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                       MASTER PURCHASE AND SALE AGREEMENT

THIS Agreement dated as of the 1st day of June, 1999 is made

BETWEEN:

            DIGITAL DISPATCH SYSTEMS INC., a company incorporated under the laws
            of the Province of British Columbia

            ("DDS")

                                                               OF THE FIRST PART

AND:

            MDSI MOBILE DATA SOLUTIONS INC., a corporation incorporated under
            the federal laws of Canada

            ("MDSI")

                                                              OF THE SECOND PART

WHEREAS:

A.    MDSI is the registered and beneficial owner of all the issued and
      outstanding shares in the capital of MDSI Mobile Data Solutions (UK) Ltd.,
      a company duly incorporated under the laws of the United Kingdom
      ("MDSI-UK"), being 558,450 ordinary shares with a par value of UK(pound)1
      each (the "MDSI-UK Shares");

B.    MDSI is the registered and beneficial owner of all of the issued and
      outstanding shares in the capital of MDSI Singapore (Services) Pte Ltd. a
      company duly incorporated under the laws of the country of Singapore
      ("MDSI-Singapore"), being 100,000 ordinary shares with a nominal or par
      value of $1 (Singapore dollars) each (the "MDSI-Singapore Shares"); and

C.    DDS and MDSI wish to enter into a transaction (the "Transaction") whereby
      DDS shall acquire from MDSI, as a going concern, the business currently
      carried out by MDSI's Transportation Business Unit ("MDSI-TBU") and all of
      the undertaking and assets thereof, consisting of 100% of the MDSI-UK
      Shares, 100% of the MDSI-Singapore Shares, 100% of the MDSI-TBU IP Assets
      (as hereinafter defined), certain customer contracts, and certain other
      assets currently held by MDSI, all as set out in Schedule "A" hereto
      (collectively, the "MDSI-TBU Assets"), but excluding the assets set out in
      Schedule "A1" hereto.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the representations, covenants, agreements and warranties hereinafter set forth
the parties hereto covenant and agree as follows:

1. INTERPRETATION

1.1   Definitions. In this Agreement the following words and phrases shall have
      the meanings set forth after each unless the context otherwise requires:

      (a)   "Closing Date" or "date of Closing": means June 15, 1999, or as
            otherwise mutually agreed to by the parties;

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      (a2)  "Closing" means completion of the Transaction upon the fulfillment
            or waiver of all conditions set out in sections 10, 11 and 12 and
            the delivery of all documents set out in section 13;

      (b)   "DDS Financial Statements": means the audited consolidated annual
            financial statements of DDS for the year ended December 31, 1998 and
            the unaudited interim financial statements of DDS for the
            three-month period ended March 31, 1999;

      (b2)  "DDS Shares": means common shares without par value in the capital
            of DDS;

      (b3)  "DDS-US": means Digital Dispatch, Ltd., a wholly-owned subsidiary of
            DDS incorporated in the State of Washington;

      (b4)  "DDS Valuation Price": means, on any particular date, an amount per
            DDS Share which is equal to 2 times the annual revenue of DDS for
            the immediately preceding 4 quarters calculated in accordance with
            Canadian GAAP, divided by the number of DDS Shares issued and
            outstanding on such date;

      (b5)  "Effective Date" means June 1, 1999

      (c1)  "MDSI-TBU IP Assets": means the intellectual property assets, rights
            or interests ("IP Assets") of the MDSI-TBU or used by it in or in
            connection with its business, including copyrights, patents,
            trademarks, trade names, service marks, trade secrets, and rights
            and licenses pertaining thereto, that have been created by or owned
            by or licensed to MDSI-TBU, as specifically set out in Schedule "G".
            For greater certainty, the MDSI-TBU IP Assets shall include all IP
            Assets owned or held by MDSI Software SRL which are licensed to or
            used in or in connection with MDSI-TBU (including all IP Assets
            acquired from MDSI-UK on December 31, 1997), but shall not include
            any intellectual property assets relating to MDSI's Telco and Cable,
            Utilities, Public Safety, Insurance or Field Service products
            whatsoever, the Advantex Enterprise Gateway or any of the
            application software derived from Advantex Courier with respect to
            the Airborne Freight Corporation project;

      (c2)  "DDS IP Assets" means the intellectual property assets, rights or
            interests of DDS. A summary of the DDS IP Assets, as described on
            the DDS web page as of May 28, 1999 has been attached as Schedule G;

      (d)   "MDSI-Singapore Financial Statements": means the audited annual
            financial statements of MDSI-Singapore for the year ended December
            31, 1998, and the unaudited interim financial statements for
            MDSI-Singapore for the three month period ended March 31, 1999;

      (e)   "MDSI-UK Financial Statements": means the audited annual financial
            statements of MDSI-UK for the year ended December 31, 1998, and the
            unaudited interim financial statements for MDSI UK for the
            three-month period ended March 31, 1999;

      (f)   "MDSI Closing Financial Statements": means separate financial
            statements for each of MDSI-UK and MDSI-Singapore for the five month
            period ending May 31, 1999, in each case accompanied by a review
            engagement report prepared by a nationally recognized firm of
            chartered accountants and otherwise prepared and delivered in
            accordance with section 5.5 of this Agreement; and

      (g)   "Person": means any individual, firm, corporation, partnership,
            trust, joint venture, governmental authority or other entity, and
            shall include any successor (by merger or otherwise) of such entity.

1.2   Schedules. The following are the Schedules attached hereto and
      incorporated by reference and deemed to be part hereof:

      Schedule A  - Purchased MDSI-TBU Assets (other than MDSI-UK Shares and the
                  MDSI-Singapore Shares)

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      Schedule A1 - Assets, Liabilities and Employees of MDSI UK unrelated to
                  MDSI-TBU
      Schedule B  - Outstanding Options to Acquire shares of DDS or DDS-US
      Schedule C  - Material Contracts of DDS and DDS-US
      Schedule C2 - Precedent DDS Customer Contract
      Schedule C3 - DDS and DDS-US Contractual Defaults or Breaches
      Schedule D  - Material Contracts and Employment Contracts of MDSI-TBU
                  (including all customer agreements)
      Schedule D1 - MDSI-UK Contractual Defaults or Breaches
      Schedule D2 - MDSI-Singapore Contractual Defaults or Breaches
      Schedule D3 - MDSI-BV Contractual Defaults or Breaches
      Schedule E  - Permitted Encumbrances of DDS and DDS-US
      Schedule F  - Permitted Encumbrances of MDSI-TBU and relating to MDSI-UK
                  and MDSI-Singapore Shares
      Schedule G  - IP Assets of DDS and DDS-US
      Schedule H  - IP Assets of MDSI-TBU
      Schedule I  - Shareholders of DDS and DDS-US and their Shareholdings
      Schedule J  - Consolidated Pro Forma Balance Sheet of MDSI-TBU
      Schedule K  - Bank Accounts/Safe Deposit Boxes/Powers of Attorney of
                  MDSI-TBU
      Schedule L  - Accidents
      Schedule M  - Employees of MDSI-TBU

2. PURCHASE AND SALE

2.1   Transfer / Exchange of Assets. Upon and subject to the terms and
      conditions set forth in this Agreement, at Closing (but then effective as
      of the Effective Date), MDSI will transfer or cause to be transferred to
      DDS (and/or DDS affiliates) 100% of the MDSI-TBU Assets (free and clear of
      all liens, pledges, charges, encumbrances, claims, security interests and
      liabilities other than those disclosed to DDS hereunder), in exchange for
      the issuance from treasury by DDS to MDSI of 11% of the issued and
      outstanding shares of DDS calculated on the Effective Date, which equals
      853,005 DDS Shares (the "Purchased DDS Shares") (free and clear of all
      liens, pledges, charges, encumbrances, claims, security interests and
      liabilities other than those disclosed to MDSI) , and an unsecured
      promissory note (the "Promissory Note") granted by DDS in favour of MDSI
      in the principal amount of $500,000, with interest to be accrued and
      calculated commencing on the Closing Date at a fixed interest rate of 8%
      per annum, with repayment in full of accrued interest and principal on
      January 1, 2001. MDSI agrees to assist DDS in effecting the transfer of
      the MDSI-TBU Assets, including the MDSI-TBU IP Assets held by MDSI
      Software SRL (including the royalty obligation of MDSI Software SRL to
      MDSI-UK), to DDS in a tax-effective manner. MDSI also agrees that all
      MDSI-TBU contracts held by MDSI Software B.V. shall be transferred to
      MDSI-UK.

      However, prior to the Closing:

      (a)   Assets, Liabilities and Employees Unrelated to MDSI-TBU: All assets
            and liabilities of MDSI-UK which are unrelated to the MDSI-TBU (as
            set out on Schedule "A1") shall, at MDSI's direction and with
            disclosure to DDS, be transferred to and assumed by MDSI or other
            MDSI affiliates with such capital assets and liabilities to be
            transferred at net book value and all inventory to be transferred at
            the lower of cost and net realizable value, and all employees of
            MDSI-UK who are unrelated to MDSI-TBU (as listed on Schedule "A1",
            including Roy Manktelow, Barry Edgar, Paul Wilkin, Jouni Rouppa and
            Ian Matthews) and all employment obligations, fees, commissions and
            claims whatsoever related thereto shall be transferred to and
            assumed by MDSI or other MDSI affiliates on Closing but effective as
            of the Effective Date. In connection with this transfer and
            assumption, DDS agrees that for a period of up to 90 days following
            Closing, DDS shall provide to MDSI, at a cost of (pound)1,500 per
            month, the office space currently used and occupied by Barry Edgar,
            Roy Manktelow and Paul Wilkin for the continued use of and
            occupation by them, as well as providing telephone answering
            services, access to coffee, kitchen and

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            washroom facilities and access to a boardroom based on availability.
            DDS will charge telephone expenses attributable to Messrs. Edgar,
            Manktelow and Wilkin during this period to MDSI based on the records
            generated by MDSI-UK's telephone billing system. On or before the
            expiry of this 90-day period, Messrs. Edgar and Wilkin will vacate
            the premises.

      (b)   MDSI-TBU Restructuring: MDSI shall restructure the MDSI-TBU (with
            full disclosure to DDS) such that on Closing (but then effective as
            of the Effective Date) MDSI-UK and MDSI-Singapore shall have a net
            book value of $1,000,000 calculated in accordance with Canadian GAAP
            using as a currency exchange rate the noon buying rate as recorded
            by the United States Federal Reserve Board on the Effective Date,
            with the Consolidated Proforma Balance Sheet of MDSI-TBU as at the
            Effective Date (consolidating the balance sheets of MDSI-UK and
            MDSI-Singapore only), a draft of which is attached as Schedule "J"
            hereto (the "MDSI-TBU Proforma"), which shall be superseded by a
            final version delivered on the Closing Date and upon which such
            calculation is based to include the following items as liabilities:
            (i) the provision for redundancy costs (i.e., staff reductions,
            lease redundancies, etc.) shall be $1,249,197; (ii) the provision
            for RTL shall be UK(pound)150,000; (iii) the DHL warranty reserve
            shall be $4,308; (iv) the provision for accrued vacation pay and
            time off in lieu of overtime shall be UK(pound)40,000; (v) the
            Copenhagen Taxi warranty reserve for 14 months shall be UK pounds
            193,605; and to exclude as assets the $512,000 previously recognized
            as a receivable regarding DHL Asia Pacific, as well as any other
            accounts receivable and unbilled receivables which are not bona fide
            and collectible in the ordinary course of business; Items (i), (ii),
            (iii), (iv) and (v) above shall not be subject to any post-closing
            adjustments. The MDSI-TBU Proforma shall also exclude any of the
            assets, liabilities, employment obligations, fees, commissions or
            claims referred to in and to be transferred pursuant to section 2.1
            (a) above. The net book value shall be comprised of assets less
            liabilities, with the provision for liabilities as detailed in
            Schedule "J". The value of the capital assets on the MDSI-TBU
            Proforma for the capital assets purchased per Schedule "A" shall be
            equal to the net book value reflected in the MDSI-UK Financial
            Statements, with depreciation applied at normal rates to and
            including May 31, 1999 and after provision for transfer out of such
            capital assets as provided for in section 2.1 (a) above. Inventory
            is to be valued at the lower of costs or net realizable value. At
            the date of Closing, all applicable assets and inventory are to be
            in MDSI-UK's possession unless otherwise agreed in writing with DDS.
            Any receivables at Closing not required by MDSI to make the
            $1,000,000 net book value (the "Excess Receivables") will be
            collected by DDS and remitted to MDSI (with the oldest receivable
            being collected in priority to the newer receivables).

      Within 30 days after the date of delivery by MDSI to DDS of the MDSI
      Closing Financial Statements in accordance with section 5.5 hereof, MDSI
      and DDS shall meet in order to make and settle post-Closing adjustments
      with respect to the MDSI-TBU Proforma, including, without limitation,
      matters relating to unbilled receivables, customer deposits and deferred
      revenue. DDS shall prepare and present to MDSI at least 5 business days
      prior to such meeting, a Statement of Adjustments, which shall be based on
      said MDSI Closing Financial Statements and the currency exchange rate
      referred to above, and a certified cheque for the net amount of
      post-Closing adjustments owed by either MDSI or DDS to the other, as the
      case may be, shall be delivered at the meeting by the applicable party to
      the other party. If the post-Closing adjustments are not agreed on and so
      paid for within such 30 day period, the matter shall be resolved by an
      independent arbitrator in accordance with and subject to the arbitration
      provisions set out in section 9.6 hereof, with the net amount of the
      adjustments determined owing by the arbitrator to bear interest at the
      rate of 10% per annum, calculated from the Closing Date to the date
      payment in full is made. The amount so determined, plus interest, together
      with any costs awarded by the arbitrator, shall be final and binding on
      the parties and shall be paid by the applicable party to the other
      forthwith following delivery of the arbitrator's decision. No amount so
      payable shall be subject to any of the limitations set out at section 9.2
      hereof .

2.2   Anti-Dilution Protection In Connection With Stock Option Exercises. With
      respect to the possible post-Closing dilution of MDSI's shareholding in
      DDS as a result of the exercise by others of existing or future options
      ("Third Party Options") to purchase DDS Shares, MDSI shall have the right,
      while DDS is a private company, and within 30 days after each such
      exercise of Third Party Options, to purchase from treasury at a price of
      $6.50 per share,

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      further DDS Shares sufficient to maintain MDSI's then current
      proportionate shareholding in DDS. This purchase price of $6.50 per
      further DDS Share shall survive for a period of 2 years following the date
      of Closing and thereafter shall be such price per further DDS Share as is
      equal to the greater of: (a) $6.50; and (b) the exercise price of such
      Third Party Options. All waivers of pre-emptive rights required from other
      DDS shareholders to enable MDSI to exercise this right shall be obtained
      by DDS.

2.3   Permitted Dilution. With respect to the possible post-Closing dilution of
      MDSI's shareholding in DDS by the future acquisition from time to time by
      DDS of shares, assets or other property or services from an arm's length
      party or parties through the issuance of DDS Shares (at fair market value,
      determined by the directors of DDS acting reasonably), MDSI agrees to
      waive its preemptive rights to participate with respect to the allotment
      and issuance of any such DDS Shares.

2.4   Transfer of Ownership and Assumption of Liabilities. Except as
      specifically provided elsewhere in this Agreement: up to the time of
      Closing, MDSI shall own, have the full benefit of and be responsible for
      all obligations and liabilities attaching to the MDSI-TBU Assets, and from
      and after the time of Closing, DDS shall own, have the full benefit of and
      be responsible for all obligations and liabilities attaching to the
      MDSI-TBU Assets.

2.5   Investigation. Prior to Closing, DDS, MDSI and their respective
      representatives shall be permitted to make such investigations of the
      MDSI-TBU and the MDSI-TBU Assets (in the case of DDS) and of DDS (in the
      case of MDSI) and of their respective financial and legal condition as
      each of the parties deems necessary or desirable and without limiting the
      generality of the foregoing, shall, during normal business hours, be
      permitted full and complete access to the premises, books, minute books,
      contracts, leases, documents, data and other records of the MDSI-TBU (in
      the case of DDS) and of DDS (in the case of MDSI) (and each of the parties
      shall provide photocopies to the other of all such written information and
      documents as may be reasonably required by or on behalf of the other). Any
      such investigation shall not, however, affect or mitigate the
      representations, warranties and covenants of the parties (or those
      relating to any of their applicable affiliates) hereunder (or under any
      agreement or instrument delivered pursuant hereto or in connection
      herewith), which shall continue in full force and effect as provided
      hereunder.

2.6   Interim Period Management. During the period from the Effective Date to
      the Closing (the "Interim Period"), DDS shall manage the MDSI-TBU, subject
      to consultation with and approval by Chris Duncombe of MDSI on major
      decisions. Notwithstanding the foregoing, if the Transaction is not
      completed as contemplated herein, all risk associated with the Interim
      Period shall be borne by MDSI. If the Transaction is completed as
      contemplated herein, all risk associated with the Interim Period shall be
      borne by DDS.

