-1-

                                                               Exhibit 4.4

                                                 ESCROW AGREEMENT



THIS AGREEMENT is dated for reference November 17, 1997.


                                              UNDERTAKING REQUIRED FROM

                                                NON-REPORTING COMPANY


TO: Executive Director                or        Vancouver Stock Exchange or
    B.C. Securities Commission                  609 Granville Street
    #1100 - 865 Hornby Street                   Vancouver, B.C.
    Vancouver, B.C.  V6Z 2H4                    V7Y 1H1

(If the shares are not listed on the VSE)  (if the shares are listed on the VSE)



The undersigned (the "Corporate Escrow  Shareholder")  represents that Edward C.
Pardiak is the sole holder of voting shares of the Corporate Escrow  Shareholder
and undertakes,  for the duration of time that the Corporate Escrow  Shareholder
is the  registered  owner of escrowed  shares of DSI DATOTECH  SYSTEMS INC. (the
"Issuer"),

     a. to effect or permit  transfer of ownership  in the voting  shares of the
Corporate Escrow Shareholder, or

     b. to allot and issue  further  voting shares of any class of shares of the
Corporate Escrow Shareholder

only upon  receipt of the  written  consent  of the  Executive  Director  of the
British Columbia Securities Commission, if the Issuer's shares are not listed on
the Vancouver Stock Exchange (the "Exchange"),  or the Exchange, if the Issuer's
shares are listed on the Exchange.

Dated at Vancouver on the 7 day of December, 1997.

The Corporate/Common Seal of EDWARD
C. PARDIAK HOLDINGS LIMITED was
affixed in the presence of

/s/ Edward C. Pardiak                                             c/s
--------------------------------------------------
Authorized Signatory

------------------------------
Authorized Signatory

<PAGE>


                                                        -2-

AMONG:

                  PACIFIC CORPORATE TRUST COMPANY, a company having an office at
                  830, 625 Howe Street, Vancouver, British Columbia, V6C 3B8

                  (the "Escrow Agent")

AND:

     DSI DATOTECH  SYSTEMS INC., a company having an office at 712 - 525 Seymour
Street, Vancouver, British Columbia V6B 3H7

                  (the "issuer")

AND:

                  PARDIAK MANAGEMENT INTERNATIONAL LIMITED. as defined in this
                  ------- ---------- ------------- -------
                  Agreement

                  (collectively, the "Parties")


     WHEREAS the  Shareholder  has acquired or is about to acquire shares of the
Issuer;

AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the
shares upon the acquisition of the shares by the Shareholder;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
contained  in this  agreement  and other good and  valuable  consideration  (the
receipt and sufficiency of which is acknowledged), the Parties agree as follows:


1.       INTERPRETATION

In this agreement:


<PAGE>


                                                        -3-

     (a) "Acknowledgment"  means the acknowledgment and agreement to be bound in
the form attached as Schedule A to this agreement:

     (b) "Act" means the Securities Act,  R.S.B.C.  1996, c.238, as amended from
time to time;

         (c)      "Exchange" means the Vancouver Stock Exchange;

         (d)      "IPO" means the initial  public  offering of common  shares of
                  the Issuer under a prospectus  which has been filed with,  and
                  for which a receipt  has been  obtained  from,  the  Executive
                  Director under section 61 of the Act;

         (e)      "Local Policy Statement 3-07" means the Local Policy Statement
                  3-07 in effect as of the date of reference  of this  agreement
                  and attached as Schedule B to this agreement;

     (f) "Shareholder"  means a holder of shares of the Issuer who executed this
agreement or an Acknowledgment;

         (g)      "Shares"  means the  shares of the  Shareholder  described  in
                  Schedule C to this agreement,  as amended from time to time in
                  accordance with section 9;

     (h)  "Executive   Director"  means  the  Executive  Director  of  the  B.C.
Securities Commission appointed under the Act; and

         (i)      "Executive  Director  or the  Exchange"  means  the  Executive
                  Director,  if the  shares of the  Issuer are not listed on the
                  Exchange,  or the  Exchange,  if the  shares of the Issuer are
                  listed on the Exchange.


2.       PLACEMENT OF SHARES IN ESCROW

The  Shareholder  places  the Shares in escrow  with the Escrow  Agent and shall
deliver the certificates  representing the Shares to the Escrow Agent as soon as
practicable.  For the purposes of this agreement,  the Escrow Agent is the agent
solely of the Executive Director or the Exchange, not the Issuer.

3.       VOTING OF SHARES IN ESCROW

Except as provided by section  4(a),  the  Shareholder  may  exercise all voting
rights attached to the Shares.

4.       WAIVER OF SHAREHOLDER'S RIGHTS



<PAGE>


                                                        -4-

The Shareholder waives the rights attached to the Shares

     (a) to vote the Shares on a resolution to cancel any of the Shares,

         (b)      to receive dividends, and

     (c) to participate in the assets and property of the Issuer on a winding up
or dissolution of the Issuer.


5.       ABSTENTION FROM VOTING AS A DIRECTOR

A  Shareholder  that is or becomes a director of the Issuer  shall  abstain from
voting on a directors' resolution to cancel any of the Shares.

6.       TRANSFER WITHIN ESCROW

         (a)      The Shareholder shall not transfer any of the Shares except in
                  accordance  with  Local  Policy  Statement  3-07  and with the
                  consent of the Executive Director or the Exchange.

     (b) The  Escrow  Agent  shall not effect a  transfer  of the Shares  within
escrow unless the Escrow Agent has received

     (i) a copy of an  Acknowledgment  executed by the person to whom the Shares
are to be transferred, and

     (ii) a letter from the Executive Director or the Exchange consenting to the
transfer.

         (c)      Upon the death or  bankruptcy  of a  Shareholder,  the  Escrow
                  Agent shall hold the Shares  subject to this agreement for the
                  person that is legally entitled to become the registered owner
                  of the Shares.

     (d) If the sole voting  shareholder,  Edward C. Pardiak, of the Shareholder
ceases to be an officer of the Company because:

     (i) the shareholder terminates its consulting employment agreement with the
Company, or

                  (ii)     the Company terminates his employment  agreement with
                           the  Company  because the  Shareholder  or Pardiak is
                           guilty of  conduct  which at common  law  constitutes
                           just cause for termination of employment


<PAGE>


                                                        -5-


the  Shareholder  shall be entitled to retain that number of Shares equal to the
number of Shares then held by it, times the number of months from August 1, 1997
until the date the Shareholder  ceased to be contracted by the Company,  rounded
to the nearest  tenth,  divided by 24 and shall not be  obligated to transfer or
surrender  that  number of Shares to the  Company or any other  person,  but the
balance  of the  Shares  shall be deemed to have  been  forthwith  gifted to the
Company.

         (e)      A  Shareholder  who ceases to be a principal,  as that term is
                  defined in Local  Policy  Statement  3-07 for any other reason
                  not  covered  by  the paragraph  immediately  above,  dies  or
                  becomes bankrupt,  shall be entitled to retain any Shares then
                  held by it and shall not be obligated to transfer or surrender
                  the Shares to the Company or any other person.

7.       RELEASE FROM ESCROW

         (a)      The Shareholder irrevocably directs the Escrow Agent to retain
                  the Shares until the Shares are released from escrow  pursuant
                  to subsection  (b) or surrender for  cancellation  pursuant to
                  section 8.

         (b)      The Escrow  Agent  shall not  release  the Shares  from escrow
                  unless  the  Escrow  Agent  has  received  a  letter  from the
                  Executive Director or the Exchange consenting to the release.

         (c)      The  approval of the  Executive  Director or the Exchange to a
                  release from escrow of any of the Shares shall  terminate this
                  agreement only in respect of the Shares so released.

