<PAGE>   1
                                                                   EXHIBIT 10.10

                                      Registered June 9, 1997 under No. BL202283

LAND TITLE ACT
FORM B
(Section 219.1)
Province of British Columbia

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<S>                            <C>                      <C>            <C>  <C>  <C>
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MORTGAGE-PART 1    (This area for Land Title Use)               PAGE 1 OF 27 PAGES
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1. APPLICATION:                                              REFERENCE #File: V14271
   Norma R. Barican of GOWLING, STRATHY & HENDERSON
   Barristers and Solicitors
   2414-1055 Dunsmuir Street
   Vancouver, BC  V7X 1J1                                    ______________________
   Tel No.  (604) 683-6498                                      Norma R. Barican
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2. PARCEL IDENTIFIER(S) AND LEGAL DESCRIPTION(S) OF THE MORTGAGED LAND:*
      (PID)                        (LEGAL DESCRIPTION)
   023-306-742                        Strata Lot 6, District Lot 764, Group 1, New
                                      Westminster District, Strata Plan LMS2241

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3. BORROWER(S) [MORTGAGOR(S)]:  (Including postal address(es) and postal code(s))*
   NIFCO SYNERGY LTD. (Incorp. No. 394358)
   600 - 815 Hornby Street, Vancouver, British Columbia, V6Z 2E6
   COVENANTOR:  NATHAN NIFCO OF #411 - 1859 Spyglass Place, Vancouver, British
                Columbia, V5Z 4G7
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4. LANDER(S) [MORTGAGEE(S)]: (Including occupations, postal address(es) and postal
   code(s))*
   GUILD PROPERTIES INC. (Incorp. No.386881)
   300- 1445 West Georgia Street, Vancouver, British Columbia, V7X 1T2
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5. PAYMENT PROVISIONS:**       b) Interest Rate:        c) Interest
a) Principal Amount:                                       Adjustment
   $260,376                       7% per annum             Date:  N/A   Y    M   D
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d) Interest Calculation        e) Payment Dates:        f) First
   Period: Semi-annually          ninth day of each        Payment
   not in advance                 month                    Date:        97   7   09
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g) Amount of each periodic     h) Interest Act (Canada) i) Last
   payment:                       Statement: The           Payment
   $2,003.10                      equivalent rate of       Date:        02   6   09
                                  interest calculated
                                  half yearly not in
                                  advance is 7% per
                                  annum
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j) Assignment of Rents         k) Place of payment:      l) Balance
   which the applicant                                      Due Date:
   wants registered?                                                    02   6   09
      YES  No /X/                 POSTAL ADDRESS IN ITEM
   If YES, page and               4 ABOVE
   paragraph number:
</TABLE>

*  If space insufficient, enter "SEE SCHEDULE", attach schedule in Form E.
** If space in any box insufficient, enter "SEE SCHEDULE", attach schedule in
   Form E.
<PAGE>   2
MORTGAGE - PART 1                                             PAGE 2 of 27 pages
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6.   MORTGAGE contains floating charge on land?        7.   MORTGAGE secures a current or
     YES [ ]   NO [X}                                       running account?  YES [ ]   NO [X]
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8.   INTEREST MORTGAGED:
     Freehold            [X]
     Other (specify)     [ ]*
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9.   MORTGAGE TERMS:
     Part 2 of this mortgage consists of (select one only):
     a)   Prescribed Standard Mortgage Terms      [ ]
     b)   Filed Standard Mortgage Terms           [ ]  D.F. Number:
     c)   Express Mortgage Terms                  [X]  (annexed to this mortgage as Part 2)

     A selection of (a) or (b) includes any additional or modified terms referred to in
     Item 10 or in a schedule annexed to this mortgage.
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10.  ADDITIONAL OR MODIFIED TERMS:*
     N/A
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11.  PRIOR ENCUMBRANCES PERMITTED BY LENDER:*
     N/A
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12.  EXECUTION(S):**  This mortgage charges the Borrower's interest in the land mortgaged as
     security for payment of all money due and performance of all obligations in accordance
     with the mortgage terms referred to in Item 9 and the Borrower(s) and every other
     signatory agree(s) to be bound by, and acknowledge(s) receipt of a true copy of, those
     terms.
</TABLE>

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                                 EXECUTION DATE
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<S>                                <C>   <C>   <C>            <C>
OFFICER SIGNATURE(S)                Y     M     D             BORROWER(S) SIGNATURE(S)

/s/ PETER B. GORGOPA               97    06    09             NIFCO SYNERGY LTD. by its
-----------------------------                                 authorized signatory(ies)
PETER B. GORGOPA
ALLARD AND COMPANY                                            /s/ NATHAN NIFCO
Barristers & Solicitors                                       -----------------------------
#600-815 HORNBY STREET                                        Name:
VANCOUVER, B.C. V6Z 2E6
PHONE NO.: 689-3885                                           -----------------------------
                                                              Name:

/s/ PETER B. GORGOPA                                          COVENANTOR
-----------------------------
PETER B. GORGOPA                                              /s/ NATHAN NIFCO
ALLARD AND COMPANY                                            -----------------------------
Barristers & Solicitors            97    06     09            NATHAN NIFCO
#600-815 HORNBY STREET
VANCOUVER, B.C. V6Z 2E6
PHONE NO.: 689-3885
</TABLE>

OFFICER CERTIFICATION:

Your signature constitutes a representation that you are a solicitor, notary
public or other person authorized by the Evidence Act, R.S.B.C. 1979, c.116, to
take affidavits for use in British Columbia and certifies the matters set out
in Part 5 of the Land Title Act as they pertain to the execution of this
instrument.

*  If space insufficient, enter "SEE SCHEDULE", attach schedule in Form E.
** If space insufficient, continue executions on additional page(s) in Form D.
<PAGE>   3
                                                              Page 3 of 27 pages
                             MORTGAGE TERMS - PART 2

1. DEFINITIONS

1.1 In this Mortgage:

      (a)   "BALANCE DUE DATE" means the balance due date, if any, set out or
            referred to in item 5(1) of the Mortgage Form;

      (b)   "BUSINESS DAY" means any day which in Vancouver, British Columbia is
            a day that is not a "holiday" as that word is defined in the
            Interpretation Act (British Columbia) as amended or replaced from
            time to time;

      (c)   "COVENANTOR" means Nathan Nifco;

      (d)   "FIRST PAYMENT DATE" means the first payment date, if any, set out
            or referred to in item 5(f) of the Mortgage Form;

      (e)   "FIXTURES" mean all present and after-acquired structures,
            additions, improvements, plant, machinery, apparatus, facilities,
            equipment, fixtures and other goods installed in or affixed or
            attached to the buildings or improvements situate on the Mortgagor's
            Interest in the Mortgaged Lands or affixed or attached thereto,
            including without limitation:

            (i)   all fences, motors, wiring, fixed mirrors, suspended ceiling
                  tiles, doors, windows and computers and all other structures,
                  additions, improvements, plant, machinery, apparatus,
                  facilities, equipment, fixtures and other goods installed in
                  or affixed or attached to the buildings or improvements
                  situate on the Mortgaged Lands or affixed or attached thereto
                  for use in carrying on an activity inside the said buildings
                  or improvements or on the said Mortgaged Lands;

            (ii)  all carpeting and other floor coverings, including without
                  limitation all carpets and floor coverings in all rooms, halls
                  and stairways;

            (iii) all window coverings and fixtures, including without
                  limitation all awnings, shutters, drapes, blinds and valances;

            (iv)  all appliances, including without limitation all
                  refrigerators, ranges, dishwashers, garbage disposal units and
                  stoves; and

            (v)   all heating, cooling, plumbing, air-conditioning,
                  air-filtering, ventilating, conveyancing, electrical,
                  lighting, security, vacuum, telecommunications, sprinkler,
                  fire-fighting, cooking and refrigeration devices, systems and
                  equipment, including without limitation all furnaces, water
                  heaters, hot water tanks, oil and gas burners, electric
                  fixtures, escalators, elevators, boilers, pressure vessels,
                  stokers, blowers, tanks, gas pipes, radiators, aerials,
                  television antennae, satellite dishes and built-in furniture;
<PAGE>   4
                                                              Page 4 of 27 pages



      (f)   "HAZARDOUS MATERIALS" means:

