Eron Lenders
Capital Place/Tower in the Park
Lender update

October 23, 1998

Subject:
Capital Place; Tower in the Park ("Capital"), Leewood Village ("Leewood"), and Sterling Place ("Sterling"), collectively referred to as the Alberta Properties.


Dear Sirs:

We have been approached by 708804 Alberta Ltd (the "borrower") with an offer for a discharge on the above Alberta Properties. The total offer for a discharge of all three mortgages is $9,575,476.

The schedule below summarizes the estimated value of the properties less any prior encumbrances and the amounts currently owed by the borrower under the specific mortgages. The estimated value of the properties was estimated by reviewing the appraisal commissioned by PricewatershouseCoopers Inc. in December 1997 and through an update discussion with the appraiser in October 1998 (to determine any changes in the properties market values). Prior encumbrances represent amounts owing under senior mortgages and outstanding property taxes.


Capital 570 Dunsmiur Sterling Leewood
Total Estimated value of property $ 8,000,000 $ 7,800,000 $ 5,600,000 $ 21,400,000
Prior encumbrances $ 4,036,065 $ 4,100,577 $ 3,950,000 $ 12,086,642
Net Equity (before realization costs) $ 3,963,935 $ 3,699,423 $ 1,650,000 $ 9,313,358
Calculated pay out (based on equity) $ 4,075,497 $ 3,803,541 $ 1,696,438 $ 9,575,476
Owing under standstill agreements $ 4,808,390 $ 3,947,671 $ 2,111,179 $ 10,867,240


The borrower has indicated that they are seeking a discharge of the above three mortgages in exchange for $9,575,476. The current offer from 708804 is less than the amounts owing under the standstill agreements but it is in excess of the estimated net equity in all three properties. Therefore the Judicial Trustee plans to recommend its acceptance. Accepting the offer is contingent upon receipt of statutory declarations from all parties who have guaranteed the above mortgages indicating that no additional assets are available to provide further security other than the properties described above.

The borrower is not concerned how the funds are divided amongst the specific mortgages. Therefore the Judicial Trustee anticipates to recommend to the Court that the total offer of $9,575,476 be distributed amongst the three properties pro-rata based on the net equity available on each individual property (net equity available before realization costs). Based on this calculation, the amount estimated to be distributed to the Capital Place would be $4.075 million. Please note that acceptance of this offer and the proposed distribution is subject to Court approval.

We anticipate to seek Court approval with in the next couple of weeks. If you have any questions, please do not hesitate to contact our Mr. Deryck Helkaa at (604) 806-7557.


Yours truly

Judicial Trustee


PricewaterhouseCoopers is a Canadian member firm of PricewaterhouseCoopers International Limited, an English company limited by guarantee.


PricewaterhouseCoopers Inc.
601 West Hastings Street
Suite 1400
Vancouver, BC
Canada V6B 5A5
Telephone +1 (604) 682 4711
Facsimile +1 (604) 662 5300
Direct phone (604) 669-5087, Ext. 416
Direct fax (604) 688-6128





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