     (d)  The  Shareholders   acknowledges  that  there  are  currently  468,500
performance  shares held in escrow for  Osvaldo  Contini  and  1,000,000  shares
allotted to Seth McCloud  (collectively the "Existing  Performance  Shares") and
that 100% of the Cumulative  Cash flow is to be allocated to the  calculation of
the release of the Existing  Performance  Shares until such time as the Existing
Performance  Shares are released from escrow and/or issued,  as the case may be.
Thereafter,  100%  of  the  Cumulative  Cash  flow  will  be  allocated  to  the
calculation of the release of the Shares and the 1,300,000  common shares of the
Company to be issued to Segev Management  International Ltd., to be released pro
rata!!


8.       SURRENDER FOR CANCELLATION

The Shareholder shall surrender the Shares for cancellation and the Escrow Agent
shall deliver the certificates representing the Shares to the Issuer



<PAGE>


                                                        -6-

     (a) at the time of a major  reorganization  of the Issuer, if required as a
condition of the consent to the  reorganization by the Executive Director or the
Exchange,

         (b)      where the  Issuer's  shares have been subject to a cease trade
                  order  issued  under  the Act for a  period  of 2  consecutive
                  years.

     (c) five years from the date the exchange has accepted  this  Agreement for
filing or

         (d)      where required by section 6(d).


9.       AMENDMENT OF AGREEMENT

         (a)      Subject to subsection  (b), this agreement may be amended only
                  by a written  agreement among the Parties and with the written
                  consent of the Executive Director or the Exchange.

         (b)      Schedule C to this agreement shall be amended upon

                  (i)      a transfer of Shares pursuant to section 6,

     (ii) a release of Shares from escrow pursuant to section 7, or

     (iii) a surrender of Shares for cancellation pursuant to section 8, and the
Escrow Agent shall note the amendment on the Schedule C in its possession.

10.      INDEMNIFICATION OF ESCROW AGENT

The Issuer and the Shareholders,  jointly and severally,  release, indemnify and
save  harmless  the  Escrow  Agent  from all costs,  charges,  claims,  demands,
damages,  losses and expenses  resulting from the Escrow  Agent's  compliance in
good faith with this agreement.


11.      RESIGNATION OF ESCROW AGENT

         (a)      If the  Escrow  Agent  wishes to  resign  as  escrow  agent in
                  respect of the Shares,  the Escrow  Agent shall give notice to
                  the Issuer.

         (b)      If the  Issuer  wishes  the  Escrow  Agent to resign as escrow
                  agent in respect of the Shares,  the Issuer  shall give notice
                  to the Escrow Agent.

     (c) A notice  referred to in subsection  (a) or (b) shall be in writing and
delivered to



<PAGE>


                                                        -7-

                  (i)      the Issuer at:

                                    Suite 712 - 525 Seymour Street
                                    Vancouver, British Columbia
                                    V6B 3147
                              Attention: Secretary

                  (ii)     the Escrow Agent at:

                                    Pacific Corporate Trust Company
                              830 -625 Howe Street
                                    Vancouver, British Columbia
                                    V6C 3B8
                                    Attention: Stock Transfer

                  and the notice  shall be deemed to have been  received  on the
                  date of  delivery.  The Issuer or the Escrow  Agent may change
                  its address for notice by giving  notice to the other party in
                  accordance with this subsection.

     (d) A  copy  of a  notice  referred  to in  subsection  (a)  or  (b)  shall
concurrently be delivered to the Executive Director or the Exchange.

         (e)      The resignation of the Escrow Agent shall be effective and the
                  Escrow Agent shall cease to be bound by this  agreement on the
                  date that is 180 days  after the date of receipt of the notice
                  referred to in subsection  (a) or (b) or on such other date as
                  the   Escrow   Agent  and  the  Issuer  may  agree  upon  (the
                  "resignation date").

         (f)      The Issuer  shall,  before the  resignation  date and with the
                  written  consent of the  Executive  Director or the  Exchange,
                  appoint  another  escrow agent and that  appointment  shall be
                  binding on the Issuer and the Shareholders.


12.      FURTHER ASSURANCES

The  Parties  shall  execute  and  deliver  any  documents  and perform any acts
necessary to carry out the intent of this agreement.

13.      TIME

Tine is of the essence of this agreement.

14.      GOVERNING LAWS



<PAGE>


                                                        -8-

This agreement shall be construed in accordance with and governed by the laws of
British Columbia and the laws of Canada applicable in British Columbia.

15.      COUNTERPARTS

This agreement may be executed in two or more counterparts,  each of which shall
be deemed to be an original and all of which shall constitute one agreement.

16.      LANGUAGE

Wherever a singular  expression is used in this  agreement,  that  expression is
deemed  to  include  the  plural or the body  corporate  where  required  by the
context.



<PAGE>


                                                        -9-

                                               Compared with original and
                                               certified to be a true copy

                                               /s/
                                               Authorized Signing Officer
                                               Pacific Corporate Trust Company

17.         ENUREMENT

This Agreement  inures to the benefit of and is binding on the Parties and their
heirs, executors, administrators, successors and permitted assigns.

18.      EARN-OUT PRICE

The "earn-out  price" as defined in Local Policy  Statement 3-07 is agreed to be
$0.25 per Share.


IN WITNESS  WHEREOF the Parties have executed and delivered this agreement as of
the date of reference of this agreement.

The Corporate/Common Seal of                         )
PACIFIC CORPORATE TRUST                              )
COMPANY w as affixed in the presence                 )
of:                                                  )
/s/                                                  )                c/s
Authorized Signatory                                 )
                                                     )
/s/                                                  )
Authorized Signatory                                 )
                                                     )
                                                     )
The Common Seal of DSI DATOTECH                      )
SYSTEMS INC. was affixed in the                      )
presence of:                                         )
                                                     )
/s/__________________________                        )                c/s
Authorized Signatory                                 )
                                                     )
/s/Maren K. Dancer                                   )
Authorized Signatory                                 )
                                                     )
                                                    )



<PAGE>


                                                        -10-

The Corporate/Common Seal of SEGEV                   )
MANAGEMENT INTERNATIONAL                             )
LTD. was affixed in the presence of:                          )
                                                     )
Authorized Signatory                                 )               c/s

/s/


                                               Compared with original and
                                               certified to be a true copy

                                               /s/
                                               ------------------------------
                                               Authorized Signing Officer
                                               Pacific Corporate Trust


Authorized Signatory                                 )
                                                     )
/s/                                                  )
                                                     )
The Corporate/Common Seal of                         )
PARDIAK MANAGEMENT                                   )
INTERNATIONAL LIMITED was                            )
affixed in the presence of:                          )
                                                     )           c/s
Authorized Signatory                                 )
                                                     )
                                                     )
Authorized Signatory                                 )
                                                     )
                                                     )




<PAGE>



                                          SCHEDULE A TO ESCROW AGREEMENT

                                     ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND


TO: Executive Director                   or       Vancouver Stock Exchange
    B.C. Securities Commission                    609 Granville Street
    #1100 - 865 Hornby Street                     Vancouver, B.C.
    Vancouver, B.C. V6Z 2H4                       V7Y 1H1

(if the shares are not listed on the VSE)  (if the shares are listed on the VSE)

I acknowledge that

     (a) I have  entered into an agreement  with  _______________________  under
which  _____________  common shares of DSI DATOTECH  SYSTEMS INC. (the "Shares")
will be transferred to me upon receipt of regulatory approval, and

     (b) the Shares are held in escrow subject to an escrow  agreement dated for
reference  November  17,  1997  (the  "Escrow  Agreement"),  a copy of  which is
attached as Schedule A to this acknowledgment.