3. REPRESENTATIONS AND WARRANTIES OF MDSI

3.1   In order to induce DDS to enter into and to consummate the Transaction as
      contemplated by this Agreement, MDSI represents and warrants, to DDS on
      and as at the date of this Agreement, as follows:

      (a)   No Liabilities: The MDSI-UK Financial Statements disclose or reflect
            all liabilities (whether accrued, absolute, contingent or otherwise)
            of MDSI-UK as required by UK generally accepted accounting
            principles and MDSI-UK has incurred no liabilities since March 31,
            1999 except in the ordinary course of business, and none of such
            subsequently incurred liabilities are or will be materially adverse
            to its business, assets, results of operations or financial
            condition;

      (a2)  No Liabilities: The MDSI-Singapore Financial Statements disclose or
            reflect all liabilities (whether accrued, absolute, contingent or
            otherwise) of MDSI-Singapore as required by Singapore generally
            accepted accounting principles and MDSI-Singapore has incurred no
            liabilities since March 31, 1999, except in the ordinary course of
            business, and none of such subsequently incurred liabilities are or
            will be materially adverse to its business, assets, results of
            operations or financial condition;

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      (b)   Organization and Good Standing of MDSI-UK: MDSI-UK is a company duly
            incorporated and organized and validly existing under the laws of
            the United Kingdom, and is in good standing under the laws of the
            United Kingdom;

      (b2)  Organization and Good Standing of MDSI-Singapore: MDSI-Singapore is
            a company duly incorporated and organized and validly existing under
            the laws of Singapore, and is in good standing under the laws of
            Singapore;

      (c)   Corporate Power and Authority: MDSI and each of its applicable
            affiliates which owns and which at Closing will exchange or assign,
            any of the MDSI-TBU Assets (the "MDSI Affiliates") is duly
            incorporated, organized, validly existing and is in good standing
            under the laws of its jurisdiction of incorporation, has full
            corporate power and authority to own its properties and assets and
            to carry on its business as presently carried on by it, to execute
            and deliver this Agreement and/or the other agreements to be
            executed and delivered at Closing (the "Other Agreements") and to
            perform its obligations hereunder and thereunder and to consummate
            the Transaction;

      (d)   Capitalization of MDSI-UK: The authorized capital of MDSI-UK
            consists of 1,000,000 ordinary shares with a par value of (pound)1
            each, of which 558,450 ordinary shares are duly and validly issued
            and outstanding as fully paid and non-assessable shares, and no
            other shares in the authorized capital of MDSI-UK are allotted or
            issued and outstanding;

      (d2)  Capitalization of MDSI-Singapore: The authorized capital of
            MDSI-Singapore is 100,000 Singapore dollars (S$), divided into
            100,000 ordinary shares with a nominal or par value of S$1 each, of
            which 100,000 ordinary shares of S$1 each have been issued at par
            for cash of S$100,000 in the aggregate (being the MDSI-Singapore
            Shares) are duly and validly issued and outstanding as fully paid
            and non-assessable shares, and no other shares in the authorized
            capital of MDSI-Singapore are allotted or issued and outstanding;

      (e)   MDSI-UK Shares: Except as set out in Schedule "F", MDSI is the
            registered and beneficial owner of the MDSI-UK Shares and of all
            right, title and interest therein, free and clear of all liens,
            pledges, charges, encumbrances, security interests, options, rights
            and claims of every nature and kind whatsoever and with all rights
            and benefits attaching thereto, and MDSI has due and sufficient
            right and authority to transfer the registered and beneficial title
            and ownership of the MDSI-UK Shares to DDS;

      (e2)  MDSI-Singapore Shares: Except as set out in Schedule "F", MDSI is
            the registered and beneficial owner of the MDSI-Singapore Shares and
            of all right, title and interest therein, free and clear of all
            liens, pledges, charges, encumbrances, security interests, options,
            rights and claims of every nature and kind whatsoever and with all
            rights and benefits attaching thereto, and MDSI has due and
            sufficient right and authority to transfer the registered and
            beneficial title and ownership of the MDSI-Singapore Shares to DDS;

      (e3)  IP Assets of MDSI Software SRL: MDSI Software SRL is the registered
            and beneficial owner of the MDSI-TBU IP Assets owned by MDSI
            Software SRL and of all right, title and interest therein, free and
            clear of all liens, pledges, charges, encumbrances, security
            interests, options, rights and claims of every nature and kind
            whatsoever and with all rights and benefits attaching thereto, and
            MDSI Software SRL has due and sufficient right and authority to
            transfer the registered and beneficial title and ownership of the
            MDSI TBU IP Assets owned by MDSI Software SRL to DDS, MDSI-UK or an
            affiliate of DDS;

      (e4)  MDSI Software B.V. Contracts: The MDSI-TBU customer contracts which
            have been entered into by MDSI Software B.V. ("MDSI BV") are all set
            out in Schedule " D" and MDSI BV owns and holds all beneficial
            right, title and interest therein, free and clear of all liens,
            pledges, charges, encumbrances, security interests, options, rights
            and claims of every nature and kind whatsoever and with all rights
            and benefits attaching thereto, and MDSI BV has due and sufficient
            right and authority to transfer said

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                                      -7-


            contracts and its right, title and interest therein to DDS, MDSI-UK
            or an affiliate of DDS; and, all said contracts have been duly
            executed by MDSI BV and are valid obligations of MDSI BV enforceable
            in accordance with their terms, subject to applicable bankruptcy,
            insolvency, reorganization, arrangement, moratorium and other laws
            of general application limiting the enforcement of creditors' rights
            generally and to general principles of equity, including the fact
            that equitable remedies, such as specific performance and injunctive
            relief, are subject to the discretion of the court and may not be
            awarded where damages are considered an adequate remedy;

      (f)   Due Authorization, Execution and Delivery: This Agreement has been
            duly authorized, executed and delivered on behalf of MDSI and is a
            valid obligation of MDSI enforceable in accordance with its terms,
            and on or prior to Closing each of the Other Agreements will be duly
            authorized, executed and delivered on behalf of MDSI and/or each of
            the applicable MDSI Affiliates and will be a valid obligation of
            MDSI and/or each of the applicable MDSI Affiliates, in each case
            enforceable in accordance with its terms, subject to applicable
            bankruptcy, insolvency, reorganization, arrangement, moratorium and
            other laws of general application limiting the enforcement of
            creditors' rights generally and to general principles of equity,
            including the fact that equitable remedies, such as specific
            performance and injunctive relief, are subject to the discretion of
            the court and may not be awarded where damages are considered an
            adequate remedy;

      (g)   Absence of Options: No Person other than DDS has any agreement or
            option, or any right capable of becoming an agreement for the
            purchase, subscription, allotment or issuance of any of the unissued
            shares in the capital or any other securities of MDSI-UK;

      (g2)  Absence of Options: No Person other than DDS has any agreement or
            option, or any right capable of becoming an agreement for the
            purchase, subscription, allotment or issuance of any of the unissued
            shares in the capital or any other securities of MDSI-Singapore;

      (g3)  Absence of Options: No Person other than DDS has any agreement or
            option, or any right capable of becoming an agreement for the
            purchase of any of the MDSI-TBU IP Assets owned by MDSI Software SRL
            or for the assignment to it of any of the MDSI-TBU contracts held by
            MDSI BV.

      (h)   Agreements Valid: The entering into, execution and delivery of this
            Agreement by MDSI as of the date hereof, and the entering into,
            execution and delivery of each of the Other Agreements by MDSI
            and/or each of the applicable MDSI Affiliates on or prior to the
            Closing Date, and the consummation of the transactions contemplated
            by this Agreement and each of the Other Agreements shall not result
            in the breach of any term or provisions of the Memorandum or
            Articles of MDSI and/or each of the applicable MDSI Affiliates or
            result in the breach of any term or provision of, or constitute a
            default under, any contract, agreement, indenture, mortgage, lien,
            pledge, charge, encumbrance, security interest, deed of trust or
            other instrument to which MDSI and/or each of the applicable MDSI
            Affiliates is a party, or result in the breach of any applicable
            laws or regulations, or result in the creation of any lien, pledge,
            charge, encumbrance, security interest, right or claim of any kind
            whatsoever in, or in respect of, any or all of MDSI's assets and/or
            each of the applicable MDSI Affiliates' assets;

      (i)   MDSI-UK Financial Statements: The MDSI-UK Financial Statements:

            (i)   were prepared in accordance with UK generally accepted
                  accounting principles applied on a basis consistent with that
                  of previous years; and

            (ii)  present fairly in all material respects the financial position
                  of MDSI-UK as at the date thereof and the results of MDSI-UK's
                  operations and the changes in MDSI-UK-s financial position for
                  the period then ended;

      (i2)  MDSI-Singapore Financial Statements: The MDSI-Singapore Financial
            Statements:

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                                      -8-


            (i)   were prepared in accordance with Singapore generally accepted
                  accounting principles applied on a basis consistent with that
                  of previous years; and

            (ii)  present fairly in all material respects the financial position
                  of MDSI-Singapore as at the date thereof and the results of
                  MDSI-Singapore's operations and the changes in
                  MDSI-Singapore's financial position for the period then ended;

      (j)   Absence of Changes: Since March 31, 1999:

            (i)   there has not been any change in the business of MDSI-UK or
                  any development or occurrence which has had, or to the best of
                  its knowledge, information and belief, may reasonably be
                  expected to have, a material adverse effect, financial or
                  otherwise, on its assets or business;

            (ii)  MDSI-UK has not waived or surrendered any right of material
                  value, issued any bonds, debentures, notes or other corporate
                  securities or granted any security interest in or otherwise
                  encumbered any of its assets;

            (iii) MDSI-UK has not sold or disposed of, or agreed to sell or
                  dispose of, any of its undertaking, property, assets or
                  rights, other than in the ordinary course of its business,
                  other than as required to restructure the MDSI-TBU as
                  contemplated in subsection 2.1(b);

            (iv)  MDSI-UK has not declared or made any payment of any dividend
                  or other distribution in respect of any of its shares or
                  purchased or redeemed any of its shares or split, consolidated
                  or reclassified any of its shares, other than as required to
                  restructure the MDSI-TBU as contemplated in subsection 2.1(b);

            (v)   to the best of its knowledge, information and belief, MDSI-UK
                  has conducted its business in its usual and normal manner;

            (vi)  no capital expenditures or commitments therefor have been made
                  by MDSI-UK save and except in the ordinary course of business;
                  and

            (vii) MDSI-UK has not increased the pay of, or paid or agreed to pay
                  any pension, bonus or share of profits or other similar
                  benefit to or for the benefit of, any employee, director or
                  officer of MDSI-UK and no payments, loans or advances of any
                  kind have been made or authorized to any employee, director or
                  officer of MDSI-UK save and except in the ordinary course of
                  business;

      (j2)  Absence of Changes: Since March 31, 1999:

            (i)   there has not been any change in the business of
                  MDSI-Singapore or any development or occurrence which has had,
                  or to the best of its knowledge, information and belief, may
                  reasonably be expected to have, a material adverse effect,
                  financial or otherwise, on its assets or business;

            (ii)  MDSI-Singapore has not waived or surrendered any right of
                  material value, issued any bonds, debentures, notes or other
                  corporate securities or granted any security interest in or
                  otherwise encumbered any of its assets;

            (iii) MDSI-Singapore has not sold or disposed of, or agreed to sell
                  or dispose of, any of its undertaking, property, assets or
                  rights, other than in the ordinary course of its business
                  other than as required to restructure the MDSI-TBU as
                  contemplated in subsection 2.1(b);

<PAGE>
                                      -9-


            (iv)  MDSI-Singapore has not declared or made any payment of any
                  dividend or other distribution in respect of any of its shares
                  or purchased or redeemed any of its shares or split,
                  consolidated or reclassified any of its shares, other than as
                  required to restructure the MDSI-TBU as contemplated in
                  subsection 2.1(b);

            (v)   to the best of its knowledge, information and belief,
                  MDSI-Singapore has conducted its business in its usual and
                  normal manner;

            (vi)  no capital expenditures or commitments therefor have been made
                  by MDSI-Singapore save and except in the ordinary course of
                  business; and

            (vii) MDSI-Singapore has not increased the pay of, or paid or agreed
                  to pay any pension, bonus or share of profits or other similar
                  benefit to or for the benefit of, any employee, director or
                  officer of MDSI-Singapore and no payments, loans or advances
                  of any kind have been made or authorized to any employee,
                  director or officer of MDSI-Singapore save and except in the
                  ordinary course of business;

      (k)   Conduct of Business: The minute books and corporate records of
            MDSI-UK, all of which have been provided to DDS, contain accurate
            and complete copies of its constating documents and any amendments
            thereto, and there are no outstanding applications or filings which
            would alter the constating documents or corporate status of MDSI-UK.
            MDSI-UK has properly recorded all material transactions and has
            filed the appropriate notices with respect to such transactions. The
            directors' and shareholders' resolutions and minutes contained in
            the corporate records of MDSI-UK are accurate and complete;

      (k2)  Conduct of Business: The minute books and corporate records of
            MDSI-Singapore, all of which have been provided to DDS, contain
            accurate and complete copies of its constating documents and any
            amendments thereto, and there are no outstanding applications or
            filings which would alter the constating documents or corporate
            status of MDSI-Singapore. MDSI-Singapore has properly recorded all
            material transactions and has filed the appropriate notices with
            respect to such transactions. The directors' and shareholders'
            resolutions and minutes contained in the corporate records of
            MDSI-Singapore are accurate and complete;

      (l)   Employment Contracts and Labour Matters: Except as set out in
            Schedule "D", to the best of its knowledge, information and belief,
            there are no written or verbal contracts or arrangements of
            employment or engagement or collective agreements entered into by
            MDSI-UK, MDSI or any of MDSI's other affiliates with or with respect
            to any employees, directors, officers, consultants or agents of
            MDSI-UK or MDSI-TBU for which DDS will be liable, directly or
            indirectly, through MDSI-UK after the Effective Date. All employees,
            directors, officers, consultants or agents of MDSI-UK or MDSI-TBU
            have been paid all wages, income, fees, commissions and any other
            sums due and owing to them by MDSI-UK, MDSI or any of MDSI's other
            affiliates as at the end of the most recent completed pay or
            compensation period. No union or association is certified as a
            bargaining agent for any employees of MDSI-UK, no negotiations by
            MDSI-UK are currently underway with any such union or association,
            no certification proceedings are currently in existence or
            threatened with respect to MDSI-UK and MDSI is not aware of any
            efforts which are currently being made or threatened by any union or
            association or any employees of MDSI-UK to unionize or to organize
            the employees of MDSI-UK in any manner whatsoever. MDSI is not aware
            of any labour conflict with any of MDSI-UK's employees which might
            reasonably be expected to have a materially adverse effect on the
            operations of MDSI-UK;

      (l2)  Employment Contracts and Labour Matters: Except as set out in
            Schedule "D", to the best of its knowledge, information and belief,
            there are no written or verbal contracts or arrangements of
            employment or engagement or collective agreements entered into by
            MDSI-Singapore, MDSI or any of MDSI's other affiliates with or with
            respect to any employees, directors, officers, consultants or agents
            of

<PAGE>
                                      -10-


            MDSI-Singapore or MDSI-TBUfor which DDS will be liable, directly or
            indirectly (through MDSI Singapore), after the Effective Date. All
            employees, directors, officers, consultants or agents of MDSI-UK or
            MDSI-TBU have been paid all wages, income, fees, commissions and any
            other sums due and owing to them by MDSI-Singapore, MDSI or any of
            MDSI's other affiliates as at the end of the most recent completed
            pay or compensation period. No union or association is certified as
            a bargaining agent for any employees of MDSI-Singapore, no
            negotiations by MDSI-Singapore are currently underway with any such
            union or association, no certification proceedings are currently in
            existence or threatened with respect to MDSI-Singapore and MDSI is
            not aware of any efforts which are currently being made or
            threatened by any union or association or any employees of
            MDSI-Singapore to unionize or to organize the employees of
            MDSI-Singapore in any manner whatsoever. MDSI is not aware of any
            labour conflict with any of MDSI-Singapore's employees which might
            reasonably be expected to have a materially adverse effect on the
            operations of MDSI-Singapore;

      (l3)  No Agents or Distributors: Other than as set out in Schedule "D",
            the MDSI-TBU does not have any agreements with agents or
            distributors;

      (m)   Employee Plans: Other than as set out in Schedule "D", there are no
            employee benefit plans maintained or contributed to by MDSI-UK;

      (m2)  Employee Plans: Other than as set out in Schedule "D", there are no
            employee benefit plans maintained or contributed to by
            MDSI-Singapore;

      (n)   Legal Position and Litigation: MDSI-UK has held and holds, free and
            clear of any claim, lien, encumbrance or security interest, all
            permits, licenses, registrations and authorizations needed to own
            and operate its assets and to carry on its business. MDSI-UK has not
            been and is not now in breach of any national, local or municipal
            statute, regulation or by-law, and all such licenses, registrations
            and authorizations are valid and subsisting and in good standing and
            none of the same contains any term, provision, condition or
            limitation which has or may have a material adverse effect on the
            business or operations of MDSI-UK or which may be adversely affected
            by the completion of the Transaction. There is not any suit, action,
            litigation, arbitration proceeding or governmental proceeding,
            including appeals and applications for review, in progress, pending
            or threatened against MDSI-UK which might materially adversely
            affect the assets or business of MDSI-UK; and there is not currently
            outstanding against MDSI-UK any judgment, decree, injunction, rule
            or order of any court, governmental department, commission, agency
            or arbitrator;

