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                                                                    EXHIBIT 10.3

                                  CONFIDENTIAL
                        PROFESSIONAL SERVICES AGREEMENT

      This PROFESSIONAL SERVICES AGREEMENT (the "Agreement") is made this 1(st)
day of June 1999 between PROTEGE SOFTWARE LIMITED, whose principal place of
business is Kinetic Centre, Theobald Street, Borehamwood, Hertfordshire WD6 4PJ
(the "Contractor") and DELANO TECHNOLOGY CORPORATION 40 West Wilmot Street,
Richmond Hill, Ontario, L4B 1H8, Canada, (the "Client Company") who agree as
follows:

1.   TERM

     The term of this Agreement shall begin on the date set out above (the
     "Effective Date") and shall end when this Agreement is terminated in
     accordance with Clause 7.

2.   PROFESSIONAL SERVICES

     (a)  The Contractor agrees to act as General Manager for the Client Company
          and to perform the professional services specified in Schedule A, as
          modified from time to time by mutual agreement of the parties (the
          "Professional Services").

     (b)  The Contractor shall in all cases act in a professional manner and
          shall perform the Professional Services in a manner which conforms to
          the standards, specifications and other reasonable requirements agreed
          between the parties.

     (c)  The Contractor agrees to submit monthly progress reports to the Client
          Company.

     (d)  The Contractor shall report to John Foresi or, in his absence, Deric
          Moilliet, who shall act as the authorised liaison point on behalf of
          the Client Company.

     (e)  The Contractor shall be entitled to attend such executive meetings of
          the Client Company as the Client Company CEO deems appropriate,
          (telephonically at the expense of the Client Company, or in person at
          the expense of Contractor, unless Client Company CEO has specifically
          required the Contractor to attend in person).

3.   CONTRACTOR'S REWARD

     The Client Company shall reward the Contractor for performing the
     Professional Services in accordance with the provisions of Schedule B.

4.   FINANCING OF SUBSIDIARY

     The Client Company shall transfer in cleared funds to the Subsidiary (as
     defined in Schedule A) or (as the case may be) any Other Entities (as
     defined in Schedule A) within seven (7) days after the end of each calendar
     month an amount equal to one hundred per cent (100%) of all costs
     reasonably incurred by the Subsidiary and such Other Entities, which have
     either been approved by the Client Company within the agreed Contractor
     Business Plan (as defined below) or otherwise agreed to by the Client
     Company and in accordance with procedures approved by Client Company CEO or
     CFO. The Client Company can alter the Contractor Business Plan after
     consultation with the Contractor and after reasonable notice. The
     Contractor will keep records of, and receipts for, all costs incurred by
     the Subsidiary and such Other Entities and will provide copies of such
     records to the Client Company upon reasonable request.
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5.   PROPRIETARY INFORMATION

     (a)  The Client Company acknowledges that any business plan and related
          documentation which it receives from the Contractor as part of the
          Professional Services ("Contractor Business Plan") will be based on
          Proprietary Information (defined below) of the Contractor and may also
          include Proprietary Information provided by the Client Company. The
          Client Company undertakes not to use or disclose the Proprietary
          Information in the Contractor Business Plan save as expressly
          permitted by the Contractor or by this section 5. The Client Company
          also acknowledges that the Contractor may use or disclose any
          materials or techniques included in the Contractor Business Plan
          (other than Proprietary Information provided by, or created by
          Contractor specifically for, the Client Company), without reference to
          the Client Company.

     (b)  Each party acknowledges that it may be furnished with or may otherwise
          receive or have access to confidential or proprietary information
          which belongs to or relates to the other party's business, including
          (without limitation) past, present or future business plans, marketing
          plans, products, software, research, development, inventions,
          processes, techniques, design or other technical information and data
          (the "Proprietary Information"). Each party further acknowledges that
          all intellectual property rights residing in the other party's
          Proprietary Information are and will remain the exclusive property of
          the other party.

     (c)  Each party agrees to preserve and protect the confidentiality of the
          other party's Proprietary Information and all forms thereof, whether
          disclosed to it before this Agreement is signed or afterwards. In
          addition, each party agrees that it shall not disclose or disseminate
          the other party's Proprietary Information to any third party and shall
          not use such Proprietary Information for its own benefit or for the
          benefit of any third party (other than in furtherance of the goals of
          the party to whom the Proprietary Information belongs or relates).

     (d)  The foregoing obligations shall not apply to any information which the
          recipient can prove:

          (i)   is previously publicly known at the time of receipt from the
                other party or which subsequently becomes publicly known through
                no act or fault of the recipient;

          (ii)  was given to it by a third party not under any obligation to
                maintain its confidentiality; or

          (iii) was independently developed by it without resort to the
                Proprietary Information of the other party.

     (e)  Within 30 days after the termination of this Agreement or such other
          period as the parties may agree, each party shall return to the other
          all materials embodying the Proprietary Information of the other in
          its possession or control (including in the case of the Client
          Company, the Contractor Business Plan) and shall confirm that all
          copies of such materials have been permanently deleted from its
          computer systems.

