<PAGE>   1
                                                                    EXHIBIT 4.1

                          PROVINCE OF BRITISH COLUMBIA

                                  COMPANY ACT



                                    ARTICLES

                                       OF

                         RAINTREE RESORTS HOLDINGS LTD.



                                     PART 1

                                 INTERPRETATION

1.1      In these Articles, unless there is something in the subject or context
         inconsistent therewith:

         "BOARD" and "THE DIRECTORS" or "THE DIRECTORS" or "THE BOARD OF
         DIRECTORS" mean the Directors or sole Director of the Company for the
         time being.

         "COMPANY ACT" means the Company Act of the Province of British
         Columbia as from time to time in force and all amendments thereto and
         includes the regulations made pursuant thereto.

         "INTERPRETATION ACT" means the Interpretation Act of the Province of
         British Columbia as and from time to time in force and all amendments
         thereto and includes the regulations made pursuant thereto.

         "PROXYHOLDER" means a person duly appointed by a registered holder to 
         represent him at a meeting.

         "REGISTERED ADDRESS" of a member or registered holder means his
         address as recorded in the register of members.

         "REGISTERED OWNER" or "REGISTERED HOLDER" when used with respect to a
         share in the authorized capital of the Company means the person
         registered in the register of members in respect of such share.

         "SEAL" means the common seal of the Company.

         Expressions referring to writing shall be construed as including
         references to printing, lithography, typewriting, photography and
         other modes of representing or reproducing words in a visible form.

<PAGE>   2


         Words importing the singular include the plural and vice versa; and
         words importing male persons include female persons and words
         importing individuals shall include corporations and vice versa.

1.2      The meaning of any words or phrases defined in the Company Act and the
         Interpretation Act shall, if not inconsistent with definitions herein
         or with the subject or context, bear the same meaning in these
         Articles provided that in the event of any conflict or inconsistency
         between the Company Act and the Interpretation Act, the former shall
         govern.

1.3      Except as may be otherwise provided expressly or by necessary
         implication in the Company Act, the rules of construction contained in
         the Interpretation Act shall apply, with the necessary changes and so
         far as applicable, to the interpretation of these Articles.


                                     PART 2

                          SHARES AND SHARE CERTIFICATE

2.1      Every member is entitled without charge, to one certificate
         representing the shares of each class or series held by him. If a
         member requests the Company to issue to him more than one share
         certificate for any shares of the same class or series registered in
         his name, the Directors may prescribe the fee to be paid for each
         additional certificate. In respect of a share or shares held jointly
         by several persons, the Company shall not be bound to issue more than
         one certificate, and delivery of a certificate for a share to one of
         several joint registered holders or to his duly authorized agent shall
         be sufficient delivery to all; and provided further that the Company
         shall not be bound to issue certificates representing redeemable
         shares, if such shares are to be redeemed within one month of the date
         on which they were allotted. Any share certificate may be sent through
         the mail by registered prepaid mail to the member entitled thereto at
         his registered address, and neither the Company nor any transfer agent
         shall be liable for any loss occasioned to the member owing to any
         such share certificate so sent being lost in the mail, stolen or
         destroyed.

2.2      If a share certificate:

         (a)      is worn out or defaced, the Company shall, upon production to
                  it of the said certificate and upon such other terms, if any,
                  as the Directors prescribe, order the said certificate to be
                  cancelled and shall issue a new certificate in replacement
                  thereof; or

         (b)      is lost, stolen or destroyed, then, upon proof thereof to the
                  satisfaction of the Directors and upon such indemnity, if
                  any, as the Directors deem adequate being given, a new share
                  certificate in lieu thereof shall be issued to the person
                  entitled to such lost, stolen or destroyed certificate.

         Such sum, not exceeding the amount permitted by the Company Act, as
         the Directors may from time to time fix, shall be paid to the Company
         for each certificate to be issued under this Article.

2.3      Save in the case of the personal representatives of a deceased member,
         the Directors may refuse to register more than three persons as the
         joint holders of a share.


                                      -2-


<PAGE>   3

2.4      Every share certificate shall be signed manually by at least one
         officer or Director of the Company, or by or on behalf of a registrar,
         branch registrar, transfer agent or branch transfer agent of the
         Company and any additional signatures may be printed or otherwise
         mechanically reproduced and, in such event, a certificate so signed is
         as valid as if signed manually, notwithstanding that any person whose 
         signature is so printed or mechanically reproduced shall have ceased to
         hold the office that he is stated on such certificate to hold at the 
         date of the issue of a share certificate.

2.5      Except as required by law or these Articles, no person shall be
         recognized by the Company as holding any share upon any trust, and the
         Company shall not be bound by or compelled in any way to recognize
         (even when having notice thereof) any equitable, contingent, future or
         partial interest in any share or in any fractional part of a share or
         (except only as by law or these Articles provided or as ordered by a
         court of competent jurisdiction) any other rights in respect of any
         share except an absolute right to the entirety thereof in its
         registered holder.


                                     PART 3

                                ISSUE OF SHARES

3.1      Subject to the Company Act, the Memorandum and these Articles and to
         the rights of holders of issued shares arising under the Company Act
         or otherwise, the shares shall be under the control of the Directors
         who may issue, allot, sell or otherwise dispose of, and/or grant
         options on or otherwise deal in, shares authorized but not
         outstanding, and outstanding shares (including shares purchased or
         redeemed by the Company but not cancelled) held by the Company, at
         such times, to such persons (including Directors), in such manner,
         upon such terms and conditions, and at such price or for such
         consideration, as they may determine.

3.2      The Directors may authorize the issue of share purchase or
         subscription warrants to the purchasers or holders of any debt
         obligations or other evidences of indebtedness or other obligations or
         shares of the Company, upon such terms and subject to such
         restrictions as they may determine.

3.3      Subject to the provisions of the Company Act, the Company, or the
         Directors on behalf of the Company, may pay a commission or allow a
         discount to any person in consideration of his subscribing or agreeing
         to subscribe, whether absolutely or conditionally, for any shares in,
         or securities of, the Company, or procuring or agreeing to procure
         subscriptions, whether absolutely or conditionally, for any such
         shares or securities, provided that, if the Company is not a specially
         limited company, the rate of the commission and discount shall not in
         the aggregate exceed 25 per centum of the amount of the subscription
         price of such shares. The Directors may also on any issue or sale of
         shares or other securities cause the Company to pay such brokerage as
         may be lawful.

3.4      Subject to the exceptions permitted by the Company Act, no share may
         be issued until it is fully paid and the Company shall have received
         the full consideration therefor in cash, property or past services
         actually performed for the Company. The value of property or services
         for the purpose of this Article shall be the amount determined by the
         Directors by resolution to be, in all circumstances of the
         transaction, no greater than the fair market value thereof.

                                      -3-

<PAGE>   4

3.5      If the Company is, or becomes, a company which is not a reporting
         company and the Directors are required by the Company Act before
         allotting any shares to offer them pro rata to the members, the
         Directors shall, before allotting any shares, comply with the
         applicable provisions of the Company Act.

                                    PART 4

                                SHARE REGISTERS

4.1      The Company shall keep or cause to be kept a register of members, a
         register of transfers and a register of allotments within British
         Columbia, all as required by the Company Act, and may combine one or
         more of such registers. If the Company's capital shall consist of more
         than one class or series of shares, a separate register of members,
         register of transfers and register of allotments may be kept in
         respect of each class or series of shares. The Directors may appoint a
         trust company to keep the register of members, register of transfers
         and register of allotments or, if there is more than one class or
         series of shares, the Directors may appoint a trust company, which
         need not be the same trust company, to keep the register of members,
         the register of transfers and the register of allotments for each
         class or series of shares. The Directors may also appoint one or more
         trust companies, including the trust company which keeps the said
         registers of its shares or of a class or series thereof, as transfer
         agent or branch transfer agent for its shares or a class or series
         thereof, as the case may be, and the same or another trust company or
         companies as registrar for its shares or a class or series thereof, as
         the case may be. The Directors may terminate the appointment of any
         trust company referred to in this Article or in Article 4.2 at any
         time and may appoint another trust company in its place.

4.2      Subject to the Company Act, the Company may keep or cause to be kept
         branch registers of members at such places as the Directors may
         determine, provided that any such branch register kept within British
         Columbia shall be kept by a trust company.

4.3      The Company shall not at any time close its register of members.


                                     PART 5

                      TRANSFER AND TRANSMISSION OF SHARES

5.1      Subject to the Memorandum and these Articles, any member may
         transfer any of his shares by instrument in writing executed by
         or on behalf of such member. The instrument of transfer of any
         share of the Company shall be in the form, if any, on the back
         of the Company's share certificates or in any usual or common
         form or in such other form as the Directors may from time to
         time approve. Except to the extent that the Company Act may
         otherwise provide, the transferor shall be deemed to remain the
         holder of the shares until the name of the transferee is entered
         in the register of members or a branch register of members in
         respect thereof.

5.2      The signature of the registered owner of any shares, or of his duly
         authorized attorney, upon an authorized instrument of transfer
         delivered to the Company shall constitute a complete and sufficient
         authority to the Company, its Directors, officers and agents to
         register, in the name of the transferee as named in the instrument of
         transfer, the number of shares specified therein or, 

                                      -4-


<PAGE>   5
 
         if no number is specified, all the shares of the registered owner
         represented by share certificates deposited with the instrument of
         transfer. If no transferee is named in the instrument of transfer, the
         instrument of transfer shall constitute a complete and sufficient
         authority to the Company, its directors, officers and agents to
         register, in the name of the person on whose behalf any certificate
         for the shares to be transferred is deposited with the Company for the
         purpose of having the transfer registered, the number of shares
         specified in the instrument of transfer or, if no number is specified,
         all the shares represented by all share certificates deposited with
         the instrument of transfer.

5.3      Neither the Company nor any Director, officer or agent thereof shall
         be bound to inquire into the title of the person named in the form of
         transfer as transferee, or, if no person is named therein as
         transferee, of the person on whose behalf the certificate is deposited
         with the Company for the purpose of having the transfer registered or
         be liable to any claim by such registered owner or by any intermediate
         owner or holder of the certificate or of any of the shares represented
         thereby or any interest therein for registering the transfer, and the
         transfer, when registered, shall confer upon the person in whose name
         the shares have been registered a valid title to such shares.

5.4      Every instrument of transfer shall be executed by the transferor and
         left at the registered office of the Company or at the office of its
         transfer agent or branch transfer agent or registrar or branch
         registrar for the shares to be transferred for registration together
         with the share certificate for the shares to be transferred and such
         other evidence, if any, as the Directors or the transfer agent or
         branch transfer agent or registrar or branch registrar may require to
         prove the title of the transferor or his right to transfer the shares
         and the right of the transferee to have the transfer registered. All
         instruments of transfer or a photographic reproduction thereof, if the
         transfer is registered, shall be retained by the Company or its
         transfer agent or branch transfer agent or registrar or branch
         registrar and any instrument of transfer, if the transfer is not
         registered, shall be returned to the person depositing the same
         together with the share certificate which accompanied the same when
         tendered for registration.

5.5      There shall be paid to the Company in respect of the registration of
         any transfer such sum, if any, as the Directors may from time to time
         determine.

5.6      In the case of the death of a member, the survivors where the deceased
         was a joint registered holder, and the personal representatives of the
         deceased where he was the sole registered holder, shall be the only
         persons recognized by the Company as having any title to the
         deceased's interest in the shares registered in his name. Before
         recognizing any personal representative the Directors may require him
         to deliver to the Company the documents required by the Company Act
         and such other evidence as the Directors may require of the personal
         representative's appointment, including a grant of probate, letters of
         administration or other similar documentation from the jurisdiction in
         which the shares are to be transferred, and of the payment or
         satisfaction of all taxes, duties, fees and other similar assessments
         payable to any governmental authority of any applicable jurisdiction
         with respect to the shares arising out of the member's death.

5.7      A guardian, committee, trustee, curator, tutor, personal
         representative or trustee in bankruptcy of a member, although not a
         member himself, shall have the same rights, privileges and obligations
         that attach to the shares held by the member if the documents and
         evidence referred in Article 5.6 are delivered to the Company. This
         Article does not apply on the death of a member with respect to shares
         registered in his name and the name of another person in joint
         tenancy.


                                      -5-
<PAGE>   6

5.8      Any person referred to in Article 5.7 who becomes entitled to shares
         of a member, upon the documents and evidence referred to in Article
         5.6 being delivered to the Company, has the right either to be
         registered as a member in his representative capacity in respect of
         such shares, or, if he is a personal representative, instead of being
         registered himself, to make such transfer of the shares as the member
         could have made; but the Directors shall, as regards a transfer by any
         such person, have the same right, if any, to decline registration of a
         transferee as they would have in the case of a transfer of the shares
         by the member.


                                     PART 6

                             ALTERATION OF CAPITAL

6.1      The Company may by ordinary resolution amend its Memorandum to
         increase the authorized capital of the Company by:

         (a)      creating shares with par value or shares without par value, or
                  both;

         (b)      increasing the number of shares with par value or shares 
                  without par value, or both; or

         (c)      increasing the par value of a class of shares with par value,
                  if no shares of that class are issued.

6.2      The Company may by special resolution alter its Memorandum to
         subdivide, consolidate, change from shares with par value to shares
         without par value, or from shares without par value to shares with par
         value, or change the designation of, all or any of its shares but only
         to such extent, in such manner and with such consents of members
         holding a class or series of shares which is the subject of or
         affected by such alteration, as the Company Act provides.

6.3      The Company may alter its Memorandum or these Articles by such
         resolution as is permitted by the Company Act and by otherwise
         complying with any applicable provisions of the Memorandum or these
         Articles, to create, define and attach special rights or restrictions
         to any shares and to vary or abrogate any special rights and
         restrictions attached to any shares.

6.4      No right or special right attached to the issued shares of any class
         or series shall be prejudiced or interfered with unless the consents
         of the holders of the shares of each such class or series required by
         the Company Act are obtained. Notwithstanding such consent, no right
         or special right attached to any issued shares shall be prejudiced or
         interfered with as to any part of issued shares of any class or series
         unless the holders of the rest of the issued shares of such class or
         series either all consent thereto in writing or consent thereto by a
         resolution passed by the votes of members holding three-fourths of the
         rest of such class or series.

6.5      Subject to the Company Act, and unless these Articles or the
         Memorandum otherwise provide, the provisions of these Articles
         relating to general meetings shall apply, with the necessary changes
         and so far as they are applicable, to a class or series meeting of
         members holding a particular class or series of shares but the quorum
         at a class or series meeting shall be one person holding in person or
         by proxy not less than one-third of the issued shares of that class or
         series, as the case may be.


                                      -6-
<PAGE>   7

6.6      The Company may, by resolution of the Directors, alter the Memorandum
         by cancelling shares which are not allotted or issued, or which are
         surrendered to the Company either by way of gift or otherwise in
         accordance with the Company Act, and diminish its authorized capital
         accordingly.

6.7      The rights, or special rights or restrictions attached to the shares
         of any class or series shall, unless otherwise expressly provided by
         the terms, if any, of such rights, or special rights or restrictions
         be deemed not to be modified, abrogated, varied or dealt with by the
         creation or issue of further shares ranking pari passu therewith.


                                     PART 7

                       PURCHASE AND REDEMPTION OF SHARES

7.1      Subject to the special rights and restrictions attached to any shares,
         the Company may, by resolution of the Directors and in compliance with
         the Company Act, purchase any of its shares at the price and upon the
         terms specified in such resolution, or redeem any of its shares which
         have a right of redemption attached to them. No such purchase or
         redemption shall be made if the Company is insolvent at the time of
         the proposed purchase or redemption or if the proposed purchase or
         redemption would render the Company insolvent. Unless the shares are
         to be purchased through a stock exchange or the Company is purchasing
         the shares from dissenting members pursuant to the requirements of the
         Company Act, or from a bona fide employee or former employee of the
         Company or an affiliate of the Company or his personal representative
         in respect of shares beneficially owned by such employee or former
         employee, the Company shall, if required by the Company Act, make its
         offer to purchase pro rata to every member who holds shares of the
         class or series, as the case may be, to be purchased.

7.2      If the Company proposes at its option to redeem some but not all of
         the shares of any class or series, the Directors may, subject to the
         special rights and restrictions attached to the shares of such class
         or series, decide the manner in which the shares to be redeemed shall
         be selected, and, subject as aforesaid, need not redeem pro rata.

7.3      Subject to the Company Act and the Memorandum, any shares purchased or
         redeemed by the Company, if not cancelled, may be sold or, if
         cancelled (but still in the Company's authorized capital), may be
         reissued, but, while such shares which have not been cancelled are
         held by the Company, it shall not exercise any vote in respect of such
         shares and no dividend or other distribution shall be paid or made
         thereon.


                                     PART 8

                                BORROWING POWERS

8.1      Subject to the Company Act, the Directors may authorize and cause the
         Company to:

         (a)      borrow money in such manner and amounts, on such security, or
                  without security, from such sources and upon such terms and
                  conditions as they think fit;

                                      -7-
<PAGE>   8

         (b)      guarantee the repayment of money by any other person or the
                  performance of any obligation of any other person;

         (c)      issue debt obligations, or other evidences of obligations or
                  indebtedness, either outright or as security for any
                  liability or obligation of the Company or any other person;

         (d)      mortgage, charge, whether by way of specific or floating
                  charge, or both, or give other security on the undertaking,
                  or on the whole or any part of the property and assets, of
                  the Company (both present and future); and

         (e)      for the purposes of the Special Corporate Powers Act of the
                  Province of Quebec and without in any way limiting the powers
                  conferred upon the Company and the Directors by the foregoing
                  or by any other provisions of these Articles, or by the
                  Memorandum, or by the Company Act, for the purpose of
                  securing any notes, bonds, debentures or debenture stock
                  which it is by law entitled to, issue, hypothecate, mortgage
                  or pledge, and cede and transfer, any property, moveable or
                  immovable, present or future, which it may own in the
                  Province of Quebec.

8.2      Any debt obligations of the Company may be issued at a discount,
         premium or otherwise, and with any special privileges as to
         redemption, surrender, drawings, allotment of or conversion into or
         exchange for shares or other securities, attending and voting at
         general meetings of the Company, appointment or election of Directors,
         or otherwise, and may by their terms be assignable free from any
         equities between the Company and the person to whom they are issued or
         any other person who subsequently acquires the same, all as the
         Directors may determine.

8.3      The Company shall keep or cause to be kept within the Province of
         British Columbia in accordance with the Company Act a register of its
         debentures and a register of debentureholders, which registers may be
         combined, and if there is more than one series of debentures a
         separate register of debentures and debentureholders may be kept in
         respect of each series. The Directors may appoint a trust company to
         keep the register of debentureholders. Subject to the Company Act, the
         Company may keep or cause to be kept branch registers of its
         debentureholders at such places as the Directors may determine,
         provided that any such branch register kept within British Columbia
         shall be kept by a trust company. The Directors may also appoint a
         trust company as transfer agent or branch transfer agent for its
         debentures or a series thereof. The Directors may terminate the
         appointment of any such trust company at any time and may appoint
         another trust company in its place.

8.4      Every debt obligation of the Company shall be signed manually be at
         least one Director or officer of the Company or by or on behalf of a
         trustee, registrar, branch registrar, transfer agent or branch
         transfer agent for the debt obligation appointed by the Company or
         under any instrument under which the debt obligation is issued, or by
         or on behalf of a trustee who certifies it in accordance with a trust
         indenture, and any additional signatures may be printed or otherwise
         mechanically reproduced thereon and, in such event, a debt obligation
         so signed is as valid as if signed manually notwithstanding that any
         person whose signature is so printed or mechanically reproduced shall
         have ceased to hold the office that he is stated on such debt
         obligation to hold at the date of the issue thereof.



                                      -8-
<PAGE>   9

8.5      If the Company is or becomes a reporting company, the Company shall
         keep or cause to be kept a register of its indebtedness to every
         Director or officer of the Company or an associate of any of them in
         accordance with the provisions of the Company Act.