      (n2)  Legal Position and Litigation: MDSI-Singapore has held and holds
            free and clear of any claim, lien, encumbrance or security interest
            all permits, licenses, registrations and authorizations needed to
            own and operate its assets and to carry on its business.
            MDSI-Singapore has not been and is not now in breach of any
            national, local or municipal statute, regulation or by-law, and all
            such licenses, registrations and authorizations are valid and
            subsisting and in good standing and none of the same contains any
            term, provision, condition or limitation which has or may have a
            material adverse effect on the business or operations of
            MDSI-Singapore or which may be adversely affected by the completion
            of the Transaction. There is not any suit, action, litigation,
            arbitration proceeding or governmental proceeding, including appeals
            and applications for review, in progress, pending or threatened
            against MDSI-Singapore which might materially adversely affect the
            assets or business of MDSI-Singapore; and there is not currently
            outstanding against MDSI-Singapore any judgment, decree, injunction,
            rule or order of any court, governmental department, commission,
            agency or arbitrator;

      (o)   Withholding: All amounts to be withheld by MDSI-UK from its
            employees' salaries and to be paid to any governmental body pursuant
            to any statute have been withheld and paid in a timely manner;

      (o2)  Withholding: All amounts to be withheld by MDSI-Singapore from its
            employees' salaries and to be paid to any governmental body pursuant
            to any statute have been withheld and paid in a timely manner;

<PAGE>
                                      -11-


      (p)   Filings and Other Tax Matters: Except for an ongoing tax
            investigation of MDSI-UK by British tax authorities regarding its
            tax return for the 1996 taxation year and that, MDSI-UK has not
            filed a tax return for the 1997 and 1998 taxation years, and except
            as may be otherwise disclosed in the MDSI-UK Financial Statements,
            to the best of its knowledge, information and belief, MDSI-UK:

            (i)   has duly filed in a timely manner:

                  A.    all tax returns, election forms and information returns
                        and all such returns and forms have been completed
                        accurately and correctly in all aspects; and

                  B.    all reports and information required to be filed with
                        all applicable government authorities, agencies and
                        regulatory bodies;

            (ii)  has paid all taxes (including all assessments in respect of
                  its income, business, assets or property) and all interest and
                  penalties thereon with respect to MDSI-UK for all previous
                  years and all required installments due for the current fiscal
                  year. MDSI shall reimburse MDSI-UK or DDS for any costs
                  incurred related to the 1996 tax year investigation, and if
                  MDSI-UK becomes liable for any taxes due for the 1996, 1997,
                  1998 and 1999 (up to the Effective Date) taxation years, MDSI
                  shall reimburse MDSI UK for such taxes , provided that (a)
                  MDSI shall be notified immediately upon MDSI-UK becoming aware
                  of any inquiry from any tax authority with respect to the
                  prior years, (b) MDSI shall have the right to complete all
                  such filings, and to control the response to any inquiries
                  with respect to such filings; (c) MDSI shall have access to
                  the records of MDSI UK with respect to these years for such
                  purposes; and (d) MDSI shall have the right to apply all
                  losses available as of the Effective Date for the years 1996,
                  1997, 1998 and 1999 (up to the Effective Date) to such tax
                  liability;

            (iii) has retained in its possession copies of all tax returns as
                  far back as and including the tax return for the year 1991 and
                  all accounting books and records required to be maintained by
                  any government or government bodies, other than tax returns,
                  as far back as and including the books and records for the
                  1991 taxation year; and

            (iv)  is not aware of any contingent tax liabilities or grounds for
                  reassessment of tax;

            and there is no agreement, waiver or other arrangement providing for
            an extension of time with respect to the filing of any tax return,
            or payment of any tax, governmental charge or deficiency by MDSI-UK
            nor is there any action, suit, proceeding, investigation or claim
            now threatened or pending against MDSI-UK in respect of, or
            discussions underway with any governmental authority relating to,
            any such tax or governmental charge or deficiency. This section 3.1
            (p) and the representations contained in this section 3.1 (p) shall
            survive the Closing and continue in full force and effect
            indefinitely for the benefit of DDS;

      (p2)  Filings and Other Tax Matters: Except as may be otherwise disclosed
            in the MDSI-Singapore Financial Statements, to the best of its
            knowledge, information and belief, MDSI-Singapore:

            (i)   has duly filed in a timely manner:

                  A.    all tax returns, election forms and information returns
                        and all such returns and forms have been completed
                        accurately and correctly in all aspects; and

                  B.    all reports and information required to be filed with
                        all applicable government authorities, agencies and
                        regulatory bodies;

            (ii)  has paid all taxes (including all assessments in respect of
                  its income, business, assets or

<PAGE>
                                      -12-


                  property) and all interest and penalties thereon with respect
                  to MDSI-Singapore for all previous years and all required
                  installments due for the current fiscal year;

            (iii) has retained in its possession copies of all tax returns as
                  far back as and including the tax return for the year 1997 and
                  all accounting books and records required to be maintained by
                  any government or government bodies, other than tax returns,
                  as far back as and including the books and records for the
                  1997 taxation year; and

            (iv)  is not aware of any contingent tax liabilities or grounds for
                  reassessment of tax;

            and there is no agreement, waiver or other arrangement providing for
            an extension of time with respect to the filing of any tax return,
            or payment of any tax, governmental charge or deficiency by
            MDSI-Singapore nor is there any action, suit, proceeding,
            investigation or claim now threatened or pending against
            MDSI-Singapore in respect of, or discussions underway with any
            governmental authority relating to, any such tax or governmental
            charge or deficiency. This section 3.1 (p2) and the representations
            contained in this section 3.1 (p2) shall survive the Closing and
            continue in full force and effect indefinitely for the benefit of
            DDS;

      (q)   Directors and Officers: The directors and officers of MDSI-UK
            currently are:

            Name                                       Position

            Erik Dysthe                                Director
            Kenneth R. Miller                          Director
            Erik Dysthe                                Managing Director
            Verne Pecho                                Secretary

            all of whom were validly elected and appointed;

      (q2)  Directors and Officers: The directors and officers of MDSI-Singapore
            currently are:

            Name                                       Position

            Erik Dysthe                                Director
            Kenneth R. Miller                          Director
            Lee Kay Beng                               Company Secretary
            Kenneth R. Miller                          Officer
            Verne Pecho                                Officer

            all of whom were validly elected and appointed;

      (q3)  Material Contracts: Except as set out in Schedule "D", to the best
            of its knowledge, information and belief, none of MDSI, MDSI-UK,
            MDSI-Singapore or any other MDSI affiliate is a party to or bound by
            any material contract or commitment (which for these purposes means
            a contract or commitment in excess of or having a value in excess of
            $5,000), written or oral, pertaining to the MDSI-TBU or the MDSI-TBU
            Assets (collectively, the "MDSI-TBU Material Contracts"). MDSI has
            made available to DDS true and complete copies of all MDSI-TBU
            Material Contracts in effect on the date hereof;

      (r)   MDSI-UK Contracts: Except as set out in Schedule "D1", to the best
            of its knowledge, information and belief, MDSI-UK is not in default
            or breach of any contract or commitment to which it is a party and
            to its knowledge there exists no condition, event or act that, with
            the giving of notice or lapse of time, would constitute such a
            default or breach of any such contract or commitment or result in
            the acceleration of any obligation thereunder, and all such
            contracts and commitments are in good standing

<PAGE>
                                      -13-


            and in full force and effect without amendment thereto and MDSI-UK
            is entitled to all benefits thereunder;

      (r2)  MDSI-Singapore Contracts: Except as set out in Schedule "D2", to the
            best of its knowledge, information and belief, MDSI-Singapore is not
            in default or breach of any contract or commitment to which it is a
            party and to its knowledge there exists no condition, event or act
            that, with the giving of notice or lapse of time, would constitute
            such a default or breach of any such contract or commitment or
            result in the acceleration of any obligation thereunder, and all
            such contracts and commitments are in good standing and in full
            force and effect without amendment thereto and MDSI-Singapore is
            entitled to all benefits thereunder;

      (r3)  MDSI-BV Contracts: Except as set out in Schedule "D3", to the best
            of its knowledge, information and belief, MDSI-BV is not in default
            or breach of any contract or commitment relating to MDSI-TBU to
            which it is a party and to its knowledge there exists no condition,
            event or act that, with the giving of notice or lapse of time, would
            constitute such a default or breach of any such contract or
            commitment or result in the acceleration of any obligation
            thereunder, and all such contracts and commitments are in good
            standing and in full force and effect without amendment thereto and
            MDSI-BV is entitled to all benefits thereunder;

      (r4)  MDSI-TBU Contracts: Except as has been otherwise disclosed hereunder
            to DDS and to the best of MDSI's knowledge and belief:

            1)    All past contracts of MDSI-TBU have successfully met the
                  acceptance requirements under the terms of those contracts or
                  have been accepted by the customer in writing.

            2)    There are no rebates or pricing discounts granted or
                  contingently owing or accruing to any past or present customer
                  of the MDSI-TBU other than those provided for in the MDSI-UK
                  Material Contracts.

            3)    Other than provided for in the MDSI-TBU Proforma there are no
                  liabilities of MDSI TBU under "project agreements" with past
                  and present customers.

            4)    None of the present customers of the MDSI-TBU have advised
                  MDSI that they would, as a result of the Transaction
                  contemplated herein, discontinue purchasing goods and services
                  from MDSI in accordance with their past practice.

            5)    There are no volume or discounts or other material price
                  advantages which are likely to be lost to the MDSI-TBU by
                  reason of the Transaction contemplated herein.

            6)    None of the present suppliers have advised MDSI that they
                  would discontinue supplying goods and services to the MDSI-TBU
                  in accordance with their past practice by reason of the
                  Transaction contemplated herein;

      (r5)  Customers/Suppliers: Except as set out in Schedule "D", there are no
            material or long term contracts or commitments for the supply of
            goods or services to the MDSI-TBU;

      (r6)  Accounts Receivable: The accounts receivable of MDSI-TBU are bona
            fide and are good and collectable in the ordinary course of business
            of the MDSI-TBU;

      (r7)  Unbilled Receivable: The unbilled receivables, customer deposits,
            percentage complete amounts and prepaid and recoverable expenses
            represented to DDS are bona fide and accurately represented in the
            MDSI-TBU Proforma;

      (s)   Absence of Guarantees: MDSI-UK is not a party to or bound by any
            guarantee, indemnification, surety or similar obligation other than
            those that may be contained in contracts listed in Schedule "D", and
            to the best of its knowledge, information and belief, there are no
            unresolved claims or disputes with respect to

<PAGE>
                                      -14-


            any such obligation;

      (s2)  Absence of Guarantees: MDSI-Singapore is not a party to or bound by
            any guarantee, indemnification, surety or similar obligation other
            than those that may be contained in contracts listed in Schedule
            "D", and to the best of its knowledge, information and belief there
            are no unresolved claims or disputes with respect to any such
            obligation;

      (t)   Absence of Royalties, etc.: Except as set out in the contracts
            listed in Schedule "D" MDSI-UK is not a party to or bound by any
            contract or commitment to pay any royalty or license fee, and all
            amounts due or payable in respect of any such royalty or license fee
            have been paid;

      (t2)  Absence of Royalties, etc.: Except as set out in the contracts
            listed in Schedule "D", MDSI-Singapore is not a party to or bound by
            any contract or commitment to pay any royalty or license fee, and
            all amounts due or payable in respect of any such royalty or license
            fee have been paid;

      (u)   Assets: MDSI-UK has good and marketable title to and possession of
            all of its assets, free and clear of all liens, pledges, charges,
            encumbrances, security interests, rights and claims of every nature
            and kind whatsoever (save for those Permitted Encumbrances of
            MDSI-UK listed at Schedule "F"), and to the best of its knowledge,
            information and belief, is not in default of any lien, pledge,
            charge, encumbrance, security interest, right or claim;

      (u2)  Assets: MDSI-Singapore has good and marketable title to and
            possession of all of its assets, free and clear of all liens,
            pledges, charges, encumbrances, security interests, rights and
            claims of every nature and kind whatsoever (save for those Permitted
            Encumbrances of MDSI-Singapore listed at Schedule "F"), and to the
            best of its knowledge, information and belief, is not in default of
            any lien, pledge, charge, encumbrance, security interest, right or
            claim;

      (v)   Absence of Other Interest: MDSI-UK does not own or have the right or
            obligation to acquire, directly or indirectly, any shares or
            interest in or any assets, liabilities or indebtedness of any other
            corporation, partnership or firm;

      (v2)  Absence of Other Interest: MDSI-Singapore does not own or have the
            right or obligation to acquire, directly or indirectly, any shares
            or interest in or any assets, liabilities or indebtedness of any
            other corporation, partnership or firm;

      (w)   Environmental: To MDSI's knowledge, having made due inquiries,

            (i)   the property and assets of MDSI-UK are free from any
                  pollutants, contaminants, wastes or hazardous or toxic
                  substances of any kind;

            (ii)  no underground storage tanks exist on any property owned or
                  occupied by MDSI-UK, and MDSI-UK has not discharged or caused
                  or permitted nor does it have any knowledge of, any discharge
                  of a contaminant of a waste on, in, under or from any property
                  owned or occupied by MDSI-UK;

            (iii) MDSI-UK has handled, stored, treated and disposed of any
                  pollutants, wastes, hazardous substances or contaminants in
                  compliance with all applicable environmental laws; and

            (iv)  MDSI-UK is not in default in making any report or giving any
                  notice required by any environmental law;

      (w2)  Environmental: To MDSI's knowledge, having made due inquiries,

<PAGE>
                                      -15-


            (i)   the property and assets of MDSI-Singapore are free from any
                  pollutants, contaminants, wastes or hazardous or toxic
                  substances of any kind;

            (ii)  no underground storage tanks exist on any property owned or
                  occupied by MDSI-Singapore, and MDSI-Singapore has not
                  discharged or caused or permitted nor does it have any
                  knowledge of, any discharge of a contaminant of a waste on,
                  in, under or from any property owned or occupied by
                  MDSI-Singapore;

            (iii) MDSI-Singapore has handled, stored, treated and disposed of
                  any pollutants, wastes, hazardous substances or contaminants
                  in compliance with all applicable environmental laws; and

            (iv)  MDSI-Singapore is not in default in making any report or
                  giving any notice required by any environmental law;

      (x)   Consents, Authorizations, and Binding Effect: MDSI may execute,
            deliver and perform this Agreement without the necessity of MDSI
            obtaining any consent, approval, authorization or waiver, or giving
            any notice or otherwise, except:

            (i)   those, with respect to consents, approvals, authorizations and
                  waivers, which have already been obtained, are unconditional,
                  and are in full force and effect and, with respect to notices,
                  which have been given on a timely basis;

            (ii)  the authorization and approval of the transfer of the MDSI-UK
                  Shares by the directors of MDSI-UK and MDSI, and the
                  authorization and approval of the transfer of the
                  MDSI-Singapore Shares by the directors of MDSI-Singapore and
                  MDSI;

            (iii) those which, if not obtained or made, would not prevent or
                  delay the consummation of the Transaction or otherwise prevent
                  MDSI from performing its obligations under this Agreement and
                  the Other Agreements and would not be reasonably likely to
                  have a material adverse effect on MDSI-UK and MDSI-Singapore;
                  and

            (iv)  those consents set out in section II.6 (b) of the March 18,
                  1999 Timetable and List of Documents for the Transaction (as
                  superseded by any subsequent version of that list) (the
                  "Document List");

      (y)   Insurance: MDSI-UK has its assets insured under policies of
            insurance issued by responsible insurers against loss or damage with
            coverage of a type and in an amount consistent with the types and
            amounts of insurance maintained by corporations of a size and
            carrying on businesses of the type carried on by MDSI-UK. To the
            best of its knowledge, information and belief, all such policies of
            insurance are set forth in Schedule "D" and are in full force and
            effect and there is no default, whether as to the payment of premium
            or otherwise, under the terms of any such policies;

      (y2)  Insurance: MDSI-Singapore has its assets insured under policies of
            insurance issued by responsible insurers against loss or damage with
            coverage of a type and in an amount consistent with the types and
            amounts of insurance maintained by corporations of a size and
            carrying on businesses of the type carried on by MDSI-Singapore. To
            the best of its knowledge, information and belief, all such policies
            of insurance are set forth in Schedule "D" and are in full force and
            effect and there is no default, whether as to the payment of premium
            or otherwise, under the terms of any such policies;

      (z)   No Bankruptcy, etc.: There has not been filed any petition or
            application, or any proceedings commenced which have not been
            discharged, by or against MDSI-UK with respect to any of the MDSI-UK
            Shares or any of its assets under any law, domestic or foreign,
            relating to bankruptcy, receivership or

<PAGE>
                                      -16-


            winding up, reorganization, compromise arrangements, insolvency,
            readjustment of debt or creditors' rights, and no assignment or
            proposal for the benefit of creditors has been made by MDSI-UK;

      (z2)  No Bankruptcy, etc.: There has not been filed any petition or
            application, or any proceedings commenced which have not been
            discharged, by or against MDSI-Singapore with respect to any of the
            MDSI-Singapore Shares or any of its assets under any law, domestic
            or foreign, relating to bankruptcy, receivership or winding up,
            reorganization, compromise arrangements, insolvency, readjustment of
            debt or creditors' rights, and no assignment or proposal for the
            benefit of creditors has been made by MDSI-Singapore;