     (f)  Contractor shall not compete against Client Company, nor shall it act
          on behalf of a direct competitor of Client Company, listed in Schedule
          D from time to time, during the term, and for 6 months thereafter.
          Client Company may at its discretion, but only acting reasonably and
          in good faith, add additional names to Schedule D. Contractor agrees
          to act reasonably and in good faith not to pursue any potential client
          which it believes is a direct competitor of Client Company, and to
          consult with Client Company in situations where it is in doubt.

     (g)  This Clause 5 shall survive the termination of the Agreement.

6.   WARRANTIES AND COVENANTS

     (a)  The Contractor warrants and covenants that:

          (i)   it is able to perform the Professional Services specified in
                Schedule A, and that doing so will not breach any other
                obligation by which it is bound, legislative, contractual, in
                tort or otherwise;
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          (ii)  it shall not infringe any intellectual property right, or trade
                secret of any third party in the performance of its obligations
                hereunder;

          (iii) any information or materials it discloses to the Client Company
                shall not in any way be based upon any confidential or
                proprietary information derived from any source other than the
                Contractor or the Client Company, unless the Contractor is
                specifically authorised in writing by such source to use such
                proprietary information;

          (iv)  if the Client Company incurs any liability or expense as a
                result of any warranty which the Contractor makes in this
                Agreement not being true, the Contractor shall indemnify the
                Client Company and hold it harmless against all such liability
                or expense, including reasonable attorney/solicitor fees,
                provided that the Client Company notifies the Contractor of the
                claim and co-operates with the Contractor in defending it
                against the claim. Each party shall notify the other if it ever
                becomes aware of any such claim; and

          (v)   it shall perform the Professional Services in a professional
                manner.

     (b)  The Client Company warrants and covenants that:

          (i)   it is entitled to appoint the Contractor to perform the
                Professional Services in the Territory (as defined in Schedule
                C);

          (ii)  any information or materials it discloses to the Contractor
                shall not in any way be based upon any confidential or
                proprietary information derived from any source other than the
                Contractor or the Client Company, unless the Client Company is
                specifically authorised in writing by such source to use such
                proprietary information;

          (iii) it will not infringe any intellectual property right or trade
                secret of any third party in the performance of its obligations
                or the provision of information to the Contractor hereunder;

          (iv)  if the Contractor incurs any liability or expense as a result of
                any warranty which the Client Company makes in this Agreement
                not being true, the Client Company shall indemnify the
                Contractor and hold it harmless against all such liability or
                expense, including reasonable attorney/solicitor fees, provided
                that the Contractor notifies the Client Company of the claim and
                co-operates with the Client Company in defending it against the
                claim. Each party shall notify the other if it ever becomes
                aware of any such claim; and

          (v)   it will sell its products and services in the Territory only
                through the Subsidiary, except for sales leads primarily
                generated and developed outside the Territory.

     (c)  The Client Company undertakes with the Contractor that:

          (i)   it will provide prompt and clear instructions to the Contractor
                in response to prompt and clear requests for information or
                instruction from the Contractor in relation to the Professional
                Services;

          (ii)  it shall procure that the Subsidiary and all Other Entities meet
                in full all their debts as they fall due and the Client Company
                acknowledges that any failure to do so will adversely affect the
                goodwill of the Contractor;

          (iii) other than claims arising out of the negligence or misconduct of
                the Contractor, it will indemnify the Contractor and hold it
                harmless against any liability or expense suffered or incurred
                by the Contractor, including reasonable attorney/solicitor fees,
                as a result of any claim against the Contractor that any product
                supplied by the Subsidiary, any Other Entity or the Client
                Company infringes the intellectual property rights or trade
                secrets of any third party or suffers from a design or
                manufacturing defect or is defective, dangerous or otherwise
                faulty;

          (iv)  other than claims arising out of the negligence or misconduct of
                the Contractor, it will indemnify the Contractor (for itself and
                on behalf of its employees) and hold it harmless
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                against any liability or expense suffered or incurred by the
                Contractor or any of its employees, including reasonable
                attorney/solicitor fees, in respect of the debts or liabilities
                of the Client Company or any of its subsidiaries or associated
                companies, including the Subsidiary and any Other Entities;

          (v)   it shall procure that the Subsidiary will obtain Directors'
                Liability Insurance commensurate with the Directors' Liability
                Insurance provided to directors of its other wholly owned
                subsidiaries, as soon as practicable after the Subsidiary has
                been incorporated.

          (vi)  it shall procure that a minimum of LS50,000 will be retained in
                the Subsidiary's UK bank account and that L87,500 will be
                transferred to the Subsidiary's UK bank account immediately
                following execution by the Client Company of this Agreement, and
                thereafter that the Subsidiary be funded in accordance with
                reasonable commercial practice.

7.   TERMINATION AND RENEWAL

     (a)  The initial term of this Agreement shall be for an 18 month period
          from the Effective Date (the "Initial Term").

     (b)  This Agreement shall automatically continue, following the expiry of
          the Initial Term, for subsequent periods of 12 months each ("Renewal
          Terms"), unless terminated as set out below.