            (i)   any oil, flammable substances, explosives, radioactive
                  materials, hazardous wastes or substances, toxic wastes or
                  substances or any other wastes, contaminates, materials or
                  pollutants which:

                  A.    pose a hazard to the whole or any portion of the Lands,
                        or business of the Mortgagor in connection with the
                        Lands or to the persons on or about the Lands;or

                  B.    cause the whole or any portion of the Lands or the
                        business of the Mortgagor in connection with the Lands
                        to be in violation of any Hazardous Materials Laws;

            (ii)  asbestos in any form which is or could become friable, urea
                  formaldehyde foam insulation, transformers or other equipment
                  which contain dielectric fluid containing levels of
                  polychlorinated biphenyls or radon gas;

            (iii) any chemical, material or substance defined as or included in
                  the definition of "dangerous goods", "deleterious substance",
                  "hazardous substances", "hazardous wastes", "hazardous
                  materials", "extremely hazardous wastes", "restricted
                  hazardous waste", or "toxic substances", "waste" or words of
                  similar import under any applicable local, provincial or
                  federal law or under the regulations adopted or publications
                  promulgated pursuant thereto, including, but not limited to,
                  the Canadian Environmental Protection Act (Canada), Fisheries
                  Act (Canada), Transportation of Dangerous Goods Act (Canada),
                  Canada Water Act and the Waste Management Act (British
                  Columbia);

            (iv)  any other chemical, material or substance, exposure to which
                  is prohibited, limited or regulated by any governmental
                  authority or which may or could pose a hazard to the occupants
                  of the Lands or the owners or occupants of property adjacent
                  thereto or any other person coming upon the Lands or adjacent
                  property; and

            (v)   any other chemical, materials or substance which may or could
                  pose a hazard to the environment;

      (g)   "HAZARDOUS MATERIALS CLAIMS" means any and all enforcement, cleanup,
            removal, remedial or other governmental or regulatory actions,
            prosecution, investigations, agreements, injunctions or orders
            instituted or completed pursuant to any Hazardous Materials Laws,
            together with any and all claims made by any third party against the
            Mortgagor in connection with the Lands or the business contribution,
            cost recovery, compensation, loss or injury resulting from the
            presence, release or discharge of any Hazardous Materials;

      (h)   "HAZARDOUS MATERIALS LAWS" means any federal, provincial or local
            laws, rules, ordinances, regulations, order or other edicts having
            the force of law relating to the environment or any Hazardous
            Materials (including, without limitation, the use,
<PAGE>   5
                                                              Page 5 of 27 pages



            handling, transportation, production, disposal, discharge or storage
            thereof or the terms of any permit issued therefor) or the
            environmental conditions on, under or about the Lands including,
            without limitation, soil, ground water and indoor and ambient air
            conditions;

      (i)   "INTEREST ADJUSTMENT DATE" means the interest adjustment date, if
            any, set out or referred to in item 5(c) of the Mortgage Form;

      (j)   "INTEREST CALCULATION PERIOD" means the interest calculation period
            set out or referred to in item 5(d) of the Mortgage Form;

      (k)   "INTEREST MARGIN" means the annual percentage rate, if any, above or
            below the Prime Rate set out or referred to in item 5(b) of the
            Mortgage Form;

      (l)   "INTEREST RATE" means, subject to the provisions of paragraph 19 of
            this Mortgage, the annual interest rate set out or referred to in
            item 5(b) of the Mortgage Form (or such other rate or rates of
            interest as may be agreed upon between the Mortgagor and the
            Mortgagee or as may be fixed by the Mortgagor pursuant to the Loan
            Agreement), calculated and compounded at the end of each Interest
            Calculation Period not in advance, and, if the Interest Rate is
            stated to be a rate above or below the Prime Rate, Interest Rate
            shall mean the rate per annum equal to the Prime Rate plus or minus
            the Interest Margin, as the case may be, calculated and compounded
            at the end of each Interest Calculation Period;

      (m)   "LANDS" mean:

            (i)   the land(s) described or referred to in item 2 of the Mortgage
                  Form together with the improvements, appurtenances and every
                  other thing referred to in Section 10 of the Land Transfer
                  Form Act (British Columbia), as amended or replaced from time
                  to time, and whether now or hereafter existing or acquired, in
                  connection with such land(s); and

            (ii)  the Fixtures;

      (n)   "LAST PAYMENT DATE" means the last payment date, if any, set out or
            referred to in item 5(i) of the Mortgage Form;

      (o)   "MORTGAGE" means the Mortgage Form and these express mortgage terms,
            read together, as amended, modified and extended from time to time;

      (p)   "MORTGAGE FORM" means the Form B under the Land Title (Transfer
            Forms) Regulation (British Columbia), as amended or replaced from
            time to time, which refers to these express mortgage terms and is
            executed by the Mortgagor and the Covenantor, if any, and all
            schedules and addenda attached to such Form B;

      (q)   "MORTGAGEE" means the person or persons described in item 4 of the
            Mortgage Form as the lender(s) or mortgagee(s) and their respective
            heirs, personal representatives, successors or assigns, as the case
            may be;

<PAGE>   6
                                                              Page 6 of 27 pages


      (r)   "MORTGAGOR" means the person or persons described in item 3 of the
            Mortgage Form as the borrower(s) or mortgagor(s) who executed the
            Mortgage Form and their respective heirs, personal representatives,
            successors or permitted assigns, as the case may be;

      (s)   "PAYMENT DATES" means the payment dates, if any, set out or referred
            to in item 5(e) of the Mortgage Form and "PAYMENT DATE" means any
            one of them;

      (t)   "PAYMENT OFFICE" means the place of payment set out or referred to
            in item 5(k) of the Mortgage Form;

      (u)   "PERIODIC PAYMENT" means the amount of each payment, if any, set out
            or referred to in item 5(g) of the Mortgage Form;

      (v)   "PERMITTED ENCUMBRANCES" means the prior encumbrances, if any, set
            out or referred to in item 11 of the Mortgage Form;

      (w)   "PERSON" includes an individual, a corporation and a partnership of
            individuals or corporations or a combination thereof;

      (x)   "PRIME RATE" means the variable percentage rate of interest per
            annum announced from time to time by the Royal Bank of Canada at its
            main branch in Vancouver, British Columbia, as a reference rate then
            in effect for determining interest rates on Canadian dollar loans
            made by the Royal Bank of Canada in Canada and as such the annual
            variable rate of interest now designated by the Royal Bank of Canada
            and commonly referred to and known as its "Prime Rate";

      (y)   "PRINCIPAL SUM" means, at any time and from time to time, the
            outstanding balance of the principal amount set out or referred to
            in item 5(a) of the Mortgage Form;

      (z)   "TERMS" and "MORTGAGE TERMS" mean, unless the context otherwise
            requires, all of the covenants, agreements, provisos, terms,
            conditions and provisions of this Mortgage, and the agreement set
            out in item 12 of the Mortgage Form of the Mortgagor to be bound by
            the mortgage terms referred to in item 9 shall constitute the
            agreement of the Mortgagor to be bound by all of the covenants,
            agreements, provisos, terms, conditions and provisions of this
            Mortgage.

2. GRANT OF SECURITY

2.1 This Mortgage is made under Part 3 of the Land Transfer Form Act (British
Columbia) as amended or replaced from time to time.

2.2 For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the Mortgagor, the Mortgagor:

      (a)   GRANTS AND MORTGAGES unto the Mortgagee forever ALL AND SINGULAR the
            Lands subject only to the Permitted Encumbrances;

<PAGE>   7
                                                              Page 7 of 27 pages



      (b)   GRANTS AND MORTGAGES unto the Mortgagee forever ALL AND SINGULAR the
            Fixtures subject only to the Permitted Encumbrances.

2.3 If the Mortgagor hereafter acquires any further or greater interest in the
Lands, this Mortgage shall extend to such interest in the Lands.