                                     PART 9

                                GENERAL MEETINGS

9.1      Annual general meetings of the Company shall be held as required by
         the Company Act at such time and place as is determined by the
         Directors.

9.2      If the Company is, or becomes, a company which is not a reporting
         company, and all the members entitled to attend and vote at an annual
         general meeting consent in writing to all the business which is
         required or desired to be transacted at the meeting, the meeting need
         not be held, and shall be deemed to have been held on the date
         specified in such written consent, or, failing such a date being
         specified, on the date all such members consent thereto. A written
         consent for the purposes of this Article 9.2 may be given by any
         method or means authorized by Article 16.9 for consenting in writing
         to a resolution.

9.3      All general meetings other than annual general meetings are herein
         referred to as and may be called extraordinary general meetings or
         special general meetings.

9.4      The Directors may, whenever they think fit, convene a special general
         meeting. A special general meeting, if requisitioned in accordance
         with the Company Act, shall be convened by the Directors or, if not
         convened by the Directors, may be convened by the requisitionists as
         provided in the Company Act.

9.5      If the Company is or becomes a reporting company, advance notice of
         any general meeting at which Directors are to be elected shall be
         published in the manner required by the Company Act.

9.6      A notice convening a general meeting specifying the place, the day,
         and the hour of the meeting, and, in case of special business, the
         general nature of that business, shall be given as provided in the
         Company Act and in the manner hereinafter in these Articles mentioned,
         or in such other manner (if any) as may be prescribed by ordinary
         resolution, whether previous notice thereof has been given or not, to
         such persons as are entitled by law or under these Articles to receive
         such notice from the Company. Accidental omission to give notice of a
         meeting to, or the non-receipt of notice of a meeting, by any member
         shall not invalidate the proceedings at that meeting.

9.7      All the members of the Company entitled to attend and vote at a
         general meeting may, by unanimous consent in writing given before,
         during or after the meeting, or if they are present at the meeting by
         a unanimous vote, waive or reduce the period of notice of such meeting
         and an entry in the minute book of such waiver or reduction shall be
         sufficient evidence of the due convening of the meeting. A consent in
         writing for the purposes of this Article 9.7 may be given by any
         method or means authorized by Article 16.9 for consenting in writing
         to a resolution.

9.8      Except as otherwise provided by the Company Act, where any special
         business at a general meeting includes considering, approving,
         ratifying, adopting or authorizing any document or the execution
         thereof or the giving of effect thereto, the notice convening the
         meeting shall, with 

                                      -9-
<PAGE>   10


         respect to such document, be sufficient if it states that a copy of the
         document is or will be available for inspection by members at the
         registered office or records office of the Company or at some other
         place in British Columbia designated in the notice during usual
         business hours on specified dates prior to the date of such meeting.


                                    PART 10

                        PROCEEDINGS AT GENERAL MEETINGS

10.1     All business shall be deemed special business which is transacted at:

         (a)      a special general meeting other than the conduct of and voting
                  at, such meeting; and

         (b)      an annual general meeting, with the exception of the conduct
                  of, and voting at, such meeting, the consideration of the
                  financial statement and of the respective reports of the
                  Directors and Auditor, fixing or changing the number of
                  Directors, electing Directors, appointing the Auditor, fixing
                  the remuneration of the Auditor and the Directors if
                  applicable, and such business as by these Articles or the
                  Company Act may be transacted at a general meeting without
                  prior notice thereof being given to the members and any
                  business which is brought under consideration by the report
                  of the Directors.

10.2     No business, other than election of the chairman or the adjournment of
         the meeting, shall be transacted at any general meeting unless a
         quorum of members, entitled to attend and vote, is present at the
         commencement of the meeting, but the quorum need not be present
         throughout the meeting.

10.3     Save as herein otherwise provided, a quorum for a meeting shall be two
         persons present and being, or representing by proxy, members holding
         not less than one-twentieth of the issued shares entitled to be voted
         at the meeting. If there is only one member the quorum is one person
         present and being, or representing by proxy, such member. The
         Directors, the Secretary, an Assistant Secretary and a solicitor of
         the Company shall be entitled to attend at any general meeting but no
         such person shall be counted in the quorum or vote at any meeting
         unless he shall be a member or proxyholder entitled to vote thereat.

10.4     If within half an hour from the time appointed for a general meeting a
         quorum is not present, the meeting, if convened upon the requisition
         of members, shall be dissolved. In any other case it shall stand
         adjourned to the same day in the next week, at the same time and
         place, and, if at the adjourned meeting a quorum is not present within
         half an hour from the time appointed for the meeting, the person or
         persons present and being, or representing by proxy, a member or
         members entitled to attend and vote at the meeting shall be a quorum.

10.5     The Chairman of the Board, if any, or in his absence the President of
         the Company or in his absence a Vice-President of the Company, if any,
         shall be entitled to preside as chairman at every general meeting of
         the Company.

10.6     If at any general meeting neither the Chairman of the Board nor
         President nor a Vice-President is present within fifteen minutes after
         the time appointed for holding the meeting or is willing to act as
         chairman, the Directors present shall choose some one of their number
         to be chairman, or 

                                     -10-

<PAGE>   11

         if all the persons occupying the said offices shall have advised the
         Secretary or an Assistant Secretary that they will not be present at a
         meeting, the Directors present shall choose one of their number to be
         chairman or if no Director is present, the members and proxyholders
         present may choose one of their number to be a chairman. If a person
         willing to act is not chosen as chairman in accordance with these
         provisions within 45 minutes after the time appointed for holding the
         meeting, the meeting shall be dissolved.

10.7     The chairman may and shall, if so directed by the meeting, adjourn a
         meeting from time to time and from place to place, but no business
         shall be transacted at any adjourned meeting other than the business
         left unfinished at the meeting from which the adjournment took place.
         When a meeting is adjourned for thirty days or more, notice, but not,
         "advance notice" referred to in Article 9.5, of the adjourned meeting
         shall be given as in the case of an original meeting. Save as
         aforesaid, it shall not be necessary to give any notice of an
         adjourned meeting or of the business to be transacted at an adjourned
         meeting.

10.8     No motion proposed at a general meeting need be seconded, and the
         chairman, a director, a member or a proxyholder may propose or second
         a motion.

10.9     Subject to the provisions of the Company Act, at any general meeting a
         resolution put to the vote of the meeting shall be decided on a show
         of hands, unless (before or on the declaration of the result of the
         show of hands) a poll is directed by the chairman or demanded by at
         least one member or proxyholder entitled to vote who is present. The
         chairman shall declare to the meeting the decision on every question
         in accordance with the result of the show of hands or the poll, and
         such decision shall be entered in the book of proceedings of the
         Company. A declaration by the chairman that a resolution has been
         carried, or carried unanimously, or by a particular majority, or lost
         or not carried by a particular majority and an entry to that effect in
         the book of the proceedings of the Company shall be conclusive
         evidence of the fact, without proof of the number or proportion of the
         votes recorded in favour of, or against, that resolution.

10.10    In the case of an equality of votes, whether on a show of hands or on
         a poll, the chairman of the meeting at which the show of hands takes
         place or at which the poll is demanded shall not be entitled to a
         second or casting vote.

10.11    No poll may be demanded on the election of a chairman. A poll demanded
         on a question of adjournment shall be taken forthwith. A poll demanded
         on any other question shall be taken as soon as, in the opinion of the
         chairman, is reasonably convenient, but in no event later than seven
         days after the meeting and at such time and place and in such manner
         as the chairman of the meeting directs. The result of the poll shall
         be deemed to be the resolution of and passed at the meeting at which
         the poll was demanded. Any business other than that upon which the
         poll has been demanded may be proceeded with pending the taking of the
         poll. A demand for a poll may be withdrawn. In any dispute as to the
         admission or rejection of a vote the decision of the chairman made in
         good faith shall be final and conclusive. In the event of a poll by
         mail, the seven days limit hereinbefore prescribed shall be deemed to
         be satisfied if the ballot is mailed within seven days and specifies a
         date by which completed ballots must be received to be counted in the
         poll that date being such date as the chairman in the reasonable
         exercise of his discretion thinks is appropriate, but being in no
         event later than twenty-one days after the mailing of the ballot form.


                                     -11-

<PAGE>   12

10.12    Every ballot cast upon a poll and every proxy appointing a proxyholder
         who casts a ballot upon a poll shall be retained by the Secretary for
         such period and be subject to such inspection as the Company Act may
         provide.

10.13    On a poll a person entitled to cast more than one vote need not, if he
         votes, use all his votes or cast all the votes he uses in the same
         way.

10.14    Unless the Company Act, the Memorandum or these Articles otherwise
         provide, any action to be taken by a resolution of the members may be
         taken by an ordinary resolution.


                                    PART 11

                                VOTES OF MEMBERS

11.1     Subject to any special voting rights or restrictions attached to any
         shares and the restrictions on joint registered holders of shares, on
         a show of hands every member who is present in person at a meeting and
         entitled to vote thereat shall have one vote and on a poll every
         member shall have one vote for each share entitled to be voted at the
         meeting of which he is the registered holder and may exercise such
         vote either in person or by proxyholder. A proxyholder shall not have
         the right to vote on a show of hands unless he is a member entitled to
         vote at the meeting on a show of hands.

11.2     Any person who is not registered as a member but is entitled to vote
         at any meeting in respect of a share, may vote the share in the same
         manner as if he were a member; but, unless the Directors have
         previously admitted his right to vote at that meeting in respect of
         the share, he shall satisfy the Directors or the Secretary of his
         right to vote the share before the time for holding the meeting, or
         adjourned meeting, as the case may be, at which he proposes to vote,
         and unless he shall so satisfy the Directors or the Secretary he shall
         not be entitled to vote that share.

11.3     Any corporation not being a subsidiary which is a member of the
         Company may authorize such person as it thinks fit to act as its
         representative at any meeting. The person so authorized shall be
         entitled to exercise in respect of and at such meeting the same powers
         on behalf of the corporation which he represents as that corporation
         could exercise if it were an individual member of the Company
         personally present, including, without limitation, the right to
         appoint a proxyholder to represent such corporation, and shall, if
         present at the meeting, be counted for the purpose of forming a quorum
         and be deemed to be a member present at the meeting. Evidence of the
         appointment of any such representative may be sent to the Company by
         written instrument, telegram, telex or any method of transmitting
         legibly recorded messages. Notwithstanding the foregoing, a
         corporation being a member and entitled to vote may appoint a
         proxyholder.

11.4     In the case of joint registered holders of a share the vote of the
         senior who exercises a vote, whether in person or by proxyholder,
         shall be accepted to the exclusion of the votes of the other joint
         registered holders; and for this purpose seniority shall be determined
         by the order in which the names stand in the register of members, the
         person whose name stands first being senior to the person whose name
         stands second, and so on. Several legal personal representatives of a
         deceased member whose shares are registered in his sole name shall for
         the purpose of this Article be deemed joint registered holders.


                                     -12-
<PAGE>   13

11.5     A member of unsound mind entitled to attend and vote, in respect of
         whom an order has been made by any court having jurisdiction, may
         vote, whether on a show of hands or on a poll, by his committee,
         curator bonis, or other person in the nature of a committee or curator
         bonis appointed by that court, and any such committee, curator bonis,
         or other person may appoint a proxyholder.

11.6     A member holding more than one share in respect of which he is
         entitled to vote shall be entitled to appoint one or more, but not
         more than three, proxyholders to attend, act and vote for him on the
         same occasion. If such a member should appoint more than one
         proxyholder for the same occasion he shall specify the number of
         shares each proxyholder shall be entitled to vote. A member may also
         appoint one or more alternate proxyholders to act in the place and
         stead of an absent proxyholder.

11.7     A proxy shall be in writing under the hand of the appointor or of his
         attorney duly authorized in writing, or, if the appointor is a
         corporation, either under the seal of the corporation or under the
         hand of a duly authorized officer or attorney. A proxyholder need not
         be a member of the Company.

11.8     Unless otherwise permitted by the Directors, a proxy and the power of
         attorney or other authority, if any, under which it is signed or a
         notarially certified copy thereof shall be deposited at the registered
         office of the Company or at such other place as is specified for that
         purpose in the notice convening the meeting, not less than 48 hours
         (excluding Saturdays and holidays) before the time for holding the
         meeting in respect of which the person named in the instrument is
         appointed. In addition to any other method of depositing proxies
         provided for in these Articles, the Directors may, subject to the
         Company Act, make regulations relating to the depositing of proxies at
         any place or places and fixing the time or times for depositing the
         proxies prior to the meeting or adjourned meeting at which they are to
         be used and providing for particulars of such proxies to be sent to
         the Company or any agent of the Company in writing or by letter,
         telegram, telex or any method of transmitting legibly recorded
         messages so as to arrive before the commencement of the meeting or
         adjourned meeting at the office of the Company or of any agent of the
         Company appointed for the purpose of receiving such particulars and
         providing that proxies so deposited may be acted upon as though the
         proxies themselves were deposited as required by this Part and votes
         given in accordance with such regulations shall be valid and shall be
         counted.

11.9     Unless the Company Act or any other statute or law which is applicable
         to the Company or to any class of its shares requires any other form
         of proxy, a proxy, whether for a specified meeting or otherwise, shall
         be in the form following, but may also be in any other form that the
         Directors or the chairman of the meeting shall approve:

                                     -13-

<PAGE>   14

                                     PROXY

           The undersigned, being a member of_____________ , hereby appoints
           _____________ , or failing him,________________ , as proxyholder for
           the undersigned to attend, act and vote for and on behalf of the
           undersigned at the annual or extraordinary (as the case may be)
           general meeting of the Company to be held on the _____ day of _____,
           19__ and at any adjournment thereof.

           Signed this ___________ day of ___________ , 19__.


                              -------------------
                             (Signature of member)


11.10    A vote given in accordance with the terms of a proxy is valid
         notwithstanding the previous death or incapacity of the member giving
         the proxy or the revocation of the proxy or of the authority under
         which the form of proxy was executed or the transfer of the share in
         respect of which the proxy is given, provided that no notification in
         writing of such death, incapacity, revocation or transfer shall have
         been received by the chairman of the meeting or adjourned meeting for
         which the proxy was given before the vote is taken.

11.11    Every proxy may be revoked by an instrument in writing:

         (a)      executed by the member giving the same or by his attorney
                  authorized in writing or, where the member is a corporation,
                  by a duly authorized officer or attorney of the corporation;
                  and

         (b)      delivered either at the registered office of the Company at
                  any time up to and including the last business day preceding
                  the day of the meeting, or any adjournment thereof at which
                  the proxy is to be used, or to the chairman of the meeting on
                  the day of the meeting or any adjournment thereof before any
                  vote in respect of which the proxy is to be used shall have
                  been taken,

         or in any other manner provided by law.


                                    PART 12

                                   DIRECTORS

12.1     If the Company is an amalgamated Company, the first Directors shall be
         the persons so specified in the amalgamation agreement. If the Company
         is a continued Company, the first Directors shall be the persons so
         specified in the Instrument of Continuation. If the Company is a new
         incorporation, the Directors to succeed the first Directors, after
         incorporation of the Company, may be appointed in writing by a
         majority of the subscribers to the Memorandum or at a meeting of the
         subscribers, or if not so appointed, they shall be elected by the
         members entitled to vote on the election of Directors and the number
         of Directors shall be the same as the number of Directors so appointed
         or elected. The number of Directors, excluding additional Directors,
         may 


                                     -14-
<PAGE>   15

         be fixed or changed from time to time by ordinary resolution, whether
         previous notice thereof has been given or not, but notwithstanding
         anything contained in these Articles the number of Directors shall
         never be less than one or, if the Company is or becomes a reporting
         company, less than three.

12.2     The remuneration of the Directors as such may from time to time be
         determined by the Directors or, if the Directors shall so decide, by
         the members. Such remuneration may be in addition to any salary or
         other remuneration paid to any officer or employee of the Company as
         such who is also a Director. The Directors shall be repaid such
         reasonable travelling, hotel and other expenses as they incur in and
         about the business of the Company (including, if authorized by
         resolution of the Directors in respect of the Directors generally,
         those incurred in attending meetings of the Directors or of any
         committees of the Directors) and if any Director shall perform any
         professional or other services for the Company that in the opinion of
         the Directors are outside the ordinary duties of a Director or shall
         otherwise be specially occupied in or about the Company's business, he
         may be paid a remuneration to be fixed by the Board, or, at the
         option of such Director, by the Company in general meeting, and such
         remuneration may be either in addition to, or in substitution for any
         other remuneration that he may be entitled to receive. The Directors
         on behalf of the Company, unless otherwise determined by ordinary
         resolution, may pay a gratuity or pension or allowance on retirement
         to any Director who has held any salaried office or place of profit
         with the Company or to his spouse or dependents and may make
         contributions to any fund and pay premiums for the purchase or
         provision of any such gratuity, pension or allowance.

12.3     A Director shall not be required to hold a share in the capital of the
         Company as qualification for his office but shall be qualified as
         required by the Company Act, to become or act as a Director.


                                    PART 13

                       ELECTION AND REMOVAL OF DIRECTORS

13.1     At each annual general meeting of the Company all the Directors shall
         retire and the members entitled to vote thereat shall elect a Board of
         Directors consisting of the number of Directors for the time being
         fixed pursuant to these Articles. If the Company is, or becomes, a
         company that is not a reporting company and the business to be
         transacted at any annual general meeting is consented to in writing by
         all the members who are entitled to attend and vote thereat such
         annual general meeting shall be deemed for the purpose of this Part to
         have been held on such written consent becoming effective.

13.2     A retiring Director shall be eligible for re-election.

13.3     Where the Company fails to hold an annual general meeting in
         accordance with the Company Act, the Directors then in office shall be
         deemed to have been elected or appointed as Directors on the last day
         on which the annual general meeting could have been held pursuant to
         these Articles and they may hold office until other Directors are
         appointed or elected or until the day on which the next annual general
         meeting is held.

                                     -15-
<PAGE>   16

13.4     If at any general meeting at which there should be an election of
         Directors, the places of any of the retiring Directors are not filled
         by such election, such of the retiring Directors who are not
         re-elected as may be requested by the newly-elected Directors shall,
         if willing to do so, continue in office to complete the number of
         Directors for the time being fixed pursuant to these Articles until
         further new Directors are elected. If any such election or continuance
         of Directors does not result in the election or continuance of the
         number of Directors for the time being fixed pursuant to these
         Articles such number shall be fixed at the number of Directors
         actually elected or continued in office. If no Directors are elected
         at such meeting the retiring Directors shall be deemed to have been
         re-elected, but nothing herein shall prohibit or restrict the right of
         a Director to resign.

13.5     Subject to Article 16.7, any casual vacancy occurring in the Board of
         Directors may be filled by the remaining Directors or Director.

13.6     Between successive annual general meetings the Board of Directors
         shall itself have power to appoint one or more additional Directors of
         the Company but the number of Directors so
         appointed shall not at any time exceed one-third of the number of
         Directors elected at the last general meeting at which Directors were
         elected. Any Director so appointed shall hold office only until the
         next following annual general meeting of the Company, but shall be
         eligible for election at such meeting and so long as he is an
         additional Director the number of Directors shall be increased
         accordingly.

13.7     Any Director may by instrument in writing delivered to the Company
         appoint any person to be his alternate to act in his place at meetings
         of the Directors at which he is not present unless the Directors shall
         have reasonably disapproved the appointment of such person as an
         alternate Director and shall have given notice to that effect to the
         Director appointing the alternate Director within a reasonable time
         after delivery of such instrument to the Company. Every such alternate
         shall be entitled to notice of meetings of the Directors and to
         attend, be counted in the quorum and vote as a Director at a meeting
         at which the person appointing him is not personally present, and, if
         the alternate is a Director in his own right, to be separately counted
         in the determination of a quorum on behalf of the Director or
         Directors he is representing and to have a separate vote on behalf of
         the Director or Directors he is representing. Every such alternate, to
         the extent not restricted by the instrument appointing him, may sign
         on behalf of the Director or Directors who appointed him, resolutions
         submitted to the Directors to be consented to in writing, as referred
         to in Article 16.9, and shall be deemed to be a Director for the
         purposes of so signing such resolutions. Save as aforesaid or as
         expressly otherwise provided in these Articles, an alternate Director
         shall not generally have the power to act as a Director. A Director
         may at any time by instrument in writing revoke the appointment of an
         alternate appointed by him. The remuneration if any payable to such an
         alternate Director shall be payable out of the remuneration of the
         Director appointing him. The appointment or revocation of the
         appointment of an alternate Director may be by telegram, telex or any
         method of transmitting legibly recorded messages delivered to the
         Company.

