<PAGE>   1
                                                                    EXHIBIT 10.5

Guarantee and Postponement of Claim

To:  Royal Bank of Canada

FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the
undersigned and each of them (if more than one) hereby jointly and
severally guarantee(s) payment on demand to Royal Bank of Canada
(hereinafter called the "Bank") of all debts and liabilities, present
or future, direct or indirect, absolute or contingent, matured or not,
at any time owing by BLUE ZONE PRODUCTIONS LTD (hereinafter called the
"customer") to the Bank or remaining unpaid by the customer to the Bank,
heretofore or hereinafter incurred or arising and whether incurred by
or arising from agreement or dealings between the Bank and the customer
or by or from any agreement or dealings with any third party by which
the Bank may be or become in any manner whatsoever a creditor of the
customer or however otherwise incurred or arising anywhere within or
outside the country where this guarantee is executed and whether the
customer be bound alone or with another or others and whether as
principal or surety (such debts and liabilities being hereinafter
called the "liabilities"); the liability of the undersigned hereunder
being limited to the sum of $50,000.00 (Fifty Thousand Dollars)
together with interest thereon from the date of demand for payment at a
rate equal to the Bank's Prime Interest Rate per annum in effect from
time to time plus 2.00% (two point zero percent) per annum as well as
after as before default and judgment.

AND THE UNDERSIGNED AND EACH OF THEM (IF MORE THAN ONE) HEREBY JOINTLY
AND SEVERALLY AGREE(S) WITH THE BANK AS FOLLOWS:

(1)      The Bank may grant time, renewals, extensions, indulgences, releases
         and discharges to, take securities (which word used herein includes
         securities taken by the Bank from the Customer and others, monies which
         the Customer has on deposit with the Bank, other assets of the Customer
         held by the Bank in safekeeping or otherwise, and other guarantees)
         from and give the same and any or all existing securities up to,
         abstain from taking securities from, or perfecting securities of, cease
         or refrain from giving credit or making loans or advanced to, accept
         compositions from or otherwise deal with, the customer and others and
         with all securities upon such part of the liabilities as the Bank deems
         bast and change any such application in whole or in part from time to
         time as the Bank may see fit, the whole without in any way limiting or
         lessening the liability of the undersigned under this guarantee, and no
         loss of or in respect of any securities received by the Bank from the
         customer or others, whether occasioned by the fault of the Bank or
         otherwise, shall in any way limit or lessen the liability of the
         undersigned under this guarantee.
<PAGE>   2
(2)      This guarantee shall be a continuing guarantee and shall cover all the
         liabilities, and it shall apply to and secure any ultimate balance due
         or remaining unpaid to the Bank.

(3)      The Bank shall not be bound to exhaust its recourse against the
         customer or others or any securities it may at any time hold before
         being entitles to payment from the undersigned of the liabilities. The
         undersigned renounce(s) to all benefits of discussion and division,

(4)      The undersigned or any of them may, by notice in writing delivered to
         the Manager of the branch or agency of the Bank receiving this
         instrument, determine their or his/her liability under this guarantee
         in respect of liabilities thereafter incurred or arising but not in
         respect of any liabilities theretofore incurred or arising even though
         not then matured, provided, however, that notwithstanding receipt of
         any such notice and any resulting liabilities shall be based on
         agreements express or implied made prior to the receipt of such notice,
         and any resulting liabilities shall be covered by this guarantee, and
         provided further that in the event of the determination of the
         guarantee as to one of more of the undersigned it shall remain a
         continuing guarantee as to the other or others of the undersigned.

(5)      All indebtedness and liability, present and future, of the customer to
         the undersigned or any of them are hereby assigned to the Bank and
         postponed to the liabilities, and all monies received by the
         undersigned or any of them in respect thereof shall be received in
         trust for the Bank, and forthwith upon receipt shall be paid over to
         the Bank, the whole without in any way limiting or lessening the
         liability of the undersigned under the foregoing guarantee; and this
         assignment and postponement is independent of the said guarantee and
         shall remain in full effect notwithstanding that the liability of the
         undersigned or any of them under the said guarantee may be extinct. The
         term "Liabilities", as previously defined, for purposes of the
         postponement feature provided by this agreement, and this section in
         particular, includes any funds advanced or held at the disposal of the
         customer under any line(s) of credit.

(6)      This guarantee and agreement shall not be affected by the death or loss
         or diminution of capacity of the undersigned or any of them or by any
         change in the name of the customer or in the membership of the
         customer's firm through the death or retirement of one or more partners
         or the introduction of one or more other partners or otherwise, or by
         the acquisition of the customer's business or by a corporation, or by
         any change whatsoever in the objects, capital structure or constitution
         of the customer, or by the customer's business being amalgamated with a
         corporation, but shall notwithstanding the happening of any such event
         continue to apply to all the liabilities whether theretofore or
         thereafter incurred or arising and in this instrument the word
         'customer' shall include every such firm and corporation.

(7)      This guarantee shall not be considered as wholly or partially satisfied
         by the payment or liquidation at any time or times of any sum or sums
         of money for the time being due or remaining unpaid to the Bank, and
         all dividends, compositions, proceeds of security valued and payments
         received by the Bank
<PAGE>   3
         from the customer or from others or from estates shall be regarded for
         all purposes as payments in gross without any right on the part of the
         undersigned to claim in reduction of the liability under this guarantee
         the benefit of any such dividends, compositions, proceeds or payments
         or any securities held by the Bank or proceeds thereof, and the
         undersigned shall have no right to be subrogated in any rights of the
         Bank until the Bank shall have received payment in full of the
         liabilities.