2.4 Without in any way affecting or releasing the Mortgagor's liability to the
Mortgagee for the payment of the moneys and the performance of the obligations
hereby secured and for the consideration aforesaid the Mortgagor assigns,
transfers and sets over to the Mortgagee:

      (a)   any moneys due and payable by an expropriating authority upon an
            expropriation of any or all of the Lands, provided that such
            assignment is limited to the amount of moneys secured hereby and
            outstanding at the date the Mortgagor ceases to be the registered
            owner of the Lands or such part of the Lands as may be affected by
            any such expropriation, and the Mortgagor further agrees that it
            shall execute and deliver any such further or additional
            documentation which the Mortgagee may in the Mortgagee's sole
            discretion deem necessary to effect the above assignment or which is
            requested by the expropriating authority and also agrees to forward
            to the Mortgagee copies of any documentation relating to an
            expropriation or proposed expropriation of the Lands or any portion
            thereof forthwith upon the receipt of the same; and

      (b)   all right, title, claim, demand and interest of the Mortgagor
            whatsoever at law or in equity or otherwise to indemnification,
            express or implied, of and from the performance and observance of
            any and all of the terms of this Mortgage, including without
            limitation payment of any and all moneys due under this Mortgage by
            any purchaser of the Lands, or any part thereof, from the Mortgagor.

2.5 The security constituted or intended to be constituted by this Mortgage and
the indebtedness and obligations hereby secured or intended to be secured shall
exist notwithstanding any lack or limitation of status, power or capacity of the
Mortgagor or of the directors, officers, partners or agents thereof, or that the
Mortgagor may not be a legal entity, or by virtue of any irregularity, defect or
informality in the taking or registering of this Mortgage or any other security
and whether or not any or all of the foregoing is known to the Mortgagee.

3. PROVISO FOR REDEMPTION

3.1 Provided this Mortgage to be void on the occurrence of the following events:

      (a)   payment to the Mortgagee of the Principal Sum with interest thereon
            at the Interest Rate calculated as well after as before maturity,
            default and judgment, as follows:

            (i)   interest at the Interest Rate calculated as aforesaid on the
                  total of all amounts from time to time advanced or secured
                  hereunder as part of the Principal Sum and computed from the
                  respective dates of such advances, or when such sums become
                  secured, shall become due and be paid by Periodic Payments on
                  each and every Payment Date commencing on the First Payment
                  Date and continuing on


<PAGE>   8
                                                              Page 8 of 27 pages



                  each and every Payment Date thereafter to and including the
                  date the entire balance of the Principal Sum, interest thereon
                  as aforesaid and all other moneys due and owing hereunder are
                  fully paid and satisfied;

            (ii)  the outstanding balance of the Principal Sum together with
                  interest as aforesaid and all other sums secured hereunder
                  shall become due and be paid on the Balance Due Date (herein
                  sometimes called "maturity");

            provided that the Mortgagor shall have the privilege, at any time
            and from time to time of prepaying the whole or any part of the
            monies secured hereby, without notice, bonus or penalty;

      (b)   payment by the Mortgagor to the Mortgagee of all such other moneys
            as the Mortgagee may be entitled to by virtue of this Mortgage, as
            and when such moneys shall become due and payable;

      (c)   payment of taxes and performance of statute labour; and

      (d)   observance and performance of all covenants, agreements, provisos,
            terms, conditions and provisions herein contained.

      AND the Mortgagor releases to the Mortgagee all the claims of the
Mortgagor on the Lands subject to the above provisos.

      THE MORTGAGOR COVENANTS AND AGREES WITH THE MORTGAGEE AS FOLLOWS:

4. PAYMENT

4.1 The Mortgagor will duly pay the Principal Sum, interest, and all other
moneys secured hereby when due and hereunder and will observe the above
provisos.

4.2 The Principal Sum, interest and all other moneys payable hereunder shall be
paid when due without any set-off, deduction, defalcation or abatement
whatsoever.

4.3 If the Mortgagor fails to pay when due the Principal Sum, interest or other
moneys secured hereby, or any part thereof, including compound interest, the
Mortgagor shall pay to the Mortgagee compound interest thereon on demand, as
well after as before maturity, default and judgment, to be computed with rests
on the last day of each Interest Calculation Period.

4.4 The following shall apply if the Interest Rate is a rate below, equal to or
above the Prime Rate:

      (a)   if the Prime Rate changes and so often as the same occurs during the
            currency of this Mortgage, the Interest Rate shall change without
            notice to the Mortgagor on the same day and in the same amount as
            the Prime Rate changed;


<PAGE>   9
                                                              Page 9 of 27 pages



      (b)   a certificate of any officer of the Hongkong Bank of Canada as to
            the Prime Rate at any particular time or times, shall be deemed to
            be conclusive evidence of the Prime Rate hereunder at such time or
            times;

      (c)   if the Hongkong Bank of Canada shall at any time during the currency
            of this Mortgage establish more than one rate of interest as its
            Prime Rate, then for the purposes hereof the Prime Rate hereunder
            shall be the higher or highest of such rates so established; and

      (d)   in the event foreclosure proceedings are commenced hereunder by the
            Mortgagee, the Mortgagee may, at its option, apply to fix the
            Interest Rate that will be payable hereunder after the grant of the
            Order Nisi until the balance of the Principal Sum outstanding has
            been paid in full at the Interest Rate applicable hereunder on that
            day which is seven (7) days prior to the date of the grant of the
            Order Nisi.

4.5 Until the Mortgagee shall notify the Mortgagor otherwise, all payments to be
made to the Mortgagee under this Mortgage shall be paid to or to the order of
the Mortgagee at the Payment Office, in dollars of lawful money of Canada,
solely on business days, and before 12:00 o'clock noon local time on any such
day and in the event a payment is made after 12:00 o'clock noon local time on
any business day, or is made on any day that is not a business day, such payment
will be deemed to have been received by the Mortgagee on the business day next
following.

4.6 The Mortgagor will, on the due date thereof, pay and satisfy all taxes,
rates, levies, charges, rents, assessments, statute labour and other impositions
whatsoever already or hereafter rated, charged, assessed or imposed no matter by
whom or by what authority howsoever on the Lands or on the Mortgagor or
Mortgagee in respect of the Lands, and submit to the Mortgagee upon its request
tax receipts evidencing the payment of taxes within thirty (30) days after they
become due, and if requested by the Mortgagee, the Mortgagor shall transmit to
the Mortgagee the assessment notices, tax bills and other notices affecting the
imposition of taxes forthwith after the receipt of such request.

4.7 If this Mortgage is now or at any time hereafter subject to any prior or
equal ranking, encumbrance, charge, lien or interest claimed upon the Lands,
including but not limited to Permitted Encumbrances (each hereinafter called a
"prior charge"):

      (a)   the Mortgagor will pay or cause to be paid as they become due all
            payments required to be made under or by virtue of each prior
            charge, whether for principal, interest, taxes or otherwise;

      (b)   the Mortgagor will duly observe, perform and comply with the
            covenants, provisos and agreements contained in each prior charge
            which are to be kept, observed and performed by it;

      (c)   any default under a prior charge which allows any person to commence
            proceedings to enforce its rights resulting from such default, shall
            be deemed to be default hereunder and shall entitle the Mortgagee to
            exercise any and all remedies available to the Mortgagee in the
            event of default hereunder; and


<PAGE>   10
                                                             Page 10 of 27 pages



      (d)   in the event of default by the Mortgagor under a prior charge which
            allows any person to commence proceedings to enforce its rights
            resulting from such default, the Mortgagee shall have the right, but
            no obligation, to cure the same in its sole and absolute discretion.

4.8 The Mortgagor shall pay all costs, charges and expenses including, without
limitation, legal costs on a solicitor and his own client basis and appraiser's
fees, in connection with any modification or extension of this Mortgage
requested by the Mortgagor or reasonably requested by the Mortgagee to preserve
its security because of any act by the Mortgagor in respect of the Land.

4.9 The Mortgagor shall pay all fees, costs, charges and expenses including,
without limitation, legal fees, costs, charges and expenses on a solicitor and
his own client basis, which may be incurred by or on behalf of the Mortgagee
whether before or after court proceedings are commenced, or whether otherwise
incurred, in recovering, collecting, procuring or enforcing payment of any or
all the moneys secured under this Mortgage or in any way enforcing or protecting
the security of this Mortgage or enforcing any of the terms of this Mortgage
(including but not limited to all travelling expenses of the Mortgagee, the
Mortgagee's servants and agents, and commissions on collection of rent which may
be incurred by or on behalf of the Mortgagee in the taking, recovering and
keeping possession of the Lands or in inspecting the same) and all other amounts
generally in any other measure or proceedings taken by or on behalf of the
Mortgagee to realize or collect the moneys hereby secured or to defend or
perfect the title of the Lands, all of which fees, costs, charges, commissions,
expenses and other amounts shall be a charge under this Mortgage on the Lands in
favour of the Mortgagee and shall be payable forthwith by the Mortgagor to the
Mortgagee with interest at the Interest Rate until paid.