      (aa)  Intellectual Property: The MDSI-TBU IP Assets are valid and
            subsisting. No registered user agreements have been issued or have
            been executed or recorded in any trade marks office and no licenses
            or sub-licenses have been granted to MDSI (or any of its affiliates
            other than MDSI-UK or MDSI-Singapore) or any third party to use any
            of the MDSI-TBU IP Assets, except as set out in Schedule "H". There
            are no unresolved conflicts with, written threats or pending claims
            of, or potential, threatened or pending claims by the MDSI-TBU
            against, any other Person, whether in litigation or otherwise,
            involving the MDSI-TBU IP Assets and, except as set out in Schedule
            "H", there are no liens, pledges, charges, encumbrances, claims,
            security interests or rights of any other Person, including moral
            rights, with respect to the MDSI-TBU IP Assets or which would
            prevent MDSI (or any of the MDSI Affiliates) from fulfilling its (or
            their) obligations under this Agreement and the Other Agreements. No
            activity of any employee of MDSI, any of the MDSI Affiliates or
            MDSI-TBU as or while an employee thereof has caused a violation of
            any trade secret of MDSI-TBU. To the best of MDSI's knowledge,
            information and belief, there is no patent or application therefor
            or investigation by any Person that would adversely affect the
            MDSI-TBU or any product, apparatus, method, process or design of
            MDSI-TBU. Upon Closing, neither MDSI or any of its affiliates nor
            any of their respective officers, directors or employees, nor any
            third party will have an interest in any of the MDSI-TBU IP Assets.
            To the best of MDSI's knowledge, information and belief, there is no
            government restriction or any limitation, domestic or foreign, on
            the manner in which any of the MDSI-TBU IP Assets may be used;

      (bb)  Bank Accounts/Safe Deposit Boxes/Power of Attorney: Schedule "K" is
            a true and complete list showing:

            (i)   the name of each bank, trust company, brokerage company or
                  similar institution in which MDSI-TBU holds accounts or safe
                  deposit boxes and the names of all Persons authorized to sign
                  or draw thereon or to have access thereto; and

            (ii)  the name of each Person holding a general or special power of
                  attorney from MDSI-UK, MDSI-Singapore or, with respect to the
                  MDSI-TBU, MDSI or any other MDSI Affiliate and a summary of
                  the terms thereof;

      (cc)  Leases: Schedule "D" contains an accurate and complete list of
            leases (the "Leases") of real or personal property (the "Leasehold
            Property") to which MDSI-UK or MDSI-Singapore is a party, excluding
            those car and mobile leases previously disclosed to DDS. MDSI has
            made available to DDS true and complete copies of all the Leases.
            None of the Leases has been or is being further modified or amended
            or assigned and all rents and additional rents required to be paid
            and all obligations required to be performed by the lessee
            thereunder have paid and performed. The Leases have not been
            encumbered and all the Leases are good, valid and subsisting and are
            in full force and effect. Schedule "D" identifies the Leases in
            respect of which consents of landlords and/or others are required to
            the Transaction. None of the Leases contains any provision which as
            a result of the Transaction will: (i) increase the lessee's cost of
            operating the Leasehold Property; (ii) result in the lessee being
            deprived of any right under such Lease; nor (iii) interfere with the
            lessee's ability to conduct or continue to conduct its business on
            such Leasehold Property in accordance with the terms of the Lease.
            The Leasehold Properties are all in a good state of repair and
            comply with all statutes, regulations, codes and by-laws. All of the
            Leasehold

<PAGE>
                                      -17-


            Properties are properly zoned to permit the current use of such
            Leasehold Properties. Neither MDSI-UK nor MDSI-Singapore has
            received, with respect to any Leasehold Property, any notice from
            any municipal or other governmental authority relating to work
            orders, or other compliance orders, or relating to any local
            improvement charges, levies or assessments or relating to
            expropriation;

      (dd)  Accidents: Schedule "L" is a true and complete list of all reported
            accidents and/or injuries suffered by any Person in connection with
            the MDSI-TBU within the past three years together with details of
            any action, claim, demand or other proceeding pending or threatened
            arising therefrom and any settlement (including insurance
            settlements) made in relation thereto, none of which are or will be
            materially adverse to the MDSI-TBU or the MDSI-TBU Assets; and

      (ee)  Y2K Definitions and Representation:

            (a)   Y2K Definitions: The following terms shall have the meanings
                  assigned to them herein

            (i)   "MDSI-TBU Software" shall include all "Software Products"
                  included in the MDSI-TBU IP Assets, including microcode,
                  firmware, application programs, files and database developed
                  or acquired by MDSI to form part of the MDSI-TBU Software.

            (ii)  "Leap Year" shall mean a year during which an extra day is
                  added in February (February 29th). Leap Year occurs in all
                  years evenly divisible by 400 or evenly divisible by 4 and not
                  evenly divisible by 100. For example, the year 1996 is a Leap
                  Year since it is evenly divisible by 4 and not evenly
                  divisible by 100. The year 2000 is a Leap Year since it is
                  evenly divisible by 400.

            (iii) The terms "process" "processes" and "processing" of data shall
                  include, but shall not be limited to, the functions of
                  comparing, sorting, or otherwise manipulating, performing
                  calculations, reading, storing and retrieving.

            (iv)  With respect to the MDSI-TBU Software, "Year 2000 Compliant"
                  shall mean that such MDSI-TBU Software correctly processes
                  valid, accurate and correct date data (including, but not
                  limited to, calculating, comparing, and sequencing) from,
                  into, and between the twentieth and twenty-first centuries,
                  including Leap Year calculations, without impairing the
                  performance, output or accuracy of the system or products
                  based on the MDSI-TBU Software.

      (b)   Y2K Representation: MDSI represents and warrants that the MDSI-TBU
            Software when used with the hardware, operating system software and
            database software chosen by MDSI to meet the MDSI obligation set out
            in the Material Contracts is Year 2000 Compliant. Notwithstanding
            any other provision of this Agreement, MDSI's sole obligation and
            liability under this representation is set out in Section 7.6 below.

4. REPRESENTATIONS AND WARRANTIES OF DDS

4.1   In order to induce MDSI to enter into and to consummate the Transaction as
      contemplated by this Agreement, DDS represents and warrants to MDSI on and
      as at the date of this Agreement as follows:

      (a)   No Liabilities: The DDS Financial Statements disclose or reflect all
            liabilities of DDS (whether, accrued, absolute, contingent or
            otherwise) as required by generally accepted accounting principles
            and DDS has incurred no liabilities since March 31, 1999 except in
            the ordinary course of business, and none of such subsequently
            incurred liabilities are or will be materially adverse to its
            business, assets, results of operations or financial condition;

<PAGE>
                                      -18-


      (b)   Organization and Good Standing of DDS: DDS is a company duly
            incorporated and organized and validly existing under the laws of
            the Province of British Columbia, is not a "reporting company"
            within the meaning of the Company Act (British Columbia), is a
            "private issuer" within the meaning of the Securities Act (British
            Columbia), is in good standing in the Office of the Registrar of
            Companies of the Province of British Columbia with respect to the
            filing of annual reports, and does not carry on business in any
            other province or territory of Canada or in any other country.

      (b1)  Organization and Good Standing of DDS-US: DDS-US is a company duly
            incorporated and organized and validly existing and in good standing
            under the laws of the State of Washington;

      (c)   Corporate Power and Authority: DDS has full corporate power and
            authority to own its properties and assets and to carry on its
            business as presently carried on by it and to execute and deliver
            this Agreement and the Other Agreements and to perform its
            obligations hereunder and thereunder and to consummate the
            Transaction;

      (d)   Capitalization of DDS: The authorized capital of DDS consists of
            55,000,000 shares divided into 50,000,000 common shares without par
            value and 5,000,000 preferred shares without par value, of which
            6,901,585 common shares are duly and validly issued and outstanding
            as fully paid and non-assessable shares, and no other shares in the
            authorized capital of DDS are allotted or issued and outstanding,
            except for 658,915 allotted but unissued DDS Shares remaining in a
            certain allotment originally made January 27, 1993 and amended April
            10, 1996, July 10, 1998 and April 30, 1999;

      (d2)  Capitalization of DDS-US: The authorized capital of DDS-US consists
            of 100,000 common shares without par value ("DDS-US Shares"), of
            which 1,000 shares are duly and validly issued and outstanding as
            fully paid and non-assessable shares, and no other shares in the
            authorized capital of DDS are allotted or issued and outstanding;

      (e)   Shareholders of DDS: The current shareholders of DDS and their
            respective shareholdings in DDS are as set out in Schedule "I";

      (e2)  DDS-US Shares: DDS is the registered and beneficial owner of all of
            the issued and outstanding DDS-US Shares and of all right, title and
            interest therein, free and clear of all liens, pledges, charges,
            encumbrances, security interests, options, rights and claims of
            every nature and kind whatsoever and with all rights and benefits
            attaching thereto;

      (f)   Due and Valid Issuance of Purchased DDS Shares: On Closing the
            Purchased DDS Shares will have been duly authorized and validly
            issued by DDS and will be outstanding as fully paid and
            non-assessable shares;

      (g)   Due Authorization, Execution and Delivery: This Agreement has been
            duly authorized, executed and delivered on behalf of DDS and is a
            valid obligation of DDS enforceable in accordance with its terms,
            and on or prior to Closing each of the Other Agreements will be,
            duly authorized, executed and delivered on behalf of DDS and will be
            a valid obligation of DDS, in each case enforceable in accordance
            with its terms, subject to applicable bankruptcy, insolvency,
            reorganization, arrangement, moratorium and other laws of general
            application limiting the enforcement of creditors' rights generally
            and to general principles of equity, including the fact that
            equitable remedies, such as specific performance and injunctive
            relief, are subject to discretion of the court and may not be
            awarded where damages are considered an adequate remedy;

      (h)   Absence of Options: Except for MDSI and except as has been disclosed
            by DDS to MDSI in Schedule "B" hereto, no Person has any agreement
            or option, or any right capable of becoming an agreement, for the
            purchase, subscription, allotment or issuance of any of the unissued
            shares in the capital of DDS or DDS-US;

<PAGE>
                                      -19-


      (i)   Agreements Valid: The entering into, execution and delivery of this
            Agreement by DDS as of the date hereof, and the entering into,
            execution and delivery of each of the Other Agreements by DDS on or
            prior to the Closing Date, and the consummation of the transactions
            contemplated by this Agreement and the Other Agreements shall not
            result in the breach of any term or provision of the Memorandum or
            Articles of DDS or the constating documents of DDS-US or result in
            the breach of any term or provision of, or constitute a default
            under, any contract, agreement, indenture, mortgage, lien, pledge,
            charge, encumbrance, security interest, deed of trust or other
            instrument to which DDS or DDS-US is a party, or result in the
            breach of any applicable laws or regulations, or result in the
            creation of any lien, pledge, charge, encumbrance, security interest
            right or claim of any kind whatsoever in, or in respect of, any or
            all of DDS's or DDS-US's assets;

      (j)   DDS Financial Statements: The DDS Financial Statements:

            (i)   were prepared in accordance with Canadian generally accepted
                  accounting principles applied on a basis consistent with that
                  of previous years; and

            (ii)  present fairly in all material respects the financial position
                  of DDS as at the date thereof and the results of DDS's
                  operations and the changes in DDS's financial position for the
                  period then ended;

      (k)   Absence of Changes: Since March 31, 1999:

            (i)   there has not been any change in the business of DDS or DDS-US
                  or any development or occurrence which has had, or to the best
                  of its knowledge, information and belief, may reasonably be
                  expected to have, a material adverse effect, financial or
                  otherwise, on either of their assets or business;

            (ii)  neither DDS nor DDS-US has waived or surrendered any right of
                  material value, issued any bonds, debentures, notes or other
                  corporate securities or granted any security interest in or
                  otherwise encumbered any of its assets;

            (iii) neither DDS nor DDS-US has sold or disposed of, or agreed to
                  sell or dispose of, any of its undertaking, property, assets
                  or rights, other than in the ordinary course of its business;

            (iv)  neither DDS nor DDS-US has declared or made any payment of any
                  dividend or other distribution in respect of any of its shares
                  or purchased or redeemed any of its shares (except as
                  disclosed to MDSI in Schedule "I") or split, consolidated or
                  reclassified any of its shares ;

            (v)   to the best of its knowledge, information and belief, DDS and
                  DDS-US have conducted their respective businesses in their
                  usual and normal manner;

            (vi)  no capital expenditures or commitments therefor have been made
                  by DDS or DDS-US save and except in the ordinary course of
                  business; and

            (vii) neither DDS nor DDS-US has increased the pay of, or paid or
                  agreed to pay any pension, bonus or share of profits or other
                  similar benefit to or for the benefit of, any employee,
                  director or officer of DDS or DDS-US and no payments, loans or
                  advances of any kind have been made or authorized to any
                  employee, director or officer of DDS or DDS-US save and except
                  in the ordinary course of business;

      (l)   Conduct of Business: The minute books and corporate records of DDS,
            all of which have been provided to MDSI, contain accurate and
            complete copies of its constating documents and any amendments
            thereto, and there are no outstanding applications or filings which
            would alter the

<PAGE>
                                      -20-


            constating documents or corporate status of DDS. DDS has properly
            recorded all material transactions and has filed the appropriate
            notices with respect to such transactions. The directors' and
            shareholders' resolutions and minutes contained in the corporate
            records of DDS are accurate and complete;

      (l1)  Conduct of Business: The minute books and corporate records of
            DDS-US, all of which have been provided to MDSI, contain accurate
            and complete copies of its constating documents and any amendments
            thereto, and there are no outstanding applications or filings which
            would alter the constating documents or corporate status of DDS-US.
            DDS-US has properly recorded all material transactions and has filed
            the appropriate notices with respect to such transactions. The
            directors' and shareholders' resolutions and minutes contained in
            the corporate records of DDS-US are accurate and complete;

      (m)   Employment Contracts and Labour Matters: The employment contracts
            between DDS and DDS-US and its employees contain terms (including,
            but not limited to, with respect to compensation) which are
            reasonable and similar to and commensurate with employment contracts
            in DDS's line of business. All employees, directors, officers,
            consultants or agents have been paid all wages, income, fees,
            commissions and any other sums due and owing to them by DDS or
            DDS-US as at the end of the most recent completed pay or
            compensation period. No union or association is certified as a
            bargaining agent for any employees of DDS, no negotiations by DDS
            are currently underway with any such union or association, no
            certification proceedings are currently in existence or threatened
            with respect to DDS and DDS is not aware of any efforts which are
            currently being made or threatened by any union or association or
            any employees of DDS to unionize or to organize the employees of DDS
            in any manner whatsoever. DDS is not aware of any labour conflict
            with any of DDS's employees which might reasonably be expected to
            have a materially adverse effect on the operations of DDS;

      (n)   Employee Plans: Other than as set out in Schedule "C", there are no
            employee benefit plans maintained or contributed to by DDS;

      (o)   Legal Position and Litigation: DDS and DDS-US have held and now
            hold, free and clear of any claim, lien, encumbrance or security
            interest, all permits, licenses, registrations and authorizations
            needed to own and operate their assets and to carry on their
            businesses. Neither DDS nor DDS-US has been or is now in breach of
            any federal, provincial, state, local or municipal statute,
            regulation or by-law, and all such licenses, registrations and
            authorizations are valid and subsisting and in good standing and
            none of the same contains any term, provision, condition or
            limitation which has or may have a material adverse effect on the
            business or operations of DDS or DDS-US or which may be adversely
            affected by the completion of the Transaction. There is not any
            suit, action, litigation, arbitration proceeding or governmental
            proceeding, including appeals and applications for review, in
            progress, pending or threatened against DDS or DDS-US which might
            materially adversely affect the assets or business of DDS or DDS-US;
            and there is not currently outstanding against DDS or DDS-US any
            judgment, decree, injunction, rule or order of any court,
            governmental department, commission, agency or arbitrator;

      (p)   Withholding: All amounts to be withheld by DDS from its employees'
            salaries and to be paid to any governmental body pursuant to any
            statute have been withheld and paid in a timely manner;

      (q)   Filings and Other Tax Matters: Except as may be otherwise disclosed
            in the DDS Financial Statements, DDS to the best of its knowledge,
            information and belief,:

            (i)   has duly filed in a timely manner:

                  A.    all federal and provincial tax returns, election forms
                        and information returns and

<PAGE>
                                      -21-


                        except for U.S. income tax returns of a foreign
                        corporation subsequent to 1993, the tax returns of any
                        other jurisdictions required to be filed, and all such
                        returns and forms have been completed accurately and
                        correctly in all aspects; and

                  B.    all reports and information required to be filed with
                        all applicable government authorities, agencies and
                        regulatory bodies;

            (ii)  has paid all taxes (including all federal, provincial and
                  local taxes and assessments in respect of its income,
                  business, assets or property) and all interest and penalties
                  thereon with respect to DDS for all previous years and all
                  required quarterly installments due for the current fiscal
                  year;

            (iii) has retained in its possession copies of all tax returns as
                  far back as and including the tax return for the year 1991 and
                  all accounting books and records required to be maintained by
                  any government or government bodies, other than tax returns,
                  as far back as and including the books and records for the
                  1991 taxation year;

            (iv)  is not aware of any contingent tax liabilities or grounds for
                  reassessment of tax; and