     (c)  This Agreement may be terminated by either party, as follows:

          (i)   without cause, on giving 3 months' written notice to the other,
                such notice:

                (aa) to expire at the end of the Initial Term; or

                (bb) to expire at the end of any Renewal Term

          (ii)  during the Initial Term or any Renewal Term, if the other party
                has committed any material breach of the terms of this
                Agreement, in which case the following provisions shall apply:

                (aa) if such breach is incapable of being cured, then the
                     non-defaulting party shall be entitled to terminate this
                     Agreement forthwith by giving written notice to that effect
                     to the other party;

                (bb) if such breach is capable of being cured, the
                     non-defaulting party shall give to the other written notice
                     of the event or circumstances representing such breach
                     together with a demand that such breach be cured
                     immediately; and

                (cc) if the breach has not been cured (or other arrangements
                     satisfactory to the non-defaulting party have not been
                     agreed to) within 30 days from the date of the notice
                     delivered under paragraph (bb) above, then the
                     non-defaulting party shall be entitled to terminate this
                     Agreement forthwith by giving to the other a second written
                     notice to that effect.

     (d)  This Agreement may be terminated by the Contractor with immediate
          effect and on written notice, if proceedings are commenced for the
          liquidation or winding up of the Client Company or the Subsidiary.

     (e)  This Agreement may be terminated by the Client Company with immediate
          effect and on written notice, if proceedings are commenced for the
          liquidation or winding up of the Contractor.

     (f)  This Agreement may be terminated by the Contractor on giving 3 months'
          notice if a third party obtains control of the Client Company (and for
          these purposes, control of the Client Company means the holding of
          shares conferring in aggregate 50% or more of the total voting rights
          conferred by all the shares in the capital of the Client Company for
          the time being in issue and conferring the right to vote on all
          resolutions passed at all general meetings).
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     (g)  This Agreement may be terminated by the Client Company on giving 3
          months' notice if a third party obtains control of the Contractor (and
          for these purposes, control of the Contractor means the holding of
          shares conferring in aggregate 50% or more of the total voting rights
          conferred by all the shares in the capital of the Contractor for the
          time being in issue and conferring the right to vote on all
          resolutions passed at all general meetings).

     (h)  Termination of this Agreement pursuant to this Clause 7 shall be
          without prejudice to the accrued rights and remedies of either party
          prior to such termination, including by way of example, but without
          limitation, the Contractor's rights to payments in accordance with
          Schedule B.

8.   SET OFF

     Where the Client Company, the Subsidiary or any Other Entity owes any sums
     to the Contractor, or vice -- versa, whether contractual or non-contractual
     and whether liquidated or unliquidated, the party owed shall have the right
     to set-off any amounts in its possession or control payable to the
     other(s), against the sums which are owed to the setting off party.

9.   LIMITATION OF LIABILITY

     REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL
     PURPOSE, IN NO EVENT WILL EITHER PARTY OR ANY MEMBER OF THE GROUP, OR
     LICENSORS TO IT OF ANY THIRD PARTY SOFTWARE OR DATA EMBEDDED IN THE DELANO
     SYSTEM, BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR
     SIMILAR DAMAGES, INCLUDING ANY LOST PROFITS OR LOST DATA ARISING OUT OF THE
     USE OR INABILITY TO USE THE SYSTEM, EVEN IF THE CLAIMED AGAINST PARTY HAS
     BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME JURISDICTIONS DO NOT
     ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR
     CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY.
     IN NO CASE SHALL A PARTY'S LIABILITY EXCEED US$100,000.

10.  MISCELLANEOUS

     (a)  The laws of Ontario and Canada shall govern this Agreement (excepting
          their choice of law provisions) and the parties hereby submit to the
          exclusive jurisdiction of the Ontario courts, in Toronto.

     (b)  This Agreement, including the Schedules attached hereto, comprises the
          entire agreement between the parties. Any amendment to this Agreement
          must be made in writing and signed by both the Client Company and the
          Contractor.

     (c)  If any provision of this Agreement shall be deemed by a court to be
          too broad, the court is hereby authorised to limit any scope, duration
          or area of applicability, or all of them, so such provision is no
          longer overly broad and to enforce the same as so limited. Subject to
          the prior sentence, if any part of this Agreement is held
          unenforceable for any reason, such unenforceability shall void only
          such part and shall not render unenforceable any other part of this
          Agreement.

     (d)  Either party's waiver of a default by the other does not constitute a
          waiver of future or other defaults.

     (e)  Neither party shall, save with the consent of the other party (which
          such consent shall, in the case of the Contractor, in respect of the
          general manager (GM) employed by the Contractor to manage the
          Subsidiary and Other Entities be given on the terms set out below),
          during the term of this Agreement or for a period of 12 months after
          its termination, hire or solicit for employment or for the provision
          of services, any employee of the other party, or any employee of any
          member of the other party's Group.
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          The Client Company shall not, save with the consent of the Contractor
          during the term of this Agreement or for a period of 12 months after
          its termination, hire or solicit for employment or for the provision
          of services, any employee of the Contractor's customers who are bound
          by a reciprocal clause in favour of Client Company and its Subsidiary.