4.10 The Mortgagor shall forthwith upon demand repay to the Mortgagee all other
proper outlays incurred by the Mortgagee and not covered by any other covenant
herein.

4.11 The Mortgagee shall have a reasonable time after payment in full of the
moneys secured hereby within which to prepare and execute a discharge of this
Mortgage, and interest at the Interest Rate shall continue to run and accrue
until actual payment in full of all moneys secured hereby has been received by
the Mortgagee, and all legal and other expenses for the preparation and
execution of such discharge shall be borne by the Mortgagor, and the Mortgagor
will not be entitled to a discharge of this Mortgage unless and until the
Mortgagor shall have kept and performed all the covenants, provisos, agreements
and stipulations herein contained, whether the Mortgagee has taken legal
proceedings thereon and recovered judgment or otherwise.

4.12 The Mortgagor may prepay this Mortgage in whole or in part without notice,
bonus or penalty. Any amount prepaid shall be applied firstly to accrued but
unpaid interest with the balance applied to principal.

5. TITLE

5.1 The Mortgagor has a good title in fee simple to the Lands, subject only to
Permitted Encumbrances.



<PAGE>   11
                                                             Page 11 of 27 pages



5.2 The Mortgagor has the right to convey the Lands to the Mortgagee save as
aforesaid.

5.3 The Mortgagor has done no act to encumber the Lands, save as aforesaid.

5.4 There are no environmental risks or liabilities in connection with the Lands
known to the Mortgagor, (or if the Mortgagor is a corporation, to any of the
Mortgagor's directors and officers) which have not been disclosed to the
Mortgagee.

5.5 On default the Mortgagee shall have quiet possession of the Lands free from
all encumbrances, save only for Permitted Encumbrances, provided that until
default of payment the Mortgagor shall have quiet possession of the Lands.

5.6 The Mortgagor will execute such further assurances of the Lands as the
Mortgagee may require including without limitation any and all documents
required by the Mortgagee in connection with the Personal Property Security Act
(British Columbia) as amended by the Personal Property Security Amendment Act,
1990 (British Columbia) as further amended or replaced from time to time.

5.7 The Mortgagor will not permit a lien to be acquired or filed against the
Lands under the Builders Lien Act, (British Columbia), as amended or replaced
from time to time, or under any other statute or law at any time in force
affecting the Lands.

6. INSURANCE

6.1 The Mortgagor will forthwith insure and during the continuance of this
Mortgage will keep insured each and every building, structure, erection,
improvement, fixture or replacement thereof (including without limitation all
plant, equipment, apparatus, machinery and fixtures of every kind and nature
whatsoever) now on the Lands or which may hereafter be erected thereon against
loss or damage by fire and such other perils as the Mortgagee may reasonably
require.

6.2 The Mortgagor will keep and maintain third party liability insurance in an
amount satisfactory to the Mortgagee.

6.3 The Mortgagor will keep and maintain such other insurance as is customarily
maintained by persons operating or occupying similar properties in equivalent
locations.

6.4 All insurance coverage required by the Mortgagee shall be issued by insurers
in the form and upon terms and in amounts acceptable to the Mortgagee, and the
Mortgagor shall cause the Mortgagee to be named as a loss payee as its interest
may appear in respect of the Lands on the policy or policies of insurance
effected by the Mortgagor and shall cause mortgage clauses in a form approved by
the Mortgagee to be included in such policy or policies and shall provide
evidence of such insurance to the Mortgagee forthwith upon demand.

6.5 The Mortgagor will pay all insurance premiums and sums of money necessary
for such purposes as the same shall become due.

<PAGE>   12
                                                             Page 12 of 27 pages



6.6 The Mortgagor shall forthwith on the happening of any loss or damage furnish
to the Mortgagee at the Mortgagor's expense all necessary proofs and do all
necessary acts to enable the Mortgagee to obtain payment of insurance moneys.

6.7 The Mortgagor will forthwith assign, transfer and deliver over to the
Mortgagee each and every policy or policies of insurance and receipts thereto
appertaining.

6.8 Any insurance moneys received may, at the option of the Mortgagee, be
applied to a suspense account or in or towards rebuilding, reinstating or
repairing all or any portion of the Lands or be paid to the Mortgagor or any
other person appearing by the registered title to be or to have been the owner
of the Lands or be applied or paid partly in one way and partly in another or
such moneys may be applied, in the sole discretion of the Mortgagee, in whole or
in part on the moneys secured hereby or any part thereof whether due or not then
due;

6.9 To ensure that the Mortgagee may so apply such insurance moneys in the
manner herein contemplated, the Mortgagor assigns and releases to the Mortgagee
all rights of the Mortgagor to receive the insurance moneys and expressly waives
all the Mortgagor's rights and benefits under the Insurance Act (British
Columbia) as amended or replaced from time to time and the Fire Prevention
(Metropolis) Act 1774 as amended or replaced from time to time.

7. USE, ALTERATIONS AND REPAIRS

7.1 The Mortgagor shall not, without the express written consent of the
Mortgagee first had and obtained, change the present use of the Lands nor permit
the Lands or any portion thereof to be unoccupied or unused, except while
undeveloped or in the course of development.

7.2 The Mortgagor shall promptly observe, perform, execute and comply with all
laws, rules, requirements, orders, directions, ordinances and regulations of
every governmental, municipal and civil authority or agency concerning the Lands
and further agrees, at the cost and expense of the Mortgagor, to do and perform
all acts and things which may be required at any time hereafter by any such
present or future laws, rules, requirements, orders, directions, ordinances and
regulations and in particular, but without limiting the generality of the
foregoing:

      (a)   it will observe and comply in all material respects with the
            provisions of all Hazardous Materials Laws pertaining to the Lands
            or the business of the Mortgagor in connection therewith and from
            time to time, upon request of the Mortgagee, provide to the
            Mortgagee evidence satisfactory to the Mortgagee, acting reasonably,
            of such observance and compliance;

      (b)   it will, after becoming aware thereof, promptly provide the
            Mortgagee with notice of:

            (i)   the presence of or any discharge or release of Hazardous
                  Materials on, under or about the Lands which is required to be
                  reported to any governmental authority;

            (ii)  any Hazardous Materials Claims; and

            (iii) any remedial action taken in response to any Hazardous
                  Materials Claims;

<PAGE>   13
                                                             Page 14 of 27 pages



thereof from time to time shall be in the absolute discretion of the Mortgagee
and not exercised or deemed exercised unless and until that advance has actually
been made to the Mortgagor, but nevertheless the security created by this
Mortgage shall take effect in accordance with the terms of this Mortgage
forthwith upon the execution hereof by the Mortgagor. NOTICE IS HEREBY GIVEN to
every person dealing with the title to the Lands that advances not exceeding the
aggregate amount secured by this Mortgage are contemplated and secured by this
Mortgage.

8.2 If this Mortgage is redeemed by the Mortgagor, it shall be cancelled and
shall not be reissued, but neither:

      (a)   any partial payment made thereon by the Mortgagor to the Mortgagee;
            nor

      (b)   any ceasing by the Mortgagor to be indebted to the Mortgagee,

shall be deemed to be a redemption or cancellation pro tanto or otherwise, and
this Mortgage shall be and remain valid security for any subsequent advance by
the Mortgagee to the Mortgagor, including without limitation any additional
amounts which pursuant to the Loan Agreement are deemed to be Loans, to the same
extent as if that advance or re-advance had been made on the execution of this
Mortgage.

9. MORTGAGEE'S ELECTION TO MAKE PAYMENTS AND CURE DEFAULTS

9.1 If the Mortgagor fails to make any payment which the Mortgagor has
covenanted or agreed to make by the terms of this Mortgage or to provide proof
of the making of any such payment to the Mortgagee upon demand, the Mortgagee
may make any such payment.

