the holder's exercise of Call Rights and deposit of the Call Price with the
Escrow Agent for such Certificates in accordance

<PAGE>

with the applicable procedures in the Warrant Agreement. The property of the
Trust consists of the Underlying Securities, all payments received or receivable
on the Underlying Securities accrued on or after the Cut-off Date, and the other
Deposited Assets, if any, all as more fully specified in the Trust Agreement.

                  Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date to the Person in whose name
this Certificate is registered on the applicable Record Date, in an amount equal
to such Certificateholder's fractional undivided interest in the amount required
to be distributed to the Holders of the Certificates on such Distribution Date.
The Record Date applicable to any Distribution Date is the close of business on
the day immediately preceding such Distribution Date.

                  Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates or
the Trust Agreement.

                  Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by check mailed to the
Certificateholder of record in the Certificate Register or by wire transfer to
an account designated by such Holder without the presentation or surrender of
this Certificate or the making of any notation hereon of, except that with
respect to Certificates registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee shall be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Except as otherwise provided in the Trust Agreement
and notwithstanding the above, the final distribution on this Certificate will
be made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate Trust
Office or such other location as may be specified in such notice.

                  Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

                  The Trustee does not assume responsibility for the accuracy of
the statements in the Certificate (and the reverse hereof).

                  Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, this Certificate shall not entitle the
Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.

                  THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed as of the date set forth below.

                                      PREFERREDPLUS TRUST SERIES LMG-2

                                       By:  THE BANK OF NEW YORK, solely
                                            in its capacity as Trustee under the
                                            Trust Agreement and not in its
                                            individual capacity

Dated: December 7, 2001                By:  ___________________________________
                                                    Authorized Signatory

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates described in the Trust
Agreement referred to herein.

                                       PREFERREDPLUS TRUST SERIES LMG-2

                                       By:  THE BANK OF NEW YORK, solely
                                            in its capacity as Trustee under the
                                            Trust Agreement and not in its
                                            individual capacity

Dated: December 7, 2001                By:    _________________________
                                              Authorized Signatory

<PAGE>

                            (REVERSE OF CERTIFICATE)

                  The Certificates are limited in right of distribution to
certain payments and collections respecting the Underlying Securities, all as
more specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to the
Deposited Assets (to the extent of its rights therein) for interest
distributions hereunder. Both the Underlying Securities and Call Holders that
exercise their Call Rights may be sources of principal distributions on the
Certificates. The rights of the Certificate-holders under the Trust Agreement
and this Certificate are limited by the terms, provisions and conditions of the
Trust Agreement and the Warrant Agreement with respect to the exercise of Call
Rights by the holders of Call Rights. The Certificateholders, by their
acceptance of the Certificates, covenant and agree to tender any and all
Certificates to the Warrant Agent upon the holder's exercise of Call Rights and
deposit of the Call Price with the Escrow Agent for such Certificates in
accordance with the applicable procedures in the Warrant Agreement.

                  The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the Holders of Certificates evidencing greater
than 66 2/3% of the aggregate Voting Rights of the Certificates subject to
certain provisions set forth in the Trust Agreement. Any such consent by the
Holder of this Certificate (or any predecessor Certificate) shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, The City of New York, duly endorsed
by, or accompanied by an assignment in the form below and by such other
documents as required by the Trust Agreement signed by, the Holder hereof, and
thereupon one or more new Certificates of the same class in Authorized
Denominations evidencing the same principal amount will be issued to the
designated transferee or transferees. The initial Certificate Registrar
appointed under the Trust Agreement is United States Trust Company of New York.

                  No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Trustee and the Securities Intermediary and
any agent of the Depositor, the Trustee or the Securities Intermediary may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, or the Securities
Intermediary nor any such agent shall be affected by any notice to the contrary.

<PAGE>

                  It is the intention of the parties to the Trust Agreement that
the Trust created thereunder shall constitute a fixed investment trust for
federal income tax purposes under Treasury Regulation Section 301.7701-4, and
the Certificateholder, by its acceptance of this Certificate, agrees to treat
the Certificates, the distributions from the Trust and its beneficial interest
in the Trust consistently with such characterization.

                  The Trust may not engage in any business or activities other
than in connection with, or relating to, the holding, protecting and preserving
of the Deposited Assets and the issuance of the Certificates and the Call
Rights, and other than those required or authorized by the Trust Agreement or
incidental and necessary to accomplish such activities. The Trust may not issue
or sell any certificates or other obligations other than the Certificates and
the Call Rights or otherwise incur, assume or guarantee any indebtedness for
money borrowed.

                  The Trust and the obligations of the Depositor, the Trustee
and the Securities Intermediary created by the Trust Agreement with respect to
the Certificates shall terminate upon the earlier of (i) the payment in full at
maturity or sale by the Trust after a payment default on or an acceleration or
other early payment of the Underlying Securities and the distribution in full of
all amounts due in respect of the Certificates and (ii) February 15, 2031.

                  If an employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), including an individual
retirement account or Keogh plan (each, a "Plan"), purchases Certificates,
certain aspects of such investment, including the operation of the Trust, might
be subject to the prohibited transaction provisions under ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), unless certain exemptions apply.
A Plan should consult its advisors concerning the ability of such Plan to
purchase Certificates under ERISA or the Code.

<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)

_______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

___________________________________ Attorney to transfer said Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.

Dated:

                                                                              *
                                            -----------------------------------
                                            Signature Guaranteed:

                                                                              *
                                            -----------------------------------

* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a brokerage firm or financial institution that is a member of a
Securities Approved Medallion Program such as Securities Transfer Agents
Medallion Program (STAMP), Stock Exchange Medallion Program (SEMP) or New York
Stock Exchange Inc. Medallion Signature Program (MSP).

<PAGE>

                            OPTION TO ELECT EXCHANGE

         If you wish to have this Certificate, or a portion thereof, exchanged
by the Trustee pursuant to Section 4.07 of the Standard Terms, check the Box: __

         If you wish to have less than all of this Certificate exchanged, state
the amount: $___________________.

Date:

Your Signature: _______________________
                (Sign exactly as your name appears on the other side of this
Certificate)

Signature Guarantee:  ______________________________

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