13.8     In addition to the provisions of Article 13.1 and Article 13.9, a
         Director shall cease to hold office if he:

         (a)      resigns his office by notice in writing delivered to the 
                  registered office of the Company; or

                                     -16-
<PAGE>   17

         (b)      is convicted of an indictable offence and the other Directors
                  shall have resolved to remove him; or

         (c)      ceases to be qualified to act as a Director pursuant to the
                  Company Act.

         The appointment of an alternate Director shall terminate if:

         (a)      the Director who appointed him at any time or by notice to the
                  Company revokes his appointment; or

         (b)      he resigns by notice to the Company; or

         (c)      the Director who appointed him ceases for any reason to be a 
                  Director; or

         (d)      he is convicted of an indictable offence and the other
                  Directors shall have resolved to remove him; or

         (e)      he ceases to hold the qualifications necessary for a Director
                  pursuant to the Company Act; or

         (f)      the term of his appointment, if any, expires.

13.9     The Company may by special resolution remove any Director before the
         expiration of his period of office, and may by an ordinary resolution
         appoint another person in his stead.


                                    PART 14

                         POWERS AND DUTIES OF DIRECTORS

14.1     The Directors shall manage, or supervise the management of, the
         affairs and business of the Company and shall have the authority to
         exercise all such powers of the Company as are not, by the Company Act
         or by the Memorandum or these Articles, required to be exercised by
         the Company in general meeting.

14.2     The Directors may from time to time by power of attorney or other
         instrument under the seal, appoint any person to be the attorney of
         the Company for such purposes, and with such powers, authorities and
         discretions (not exceeding those vested in or exercisable by the
         Directors under these Articles and excepting the powers of the
         Directors relating to the constitution of the Board and of any of its
         committees and the appointment or removal of officers and the power to
         declare dividends) and for such period, with such remuneration and
         subject to such conditions as the Directors may think fit, and any
         such power of attorney or other instrument may contain such provisions
         for the protection or convenience of persons dealing with such
         attorney as the Directors think fit. Any such attorney may be
         authorized by the Directors to subdelegate all or any of the powers,
         authorities and discretions for the time being vested in him.

                                     -17-

<PAGE>   18

                                    PART 15

                      DISCLOSURE OF INTEREST OF DIRECTORS

15.1     A Director who:

         (a)      is, in any way, directly or indirectly interested in an 
                  existing or proposed contract or transaction with the Company;
                  or

         (b)      holds any office or possesses any property whereby, directly
                  or indirectly, a duty or interest may be created to conflict
                  with his duty or interest as a Director,

         shall declare the nature and extent of his interest in such contract
         or transaction or of the conflict or potential conflict with his duty
         and interest as a Director, as the case may be, in accordance with the
         Company Act. A Director interested in a contract or transaction as
         aforesaid shall be counted in the quorum at a meeting of the Directors
         at which the proposed contract or transaction is approved, if present
         at the meeting, and such Director may vote in respect of the approval
         of the contract or transaction. If he votes he may be liable to
         account for any profit in accordance with the provisions of the
         Company Act.

15.2     A Director may hold any office or place of profit with the Company
         (other than the office of auditor of the Company) in addition to his
         office of Director for such period and on such terms (as to
         remuneration or otherwise) as the Directors may determine and no
         Director or intended Director shall be disqualified by his office from
         contracting with the Company either with regard to his tenure of any
         such other office or place of profit or as vendor, purchaser or
         otherwise, and, subject to compliance with the provisions of the
         Company Act, no contract or transaction entered into by or on behalf
         of the Company in which a Director is in any way interested shall be
         liable to be voided by reason thereof.

15.3     Subject to the Company Act, a Director or his firm may act in a
         professional capacity for the Company (except as auditor of the
         Company) and he or his firm shall be entitled to remuneration for
         professional services as if he were not a Director.

15.4     A Director may be or become a director or other officer or employee
         of, or otherwise interested in, any corporation or firm in which the
         Company may be interested as a shareholder or otherwise, and, subject
         to compliance with the provisions of the Company Act, such Director
         shall not be accountable to the Company for any remuneration or other
         benefits received by him as director, officer or employee of, or from
         his interest in, such other corporation or firm.


                                    PART 16

                            PROCEEDINGS OF DIRECTORS

16.1     The Chairman of the Board, if any, or in his absence, the President
         shall preside as chairman at every meeting of the Directors, or if
         there is no Chairman of the Board or neither the Chairman of the Board
         nor the President is present within fifteen minutes of the time
         appointed for holding the meeting or is willing to act as chairman,
         or, if the Chairman of the Board, if any, and the 

                                     -18-
<PAGE>   19

         President have advised the Secretary that they will not be present at 
         the meeting, the Directors present shall choose one of their number to
         be chairman of the meeting.

16.2     Subject to these Articles, the Directors may meet together for the
         dispatch of business, adjourn and otherwise regulate their meetings,
         as they think fit. Questions arising at any meeting shall be decided
         by a majority of votes. In case of an equality of votes the chairman
         shall not have a second or casting vote. Meetings of the Board held at
         regular intervals may be held at such place, at such time and upon
         such notice (if any) as the Board may by resolution from time to time
         determine.

16.3     A Director may participate in a meeting of the Board or of any
         committee of the Directors by means of conference telephones or other
         communications facilities by means of which all Directors
         participating in the meeting can hear each other and provided that all
         such Directors agree to such participation. A Director participating
         in a meeting in accordance with this Article shall be deemed to be
         present at the meeting and to have so agreed and shall be counted in
         the quorum therefor and be entitled to speak and vote thereat.

16.4     A Director may, and the Secretary or an Assistant Secretary upon
         request of a Director shall, call a meeting of the Board at any time.
         Reasonable notice of such meeting specifying the place, day and hour
         of such meeting shall be given by mail, postage prepaid, addressed to
         each of the Directors and alternate Directors at his address as it
         appears on the books of the Company or by leaving it at his usual
         business or residential address or by telephone, telegram, telex, or
         any method of transmitting legibly recorded messages. It shall not be
         necessary to give notice of a meeting of Directors to any Director if
         such meeting is to be held immediately following a general meeting at
         which such Director shall have been elected or is the meeting of
         Directors at which such Director is appointed.

16.5     Any Director or alternate Director may file with the Secretary a
         document executed by him waiving notice of any past, present or future
         meeting or meetings of the Directors being, or required to have been,
         sent to him and may at any time withdraw such waiver with respect to
         meetings held after such withdrawal. After filing such waiver with
         respect to future meetings and until such waiver is withdrawn no
         notice need be given to such Director and, unless the Director
         otherwise requires in writing to the Secretary, to his alternate
         Director of any meeting of Directors and all meetings of the Directors
         so held shall be deemed not to be improperly called or constituted by
         reason of notice not having been given to such Director or alternate
         Director. A waiver as aforesaid may be given by telegram, telex or
         other method of transmitting legibly recorded messages.

16.6     The quorum necessary for the transaction of the business of the
         Directors may be fixed by the Directors and if not so fixed shall be
         that number of Directors that is a majority of the number of Directors
         positions then fixed for the Company, whether or not each position is
         filled.

16.7     The continuing Directors may act notwithstanding any vacancy in their
         body, but, if and so long as their number is reduced below the number
         that, pursuant to these Articles, is the necessary quorum for meetings
         of the Directors, the continuing Directors may act for the purpose of
         increasing the number of Directors to that number, or of summoning a
         general meeting of the Company, but for no other purpose.

                                     -19-
<PAGE>   20

16.8     Subject to the Company Act, all acts done by any meeting of the
         Directors or of a committee of Directors, or by any person acting as a
         Director, shall, notwithstanding that it be afterwards discovered that
         there was some defect in the qualification, election or appointment of
         any Director or person acting as aforesaid, be as valid as if every
         such person had been duly elected or appointed and was qualified to be
         a Director.

16.9     A resolution consented to in writing (which resolution may be in
         counterparts which together shall be deemed to constitute one
         resolution in writing) whether by document, telegram, telex or any
         method of transmitting legibly recorded messages or other means, by
         all of the Directors shall be as valid and effectual as if it had been
         passed at a meeting of the Directors duly called and held on the date,
         expressly or by necessary implication stated thereon to be the
         effective date of the passage or adoption of the resolution. In the
         event of counterparts bearing expressly or by implication different
         effective dates, then in the absence of a further resolution of the
         Directors in that regard, the date the resolution is passed or adopted
         shall be deemed to be the latest effective date stated on any
         counterpart.


                                    PART 17

                         EXECUTIVE AND OTHER COMMITTEES

17.1     The Directors may appoint an Executive Committee to consist of such
         member or members of their body as they think fit, which Committee
         shall have, and may exercise during the intervals between the meetings
         of the Directors, all the powers vested in the Directors except the
         power to fill vacancies in the Board of Directors, the power to change
         the membership of, or fill vacancies in, said Committee and such other
         powers, if any, as may be specified by the Directors.

17.2     The Directors may appoint committees consisting of such members of
         their body as they think fit and may delegate to any such committee
         any power of the Directors (except the power to fill vacancies in the
         Board of Directors, the power to change the membership of, or fill
         vacancies in, any committee of the Directors and the power to appoint
         or remove officers appointed by the Directors), subject to such
         conditions as may be prescribed by the Directors.

17.3     If the Company is or becomes a reporting company, the Directors shall
         appoint an audit committee at such time and consisting of such members
         of their body as they think fit subject to the Company Act. The audit
         committee shall exercise the powers and perform the functions of an
         audit committee as described in the Company Act. In addition, the
         Directors may delegate to the audit committee any power of the
         Directors (except the power to fill vacancies in the Board of
         Directors, the power to change the membership of, or fill vacancies
         in, any committee of the Directors and the power to appoint or remove
         officers appointed by the Directors), subject to such conditions as
         may be prescribed by the Directors.

17.4     All committees of Directors shall keep regular minutes of their
         proceedings and meetings and shall cause them to be recorded in books
         kept for that purpose, and shall report the same to the Directors at
         such times as the Directors may from time to time require. Committees
         may make rules for the conduct of their business and may appoint such
         assistants as they may deem necessary. A majority of the members of a
         committee shall constitute a quorum thereof. Save as set out in this
         Part 17 or in the rules made by a committee as aforesaid, the meetings
         and 

                                     -20-
<PAGE>   21
         

         proceedings of a committee consisting of more than one member
         shall be governed by the provisions of these Articles regulating the
         proceedings and meetings of the Directors, including, without
         limitation, the provisions with respect to the appointment of
         alternates to the intent that a Director who is a member of a
         committee may appoint an alternate to represent him at a meeting of
         the committee unless the Board of Directors shall prohibit the
         appointment of alternates by the members of such committee, and
         including the provisions with respect to resolutions consented to in
         writing. The Directors shall have power at any time to revoke or
         override any authority given to or acts to be done by any such
         committees, except with respect to acts done before such revocation or
         overriding, and to terminate the appointment or change the membership
         of a committee and to fill vacancies in it.


                                    PART 18

                                    OFFICERS

18.1     The Directors shall appoint a President and a Secretary and such other
         officers, if any, as the Directors shall determine from time to time
         and the Directors may, at any time, terminate any such appointment. No
         officer shall be appointed unless he is qualified in accordance with
         the provisions of the Company Act.

18.2     One person may hold more than one of such offices except that the
         offices of President and Secretary must be held by different persons
         unless the Company has only one member. Any person appointed as the
         Chairman of the Board, the President or the Managing Director shall be
         a Director. The other officers need not be Directors.

18.3     The remuneration of the officers of the Company as such and the terms
         and conditions of their tenure of office or employment shall from time
         to time be determined by the Directors; such remuneration may be by
         way of salary, fees, wages, commission or participation in profits or
         any other means or all of these modes and an officer may in addition
         to such remuneration be entitled to receive after he ceases to hold
         such office or leaves the employment of the Company a pension or
         gratuity.

18.4     The Directors may decide what functions and duties each officer shall
         perform and may entrust to and confer upon him any of the powers
         exercisable by them upon such terms and conditions and with such
         restrictions as they think fit and may from time to time revoke,
         withdraw, alter or vary all or any of such functions, duties and
         powers. The Secretary shall, inter alia, perform the functions of the
         Secretary specified in the Company Act.

18.5     Every officer of the Company who holds any office or possesses any
         property whereby, whether directly or indirectly, duties or interests
         might be created in conflict with his duties or interests as an
         officer of the Company shall, in writing, disclose to the President
         the fact and the nature and extent of the conflict.




                                     -21-

<PAGE>   22
                                    PART 19

                          INDEMNITY AND PROTECTION OF
                       DIRECTORS, OFFICERS AND EMPLOYEES



19.1     Subject to the Company Act and these Articles, the Directors shall
         cause the Company to indemnify a Director or former Director of the
         Company and a Director or former Director of a corporation which is or
         was a subsidiary of the Company or (if he acted as such at the request
         of the Company) of any other corporation of which the Company is or
         was a shareholder and the heirs and personal representatives of any
         such person against all costs, charges and expenses, including an
         amount paid to settle an action or satisfy a judgment, actually and
         reasonably incurred by him or them including an amount paid to settle
         an action or satisfy a judgment in a civil, criminal or administrative
         action or proceeding to which he is or they are made a party by reason
         of his being or having been a Director of the Company or a director of
         such corporation, including any action brought by the Company or any
         such corporation. The Company shall apply to the Court for all
         approvals of the Court which may be required to make any indemnity
         referred to in this Article effective and enforceable. The Company
         shall be deemed to have contracted, on the terms of the foregoing
         indemnity, with each Director of the Company and each such Director of
         such corporation on his being elected or appointed.

19.2     Subject to the Company Act and these Articles, the Directors shall
         cause the Company to indemnify:

         (a)      any officer or former officer (but in the case of an officer
                  of a corporation other than a subsidiary of the Company only
                  if he acted as such at the request of the Company); and

         (b)      any employee, former employee or agent or former agent 
                  designated by the Directors,

         of the Company or of a corporation which is or was a subsidiary of the
         Company or of any other corporation of which the Company is or was a
         shareholder (notwithstanding that he is also a Director) and his heirs
         and personal representatives against all costs, charges and expenses
         whatsoever (including, without limiting the generality of the
         foregoing, those specifically referred to in Article 19.1 above)
         incurred by him or them and resulting from his acting as an officer,
         employee or agent of the Company or of such corporation. The Company
         shall be deemed to have contracted, on the terms of the foregoing
         indemnity, with each such officer or former officer on his being
         appointed.

19.3     The failure of a person to comply with the Company Act or of the
         Memorandum or these Articles shall not, of itself, invalidate any
         indemnity to which such person is entitled under this Part.

19.4     The Directors may cause the Company to purchase and maintain insurance
         for the benefit of:

         (a)      any person who is or was serving as a Director or officer of
                  the Company or as a director or officer of a corporation
                  which is or was a subsidiary of the Company or (if he acted
                  as such at the request of the Company) of any other
                  corporation of which the Company is or was a shareholder; and

         (b)      any person designated by the Directors who is or was serving
                  as an employee or agent of the Company or of such
                  corporation; and

         (c)      any person in respect of whom the Company is or may be
                  obligated to indemnify pursuant to this Part 19,

                                     -22-
<PAGE>   23

         and his heirs and personal representatives against any liability
         incurred by him as such Director, director, officer, employee or
         agent.

19.5     If any of the provisions of this Part shall be void, illegal or
         invalid, the remaining provisions of this Part shall be construed and
         take effect as if the void, illegal or invalid provision had never
         been contained herein. The Company shall not be required to indemnify
         a person pursuant to Articles 19.1 or 19.2 if such person did not,
         with respect to the act or matter giving rise to the proposed
         indemnification, act honestly and in good faith and with a view to the
         best interests of the Company or the corporation referred to therein,
         as the case may be, or in the case of a criminal or administrative act
         or proceeding, if he did not have reasonable grounds for believing his
         conduct was lawful or duly authorized. The provisions of this Part 19
         relating to Directors and former Directors of the Company and to
         directors and former directors of a corporation which is or was a
         subsidiary of the Company or of a corporation in which the Company is
         or was a shareholder also apply, with the necessary changes and so far
         as applicable, to alternate Directors of the Company and alternate
         directors of such corporations.


                                    PART 20

                             DIVIDENDS AND RESERVES

20.1     Subject to the Company Act and to the special rights and restrictions
         as to dividends attached to any shares, the Directors may from time to
         time declare and authorize payment of such dividends, if any, as they
         may deem advisable and need not give notice of such declaration to any
         member. No dividend shall be paid otherwise than out of funds and/or
         assets properly available for the payment of dividends and a
         declaration by the Directors as to the amount of such funds and/or
         assets available for dividends shall be conclusive. The Company may
         pay any such dividend wholly or in part by the distribution of
         specific assets and in particular by paid up shares, bonds, debentures
         or other securities of the Company or any other corporation or in any
         one or more such ways as may be authorized by the Company or the
         Directors and where any difficulty arises with regard to such a
         distribution the Directors may settle the same as they think
         expedient, and in particular may fix the value for distribution of
         such specific assets or any part thereof, and may determine that cash
         payments in substitution for all or any part of the specific assets to
         which any members are entitled shall be made to any members on the
         basis of the value so fixed in order to adjust the rights of all
         parties and may vest any such specific assets in trustees for the
         persons entitled to the dividend as may seem expedient to the
         Directors.

20.2     Any dividend declared on shares of any class or series by the
         Directors may be made payable on such date as is fixed by the
         Directors.

20.3     Subject to the rights of members (if any) holding shares with special
         rights as to dividends, all dividends on shares of any class or series
         shall be declared and paid according to the number of such shares
         held.

20.4     The Directors may, before declaring any dividend, set aside out of the
         funds properly available for the payment of dividends such sums as
         they think proper as a reserve or reserves, which shall, at the
         discretion of the Directors, be applicable for meeting contingencies,
         or for equalizing dividends, or for any other purpose to which such
         funds of the Company may be properly applied, and pending such
         application may, at the like discretion, either be employed in the 

                                     -23-

<PAGE>   24

         business of the Company or be invested in such investments as the
         Directors may from time to time think fit. The Directors may also,
         without placing the same in reserve, carry forward such funds, which
         they think prudent not to divide.

20.5     If several persons are registered as joint holders of any share, any
         one of them may give an effective receipt for any dividend, bonuses or
         other moneys payable in respect of the share.

20.6     No dividend shall bear interest against the Company. Where the
         dividend to which a member is entitled includes a fraction of a cent,
         such fraction shall be disregarded in making payment thereof and such
         payment shall be deemed to be payment in full.

20.7     Any dividend, bonus or other moneys payable in cash in respect of
         shares may be paid by cheque or warrant sent through the post directed
         to the registered address of the holder, or in the case of joint
         holders, to the registered address of that one of the joint holders
         who is first named on the register, or to such person and to such
         address as the holder or joint holders may direct in writing. Every
         such cheque or warrant shall be made payable to the order of the
         person to whom it is sent. The mailing of such cheque or warrant
         shall, to the extent of the sum represented thereby (plus the amount
         of any tax required by law to be deducted) discharge all liability for
         the dividend, unless such cheque or warrant shall not be paid on
         presentation or the amount of tax so deducted shall not be paid to the
         appropriate taxing authority.

20.8     Notwithstanding anything contained in these Articles the Directors may
         from time to time capitalize any retained earnings or surplus of the
         Company and may issue as fully paid and non-assessable any unissued
         shares or any debt obligations of the Company as a dividend
         representing such retained earnings or surplus or any part thereof.