          The Client Company shall not without the express written consent of
          the Contractor commence dialogue with or initiate solicitation of the
          GM in any form whether verbally, electronically or in writing
          regarding the engagement of the GM for employment or for the provision
          of services. If after such consent has been given by the Contractor in
          accordance with this clause and if the Client Company or any member of
          its Group does engage the GM for employment or for the provision of
          services, the Client Company pays to the Contractor upon the
          commencement of such engagement a sum equal to the guaranteed minimum
          pre-tax salary and bonus (excluding options) which the Client Company
          or any member of its Group has agreed to pay to the GM during the
          first year of the GM's engagement with the Client Company or any
          member of its Group. The provisions of this clause 10(e) shall survive
          termination of this Agreement.

     (f)  The Contractor shall not assign its rights or obligations under this
          Agreement unless it first obtains the prior written agreement of the
          Client Company.

     (g)  Any notice or other communication required or permitted to be given by
          this Agreement shall be in writing and shall be effectively given if
          delivered personally, by facsimile confirmed received, or by
          registered mail to the relevant party at its address set out below.

     Dated at           this      day of           1999

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

duly authorised for and on behalf of

DELANO TECHNOLOGY CORPORATION
40 West Wilmot Street,
Richmond Hill, Ontario, L4B 1H8, Canada

     Dated at           this      day of           1999

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

duly authorised for and on behalf of

PROTEGE SOFTWARE LIMITED
of Kinetic Centre, Theobald Street,
Borehamwood, Hertfordshire WD6 4PJ
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                                   SCHEDULE A

                                WORK ASSIGNMENT

      During the term of this Agreement, the Contractor shall perform the
following professional services in the Territory.

A.  CLIENT COMPANY SUBSIDIARY

      The Contractor shall:

     (a)  incorporate, or otherwise set up, a wholly owned subsidiary of the
          Client Company (subject to local approval) to be called           (the
          "Subsidiary");

     (b)  incorporate, or otherwise set up, such other corporations or entities
          as the Client Company and Contractor agree to establish in the
          Territory from time to time ("Other Entities").

B.  ANALYSIS, RECOMMENDATIONS AND IMPLEMENTATION

     The Contractor shall carry out analysis and make recommendations relating
to:

     -  marketing positioning

     -  presentation

     -  technical support

     -  competitiveness

     -  localisation

     The Contractor shall implement its approved recommendations for:

     -  sales

     -  marketing

     -  technical support

     -  production

     -  finance and administration

     all for operations in the Territory, as more particularly set out in the
     annual business plans (including budgets) of the Client Company, as such
     plans and budgets relate to its operations implemented directly or through
     the Subsidiary and/or Other Entities.

     The business plan and budgets shall be mutually agreed by the Contractor
and Client Company.

C.   SCOPE OF ACTIVITIES

     The establishment of an organisation for the Territory, to complement the
current resources, technology and economic considerations of the Client Company,
and the circumstances that prevail in the Territory, so that through the
Subsidiary and Other Entities, the Client Company may professionally provide the
following:

     (a)  solicitation of sales orders generating Net Revenue;

     (b)  provision of support for the Client Company's distributors and dealers
          in the Territory;

     (c)  co-ordination of product and warranty service between the Subsidiary
          and such other affiliated or third party, arms length corporations or
          entities, and licensees and distributors/VARs etc. of the Client
          Company's products (including Other Entities), located in the
          Territory;

     (d)  provision of product technical support services;
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     (e)  the conducting of periodic training courses and seminars regarding
          applications and operations of the products in major marketing centres
          located in the Territory for the benefit of distributors and dealers
          etc.;

     (f)  development of business plans for the Territory;

     (g)  management and co-ordination of the implementation of the Client
          Company's marketing strategy in the Territory (for the products of the
          Client Company handled by the Contractor);

     (h)  localisation of products;

     (i)  set up of systems (such as accounting, legal and human resources
          consistent with those set-up by the Client Company) and for these
          purposes the Contractor shall assist the Subsidiary (and other related
          entities as agreed at the Client Company's request) with
          implementation and administration of all general, administrative and
          financial systems as requested by the Client Company; and

     (j)  administration of the "Market Development Fund" specified in the
          budget approved by the Client Company related to customers in the
          Territory (for products of the Client Company).

D.   SOLICITATION OF CONTRACTS

     (a)  The Subsidiary and any Other Entities shall solicit orders for product
          only at such current prices as may be periodically established in
          writing by the Client Company and notified to the Contractor.

     (b)  All orders solicited by the Subsidiary or Other Entities from
          customers in the Territory are subject to acceptance or rejection
          based on agreed authorisation procedures.

     (c)  The Contractor agrees to despatch all inquiries received by it,
          applicable to the Client Company or the products of the Client
          Company, from points or sources outside the Territory promptly to the
          Client Company for attention and handling.