            (v)   is a Canadian Controlled Private Corporation within the
                  meaning of the Income Tax Act (Canada);

            and there is no agreement, waiver or other arrangement providing for
            an extension of time with respect to the filing of any tax return,
            or payment of any tax, governmental charge or deficiency by DDS nor
            is there any action, suit, proceeding, investigation or claim now
            threatened or pending against DDS in respect of, or discussions
            underway with any governmental authority relating to, any such tax
            or governmental charge or deficiency;

      (r)   Directors and Officers: The directors and officers of DDS currently
            are:

             Name                                       Position

             Vari Ghai                                  President and Director
             Neera Ghai                                 Secretary/Treasurer

             all of whom were validly elected and appointed;

      (r1)  Directors and Officers: The directors and officers of DDS-US
            currently are:

             Name                                       Position

             Vari Ghai                                  President/Secretary
                                                          and Director

             all of whom were validly elected and appointed;

      (s)   Accounts Receivable: The accounts receivable of DDS are bona fide
            and are good and collectible in the ordinary course of the business
            of DDS; the accounts receivable of DDS-US are bona fide and are good
            and collectible in the ordinary course of the business of DDS-US

      (t)   Material Contracts: Other than in DDS customer contracts, except as
            set out in Schedule "C", to the

<PAGE>
                                      -22-


            best of its knowledge, information and belief, neither DDS nor
            DDS-US is a party to or bound by any material contract or commitment
            (which for these purposes means a contract or commitment in excess
            of or having a value in excess of $5,000), written or oral
            (collectively, the "DDS Material Contracts"). DDS has made available
            to MDSI true and complete copies of all DDS Material Contracts in
            effect on the date hereof. All DDS customer contracts contain terms
            materially similar to the terms and conditions contained in the
            precedent attached as Schedule C2 (except provisions in certain
            customer contracts where DDS has provided financing for a portion of
            the unpaid purchase price);

      (t2)  Contracts: Except as set out in Schedule "C3", to the best of its
            knowledge, information and belief, neither DDS nor DDS-US is in
            default or breach of any contract or commitment to which DDS or
            DDS-US is a party and to its DDS's knowledge there exists no
            condition, event or act that, with the giving of notice or lapse of
            time or both, would constitute such a default or breach of any such
            contract or commitment or result in the acceleration of any
            obligation thereunder, and all such contracts and commitments are in
            good standing and in full force and effect without amendment thereto
            and DDS or DDS-US, as the case may be, is entitled to all benefits
            thereunder;

      (u)   Absence of Guarantees: Neither DDS nor DDS-US is a party to or bound
            by any guarantee, indemnification, surety or similar obligation
            other than those that may be contained in the DDS customer
            contracts, and to the best of its knowledge, information and belief,
            there are no unresolved claims or disputes with respect to any such
            obligation;

      (v)   Absence of Royalties, etc.: Except as set out in the contracts
            listed in Schedule "C", neither DDS nor DDS-US is a party to or
            bound by any contract or commitment to pay any royalty or license
            fee;

      (w)   Assets: DDS and DDS-US have good and marketable title to and
            possession of all of their assets, free and clear of all liens,
            pledges, charges, encumbrances, security interests, rights and
            claims of every nature and kind whatsoever (save for those Permitted
            Encumbrances of DDS listed at Schedule "E"), and to the best of its
            knowledge, information and belief, are not in default of any lien,
            pledge, charge, encumbrance, security interest, right or claim;

      (x)   Absence of Other Interest: Except for DDS's interest in DDS-US and
            except for certain marketable securities referred to in the DDS
            Financial Statements, neither DDS nor DDS-US owns, directly or
            indirectly, any shares or interest in any other corporation,
            partnership or firm;

      (y)   Environmental: To DDS's knowledge, having made due inquiries,

            (i)   the property and assets of DDS and DDS-US are free from any
                  pollutants, contaminants, wastes or hazardous or toxic
                  substances of any kind;

            (ii)  no underground storage tanks exist on any property owned or
                  occupied by DDS or DDS-US, and DDS and DDS-US have not
                  discharged or caused or permitted nor do they have any
                  knowledge of, any discharge of a contaminant of a waste on,
                  in, under or from any property owned or occupied by DDS or
                  DDS-US;

            (iii) DDS and DDS-US have handled, stored, treated and disposed of
                  any pollutants, wastes, hazardous substances or contaminants
                  in compliance with all applicable environmental laws; and

            (iv)  Neither DDS nor DDS-US is in default in making any report or
                  giving any notice required by any environmental law;

      (z)   Consents, Authorizations, and Binding Effect: DDS may execute,
            deliver and perform this Agreement and the Other Agreements without
            the necessity of DDS or DDS-US obtaining any consent, approval,

<PAGE>
                                      -23-


            authorization or waiver, or giving any notice or otherwise, except:

            (i)   waivers of pre-emptive rights of the existing DDS shareholders
                  under the Company Act (British Columbia) and under the
                  Shareholders' Agreement made as of February 8, 1993, as
                  amended, among DDS and the existing DDS shareholders (the "DDS
                  Shareholders' Agreement");

            (ii)  those, with respect to consents, approvals, authorizations and
                  waivers, which have already been obtained, are unconditional,
                  and are in full force and effect and, with respect to notices,
                  which have been given on a timely basis;

            (iii) the authorization and approval of the issuance of the
                  Purchased DDS Shares by the sole director of DDS;

            (iv)  those which, if not obtained or made, would not prevent or
                  delay the consummation of the Transaction or otherwise prevent
                  DDS from performing its obligations under this Agreement and
                  the Other Agreements and would not be reasonably likely to
                  have a material adverse effect on DDS; and

            (v)   those consents set out in section II.6 (a) of the Document
                  List;

      (aa)  Insurance: DDS and DDS-US have their assets insured under policies
            of insurance issued by responsible insurers against loss or damage
            with coverage of a type and in an amount consistent with the types
            and amounts of insurance maintained by corporations of a size and
            carrying on businesses of the type carried on by DDS and DDS-US. To
            the best of its knowledge, information and belief, all such policies
            of insurance are set forth in Schedule "C" and are in full force and
            effect and there is no default, whether as to payment of premium or
            otherwise, under the terms of any such policies;

      (bb)  No Bankruptcy, etc.: There has not been filed any petition or
            application, or any proceedings commenced which have not been
            discharged, by or against DDS with respect to any of the DDS Shares
            or any of its assets under any law, domestic or foreign, relating to
            bankruptcy, receivership or winding up, reorganization, compromise
            arrangements, insolvency, readjustment of debt or creditors' rights,
            and no assignment or proposal for the benefit of creditors has been
            made by DDS;

      (cc)  Intellectual Property: The DDS IP Assets are valid and subsisting.
            There are no unresolved conflicts with, threatened or pending claims
            of, or potential, written threats or pending claims by DDS against,
            any other Person, whether in litigation or otherwise, involving the
            DDS IP Assets and, except as set out in Schedule "G", there are no
            liens, pledges, charges, encumbrances, claims, security interests or
            rights of any other Person, including moral rights, with respect to
            the DDS IP Assets or which would prevent DDS from fulfilling its
            obligations under this Agreement and the Other Agreements. No
            activity of any employee of DDS as or while an employee thereof has
            caused a violation of any trade secret of DDS. To the best of DDS's
            knowledge, information and belief, there is no patent or application
            therefor or investigation by any Person that would adversely affect
            DDS or any product, apparatus, method, process or design of DDS. To
            the best of DDS's knowledge, information and belief, there is no
            government restriction or any limitation, domestic or foreign, on
            the manner in which any of the DDS IP Assets may be used which
            materially negatively affects DDS's business;

      (dd)  Leases and Real Property Interests: Schedule "C" contains an
            accurate and complete list of leases (the "Leases") of real or
            personal property (the "Leasehold Property") to which DDS or DDS-US
            is a party and a list of the real property held by DDS or DDS-US
            (the "Freehold Property"). DDS has made available to MDSI true and
            complete copies of all the Leases and the summary title documents
            relating to the Freehold Property. None of the Leases has been or is
            being further modified or amended or assigned and all rents and
            additional rents required to be paid and all obligations required to
            be performed by the lessee thereunder have paid and performed.
            Except as disclosed in Schedule "E", the

<PAGE>
                                      -24-


            Leases and the Freehold Property have not been encumbered and all
            the Leases are good, valid and subsisting and are in full force and
            effect. Schedule "C" identifies the Leases in respect of which
            consents of landlords and/or others are required to the Transaction,
            and Schedule "E" identifies all encumbrances on the Freehold
            Property in respect of which consents of encumbrancers are required
            to the Transaction. None of the Leases contains any provision which
            as a result of the Transaction will: (i) increase the lessee's cost
            of operating the Leasehold Property; (ii) result in the lessee being
            deprived of any right under such Lease; nor (iii) interfere with the
            lessee's ability to conduct or continue to conduct its business on
            such Leasehold Property in accordance with the terms of the Lease.
            The Leasehold Properties and the Freehold Property are all in a good
            state of repair and comply with all statutes, regulations, codes and
            by-laws. All of the Leasehold Properties and the Freehold Property
            are properly zoned to permit the current use of such Leasehold
            Properties and the Freehold Property. Neither DDS nor DDS-US has
            received, with respect to any Leasehold Property or the Freehold
            Property, any notice from any municipal or other governmental
            authority relating to work orders, or other compliance orders, or
            relating to any local improvement charges, levies or assessments or
            relating to expropriation; and

      (ee)  Y2K Representation: DDS represents and warrants that the latest
            version of each of the products of comprising the DDS Software is
            year 2000 compliant.

5. COVENANTS OF MDSI

MDSI hereby covenants and agrees with DDS as follows:

5.1.1 Copenhagen Taxi Costs and Revenue. MDSI will manage the Copenhagen Taxi
      contract of MDSI-UK to the point in time (the "Site Acceptance Time") that
      MDSI has successfully passed a site acceptance test with Copenhagen Taxi,
      with no material variation from the acceptance terms contained within the
      terms of the Copenhagen contract unless agreed to in writing with the
      Customer and agreed to in writing by DDS, and throughout this period MDSI
      shall provide all disclosure to DDS as reasonably requested by DDS. DDS
      shall be entitled, at its own expense, to have any of its employees or
      representatives attend the site acceptance test or any other significant
      meetings or tests, provided that such attendance will be strictly in the
      capacity of an observer, and such employees or representatives shall not
      participate in or influence any discussions with the customer. All
      revenues, benefits, costs, penalties, discounts and other liabilities
      associated with the Copenhagen Taxi project accrued and owing up to and
      including the Site Acceptance Time will be for MDSI's account. Effective
      at the Site Acceptance Time, MDSI will transfer on an orderly basis and
      DDS will assume management of the Copenhagen Taxi project and all the
      benefits and the obligations thereunder, however, all liability for
      penalties under the supply contract shall be borne solely by MDSI and all
      such discounts shall be paid for solely by MDSI in cash to the customer or
      to DDS. Accordingly, all of the benefits and obligations under the support
      and maintenance contract will be solely for the account of DDS. In
      furtherance of this covenant, the supply contract will be assigned to MDSI
      at Closing and then assigned to DDS effective at the Site Acceptance Time.
      In addition, MDSI agrees not to make any amendments to the existing
      maintenance agreement with respect to incurring any additional discounts
      without DDS's consent. From the Site Acceptance Time forward, all
      revenues, benefits, costs and other liabilities (except for penalties
      accrued and owing prior to the Site Acceptance Time) associated with the
      Copenhagen Taxi project will be for DDS's account. MDSI acknowledges and
      agrees that, from and after Closing, all MDSI-TBU IP Assets associated
      with or developed in connection with the Copenhagen Taxi project (except
      for the Oracle licenses registered in the name of MDSI) shall be the sole
      property of DDS directly or indirectly (through MDSI-UK), that MDSI shall
      have no right, title and interest therein and that MDSI shall not use such
      MDSI-TBU IP Assets except for the purpose of performing its management
      obligations set out above. MDSI shall not duplicate any of such MDSI-TBU
      IP Assets and it shall not disclose or permit access to any of such
      MDSI-TBU IP Assets to any Person other than disclosure on a "need to know"
      basis to its direct employees or contractors working on the project (a
      list of whom shall be provided to DDS on Closing and updated from time to
      time) and who have signed appropriate confidentiality agreements and
      agreements relinquishing and assigning any and all rights in and to such
      MDSI-TBU IP Assets. MDSI shall indemnify and hold harmless DDS for costs,
      losses or damages it may incur arising from a breach by it of such
      confidentiality and non-use covenants. MDSI

<PAGE>
                                      -25-


      also agrees that on a timely basis following the Site Acceptance Time, it
      shall deliver to DDS all MDSI-TBU IP Assets, data and materials (and all
      copies thereof) associated with the project, and that within 30 days
      following the Site Acceptance Time it shall separately transfer to DDS, at
      DDS' discretion, all assets used by MDSI in connection with the Copenhagen
      project for a price equal to their aggregate net book value as of the Site
      Acceptance Time. At such time, MDSI and DDS shall also adjust and settle
      all other amounts owing or claims between them regarding the Copenhagen
      Taxi project, and any dispute between them regarding such settlement shall
      be resolved by arbitration on the same terms and conditions as apply for
      resolving post-Closing adjustments set out in section 2.1 above including
      that such adjustment shall not be subject to the limitations set out in
      section 9.2 hereof.

5.1.2 Copenhagen Warranty Reserve. The Copenhagen warranty reserve provided in
      section 2.1(b) is provided on the basis that DDS will provide warranty
      services for a 14 month warranty period under the service agreement to
      Copenhagen Taxi, and DDS shall indemnify MDSI for any liability incurred
      under the MDSI guarantee granted to Copenhagen Taxi for any breaches under
      the service agreement with Copenhagen Taxi.

5.2   Underwriters' Terms and Restrictions. MDSI will agree to the commercially
      reasonable terms of the underwriting agreement entered into by DDS when
      DDS initially becomes a publicly traded entity, including any hold period
      on the disposition of DDS Shares required by the underwriters, provided
      that such hold period is no longer than 6 months.

5.3   Marketing to Airborne Freight Corporation. MDSI shall provide reasonable
      support to DDS in DDS's efforts to market DDS's products and services to
      Airborne Freight Corporation. If, with respect to a future DDS project
      involving Airborne Freight Corporation, resources are required from MDSI
      with respect to installation, testing or support, MDSI will provide such
      services on a "time and materials" basis to DDS at MDSI's standard market
      rates at that time. Such support shall not include any access to the
      Advantex Courier software source code used on the Airborne Freight
      Corporation project by DDS. Any licenses to the Advantex Courier software
      executable code to be sublicensed to Airborne Freight Corporation will be
      negotiated between MDSI and DDS.

5.4   Accounts Receivable. If any accounts receivable of MDSI-TBU in the MDSI
      TBU Proforma delivered at Closing (other than those Excess Receivables
      described in section 2.1(b))are not recovered by DDS within 90 days after
      Closing (provided that reasonable efforts to recover such receivables have
      been made by DDS), MDSI shall pay DDS the amounts of such accounts
      receivable, provided that DDS assigns the right to collect such accounts
      receivable to MDSI.

5.4.1 Unbilled Receivables. If any unbilled receivable of MDSI-TBU in the
      MDSI-TBU Proforma delivered at Closing are not recovered by DDS within 90
      days after Closing (provided that reasonable efforts have been made by DDS
      to collect if billable) MDSI shall pay DDS the amounts of such
      receivables, provided that DDS assigns the right to collect such
      receivables to MDSI. DDS will use all reasonable commercial efforts to
      complete all bug fixes with respect to the Radio Taxi London installation
      and DDS will support MDSI with respect to MDSI's collection of such
      receivables.

5.5   Financial Statements. On or prior to Closing, MDSI shall provide DDS with
      copies of the MDSI-UK Financial Statements and of the MDSI-Singapore
      Financial Statements and, as soon as practicable after Closing, MDSI shall
      provide DDS with copies of the MDSI Closing Financial Statements. In
      connection with the review engagement process regarding the MDSI Closing
      Financial Statements, DDS agrees to provide all necessary assistance to
      the auditor or auditors carrying out such reviews, and MDSI shall be
      responsible for all costs in connection with obtaining these review
      engagement reports, such that these costs will not form part of the
      post-Closing adjustments. The MDSI Closing Financial Statements shall be
      prepared in accordance with generally accepted accounting principles
      applied on a basis consistent with that of previous years and shall
      present fairly in all material respects the financial position of MDSI-UK
      and MDSI-Singapore as at Closing and the results of their respective
      operations and the changes in their respective financial positions for the
      5 month period then ended. Also in connection with the review engagement
      process, DDS agrees to give MDSI full and free access to, and the right to
      supervise and direct,

<PAGE>
                                      -26-


      the process of preparing the MDSI Closing Financial Statements and review
      engagement reports, and DDS will deliver at Closing a Direction of DDS
      addressed to MDSI-UK and MDSI-Singapore to that effect.

5.6   RTL Voice Fall Back. MDSI shall retain DDS at the rate of $600 per man day
      plus expenses at cost, to assist MDSI in the completion of the RTL voice
      fall back functionality. If after Closing, RTL decides to submit to
      arbitration the matter of whether MDSI has met the voice fallback
      requirements as set out in MDSI-UK's contract with RTL and such
      arbitration results in a finding that MDSI has not met such requirements,
      at the direction of MDSI, DDS will make the human resources available so
      that DDS can modify the code or supply any software or hardware required
      to satisfy the arbitrator's decision. MDSI shall have full control of the
      applications made in respect of such arbitration and DDS will cooperate
      fully in support of MDSI's application to the arbitrator and support
      MDSI's position. In such case MDSI shall be liable to DDS for the costs of
      such modifications to software and hardware (including any related
      expenses) with such costs of any DDS services to be at the same man day
      rate and expenses noted above.