                                    PART 21

                         DOCUMENTS, RECORDS AND REPORTS

21.1     The Company shall keep at its records office or at such other place as
         the Company Act may permit, the documents, copies, registers, minutes,
         and records which the Company is required by the Company Act to keep
         at its records office or such other place, as the case may be.

21.2     The Company shall cause to be kept proper books of account and
         accounting records in respect of all financial and other transactions
         of the Company in order properly to record the financial affairs and
         condition of the Company and to comply with the Company Act.

21.3     Unless the Directors determine otherwise, or unless otherwise
         determined by an ordinary resolution, no member of the Company shall
         be entitled to inspect the accounting records of the Company.

21.4     The Directors shall from time to time at the expense of the Company
         cause to be prepared and laid before the Company in general meeting
         such financial statements and reports as are required by the Company
         Act.

21.5     Every member shall be entitled to be furnished once gratis on demand
         with a copy of the latest annual financial statement of the Company
         and, if so required by the Company Act, a copy of 

                                     -24-

<PAGE>   25

         each such annual financial statement and interim financial statement
         shall be mailed to each member.


                                    PART 22

                                    NOTICES

22.1     A notice, statement or report may be given or delivered by the Company
         to any member either by delivery to him personally or by sending it by
         mail to him to his address as recorded in the register of members.
         Where a notice, statement or report is sent by mail, service or
         delivery of the notice, statement or report shall be deemed (a) to be
         effected by properly addressing, prepaying and mailing the notice,
         statement or report, and (b) to have been given on the date, Saturdays
         and holidays excepted, following the date of mailing. A certificate
         signed by the Secretary or other officer of the Company or of any
         other person acting in that behalf for the Company that the letter,
         envelope or wrapper containing the notice, statement or report was so
         addressed, prepaid and mailed shall be conclusive evidence thereof.

22.2     A notice, statement or report may be given or delivered by the Company
         to the joint holders of a share by giving the notice to the joint
         holder first named in the register of members in respect of the share.

22.3     A notice, statement or report may be given or delivered by the Company
         to the persons entitled to a share in consequence of the death,
         bankruptcy or incapacity of a member by sending it through the mail
         prepaid addressed to them by name or by his title or by any like
         description, at the address (if any) supplied to the Company for the
         purpose by the persons claiming to be so entitled, or (until such
         address has been so supplied) by giving the notice in a manner in
         which the same might have been given if the death, bankruptcy or
         incapacity had not occurred.

22.4     Notice of every general meeting or meeting of members shall be given
         in a manner hereinbefore authorized to every member holding at the
         record date for determining the members entitled to such notice shares
         which confer the right to notice of and to attend and vote at any such
         meeting. No other person except the auditor of the Company and the
         Directors of the Company shall be entitled to receive notices of any
         such meeting.


                                    PART 23

                                  RECORD DATES

23.1     Subject to the Company Act, the Directors may fix in advance a date as
         the record date for the determination of the members entitled to
         notice of any meeting of members or any adjournment thereof, and/or a
         date as the record date for the determination of the members entitled
         to attend and vote at any meeting of members or any adjournment
         thereof (which may but need not be the same date as the record date
         for determining members entitled to notice) and/or a date as a record
         date for the determination of members entitled to receive payment of a
         dividend, or for any other proper purpose and in such case,
         notwithstanding anything elsewhere contained in these Articles, only
         members or persons of record on the date so picked shall be deemed to
         be members for the particular purpose or purposes aforesaid.


                                     -25-
<PAGE>   26

23.2     Where no record date is fixed for the determination of members
         entitled to notice, or to vote, or of members entitled to receive
         payment of a dividend or for any other proper purpose, the date on
         which notice of the meeting is mailed or on which the resolution of
         the Directors declaring the dividend is adopted respectively is the
         record date for such determination.

                                    PART 24

                                      SEAL

24.1     The Directors may provide a seal for the Company and, if they do so,
         shall provide for the safe custody of the seal which shall not be
         affixed to any instrument except in the presence of the following
         persons, namely;

         (a)      the President or the Secretary;

         (b)      any two Directors of the Company;

         (c)      one of the Chairman of the Board, the President, a Director
                  or the Vice-President together with any one of the Secretary,
                  an Assistant Secretary, the Treasurer, the
                  Secretary-Treasurer, an Assistant Treasurer and an Assistant
                  Secretary-Treasurer; or

         (d)      such person or persons as the Directors may from time to time
                  by resolution appoint,

         and the said Directors, officers, person or persons in whose presence
         the seal is so affixed to an instrument shall sign such instrument.
         For the purpose of certifying under the seal copies or extracts from
         the Memorandum or Articles of the Company, minutes of meetings or
         resolutions of the members or Directors or committees of Directors, or
         any instrument executed or issued by the Company, the seal may be
         affixed in the presence of any one of the persons hereinbefore
         mentioned unless the Directors shall by resolution determine
         otherwise.

24.2     The signatures of any one or more of the Chairman of the Board,
         President, Vice-Presidents, Directors, Secretary, Treasurer,
         Assistant-Secretaries, Assistant-Treasurers and any other officers of
         the Company and any persons referred to in Article 24.1(d) may, if
         authorized by the Directors, be printed, lithographed, engraved or
         otherwise mechanically reproduced upon all instruments executed or
         issued by the Company; and any instrument on which the signature of
         any such person is so reproduced by authorization of the Directors
         shall be deemed to have been manually signed by such person whose
         signature is so reproduced and shall be, subject to the Company Act,
         as valid to all intents and purposes as if such instrument had been
         signed manually, and notwithstanding that the person whose signature
         is so reproduced may have ceased to hold office (if applicable) at the
         date of the delivery or issue of such instrument. The term
         "instrument" as used in Article 24.1 and this Article 24.2 shall
         include deeds, mortgage, hypothecs, charges, conveyances, transfers
         and assignments of property, real or personal, agreements, releases,
         receipts and discharges for the payment of money or other obligation,
         certificates of the Company's shares, bonds, debentures and other
         securities and debt obligations of the Company, and all
         paper-writings.

24.3     To enable the seal of the Company to be affixed to any debt
         obligations, share certificates, or other securities of the Company,
         whether in definitive or interim form, on which facsimiles of 

                                     -26-

<PAGE>   27

         any of the signatures of the Directors or officers of the Company are,
         in accordance with the Company Act and/or these Articles, printed or
         otherwise mechanically reproduced there may be delivered to the firm
         or company employed to engrave, lithograph or print such definitive or
         interim debt obligations, share certificates or other securities one
         or more unmounted dies reproducing the Company's seal and the Chairman
         of the Board, the President, the Managing Director or a Vice-President
         and the Secretary, Treasurer, Secretary-Treasurer, an Assistant
         Secretary, an Assistant Treasurer or an Assistant Secretary-Treasurer
         may by a document authorize such firm or company to cause the
         Company's seal to be affixed to such definitive or interim debt
         obligations, share certificates or other securities by the use of such
         dies. Debt obligations, share certificates or other securities to
         which the Company's seal has been so affixed shall for all purposes be
         deemed to be under and to bear the Company's seal lawfully affixed
         thereto.

24.4     The Company may have for use in any other province, state, territory
         or country an official seal which shall have on its face the name of
         the province, state, territory or country where it is to be used.


                                    PART 25

                    PROHIBITIONS IF NOT A REPORTING COMPANY

25.1     If the Company is, or becomes, a company which is not a reporting
         company under the Company Act:

         (a)      the number of members for the time being of the Company,
                  exclusive of persons who are for the time being in the
                  employment of the Company and continue to be members after
                  the termination of such employment, shall not exceed 50;

         (b)      no securities of the Company shall be offered for sale or 
                  subscription to the public;

         (c)      no shares shall be transferred without the previous consent
                  of the Directors expressed by a resolution of the Board and
                  the Directors shall not be required to give any reason for
                  refusing to consent to any such proposed transfer.


                                    PART 26

                    SPECIAL SHARE PROVISIONS AND DEFINITIONS

26.1     SHARE PROVISIONS. The special rights, privileges, restrictions and
         conditions attached to the Convertible Shares, Exchangeable Shares and
         Common Shares are set forth in Parts 26 through 32 (collectively, the
         "Share Provisions").

26.2     LEGEND ON SHARE CERTIFICATES. The certificates evidencing the
         Convertible Shares or the Exchangeable Shares, as the case may be,
         shall contain or have affixed thereto a legend, in form and on terms
         approved by the Board of Directors, with respect to the applicable
         provisions relating to the Automatic Conversion Right, the Optional
         Conversion Right, the Automatic Exchange Right, the Retraction Call
         Right, the Liquidation Call Right, the Redemption Call

                                      -27

<PAGE>   28

         Right, the Exchange Right and the provisions of the Trust Agreement
         (including the provisions with respect to the voting rights and
         exchange right thereunder) and the restrictions on transfer and
         Changes of Control set out in Article 26.3.

26.3     RESTRICTIONS ON TRANSFER AND CHANGE OF CONTROL.

         (a)      Except with the prior written consent of the Parent, no
                  holder of Convertible Shares and no holder of Exchangeable
                  Shares (other than the Parent or Holdco) may at any time (i)
                  transfer to any person any Convertible Share or Exchangeable
                  Share or any beneficial interest therein; or, (ii) if such
                  holder is a body corporate, permit any Change of Control of
                  such holder to occur.

         (b)      If any holder of Exchangeable Shares permits any transaction
                  contemplated by Subsection 26.3(a) to occur without first
                  obtaining the prior written consent of the Parent (i) such
                  holder shall be deemed to have irrevocably exercised such
                  holder's retraction right pursuant to Article 28.10 with
                  respect to all of such holder's Exchangeable Shares as of the
                  date of such transaction; and (ii) the Parent or at the
                  Parent's option, Holdco, shall be deemed to have exercised
                  its Retraction Call Right pursuant to Article 28.11 with
                  respect to such Exchangeable Shares immediately thereafter.

         (c)      Notwithstanding any other provision herein, no Exchangeable
                  Share will be exchanged for Parent Common Shares by the
                  Parent, the Company or Holdco pursuant to any of the
                  provisions of Part 28, except (i) the provisions of Articles
                  28.10 and 28.11 in connection with a deemed exercise of
                  retraction right and a deemed exercise of Retraction Call
                  Right thereunder pursuant to Subsection 26.3(b); and (ii) the
                  provisions of Article 28.9 in connection with a Parent
                  Liquidation Event, unless the holder of such Exchangeable
                  Share delivers to the Parent, the Company or Holdco, as the
                  case may be, a statutory declaration in form and substance
                  reasonably acceptable to the Parent, the Company or Holdco,
                  as the case may be, sworn by such holder, or if such holder
                  is a body corporate, sworn by a director of such holder,
                  confirming that none of the events prohibited by Subsection
                  26.3(a) has occurred at any time except with the Parent's
                  prior written consent (a "No Transfer Declaration").

26.4     DEFINITIONS. In the Share Provisions, unless something in the subject
         matter or context is inconsistent:

         "AFFILIATE" of any person means any other person directly or
         indirectly controlled by, or under common control with, that person.
         For the purposes of this definition, "control" (including, with
         correlative meanings, the terms "controlled by" and "under common
         control with"), as applied to any person, means the possession by
         another person, directly or indirectly, of the power to direct or
         cause the direction of the management and policies of that first
         mentioned person, whether through the ownership of voting securities,
         by contract or otherwise.

         "AUTOMATIC REDEMPTION DATE" means the date for the automatic
         redemption by the Company of Exchangeable Shares pursuant to Article
         28.12, being the earliest of the following:

         (i)      the time of and simultaneously with the closing of any
                  amalgamation, merger, reorganization or other transaction
                  affecting the Parent Common Shares that will be a taxable
                  event for the holders of Parent Common Shares;


                                     -28-
<PAGE>   29

        (ii)      February 1 of the year immediately following any calendar
                  year other than 1998 during which the total number of
                  Exchangeable Shares outstanding or capable at being
                  outstanding upon conversion of the Convertible Shares and the
                  promissory notes issued under Section 2.2(a) of the Stock
                  Purchase Agreement (other than Exchangeable Shares held by
                  Parent or Holdco) is less than 25% of the sum of (1) the
                  number of Exchangeable Shares underlying the Convertible
                  Shares issued at the Initial Closing (as defined in the Stock
                  Purchase Agreement); (2) the number of Exchangeable Shares
                  underlying the Convertible Shares, if any, issued at the
                  Bonus Closing (as defined in the Stock Purchase Agreement);
                  (3) the number of Exchangeable Shares underlying the
                  Convertible Shares or the number of Exchangeable Shares, as
                  the case may be, if any, issued at the Second Closing (as
                  defined in the Stock Purchase Agreement); and (4) the number
                  of Exchangeable Shares into which the promissory notes issued
                  under Section 2.2(a) of the Stock Purchase Agreement may be
                  converted, in each case as such number of shares may be
                  adjusted as deemed appropriate by the Board of Directors to
                  give effect to any subdivision, combination or consolidation
                  of or stock dividend on the Exchangeable Shares, any issue or
                  distribution of rights to acquire Exchangeable Shares or
                  securities exchangeable for or convertible into Exchangeable
                  Shares, any issue or distribution of other securities or
                  rights or evidences of indebtedness or assets, or any other
                  capital reorganization or other transaction affecting the
                  Exchangeable Shares; and

        (iii)     the fifteenth anniversary of the Parent IPO Date.

         "AUTOMATIC CONVERSION RIGHT" has the meaning ascribed to it in 
         Subsection 27.9.

         "AUTOMATIC EXCHANGE RIGHT" has the meaning ascribed thereto in 
         Subsection 28.9(b).

         "BOARD OF DIRECTORS" means the board of directors of the Company.

         "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
         when banks are not open for business in either or both of Vancouver,
         British Columbia and Houston, Texas.

         "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed
         in United States Dollars (the "US$ Amount") at any date, the product
         obtained by multiplying (i) the US$ Amount by (ii) the exchange rate
         of Canadian dollars for United States dollars as published by the Wall
         Street Journal on the last Business Day prior to such date or, in the
         event such exchange rate is not available, such exchange rate on such
         date as may be deemed by the Board of Directors to be appropriate for
         such purpose.

         "COMMON SHARES" means the Common Shares without par value.

         "CONTROL" of any body corporate means the right to exercise a majority
         of votes that may be cast at a general meeting of shareholders of such
         body corporate; and

         "CHANGE OF CONTROL" of any body corporate means the acquisition of a
         sufficient number of shares to give the holder Control of such body
         corporate other than by a person who is the spouse of the former
         holder of such shares or by a "spouse trust" (within the meaning of
         the Income Tax Act (Canada)) in relation to such former holder.

         "CONVERTIBLE SHARES" means the Class A Preferred Convertible Shares 
         without par value.


                                     -29-
<PAGE>   30

         "CURRENT MARKET PRICE" means, in respect of the Parent Common Shares
         (i) on the Parent IPO Date, the price to the public for each Parent
         Common Share sold in the Parent IPO; and (ii) on any other date, the
         Canadian Dollar Equivalent of the average of the high and the low
         trades of the Parent Common Shares (as reported in the Wall Street
         Journal) for each of the 10 trading days before such date; provided,
         however, that if in the opinion of the Board of Directors the public
         distribution or trading activity of Parent Common Shares during such
         period does not create a market which reflects the fair market value
         of a Parent Common Share, then the Current Market Price of a Parent
         Common Share shall be determined by the Board of Directors based upon
         the advice of such qualified independent financial advisors as the
         Board of Directors may deem to be appropriate, and provided further
         that any such selection, opinion or determination by the Board of
         Directors shall be conclusive and binding.

         "DIVIDEND AMOUNT" means (i) in connection with the Convertible Shares,
         an amount equal to the full amount of all dividends and distributions
         declared and unpaid on each Convertible Share; and (ii) in connection
         with the Exchangeable Shares, an amount equal to the full amount of
         all dividends and distributions declared and unpaid on each
         Exchangeable Share and all dividends and distributions declared on a
         Parent Common Share that have not been declared on each Exchangeable
         Share in accordance with Article 28.3, in each case, with a record
         date prior to the effective date of the exchange of such Exchangeable
         Share for a Parent Common Share.

         "EXCHANGE RIGHT" has the meaning ascribed thereto in Section 5.1 of the
         Trust Agreement.

         "EXCHANGEABLE SHARES" means the Class B Preferred Exchangeable Shares 
         without par value.

         "HOLDCO" means Raintree Resorts Holdings ULC, an unlimited company
         incorporated under the laws of the Province of Nova Scotia.

         "LIQUIDATION" means for any company, the liquidation, dissolution or
         winding-up of such company, whether voluntary or involuntary, or any
         other distribution of the assets of such company among its
         shareholders for the purpose of winding-up its affairs.

         "LIQUIDATION AMOUNT" (i) in connection with the Convertible Shares,
         has the meaning ascribed thereto in Subsection 27.4(a); and (ii) in
         connection with the Exchangeable Shares, has the meaning ascribed
         thereto in Subsection 28.7(a).

         "LIQUIDATION CALL EXERCISING PARTY" (i) in connection with the
         Convertible Shares, has the meaning ascribed thereto in Subsection
         27.5(a); and (ii) in connection with the Exchangeable Shares, has the
         meaning ascribed thereto in Subsection 28.8(a).

         "LIQUIDATION CALL RIGHT" (i) in connection with the Convertible
         Shares, has the meaning ascribed thereto in Subsection 27.5(a); and
         (ii) in connection with the Exchangeable Shares, has the meaning
         ascribed thereto in Subsection 28.8(a).

         "LIQUIDATION CALL PURCHASE PRICE" (i) in connection with the
         Convertible Shares, has the meaning ascribed thereto in Subsection
         27.5(a); and (ii) in connection with the Exchangeable Shares, has the
         meaning ascribed thereto in Subsection 28.8(a).

         "LIQUIDATION DATE" has the meaning ascribed thereto in Subsection 27.4
         (a).

                                     -30-
<PAGE>   31

         "NO TRANSFER DECLARATION" has the meaning ascribed to it in Subsection
         26.3(b).

         "OPTIONAL CONVERSION RIGHT" has the meaning ascribed to it in 
         Subsection 27.10(a).

         "PARENT" means Raintree Resorts International, Inc., a corporation
         organized and existing under the laws of the State of Nevada, and any
         successor corporation.

         "PARENT COMMON SHARES" mean the shares of common stock of the Parent,
         with a par value of US$0.001 per share, having voting rights of one
         vote per share, and any other securities into which such shares may be
         changed.

         "PARENT DIVIDEND DECLARATION DATE" means the date on which the board
         of directors of the Parent declares any dividend on the Parent Common
         Shares.

         "PARENT IPO" means the initial underwritten public offering of the
         Parent Common Shares pursuant to an effective registration statement
         under the Securities Act of 1933, as amended.

         "PARENT IPO DATE" means the date of the closing of the Parent IPO.

         "PARENT IPO PRICE" means the price to the public for each Parent
         Common Share sold in the Parent IPO.

         "PARENT LIQUIDATION EVENT" has the meaning ascribed thereto in 
         Subsection 28.9(a).

         "PARENT LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed 
         thereto in Subsection 28.9(c).

         "PARENT STOCK TENDER OFFER" has the meaning ascribed thereto in
         Section 6.8 of the Trust Agreement.

         "REDEMPTION CALL EXERCISING PARTY" (i) in connection with the
         Convertible Shares, has the meaning ascribed thereto in Subsection
         27.7(a); and (ii) in connection with the Exchangeable Shares, has the
         meaning ascribed thereto in Subsection 28.13(a).

         "REDEMPTION CALL PURCHASE PRICE" (i) in connection with the
         Convertible Shares, has the meaning ascribed thereto in Subsection
         27.7(a); and (ii) in connection with the Exchangeable Shares, has the
         meaning ascribed thereto in Subsection 28.13(a).

         "REDEMPTION CALL RIGHT" (i) in connection with the Convertible Shares,
         has the meaning ascribed thereto in Subsection 27.7(a); and (ii) in
         connection with the Exchangeable Shares, has the meaning ascribed
         thereto in Subsection 28.13(a).