     (d)  All invoices in connection with sales to customers in the Territory
          shall be rendered by the Subsidiary or (as the case may be) Other
          Entities to such customers. It is expressly understood that full power
          by and such authority for all collections rests with the Subsidiary or
          (as the case may be) Other Entities and the Client Company, which
          exercise complete control over the approval of all customers' credit,
          orders, and contracts. The Contractor agrees to protect the Subsidiary
          or (as the case may be) Other Entities and the Client Company, as far
          as is reasonable, by reporting adverse credit information of which it
          is aware with respect to customers of the Subsidiary or (as the case
          may be) Other Entities in the Territory.
<PAGE>   9

                                   SCHEDULE B

                              CONTRACTOR'S REWARD

1.   GENERAL

     Without prejudice to either party's liabilities to the other for all sums
     payable pursuant to this Agreement, the Contractor shall be entitled to
     invoice the Subsidiary or (as the case may be) Other Entities in respect of
     any sums payable by the Client Company to the Contractor pursuant to this
     Agreement and to deduct such sums from any funds held by the Subsidiary or
     (as the case may be) Other Entities in satisfaction of such invoices.

     All sums due to the Contractor from the Client Company pursuant to this
     Agreement shall be paid in UK pounds sterling and all sums payable to the
     Contractor by the Client Company pursuant to this Agreement are quoted
     (unless the contrary is stated) exclusive of VAT.

2.   NET REVENUE

     In this Schedule, Net Revenue means:

     (a)  invoiced gross revenue of the Subsidiary and Other Entities from sales
          and/or licenses of product and services in the Territory (net of
          returns, allowances, credits, discounts (based on volume or otherwise)
          and net of actual bad debts and net of fees generated in connection
          with Mark VII); and

     (b)  15% of invoiced gross revenue of the Client Company and any other
          member of its Group (other than the Subsidiary and Other Entities)
          from sales and/or licences of products and services within the
          territory (net of returns, allowances, credits, discounts (based on
          volume or otherwise) and net of actual bad debts).

     In all cases invoiced gross revenue means the value of invoices without
     reduction for any deferred revenue which may not be treated as recognisable
     income by the Client Company or the Subsidiary.

3.   MANAGEMENT FEE

     The Client Company shall pay the Contractor a management fee of L125,000
     per annum. The management fee shall be payable quarterly in advance, the
     first such instalment being due on the Effective Date, with each subsequent
     instalment being due quarterly thereafter.

4.   PROTEGE FINANCIAL SERVICES FEE

     The Client Company shall pay to the Contractor a fee, calculated as set out
     below, for the provision and/or co-ordination of Financial Services
     functions (the "Financial Services Fee"). Such Financial Services functions
     shall provide back office administration services, including, but not
     necessarily limited to:

     (a) ensuring that the Subsidiary and any Other Entities are properly
          incorporated;

     (b)  providing persons to act as directors, company secretary and (if
          required) other officers of the Subsidiary and any Other Entities;

     (c)  providing and/or co-ordinating facilities management, banking
          facilities, VAT management, accounts receivable, accounts payable and
          cash management, purchase orders, all financial reporting (including
          integration with the Client Company's financial systems), Government
          reporting requirements, payroll functions, income tax reporting and
          tax returns for the Subsidiary and any Other Entities; and

     (d)  providing day-to-day Human Resources management in connection with the
          hiring and personnel management requirements of the Subsidiary and any
          Other Entities.
<PAGE>   10
     The Financial Services Fee will be charged at the rate of L5,500 per month
     until the Subsidiary and Other Entities are employing 5 staff. Once the
     number of employees has reached 5 the Financial Services Fee shall be
     increased to L6,000 per month to reflect the increased Human Resources
     management costs. An additional Financial Services Fee of L1,750 per month
     shall be charged for each additional country in the Territory (other than
     the United Kingdom) in which the Client Company instructs the Contractor to
     establish an office or Other Entity. The Financial Services Fee will be
     invoiced on the last day of each calendar month and shall be payable seven
     days thereafter.

5.   CORPORATE BONUS

     (a)  The Contractor shall be entitled to an annual corporate bonus from the
          Client Company (the "Corporate Bonus"), calculated and payable in
          accordance with the following provisions of this paragraph 5.

     (b)  Subject to paragraphs (c), (d) and (e), the Corporate Bonus shall be
          the sum which is 15 per cent. of Net Revenue during:

          (i)   the 12 month period from the Effective Date until the first
                anniversary of the Effective Date (the "First Period");

          (ii)  the 6 month period from the end of the first Period (the "Second
                Period") and

          (iii) each 12 month period from the end of the Second Period until the
                next anniversary thereof (the subsequent "Periods"),

          and the Corporate Bonus shall be invoiced at the end of each Period in
          arrears and paid by the Client Company 60 days after the end of each
          relevant Period. The Client Company hereby agrees to notify the
          Contractor of any dispute in the amount invoiced within a reasonable
          period of time.

          The Contractor shall have the option of converting part or all the
          Corporate Bonus in respect of the First Period into shares of common
          stock in the Client Company and up to 50% of the Corporate Bonus in
          respect of the Second Period into shares of common stock in the Client
          Company on the conditions set out below. The Contractor shall notify
          the Client Company of its intention to exercise this option when the
          Corporate Bonus is due to be paid.