9.2 If the Mortgagor fails to perform any covenant or agreement herein contained
on the part of the Mortgagor or to provide proof of performance to the Mortgagee
upon demand, the Mortgagee may in its sole discretion perform or cause to be
performed any such covenant or agreement and may do such acts as it considers
are reasonable to protect the interests of the Mortgagee and for such purposes
the Mortgagee and its authorized representatives may enter onto the Lands.
Without limiting the generality of the foregoing, the Mortgagee may:

      (a)   insure the buildings on the Lands in accordance with the provisions
            hereof if the Mortgagor neglects to insure or to deliver policies
            and receipts in accordance herewith;

      (b)   repair and reinstate the buildings and improvements on the Lands if
            the Mortgagor fails to repair in accordance herewith or demolishes
            or alters such buildings or improvements in contravention hereof;

      (c)   without any order or direction of the Mortgagor, pay to contractors,
            sub-contractors, material men, labourers, and other persons
            supplying or having a claim for work, services, or materials
            supplied in and about the construction, repairing, altering or
            replacing of any buildings, structures, erections or improvements
            and the like now or hereafter constructed on the Lands, any moneys
            due to them for such work, services or materials;


<PAGE>   14
                                                             Page 15 of 27 pages



      (d)   pay common expenses, assessments, contributions or levies required
            to be paid in connection with any strata lot comprising the Lands;
            and

      (e)   perform any other acts, matters or things necessary in the sole
            opinion of the Mortgagee to prevent damage to or to protect or
            preserve the Lands or to remedy any default of the Mortgagor
            hereunder.

      PROVIDED THAT the Mortgagee shall not be bound to exercise its rights
hereunder and, if the Mortgagee shall exercise its rights hereunder, it shall
not be liable to the Mortgagor for any loss or damage suffered by the Mortgagor
as a result of such exercise.

9.3 If the Mortgagee shall make payment to any creditor of the Mortgagor or any
encumbrance holder in respect of the Lands pursuant to the provisions hereof,
the Mortgagee shall be entitled to all equities and securities held by such
creditor or encumbrance holder in respect of the indebtedness or encumbrance
paid or satisfied.

9.4 All payments made and all sums of money expended by the Mortgagee under this
paragraph 9, including incidental costs, charges, expenses and outlays incurred
in doing anything under this paragraph 9, shall be forthwith payable by the
Mortgagor on demand with interest at the Interest Rate from the time or
respective times of the payment thereof until paid, and until paid shall be a
charge on the Lands in favour of the Mortgagee prior to all claims thereon
subsequent to this Mortgage and may be added to the Principal Sum as if the same
had originally formed part thereof.

9.5 Nothing done by the Mortgagee in reliance on the provisions of this
paragraph 9 shall in any manner prejudice the remedies of the Mortgagee in
respect of any default of the Mortgagor or otherwise.

10. DEFAULT AND ACCELERATION

10.1 If any default at any time be made of or in any payment of the Principal
Sum or interest hereby secured or mentioned, or intended so to be, or any part
thereof, at the times and in the amounts provided, or in payment of any of the
taxes, rates, levies, charges, rents, assessments, statute labour or other
impositions whatsoever, or under the covenant to insure herein given, or as to
any other covenant or proviso herein contained, or if the Mortgagor becomes
bankrupt or insolvent or makes or demonstrates an intention to make an
assignment for the benefit of its creditors or makes a proposal or takes
advantage of any provision of the Bankruptcy and Insolvency Act or any other
legislation for the benefit of insolvent debtors or if the whole or any portion
of the Lands become the subject of expropriation proceedings, then and in every
such case and in the sole discretion of the Mortgagee:

      (a)   the outstanding Principal Sum, interest, and all other moneys owing
            hereunder shall forthwith become due and payable without notice in
            like manner and with like consequences and effects to all intents
            and purposes whatsoever as if the Balance Due Date had fully come
            and expired, and notwithstanding that this Mortgage is declared to
            be made in pursuance of Part 3 of the Land Transfer Form Act
            (British Columbia), as amended or replaced from time to time, it is
            expressly understood and agreed by the Mortgagor that the
            reinstatement provisions of the form of words


<PAGE>   15
Page 16 of 27 pages



            numbered 15 in Column II of Schedule 6 to the said Land Transfer
            Form Act shall have no force and effect in respect of this Mortgage
            or any of the moneys hereby secured, whether for interest, the
            Principal Sum or upon any other account whatsoever and the
            provisions relating to a default under this Mortgage by the
            Mortgagor shall be as set out herein and the Mortgagor shall not be
            relieved from the consequences of default by payment of the moneys
            of which default of payment has been made and costs and charges
            related thereto;

      (b)   the Mortgagee shall have possession of the Lands free and clear from
            all encumbrances subject only to Permitted Encumbrances; and

      (c)   the Mortgagee may exercise any and all remedies to enforce this
            Mortgage.

10.2 If the Mortgagor or any other person liable for the performance of any or
all of the Mortgagor's obligations under this Mortgage defaults in the
observance or performance of any of the terms of any other security documents
given or granted to the Mortgagee as additional or collateral security for the
payment of the moneys hereby secured or the performance of the terms of this
Mortgage, then such default shall be deemed to be a default under this Mortgage
and entitle the Mortgagee to exercise any and all remedies available to the
Mortgagee in the event of default under this Mortgage.

11. REMEDIES OF MORTGAGEE ON DEFAULT

11.1 The Mortgagee, on default of any payment required to be made hereunder as
and when due, may on one week's notice enter on and lease or sell the Lands or
any part or parts thereof; and should default in payment continue for one month,
the foregoing powers of entry and leasing or sale, or any of them, may be
exercised without notice and the Mortgagee may lease or sell as aforesaid
without entering into possession of the Lands; and the title of a purchaser or
lessee upon a sale or lease made in professed exercise of the above power shall
not be liable to be impeached on the ground that no case had arisen to authorize
the exercise of such power, or that such power had been improperly or
irregularly exercised or that notice had not been given; and the Mortgagee may
sell the whole or any part or parts of the Lands by public auction or private
contract, or partly one and partly the other, on such terms as to credit and
otherwise as to the Mortgagee shall appear most advantageous and for such prices
as can reasonably be obtained therefor; and sales may be made from time to time
of portions of the Lands to satisfy interest or parts of the Principal Sum
overdue, leaving the Principal Sum or balance thereof to run at interest,
payable at the Interest Rate; and the Mortgagee may make any stipulations as to
title or commencement of title, or otherwise, as the Mortgagee shall deem
proper; and the Mortgagee may buy in or rescind or vary any contract for sale of
any of the Lands and re-sell, without being answerable for any loss occasioned
thereby; and in the case of a sale on credit the Mortgagee shall only be bound
to account to the Mortgagor for such moneys as have been actually received from
the purchaser(s) after the satisfaction of the Mortgagee's claim; and for any of
such purposes the Mortgagee may make and execute all agreements and assurances
that the Mortgagee deems fit; and the purchaser at any sale hereunder shall not
be bound to see to the propriety or regularity thereof; and no want of notice or
of publication, even if required hereby, shall invalidate any sale hereunder;
and the above powers may be exercised by the Mortgagee and against the
Mortgagor, and the costs


<PAGE>   16
                                                             Page 17 of 27 pages



of any abortive sale shall become a charge upon the Lands, and the Mortgagee may
add them to the moneys secured hereby;

11.2 If default shall be made in payment of any part of the Principal Sum,
interest or other moneys hereby secured at any time herein provided for the
payment thereof, it shall be lawful for the Mortgagee to, and the Mortgagor
hereby grants full power and license to the Mortgagee to, enter, seize and
distrain upon any goods upon the Lands and by distress warrant to recover by way
of rent reserved as in the case of a demise of the Lands as much of the
Principal Sum, interest or other moneys hereby secured as shall from time to
time be or remain in arrears or unpaid, together with all costs, charges and
expenses of the Mortgagee in connection therewith (including without limitation
legal fees, costs, charges and expenses on a solicitor and his own client
basis);

11.3 The obtaining of a judgment or judgments in any action to enforce this
Mortgage or any of the covenants herein contained or any covenant contained in
any other security for payment of the moneys hereby secured or performance of
the obligations herein contained shall not operate as a merger of this Mortgage
or of the moneys hereby secured or any of the said covenants or affect the right
of the Mortgagee to interest at the Interest Rate and at the times aforesaid on
any moneys owing to the Mortgagee under any covenant therein or herein set
forth, and any judgment shall provide that interest shall be computed at the
Interest Rate and in the same manner as herein provided until the judgment or
judgments shall have been fully paid and satisfied;