         "REDEMPTION DATE" has the meanings ascribed thereto in Subsections 
         27.6(a) and 27.6(b).

         "REDEMPTION PRICE" (i) in connection with the Convertible Shares, has
         the meaning ascribed thereto in Subsection 27.6(a); and (ii) in
         connection with the Exchangeable Shares, has the meaning ascribed
         thereto in Subsection 28.12(a).

         "RETRACTED SHARES" has the meaning ascribed thereto in Subsection 
         28.10.

         
                                     -31-
<PAGE>   32

         "RETRACTION CALL EXERCISING PARTY" has the meaning ascribed thereto in
         Subsection 28.11(a).

         "RETRACTION CALL PURCHASE PRICE" has the meaning ascribed thereto in 
         Subsection 28.11(a).

         "RETRACTION CALL RIGHT" has the meaning ascribed thereto in Subsection
         28.11(a).

         "RETRACTION DATE" means the fifth (5th) Business Day after the date on
         which a Retraction Request is received by the Company except if such
         Retraction Request states that it is being made for the purpose of
         participating in a Parent Stock Tender Offer, in which case,
         "RETRACTION DATE" shall mean the date, if any, on which such Parent
         Stock Tender Offer closes.

         "RETRACTION PRICE" has the meaning ascribed thereto in Subsection 28.10
         (a).

         "RETRACTION REQUEST" has the meaning ascribed thereto in Subsection 28.
         10(a).

         "SHARE PROVISIONS" has the meaning ascribed to it in Article 26.1.

         "STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement dated as
         of the 27th day of July, 1998 among the Parent, the Company, Raintree
         Resorts Canada, LLC, G.B. Properties Ltd., K.B. Ventures Ltd., M.M. & 
         M. Management Ltd., Shawndra Enterprises Ltd., N. Kent Bubbs, Patricia
         J. Bubbs, Geraldine L. Bubbs, G. Michael McGeough, Whiski Jack Resorts
         Ltd. and Northface Realty Co. Ltd., a copy of which will be available
         at the records office of the Company.

         "TRUST AGREEMENT" means the Voting, Support and Exchange Trust
         Agreement between the Company, the Parent and the Trustee, made as of
         the 27th day of July, 1998, a copy of which will be available at the
         records office of the Company.

         "TRUSTEE" means Holdco, as trustee.


                                    PART 27

                          CONVERTIBLE SHARE PROVISIONS

                         RANKING OF CONVERTIBLE SHARES

27.1     SENIOR RANKING. The Convertible Shares shall rank senior to the
         Exchangeable Shares and the Common Shares, and shall be entitled to a
         preference over the Exchangeable Shares, Common Shares and any other
         shares ranking junior to the Convertible Shares, with respect to the
         payment of dividends and the distribution of assets in the event of
         the Liquidation of the Company as and to the extent provided in these
         Share Provisions.


                   VOTING RIGHTS OF CONVERTIBLE SHAREHOLDERS

27.2     VOTING RIGHTS. Except as required by applicable law or the provisions
         of Parts 30 hereof, a holder of a Convertible Share shall not, as
         such, be entitled to receive notice of or attend in person or by proxy
         or vote at any general meeting of the Company.

                                     -32-

<PAGE>   33



                 DIVIDENDS PAYABLE TO CONVERTIBLE SHAREHOLDERS

27.3     DIVIDENDS.

         (a)      The holders of Convertible Shares shall be entitled to receive
                  and the Company shall pay, out of the assets of the Company
                  properly applicable to the payment of dividends, a fixed
                  annual cumulative preferential dividend equal to US$10 per
                  share each year, payable in four equal payments of US$2.50
                  per share on January 31, April 30, July 31 and October 31
                  each year, provided that (i) dividends shall begin to accrue
                  on each Convertible Share upon its issuance; and (ii) the
                  first dividend payment shall be made on October 31, 1998 and
                  shall be prorated accordingly. The holders of the Convertible
                  Shares shall not be entitled in any year to any further
                  dividend.

         (b)      If on any payment date for any dividends declared on the
                  Convertible Shares under Section 27.3(a), the dividends are
                  not paid in full on all of the Convertible Shares then
                  outstanding, any such dividends that remain unpaid shall be
                  paid on a subsequent date or dates determined by the Board of
                  Directors on which the Company shall have sufficient moneys,
                  assets or property properly applicable to the payment of such
                  dividends.


                            DISTRIBUTIONS PAYABLE TO
                    CONVERTIBLE SHAREHOLDERS ON LIQUIDATION

27.4     DISTRIBUTION OF LIQUIDATION AMOUNT.

         (a)      In the event of the Liquidation of the Company, a holder of
                  Convertible Shares shall be entitled, subject to applicable
                  law and the due exercise by the Parent or Holdco of the
                  Liquidation Call Right, to receive from the assets of the
                  Company in respect of each Convertible Share held by such
                  holder on the effective date (the "Liquidation Date") of such
                  Liquidation, an amount per share equal to (i) US$100, plus
                  (ii) the Dividend Amount (collectively the "Liquidation
                  Amount").

         (b)      In the case of a distribution on Convertible Shares under this
                  Article 27.4, on or promptly after the Liquidation Date, and
                  subject to the due exercise by the Parent or Holdco of the
                  Liquidation Call Right, the Company shall cause to be
                  delivered to the holders of the Convertible Shares the
                  Liquidation Amount for each such Convertible Share upon
                  presentation and surrender at the registered office of the
                  Company of the certificates representing such Convertible
                  Shares, together with such other documents and instruments as
                  may be required to effect a transfer of Convertible Shares
                  under the Company Act and such additional documents and
                  instruments as the Company may reasonably require. Payment of
                  the total Liquidation Amount for such Convertible Shares
                  shall be made by delivery to each holder, at the address of
                  the holder recorded in the securities register of the Company
                  for the Convertible Shares or by holding for pick up by the
                  holder at the registered office of the Company, a cheque of
                  the Company payable at par at any branch of the bankers of
                  the Company, in the amount of the aggregate Liquidation
                  Amount payable to such holder. On and after the Liquidation
                  Date, the holders of the Convertible Shares shall cease to be
                  holders of such Convertible Shares and shall not be entitled
                  to exercise any of the rights of holders in respect thereof,

                                     -33-
<PAGE>   34

                  other than the right to receive their proportionate part of
                  the total Liquidation Amount, unless payment of the total
                  Liquidation Amount for such Convertible Shares shall not be
                  made upon presentation and surrender of share certificates in
                  accordance with the foregoing provisions, in which case the
                  rights of the holders shall remain unaffected until the total
                  Liquidation Amount has been paid in the manner hereinbefore
                  provided.

         (c)      The Company shall have the right at any time on or after the 
                  Liquidation Date to deposit or cause to be deposited the
                  total Liquidation Amount in respect of the Convertible Shares
                  represented by certificates that have not at the Liquidation
                  Date been surrendered by the holders thereof in a custodial
                  account with any chartered bank or trust company in Canada
                  and any interest paid on such deposit shall belong to the
                  Company. Upon such deposit being made, the rights of the
                  holders of Convertible Shares after such deposit shall be
                  limited to receiving their proportionate part of the total
                  Liquidation Amount without interest for such Convertible
                  Shares so deposited, against presentation and surrender of
                  the said certificates held by them, respectively, in
                  accordance with the foregoing provisions.

         (d)      After the Company has satisfied its obligations to pay the
                  holders of the Convertible Shares the Liquidation Amount per
                  Convertible Share pursuant to this Article 27.4, such holders
                  shall not be entitled to share in any further distribution of
                  the assets of the Company.

27.5     LIQUIDATION CALL RIGHT.

         (a)      Subject to the limitations set forth in Subsection 27.5(b),
                  the Parent and Holdco shall each have the overriding right
                  (the "Liquidation Call Right"), in the event of and
                  notwithstanding the proposed Liquidation of the Company
                  pursuant to Article 27.4, to purchase from all but not less
                  than all of the holders (other than the Parent and Holdco) of
                  Convertible Shares on the Liquidation Date all but not less
                  than all of the Convertible Shares held by each such holder
                  on payment by whichever of the Parent or Holdco is exercising
                  such right (the "Liquidation Call Exercising Party") of an
                  amount per share equal to (i) US$100, plus (ii) the Dividend
                  Amount, if any, (collectively the "Liquidation Call Purchase
                  Price"). Upon the exercise of the Liquidation Call Right by a
                  Liquidation Call Exercising Party, each holder of Convertible
                  Shares (other than the Parent or Holdco) shall be obligated
                  to sell all the Convertible Shares held by the holder to such
                  Liquidation Call Exercising Party on the Liquidation Date on
                  payment by such Liquidation Call Exercising Party to the
                  holder of the Liquidation Call Purchase Price for each such
                  share.

         (b)      Holdco shall be only entitled to exercise its Liquidation Call
                  Right with respect to those holders of Convertible Shares, if
                  any, in respect of which the Parent has not exercised its
                  Liquidation Call Right. To exercise the Liquidation Call
                  Right, a Liquidation Call Exercising Party must notify the
                  Company of its intention to exercise such right at least 55
                  days before the Liquidation Date in the case of a voluntary
                  Liquidation of the Company and at least five Business Days
                  before the Liquidation Date in the case of an involuntary
                  Liquidation of the Company. The Company will notify the
                  holders of Convertible Shares as to whether or not a
                  Liquidation Call Right has been exercised (such notice to
                  specify the Liquidation Call Exercising Party) forthwith
                  after the expiry of the date by which the same may be
                  exercised. If a Liquidation Call Exercising Party 

                                     -34-
<PAGE>   35

                  exercises the Liquidation Call Right in accordance herewith,
                  such Liquidation Call Exercising Party will purchase and the
                  holders of the Convertible Shares (other than the Parent or
                  Holdco) will sell all of their Convertible Shares then
                  outstanding for a price per share equal to the Liquidation
                  Call Purchase Price.

         (c)      For the purposes of completing the purchase of the Convertible
                  Shares pursuant to the exercise of a Liquidation Call Right,
                  the Liquidation Call Exercising Party shall deposit with the
                  Company, on or before the Liquidation Date, a cheque or
                  cheques in the amount of the total Liquidation Call Purchase
                  Price and any interest paid on such deposit shall belong to
                  the Liquidation Call Exercising Party. Provided that the
                  total Liquidation Call Purchase Price has been so deposited
                  with the Company, on and after the Liquidation Date the
                  rights of each holder of Convertible Shares (other than the
                  Parent and Holdco) will be limited to receiving such holder's
                  proportionate part of the total Liquidation Call Purchase
                  Price payable by the Liquidation Call Exercising Party upon
                  presentation and surrender by the holder of certificates
                  representing the Convertible Shares held by such holder in
                  accordance with the following provisions. Upon presentation
                  and surrender at the registered office of the Company of a
                  certificate or certificates representing Convertible Shares,
                  together with such other documents and instruments as may be
                  required to effect a transfer of Convertible Shares under the
                  Company Act and such additional documents and instruments as
                  the Company may reasonably require, the holder of such
                  surrendered certificate or certificates shall be entitled to
                  receive in exchange therefor, and the Company on behalf of
                  the Liquidation Call Exercising Party shall deliver to such
                  holder, a cheque in payment of the holder's proportionate
                  part of the total Liquidation Call Purchase Price.

         (d)      If neither the Parent nor Holdco exercises its Liquidation
                  Call Right in the manner described above, on the Liquidation
                  Date the holders of the Convertible Shares will be entitled
                  to receive in exchange therefor the liquidation price
                  otherwise payable by the Company in connection with the
                  Liquidation of the Company pursuant to Article 27.4.


                  REDEMPTION OF CONVERTIBLE SHARES BY COMPANY

27.6     REDEMPTION BY COMPANY.

         (a)      Subject to applicable law and the due exercise by either the 
                  Parent or Holdco of its Redemption Call Right, commencing on
                  January 31, 1999, the Company shall, on January 31, April 30,
                  July 31 and October 31 of every year that any Convertible
                  Shares are issued and outstanding (each a "Redemption Date"),
                  redeem the number of Convertible Shares which is the lesser
                  of (i) 5,000 and (ii) the number of Convertible Shares then
                  issued and outstanding, for an amount per share equal to (A)
                  US$100, plus (B) the Dividend Amount (collectively, the
                  "Redemption Price"). If there is more than one holder of
                  Convertible Shares on any Redemption Date, the Company shall
                  redeem such shares pro rata according to the number of
                  Convertible Shares held by each such holder. If only part of
                  the Convertible Shares represented by any certificate is
                  called for redemption, a new certificate for the balance of
                  such Convertible Shares shall be issued to the holder at the
                  expense of the Company. The Company shall, at least 20
                  Business Days before each such Redemption Date, send or cause
                  to be sent to Parent, Holdco and each holder of Convertible
                  Shares, a notice in writing (the "Redemption Notice") setting

                                     - 35 -

<PAGE>   36



                  out the Redemption Date, the number of Convertible Shares to
                  be redeemed, the Redemption Price and particulars of the
                  Redemption Call Right.

         (b)      Subject to applicable law and the due exercise by either
                  Parent or Holdco of its Redemption Call Right, if the Parent
                  IPO Date occurs on a date (a "Redemption Date") later than
                  January 31, 1999, the Company shall on such Redemption Date,
                  have the option to redeem all the Convertible Shares that
                  have not been redeemed or converted into Exchangeable Shares
                  prior thereto for an amount per share equal to the Redemption
                  Price.

         (c)      Subject to the exercise by the Parent or Holdco of a 
                  Redemption Call Right, the Company shall, on each Redemption
                  Date, cause to be paid to the holders of the Convertible
                  Shares to be redeemed on such date, the Redemption Price for
                  each such Convertible Share upon presentation and surrender
                  at the registered office of the Company of the certificates
                  representing such Convertible Shares, together with such
                  other documents and instruments as may be required to effect
                  a transfer of Convertible Shares under the Company Act and
                  such additional documents and instruments as the Company may
                  reasonably require. Payment of the aggregate Redemption Price
                  for such Convertible Shares held by a holder shall be made by
                  delivery to such holder, at the address of the holder
                  recorded in the securities register of the Company or by
                  holding for pick up by such holder at the registered office
                  of the Company, of a cheque of the Company payable at par at
                  any branch of the bankers of the Company in the amount of
                  such aggregate Redemption Price. On and after the Redemption
                  Date, the holders of the Convertible Shares called for
                  redemption shall cease to be holders of such Convertible
                  Shares and shall not be entitled to exercise any of the
                  rights of holders in respect thereof, other than the right to
                  receive their proportionate part of the total Redemption
                  Price, unless payment of the aggregate Redemption Price
                  deliverable to such holder for such Convertible Shares shall
                  not be made upon presentation and surrender of certificates
                  in accordance with the foregoing provisions, in which case
                  the rights of the holders shall remain unaffected until the
                  aggregate Redemption Price deliverable to such holder has
                  been paid in the manner hereinbefore provided.

         (d)      The Company shall have the right at any time after the sending
                  of notice of its intention to redeem the Convertible Shares
                  as aforesaid to deposit or cause to be deposited the total
                  Redemption Price of the Convertible Shares so called for
                  redemption, or of such of the said Convertible Shares
                  represented by certificates that have not at the date of such
                  deposit been surrendered by the holders thereof in connection
                  with such redemption, in a custodial account with any
                  chartered bank or trust company in Canada named in such
                  notice and any interest paid on such deposit shall belong to
                  the Company. Upon the later of such deposit being made and
                  the Redemption Date, the Convertible Shares in respect
                  whereof such deposit shall have been made shall be redeemed
                  and the rights of the holders thereof after such deposit or
                  Redemption Date, as the case may be, shall be limited to
                  receiving their proportionate part of the total Redemption
                  Price for such Convertible Shares so deposited, against
                  presentation and surrender of the said certificates held by
                  them, respectively, in accordance with the foregoing
                  provisions.

                                     - 36 -

<PAGE>   37



27.7     REDEMPTION CALL RIGHT.

         (a)      Subject to the limitations set forth in Subsection 27.7(b), 
                  the Parent and Holdco shall each have the overriding right (a
                  "Redemption Call Right"), notwithstanding the proposed
                  redemption of the Convertible Shares called for redemption by
                  the Company pursuant to Article 27.6 on any Redemption Date,
                  to purchase from all but not less than all of the holders of
                  such Convertible Shares (other than the Parent or Holdco), on
                  the last Business Day prior to such Redemption Date, all but
                  not less than all of the Exchangeable Shares to be issued to
                  such holders upon the automatic conversion of such
                  Convertible Shares into Exchangeable Shares pursuant to
                  Subsection 27.7(b), on payment by whichever of the Parent or
                  Holdco is exercising such right (the "Redemption Call
                  Exercising Party") to the holder of an amount per share equal
                  to (i) US$100, plus (ii) the Dividend Amount (collectively,
                  the "Redemption Call Purchase Price"). In the event of the
                  exercise of the Redemption Call Right, each holder of
                  Convertible Shares called for redemption (other than the
                  Parent or Holdco) shall be obligated to sell all the
                  Exchangeable Shares to be issued upon the automatic
                  conversion of such Convertible Shares pursuant to Subsection
                  27.7(b) to the Redemption Call Exercising Party on the last
                  Business Day prior to the Redemption Date on payment by the
                  Redemption Call Exercising Party to such holder of the
                  Redemption Call Purchase Price for each such share.

         (b)      Holdco shall only be entitled to exercise its Redemption Call
                  Right with respect to those holders of Convertible Shares, if
                  any, in respect of which the Parent has not exercised its
                  Redemption Call Right. In order to exercise its Redemption
                  Call Right, a Redemption Call Exercising Party must notify
                  the Company in writing of its intention to exercise such
                  right at least 10 Business Days before the Redemption Date.
                  The Company will notify the holders of the Convertible Shares
                  as to whether the Redemption Call Right has been exercised
                  (such notice to specify the Redemption Call Exercising Party)
                  forthwith after the expiry of the date by which the same may
                  be exercised. If a Redemption Call Exercising Party exercises
                  its Redemption Call Right with respect to the Convertible
                  Shares called for redemption on any Redemption Date, on the
                  last Business Day before such Redemption Date (i) the right
                  of the Company to redeem such Convertible Shares called for
                  redemption pursuant to Article 27.6 shall terminate at such
                  time; (ii) each such Convertible Share called for redemption
                  shall be automatically converted into one Exchangeable Share;
                  (iii) each holder of such Convertible Shares called for
                  redemption shall cease to be the holder of such Convertible
                  Shares and shall be considered and deemed for all purposes to
                  be the holder of one Exchangeable Share for each such
                  Convertible Share; (iv) the certificates held by such holder
                  representing such Convertible Shares called for redemption
                  shall thereafter be deemed to represent the Exchangeable
                  Shares into which such Convertible Shares were automatically
                  converted; and (v) the Redemption Call Exercising Party will
                  purchase and the former holders of such Convertible Shares
                  called for redemption (other than the Parent or Holdco) will
                  sell all the Exchangeable Shares into which such Convertible
                  Shares were automatically converted for a price per share
                  equal to the Redemption Call Purchase Price.