In consideration of $1.00 and other good and valuable consideration (the receipt
and  sufficiency of which is  acknowledged)  I agree,  effective upon receipt of
regulatory  approval of the  transfer  to me of the  Shares,  to be bound by the
Escrow Agreement in respect of the Shares as if I were an original  signatory to
the Escrow Agreement.

Dated at __________________________________ on ________________________ 19__

Where the transferee is an individual:


SIGNED, SEALED and DELIVERED
by [transferee] in the presence of:
                                                         )
                                                         )
Name:                                                    )
                                                         )
Address                                                  )      [Shareholder]
                                                         )
Occupation                                               )


Where the transferee is a company:



<PAGE>



The Corporate/Common Seal of                              )
[transferee] was affixed in the presence of:              )
                                                          )
----------------------------------                        )
Authorized Signatory                                      )          c/s
                                                          )
Authorized Signatory                                      )



<PAGE>



[GRAPHIC_OMITTED]

Province of                   BRITISH COLUMBIA SECURITIES COMMISSION
British Columbia
                              SCHEDULE B
OFFICE OF THE
CHAIRMAN
                                     LOCAL POLICY STATEMENT 3-07

                            POLICY GUIDELINES RESPECTING TRADING SHARES,
                             PERFORMANCE SHARES AND OTHER CONSIDERATION


<TABLE>
<CAPTION>

                                          TABLE OF CONTENTS

PART            TITLE                                                                           PAGE
----            -----                                                                           ----

<S>             <C>       <C>                                                                   <C>
1.               IMPLEMENTATION                                                                   1

2.               APPLICATION                                                                      1

                 2. 1    Pre-prospectus
                 2.2     Reactivations and reorganizations

3.               TRANSITION                                                                       2

                 3.1     Agreements made under former policy statement
                 3.2     Option of conforming with new policy statement

4.               DEFINITIONS                                                                      2

                 4.1     Defined terms
                 4.2     Terms defined in legislation

5.               GENERAL MATTERS                                                                  5

                 5.1     Review of opinions and reports
                 5.2     Requirement for valuation opinion
                 5.3     Out of pocket costs
                 5.4     Confirmation of fair value

6.               ISSUANCE OF TRADING SHARES                                                       6

                 6.1     Minimum price and maximum aggregate value
                 6.2     Interest in operating subsidiary
                 6.3     Value assigned to non-cash assets
                 6.4     Purchase of interest in mineral property

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PART             TITLE                                                                            PAGE
----             -----                                                                            ----

<S>             <C>     <C>                                                                   <C>
                 6.5    Accumulated deficit related to issuer's stated
                              business purpose
                 6.6    Exclusion of amounts by Superintendent

7.               ISSUANCE OF PERFORMANCE SHARE                                                      8

                 7.1    Issuance to principals
                 7.2    Natural resource issuer
                 7.3    Industrial issuer
                 7.4    Escrow requirement
                 7.5    Escrow agreement
                 7.6 Limitations on rights of holders of performance  shares 7.7
                 Rights on ceasing to be a principal 7.8  undertaking of holding
                 company

8.               TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW                                     10

                 8.1    Permitted transferees
                 8.2    Request for consent to transfer
                 8.3  Documents to be filed with request for consent to transfer
                 8.4 Letter of  consent  or  objection  8.5 No  transfer  during
                 period between prospectus receipt
                              and listing

9.               RELEASE OF PERFORMANCE SHARES FROM ESCROW         11

                 9. 1   Release of shares of natural resource issuer
                 9.2    Reduction in release for natural resource issuer
                 9.3    Release of shares of industrial issuer
                 9.4    Adjustment of release calculation
                 9.5    Requirements for release
                 9.6    Annual release based on annual audited financial statements
                 9.7    Request for consent to release
                 9.8    Documents to be filed with request for consent to release
                 9.9    Letter of consent or objection
                 9.10   Request by holder of performance shares for consent to release

10.      SURRENDER OF PERFORMANCE SHARES FOR                                                      14
                        CANCELLATION

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PART             TITLE                                                                           PAGE
----             -----                                                                           ----
<S>             <C>       <C>                                                                   <C>

11.              OTHER CONSIDERATION                                                            14

                 11.1   Natural resource issuer
                 11.2   Industrial issuer


Appendix A              Escrow Agreement

Appendix B              Examples of earn-out prices for performance shares issued
                        by an industrial issuer

Appendix C              Undertaking Required from Non-Reporting or Closely Held
                        Company

</TABLE>


<PAGE>


                                                 -1-

PART 1            IMPLEMENTATION

     1.1 The following  local policy  statements  are hereby  rescinded and this
local policy statement substituted therefor, effective March 1, 1990:

     (a) Local Policy Statement 3-07, dated February 6, 1987 (the "Former Policy
Statement"), and

     (b) Local Policy  Statements  3-08,  3-09 and 3-10,  each dated February 1,
1987.


PART 2            APPLICATION

2.1      Pre-prospectus  - This local policy  statement  sets out guidelines for
         issuance of shares and payment of consideration for assets by an issuer
         intending to do an initial public  offering and obtain a listing on the
         Vancouver Stock Exchange. This local policy statement addresses

     (a) the  issuance  of trading  shares,  which are common  shares  issued as
consideration  for cash or assets  contributed  to the  issuer  and,  in certain
cases, expenses incurred to advance the business of the issuer,

         (b)      the issuance of and escrow restrictions imposed on performance
                  shares, which are common shares issued to directors, officers,
                  promoters  and other  principals of the issuer to provide them
                  with  both  a  reasonable  assurance  of  control  during  the
                  formative stages of the issuer's  development and an incentive
                  to support the issuer, and

     (c) the  payment  of  other  consideration  by the  issuer  for  assets  or
services.

     2.2  Reactivations  and  reorganizations  -  This  local  policy  statement
applies, with the --------------------------------- necessary changes, to

     (a) the  reactivation  of an issuer by way of a prospectus,  carried out in
accordance  with Local Policy  Statement  3-35 and the policies of the Vancouver
Stock Exchange, and

         (b)      a major reorganization of an issuer,  including a reverse take
                  over,  carried  out in  accordance  with the  policies  of the
                  British Columbia Securities Commission and the Vancouver Stock
                  Exchange.


PART 3            TRANSITION



<PAGE>


                                                 -2-

3.1      Agreements made under former policy statement - Subject to section 3.2,
         shares  issued in  accordance  with the Former  Policy  Statement  will
         continue to be governed by any agreements  made in accordance  with the
         Former Policy Statement.  Such shares,  however, will be subject to the
         transfer  restrictions and procedures set out in Part B and the release
         criteria  and  procedures  set out in sections 9.5 through 9.10 of this
         local policy statement.

3.2      Option of  conforming  with new policy  statement  - An issuer that has
         issued  shares in  accordance  with the  Former  Policy  Statement  may
         reorganize  its  capital  to  fully  conform  with  this  local  policy
         statement.  Before doing so, the issuer must obtain the approval of its
         shareholders and the written consent of the  Superintendent of Brokers,
         if the issuer's  shares are not listed on the Vancouver Stock Exchange,
         or the Vancouver Stock Exchange,  if the issuer' s shares are listed on
         that exchange.  Both the approval and consent must be obtained by March
         1, 1991.