11.4 Upon any default or defaults in the payment of the moneys hereby secured or
of any instalment thereof or of interest thereon, as they become due, or upon
any default by the Mortgagor in the performance or observance of any of the
terms of this Mortgage, or of any of the assignments of rents or leases or other
deeds or instruments from time to time given by the Mortgagor to the Mortgagee
as additional or collateral security for the moneys hereby secured, then on the
happening of any one or more of such events, the Mortgagor shall refrain from
collecting and receiving all rents accruing as aforesaid and, upon notice from
the Mortgagee, all tenants shall thereafter pay all such rents to the Mortgagee,
and any payment made otherwise will not discharge the obligations of such
tenant, and the Mortgagee may immediately cause default proceedings to be
commenced under this Mortgage in the manner prescribed by law, and the Mortgagee
shall be entitled to have a receiver, receiver-manager or a receiver and manager
appointed and, without proof of any ground for his appointment other than the
said default, to take possession and charge of the Lands and to fully and
effectively operate the business which the Lands comprise or which was conducted
thereon by the Mortgagor including, without limiting the generality of the
foregoing, the right to rent the same and receive and collect the rents, issues
and profits thereof under direction of the Court, and any amount so collected by
such receiver shall be applied under direction of the Court to the payment of
any judgment rendered, or amounts found due, according to the terms of this
Mortgage including the costs of collection and legal fees, costs, charges and
expenses on a solicitor and his own client basis, and in the event of any
default or defaults in the payment of the moneys hereby secured or of any
instalment thereof or of interest thereon or in the performance or observance of
any of the terms of this Mortgage, the Mortgagee shall have the right forthwith
after any such default to enter upon, take possession of and rent the Lands and
receive the rents, issues and profits thereof and apply the same, after payment
of all necessary charges and expenses, on account of the moneys hereby secured;


<PAGE>   17
                                                             Page 18 of 27 pages



11.5 In addition to the foregoing rights and powers, the Mortgagee may appoint
by instrument in writing a receiver, receiver-manager or receiver and manager
(herein called the "Receiver") of the Lands, with or without bond, and may from
time to time remove the Receiver and appoint another in his stead. A Receiver
appointed by the Mortgagee as aforesaid will be deemed to be the agent of the
Mortgagor and the Mortgagor shall be solely responsible for the Receiver's acts
or defaults and the Mortgagee shall not be in any way responsible therefor and
the Mortgagee shall not be liable to the Receiver for his remuneration, costs,
charges or expenses;

11.6 It is further specifically understood and agreed that the Receiver
appointed by the Mortgagee shall have the following powers, subject to any
limitations in the instrument in writing or any order of a court of competent
jurisdiction appointing him, namely to:

      (a)   take possession of the Lands;

      (b)   rent the Lands or any portion thereof and receive and collect the
            rents, issues and profits thereof;

      (c)   carry on or concur in carrying on the business of the Mortgagor in
            operating the business comprised of the Lands or which is conducted
            thereon by the Mortgagor;

      (d)   pay any or all debts and liabilities in connection with the Lands;

      (e)   sell or lease or concur in selling or leasing any or all of the
            Lands;

      (f)   make any arrangements or compromises which the Receiver considers
            expedient;

      (g)   borrow money, upon the security of the whole or any part of the
            Lands, to carry on the business of the Mortgagor comprised of the
            Lands or which is conducted thereon by the Mortgagor or to maintain
            the whole or any part of the Lands in a manner that will be
            sufficient to obtain the amounts from time to time required in the
            opinion of the Receiver, and in so doing the Receiver may issue
            certificates (each herein called a "Receiver's Certificate") that
            may be payable as the Receiver considers expedient and bear interest
            as stated therein, and the amounts from time to time payable under
            any Receiver's Certificate shall charge the Lands in priority to
            this Mortgage and the Mortgagor hereby charges the Lands with the
            debt, if any, owing from time to time under any Receiver's
            Certificate; and

      (h)   institute and prosecute all suits, proceedings and actions which the
            Receiver considers necessary or advisable for the proper protection
            of the Lands, to defend all suits, proceedings and actions against
            the Mortgagor or the Receiver, to appear in and conduct the
            prosecution and defence of any suit, proceeding or action then
            pending or thereafter instituted, and appeal any suit, proceeding or
            action;

11.7 In exercising his powers hereunder, any Receiver will be free to deal with
the Lands and any assets of the Mortgagor related thereto in such order or
manner as he may be directed by the Mortgagee, any rule of law or equity to the
contrary notwithstanding, including, without limitation, the equitable principle
or doctrine of marshalling;

<PAGE>   18
                                                             Page 19 of 27 pages



11.8 The net revenue received from the Lands and the net proceeds of sale of the
Lands or any part thereof shall be applied by the Receiver, subject to the
claims of creditors, if any, ranking in priority to this Mortgage, as follows:

      (a)   firstly, in payment of all costs, charges and expenses of and
            incidental to the appointment of the Receiver and the exercise by
            him of all or any of the powers aforesaid including the reasonable
            remuneration of the Receiver and all amounts properly payable to
            him;

      (b)   secondly, in payment to the Mortgagee of all costs and charges owing
            hereunder and interest and arrears of interest remaining unpaid
            hereunder;

      (c)   thirdly, in payment to the Mortgagee of the Principal Sum owing
            hereunder; and

      (d)   fourthly, any surplus shall be paid to the Mortgagor;

provided that in the event any party claims a charge against all or a portion of
the surplus, the Receiver shall make such disposition of all or any portion of
the surplus as the Receiver deems appropriate in the circumstances;

11.9 Neither the provisions of this Mortgage nor the exercise of the powers
provided in this Mortgage shall render the Mortgagee a mortgagee in possession,
and the Mortgagee shall not be accountable except for the moneys actually
received by the Mortgagee;

11.10 All remedies available to the Mortgagee herein shall be in addition to and
not restrictive of the remedies of the Mortgagee at law and in equity and by
statute;

11.11 Each remedy of the Mortgagee may be enforced in priority to or
concurrently with or subsequent to any other remedy or remedies of the
Mortgagee;

11.12 The Mortgagee may realize on various securities and any parts thereof in
any order that the Mortgagee may consider advisable, and any realization,
whether by foreclosure or sale, on any security or securities shall not bar
realization on any other security or securities.

12. PRESERVATION OF MORTGAGE AND OTHER SECURITY

12.1 No extension of time given by the Mortgagee to the Mortgagor, nor anyone
claiming under the Mortgagor, nor any other dealing by the Mortgagee with the
owner of the equity of redemption of the Lands, shall in any way affect or
prejudice the rights or remedies of the Mortgagee against the Mortgagor or any
other person liable either in whole or in part for the payment of the moneys
hereby secured or the performance of the obligations of the Mortgagor hereunder.

12.2 Every part, lot or strata lot into which the Lands are or may hereafter be
divided does and shall stand as charged with the whole of the moneys hereby
secured, and no person shall have any right to require the moneys hereby secured
to be apportioned upon or in respect of any such part, lot or strata lot.


<PAGE>   19
                                                             Page 20 of 27 pages



12.3 All erections, buildings, structures, machinery, plant and improvements
whatsoever, including furnaces, boilers, water heaters and all plumbing, air
conditioning, ventilating and heating equipment, electric light fixtures, storm
windows and storm doors, window screens and screen doors, (and if applicable,
refrigerators, ranges, dishwashers, clothes washers, clothes dryers, garbage
compactors and any other appliances and all apparatus and equipment appurtenant
thereto), which are now or which shall hereafter be owned by the Mortgagor and
be put upon the Lands, are or shall thereafter be deemed to be fixtures and a
part of the Lands and the security for the moneys hereby secured, even though
not attached otherwise than by their own weight.

12.4 The Mortgagee may at all times release any part or parts of the Lands or
any other security or any surety for payment of all or any part of the moneys
hereby secured or may release the Mortgagor or any other person from any
covenant or other liability to pay the moneys secured hereby or any part
thereof, either with or without any consideration therefor and without being
accountable for the value thereof or for any moneys except those actually
received by the Mortgagee, and without thereby releasing any other part of the
Lands or any other securities or covenants herein contained, it being agreed
that, notwithstanding any such release, the Lands, securities and covenants
remaining unreleased shall stand charged with the whole of the moneys hereby
secured.

12.5 The Mortgagee may waive any default hereunder provided that no such waiver,
nor any failure to enforce at any time or from time to time any of the rights of
the Mortgagee hereunder, shall prejudice the Mortgagee's rights in the event of
any future default or breach.