         (c)      For the purposes of completing the purchase of Exchangeable
                  Shares pursuant to the exercise of any Redemption Call Right,
                  the Redemption Call Exercising Party shall deposit with the
                  Company, on or before the applicable Redemption Date, a
                  cheque or cheques in the amount of the total Redemption Call
                  Purchase Price and interest paid on such deposit shall belong
                  to the Redemption Call Exercising Party. Provided that the

                                     - 37 -

<PAGE>   38

                  total Redemption Call Purchase Price has been so deposited
                  with the Company, on and after the last Business Day prior to
                  such Redemption Date, the rights of each holder of
                  Convertible Shares called for redemption on such date (other
                  than the Parent or Holdco) with respect to such Convertible
                  Shares will be limited to receiving such holder's
                  proportionate part of the total Redemption Call Purchase
                  Price payable by the Redemption Call Exercising Party upon
                  presentation and surrender by the holder of certificates
                  previously representing such Convertible Shares held by such
                  holder in accordance with the following provisions. Upon
                  presentation and surrender at the registered office of the
                  Company of a certificate or certificates previously
                  representing the Convertible Shares called for redemption on
                  such Redemption Date and deemed to represent the Exchangeable
                  Shares into which they were converted, together with such
                  other documents and instruments as may be required to effect
                  the automatic conversion of such Convertible Shares into
                  Exchangeable Shares and a subsequent transfer of such
                  Exchangeable Shares under the Company Act and such additional
                  documents and instruments as the Company may reasonably
                  require, the holder of such surrendered certificate or
                  certificates shall be entitled to receive in exchange
                  therefor, and the Company on behalf of the Redemption Call
                  Exercising Party shall deliver to such holder, a cheque in
                  payment of the holder's proportionate part of the total
                  Redemption Call Purchase Price. If only part of the
                  Convertible Shares represented by any certificate is
                  converted into Exchangeable Shares and subsequently
                  transferred to the Redemption Call Exercising Party, a new
                  certificate for the balance of such Convertible Shares shall
                  be issued to the holder at the expense of the Company.

         (d)      If a Redemption Call Right is exercised in respect of the
                  Convertible Shares called for redemption on any Redemption
                  Date, the automatic conversion of such Convertible Shares
                  into Exchangeable Shares and the subsequent transfer of such
                  Exchangeable Shares to the Redemption Call Exercising Party
                  pursuant to Subsection 27.7(b) shall be deemed to have
                  occurred on the last Business Day prior to such Redemption
                  Date, and each former holder of such Convertible Shares shall
                  be deemed to have (i) transferred to the Company all of such
                  holder's right, title and interest in and to such Convertible
                  Shares, and (ii) subsequently transferred to the Redemption
                  Call Exercising Party all of such holder's right, title and
                  interest in and to the Exchangeable Shares issued upon such
                  automatic conversion and shall first cease to be a holder of
                  such Convertible Shares and then cease to be a holder of the
                  Exchangeable Shares into which they shall have been
                  converted, and provided that the Redemption Call Exercising
                  Party shall have delivered to the Company a cheque or cheques
                  in the amount of the total Redemption Call Purchase Price,
                  the Company shall deliver to the Redemption Call Exercising
                  Party or hold for pick up by the Redemption Call Exercising
                  Party at the registered office of the Company, a certificate
                  for the number of Exchangeable Shares deliverable to it
                  pursuant to the exercise of its Redemption Call Right (which
                  shares shall be duly issued as fully paid and non-assessable
                  and shall be free and clear of any lien, claim or
                  encumbrance, security interest or adverse claim), and the
                  Redemption Call Exercising Party shall be considered and
                  deemed for all purposes to be the holder of the Exchangeable
                  Shares delivered to it, or held by the Company on its behalf.

         (e)      If neither the Parent or Holdco exercises the Redemption Call
                  Right in the manner described above, on the Redemption Date
                  the holders of the Convertible Shares will be entitled to
                  receive in exchange therefor the redemption price otherwise
                  payable by the

                                     - 38 -

<PAGE>   39



                  Company in connection with the redemption of the Convertible
                  Shares pursuant to Article 27.6.


         CONVERSION OF CONVERTIBLE SHARES INTO EXCHANGEABLE SHARES

27.8     NOTICE OF PARENT IPO.

         (a)      If the Parent IPO is expected to take place, the Parent shall
                  give the Company written notice of such event at least 10
                  Business Days prior to the initial filing of a registration
                  statement with respect thereto. Immediately following receipt
                  by the Company from the Parent of such notice, the Company
                  will give notice thereof to the holders of Convertible
                  Shares. Such notice shall be provided by the Parent to the
                  Company.

         (b)      If the Company reasonably expects the Parent IPO Date to occur
                  on or before March 31, 1999 and if a registration statement
                  is filed by October 31, 1998, such notices shall include a
                  brief description of the automatic conversion of Convertible
                  Shares into Exchangeable Shares for Parent Common Shares
                  provided for in Subsection 27.9 below (the "Automatic
                  Conversion Right"). If the Company reasonably expects the
                  Parent IPO Date to occur after March 31, 1999, such notices
                  shall include a brief description of the holder's option to
                  convert Convertible Shares into Exchangeable Shares provided
                  for in Subsection 27.10 below and the Company's right to
                  redeem such Convertible Shares provided for in Subsection
                  27.6(b).

27.9     AUTOMATIC CONVERSION.

         (a)      If a registration statement with respect to the Parent IPO is
                  filed prior to November 1, 1998 and if the Parent IPO Date
                  occurs on or before March 31, 1999, then on such Parent IPO
                  Date, all the Convertible Shares shall be automatically
                  converted into Exchangeable Shares. The number of
                  Exchangeable Shares into which each Convertible Share shall
                  be converted shall be equal to the quotient of (i) the sum of
                  US$100 plus the Dividend Amount divided by (ii) the Parent
                  IPO Price, provided that the aggregate number of Exchangeable
                  Shares to be issued to any holder upon the conversion
                  hereunder of the Convertible Shares held by such holder shall
                  be rounded down to the closest whole number. Each holder of
                  Convertible Shares shall be deemed to have transferred to the
                  Company all of such holder's right, title and interest in and
                  to such Convertible Shares and shall cease to be a holder of
                  such Convertible Shares or entitled to receive any Dividend
                  Amount thereon, all as of such Parent IPO Date, and the
                  Company shall deliver to each holder of Convertible Shares at
                  the address of the holder recorded in the securities register
                  of the Company or hold for pick up by the holder at the
                  registered office of the Company, a certificate for the
                  number of Exchangeable Shares deliverable to such holder upon
                  the automatic conversion of Convertible Shares for
                  Exchangeable Shares (which shares shall be duly issued as
                  fully paid and non-assessable and shall be free and clear of
                  any lien, claim or encumbrance, security interest or adverse
                  claim).

         (b)      Concurrently with each such holder ceasing to be a holder of
                  Convertible Shares, such holder shall be considered and
                  deemed for all purposes to be the holder of the Exchangeable
                  Shares delivered to it, or held by the Company on its behalf,
                  pursuant to such automatic conversion, and the certificates
                  held by such holder previously

                                     - 39 -

<PAGE>   40

                  representing the Convertible Shares shall thereafter be
                  deemed to represent the Exchangeable Shares delivered to such
                  holder pursuant to such automatic conversion. Upon the
                  request of any such former holder of Convertible Shares and
                  the presentation and surrender at the registered office of
                  the Company by such holder of Convertible Share certificates
                  deemed to represent Exchangeable Shares, duly endorsed in
                  blank and accompanied by such instruments of transfer as the
                  Company may reasonably require, the Company shall deliver or
                  cause to be delivered to such holder certificates
                  representing the Exchangeable Shares of which such holder is
                  the holder.

27.10    CONVERSION AT OPTION OF HOLDER.

         (a)      If the Parent IPO Date has not occurred by March 31, 1999, any
                  holder of a Convertible Share shall be entitled at his option
                  to convert any Convertible Share held by him into
                  Exchangeable Shares simultaneously with the Parent IPO
                  subject to and in accordance with the following provisions
                  (the "Optional Conversion Right"). The number of Exchangeable
                  Shares into which each Common Share shall be converted shall
                  be equal to the quotient of (i) the sum of US$100 plus the
                  Dividend Amount divided by (ii) the Parent IPO Price,
                  provided that the aggregate number of Exchangeable Shares to
                  be issued to any holder upon the conversion hereunder of the
                  Convertible Shares held by such holder shall be rounded down
                  to the closest whole number.

         (b)      If the Company gives notice to any holder of Convertible 
                  Shares of a Parent IPO with a Parent IPO Date scheduled to
                  occur on a date later than March 31, 1999, if such holder
                  wishes to exercise the Optional Conversion Right with respect
                  to all or a portion of the Convertible Shares held by such
                  holder, such holder shall do so in accordance with the
                  provisions of Subsection 27.10(c) within 5 Business Days
                  after receipt of such notice, failing which, such holder
                  shall thereafter cease to have any right to exercise the
                  Optional Conversion Right with respect to any Convertible
                  Share held by such holder unless the Parent withdraws the
                  registration statement with respect to the Parent IPO, in
                  which case, such holder's Optional Conversion Right shall be
                  restored on and as of the date of such withdrawal. In
                  addition, if any holder fails to exercise such Optional
                  Conversion Right in accordance with the foregoing provisions,
                  all the Convertible Shares of such holder shall be redeemed
                  by the Company on such Parent IPO Date pursuant to the
                  provisions of Subsection 27.6(b).

         (c)      Any holder of Convertible Shares may exercise the holder's 
                  Optional Conversion Right by presenting and surrendering at
                  the registered office of the Company the certificate
                  representing the Convertible Shares to be converted into
                  Exchangeable Shares, together with a written notice stating
                  that such holder irrevocably exercises its Optional
                  Conversion Right with respect to such Convertible Shares and
                  such other documents and instruments as may be required to
                  effect a transfer of Convertible Shares under the Company Act
                  and such additional documents and instruments as the Company
                  may reasonably require. Upon receipt thereof, subject to
                  applicable law, the Company shall forthwith deliver to each
                  such holder, at the address of the holder recorded in the
                  securities register of the Company or hold for pick up by the
                  holder at the registered office of the Company, a certificate
                  registered in the name of the holder representing the
                  aggregate number of Exchangeable Shares deliverable by the
                  Company to such holder (which shares shall be duly issued as
                  fully paid and non-assessable and shall be free and clear of
                  any lien, claim, encumbrance, security interest or adverse
                  claim).

                                     - 40 -

<PAGE>   41

         (d)      If the holder shall have exercised such Optional Conversion 
                  Right with respect to any Convertible Share held by such
                  holder after receiving notice of a Parent IPO pursuant to
                  Subsection 27.10(b), such Convertible Shares shall be
                  converted into Exchangeable Shares and the Company shall
                  deliver certificates representing Exchangeable Shares to the
                  holder in accordance with the foregoing provisions if and
                  only if such Parent IPO closes on or before the scheduled
                  Parent IPO Date, failing which, such Convertible Shares will
                  not be converted into Exchangeable Shares pursuant to such
                  exercise of the holder's Optional Conversion Right and the
                  Company shall forthwith return to such holder, in accordance
                  with the foregoing provisions, the certificates representing
                  the Convertible Shares held by such holder that were to have
                  been converted, together with all other documents and
                  instruments delivered by such holder to the Company in
                  connection therewith.

         (e)      If only a part of the Convertible Shares represented by any
                  certificate is converted into Exchangeable Shares, a new
                  certificate for the balance of such Convertible Shares shall
                  be issued to the holder at the expense of the Company.


                       ALTERATIONS OF CONVERTIBLE SHARES

27.11    NO ALTERATION OF CONVERTIBLE SHARES. The Company shall not subdivide,
         consolidate or change the number of authorized Convertible Shares
         unless it simultaneously takes such steps, if any, as may be necessary
         to ensure that the number of authorized but unissued Exchangeable
         Shares immediately after such alteration will be sufficient to effect
         the conversion of all authorized Convertible Shares pursuant to any of
         Articles 27.7, 27.9 or 27.10 hereof immediately after such alteration.


                         TRANSFER OF CONVERTIBLE SHARES

27.12    TRANSFER OF CONVERTIBLE SHARES. Notwithstanding any other provision
         herein, no Convertible Share may be transferred by any holder to any
         person except after complying with the provisions of Article 26.3.


                                    PART 28

                         EXCHANGEABLE SHARE PROVISIONS

                         RANKING OF EXCHANGEABLE SHARES

28.1     RANKING. The Exchangeable Shares shall rank junior to the Convertible
         Shares, and shall be entitled to a preference over the Common Shares
         and any other shares ranking junior to the Exchangeable Shares, with
         respect to the payment of dividends and the distribution of assets in
         the event of the Liquidation of the Company and to the extent provided
         in this Part 28.


                                     - 41 -

<PAGE>   42



                   VOTING RIGHTS OF EXCHANGEABLE SHAREHOLDERS

28.2     VOTING RIGHTS. Except as required by applicable law and the provisions
         of Parts 30 and 31 hereof, the holders of the Exchangeable Shares
         shall not be entitled as such to receive notice of or to attend any
         meeting of the shareholders of the Company or to vote at any such
         meeting.


                 DIVIDENDS PAYABLE TO EXCHANGEABLE SHAREHOLDERS

28.3     DIVIDENDS. A holder of an Exchangeable Share shall be entitled to
         receive and the Board of Directors shall, subject to applicable law,
         on each Parent Dividend Declaration Date, declare a dividend on each
         Exchangeable Share:

         (a)      in the case of a cash dividend declared on the Parent Common
                  Shares, in an amount in cash for each Exchangeable Share
                  equal to the Canadian Dollar Equivalent of the cash dividend
                  declared on each Parent Common Share; or

         (b)      in the case of a stock dividend declared on the Parent Common
                  Shares to be paid in Parent Common Shares, in such number of
                  Exchangeable Shares for each Exchangeable Share as is equal
                  to the number of Parent Common Shares to be paid on each
                  Parent Common Share; or

         (c)      in the case of a dividend declared on the Parent Common Shares
                  in property other than cash or Parent Common Shares, in such
                  type and amount of property for each Exchangeable Share as is
                  the same as or economically equivalent to (to be determined
                  by the Board of Directors as contemplated by Article 2.8 of
                  the Trust Agreement) the type and amount of property declared
                  as a dividend on each Parent Common Share. Such dividends
                  shall be paid out of money, assets or property of the Company
                  properly applicable to the payment of dividends, or out of
                  authorized but unissued shares of the Company.

28.4     PAYMENT OF DIVIDENDS. Cheques of the Company payable at par at any
         branch of the bankers of the Company shall be issued in respect of any
         cash dividends contemplated by Subsection 28.3(a) and the sending of
         such a cheque to each holder of an Exchangeable Share shall satisfy
         the cash dividend represented thereby unless the cheque is not paid on
         presentation. Certificates registered in the name of the registered
         holder of Exchangeable Shares shall be issued or transferred in
         respect of any stock dividends contemplated by Subsection 28.3(b) and
         the sending of such a certificate to each holder of an Exchangeable
         Share shall satisfy the stock dividend represented thereby. Such other
         type and amount of property in respect of any dividends contemplated
         by Subsection 28.3(c) shall be issued, distributed or transferred by
         the Company in such manner as it shall determine and the issuance,
         distribution or transfer thereof by the Company to each holder of an
         Exchangeable Share shall satisfy the dividend represented thereby. No
         holder of an Exchangeable Share shall be entitled to recover by action
         or other legal process against the Company any dividend that is
         represented by a cheque that has not been duly presented to the
         Company's bankers for payment or that otherwise remains unclaimed for
         a period of six years from the date on which such dividend was
         payable.

28.5     RECORD AND PAYMENT DATE.  The record date for the determination of the 
         holders of Exchangeable Shares entitled to receive payment of, and the
         payment date for, any dividend

                                     - 42 -

<PAGE>   43



         declared on the Exchangeable Shares under Article 28.3 shall be the
         same dates as the record date and payment date, respectively, for the
         corresponding dividend declared on the Parent Common Shares.

28.6     PARTIAL PAYMENT. If on any payment date for any dividends declared on
         the Exchangeable Shares under Article 28.3, the dividends are not paid
         in full on all of the Exchangeable Shares then outstanding, any such
         dividends that remain unpaid shall be paid on a subsequent date or
         dates determined by the Board of Directors on which the Company shall
         have sufficient moneys, assets or property properly applicable to the
         payment of such dividends.


         DISTRIBUTION TO EXCHANGEABLE SHAREHOLDERS ON LIQUIDATION

28.7     DISTRIBUTION OF LIQUIDATION AMOUNT.

         (a)      In the event of the Liquidation of the Company, a holder of 
                  Exchangeable Shares shall be entitled, subject to applicable
                  law and the due exercise by the Parent or Holdco of the
                  Liquidation Call Right, to receive from the assets of the
                  Company in respect of each Exchangeable Share held by such
                  holder on the effective date (the "Liquidation Date") of such
                  Liquidation, before any distribution of any part of the
                  assets of the Company among the holders of the Common Shares
                  or any other shares ranking junior to the Exchangeable
                  Shares, an amount per share equal to (i) the Current Market
                  Price of a Parent Common Share on the last Business Day prior
                  to the Liquidation Date, which shall be satisfied in full by
                  the Company causing to be delivered to such holder one Parent
                  Common Share, plus (ii) the Dividend Amount (collectively the
                  "Liquidation Amount").

         (b)      In the case of a distribution on Exchangeable Shares under 
                  this Article 28.7, on or promptly after the Liquidation Date,
                  and subject to the due exercise by the Parent or Holdco of
                  the Liquidation Call Right, the Company shall cause to be
                  delivered to the holders of the Exchangeable Shares the
                  Liquidation Amount for each such Exchangeable Share upon
                  presentation and surrender at the registered office of the
                  Company of the certificates representing such Exchangeable
                  Shares, together with such other documents and instruments as
                  may be required to effect a transfer of Exchangeable Shares
                  under the Company Act, a No Transfer Declaration and such
                  additional documents and instruments as the Company may
                  reasonably require. Payment of the total Liquidation Amount
                  for such Exchangeable Shares shall be made by delivery to
                  each holder, at the address of the holder recorded in the
                  securities register of the Company for the Exchangeable
                  Shares or by holding for pick up by the holder at the
                  registered office of the Company, of certificates
                  representing Parent Common Shares (which shares shall be duly
                  issued as fully paid and non-assessable and shall be free and
                  clear of any lien, claim, encumbrance, security interest or
                  adverse claim) and a cheque of the Company payable at par at
                  any branch of the bankers of the Company in respect of the
                  remaining portion, if any, of the aggregate Liquidation
                  Amount payable to such holder. On and after the Liquidation
                  Date, the holders of the Exchangeable Shares shall cease to
                  be holders of such Exchangeable Shares and shall not be
                  entitled to exercise any of the rights of holders in respect
                  thereof, other than the right to receive their proportionate
                  part of the total Liquidation Amount, unless payment of the
                  total Liquidation Amount for such Exchangeable Shares shall
                  not be made upon presentation and surrender of share
                  certificates in accordance with the foregoing provisions, in
                  which case the rights of the

                                     - 43 -

<PAGE>   44



                  holders shall remain unaffected until the total Liquidation
                  Amount has been paid in the manner hereinbefore provided.

         (c)      The Company shall have the right at any time on or after the 
                  Liquidation Date to deposit or cause to be deposited the
                  total Liquidation Amount in respect of the Exchangeable
                  Shares represented by certificates that have not at the
                  Liquidation Date been surrendered by the holders thereof in a
                  custodial account with any chartered bank or trust company in
                  Canada and any interest paid on such deposit shall belong to
                  the Company. Upon such deposit being made, the rights of the
                  holders of Exchangeable Shares after such deposit shall be
                  limited to receiving their proportionate part of the total
                  Liquidation Amount without interest for such Exchangeable
                  Shares so deposited, against presentation and surrender of
                  the said certificates held by them, respectively, in
                  accordance with the foregoing provisions. Upon such payment
                  or deposit of the total Liquidation Amount, the holders of
                  the Exchangeable Shares shall thereafter be considered and
                  deemed for all purposes to be the holders of the Parent
                  Common Shares delivered to them.

         (d)      After the Company has satisfied its obligations to pay the
                  holders of the Exchangeable Shares the Liquidation Amount per
                  Exchangeable Share pursuant to this Article 28.7, such
                  holders shall not be entitled to share in any further
                  distribution of the assets of the Company.