PART 4            DEFINITIONS

4.1      Defined terms-- In this local policy statement:
         -------------

         "Act" means the Securities Act, S.B.C. 1985, c. 83;

     "arm's  length  transaction"  means a  transaction  other than a non-arm's
length transaction;

         "cash flow"  means net income or loss before tax,  adjusted to add back
         the following expenses:

     (a)  depreciation,

     (b) amortization of goodwill and deferred  research and development  costs,
excluding general and administrative costs,

     (c)  expensed  research  and  development  costs,   excluding  general  and
administrative costs, and

(d) any other amounts permitted or required by the Superintendent;

         "cumulative  cash flow" means,  - at -any time, the aggregate cash flow
         of an issuer up to that time from a date no earlier  than the  issuer's
         financial  year end  immediately  preceding the date of its IPO, net of
         any negative cash flow;

     "earn-out  factor"  means the number  obtained by squaring the  performance
share percentage, expressed as a decimal, and multiplying by four;

         "earn-out price" means the IPO price multiplied by the earn-out factor;


<PAGE>


                                                 -3-

     "escrow agreement" means an agreement in the form attached as Appendix A to
this local policy statement;

         "Exchange" means the Vancouver Stock Exchange;

     "industrial issuer" means an issuer other than a natural resource issuer;

         "IPO" means the initial  public  offering of common shares of an issuer
         under a prospectus  which has been filed with,  and for which a receipt
         has been obtained from, the Superintendent under section 42 of the Act;

     "IPO  price"  means the price per share paid by the  public on an  issuer's
IPO;

         "non-arm's length  transaction" means a transaction  between the issuer
         and a person that, at any time from the date of the  transaction  until
         the date of completion of the issuer's IPO, is

         (a)      an insider, associate, affiliate or principal of the issuer,

         (b)      a person that

     (i) has a control  person,  insider or promoter  that is a control  person,
insider or promoter of the issuer, or

     (ii) has a control  person,  insider or promoter  that is an  associate  or
affiliate of a control person, insider or promoter of the issuer

                  except  where the  person's  insiders  that are  described  in
                  paragraphs  (i) and (ii)  hold in total  less  than 10% of the
                  voting securities of the person, or

     (c)  determined  by the  Superintendent  not to be at arm's  length  to the
issuer;

         "performance  shares"  means  common  shares  of an  issuer  issued  in
         accordance with Part 7 of this local policy statement,  so long as they
         are held in escrow in accordance with this local policy statement;

         "performance share percentage" means the percentage,  determined on the
         date the issuer's  shares are listed,  posted and called for trading on
         the Exchange,  that the issued  performance shares of the issuer are of
         the total issued and outstanding voting securities of the issuer;

         "principal" means, in relation to an issuer,



<PAGE>


                                                 -4-

         (a)      a promoter of the issuer,

     (b) a director of the issuer or of an operating subsidiary of the issuer,

     (c) a full time  management  employee  of the  issuer,  or of an  operating
subsidiary of the issuer, whose direct or indirect employment is with the issuer
or the subsidiary,

     (d) a person who has  provided key services or  contributed  a  fundamental
asset to the issuer and has elected to be treated as a principal, or

     (e) a company all the voting  securities  of which are owned by one or more
of the persons referred to in subsections (a) through (d);

         "Regulation" means the Securities Regulation, B.C. Reg. 270/86;

         "Superintendent  or the  Exchange"  means  the  Superintendent,  if the
         issuer's  shares are not listed on the Exchange,  and the Exchange,  if
         the issuer's shares are listed on the Exchange;

         "trading  shares"  means shares of the class of common shares issued on
         an issuer's IPO, excluding performance shares issued in accordance with
         Part 7 of this local policy statement;

         "valuation opinion" means, in respect of

         (a)      a natural  resource  issuer,  a written opinion  prepared by a
                  qualified  expert as to the fair  market  value of a  resource
                  property, determined either through the computation of present
                  value or some other recognized method of valuation  acceptable
                  to the Superintendent, and

         (b)      an industrial issuer, a written opinion prepared in accordance
                  with  generally  applied  valuation  approaches by a Chartered
                  Business  Valuator,   or  another  expert  acceptable  to  the
                  Superintendent,  as to the  highest  price  available  for the
                  issuer's   business,   assets   or   shares  in  an  open  and
                  unrestricted market between informed,  prudent parties, acting
                  at arm's length and under no compulsion  to act,  expressed in
                  terms of money or money's worth.

     4.2 Terms defined in legislation - Subject to section 4.1, terms defined in
the Act, the ---------------------------- Regulation and the Interpretation Act,
R.S.B.C.  1979,  c. 206 and used in this local  policy  statement  have the same
meaning as in the Act, the Regulation and the Interpretation Act.


<PAGE>


                                                 -5-

PART 5            GENERAL MATTERS

5.1      Review of  opinions  and  reports - The  Superintendent  may,  with the
         agreement  of an issuer,  seek the opinion of an  engineer,  appraiser,
         business  valuator,   accountant  or  other  expert  to  determine  the
         acceptability of a valuation  opinion or other report filed pursuant to
         this local policy statement and, in such circumstances, the issuer will
         be  liable  for the fees  charged  by such  person in  connection  with
         providing the opinion.

5.2      Requirement for valuation opinion - The Superintendent may, at the time
         of reviewing an issuer's  prospectus  for its IPO,  require a valuation
         opinion in support of the value attributed to any non-cash assets.

5.3      Out of pocket costs.  Where this local policy  statement  provides that
         the value of trading  shares  issued or other  consideration  paid to a
         person by an issuer for a  non-cash  asset  must be  calculated  on the
         basis of the out of pocket  costs  incurred by the person in respect of
         the non-cash asset, those out of pocket costs must

         (a)      be reasonable,

     (b) have contributed or be reasonably  expected to contribute to the future
operations of the issuer,

         (c)      be supported by an audited statement of costs, and

         (d)      in  respect  of  a  resource   property,   be   restricted  to
                  acquisition  costs and such other  costs as are  necessary  to
                  secure a preliminary  evaluation of the resource  property and
                  to lead to the identification of exploration targets.

5.4      Confirmation  of  fair  value  - The  onus  will  be on an  issuer,  if
         questioned,  to satisfy the Superintendent that fair value was received
         for  costs  or  expenditures   associated   with  a  non-arm's   length
         transaction.


PART 6            ISSUANCE OF TRADING SHARES

6.1      Minimum  price and  maximum  aggregate  value - Although  in most cases
         trading  shares will be paid for in cash,  trading shares may be issued
         for consideration other than cash. Subject to sections 6.2 through 6.6,
         an issuer may issue trading shares at a minimum price of $.25 per share
         up to an aggregate value equal to:

         (a)      the amount of cash paid in as share capital; plus


<PAGE>


                                                 -6-

     (b) the fair  market  value of any  non-cash  assets  contributed  as share
capital; plus

         (c)      the issuer's retained earnings, if any; less

         (d)      where the issuer has an accumulated  deficit,  that portion of
                  the  accumulated  deficit that does not directly relate to the
                  issuer's stated business purpose at the time of its IPO.

6.2      Interest in  operating  subsidiary  - Where an issuer has an  operating
         subsidiary, or is proposing to issue trading shares in order to acquire
         an operating subsidiary,  and the value of that operating subsidiary is
         not supported by a current  valuation  opinion,  the principles of this
         Part  will  apply  to the  operating  subsidiary  for  the  purpose  of
         determining  the  number of  trading  shares  that may be issued by the
         issuer in respect of its interest in the operating subsidiary.

6.3      Value assigned to non-cash  assets - For the purpose of section 6.l(b),
         where non- cash  assets are  contributed  to an issuer by a person in a
         non-arm's length  transaction,  the fair market value attributed to the
         non-cash assets must be either

         (a)      supported by a valuation opinion, or

         (b)      limited to an amount equal to the out of pocket costs incurred
                  by the person in respect of the non-cash assets, determined in
                  accordance with section 5.3.

6.4      Purchase of interest in mineral  property - A natural  resource  issuer
         that, in an arm's length transaction, agrees to issue trading shares as
         consideration  for  a  mineral  property  or  an  option  on a  mineral
         property,  the value of which is not  supported by a current  valuation
         opinion, will generally be required to meet the following conditions:

         (a)      The  consideration  must  consist  of not  more  than  200,000
                  trading  shares  issuable in no fewer than four  blocks,  each
                  block consisting of not more than 50,000 trading shares.