12.6 The provisions of this Mortgage and the security of this Mortgage are in
addition to, but not in substitution for, any other security now or hereafter
held by the Mortgagee for the Principal Sum, interest and other amounts hereby
secured or any part thereof.

12.7 Any act done or omitted to be done by any of the parties hereto regarding
any other securities held by the Mortgagee for the Principal Sum, interest and
other amounts hereby secured or any part thereof shall not in any way affect or
prejudice this Mortgage, and this Mortgage shall remain and be in force until
satisfaction thereof is made by payment of all sums hereby secured as if no
other security was held by the Mortgagee for such sums.

13. RIGHT OF CONSOLIDATION PRESERVED

13.1 The doctrine of consolidation shall apply to this Mortgage notwithstanding
Section 27 of the Property Law Act (British Columbia) as amended or replaced
from time to time.

14. SALE OR TRANSFER

14.1 If:

      (a)   the Lands or any part thereof are sold, transferred, conveyed or
            assigned or otherwise disposed of, or the Mortgagor enters into any
            agreement to effect any of the foregoing, whether by registered or
            unregistered instrument and whether for valuable or nominal
            consideration or otherwise, to a party not first approved in writing
            by the Mortgagee; or

<PAGE>   20
                                                             Page 21 of 27 pages



      (b)   such purchaser, grantee, transferee or assignee should fail to:

            (A)   apply for and receive the Mortgagee's written approval as
                  aforesaid;

            (B)   if required by the Mortgagee, personally assume all the
                  obligations of the Mortgagor under this Mortgage; and

            (C)   if required by the Mortgagee, execute an assumption agreement
                  in the form required by the Mortgagee,

then the Mortgagee at its option may declare the Principal Sum then secured
hereunder, all accrued interest and all other moneys then secured hereby, to
become immediately due and payable in full and the Mortgagor shall pay the same
forthwith.

14.2 The word "assigned" as used in paragraph 14.1 shall include any transfer,
sale, assignment, bequest, inheritance, encumbrance or other disposition of
shares of any body corporate comprising the Mortgagor, in whole or in part,
having the result of changing the identity of the person(s) who during the
currency of this Mortgage exercise the effective voting control of such body
corporate.

14.3 The Mortgagee shall be entitled to be reimbursed for reasonable out of
pocket expenses it incurs to process each application for approval as herein
contemplated, which expenses shall be payable by the Mortgagor forthwith upon
demand. Failure by the Mortgagor to pay such expenses shall be deemed to be an
act of default hereunder. It is further understood and agreed that any approval
given hereunder shall in no way change the liability of the Mortgagor or in any
way alter the rights of the Mortgagee as against the Mortgagor or any other
person liable for payment of the moneys hereby secured.

15. STRATA LOT PROVISIONS

15.1 If the Lands now or at any time hereafter are comprised of one or more
strata lots, the Mortgagor covenants and agrees:

      (a)   "Act" means for the purposes of this paragraph, the Condominium Act
            (British Columbia) as amended or replaced from time to time;

      (b)   where used in this paragraph 15, the terms "buildings", "common
            facilities", "common property", "Form A certificate", "Form B
            certificate", "owner", "Strata Corporation", "strata lot", and
            "strata plan" shall have the respective meanings attributed to them
            in the Act;

      (c)   to observe and perform in all material respects all the covenants,
            agreements, conditions and provisos required to be observed and
            performed under the Act and any by-laws, rules and regulations that
            may be passed by the Strata Corporation or any special interest
            section thereof of which the Mortgagor is a member by virtue of
            ownership by the Mortgagor of the strata lot(s) hereby charged;


<PAGE>   21
                                                             Page 22 of 27 pages



      (d)   to pay, on or before the due dates thereof, the share of common
            expenses and each and every assessment, contribution or levy made by
            the Strata Corporation or any special interest section thereof
            against the strata lot(s) and interest(s) in the Lands, and the
            Mortgagor shall not permit a situation under which the Strata
            Corporation or any special interest section thereof may register in
            the land title office a Form B certificate under the Act;

      (e)   to forward to the Mortgagee within ten (10) days of demand by the
            Mortgagee a Form A certificate as provided for in the Act certifying
            that no moneys are owing to the Strata Corporation by the Mortgagor;

      (f)   that the Mortgagor shall not without the prior written consent of
            the Mortgagee:

            (i)   assign any of the Mortgagor's rights, powers, duties or
                  obligations under the Act or the by-laws created under the
                  Act; or

            (ii)  give possession of any strata lot(s) hereby charged to any
                  person whether on the basis of an agreement providing for the
                  purchase of the strata lot(s) by the occupier or on the basis
                  of a lease, sublease or assignment of lease for a term of one
                  (1) year or more or otherwise;

      (g)   to grant and hereby grants to the Mortgagee all rights and powers to
            vote conferred on the Mortgagor by the Act, but neither this section
            nor anything done by virtue thereof shall render the Mortgagee a
            mortgagee in possession;

      (h)   that this Mortgage constitutes express written notice to the
            Mortgagor that the Mortgagee intends to exercise the power to vote
            on any matters relating to insurance, maintenance, finance or other
            matters affecting the security for this Mortgage and no additional
            notice need be given to the Mortgagor to permit the Mortgagee to
            exercise the right and power to vote conferred on the Mortgagor in
            respect of these matters, and the Mortgagee may, at any duly called
            meeting of the Strata Corporation of which the Mortgagee has
            received written notice, exercise the right to vote on these matters
            if the Mortgagee is not by its authorized representative, agent or
            proxy, present at that meeting;

      (i)   that the right and power to vote granted in this Mortgage to the
            Mortgagee does not impose on the Mortgagee any duty or obligation
            whatsoever to protect the interest of the Mortgagor, and the
            Mortgagee shall not be responsible for the consequences of any
            exercise of the right to vote or any failure to exercise the right
            to vote;

      (j)   that under Section 28(3) of the Act the Mortgagor hereby authorizes
            any officer of the Mortgagee to apply at any time and from time to
            time during the term hereof to the Strata Corporation to have the
            by-laws for the time being in force governing the strata lot(s) and
            interest in the Lands hereby charged made available for inspection
            by an officer of the Mortgagee;

<PAGE>   22
                                                             Page 23 of 27 pages



      (k)   that under Section 36 of the Act the Mortgagor hereby authorizes any
            officer of the Mortgagee to apply at any time and from time to time
            to the Strata Corporation for certification to the Mortgagee of:

            (i)   the amount of any contribution determined as the contribution
                  of the Mortgagor;

            (ii)  the manner in which the contribution is payable;

            (iii) the extent to which the contribution has been paid by the
                  Mortgagor; and

            (iv)  the amount of any moneys expended by the Strata Corporation on
                  behalf of the Mortgagor under Section 34(2) of the Act and not
                  recovered by the Strata Corporation;

      (l)   that the Mortgagor shall cause the Mortgagee to be named as a loss
            payee as its interest may appear in respect of the strata lot(s) on
            the policy or policies of insurance effected by the Strata
            Corporation, on the buildings, common facilities and the insurable
            improvements owned by the Strata Corporation and shall cause
            mortgage clauses in a form approved by the Mortgagee to be included
            in such insurance policy or policies and shall provide evidence of
            such insurance to the Mortgagee forthwith upon demand;

      (m)   that if the insurance effected by the Strata Corporation on the
            buildings and common facilities is inadequate in the opinion of the
            Mortgagee, then the Mortgagor shall upon demand effect insurance of
            the strata lot(s) and the Mortgagor's interest in the common
            property against such risks or hazards and in an amount as the
            Mortgagee may require with an insurance company and by a policy
            satisfactory to the Mortgagee, which policy or policies shall
            contain loss payable provisions and mortgage clauses as aforesaid,
            and shall provide evidence of such insurance to the Mortgagee; and

      (n)   that the Mortgagee is the Mortgagor's agent to examine, inspect and
            obtain copies of any and all records, minutes, books of account or
            other documents of any nature and kind whatsoever which the
            Mortgagor is entitled to examine or inspect.

16. PROMISSORY NOTE

16.1 Any promissory note or notes taken in connection with any advance of funds
to be secured hereunder is taken as collateral security only and not in
satisfaction of the moneys secured hereby.