5.7   DDS Shareholders' Agreement. MDSI shall execute the DDS Shareholders'
      Agreement at Closing.

5.8   Release of Certain Encumbrances. MDSI shall obtain a release or consent to
      transfer in respect of the sale of the MDSI-TBU Assets which are currently
      encumbered under any security instrument or agreement, including without
      limitation, under the General Security Agreement between MDSI and the Bank
      of Montreal.

5.9   Documents and Data. On the Closing Date, MDSI shall deliver or cause to be
      delivered to DDS all minute books, corporate seals and corporate records
      relating to MDSI-UK and MDSI-Singapore, together with all documents (or
      copies thereof) and other data (technical, financial or otherwise) in the
      possession of MDSI and its affiliates, which relate to the MDSI-TBU and/or
      the MDSI-TBU Assets or which will be necessary for the conduct of the
      MDSI-TBU after the Closing Date including, without limitation, such
      operating manuals, books of account and financial records as DDS may
      request.

5.10  Grants. If DDS or MDSI UK is required to repay all or any part of the
      150,000 British pound grant from the British Government to MDSI UK , MDSI
      shall repay DDS, and the threshold limitations set out in section 9.2
      shall not apply to any claim by DDS based on this covenant. DDS shall not
      initiate any communications with the British Government with respect to
      this grant and will not answer any questions with respect to this grant
      (without due consultation with MDSI), except as required by law. This
      section 5.10 and the covenants contained in this section 5.10 shall
      survive the Closing and continue in full force and effect indefinitely for
      the benefit of DDS.

6. COVENANTS OF DDS

DDS hereby covenants and agrees with MDSI as follows:

6.1   DDS Options. In addition to the anti-dilution protection set out at
      section 2.2, DDS will not, pursuant to any share compensation arrangement,
      reserve for issuance DDS Shares, or grant share options to directors,
      officers, employees, consultants or any other service providers
      exerciseable for an amount of DDS Shares representing in the aggregate
      greater than 20% of the issued and outstanding shares of DDS at the time
      of grant, and DDS will not grant to any one director, officer, employee,
      consultant or other service provider of DDS share options pursuant to
      share compensation arrangements exerciseable for an amount of DDS Shares
      representing greater than 5% of the issued and outstanding shares of DDS
      at the time of grant. For the purposes of this section 6.1, "share
      compensation arrangement" and "service provider" shall have the meanings
      ascribed to such terms in section 627 of The Toronto Stock Exchange
      Company Manual.

<PAGE>
                                      -27-


6.2   DDS To Be Taken Public. DDS shall use all commercially reasonable efforts
      and shall become a publicly traded entity by the later of the following
      three deadlines (the "First Penalty Date"): (a) two years from the Closing
      Date (the "First Deadline"); (b) six months from the date of the First
      Deadline if, at the time of the First Deadline, DDS has entered into a
      bonafide enforceable underwriting or agency agreement with a registered
      dealer to take DDS public or DDS has entered into any other binding
      agreement (e.g., amalgamation) the completion of which will result in DDS
      becoming a publicly traded entity; or (c) one year from the First
      Deadline, if either of the following two circumstances exists on the First
      Deadline: (i) "market out" conditions exist as evidenced by the figure on
      the IPO index to be agreed to by the parties prior to Closing, , or (ii)
      DDS has not been offered terms by an underwriter or registered dealer to
      be taken public on a "best efforts" agency basis or better for a value
      that represents 1.5 times the annual revenue of DDS or 15 times the net
      earnings of DDS (the foregoing circumstances being the "Market Out
      Conditions"), both such circumstances being measured on the 4 financial
      quarters prior to the First Deadline Date proposed to be included in the
      offering memorandum, prospectus or other securities document regarding the
      proposed offering.. If DDS is not a publicly traded entity by the First
      Penalty Date, then DDS shall issue 170,601DDS Shares from treasury to MDSI
      forthwith (which amount equals 20% of the Purchased DDS Shares on the
      Effective Date). If DDS is not a publicly traded entity by the first
      anniversary date after the First Deadline and by each subsequent
      anniversary date thereafter (each such date being a "Subsequent
      Deadline"), then DDS shall issue 85,301 DDS Shares from treasury forthwith
      to MDSI (which amount equals 10% of the Purchased DDS Shares on the
      Effective Date). Notwithstanding the foregoing, if on the First Penalty
      Date or any Subsequent Deadline, either of the Market Out Conditions still
      exists and DDS is not a publicly traded entity, DDS shall not be required
      to issue the DDS Shares which are due on the First Penalty Date or that
      Subsequent Deadline (and the First Penalty Date and/or the Subsequent
      Deadline shall be moved one year into the future). In addition to the
      foregoing, and notwithstanding Part 5 of the DDS Shareholders' Agreement,
      at any time after 6 months prior to the First Deadline, DDS shall have the
      right to purchase or arrange for another party or parties to purchase
      MDSI's interest in DDS for an amount equal to the number of DDS Shares
      held by MDSI on the date DDS gives written notice to MDSI of its intention
      to exercise such purchase right, multiplied by the DDS Valuation Price on
      that date (provided that if DDS goes public within 9 months of such
      purchase, the purchase price will be adjusted to reflect the net proceeds
      per share realized on the public offering, as further adjusted, if
      necessary for example, for stock splits and share consolidations and
      similar matters).

6.3   Permitted Encumbrance of MDSI's Shareholding. MDSI shall have the right to
      encumber its shareholding in DDS under MDSI's security agreements with its
      bankers, provided that the terms of such security agreements do not
      prohibit the transfer of such shareholding by MDSI pursuant to the DDS
      Shareholders' Agreement or hereunder and the same is acknowledged in
      writing by such bankers. DDS hereby consents to any such encumbrance for
      the purpose of section 2.2 of the DDS Shareholders' Agreement.

6.4   Provision of Financial Information. DDS shall provide quarterly unaudited
      and annual audited financial statements to MDSI as soon as possible upon
      such financial statements being produced, and MDSI agrees to keep any such
      financial statements confidential.

6.5   Payment of Taxes. DDS will be liable for and will pay all sales and
      transfer taxes, federal taxes and all other taxes, duties or other like
      charges properly payable upon and in connection with the conveyance and
      transfer of the MDSI-TBU Assets by MDSI to DDS including but not limited
      to GST, sales tax under the Social Services Tax Act (British Columbia) and
      Stamp Duties in connection with the transfers of the MDSI-TBU IP Assets,
      the MDSI-UK and, if any, the MDSI-Singapore Shares, and DDS will indemnify
      and hold harmless MDSI for any such outstanding amounts.

6.6   Financial Statements. On or prior to Closing, DDS shall provide MDSI with
      copies of the DDS Financial Statements.

6.7   Airborne Freight Corporation Settlement. DDS acknowledges that MDSI is
      currently involved in a contractual dispute with Airborne Freight
      Corporation. DDS agrees that MDSI shall have the right to pursue Airborne
      Freight Corporation with respect to payment under this contract, provided
      that MDSI does not commence any litigation proceedings. DDS further agrees
      that MDSI shall be entitled to and shall retain 100% of any and all

<PAGE>
                                      -28-


      settlement proceeds obtained by MDSI from Airborne Freight Corporation in
      connection with this matter, provided that such settlement shall occur
      either prior to Closing or up to 90 days after the Closing Date (except
      that any payments to be made by Airborne Freight Corporation to MDSI
      relating to such settlement may be made over time, beyond such time
      period).

6.8   Retention of MDSI-UK Employees Required to Complete Copenhagen Taxi
      Contract. DDS shall use commercially reasonable efforts to retain , David
      Weeden, Bernie Goosman, and Steve Burt (the "Retained Employees"), whose
      services MDSI has confirmed it requires to fulfill its obligations
      regarding the Copenhagen Taxi project under section 5.1 hereof, as
      employees of MDSI-UK after Closing, and DDS shall not terminate or
      constructively dismiss the Retained Employees, or take any steps in
      furtherance of same, until after the Site Acceptance Time. MDSI shall pay
      DDS for the services of the Retained Employees at the rates set out in
      section 7.2 below.

6.9   Employment Contract and Employee Information. Prior to Closing, DDS shall
      provide to Kenneth R. Miller, CEO of MDSI, on a strictly confidential
      basis for his review only the following information in written form: a
      list of the range of salaries (including all bonuses, incentives, benefits
      and other compensation) of all DDS employees and a copy of the standard
      form of employment agreement used by DDS for its employees.

6.10  Discontinuance of Use of Names, Trademarks, Etc. Within 90 days of
      Closing, DDS shall discontinue, and cease and desist from, the use of all
      names, trademarks, slogans and logos currently used by MDSI and its
      affiliates in connection with the MDSI-TBU. Provided DDS takes or causes
      to be taken all commercially reasonable steps required to effect and
      complete the change of name of MDSI-UK to Digital Despatch (UK) Ltd. and
      of MDSI-Singapore to Digital Despatch Pte. Ltd., or any such similar names
      on Closing (and DDS will promptly provide MDSI with evidence of same) no
      later than 30 days from the date of such name changes, DDS shall ensure
      that all new proposals and letterhead and any legal agreements are entered
      into under the applicable DDS legal name.

6.11  Auselda or other commission: If MDSI brings a substantial customer to DDS
      or its affiliates (the total consideration being over UK Pounds 1,000,000,
      such as for example Rome Taxi or Milan Taxi through Auselda) which results
      in a signed contract, within 12 months of the Closing Date DDS will pay
      MDSI a commission of 3% of the gross margin on the total consideration
      under such customer contracts. MDSI (or as MDSI may direct) will be paid
      such commission when DDS receives its milestone payments from such
      customers so that MDSI receives its commission on a pro-rata basis with
      each milestone payment.

7. MUTUAL COVENANTS AND OF DDS AND MDSI

DDS and MDSI each mutually covenant and agree with one another as follows:

7.1   No Solicitation. Subject to section 7.2 below, both MDSI and DDS will not
      solicit each other's existing employees for a period of 3 years from the
      date of Closing, except that DDS shall be entitled to solicit any or all
      MDSI employees who are employed by MDSI-TBU at Closing, as set out in the
      list at Schedule "M".

7.2   Provision of Employee Services. The parties acknowledge and agree that
      during the transition period immediately following the Effective Date, DDS
      will require the services of certain MDSI employees and, in order to
      complete the Copenhagen Taxi project, MDSI will require the services of
      certain employees of DDS, and each of the parties agrees to make such
      services available to the other. In connection with these arrangements, ,
      the party receiving such services will pay the other party an amount per
      employee equal to that employee's salary or hourly rate multiplied by 1.4.
      For greater certainty, each party shall hire and be responsible for their
      own contractors from and after the Effective Date (except for S. Bond who
      shall be DDS's responsibility).

7.3   Confidential Information. Any Confidential Information provided by either
      party to the other during the course of the due diligence investigation
      carried out in connection with the Transaction shall be kept confidential
      by the receiving party, its employees and professional advisors and will
      not be disclosed to any other Person for a period expiring on May 31,
      2004. Any obligations hereunder relating to the non-disclosure of the
      source code and trade secrets of a party shall remain in force and effect
      indefinitely. For the purposes of this section 7.3, "Confidential

<PAGE>
                                      -29-


      Information" shall mean all information regarding the business and affairs
      of DDS or MDSI, as the case may be, furnished by or on behalf of the other
      party or its affiliates, directors, officers, employees, agents,
      professional advisors or controlling persons in connection with the due
      diligence investigation carried out by each of DDS and MDSI in connection
      with the Transaction. Any information provided by either party to the
      other will not be deemed Confidential Information if it is generally
      available to the public, it is or becomes known to the receiving party
      independently of the party providing the information, or it is obtained
      from a third party without restriction and without breach of this
      Agreement.

7.4   Consents and Notices. After the Closing of the Transaction:

      (a)   each of DDS and MDSI shall use all reasonable efforts, and the
            parties shall cooperate with each other to obtain, all consents,
            waivers, approvals, and authorizations, which may be necessary to
            effect the Transaction; and

      (b)   each of DDS and MDSI will promptly execute and file, or join in the
            execution and filing of, any application or other document that may
            be necessary in order to obtain the authorization, approval or
            consent of any governmental entity which may be reasonably required,
            or which the other party may reasonably request in connection with
            the consummation of the Transaction. Each of DDS and MDSI will use
            reasonable efforts to obtain promptly all such authorizations,
            approvals and consents.

7.5   Press Releases. Before issuing any press release or otherwise making any
      public statements with respect to the Transaction, DDS and MDSI shall
      consult with each other and shall undertake reasonable efforts to agree
      upon the terms of such press release, and shall not issue any such press
      release or make any such public statement prior to such consultation,
      except as may be required by applicable law or by obligations pursuant to
      any listing agreement with any stock exchange or national securities
      exchange.

7.6   Y2K Covenant. Notwithstanding anything in this Agreement to the contrary,
      MDSI's sole liability with respect to Year 2000 Compliance and Y2K defects
      is set out in this section 7.6. For the purposes of this section 7.6,
      "Material Contracts" shall mean the customer agreements (in the form in
      which such agreements exist at Closing) included with the MDSI-TBU
      Material Contracts acquired by DDS under this Agreement.

7.6.1 MDSI shall continue and complete its Y2K testing on the MDSI-TBU Software
      Products until and on the Closing Date (except for the Copenhagen project
      which will continue until the Site Acceptance Time). DDS shall perform all
      reasonable further Y2K testing on the MDSI-TBU Software Products for the
      remainder of the year 1999. If DDS discovers and demonstrates that there
      is a substantial Y2K defect (meaning a single defect or batch of defects
      requiring an aggregate of more than 15 man days to correct in the MDSI-TBU
      Software Products supplied under one or more Material Contracts, primarily
      attributable to MDSI and not materially attributable to any other party
      including DDS; a "Substantial Y2K Defect"), and MDSI's sole
      responsibility, except as described in section 7.6.3, shall be to pay the
      costs for DDS to remedy such Substantial Y2K Defect(s) at the rate
      calculated in accordance with section 7.2. If DDS's estimates for the
      costs to remedy are unreasonable, MDSI may submit such dispute to be
      resolved by arbitration. The correction of any non Substantial Y2K Defects
      shall be the sole responsibility of DDS. For greater certainty any work
      done by DDS or MDSI UK employees to assist MDSI in the completion of the
      Copenhagen taxi project to the Site Acceptance Time and to assist MDSI in
      the completion of the RTL voice fall back functionality shall be deemed to
      be work that is solely attributable to MDSI for Y2K liability.

7.6.2 DDS shall respond to customer requests for support and/or maintenance
      related to Year 2000 Compliance issues within the time frames set out in
      the maintenance and support agreements included as Material Contracts. For
      greater certainty, DDS shall not be in breach of such response time
      obligations if it responds within the applicable time period, but is
      unable to resolve the defect because of a Substantial Y2K Defect. From
      December 1, 1999 through and including April 30, 2000 if DDS knows or
      suspects that a request for support or maintenance arises from a
      Substantial Y2K Defect (or after this date if DDS knows that a defect
      relates to a year 2000 compliance issue arising directly from the MDSI-TBU
      Software): (i) if there are any requests for support or maintenance

<PAGE>
                                      -30-


      under the Material Contracts, DDS shall notify MDSI of any such requests
      forthwith upon receiving the request from the customer; (ii) DDS shall
      also notify MDSI of DDS' response time in connection with such customer
      request and whether or not such response was within the time period set
      out in the applicable support and maintenance agreement; and (iii) DDS
      shall also notify MDSI of the particulars of the resolution of a customer
      request for support or maintenance where the request is related to a year
      2000 compliance issue arising directly from the MDSI-TBU Software. In
      addition to the foregoing, throughout this period DDS shall provide all
      disclosure to MDSI as reasonably requested by MDSI and MDSI shall be
      entitled, at its own expense, to have any of its employees or
      representatives attend any significant meetings or tests, provided that
      such attendance will be strictly in the capacity of an observer, and such
      employees or representatives shall not participate in or influence any
      discussions with the customer.

7.6.3 If at any time during the period beginning on December 1, 1999 to the end
      of the survival period of the representations and warranties under this
      Agreement, DDS can demonstrate that the MDSI-TBU Software contains a
      Substantial Y2K Defect:

      (a)   MDSI shall pay the costs to remedy any such Substantial Y2K Defect
            at the rate calculated in accordance with section 7.2 (or at MDSI's
            option, in full consultation with DDS, MDSI may perform such
            remedial work); and

      (b)   MDSI shall also indemnify DDS from and against any and all
            liabilities, claims, demands, costs, expenses, losses, damages,
            actions, causes of action and judgements whatsoever incurred or
            suffered by or asserted against DDS arising from any Substantial Y2K
            Defects, provided that DDS has not amended and shall not amend any
            provision relating to the limitation of liability in any Material
            Contract.