          -- If the Contractor decides to have part or all of the Corporate
             Bonus for the First Period converted into shares of common stock,
             the amount of the Corporate Bonus for the First Period satisfied in
             this way shall be established by the Client Company's Series C
             round of financing of US$3.55 per share provided that the number of
             shares issued by the Client Company to the Contractor in respect of
             the First Period shall not exceed a maximum of 100,000 shares of
             common stock.

          If the Contractor decides to have part or all of the Corporate Bonus
          for the Second Period converted into shares of common stock, the
          amount of the Corporate Bonus for the Second Period satisfied in this
          way shall be established by the Client Company's then most recent
          round of financing if it is private (and a round of financing has
          occurred subsequent to the June, 1999 round), the then current fair
          market value strike price for options being granted to employees (if
          no round of financing has occurred subsequent to the June, 1999
          round), or the average trading price for the Client Company shares for
          the ten trading days prior to June 1, 2000, provided that the number
          of shares issued by the Client Company to the Contractor in respect of
          the Second Period shall not exceed a maximum of 50,000 shares of
          common stock in respect of each period and that a maximum of 50% of
          the total Corporate Bonus for the Second Period may be so converted.

          If the length of any Period is less than 12 months in the case of the
          First Period, or 6 months in the case of the Second Period, then the
          maximum number of shares that can be issued under this clause shall be
          reduced proportionately.

          There shall be no additional conversion rights.
<PAGE>   11
     (c)  If, prior to the end of any Period, this Agreement is terminated
          pursuant to Clause 7 "Termination and Renewal", in such case a
          "triggering event", then the Contractor shall be entitled (but not
          obliged) to require the Corporate Bonus to be calculated and paid by
          the Client Company within 60 days after the triggering event. In such
          circumstances, the Corporate Bonus shall be the sum which is 15 per
          cent. of Average Net Revenue.

          Average Net Revenue shall be the product of:

          (i)   calculating the average Net Revenue for each completed calendar
                month between the start of the relevant Period and the date of
                the triggering event (the "Monthly Average"); and

          (ii)  multiplying the Monthly Average by twelve.

     (d)  If:

          (i)   Net Revenue during any Period amounts to less than 10 per cent.
                of World-wide Revenue during that Period; or

          (ii)  (in the circumstances specified in paragraph 5(c) above),
                Average Net Revenue calculated for the purposes of any
                incomplete Period amounts to less than 10 per cent. of
                World-wide Revenue (such World-wide Revenue to be calculated in
                the same way, mutatis mutandis, as Average Net Revenue for that
                incomplete Period), then the Bonus for that Period or incomplete
                Period (as the case may be) shall be reduced proportionately.

                For example, if Net Revenue during any Period amounts to 8 per
                cent. of World-wide Revenue during that Period, then the
                percentage of Net Revenue which is payable as the Bonus shall be
                reduced as follows:

                15 - ((2)/(10) x 15)

     (e)  If:

          (i)   Net Revenue during any Period amounts to more than 25 per cent.
                of World-wide Revenue during that Period; or

          (ii)  (in the circumstances specified in paragraph 5(c) above),
                Average Net Revenue calculated for the purposes of any
                incomplete Period amounts to more than 25 per cent. of
                World-wide Revenue (such World-wide Revenue to be calculated in
                the same way, mutatis mutandis, as Average Net Revenue for that
                incomplete Period),

                then the Bonus for that Period or incomplete Period (as the case
                may be) shall be increased proportionately.

                For example, if Net Revenue during the relevant Period amounts
                to 30 per cent. of World-wide Revenue during that Period, then
                the percentage of Net Revenue which is payable as the Bonus
                shall be increased as follows:

                15 + ((5)/(25) x 15)

6.   TRANSITION, CHANGE OF CONTROL OR CLOSURE OF THE SUBSIDIARY

     The Contractor shall be entitled to a fee of L8,000 on completion of the
     Initial Term if this Agreement is not renewed by Client Company (or at the
     end of a Renewal Term if this Agreement is not further renewed by Client
     Company). This fee shall be for the provision of the Financial Services
     support in the transition of the Subsidiary and any Other Entities from the
     Contractor to a stand-alone basis. The services included in this fee
     include the hand-over of accounting information to the new management of
     the Subsidiary and the management of employment issues such as relocation
     of staff to new premises. In addition, the Contractor shall liase with the
     Subsidiary's (and any Other Entities) recruitment agents for the employment
     of administrative staff for the Subsidiary. This fee is not payable in the
     event of termination by Client Company of the Agreement for cause.
<PAGE>   12
     In the event of the closure of the Subsidiary (or any Other Entity) during
     the term or any renewal term, the Contractor shall be entitled to a fee of
     L12,000, payable immediately. This fee is for the provision of Financial
     Services support in order to ensure an orderly closure of the Subsidiary
     (and any Other Entity) including the dismissal of the Subsidiary's
     employees.