         (b)      One block of shares may be issued prior to the date the issuer
                  s shares are  listed,  posted  and  called for  trading on the
                  Exchange.

         (c)      The  remaining  blocks of shares may be issued in stages  upon
                  the  filing  with  the   Exchange  of   engineering   reports,
                  acceptable to the Exchange,  recommending  further work on the
                  mineral property.



<PAGE>


                                                 -7-

6.5      Accumulated  deficit related to issuer's stated business  purpose - For
         the purpose of section 6.1(d), that portion of the issuer's accumulated
         deficit that directly  relates to the issuer's stated business  purpose
         at the time of its IPO includes

         (a)      for a natural resource issuer, expenses incurred

     (i) in exploring  and  developing  the resource  properties  upon which the
issuer's IPO proceeds are to be spent, and

                  (ii)    in exploring and developing other resource properties,
                          provided  that  these   expenses  do  not  exceed  the
                          expenses referred to in paragraph (i), and

     (b) for an industrial  issuer,  expenses incurred in respect of the project
or business to be financed by the issuer's IPO proceeds.

6.6      Exclusion of amounts by Superintendent-  The Superintendent may require
         that an amount be  excluded  from the  determination  of the  number of
         trading   shares  that  may  be  issued  under  this  Part  if  in  the
         circumstances  he  considers  that to include any such amount  would be
         inappropriate or unconscionable.  For example, the Superintendent would
         question the  appropriateness  of issuing  trading  shares for non-cash
         assets unrelated to the issuer's stated business purpose at the time of
         its IPO or for excessive administrative expenses .


PART 7            ISSUANCE OF PERFORMANCE SHARES

     7.1 Issuance to principals -  Performance  shares may be issued for cash to
the ---------------------- principals of an issuer

     (a) to provide the  principals  with a measure of control to facilitate the
development of the issuer in an orderly fashion,

     (b) to provide an incentive for the  principals  to diligently  support the
affairs of the issuer, and

     (c) to provide an incentive for the  principals  to  contribute  management
services or fundamental assets to the issuer.

7.2      Natural  resource  issuer - A natural  resource issuer may issue to its
         principals up to a total of 750,000  performance  shares,  at a minimum
         price of $.01 per share.



<PAGE>


                                                 -8-

7.3      Industrial issuer - An industrial  issuer may issue performance  shares
         to its principals,  at a minimum price of $.01 per share, provided that
         the resulting performance share percentage does not exceed 65%.

7.4      Escrow requirement - Performance shares are required to be escrowed. It
         should be noted that the higher the performance share  percentage,  the
         more difficult it becomes to obtain a release of the performance shares
         from  escrow.  The table  attached as  Appendix B to this local  policy
         statement  provides  some  examples  of the  operation  of the  release
         provisions  for  industrial  issuers  set out in  Part 9 of this  local
         policy statement .

7.5      Escrow  agreement  - Prior to or at the time of  acquiring  performance
         shares,  principals must execute an escrow agreement.  The certificates
         representing the performance  shares must be registered in the names of
         the  holders  of the  shares and  deposited  with the  escrow  agent in
         accordance with the terms of the escrow agreement. Only a trust company
         carrying on business in British  Columbia or a company  approved by the
         Superintendent may act as an escrow agent.

7.6      Limitations  on rights of holders  of  performance  shares-  The escrow
         agreement  provides  that the holders of  performance  shares waive any
         rights attached to those shares to receive  dividends or to participate
         in  the  assets  and  property  of  the  issuer  on  a  winding  up  or
         dissolution.  Holders of performance shares do retain the right to vote
         those shares, except on a resolution respecting their cancellation.

7.7      Rights on ceasing to be a  principal  - The escrow  agreement  requires
         that  the  parties  to it set  out  in  the  agreement  any  rights  or
         obligations  of a person who ceases to be a principal,  dies or becomes
         bankrupt  to  retain,   transfer  or   surrender   to  the  issuer  for
         cancellation any performance shares then held by the person.

7.8      Undertaking  of holding  company - Where  performance  shares are to be
         issued to a non-reporting  or closely held company,  wherever  situate,
         rather than to an individual, the company must, prior to or at the time
         of acquiring the performance shares, execute an undertaking in the form
         attached  as  Appendix  C  to  this  local  policy  statement.  In  the
         undertaking, the company agrees not to effect or permit any transfer of
         ownership of shares of the company nor to issue  further  shares of any
         class in the company without the consent of the  Superintendent  or the
         Exchange,  so long as the company continues to hold any of the issuer's
         performance  shares.  An application  for consent should be made in the
         same manner as an application  for consent to a transfer of performance
         shares pursuant to Part 8 of this local policy statement.


PART 8            TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW
                  --------------------------------------------



<PAGE>


                                                 -9-

8.1      Permitted  transferees - Performance shares may be transferred only to
         ----------------------

         (a)      other principals, including incoming principals,

         (b)      the issuer of the performance shares, or

     (c) an offeror under a formal bid (as defined in section 74 of the Act).

8.2      Request  for  consent to  transfer - In order to  transfer  performance
         shares,   the  holder  of  performance   shares  must  deliver  to  the
         Superintendent  or the  Exchange a written  request  for consent to the
         transfer. The request for consent to the transfer must include:

     (a) the name of the  escrow  agent  and the  reference  date of the  escrow
agreement,

         (b)      an explanation of the reason for the transfer,

     (c) a  description  of the  consideration  to be paid  for the  performance
shares,

     (d) where the  performance  shares are to be  transferred  to a  principal,
confirmation that the transferee is a principal or will become a principal on or
before the date of the proposed transfer, and

     (e) a description of the exemptions in the Act or the  Regulation,  if any,
being relied upon to make the transfer

8.3      Documents  to be filed  with  request  for  consent  to  transfer - The
         request for consent to the transfer must be accompanied by:

         (a)      a copy of the transfer agreement,

     (b) an  acknowledgment  and  agreement to be bound in the form  attached as
Schedule A to the escrow agreement, executed by the transferee,

         (c)      where  the  performance  shares  are  to be  transferred  to a
                  non-reporting  or  closely  held  company,  wherever  situate,
                  rather than to an individual, an undertaking by the company in
                  the  form   attached  as  Appendix  C  to  this  local  policy
                  statement,

     (d) where applicable, evidence that the proposed change of control has been
approved by the shareholders of the issuer, and



<PAGE>


                                                 -10-

         (e)      the appropriate application fee.

8.4      Letter of consent or  objection - Upon  receiving a request for consent
         to a transfer and accompanying  documents that comply with sections 8.2
         and 8.3, the Superintendent or the Exchange will issue to the applicant
         a letter that  either  consents  or objects to the  transfer.  A letter
         consenting to the transfer will be copied to the escrow agent.

8.5      No transfer during period between  prospectus receipt and listing - The
         Superintendent  will  generally  refuse to  consent  to a  transfer  of
         performance  shares  during the period  between the date of the receipt
         for the  issuer's  prospectus  for its IPO and the  date  the  issuer's
         securities are listed, posted and called for trading on the Exchange.


PART 9            RELEASE OF PERFORMANCE SHARES FROM ESCROW
                  -----------------------------------------

9.1      Release of shares of natural  resource  issuer - Holders of performance
         shares of a natural  resource  issuer will be entitled to the  pro-rata
         release of those performance shares on the basis of 15% of the original
         number of performance shares for every $100,000 expended on exploration
         and development of a resource property by

         (a)      the issuer, or

         (b)      a person other than the issuer in order to earn an interest in
                  the resource property,  but only in respect of that proportion
                  of  the   expenditure   equal   to  the   issuer's   remaining
                  proportionate  interest  in the  resource  property  after the
                  person's interest has been earned,

         provided that

     (c) no more than 50% of the original  number of  performance  shares may be
released in any 12 month period, and

     (d) no expenditure on exploration and development made prior to the date of
the receipt for the issuer's prospectus for its IPO may be included.