      If DDS has not amended the applicable limitation of liability provision in
      a Material Contract, MDSI may be liable for a Substantial Y2K Defect for
      an amount in excess of this limit of liability, if a court of competent
      jurisdiction delivers a final and non-appealable judgement that states
      that such limitation of liability is not enforceable. Any claims for
      indemnification by DDS under this section shall not be limited by the
      threshold limits set out in section 9.2 of this Agreement, but in all
      other respects the provisions of section 9 shall apply to any such claims.
      If any customer or other third party commences or threatens to commence
      any legal action against DDS arising from any such Substantial Y2K Defect,
      DDS shall immediately give written notice of the particulars of such
      action or threatened action to MDSI. Moreover where DDS wishes to rely
      upon the indemnification provisions set out in section 9 or otherwise make
      a claim for indemnity in connection with such Substantial Y2K Defect
      against MDSI, MDSI shall have the right to participate in and, to the
      extent it may wish to do so, assume the defence of such legal action in
      accordance with section 9.7. Notwithstanding the foregoing, in the year
      2000, if DDS discovers and demonstrates that there is a Substantial Y2K
      Defect in the MDSI-TBU Software supplied by MDSI to RTL, MDSI shall pay
      one half of the amount of any claim for loss of profits and/or liquidated
      damages relating to such Substantial Y2K Defect and DDS shall pay the
      other half of such amount. The correction of any non Substantial Y2K
      Defects shall be the sole responsibility of DDS.

7.7   DHL AP. If prior to the Closing Date MDSI is able to settle the
      outstanding account of $512,000 with DHL AP, MDSI shall keep all of the
      funds in connection with such settlement. If MDSI is not able to settle
      the outstanding accounts with DHL AP prior to the Closing Date, at Closing
      MDSI shall cause MDSI-UK to assign all rights to recover the account
      (including any documents reasonably required to assist MDSI in collecting
      such accounts) to MDSI so that MDSI may pursue the collection of the
      outstanding account after the Closing Date. For a period of 3 months from
      the Closing Date, MDSI shall attempt to settle this account amicably with
      DHL AP and accordingly MDSI will not threaten or commence legal action
      against DHL AP during this period to collect this outstanding account.
      After this 3 month period expires: if MDSI has not settled this account
      and DHL AP indicates that it is not prepared to continue to take delivery
      of products and services under the existing terms of its customer
      agreement with MDSI-UK, MDSI may commence legal action against DHL AP to
      collect this account; if DHL AP indicates that it is prepared to continue
      to take delivery of products and services under the existing terms of its
      customer agreement with MDSI-UK, DDS shall pay to MDSI MDSI's pro rata
      share of all funds received by DDS under this agreement, such share being
      (pound)86.44 per unit shipped.

<PAGE>
                                      -31-


7.8   Kolding Agreement. On or before Closing, MDSI shall procure from Kolding
      Taxi: (i) an assignment and transfer of the Kolding Taxi agreements from
      MDSI Software B.V. to MDSI UK; (ii) the agreement from Kolding Taxi that
      Kolding Taxi will not make claims under the existing bank guarantee for
      any breach relating to the failure to meet the delivery time schedule for
      the Kolding Taxi project; (iii) a signed written waiver or deletion of
      Kolding Taxi's right under section 23 of its Taxi Despatch supply contract
      with MDSI BV to terminate such contract; (iv) the proviso that if the taxi
      despatch system being supplied by MDSI UK to Kolding is not delivered by
      December 31, 1999, MDSI UK will provide a Y2K workaround for the existing
      taxi despatch system used by Kolding so that it can despatch orders, in a
      reasonable period of time prior to December 31, 1999, and that MDSI's UK's
      maximum liability with respect to the provision of such a workaround shall
      be limited to DKK 500.000 (as this is the current estimate of the price of
      such workaround). In consideration of MDSI supporting and causing to be
      maintained the bank guarantee referenced above, , DDS shall indemnify MDSI
      for any claims made by Kolding Taxi for breach of any of the agreements
      between Kolding Taxi and MDSI UK (such as for example, all penalties
      charged by Kolding for delay), other than the liability for the provision
      of the Y2K workaround described in 7.8 (iv) above (for which MDSI shall
      pay MDSI UK or DDS on a time and materials basis). MDSI's maximum
      liability for the provision of the workaround described in 7.8 (iv) above
      shall be limited to DKK 500,000. However, for greater certainty, MDSI
      shall remain liable to DDS for Substantial Y2K Defects for the MDSI-TBU
      Software supplied by MDSI to DDS at the Site Acceptance Time under the
      Copenhagen contract (as this is the MDSI-TBU Software which will be used
      by DDS in connection with the Kolding project). DDS will be responsible
      for any Y2K defects that arise from any changes made to the MDSI-TBU
      Software by or at the direction of DDS.

7.9   Source Code Escrow. DDS agrees that MDSI shall have the right, and DDS
      shall take all reasonable steps to ensure access to such right, to
      immediate access to and possession of the source code for all of the
      MDSI-TBU Software being acquired by DDS under this Agreement and all
      documentation related to such source code (the "Source Code", which Source
      Code is to be placed into escrow in connection with the Closing), so that
      MDSI can complete the Copenahagen Taxi project to the Site Acceptance
      Time, so that MDSI can take appropriate steps in the event that MDSI is
      required to take remedial steps to address Substantial Y2K Defects, and
      otherwise as specifically described in this Agreement, with respect to any
      of the MDSI-TBU Software after Closing. At Closing, the Source Code shall
      be placed into escrow with a mutually agreeable escrow agent, and the
      terms of the escrow agreement shall include the release conditions set out
      above.

7.10  Delivery of Consents, Etc. Each of the parties shall deliver all consents,
      authorizations and approvals of, and all filings, recordings and
      registrations with, any governmental authority or regulatory body or any
      other third party that are reasonably required in order to consummate of
      the Transaction, including, but not limited to, those consents set out at
      section II.6 of the Document List.

8. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS TO SURVIVE CLOSING

8.1   All of the representations, warranties, covenants and agreements of the
      parties hereto contained in this Agreement will not merge on, and shall
      survive, the Closing and will continue in full force and effect for the
      benefit of DDS and MDSI. Except as specifically set out or contemplated in
      certain representations, warranties, covenants and agreements contained
      elsewhere in this Agreement (any such provisions being "Excepted
      Provisions", which will continue in full force and effect for the benefit
      of DDS or MDSI, as the case may be, in accordance with the terms thereof,
      such as the provisions relating to taxes and grants), the representations,
      warranties, covenants and agreements contained in this Agreement shall
      survive for a period of three years from the Closing Date.

9. INDEMNIFICATION

9.1   Mutual Indemnification. DDS and MDSI (the "Indemnifying Party") each
      mutually covenant and agree to indemnify the other (the "Indemnified
      Party") against all liabilities, claims, demands, actions, causes of
      action,

<PAGE>
                                      -32-


      damages, losses, costs or expenses suffered or incurred by or asserted
      against the Indemnified Party (each being referred to as a "Claim"),
      directly or indirectly, by reason of or arising out of:

      (a)   a breach of any warranties or representations on the part of the
            Indemnifying Party herein contained or contained in any of the Other
            Agreements; and

      (b)   a breach of any agreement, term or covenant on the part of the
            Indemnifying Party made or to be observed or performed pursuant
            hereto or pursuant to any of the Other Agreements.

      The amount of any Claim shall bear interest at a fixed rate of interest of
      8% per annum (the "Claim Rate"), calculated from and after the date such
      Claim is incurred or suffered by or asserted against the Indemnified Party
      to the date payment in full is made by the Indemnifying Party.

9.2   Limitations. No claim for indemnity shall be made pursuant to the forgoing
      section 9.1 unless and until the aggregate amount of all Claims to be made
      by the Indemnified Party equals $100,000 or more (the "Threshold Amount"),
      and each individual Claim included in such Threshold Amount must equal at
      least $10,000 (an "Eligible Claim") in order to be included in such
      Threshold Amount, however, after its aggregate Eligible Claims equal or
      exceed the Threshold Amount the Indemnified Party shall be entitled to
      indemnification in respect of the full amount of any such Eligible Claims.

9.3   MDSI Liability Re: MDSI-TBU Customer Contracts. As set out and
      contemplated in section 2.4 and except as specifically set out herein,
      from and after the time of Closing, MDSI shall not be responsible for any
      liabilities or obligations arising under any customer contracts or
      commitments of MDSI-TBU, all of which contracts and commitments MDSI
      confirms are listed in Schedule "D" and complete and accurate copies of
      which (disclosing all such liabilities and obligations) MDSI confirms it
      has provided to DDS. Subject to the limitations set out at section 9.2
      above, if after the time of Closing, any customer of MDSI-TBU claims and
      proves that MDSI or any of its affiliates had an obligation under the
      aforementioned contracts which was not disclosed to DDS, MDSI shall be
      responsible for and shall indemnify and hold harmless DDS for the amount
      of such claim.

9.4   Set-Off. DDS shall also be entitled (in addition to the foregoing right to
      indemnification or any other rights or remedies of DDS) to set-off against
      or make a reduction against any amount or amounts owing or payable by DDS
      to MDSI (including without limitation any amounts owing or payable
      pursuant to the Promissory Note), the amount of any Claim described in
      Section 9.1, together with interest thereon at the Claim Rate calculated
      from and after the date such Claim is incurred by or asserted against DDS
      to the date upon which set-off or payment so reduced is made by DDS. If at
      any time, any Claim referred to in this section 9.4 (plus interest
      thereon) exceeds the amount or amounts owing by DDS to MDSI, DDS shall
      have a general claim against MDSI for the payment of such excess and MDSI
      shall pay such excess to DDS forthwith upon written notification by DDS.
      MDSI shall also be entitled (in addition to the foregoing right to
      indemnification or any other rights or remedies of MDSI) to set-off
      against or make a reduction against any amount or amounts owing or payable
      by MDSI to DDS, the amount of any Claim described in Section 9.1, together
      with interest thereon at the Claim Rate calculated from and after the date
      such Claim is incurred by or asserted against MDSI to the date upon which
      set-off or payment so reduced is made by MDSI. If at any time, any Claim
      referred to in this section 9.4 (plus interest thereon) exceeds the amount
      or amounts owing by MDSI to DDS, MDSI shall have a general claim against
      DDS for the payment of such excess and DDS shall pay such excess to MDSI
      forthwith upon written notification by MDSI.

9.5   Expiry. The right of an Indemnified Party to indemnification or the right
      of DDS or MDSI to set-off under this Article 9 shall terminate on the date
      which is exactly three years following the Closing Date or, in the case of
      any Excepted Provision, on the date when such obligation terminates in
      accordance with the terms thereof (the "Expiry Date"), unless on or prior
      to the Expiry Date the Indemnified Party gives notice to the Indemnifying
      Party pursuant to section 9.6 of its intention to seek indemnification or
      set-off.

9.6   Notice. If an Indemnified Party intends to exercise its right of
      indemnification or set-off, it shall first give written notice thereof to
      the Indemnifying Party (a "9.6 Notice"), setting forth therein particulars
      of the nature of the

<PAGE>
                                      -33-


      Claim and estimated quantum of damages and attaching all relevant
      documentation in support of such Claim. The Indemnifying Party shall have
      15 days after receipt of the 9.6 Notice to pay or remedy the Claim,
      provided that if the Claim cannot, in the reasonable opinion of the
      Indemnifying Party by its nature be remedied within such 15 day period,
      the Indemnifying Party shall have up to a maximum of a further 45 days to
      remedy the Claim, if it proceeds immediately after receipt of the 9.6
      Notice and continues with all due diligence to take the necessary remedial
      action. Any such 9.6 Notice shall be final and binding on the Indemnifying
      Party, and the Indemnifying Party shall be deemed to agree to indemnify
      the Indemnified Party (or to set-off against any amount owing by the
      Indemnifying Party to the Indemnified Party, as the case may be) in
      respect of the amounts indicated in such 9.6 Notice, unless, within 15
      days of receipt of such 9.6 Notice, written notice of objection is given
      by the Indemnifying Party to the Indemnified Party. If notice of objection
      is given pursuant to this section 9.6, the Indemnifying Party and the
      Indemnified Party shall consult with one another with respect to the
      objection. If the foregoing parties are not able to reach agreement within
      15 days after the notice of objection is given, the dispute shall be
      resolved by an independent arbitrator, to be agreed upon by such parties.
      If no agreement concerning the identity of the arbitrator is reached
      within 30 days after the notice of objection is given, either of the
      Indemnifying Party or the Indemnified Party may apply to a court of
      competent jurisdiction for an order, under the Commercial Arbitration Act
      (British Columbia) or any successor legislation thereto, appointing an
      independent arbitrator. The resolution of the dispute, including the issue
      of responsibility for costs in respect of the arbitration and any motions
      to appoint the arbitrator, shall be provided by the independent arbitrator
      in a written decision to be delivered simultaneously to the Indemnifying
      Party and the Indemnified Party, which decision shall be final and binding
      on the parties and shall not be subject to appeal or judicial review.

9.7   Third Party Claims. Notwithstanding the provisions of section 9.6,
      promptly after receiving notice of any action, suit, proceeding or claim
      against an Indemnified Party or receipt of notice of the commencement of
      any investigation which is based, directly or indirectly, upon any matter
      in respect of which indemnification may be sought from the Indemnifying
      Party (a "Third Party Claim"), such Indemnified Party will notify the
      Indemnifying Party in writing of the particulars thereof, will provide
      copies of all relevant documentation to the Indemnifying Party and, unless
      the Indemnifying Party assumes the defence thereof, will keep the
      Indemnifying Party advised of the progress thereof and will discuss all
      significant actions proposed. The omission so to notify the Indemnifying
      Party shall relieve the Indemnifying Party of any liability which the
      Indemnifying Party may have to the Indemnified Party under this Agreement.
      The Indemnifying Party shall be entitled, at its own expense, to
      participate in and, to the extent it may wish to do so, assume the defence
      of any Third Party Claim, provided such defence is conducted by
      experienced and competent counsel. Upon the Indemnifying Party notifying
      the Indemnified Party in writing of the Indemnifying Party's election to
      assume the defence and retaining counsel, the Indemnifying Party shall not
      be liable to the Indemnified Party for any legal expenses subsequently
      incurred by the Indemnified Party in connection with such defence. If such
      defence is assumed by the Indemnifying Party, the Indemnifying Party
      throughout the course thereof will provide copies of all relevant
      documentation to the Indemnified Party, will keep the Indemnified Party
      advised of the progress thereof and will discuss with the Indemnified
      Party all significant actions proposed. Notwithstanding the foregoing, any
      Indemnified Party shall have the right, at the Indemnifying Party's
      expense (except as specifically set out in (iii) below), to employ counsel
      of such Indemnified Party's choice, in respect of the defence of any Third
      Party Claim if: (i) the employment of such counsel has been authorized by
      the Indemnifying Party; or (ii) the Indemnifying Party has not assumed the
      defence and employed counsel therefor within a reasonable time after
      receiving notice of such Third Party Claim; or (iii) counsel retained by
      the Indemnifying Party or the Indemnified Party has advised the
      Indemnified Party that representation of both parties by the same counsel
      would be inappropriate because there may be legal defences available to
      the Indemnified Party which are different from or in addition to those
      available to the Indemnifying Party (in which event and to that extent,
      the Indemnified Party shall be responsible for its own expenses and the
      Indemnifying Party shall not have the right to assume or direct the
      defence on the Indemnified Party's behalf) or that there is a conflict of
      interest between the Indemnifying Party and the Indemnified Party (in
      which event the Indemnifying Party shall not have the right to assume or
      direct the defence on the Indemnified Party's behalf). No admission of
      liability and no settlement of any Third Party Claim shall be made without
      the consent of the Indemnified Party affected, such consent not to be
      unreasonably withheld. No admission of liability shall be made and the
      Indemnifying Party shall not be liable for any settlement of any Third
      Party Claim made without its consent, such consent not to be unreasonably
      withheld.

<PAGE>
                                      -34-


9.8   Postponement of Amounts Payable. During the period from and after the date
      a 9.6 Notice is given to and including the date the Claim is paid,
      set-off, remedied or resolved by agreement or arbitration, the payment of
      any amount which becomes due by the Indemnified Party to the Indemnifying
      Party hereunder, under any of the Other Agreements or otherwise shall be
      postponed; PROVIDED THAT any amount so postponed shall bear interest at
      the Claim Rate calculated from and after the date such amount was
      otherwise due to and including the date upon which the Claim giving rise
      to such postponement is paid, set-off, remedied or resolved. For greater
      certainty, to the extent that any amount is validly set off from any other
      amount so postponed, interest shall only be calculated and owing on the
      net amount.

9.9   No Indemnity for Negligence of Indemnified Party. Notwithstanding any of
      the foregoing provisions in this section 9, this right of indemnity shall
      not apply to the extent that an arbitrator or a court of competent
      jurisdiction in a final judgment that has become non-appealable shall
      determine that such expenses, losses, claims, actions, damages or
      liabilities to which the Indemnified Party may be subject were directly
      caused by the negligence or willful misconduct of the Indemnified Party or
      the breach of this Agreement or any of the Other Agreements by the
      Indemnified Party.