28.8     LIQUIDATION CALL RIGHT.

         (a)      Subject to the limitations set forth in Subsection 28.8(b),
                  the Parent and Holdco shall each have the overriding right
                  (the "Liquidation Call Right"), in the event of and
                  notwithstanding the proposed Liquidation of the Company
                  pursuant to Article 28.7, to purchase from all but not less
                  than all of the holders (other than the Parent and Holdco) of
                  Exchangeable Shares on the Liquidation Date all but not less
                  than all of the Exchangeable Shares held by each such holder
                  on payment by whichever of the Parent or Holdco is exercising
                  such right (the "Liquidation Call Exercising Party") of an
                  amount per share equal to (i) the Current Market Price of a
                  Parent Common Share on the last Business Day prior to the
                  Liquidation Date, which shall be satisfied in full by causing
                  to be delivered to such holder one Parent Common Share, plus
                  (ii) the Dividend Amount, if any, (collectively the
                  "Liquidation Call Purchase Price") without interest. Upon the
                  exercise of the Liquidation Call Right by a Liquidation Call
                  Exercising Party, each holder of Exchangeable Shares (other
                  than the Parent or Holdco) shall be obligated to sell all the
                  Exchangeable Shares held by the holder to such Liquidation
                  Call Exercising Party on the Liquidation Date on payment by
                  such Liquidation Call Exercising Party to the holder of the
                  Liquidation Call Purchase Price for each such share.

         (b)      Holdco shall be only entitled to exercise its Liquidation Call
                  Right with respect to those holders of Exchangeable Shares,
                  if any, in respect of which the Parent has not exercised its
                  Liquidation Call Right. To exercise the Liquidation Call
                  Right, a Liquidation Call Exercising Party must notify the
                  Company of its intention to exercise such right at least 55
                  days before the Liquidation Date in the case of a voluntary
                  Liquidation of the Company and at least five Business Days
                  before the Liquidation Date in the case of an involuntary
                  Liquidation of the Company. The Company will notify the
                  holders of Exchangeable Shares as to whether or not a
                  Liquidation Call Right has been exercised (such notice to
                  specify the Liquidation Call Exercising Party) forthwith
                  after the expiry


                                     - 44 -

<PAGE>   45

                  of the date by which the same may be exercised. If a
                  Liquidation Call Exercising Party exercises the Liquidation
                  Call Right in accordance herewith, all of the obligations of
                  the Company under Article 28.7 shall terminate and such
                  Liquidation Call Exercising Party will purchase and the
                  holders of the Exchangeable Shares (other than the Parent or
                  Holdco) will sell all of their Exchangeable Shares then
                  outstanding for a price per share equal to the Liquidation
                  Call Purchase Price.

         (c)      For the purposes of completing the purchase of the 
                  Exchangeable Shares pursuant to the exercise of a Liquidation
                  Call Right, the Liquidation Call Exercising Party shall
                  deposit with the Company, on or before the Liquidation Date,
                  certificates representing the aggregate number of Parent
                  Common Shares deliverable by the Liquidation Call Exercising
                  Party (which shares shall be duly issued as fully paid and
                  non-assessable and shall be free and clear of any lien,
                  claim, encumbrance, security interest or adverse claim) in
                  payment of the total Liquidation Call Purchase Price and a
                  cheque or cheques in the amount of the remaining portion, if
                  any, of the total Liquidation Call Purchase Price and any
                  interest paid on such deposit shall belong to the Liquidation
                  Call Exercising Party. Provided that the total Liquidation
                  Call Purchase Price has been so deposited with the Company,
                  on and after the Liquidation Date the rights of each holder
                  of Exchangeable Shares (other than the Parent and Holdco)
                  will be limited to receiving such holder's proportionate part
                  of the total Liquidation Call Purchase Price payable by the
                  Liquidation Call Exercising Party upon presentation and
                  surrender by the holder of certificates representing the
                  Exchangeable Shares held by such holder in accordance with
                  the following provisions, and such holder shall on and after
                  the Liquidation Date be considered and deemed for all
                  purposes to be the holder of the Parent Common Shares
                  delivered to it. Upon surrender to the Company of a
                  certificate or certificates representing Exchangeable Shares,
                  together with such other documents and instruments as may be
                  required to effect a transfer of Exchangeable Shares under
                  the Company Act, a No Transfer Declaration and such
                  additional documents and instruments as the Company may
                  reasonably require, the holder of such surrendered
                  certificate or certificates shall be entitled to receive in
                  exchange therefor, and the Company on behalf of the
                  Liquidation Call Exercising Party shall deliver to such
                  holder, a certificate representing the Parent Common Shares
                  to which the holder is entitled and a cheque in payment of
                  the remaining portion, if any, of the holder's proportionate
                  part of the total Liquidation Call Purchase Price.

         (d)      If neither the Parent nor Holdco exercises its Liquidation
                  Call Right in the manner described above, on the Liquidation
                  Date the holders of the Exchangeable Shares will be entitled
                  to receive in exchange therefor the liquidation price
                  otherwise payable by the Company in connection with the
                  liquidation, dissolution or winding-up of the Company
                  pursuant to Article 28.7.

28.9     AUTOMATIC EXCHANGE ON LIQUIDATION OF PARENT.

         (a)      The Parent shall give the Company written notice of each of
                  the following events (each a "Parent Liquidation Event") at
                  the time set forth below:

                  (i)      in the event of any determination by the board of
                           directors of the Parent to institute voluntary
                           Liquidation proceedings with respect to the Parent,
                           at least 60 days prior to the proposed effective
                           date of such Liquidation; and


                                     - 45 -

<PAGE>   46




                  (ii)     immediately, upon receipt by the Parent of written
                           notice of any threatened or instituted claim, suit,
                           petition or other proceeding with respect to the
                           involuntary Liquidation of the Parent.

         (b)      Immediately following receipt by the Company from the Parent
                  of notice of any Parent Liquidation Event contemplated by
                  Subsection 28.9(a)(i) or 28.9(a)(ii), the Company will give
                  notice thereof to the holders of Exchangeable Shares. Such
                  notice shall be provided by the Parent to the Company and
                  shall include a brief description of the automatic exchange
                  of Exchangeable Shares for Parent Common Shares provided for
                  in Subsection 28.9(d) below (the "Automatic Exchange Right").

         (c)      In order that the holders of Exchangeable Shares (other than
                  the Parent and Holdco) will be able to participate on a pro
                  rata basis with the holders of Parent Common Shares in the
                  distribution of assets of the Parent in connection with a
                  Parent Liquidation Event, on the fifth Business Day prior to
                  the effective date (the "Parent Liquidation Event Effective
                  Date") of a Parent Liquidation Event all of the then
                  outstanding Exchangeable Shares (other than Exchangeable
                  Shares held by the Parent or Holdco) shall be automatically
                  exchanged for Parent Common Shares. To effect such automatic
                  exchange, the Parent shall purchase each Exchangeable Share
                  outstanding on the fifth Business Day prior to the Parent
                  Liquidation Event Effective Date and held by a holder of
                  Exchangeable Shares (other than the Parent or Holdco), and
                  each such holder shall sell the Exchangeable Shares held by
                  it at such time, for a purchase price per share equal to (i)
                  the Current Market Price of a Parent Common Share on the
                  fifth Business Day prior to the Parent Liquidation Event
                  Effective Date, which shall be satisfied in full by the
                  Parent delivering to such holder one Parent Common Share,
                  plus (ii) the Dividend Amount, if any.

         (d)      On the fifth Business Day prior to the Parent Liquidation
                  Event Effective Date, the closing of the transaction of
                  purchase and sale contemplated by the automatic exchange of
                  Exchangeable Shares for Parent Common Shares shall be deemed
                  to have occurred, and each holder of Exchangeable Shares
                  (other than the Parent and Holdco) shall be deemed to have
                  transferred to the Parent all of such holder's right, title
                  and interest in and to such Exchangeable Shares and shall
                  cease to be a holder of such Exchangeable Shares and the
                  Parent shall deliver or cause to be delivered to the Company,
                  for delivery to such holders, the certificates for the number
                  of Parent Common Shares deliverable upon the automatic
                  exchange of Exchangeable Shares for Parent Common Shares
                  (which shares shall be duly issued as fully paid and
                  non-assessable and shall be free and clear of any lien, claim
                  or encumbrance, security interest or adverse claim) and a
                  cheque for the balance, if any, of the total purchase price
                  for such Exchangeable Shares and any interest on such deposit
                  shall belong to the Parent. Concurrently with each such
                  holder ceasing to be a holder of Exchangeable Shares, such
                  holder shall be considered and deemed for all purposes to be
                  the holder of the Parent Common Shares delivered to it, or to
                  the Company on its behalf, pursuant to the automatic exchange
                  of Exchangeable Shares for Parent Common Shares and the
                  certificates held by such holder previously representing the
                  Exchangeable Shares exchanged by such holder with the Parent
                  pursuant to such automatic exchange shall thereafter be
                  deemed to represent the Parent Common Shares delivered to
                  such holder by the Parent pursuant to such automatic
                  exchange. Upon the request of any such former holder of
                  Exchangeable Shares and the presentation and surrender at the
                  registered office of the Company by such holder of
                  Exchangeable Share certificates deemed to represent Parent
                  Common Shares, duly endorsed in blank


                                     - 46 -

<PAGE>   47



                  and accompanied by such instruments of transfer as the Parent
                  may reasonably require, the Company shall deliver or cause to
                  be delivered to such holder certificates representing the
                  Parent Common Shares of which such holder is the holder and a
                  cheque in payment of the remaining portion, if any, of the
                  purchase price.


                  RETRACTION OF EXCHANGEABLE SHARES BY HOLDER

28.10    RETRACTION AT OPTION OF HOLDER.

         (a)      Subject to applicable law and the due exercise by either the 
                  Parent or Holdco of a Retraction Call Right, a holder of
                  Exchangeable Shares shall be entitled at any time to require
                  the Company to redeem on the Retraction Date, any or all of
                  the Exchangeable Shares registered in the name of such holder
                  for an amount per share equal to (i) the Current Market Price
                  of a Parent Common Share on the last Business Day prior to
                  the Retraction Date, which shall be satisfied in full by the
                  Company causing to be delivered to such holder one Parent
                  Common Share for each Exchangeable Share presented and
                  surrendered by the holder, plus (ii) the Dividend Amount, if
                  any (collectively the "Retraction Price"). To effect such
                  redemption, the holder shall present and surrender at the
                  registered office of the Company, the certificate or
                  certificates representing the Exchangeable Shares which the
                  holder desires to have the Company redeem, together with such
                  other documents and instruments as may be required to effect
                  a transfer of Exchangeable Shares under the Company Act, a No
                  Transfer Declaration and such additional documents and
                  instruments as the Company may reasonably require together
                  with a duly executed statement (the "Retraction Request") in
                  the form set out below or in such other form as may be
                  acceptable to the Company specifying that the holder desires
                  to have all or any number specified therein of the
                  Exchangeable Shares represented by such certificate or
                  certificates (the "Retracted Shares") redeemed by the
                  Company:

                                  RETRACTION REQUEST


          TO:     Raintree Resorts International Canada Ltd. (the "Company")

          CC:     Raintree Resorts Holdings Ltd. ("Holdco")
                  Raintree Resorts International, Inc. (the "Parent")


          This notice is given pursuant to Part 28 of the Articles of the
          Company (the "Exchangeable Share Provisions"). All capitalized words
          and expressions used in this notice which are defined in Article 26.4
          of the Articles of the Company shall have the same meanings ascribed
          to such words and expressions therein.

          The undersigned hereby notifies the Company that, subject to the
          Retraction Call Right referred to below, the undersigned desires to
          have the Company redeem in accordance with Article 28.10 of the
          Exchangeable Share Provisions:

          (a) all share(s) represented by the attached share certificate; or

          (b) _____________________ share(s) only.

                                     - 47 -

<PAGE>   48

          [ ] By checking this box, the undersigned hereby notifies the Company
              that this Retraction Request is being made for the purpose of
              participating in a Parent Stock Tender Offer and is conditional 
              upon the closing thereof.

          The undersigned acknowledges the Retraction Call Right of the Parent
          or Holdco to purchase all but not less than all the Retracted Shares
          from the undersigned and that this notice shall be deemed to be a
          revocable offer by the undersigned to sell the Retracted Shares to
          the Parent or Holdco, as the case may be, in accordance with the
          Retraction Call Right on the Retraction Date for the Retraction Call
          Purchase Price and on the other terms and conditions set out in
          Article 28.11 of the Exchangeable Share Provisions. If neither the
          Parent nor Holdco determines to exercise its Retraction Call Right,
          the Company will notify the undersigned of such fact as soon as
          possible. This notice of retraction, and offer to sell the Retracted
          Shares to the Parent or Holdco, may be revoked and withdrawn by the
          undersigned by notice in writing given to the Company at any time
          before the close of business on the Business Day immediately
          preceding the Retraction Date.

          The undersigned acknowledges that if, as a result of solvency
          provisions of applicable law, the Company is unable to redeem all
          Retracted Shares because of an Insolvency Event (as defined in the
          Trust Agreement) the undersigned will be deemed to have exercised the
          Exchange Right so as to require the Parent or Holdco, at the option
          of the Parent, to purchase the unredeemed Retracted Shares.

          The undersigned hereby represents and warrants to the Company, the
          Parent and Holdco that the undersigned has good title to, and owns,
          the share(s) represented by the attached share certificate(s) to be
          acquired by the Company, the Parent or Holdco, as the case may be,
          free and clear of all liens, claims and encumbrances.

          Date: ___________________________________

          ------------------------------------------ 
          Signature of Shareholder
          ------------------------------------------ 
          Signature Guaranteed by


          Please check box if the securities and any cheque(s) resulting from
          the retraction or purchase of the Retracted Shares are to be held for
          pick-up by the shareholder at the registered office of the Company in
          Vancouver, failing which the securities and any cheque(s) will be
          mailed to the last address of the shareholder as it appears on the
          register.

          [ ] Please hold securities and cheques at the registered office of
              the Company in Vancouver for pick up by shareholder.

          NOTE: The attached share certificate, together with such additional
                documents as the Company may require, must be deposited with
                the Company at its registered office in Vancouver. The
                securities and any cheque(s) resulting from the retraction or
                purchase of the Retracted Shares will be issued and registered
                in, and made payable to, respectively, the name of the
                shareholder as it appears on the register of the Company and
                the securities and cheque(s) resulting from such retraction or
                purchase will be delivered to such shareholder as indicated
                above, unless the form appearing immediately below is duly


                                     - 48 -

<PAGE>   49



                completed, all eligible transfer taxes are paid and the
                guarantee of the registered holder is guaranteed by a Canadian
                chartered bank or trust company or a member of a recognized
                stock exchange in Canada.

          ----------------------------------
          Name of Person in Whose Name Securities or Cheque(s) Are To Be
          Registered, Issued or Delivered (please print)

          ----------------------------------
          Street Address or P.O. Box

          ----------------------------------
          City -- Province

          NOTE: If the notice of retraction is for less than all of the
                share(s) represented by this certificate, a certificate
                representing the remaining shares of the Company will be issued
                and registered in the name of the shareholder as it appears on
                the register of the Company.

          (b)     In the case of a redemption of Exchangeable Shares under this 
                  Article 28.10, and subject to the exercise of the Retraction
                  Call Right, upon receipt by the Company in the manner
                  specified in Subsection 28.10(a) of a certificate or
                  certificates representing the number of Exchangeable Shares
                  which the holder desires to have the Company redeem, together
                  with a Retraction Request and a No Transfer Declaration, and
                  provided that the Retraction Request is not revoked by the
                  holder in the manner specified in Subsection 28.10(e), the
                  Company shall redeem the Retracted Shares effective at the
                  close of business on the Retraction Date. On the Retraction
                  Date, the Company shall deliver to the relevant holder, at
                  the address of the holder recorded in the securities register
                  of the Company for the Exchangeable Shares or at the address
                  specified in the holder's Retraction Request or by holding
                  for pick up by the holder at the registered office of the
                  Company, a certificate representing the Parent Common Shares
                  to which such holder is entitled (which shares shall be duly
                  issued as fully paid and non-assessable and shall be free and
                  clear of any lien, claim, encumbrance, security interest or
                  adverse claim) registered in the name of the holder or in
                  such other name as the holder may request and a cheque of the
                  Company payable at par at any branch of the bankers of the
                  Company in payment of the remaining portion, if any, of the
                  total Retraction Price to which such holder is entitled, and
                  such delivery of such certificate and cheque by the Company
                  shall be deemed to be payment of and shall satisfy and
                  discharge all liability for the total Retraction Price to the
                  extent that the same is represented by such share certificate
                  and cheque, unless such cheque is not paid on due
                  presentation. If only a part of the Exchangeable Shares
                  represented by any certificate is redeemed, a new certificate
                  for the balance of such Exchangeable Shares shall be issued
                  to the holder at the expense of the Company.

          (c)     On and after the close of business on the Retraction Date, the
                  holder of the Retracted Shares shall cease to be a holder of
                  such Retracted Shares and shall not be entitled to exercise
                  any of the rights of a holder in respect thereof, other than
                  the right to receive his proportionate part of the total
                  Retraction Price unless upon presentation and surrender of
                  certificates in accordance with the foregoing provisions,
                  payment of the total Retraction Price shall not be made, in
                  which case the rights of such holder shall remain unaffected
                  until the total Retraction Price has been paid in the manner
                  hereinbefore provided. On and after the close of business on
                  the Retraction Date, provided that presentation and surrender
                  of certificates and payment of the total Retraction Price has


                                     - 49 -

<PAGE>   50
                  been made in accordance with the foregoing provisions, the
                  holder of the Retracted Shares so redeemed by the Company
                  shall thereafter be considered and deemed for all purposes to
                  be a holder of the Parent Common Shares delivered to it.

          (d)     Notwithstanding any other provision of this Article 28.10, the
                  Company shall not be obligated to redeem Retracted Shares
                  specified by a holder in a Retraction Request to the extent
                  that such redemption of Retracted Shares would be contrary to
                  solvency requirements or other provisions of applicable law.
                  If the Company believes that on any Retraction Date it would
                  not be permitted by any of such provisions to redeem the
                  Retracted Shares tendered for redemption on such date, and
                  provided that neither the Parent nor Holdco shall have
                  exercised its Retraction Call Right with respect to the
                  Retracted Shares, the Company shall only be obligated to
                  redeem Retracted Shares specified by a holder in a Retraction
                  Request to the extent of the maximum number that may be so
                  redeemed (rounded down to a whole number of shares) as would
                  not be contrary to such provisions and shall notify the
                  holder at least two Business Days prior to the Retraction
                  Date as to the number of Retracted Shares which will not be
                  redeemed by the Company. In any case in which the redemption
                  by the Company of Retracted Shares would be contrary to
                  solvency requirements or other provisions of applicable law
                  and more than one holder has delivered a Retraction Request,
                  the Company shall redeem Retracted Shares in accordance with
                  Subsection 28.10(b) on a pro rata basis and shall issue to
                  each holder of Retracted Shares a new certificate, at the
                  expense of the Company, representing the Retracted Shares not
                  redeemed by the Company pursuant to Subsection 28.10(b).
                  Provided that the Retraction Request is not revoked by the
                  holder in the manner specified in Subsection 28.10(e), and
                  neither the Parent nor Holdco shall have exercised its
                  Retraction Call Right in respect of any such Retracted
                  Shares, an Insolvency Event (as defined in the Trust
                  Agreement) shall, to the extent it has not occurred earlier,
                  be deemed thereupon to have occurred, and the holder of any
                  such Retracted Shares not redeemed by the Company pursuant to
                  Subsection 28.10(b) as a result of solvency requirements or
                  other provisions of applicable law shall be deemed by giving
                  the Retraction Request to have exercised its Exchange Right
                  so as to require the Parent, or at the option of the Parent,
                  Holdco, to purchase such unredeemed Retracted Shares from
                  such holder on the Retraction Date or as soon as practicable
                  thereafter on payment by the Parent or, at the option of the
                  Parent, Holdco, to such holder of the Retraction Price for
                  each such Retracted Share, all as more specifically provided
                  in the Trust Agreement.

          (e)     A holder of Retracted Shares may, by notice in writing given
                  by the holder to the Company before the close of business on
                  the Business Day immediately preceding the Retraction Date,
                  withdraw its Retraction Request, in which event such
                  Retraction Request shall be null and void.