9.2      Reduction in release for natural  resource issuer Where  administrative
         expenses  exceed 33% of total  expenditures  during the period on which
         the calculation in section 9.1 is based,

     (a) the pro-rata release factor of 15% will be reduced to 7.5%, and



<PAGE>


                                                 -11-

         (b)      the percentage of the original  number of  performance  shares
                  available  for release in any 12 month  period will be reduced
                  to 25%.

9.3      Release of shares of industrial issuer - Holders of performance  shares
         of an industrial  issuer will be entitled to the pro-rata  release of a
         number of  performance  shares equal to the amount of  cumulative  cash
         flow, not previously  applied towards release,  divided by the earn-out
         price.

9.4      Adjustment of release  calculation - On a  consolidation,  subdivision,
         amalgamation or  reclassification  of the issuer's shares,  the release
         calculation  must be adjusted so that the proportion of the outstanding
         performance   shares   available  for  release  is  unaffected  by  the
         consolidation, subdivision, amalgamation or reclassification .

     9.5 Requirements  for release - No performance  shares may be released from
escrow  ------------------------  unless,  at the  time of the  application  for
release,

         (a)      the issuer is meeting its current  obligations in the ordinary
                  course of business as they generally  become due, as evidenced
                  by a statutory declaration of the president or chief financial
                  officer of the issuer,

         (b)      the issuer's shares are listed,  posted and called for trading
                  on  all  stock  exchanges  having  jurisdiction  over  it,  as
                  evidenced by letters from those stock exchanges,

     (c) the  issuer  is not in  default  of any  requirement  of the Act or the
Regulation, as evidenced by a certificate issued by the Commission, and

         (d)      the issuer is in good  standing  with respect to its filing of
                  returns with the Registrar of Companies  under the Company Act
                  or, if the issuer is incorporated, organized or continued in a
                  jurisdiction  other than British Columbia,  with the registrar
                  of companies or similar  authority  in that  jurisdiction,  as
                  evidenced  by  a  certificate   issued  by  the  Registrar  of
                  Companies or by that similar authority.

9.6      Annual  release  based  on  annual  audited   financial   statements  -
         Performance  shares  may be  released  only  once  during  an  issuer's
         financial year. The release  calculation  must be based on the issuer's
         annual audited financial  statements for the year or years during which
         the release  requirements were met in respect of the performance shares
         to be released.

9.7      Request  for  consent  to  release - In order to  obtain a  release  of
         performance  shares,  the issuer must deliver to the  Superintendent or
         the Exchange a written request for


<PAGE>


                                                 -12-

     consent to the release. The request for consent to the release must include
the name of the escrow agent and the reference date of the escrow agreement.

9.8      Documents to be filed with request for consent to release - The request
         for consent to the release must be accompanied by:

     (a) written evidence of compliance with the requirements of section 9.5,

         (b)      annual  audited  financial  statements  of the  issuer for the
                  financial year or years during which the release  requirements
                  were met in respect of the performance shares to be released,

     (c) where  expenditures on a resource  property were made by a person other
than the issuer, an audited statement of costs,

     (d) a  calculation,  prepared  by the  issuer's  auditor,  of the number of
performance shares to be released, and

         (e)      the appropriate application fee.

9.9      Letter of consent or  objection - Upon  receiving a request for consent
         to a release and  accompanying  documents that comply with sections 9.7
         and 9.8, the  Superintendent or the Exchange will issue to the issuer a
         letter that  either  consents or.  objects to the  release.  A letter
         consenting to the release will be copied to the escrow agent.

9.10     Request  by holder of  performance  shares  for  consent to release - A
         holder of  performance  shares may apply to the  Superintendent  or the
         Exchange for release  where the issuer is unable or unwilling to do so.
         If the president or chief  financial  officer of the issuer  refuses to
         provide the statutory  declaration  referred to in section 9.5(a),  the
         Superintendent or the Exchange may waive that requirement.


PART 10           SURRENDER OF PERFORMANCE SHARES FOR CANCELLATION
                  ------------------------------------------------

10.1     Performance shares must be surrendered to the issuer for cancellation

     (a) at the time of a major  reorganization  of the issuer, if required as a
condition  of the consent to the  reorganization  by the  Superintendent  or the
Exchange,

     (b) where the  issuer's  shares  have been  subject to a cease  trade order
issued under the Act for a period of 2 consecutive years, or


<PAGE>


                                                 -13-

         (c)      10  years  from  the  later  of  the  date  of  issue  of  the
                  performance  shares  and  the  date  of the  receipt  for  the
                  issuer's prospectus for its IPO.


PART 11           OTHER CONSIDERATION

11.1  Natural  resource  issuer - Where a natural  resource  issuer  proposes to
acquire from a person a resource  property or an option on a resource  property,
the  value of which is not  supported  by a  valuation  opinion,  the  following
principles apply:

     (a) In an arm's  length  transaction,  the issuer  may pay the person  cash
consideration.

         (b)      In an arm's  length  transaction,  the issuer may agree to pay
                  the  person  additional  consideration  at  such  time  as the
                  resource  property  commences  commercial   production.   Such
                  additional  consideration may, depending on the circumstances,
                  consist of cash  consideration,  reasonable  payments from net
                  profits, securities, or any combination of these.

         (c)      In a  non-arm's  length  transaction,  the  issuer may pay the
                  person  cash  consideration  up to the  amount  of the  out of
                  pocket costs incurred by the person in respect of the resource
                  property, determined in accordance with section 5.3.

     (d) In a  non-arms  length  transaction,  the  issuer  may agree to pay the
person additional  consideration at such time as the resource property commences
commercial  production,  where the person has carried out extensive  exploration
with  results  that  indicate  that  the  resource   property  appears  to  have
substantial  merit.  The  extent  of the  person's  effort,  skill  and  risk in
developing   the   resource   property   will  be  taken  into  account  by  the
Superintendent  in determining  whether  additional  consideration is justified.
Such additional  consideration may,  depending on the circumstances,  consist of
cash  consideration,  reasonable payments from net profits,  securities,  or any
combination  of these.  A 15% net profits  interest would normally be considered
reasonable.

11.2     Industrial issuer - Where an industrial issuer proposes to acquire from
         a person  non-cash  assets,  the value of which are not  supported by a
         valuation opinion, the following principles apply:

     (a) In an arm's  length  transaction,  the issuer  may pay the person  cash
consideration, a royalty or a combination of these.



<PAGE>


                                                 -14-

         (b)      In a  non-arm's  length  transaction,  the  issuer may pay the
                  person  cash  consideration  up to the  amount  of the  out of
                  pocket costs incurred by the person in respect of the non-cash
                  assets, determined in accordance with section 5.3.

DATED at Vancouver, British Columbia, this 21st day of December 1989.


                                                /s/Douglas M. Hyndman
                                                Douglas M. Hyndman
                                                Chairman



<PAGE>




                               APPENDIX A TO LOCAL POLICY STATEMENT 3-07


                                           ESCROW AGREEMENT


         THIS AGREEMENT is dated for reference

and made

AMONG:


         (the "Escrow Agent");


AND:


         (the "Issuer");


AND:     EACH SHAREHOLDER, as defined in this Agreement
         ----------------


(collectively, the "Parties").