10. DDS'S CONDITIONS OF CLOSING

10.1    All obligations of DDS under this Agreement are subject to the
        fulfillment prior to, or at, the Closing of the following conditions:

      (a)   the representations and warranties of MDSI set forth in this
            Agreement shall be true and correct as of the Closing as if made by
            MDSI at the Closing;

      (b)   MDSI shall have complied with all terms, covenants and agreements in
            this Agreement to be performed or caused to be performed by it on or
            before the Closing except as otherwise specifically agreed to by
            DDS;

      (c)   Subject to the post-closing adjustments, MDSI will have restructured
            the MDSI-TBU so that MDSI-UK and MDSI-Singapore will have a net book
            value of $1,000,000 calculated in accordance with Canadian GAAP as
            provided in section 2.1 (b);

      (d)   No substantial damage to or alteration in the undertaking and assets
            of the MDSI-TBU or any changes or amendments to statutes,
            regulations or orders relating to the MDSI-TBU or the MDSI-TBU
            Assets shall have occurred on or prior to the Closing Date, which in
            DDS's sole opinion would materially adversely affect their value;
            and

      (e)   The parties shall have entered into a non-competition agreement
            whereby MDSI shall agree not to compete directly with DDS in
            marketing or developing a dispatch product for the taxi, courier,
            airport, asset management and roadside recovery products for a
            period of 5 years from the date of Closing.

10.2  DDS's conditions of closing are for the sole benefit of DDS. In case any
      of the foregoing conditions shall not be fulfilled and/or performed at or
      before the Closing to the satisfaction of DDS, DDS may rescind this
      Agreement by notice to MDSI and in such event DDS shall be released from
      all obligations hereunder; provided that any of the said conditions may be
      waived in whole or in part by DDS without prejudice to any rights of
      rescission it may have in the event of the non-fulfillment of any other
      condition or conditions, any such waiver to be binding upon DDS only if
      the same is in writing.

11. MDSI'S CONDITIONS OF CLOSING

11.1  All obligations of MDSI under this Agreement are subject to the
      fulfillment prior to, or at, the Closing of the following conditions:

(a)   the representations and warranties of DDS set forth in this Agreement
      shall be true and correct as of the Closing as if made by DDS at the
      Closing;

(b)   DDS shall have complied with all terms, covenants and agreements in this
      Agreement to be performed or caused to be performed by it on or before the
      Closing except as otherwise specifically agreed to by MDSI;

<PAGE>
                                      -35-


(c)   MDSI and Ghai Investments Ltd. ("GIL") shall have executed a side
      agreement (the "Side Agreement") concurrently with the execution of this
      Agreement, which Side Agreement shall include the following provisions:
      (i) a covenant granted by GIL that provides that the combined salaries,
      benefits and loans taken directly or indirectly by Vari and Neera Ghai
      shall not exceed a certain specified amount (which amount shall be
      increased each year by a specified percentage); and (ii) a covenant
      granted by GIL that provides that MDSI's shareholding interest in DDS will
      not be diluted under section 6.12 of the DDS Shareholders' Agreement;

(d)   The parties shall have entered into a non-competition agreement such that
      DDS shall not compete directly with MDSI in developing or marketing a
      dispatch or work management product for the telco, cable, utilities or
      field service markets. During the 5 year term of this covenant not to
      compete, such covenant shall terminate prior to the end of this 5 year
      period if DDS becomes a public company or MDSI's shareholding in DDS falls
      below 7%;

(e)   DDS shall have procured waivers of pre-emptive rights from all of the
      existing DDS shareholders with respect to the issuance of the Purchased
      DDS Shares; and

(f)   The assets of MDSI-UK which are not related to the MDSI-TBU shall be
      transferred to MDSI or its affiliates prior to Closing.

11.2 MDSI's conditions of closing are for the sole benefit of MDSI. In case any
of the foregoing conditions shall not be fulfilled and/or performed at or before
the Closing to the satisfaction of MDSI, MDSI may rescind this Agreement by
notice to DDS and in such event MDSI shall be released from all obligations
hereunder; provided that any of the said conditions may be waived in whole or in
part by MDSI without prejudice to any rights of rescission it may have in the
event of the non-fulfillment of any other condition or conditions, any such
waiver to be binding upon MDSI only if the same is in writing.

12 MUTUAL CONDITIONS OF CLOSING OF DDS AND MDSI

12.1  The obligations of DDS and MDSI to consummate the Transaction are subject
      to the satisfaction of the following conditions on or prior to the Closing
      Date, each of which may be waived only with the consent in writing of DDS
      and MDSI:

      (a)   the execution by MDSI and DDS of this Agreement and the Other
            Agreements containing such representations, warranties, covenants,
            terms and conditions as may mutually be agreed between the parties
            acting reasonably;

      (b)   the delivery of all other consents, authorizations and approvals of,
            and all filings, recordings and registrations with, any governmental
            authority or regulatory body or any other third party that are
            required as a condition to the consummation of the transactions
            contemplated by this Agreement, including but not limited to those
            consents set out at section II.6 of the Document List;

      (c)   the entering into, simultaneously with this Agreement, of an
            non-exclusive cooperative marketing agreement (the "Marketing
            Agreement") between MDSI and DDS with respect to the promotion and
            marketing of certain prospective taxi, courier and roadside recovery
            customers by MDSI to DDS, and certain prospective telco, cable,
            utilities and field service customers by DDS to MDSI, with a 5 year
            term, pursuant to which MDSI and DDS will work together to find ways
            to sell each of the other's products to each of the other's markets;

      (d)   no temporary or permanent retraining order, preliminary injunction,
            permanent injunction or other order preventing the consummation of
            the Transaction shall have been issued by any national, federal,
            state, provincial or other court (whether domestic or foreign)
            having jurisdiction and remaining in effect;

      (e)   there shall not be pending or threatened any suit, action or
            proceeding by any governmental entity, before any court or
            governmental authority, agency, or tribunal, domestic or foreign,
            that has a significant likelihood of success, seeking to restrain or
            prohibit the consummation of the Transaction or any of the other
            transactions contemplated by this Agreement or seeking to obtain
            from DDS or MDSI or any of their subsidiaries any damages that are
            material in relation to DDS, MDSI and their subsidiaries

<PAGE>
                                      -36-


            taken as a whole; and

      (f)   the amendment to the Kolding Taxi contract referred to in section
            7.8 shall be made to the satisfaction of both MDSI and DDS.

13. TRANSACTION AT CLOSING

13.1  DDS's Covenants at Closing. The Closing shall take place at the offices of
      MDSI at10:00a.m. on June 15, 1999 (the "Closing Date"), or at such other
      place and time as the parties shall mutually agree upon. DDS covenants and
      agrees that at Closing it shall:

      (a)   Delivery and Issuance of DDS Shares: deliver to MDSI a share
            certificate in the name of MDSI representing the Purchased DDS
            Shares, and cause all necessary corporate action and proceedings of
            DDS to be taken to permit the due and valid authorization,
            allotment, issuance and registration of the Purchased DDS Shares to
            and in the name of MDSI;

      (b)   Delivery of Documents and Ancillary Agreements: deliver to MDSI:

      (i)   a certificate of incumbency of Vari Ghai;

      (ii)  directors' resolutions of DDS authorizing the Transaction, including
            the issuance of the Purchased DDS Shares in the name of MDSI and the
            issuance of new share certificates;

      (iii) a certificate, dated on closing, attesting to the accuracy of the
            representations and warranties contained in this Agreement;

      (iv)  evidence of appropriate entries in the Register of Members of DDS;

      (v)   the Promissory Note, duly executed;

      (vi)  the Direction of DDS referred to in section 5.5; and

      (vii) such other documents, instruments and agreements as shall be
            reasonably required by MDSI to complete the Transaction.

13.2  MDSI's Covenants at Closing. MDSI covenants and agrees that at Closing it
      shall:

      (a)   Delivery and Transfer of MDSI-UK and MDSI-Singapore Shares: deliver
            to DDS the share certificates in the name of MDSI representing the
            MDSI-UK Shares and the MDSI-Singapore Shares duly endorsed for
            transfer to DDS, and cause all necessary corporate action and
            proceedings of MDSI-UK and MDSI-Singapore to be taken to permit the
            due and valid transfer and registration of the MDSI-UK Shares and
            the MDSI-Singapore Shares to and in the name of DDS; and

      (b)   Delivery of Documents and Ancillary Agreements: deliver to DDS:

      (i)   a certificate of incumbency of the officers and directors of MDSI-UK
            and MDSI Singapore;

      (ii)  a copy of sole shareholder's resolutions of MDSI-UK and
            MDSI-Singapore changing their names to Digital Despatch (UK) Ltd.
            and Digital Despatch Pte. Ltd., respectively;

      (iii) the respective resignations as a director and/or officer and or
            employee of all of the directors and officers of MDSI-UK and
            MDSI-Singapore, and their respective personal releases, in form and
            substance

<PAGE>
                                      -37-


            satisfactory to DDS, acting reasonably, of all contracts with and
            claims against MDSI-UK and/or MDSI-Singapore, entered into or
            arising prior to the time of Closing;

      (iv)  directors' resolutions of MDSI-UK and MDSI-Singapore authorizing the
            transfer to and registration of the MDSI-UK Shares and the
            MDSI-Singapore Shares in the name of DDS and the issuance of new
            share certificates, accepting resignations of current directors and
            officers and installing new directors and officers;

      (v)   directors' resolutions of MDSI approving the Transaction;

      (vi)  a certificate, dated on closing, attesting to the accuracy of the
            representations and warranties contained in this Agreement;

      (vii) Schedule of Additional Shareholders to the DDS Shareholders'
            Agreement, undertaking to be bound by and comply with the DDS
            Shareholders' Agreement;

      (viii) evidence of appropriate entries in Register of Members and
            Transfers of MDSI-UK and MDSI-Singapore;

      (ix)  such other documents, instruments and agreements as shall be
            reasonably required by DDS to complete the Transaction; and

      (ii)  Delivery of Source Code to Escrow Agent: deliver to the escrow agent
            the Source Code.

13.3 Mutual Covenants at Closing. DDS and MDSI each covenant and agree that at
closing they shall deliver, or cause to be delivered, final executed copies of
the following agreements:

        (a)    this Agreement;

        (b)    the Side Agreement;

        (c)    an escrow agreement among DDS, MDSI and an escrow agent
               acceptable to both parties, with respect to the deposit with the
               escrow agent of the Source Code;

        (d)    the Marketing Agreement;

        (e)    the Non-Competition Agreement referred to at section 10.1(d);

        (f)    the Employment Agreements;

        (g)    an Assignment and Assumption Agreement providing for the
               assignment of all of the MDSI-TBU IP Assets from certain related
               entities or affiliates of MDSI to MDSI-UK or DDS, or a wholly
               owned subsidiary of DDS. This Assignment and Assumption Agreement
               may provide that some or all of the Purchased DDS Shares to be
               issued to MDSI are issued to MDSI Software SRL;

        (h)    an Assignment and Assumption Agreement providing for the
               assignment or subcontracting of the MDSI-TBU customer agreements
               (as set out in and included as part of Schedule "D") from certain
               related entities or affiliates of MDSI to MDSI-UK; and

        (i)    the agreement with Kolding Taxi referred to in section 7.8.

<PAGE>
                                      -38-


13.4  Deadline for Closing. The Closing of the Transaction shall in no event
      take place later than June 15, 1999, unless such date is extended by both
      parties in writing.

14. GENERAL PROVISIONS

14.1  Time. Time shall be of the essence hereof.

14.2  Expenses. Except as specifically provided for elsewhere in this Agreement,
      all costs and expenses incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the party incurring such
      expenses.

14.3  Notices. Any notice or other writing required or permitted to be given
      hereunder or for the purpose hereof shall be sufficiently given if hand
      delivered or telecopied to the party to whom it is given or if mailed, by
      prepaid registered mail, in any such case addressed to such party:

      if to DDS at:

      11920 Forge Place
      Richmond, B.C.
      V7A 4V9

      Attention: Vari Ghai
      Telecopier: (604) 241-1440

      if to MDSI at:

      10271 Shellbridge Way
      Richmond, British Columbia
      V6X 2W8

      Attention: Ken Miller
      Telecopier: (604) 207-6060

      or to such other address or telecopier number as is specified by the
      particular party by notice to the others. Any notice delivered or sent in
      accordance with this Agreement shall be deemed to have been given and
      received, if delivered, on the next day after the day of delivery and if
      sent by telecopier on the first business day following the day of
      transmittal.

14.4  Governing Law. This Agreement, including the performance and
      enforceability hereof, shall be governed by and construed in accordance
      with the laws of the Province of British Columbia and the federal laws of
      Canada applicable therein, without reference to the principles of
      conflicts of law. Each of the parties hereby submits itself for the sole
      purpose of this Agreement and any controversy arising hereunder to the
      exclusive jurisdiction of the courts of the Province of British Columbia,
      and any courts of appeal therefrom, and waives any objection (on the
      grounds of lack of jurisdiction, or forum non conveniens or otherwise) to
      the exercise of such jurisdiction over it by any such courts.

14.5  Severability. If any one or more of the provisions contained in this
      Agreement is found to be invalid, illegal or unenforceable in any respect
      in any jurisdiction, the validity, legality and enforceability of such
      provision or provisions shall not in any way be affected or impaired
      thereby in any other jurisdiction and the validity, legality and
      enforceability of the remaining provisions contained herein shall not in
      any way be affected or impaired thereby.

<PAGE>
                                      -39-


14.6  Further Assurances. DDS and MDSI shall each execute and deliver all such
      further documents and instruments and do all such acts and things as MDSI
      or DDS respectively may, either before or after the Closing, reasonably
      require to carry out the full intent and meaning of this Agreement.

14.7  Entire Agreement. This Agreement represents the entire understanding of
      the parties with reference to the Transaction and all understandings and
      agreements heretofore made by the parties and any other persons acting on
      behalf of the parties are merged in this Agreement, except to the extent
      that the subject matter contained in any of the Other Agreements is not
      covered by or contained in this Agreement. In the event of a conflict
      between any of the provisions of this Agreement and any of the provisions
      of any of the Other Agreements, the provisions of this Agreement shall
      prevail.

14.8  Assignment. No party may assign in whole or in part any of its interest
      hereunder without the prior written agreement of the other.

14.9  Enurement. This Agreement shall enure to the benefit of and be binding
      upon DDS, MDSI and their respective successors and permitted assigns.

14.10 Waivers. No waiver of any of the provisions of this Agreement shall be
      deemed to constitute a waiver of any other provisions, nor shall such
      waiver constitute a continuing waiver unless otherwise expressly agreed to
      in writing by the party bound thereby.

14.11 Amendment. This Agreement may not be amended except in writing executed by
      all the parties hereto.

14.12 Canadian Currency. All monetary amounts in this Agreement and in any
      related agreements, documents or certificates are in Canadian currency,
      unless otherwise specifically indicated.

14.13 Gender and Number. Any word herein contained importing the singular number
      shall include the plural (and vice versa) and any word importing the
      masculine gender shall include the feminine gender (and vice versa) and
      any word importing a person shall include a corporation, partnership and
      firm (and vice versa).

14.14 Headings. The headings appearing in this Agreement are inserted for
      convenience of reference only and shall not affect the interpretation of
      this Agreement.

14.15 Counterparts. This Agreement may be executed in counterparts and by
      facsimile and each counterpart when so executed shall be deemed to be an
      original, and the counterparts together shall constitute one and the same
      instrument.

14.16 Conflicts with DDS Shareholders' Agreement. To the extent that there is or
      may be any conflict or inconsistency between the terms of this Agreement
      and the terms of the DDS Shareholders' Agreement, the terms of this
      Agreement shall prevail and govern the relations between the parties to
      this Agreement, and to the extent that amendments to the DDS Shareholders'
      Agreement may be needed in order to make the terms thereof consistent with
      this Agreement, DDS shall use its best efforts to make, or cause to be
      made, such changes.

IN WITNESS WHEREOF this Agreement has been executed by the parties hereto this
7 day of June, 1999.

THE CORPORATE SEAL of DIGITAL  DISPATCH SYSTEMS  )
INC. was hereunto affixed in the presence of:    )
                                                 )
         /s/ ILLEGIBLE                           )
                                                 )
Authorized Signatory                             )                        c/s
                                                 )
                                                 )
Authorized Signatory                             )
                                                 )

<PAGE>
                                      -40-


                                                 )
THE CORPORATE SEAL of MDSI MOBILE DATA           )
SOLUTIONS INC. was hereunto affixed in the       )
presence of:                                     )
                                                 )
         /s/ Kenneth Miller                      )
                                                 )                        c/s
Authorized Signatory                             )
                                                 )
                                                 )
Authorized Signatory                             )
                                                 )

<PAGE>

                                  SCHEDULE "E"

                          PERMITTED ENCUMBRANCES OF DDS

<PAGE>

                                  SCHEDULE "F"

                       PERMITTED ENCUMBRANCES OF MDSI-TBU

<PAGE>

                                  SCHEDULE "G"

                                IP ASSETS OF DDS

<PAGE>

                                  SCHEDULE "H"

                              IP ASSETS OF MDSI-TBU

<PAGE>

                                  SCHEDULE "I"

                   SHAREHOLDERS OF DDS AND THEIR SHAREHOLDINGS

<PAGE>

                                  SCHEDULE "J"

           CONSOLIDATED PRO FORMA BALANCE SHEET OF MDSI-TBU AT CLOSING

<PAGE>

                                  SCHEDULE "K"

                    BANK ACCOUNTS/ SAFE DEPOSIT BOXES/ POWERS
                             OF ATTORNEY OF MDSI-TBU

<PAGE>

                                  SCHEDULE "L"

                                    ACCIDENTS

<PAGE>

                                  SCHEDULE "M"

                              EMPLOYEES OF MDSI-TBU