(8)      All monies, advances, renewals, credits and credit facilities in face
         borrows or obtained from the Bank shall be deemed to form part of the
         liabilities, notwithstanding any lack or limitation of status or of
         power, incapacity or disability of the customer or the directors,
         partners or agents of the customer, or that the customer may not be a
         legal or suable entity or any irregularity defect or informality in the
         borrowing or obtaining of such monies, advances, renewals, credits or
         credit facilities, ort any other reason, similar or not, the whole
         whether known to the Bank or not. Any sum which may not be recoverable
         from the undersigned on the footing or a guarantee, whether for the
         reasons set out in the previous sentence, or for any other reason,
         similar or not, shall be recoverable from the undersigned and each of
         them as sole or principal debtor in respect of that sum, and shall be
         paid to the Bank on demand with interest and accessories.

(9)      This guarantee is in addition to and not in substitution for any other
         guarantee, by whomsoever given, at any time held by the Bank, and any
         present or future obligation to the Bank incurred or arising otherwise
         then under a guarantee, of the undersigned or any of then or any other
         obligant, whether bound with or apart from the customer, excepting any
         guarantee surrendered for cancellation on delivery of this instrument.

(10)     The undersigned and each other them shall be bound by any account
         settled between the Bank and the customer, and if no account has been
         so settled immediately before demand for payment under this guarantee
         any account stated by the Bank shall be accepted by the undersigned and
         each of them as conclusive evidence of the amount which at the date of
         the account so stated is due by the customer to the Bank or remains
         unpaid by the customer to the Bank.

(11)     This guarantee and agreement shall be operative and binding upon every
         signatory thereof notwithstanding the non-execution thereof by any
         other proposed signatory or signatories, and possession of this
         instrument by the Bank shall be conclusive evidence against the
         undersigned and each of them that this instrument was not delivered in
         escrow or pursuant to any agreement that is should not be effective
         until any conditions precedent or subsequent had been complied with,
         unless at the time of receipt of this instrument by the Bank each
         signatory thereof obtains from the Manager of the branch or agency of
         the Bank receiving this instrument a letter setting out the terms and
         conditions under which this instrument was delivered and the
         conditions, if any, to be observed before it becomes effective.

(12)     No suit based on this guarantee shall be instituted until demand for
         payment has been made, and demand for payment shall be deemed to have
<PAGE>   4
         been effectually made upon any guarantor if and when an envelope
         containing such demand, addressed to such guarantor at the address of
         such guarantor last known to the Bank, is posted, postage prepaid, in
         the post office, and in the event of the death of any guarantor demand
         for payment addressed to any of such guarantor's heirs, executors,
         administrators or legal representatives at the address of the addressee
         last known to the Bank and posted as aforesaid shall be deemed to have
         been effectually made upon all of them. Moreover, when demand for
         payment has been made, the undersigned shall also be liable to the bank
         for all legal costs (on a solicitor and own client basis) incurred by
         or on behalf of the Bank resulting from any action instituted on the
         basis of this guarantee. All payments hereunder shall me made to the
         Bank at a branch or agency of the Bank.

(13)     This instrument covers all agreements between the parties hereto
         relative to this guarantee and assignment and postponement, and none of
         the parties shall be bound by any representation of promise made by any
         person relative thereto which is not embodied herein.

(14)     This guarantee and agreement shall extend to and endure to the benefit
         of the bank, and its successors and assigns, and every reference herein
         to the undersigned or to each of them or to any of them, is a reference
         to and shall be construed as including the undersigned and the heirs,
         executors, administrators, legal representatives, successors and
         assigns of the undersigned or of each of them or of any of them, as the
         case may be, to and upon all of whom this guarantee and agreement shall
         extend and be binding.

(15)     Prime Interest Rate is the annual rate is interest announced from time
         to time by Royal Bank of Canada as a reference rate then in effect for
         determining interest rates on Canadian dollar commercial loans in
         Canada.

(16)     This guarantee and postponement of Claim shall be governed by and
         construed in accordance with the laws of the Province of British
         Columbia ("Jurisdiction"). The undersigned irrevocably submits to the
         courts of the Jurisdiction in any action or proceeding arising out of
         or relating to this Guarantee and Postponement of Claim, and
         irrevocably agrees that all such action and proceedings may be heard
         and determined in such courts, and irrevocably waives, to the fullest
         extent possible, the defense of an inconvenient forum. The undersigned
         agrees that a judgment or order in any such action or proceeding may be
         enforced in other jurisdictions in any manner provided by law.
         Provided, however, that the Bank may serve legal process in any manner
         permitted by law or may bring an action or proceeding against the
         undersigned or the property or assets of the undersigned in the courts
         of any other jurisdiction.

(17)     The undersigned hereby acknowledges receipt of a copy of this
         agreement.

(18)     The undersigned hereby waives undersigned's right to receive a copy of
         any Financing Statement or Financing Change Statement registered by the
         Bank.


GIVEN UNDER SEAL at Vancouver, this July 9, 1999
<PAGE>   5
SIGNED, SEALED AND DELIVERED IN THE PRESENCE OF

/S/Witness                                           /s/ F. Michael P Warren.
---------------------                                ---------------------------