     WHEREAS the  Shareholder  has acquired or is about to acquire shares of the
Issuer;

AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the
shares upon the acquisition of the shares by the Shareholder;

NOW THEREFORE in consideration of the covenants  contained in this agreement and
other good and valuable  consideration  (the receipt and sufficiency of which is
acknowledged), the Parties agree as follows:


1.       INTERPRETATION

In this agreement:

     (a) "Acknowledgment"  means the acknowledgment and agreement to be bound in
the form attached as Schedule A to this agreement;

(b)      "Act" means the Securities Act, S.B.C. 1985, c. 83;


<PAGE>


                                                 -2-

(c)      "Exchange" means the Vancouver Stock Exchange;

(d)      "IPO" means the initial public  offering of common shares of the Issuer
         under a  prospectus  which has been filed' with and for which a receipt
         has been obtained from, the Superintendent under section 42 of the Act;

(e)      "Local Policy  Statement 3-07" means the Local Policy Statement 3-07 in
         effect as of the date of  reference of this  agreement  and attached as
         Schedule B to this agreement;

     (f) "Shareholder"  means a holder of shares of the Issuer who executes this
agreement or an Acknowledgment;

(g)      "Shares" means the shares of the Shareholder described in Schedule C to
         this agreement, as amended from time to time in accordance with section
         9;

     (h)  "Superintendent"  means the  Superintendent of Brokers appointed under
the Act; and

(i)      "Superintendent  or the  Exchange"  means  the  Superintendent,  if the
         shares of the Issuer are not listed on the  Exchange,  or the Exchange,
         if the shares of the Issuer are listed on the Exchange.


2.       PLACEMENT OF SHARES IN ESCROW

The  Shareholder  places  the Shares in escrow  with the Escrow  Agent and shall
deliver the certificates  representing the Shares to the Escrow Agent as soon as
practicable.


3.       VOTING OF SHARES IN ESCROW.

Except as provided by section  4(a),  the  Shareholder  may  exercise all voting
rights attached to the Shares.


4.       WAIVER OF SHAREHOLDER'S RIGHTS

The Shareholder waives the rights attached to the Shares

(a)      to vote the Shares on a resolution to cancel any of the Shares,

(b)      to receive dividends, and


<PAGE>


                                                 -3-

     (c) to participate in the assets and property of the Issuer on a winding up
or dissolution of the Issuer.


5.       ABSTENTION FROM VOTING AS A DIRECTOR

A  Shareholder  that is or becomes a director of the Issuer  shall  abstain from
voting on a directors' resolution to cancel any of the Shares.


6.       TRANSFER WITHIN ESCROW

(1)      The  Shareholder  shall  not  transfer  any of  the  Shares  except  in
         accordance with Local Policy Statement 3-07 and with the consent of the
         Superintendent or the Exchange.

     (2) The  Escrow  Agent  shall not effect a  transfer  of the Shares  within
escrow unless the Escrow Agent has received

     (a) a copy of an  Acknowledgment  executed by the person to whom the Shares
are to be transferred, and

     (b) a letter from the  Superintendent  or the  Exchange  consenting  to the
transfer.

(3)      Upon the death or bankruptcy of a  Shareholder,  the Escrow Agent shall
         hold the  Shares  subject  to this  agreement  for the  person  that is
         legally entitled to become the registered owner of the Shares.

(4)      [Set out in this subsection the rights and obligations of a Shareholder
         who ceases to be a  principal,  as that term is defined in Local Policy
         Statement  3-07,  dies,  or becomes  bankrupt,  to retain,  transfer or
         surrender  to the  Issuer  for  cancellation  any  Shares  held  by the
         Shareholder.


7.       RELEASE FROM ESCROW

(1)      The  Shareholder  irrevocably  directs  the Escrow  Agent to retain the
         Shares until the Shares are released from escrow pursuant to subsection
         (2) or surrendered for cancellation pursuant to section 8.



<PAGE>


                                                 -4-

(2)      The Escrow  Agent shall not  release the Shares from escrow  unless the
         Escrow  Agent has  received  a letter  from the  Superintendent  or the
         Exchange consenting to the release.

(3)      The  approval of the  Superintendent  or the Exchange to a release from
         escrow of any of the Shares  shall  terminate  this  agreement  only in
         respect of the Shares so released.


8 .      SURRENDER FOR CANCELLATION

The Shareholder shall surrender the Shares for cancellation and the Escrow Agent
shall deliver the certificates representing the Shares to the Issuer

     (a) at the time of a major  reorganization  of the Issuer, if required as a
condition  of the consent to the  reorganization  by the  Superintendent  or the
Exchange,

     (b) where the  Issuer's  shares  have been  subject to a cease  trade order
issued under the Act for a period of 2 consecutive years,

     (c) 10 years from the later of the date of issue of the Shares and the date
of the receipt for the Issuer's prospectus on its IPO, or

         (d)      where required by section 6(4).


9.       AMENDMENT OF AGREEMENT

(1)      Subject to  subsection  (2),  this  agreement  may be amended only by a
         written agreement among the Parties and with the written consent of the
         Superintendent or the Exchange.

(2)      Schedule C to this agreement shall be amended upon

         (a)      a transfer of Shares pursuant to section 6,

         (b)      a release of Shares from escrow pursuant to section 7, or

         (c)      a surrender of Shares for cancellation pursuant to section 8,

     and the Escrow  Agent  shall note the  amendment  on the  Schedule C in its
possession.



<PAGE>


                                                 -5-

10.      QUALIFICATION OF ESCROW AGENT

The Issuer and the Shareholders,  jointly and severally,  release, indemnify and
save  harmless  the  Escrow  Agent  from all costs,  charges,  claims,  demands,
damages,  losses and expenses  resulting from the Escrow  Agent's  compliance in
good faith with this agreement.


11.      RESIGNATION OF ESCROW AGENT

(1)      If the Escrow  Agent wishes to resign as escrow agent in respect of the
         Shares, the Escrow Agent shall give notice to the Issuer.
(2)      If the  Issuer  wishes the  Escrow  Agent to resign as escrow  agent in
         respect  of the  Shares,  the Issuer  shall  give  notice to the Escrow
         Agent.

     (3) A notice  referred to in subsection  (1) or (2) shall be in writing and
delivered to

         (a)      the Issuer at __________________________, or

         (b)      the Escrow Agent at ________________________

         and the  notice  shall be deemed to have been  received  on the date of
         delivery.  The Issuer or the Escrow  Agent may change its  address  for
         notice by giving  notice to the  other  party in  accordance  with this
         subsection.

     (4) A copy of a notice referred to in subsection (1) or shall  concurrently
be delivered to the Superintendent or the Exchange.

(5)      The  resignation  of the Escrow Agent shall be effective and the Escrow
         Agent shall cease to be bound by this agreement on the date that is 180
         days after the date of receipt of the notice  referred to in subsection
         (1) or (2) or on such other date as the Escrow Agent and the Issuer may
         agree upon (the "resignation date").

(6)      The Issuer  shall,  before the  resignation  date and with the  written
         consent of the  Superintendent or the Exchange,  appoint another escrow
         agent and that  appointment  shall be  binding  on the  Issuer  and the
         Shareholders.


12.      FURTHER ASSURANCES

The  Parties  shall  execute  and  deliver  any  documents  and perform any acts
necessary to carry out the intent of this agreement.




<PAGE>


                                                 -6-

13.      TIME

Time is of the essence of this agreement.


14.      GOVERNING LAWS

This agreement shall be construed in accordance with and governed by the laws of
British Columbia and the laws of Canada applicable in British Columbia.


15.      COUNTERPARTS

This agreement may be executed in two or more counterparts,  each of which shall
be deemed to be an original and all of which shall constitute one agreement.


16.      LANGUAGE

Wherever a singular  expression is used in this  agreement,  that  expression is
deemed  to  include  the  plural or the body  corporate  where  required  by the
context.