17. OTHER OBLIGATIONS

17.1 Any default by the Mortgagor in the performance of any contractual
obligation to the Mortgagee under any agreement or legal instrument collateral
or supplemental hereto, and any default by any person or persons in the
performance or observance of any provision or covenant hereunder or under any
other security for the payment of the moneys secured by this
<PAGE>   23
                                                             Page 24 of 27 pages



Mortgage and any material adverse change in the financial condition of the
Mortgagor and/or any other person executing this Mortgage, and the making of any
misstatement by any person in any statutory declaration or certificate at any
time delivered in connection with this Mortgage, shall be deemed to be a default
hereunder and shall entitle the Mortgagee to exercise all remedies available to
the Mortgagee in the event of default by the Mortgagor hereunder.

18. ESTOPPEL CERTIFICATE

18.1 The Mortgagor, within seven (7) days after receipt of a request to do so,
will certify to the Mortgagee, or any person designated by the Mortgagee, the
amount of the Principal Sum then due hereunder, the date to which interest is
paid, that it has no right of set-off against the moneys due hereunder or, if it
has such a right of set-off, the amount thereof, and that there have been no
amendments hereof or, if there has been any such amendment, specifying it.

19. INTEREST RATE ALTERNATIVE

19.1 Subject to the provisions of paragraph 20, if the Interest Rate would,
except for this clause, be a criminal rate, or void for uncertainty, or
unenforceable for any other reason, or not capable of being ascertained, or is
determined by court to be subject to deemed reinvestment of interest then the
Interest Rate shall be one percent (1%) per annum less than the minimum rate
which would be a criminal rate calculated in accordance with generally accepted
actuarial practices and principles.

20. MAXIMUM RETURN TO MORTGAGEE

20.1 It is agreed that, notwithstanding any agreement to the contrary, no
Interest on the Credit Advanced will be payable in excess of that permitted by
the laws of Canada. If the effective annual rate of Interest, calculated in
accordance with generally accepted actuarial practices and principles, would
exceed 60% on the Credit Advanced, then:

      (a)   the amount of any fees payable in connection therewith will be
            reduced to the extent necessary to eliminate such excess;

      (b)   any remaining excess that has been paid will be credited towards
            prepayment of the principal amount; and

      (c)   any overpayment that may remain after such crediting will be
            returned forthwith upon demand.

In this paragraph the terms "Interest" and "Credit Advanced" have the meanings
ascribed to them in section 347 of the Criminal Code.

21. MISCELLANEOUS

21.1 In order for any addition to or modification, amendment or variation of
this Mortgage to be effective it must be in writing and signed by all parties to
this Mortgage.


<PAGE>   24
                                                             Page 25 of 27 pages



21.2 Any extension of the term of payment of the moneys hereby secured, or any
part thereof, and any agreement increasing or decreasing the rate of interest
payable hereunder, prior to the execution of the discharge of this Mortgage by
the Mortgagee need not be registered in a land title office, but shall be
effectual and binding on the Mortgagor and any other person liable for the
moneys hereby secured, in whole or in part, and it shall not be necessary to
register any such agreement in order to retain priority of this Mortgage so
altered over any instrument registered as a charge against the Lands
subsequently to the registration of this Mortgage.

21.3 Any demand or notice necessary to be given in pursuance of the exercise of
the powers and provisions herein contained may be given to the Mortgagor or to
any encumbrancer by writing signed or purporting to be signed by or on behalf of
the Mortgagee.

21.4 Any demand or notice to be made or given under the provisions of this
Mortgage may be effectually made or given in writing addressed to the party to
whom it is made or given and delivered or mailed by registered post to the
address stated in Item 3 or Item 4 of Part 1 of this Mortgage, as the case may
be, or to such other address in British Columbia as the party to whom it is made
or given shall have previously specified by written notice, and shall be deemed
to have been made or given on the date of delivery if delivered and on the third
day after mailing if mailed.

21.5 The Mortgagee has not made and the Mortgagor does not rely on any
representations, warranties, covenants, agreements, conditions or provisos, oral
or otherwise, whether made by the Mortgagee or any person acting actually or
ostensibly on the Mortgagee's behalf, other than those contained in this
Mortgage unless those representations, warranties, covenants, agreements,
conditions and provisos are contained in a supplementary contract in writing
duly executed by both the Mortgagor and the Mortgagee which supplementary
contract is expressed to survive the closing of the transaction referred to
therein and the registration of this Mortgage.

21.6 If this Mortgage is executed by a Covenantor then the Covenantor hereby
guarantees to the Mortgagee payment of all moneys payable under this Mortgage,
provided that the Mortgagee shall not be bound to look to any other person or
the security it may hold before being entitled to payment from the Covenantor,
and provided further that the Mortgagee, at all times at its discretion and
without notice to any person and without thereby releasing the Covenantor from
payment of the moneys payable under this Mortgage, may agree with any proper
person or persons to alter or change in any way the terms of payment of this
Mortgage, and either with or without any consideration therefor may release any
person or persons from any liability under this Mortgage or release part or all
of the Mortgaged Lands or release any other security for the moneys secured by
this Mortgage, and may apply all moneys received on account of this Mortgage to
the payment of all moneys thereby secured (whether or not any amount is then
due) in such manner as the Mortgagee may determine.

22. INTERPRETATION

22.1 The paragraph headings in this Mortgage are inserted for convenience of
reference only and shall not affect the construction or interpretation of this
Mortgage.
<PAGE>   25
                                                             Page 26 of 27 pages



22.2 All references in this Mortgage to the words "hereof", "herein" or
"hereunder" shall be construed to mean and refer to this Mortgage as a whole and
shall not be construed to refer only to a specific paragraph or clause of this
Mortgage unless the context clearly requires such construction.

22.3 In the event of any party being comprised of two or more persons, all
covenants and agreements of such party herein contained shall be and be deemed
to be joint and several covenants or agreements of each such person, and the
heirs, executors, administrators, successors and permitted assigns of each such
person shall be jointly and severally bound by the covenants, agreements,
stipulations and provisos herein stated in addition to those granted or implied
by statute.

22.4 If any of the terms of this Mortgage are or are held to be unenforceable or
otherwise invalid, such holding will not in any way affect the enforceability or
validity of the remaining terms of this Mortgage.

22.5 This Mortgage including any covenants and indemnity of any covenantor
provided for herein shall be governed by and construed in accordance with the
laws of the Province of British Columbia, and each party hereby submits to the
jurisdiction of the courts of the Province of British Columbia and agrees to be
bound by any suit, action or proceeding commenced in such courts and by any
order or judgment resulting from such suit, action or proceeding; provided that
the foregoing shall in no way limit the right of the Mortgagee to commence
suits, actions or proceedings based on this Mortgage in any other jurisdiction.

22.6 Wherever the singular or masculine gender is used throughout this Mortgage,
the same shall be construed as meaning the plural or the feminine or the body
corporate or politic where the context or the parties hereto so require.

22.7 If title to the Lands or any portion thereof is held by the Mortgagor as a
partner of a firm, as a trustee, as an agent, or in any other similar capacity,
whether fiduciary or otherwise:

      (a)   each and every warranty, representation, covenant, agreement, term,
            condition, proviso and stipulation; and

      (b)   each and every grant, mortgage, mortgage by way of sublease and
            other charge constituted hereby;

made by or imposed upon the Mortgagor hereunder shall be and be deemed to be
jointly and severally made by or imposed upon the Mortgagor and the partnership,
the beneficiary (or beneficiaries) of the trust, the principals) of the agent,
or other entity (or entities), as the case may be, and each grant, mortgage,
mortgage by way of sublease and other charge contained in this Mortgage shall be
deemed to be a grant, mortgage, mortgage by way of sublease or charge of the
estate, right, title and interest of the partnership, the beneficiary (or
beneficiaries), the principals), or such entity (or entities), as the case may
be, in and to the Lands or such portion thereof, as the case may be as well as
being a grant, mortgage, mortgage by way of sublease or other charge, of the
estate, interest and title of the Mortgagor in and to the Lands, or such portion
thereof as the case may be, it being the intention of the


<PAGE>   26
                                                             Page 27 of 27 pages



parties hereto that this Mortgage shall constitute a charge against both the
legal and beneficial title to the Lands.

22.8 This Mortgage is intended by the Mortgagor and the Mortgagee to take effect
as a deed, notwithstanding that it may or may not be executed under seal

22.9 Time shall be of the essence hereof.

22.10 This Mortgage shall be dated, for reference purposes only, June 9, 1997.



                                END OF DOCUMENT