     In the event of a change of control of the Client Company the Contractor
     shall be entitled to a fee of L12,000, payable immediately. This fee is for
     the provision of Financial Services support in connection with the change
     of control, including the provision of additional accounting information
     and dealing with any changes to employees' contracts of employment. For
     these purposes, control of the Client Company means the holding of shares
     by a third party or group acting in concert, conferring in the aggregate
     50% or more of the total voting rights conferred by all the shares in the
     capital of the Client Company for the time being in issue and conferring
     the right to vote on all resolutions passed at all general meetings.

7.   SHARE OPTIONS

     (a)  The GM shall be entitled to an additional incentive from the Client
          Company in accordance with the following provisions of this paragraph
          7.

     (b)  The Client Company has on the date hereof reserved and/or granted
          options to the GM (the "Share Options") over 100,000 shares of common
          stock of the Client Company (the "Option Shares"), at an exercise
          price of C$0.95 per share, pursuant to the Client Company option plan
          (the "Scheme") and subject to the terms of a notice of grant of stock
          option entered into on the date hereof between the GM and the Client
          Company (the "Notice").

     (c)  The GM's options will vest in accordance with the Scheme, and vested
          options may be exercised subject to the terms of the Scheme, so long
          as he or she remains the GM of the Subsidiary. There are no GM
          specific performance obligations (apart from the generally applicable
          obligations of the Scheme).

     (d)  The Client Company warrants and represents to the Contractor that:

          (i)   it has full power and authority to grant the Share Options,
                which have been validly granted to the Contractor in accordance
                with the rules of the Scheme;

          (ii)  it has all the necessary approvals and permits required by
                regulatory authorities having jurisdiction over the Scheme to
                grant the Share Options and to issue the Option Shares;

          (iii) it has, and will have when the Share Options are exercised,
                sufficient available authorised but unissued share capital with
                which to issue the Option Shares; and

          (iv)  when exercised, the Option Shares will rank pari passu in all
                respects with the other shares of common stock of the Client
                Company.

          (v)   In the event of a capital re-organisation of the Client Company
                the number of options and the exercise price thereof shall be
                amended accordingly.

     (e)  Upon exercise of the Share Options by the GM, the Client Company shall
          endeavour to notify the Contractor thereof and provide such details as
          the Contractor may request in writing, to enable Contractor to
          calculate any liability it, (or during the term, which Subsidiary or
          Client Company) may have in respect of PAYE or employees' national
          insurance contributions or any equivalent or replacement taxes in
          connection with the exercise of the Share Options ("Option Tax
          Liability").

     (f)  Notwithstanding anything else in this Agreement, so long as the Client
          Company has not acted with misconduct or in a grossly negligent manner
          in fulfilling its responsibilities under subparagraph (e) above, it
          shall bear no liability to Contractor with regard to any Option Tax
          Liability (and Contractor agrees to indemnify Client Company for any
          Option Tax Liability imposed upon it or the Subsidiary, and any
          associated costs and interest, in circumstances where the liability
          arose during the time period when General Manager was an employee of
          Contractor).
<PAGE>   13
     (g)  If Client Company changes the Scheme, so that it has the right to
          withhold the Option Tax Liability, and does so generally, then it will
          endeavour to do so on behalf of the Contractor with regard to the GM.

8.   PUBLIC OFFERING OF THE CLIENT COMPANY'S SHARES

     A.   The Client Company undertakes that if, at any time during the term of
          this Agreement or within twelve months after its termination (other
          than a termination for cause), there is a public offering of shares in
          the Client Company, then,:

          (a)  as an additional reward for the Contractor in performing the
               Professional Services, the Client Company shall use reasonable
               efforts to have the underwriters allocate to Contractor the right
               to participate in any such public offering of the Client
               Company's shares by subscribing up to US$500,000 for shares of
               common stock of the Client Company at the price at which those
               shares are offered pursuant to the public offering; and

          (b)  it will notify the Contractor in good time and generally keep the
               Contractor fully informed of its intentions in connection with,
               and of any proposed, public offering of the Client Company's
               shares.

     B.   Notwithstanding s.8.A., Contractor acknowledges that the allocation
          may be reduced without liability to Client Company, that there is no
          minimum allocation due to Contractor, and that the reductions may
          occur or restrictions may be imposed, among other reasons, due to
          Underwriters' cut backs and obligations imposed by Underwriters,
          Exchanges and Securities Regulators concerning the period of time
          shares must be held, and subject to the Delano's strategic decisions
          regarding allocations in order to achieve its then current goals.
<PAGE>   14

                                   SCHEDULE C

                                   TERRITORY

     In this Agreement, Territory means Europe, Africa (other than South Africa)
and the Middle East, subject to then prevailing export regulations in Canada,
the United States or countries in which the Client Company resides. Territory
specifically does not include Australia.

     Middle East means all Arab League countries, Turkey and Israel.

     Europe means the countries listed below, except to the extent that sales of
the Client Company's products are prohibited in any of them pursuant to the laws
of Canada or other jurisdiction applicable to the Client Company's operations.