17.      INUREMENT

This Agreement  inures to the benefit of and is binding on the Parties and their
heirs, executors, administrators, successors and permitted assigns.

The  Parties  have  executed  and  delivered  this  agreement  as of the date of
reference of this agreement.


The Corporate/Common Seal of [Escrow Agent] was affixed in the presence of:


________________________________                                          c/s
Authorized signatory

--------------------------------
Authorized signatory



<PAGE>


                                                 -7-

The Corporate/Common Seal of
[Issuer] was affixed
in the presence of:


____________________________________                                      c/s
Authorized signatory

------------------------------------
Authorized signatory



Where the Shareholder is an individual:


Signed, sealed and delivered by
[Shareholder] in the presence of:

----------------------------------
Name

----------------------------------                  --------------------------
Address                                             [Shareholder]

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


----------------------------------
Occupation


Where the Shareholder is a company:

The Corporate/Common Seal of
[Shareholder] was affixed
in the presence of:

__________________________________                                        c/s
Authorized signatory

----------------------------------
Authorized signatory


<PAGE>



                                    SCHEDULE A TO ESCROW AGREEMENT


                               ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND



To:      Superintendent of Brokers              or    Vancouver Stock Exchange
         #1100 - 865 Hornby Street                    609 Granville Street
         Vancouver, B.C.                              Vancouver, B.C.
         V6Z 2H4                                      V7Y lH1

         (if the shares are not                       (if the shares are listed
         listed on the Vancouver                      on the Vancouver Stock
         Stock Exchange)                              Exchange)


I acknowledge that

(a)      I have  entered into an agreement  with  _______________________  under
         which  __________  shares  of  ______________  (the  "Shares")  will be
         transferred to me upon receipt of regulatory approval, and

(b)      the Shares are held in escrow subject to an escrow  agreement dated for
         reference  _____________________,  19__ the "Escrow Agreement"), a copy
         of which is attached as Schedule A to this acknowledgment.

In consideration of $1.00 and other good and valuable consideration (the receipt
and  sufficiency of which is  acknowledged)  I agree,  effective upon receipt of
regulatory  approval of the  transfer  to me of the  Shares,  to be bound by the
Escrow Agreement in respect of the Shares as if I were an original  signatory to
the Escrow Agreement.


Dated at                     on                                     19     .
         -------------------    -----------------------------------   -----

Where the transferee is an individual:

Signed, sealed and delivered by
[transferee) in the presence of:

--------------------------------------
Name

--------------------------------------         ---------------------------
                                               [transferee]
Address


<PAGE>



--------------------------------------
Occupation


Where the transferee is a company:

The Corporate/Common Seal of
[transferee] was affixed
in the presence of:

______________________________________                                    c/s
Authorized signatory

--------------------------------------
Authorized signatory






<PAGE>



                                    SCHEDULE C TO ESCROW AGREEMENT






NAME OF SHAREHOLDER                             NUMBER OF SHARES HELD IN ESCROW




<PAGE>




                               APPENDIX B TO LOCAL POLICY STATEMENT 3-07


                          EXAMPLES OF EARN-OUT PRICES FOR PERFORMANCE SHARES
                                    ISSUED BY AN INDUSTRIAL ISSUER
<TABLE>
<CAPTION>

                                                EARN-OUT PRICE IN DOLLARS

<S>                                         <C>              <C>               <C>             <C>
PERFORMANCE SHARE
PERCENTAGE                                  5%                25%               45%              65%
EARN-OUT FACTOR                            .01x              .25x              .81x            1.69x
        I
        P   $0.40                          .004              .10               .324             .676
        0
            $0.60                          .006              .15               .486            1.014
        P
        R   $0.80                          .008              .20               .648            1.352
        I
        C   $1.00                          .010              .25               .810            1.690
        E
------------------------------------ ----------------- ------------------ ---------------  ----------------

</TABLE>

The earn-out price  represents the amount of cash flow that must be generated to
release  one  performance  share from  escrow.  The  following  definitions  are
applicable to the calculation.


Earn-out Price:

        The IPO price multiplied by the earn-out factor.

IPO Price:

        The price per share paid by the public on the issuer's IP0.

Earn-out Factor:

        The number  obtained  by  squaring  the  performance  share  percentage,
        expressed as a decimal, and multiplying the result by four.

Performance Share Percentage:

        The  percentage,  determined on the date the issuer's shares are listed,
        posted  and  called  for  trading  on  the  Exchange,  that  the  issued
        performance shares of the issuer are of the total issued and outstanding
        voting securities of the issuer.


<PAGE>




                               APPENDIX C TO LOCAL POLICY STATEMENT 3-07


                                UNDERTAKING REQUIRED FROM NON-REPORTING
                                        OR CLOSELY HELD COMPANY



To:     Superintendent of Brokers         or        Vancouver Stock Exchange
        #1100  - 865 Hornby Street                  609 Granville Street
        Vancouver, B.C.                             Vancouver, B.C.
        V6Z 2H4                                     V7Y 1H1

        (If the Issuer's shares                     (if the Issuer's shares
        are not listed on the                       are listed on the
        Vancouver Stock Exchange)                   Vancouver Stock Exchange)


     _________________ (the "Company") undertakes,  for the duration of the time
that  the   Company   is  the   registered   owner   of   escrowed   shares   of
----------------------------------------------- (the "Issuer"),

     (a) to effect or permit transfer of ownership in the shares of the Company,
or

(b)     to allot and issue further shares of any class of shares of the Company

only upon receipt of the written consent of the  Superintendent  of Brokers,  if
the  Issuer's  shares  are not  listed  on the  Vancouver  Stock  Exchange  (the
"Exchange"), or the Exchange, if the Issuer's shares are listed on the Exchange.

Dated at                     on                                      19     .
         -------------------    ------------------------------------   -----


The Corporate/Common Seal of
[Company] was affixed
in the presence of:

--------------------------------------
 Authorized signatory                                                    c/s

--------------------------------------
Authorized signatory




<PAGE>



                                    SCHEDULE C TO ESCROW AGREEMENT




NAME OF SHAREHOLDER                  NUMBER OF SHARES HELD IN ESCROW

Pardiak Management International Limited                              1,300,000




<PAGE>




                                       UNDERTAKING REQUIRED FROM
                                         NON-REPORTING COMPANY



TO: Executive Director                  or        Vancouver Stock Exchange
    B.C. Securities Commission                    609 Granville Street
    #1100 - 865 Hornby Street                     Vancouver, B.C.
    Vancouver, B.C.  V6Z 2H4                      V7Y 1H1

(if the shares are not listed on the           (if the shares are listed on the
VSE)                                            VSE)

The undersigned (the "Corporate Escrow  Shareholder")  represents that Edward C.
Pardiak is the sole holder of voting shares of the Corporate Escrow  Shareholder
and undertakes,  for the duration of time that the Corporate Escrow  Shareholder
is the  registered  owner of escrowed  shares of DSI DATOTECH  SYSTEMS INC. (the
"Issuer"),

     a. to effect or permit  transfer of ownership  in the voting  shares of the
Corporate Escrow Shareholder, or

     b. to allot and issue  farther  voting shares of any class of shares of the
Corporate Escrow Shareholder

only upon  receipt of the  written  consent  of the  Executive  Director  of the
British Columbia Securities Commission, if the Issuer's shares are not listed on
the Vancouver Stock Exchange (the "Exchange"),  or the Exchange, if the Issuer's
shares are listed on the Exchange.

Dated at Vancouver on the 7 day of December, 1997.


The  Corporate/Common  Seal of EDWARD C. PARDIAK HOLDINGS LIMITED was affixed in
the presence of:


/s/Edward C. Pardiak                                                      c/s
------------------------------------------------------
Authorized Signatory



Authorized Signatory