<TABLE>
<S>                    <C>                      <C>
------------------------------------------------------------------------
Albania                Gibraltar                Portugal
Andorra                Greece                   Romania
Armenia                Hungary                  Russia Federation
Austria                Iceland                  San Marino
Azerbaijan             Republic of Ireland      Serbia
Belarus                Italy                    Slovak Republic
Belgium                Kazakhstan               Slovenia
Bosnia                 Kyrgyzstan               Spain
Bulgaria               Latvia                   Sweden
Byclorussia            Liechtenstein            Switzerland
Croatia                Lithuania                Tajikstan
Cyprus                 Luxembourg               Turkey
Czech Republic         Macedonia                Turkmenistan
Denmark                Malta & Gozo             Ukraine
Estonia                Moldova                  United Kingdom
Federal Republic of    Monaco                   Uzabekistan
   Yugoslavia
Finland                The Netherlands          Vatican City State
France                 Norway
Germany                Poland
------------------------------------------------------------------------
</TABLE>
<PAGE>   15

                                   SCHEDULE D
                               DIRECT COMPETITORS

Direct competitors shall include:

     Message Media

     Octane Inc.

     Silknet Responsys

     And such other names as are added in accordance with the provisions of this
Agreement.

Personal & Confidential

February 26, 1998

Bahman Koohestani

Dear Bahman

     On behalf of HERMOD Corp., I am pleased to offer employment to you in the
position of           in the position of Chief Technology Officer and Interim
President. I believe you will find this position challenging and rewarding, and
that it will provide you with an opportunity for personal career development.
The following are the terms and conditions of this offer of employment.

     This offer of employment is for an indefinite term, commencing on May 1,
1998. The salary will be $150,000 per annum, payable on a semimonthly basis by
cheque. At a later date, we will be able to direct deposit to your financial
institution.

     Additionally we will pay for one month's rental for a two bedroom apartment
for the month of May, and will provide a reasonable sum towards moving costs
from California to Toronto (which is non-recoverable assuming you do not resign
within 6 months).

     You will be eligible to participate in the company's benefit programs
generally applicable to employees, as they are implemented. As an initial
employee, there is no probationary period to be completed.

     As an initial team member, you will be issued 3,700,000 common shares of
the company, subject to the terms set out in the attached schedule "CONFIDENTIAL
SUMMARY OF TRANSACTION". Your shares will be issued on closing, and held in
escrow, vesting in 12 equal quarterly releases of 308,333.33 thereafter. (You
acknowledge that an additional person may join, and that you may transfer up to
1,000,000 shares to him at nominal consideration, from your personal
shareholding).

     You are entitled to three weeks vacation (exclusive of statutory or public
holidays) each financial year, that leave to be prorated over any partial year
of employment. Such vacation is to be taken at a time acceptable to the company
subject to its operational requirements.

     The company reserves the right to reassign you to a comparable or senior
position to that which this offer relates at any time and from time to time.
Except as provided in this letter, the company reserves all managerial rights
permitted by law with respect to the terms and conditions of your employment.
Both the company and you agree that your role as president will be interim only,
during the start up phase until the board hires a full time president and/or
CEO. Your compensation as CTO will remain the same even after you cease to be
president.

     Under our company policy we all employees must complete a 90 day
probationary period of employment. At the end of this period, an evaluation of
the employee's performance in the position will be made, and the results of this
evaluation will be discussed with the employee. The company reserves the right
<PAGE>   16

to terminate an employee's employment at any time during the probation period
without notice or pay in lieu thereof to the employee. However, as an initial
team member, the company is waiving the probationary period.

     Performance appraisals and compensation review will be conducted on an
annual basis.

     Should you elect to leave the employment of the company, you are requested
to provide the company with at least one month's notice in writing.

     All employees of the company are required to sign a Confidentiality
Agreement. A copy of this Agreement is enclosed for your review.

     The company has adopted a policy which prohibits smoking in all of its
facilities and expects all employees to respect and comply with this policy.

     Except as modified by this letter, signing this letter signifies acceptance
of the then current company policies from time to time.

     Please confirm your acceptance of this offer by returning a signed copy of
this letter and confidentiality agreement to us no later than Friday March 6,
1998, after which it expires.

     The offer letter (and its attachments) are for your use only, in connection
with your evaluation of our offer. Without limiting the foregoing, this letter
is not to be provided, nor its contents disclosed, to any other party. We also
ask that you not reveal our conversations to date or current interest. Any such
disclosure will immediately terminate the effectiveness of this indication of
interest.

     This offer letter is not intended to have any binding effect upon either
party (with the exception of the confidentiality and exclusivity requirements).
No such binding obligation will exist prior to finalization of the employment
agreement and related corporate/shareholding documentation.

     If you have any further questions, please do not hesitate to contact me.

     We look forward to you joining the team.

Sincerely,

HERMOD Corp.

Dennis Bennie
CEO

     I have had an opportunity to review the offer letter and the
confidentiality and transaction summary schedules. I have had an opportunity to
obtain independent legal advice.

<TABLE>
<S>                                         <C>

---------------------------------------     ------------------------------------
Bahman Koohestani                           March   , 1998
Signed in Acceptance of the Above Terms
</TABLE>