          (f)     If a holder of Exchangeable Shares wishes to participate in a
                  Parent Stock Tender Offer, such holder shall deliver a
                  Retraction Request to the Company at least 10 Business Days
                  prior to the closing date of such Parent Stock Tender Offer
                  stating that such Retraction Request is being made for the
                  purpose of participating in the Parent Stock Tender Offer, in
                  which case, notwithstanding any other provision of this
                  Article 28.10, such retraction shall be conditional upon and
                  shall take place, subject to the exercise of the Retraction
                  Call Right, simultaneously with, the closing of such Parent
                  Stock Tender Offer.


                                     - 50 -

<PAGE>   51



28.11     RETRACTION CALL RIGHT.

          (a)     If a holder of Exchangeable Shares delivers a Retraction
                  Request pursuant to Article 28.10 and subject to the
                  limitations set forth in Subsection 28.11(b), the Parent and
                  Holdco shall each have the overriding right (a "Retraction
                  Call Right"), notwithstanding the proposed redemption of the
                  Exchangeable Shares by the Company pursuant to Article 28.10,
                  to purchase from such holder on the Retraction Date all but
                  not less than all of the Retracted Shares held by such holder
                  on payment by whichever of the Parent or Holdco is exercising
                  such right (the "Retraction Call Exercising Party") to the
                  holder of an amount per share equal to (i) the Current Market
                  Price of a Parent Common Share on the last Business Day prior
                  to the Retraction Date which shall be satisfied in full by
                  the Retraction Call Exercising Party causing to be delivered
                  to such holder one Parent Common Share plus (ii) the Dividend
                  Amount, if any (collectively the "Retraction Call Purchase
                  Price"). In the event of the exercise of the Retraction Call
                  Right each holder of Exchangeable Shares who has delivered a
                  Retraction Request shall be obligated to sell all the
                  Retracted Shares held by the holder to the Retraction Call
                  Exercising Party on the Retraction Date on payment by the
                  Retraction Call Exercising Party to the holder of an amount
                  per share equal to the Retraction Call Purchase Price for
                  each such share.

          (b)     Upon receipt by the Company of a Retraction Request, the 
                  Company shall immediately notify the Parent and Holdco
                  thereof. In order to exercise its Retraction Call Right, the
                  Retraction Call Exercising Party must notify the Company in
                  writing of its determination to do so (the "Retraction Call
                  Notice") within two Business Days of notification to such
                  Retraction Call Exercising Party by the Company of the
                  receipt by the Company of the Retraction Request. If either
                  the Parent or Holdco delivers a Retraction Call Notice within
                  such two Business Day time period and duly exercises its
                  Retraction Call Right in accordance with this Article 28.11,
                  and provided that the Retraction Request is not revoked by
                  the holder in the manner specified in Subsection 28.10(e),
                  the Retraction Call Exercising Party shall purchase from such
                  holder and such holder shall sell to the Retraction Call
                  Exercising Party on the Retraction Date, the Retracted Shares
                  for the Retraction Call Purchase Price. Provided that the
                  total Retraction Call Purchase Price has been delivered to
                  the holder or deposited with the Company as provided in
                  Subsection 28.11(c), the closing of the purchase and sale of
                  the Retracted Shares pursuant to the Retraction Call Right
                  shall be deemed to have occurred as at the close of business
                  on the Retraction Date and, for greater certainty, no
                  redemption by the Company of such Retracted Shares shall take
                  place on the Retraction Date. In the event that neither the
                  Parent nor Holdco delivers a Retraction Call Notice within
                  such two Business Day period, and provided that Retraction
                  Request is not revoked by the holder in the manner specified
                  in Subsection 28.10(e), the Company shall redeem the
                  Retracted Shares on the Retraction Date and in the manner
                  otherwise contemplated in this Article 28.10.

          (c)     For the purposes of completing a purchase of Exchangeable
                  Shares pursuant to the exercise of a Retraction Call Right,
                  the Retraction Call Exercising Party shall or cause the
                  Company to deliver to the relevant holder, at the address of
                  the holder recorded in the securities register of the Company
                  for the Exchangeable Shares or at the address specified in
                  the holder's Retraction Request or by holding for pick up by
                  the holder at the registered office of the Company, a
                  certificate representing the number of Parent Common Shares
                  to which such holder is entitled (which shares shall be duly
                  issued as


                                     - 51 -

<PAGE>   52



                  fully paid and non-assessable and shall be free and clear of
                  any lien, claim, encumbrance, security interest or adverse
                  claim) registered in the name of the holder or in such other
                  name as the holder may request in payment of the Retraction
                  Call Purchase Price and a cheque of the Retraction Call
                  Exercising Party payable at par and in Canadian dollars at
                  any branch of the bankers of the Parent, Holdco or the
                  Company in Canada in payment of the remaining portion, if
                  any, of the total Retraction Call Purchase Price, and such
                  delivery of such certificate and cheque by or on behalf of
                  the Retraction Call Exercising Party shall be deemed to be
                  payment of and shall satisfy and discharge all liability for
                  the total Retraction Call Purchase Price to the extent that
                  the same is represented by such share certificates and
                  cheque, unless such cheque is not paid on due presentation.

          (d)     On and after the close of business on the Retraction Date, the
                  holder of the Retracted Shares shall cease to be a holder of
                  such Retracted Shares and shall not be entitled to exercise
                  any of the rights of a holder in respect thereof, other than
                  the right to receive his proportionate part of the total
                  Retraction Call Purchase Price unless upon presentation and
                  surrender of certificates in accordance with the foregoing
                  provisions, payment of the total Retraction Call Purchase
                  Price shall not be made, in which case the rights of such
                  holder shall remain unaffected until the total Retraction
                  Call Purchase Price has been paid in the manner hereinbefore
                  provided. On and after the close of business on the
                  Retraction Date, provided that presentation and surrender of
                  certificates and payment of the total Retraction Call
                  Purchase Price has been made in accordance with the foregoing
                  provisions, the holder of the Retracted Shares so purchased
                  by the Retraction Call Exercising Party shall thereafter be
                  considered and deemed for all purposes to be a holder of the
                  Parent Common Shares delivered to such holder.

          (e)     Notwithstanding any other provisions of this Article 28.11,
                  if the Retraction Request states that is being made for the
                  purpose of participating in a Parent Stock Tender Offer, the
                  closing of the purchase and sale of the Retracted Shares
                  pursuant to the Retraction Call Right shall be conditional
                  upon and take place simultaneously with, the closing of such
                  Parent Stock Tender Offer.


                REDEMPTION OF EXCHANGEABLE SHARES BY THE COMPANY

28.12     REDEMPTION BY THE COMPANY.

          (a)     Subject to applicable law and the due exercise by either the 
                  Parent or Holdco of its Redemption Call Right, the Company
                  shall on the Automatic Redemption Date redeem the then
                  outstanding Exchangeable Shares for an amount per share equal
                  to (i) the Current Market Price of a Parent Common Share on
                  the last Business Day prior to the Automatic Redemption Date,
                  which shall be satisfied in full by the Company causing to be
                  delivered to each holder of Exchangeable Shares one Parent
                  Common Share for each Exchangeable Share held by such holder,
                  plus (ii) the Dividend Amount, if any (collectively the
                  "Redemption Price").

          (b)     In case of a redemption of Exchangeable Shares under this
                  Article 6, the Company shall, at least 90 days before the
                  Automatic Redemption Date, send or cause to be sent to each
                  holder of Exchangeable Shares a notice in writing of the
                  redemption by the Company or the purchase by the Parent or
                  Holdco under the Redemption Call Right, as the case may


                                     - 52 -

<PAGE>   53



                  be, of the Exchangeable Shares held by such holder (other
                  than the Parent or Holdco). Such notice shall set out the
                  formula for determining the Redemption Price or the
                  Redemption Call Purchase Price, as the case may be, the
                  Automatic Redemption Date and, if applicable, particulars of
                  the Redemption Call Right.

          (c)     On or after the Automatic Redemption Date and subject to the
                  exercise by the Parent or Holdco of a Redemption Call Right,
                  the Company shall cause to be delivered to the holders of the
                  Exchangeable Shares to be redeemed the Redemption Price for
                  each such Exchangeable Share upon presentation and surrender
                  at the registered office of the Company of the certificates
                  representing such Exchangeable Shares, together with such
                  other documents and instruments as may be required to effect
                  a transfer of Exchangeable Shares under the Company Act, a No
                  Transfer Declaration and such additional documents and
                  instruments as the Company may reasonably require. Payment of
                  the aggregate Redemption Price for such Exchangeable Shares
                  held by a holder shall be made by delivery to such holder, at
                  the address of the holder recorded in the securities register
                  of the Company or by holding for pick up by such holder at
                  the registered office of the Company, of a certificate
                  representing the aggregate number of Parent Common Shares
                  deliverable by the Company to such holder (which shares shall
                  be duly issued as fully paid and non-assessable and shall be
                  free and clear of any lien, claim, encumbrance, security
                  interest or adverse claim) and a cheque of the Company
                  payable at par at any branch of the bankers of the Company in
                  respect of the remaining portion, if any, of such aggregate
                  Redemption Price. On and after the Automatic Redemption Date,
                  the holders of the Exchangeable Shares called for redemption
                  shall cease to be holders of such Exchangeable Shares and
                  shall not be entitled to exercise any of the rights of
                  holders in respect thereof, other than the right to receive
                  their proportionate part of the total Redemption Price,
                  unless payment of the aggregate Redemption Price deliverable
                  to such holder for such Exchangeable Shares shall not be made
                  upon presentation and surrender of certificates in accordance
                  with the foregoing provisions, in which case the rights of
                  the holders shall remain unaffected until the aggregate
                  Redemption Price deliverable to such holder has been paid in
                  the manner hereinbefore provided.

          (d)     The Company shall have the right at any time after the sending
                  of notice of its intention to redeem the Exchangeable Shares
                  as aforesaid to deposit or cause to be deposited the total
                  Redemption Price of the Exchangeable Shares so called for
                  redemption, or of such of the said Exchangeable Shares
                  represented by certificates that have not at the date of such
                  deposit been surrendered by the holders thereof in connection
                  with such redemption, in a custodial account with any
                  chartered bank or trust company in Canada named in such
                  notice and any interest paid on such deposit shall belong to
                  the Company. Upon the later of such deposit being made and
                  the Automatic Redemption Date, the Exchangeable Shares in
                  respect whereof such deposit shall have been made shall be
                  redeemed and the rights of the holders thereof after such
                  deposit or Automatic Redemption Date, as the case may be,
                  shall be limited to receiving their proportionate part of the
                  total Redemption Price for such Exchangeable Shares so
                  deposited, against presentation and surrender of the said
                  certificates held by them, respectively, in accordance with
                  the foregoing provisions. Upon such payment or deposit of the
                  total Redemption Price, the holders of the Exchangeable
                  Shares shall thereafter be considered and deemed for all
                  purposes to be holders of the Parent Common Shares delivered
                  to them.




                                     - 53 -

<PAGE>   54

28.13     REDEMPTION CALL RIGHT.

          (a)     Subject to the limitations set forth in Subsection 28.13(b), 
                  the Parent and Holdco shall each have the overriding right (a
                  "Redemption Call Right"), notwithstanding the proposed
                  redemption of the Exchangeable Shares by the Company pursuant
                  to Article 28.12, to purchase from all but not less than all
                  of the holders of Exchangeable Shares (other than the Parent
                  or Holdco) on the last Business Day prior to the Automatic
                  Redemption Date all but not less than all of the Exchangeable
                  Shares held by each such holder on payment by whichever of
                  the Parent or Holdco is exercising such right (the
                  "Redemption Call Exercising Party") to the holder of an
                  amount per share equal to (i) the Current Market Price of a
                  Parent Common Share on the last Business Day prior to the
                  Automatic Redemption Date which shall be satisfied in full by
                  the Redemption Call Exercising Party causing to be delivered
                  to such holder one Parent Common Share plus (ii) the Dividend
                  Amount, if any (collectively the "Redemption Call Purchase
                  Price"). In the event of the exercise of the Redemption Call
                  Right, each holder of Exchangeable Shares (other than the
                  Parent or Holdco) shall be obligated to sell all the
                  Exchangeable Shares held by the holder to the Redemption Call
                  Exercising Party on the last Business Day prior to the
                  Automatic Redemption Date on payment by the Redemption Call
                  Exercising Party to such holder of the Redemption Call
                  Purchase Price for each such share.

          (b)     Holdco shall only be entitled to exercise its Redemption Call
                  Right with respect to those holders of Exchangeable Shares,
                  if any, in respect of which the Parent has not exercised its
                  Redemption Call Right. In order to exercise its Redemption
                  Call Right, a Redemption Call Exercising Party must notify
                  the Company in writing of its intention to exercise such
                  right at least 125 days before the Automatic Redemption Date.
                  The Company will notify the holders of the Exchangeable
                  Shares as to whether or not the Redemption Call Right has
                  been exercised (such notice to specify the Redemption Call
                  Exercising Party) forthwith after the expiry of the date by
                  which the same may be exercised. If a Redemption Call
                  Exercising Party exercises its Redemption Call Right, the
                  right of the Company to redeem Exchangeable Shares pursuant
                  to Article 28.12 shall terminate at such time, and on the
                  last Business Date prior to the Automatic Redemption Date,
                  the Redemption Call Exercising Party will purchase and the
                  holders of Exchangeable Shares (other than the Parent or
                  Holdco) will sell all of their Exchangeable Shares then
                  outstanding for a price per share equal to the Redemption
                  Call Purchase Price.

          (c)     For the purposes of completing the purchase of the 
                  Exchangeable Shares pursuant to the Redemption Call Right,
                  the Redemption Call Exercising Party shall deposit with the
                  Company, on or before the Automatic Redemption Date,
                  certificates representing the total number of Parent Common
                  Shares deliverable by the Redemption Call Exercising Party
                  (which shares shall be duly issued as fully paid and
                  non-assessable and shall be free and clear of any lien,
                  claim, encumbrance, security interest or adverse claim) in
                  payment of the total Redemption Call Purchase Price and a
                  cheque or cheques in the amount of the remaining portion, if
                  any, of the total Redemption Call Purchase Price and interest
                  paid on such deposit shall belong to the Redemption Call
                  Exercising Party. Provided that the total Redemption Call
                  Purchase Price has been so deposited with the Company, on and
                  after the last Business Day prior to the Automatic Redemption
                  Date, the rights of each holder of Exchangeable Shares (other
                  than the Parent or Holdco) will be limited to receiving such
                  holder's proportionate part of the total Redemption Call
                  Purchase Price payable by the Redemption Call Exercising
                  Party upon presentation and surrender by the


                                     - 54 -

<PAGE>   55

                  holder of certificates representing the Exchangeable Shares
                  held by such holder in accordance with the following
                  provisions and such holder shall on and after the last
                  Business Day prior to the Automatic Redemption Date be
                  considered and deemed for all purposes to be the holder of
                  the Parent Common Shares delivered to such holder. Upon
                  surrender to the Company of a certificate or certificates
                  representing Exchangeable Shares, together with such other
                  documents and instruments as may be required to effect a
                  transfer of Exchangeable Shares under the Company Act and
                  such additional documents and instruments as the Company may
                  reasonably require, the holder of such surrendered
                  certificate or certificates shall be entitled to receive in
                  exchange therefor, and the Company on behalf of the
                  Redemption Call Exercising Party shall deliver to such
                  holder, a certificate representing the Parent Common Shares
                  to which such holder is entitled and a cheque in payment of
                  the remaining portion, if any, of the holder's proportionate
                  part of the total Redemption Call Purchase Price.

          (d)     If neither the Parent or Holdco exercises the Redemption Call
                  Right in the manner described above, on the Automatic
                  Redemption Date the holders of the Exchangeable Shares will
                  be entitled to receive in exchange therefor the redemption
                  price otherwise payable by the Company in connection with the
                  redemption of the Exchangeable Shares pursuant to Article
                  28.12.


                        TRANSFER OF EXCHANGEABLE SHARES

28.14     TRANSFER OF EXCHANGEABLE SHARES. Notwithstanding any other provision
          herein, no Exchangeable Share may be transferred by any holder to any
          person except after complying with the provisions of Article 26.3.


                                    PART 29

                            COMMON SHARE PROVISIONS

29.1      VOTING RIGHTS. Each holder of a Common Share shall be entitled to
          receive notice of and attend any general meeting of the Company and
          shall have the right to vote at any such meeting on the basis of one
          vote for each such share held.

29.2      DIVIDENDS. Subject to Article 30.1 hereof and to the prior rights of
          the holders of the Convertible Shares, Exchangeable Shares and any
          other shares ranking senior to the Common Shares with respect to
          priority in the payment of dividends, the holders of Common Shares
          shall be entitled to receive dividends and the Company shall pay
          dividends thereon, as and when declared by the Board of Directors out
          of the assets of the Company properly applicable to the payment of
          dividends, in such amount and in such form as the Board of Directors
          may from time to time determine and all dividends that the directors
          may declare on the Common Shares shall be declared and paid in equal
          amounts per share on all Common Shares at the time outstanding.

29.3      DISSOLUTION. Subject to Article 30.1 hereof and to the prior rights
          of the holders of the Convertible Shares and Exchangeable Shares, in
          the event of the liquidation, dissolution or winding-up of the
          Company or other distribution of assets of the Company among its
          members for the purpose of winding-up its affairs, the holders of the
          Common Shares shall be entitled to


                                     - 55 -

<PAGE>   56


          participate rateably in any distribution of the assets of the
          Company for the purposes of winding-up its affairs.


                                    PART 30

                  CERTAIN RESTRICTIONS; AMENDMENT AND APPROVAL

30.1      CERTAIN RESTRICTIONS. Except as provided in Article 30.2, so long as
          any of the Convertible Shares or Exchangeable Shares are outstanding,
          the Company shall not at any time without, but may at any time with,
          the prior approval of the holders of the Convertible Shares and the
          holders of the Exchangeable Shares given as hereinafter specified in
          Article 30:

          (a)     pay any dividends on the Common Shares, or any other shares
                  ranking junior to the Convertible Shares or the Exchangeable
                  Shares, other than stock dividends payable in Common Shares
                  or any such other shares ranking junior to the Convertible
                  Shares or the Exchangeable Shares, as the case may be;

          (b)     redeem or purchase or make any capital distribution in
                  respect of Common Shares or any other shares ranking junior
                  to the Convertible Shares or the Exchangeable Shares;

          (c)     redeem or purchase any other shares of the Company ranking
                  equally with the Convertible Shares or the Exchangeable
                  Shares with respect to the payment of dividends or on any
                  liquidation distribution; or

          (d)     issue any Convertible Shares or any other shares of the
                  Company ranking equally with, or superior to, the Convertible
                  Shares other than: (i) pursuant to the Stock Purchase
                  Agreement; or (ii) by way of stock dividends to the holders
                  of such Convertible Shares.

30.2      EXCEPTION.  The restrictions set out in Subsections 30.1(a), (b) and 
          (c) shall not apply if:

          (a)     all dividends on the outstanding Convertible Shares shall
                  have been declared and paid in full in accordance with
                  Article 27.3; and

          (b)     all dividends and distributions on the outstanding
                  Exchangeable Shares corresponding to dividends and
                  distributions declared to date on the Parent Common Shares
                  shall have been declared on the Exchangeable Shares and paid
                  in full.

30.3      AMENDMENT OF SHARE PROVISIONS. The rights, privileges, restrictions
          and conditions attaching to the Common Shares, the Convertible Shares
          or the Exchangeable Shares may be added to, changed or removed but
          only with the approval of the holders of the Convertible Shares and
          the holders of the Exchangeable Shares given as hereinafter specified
          in Article 30.4(a).

30.4      APPROVAL.

          (a)     Any approval or consent given by the holders of the
                  Convertible Shares and the holders of the Exchangeable Shares
                  to add to, change or remove any right, privilege, restriction
                  or condition attaching to the Common Shares, the Convertible
                  Shares or the Exchangeable Shares shall be deemed to have
                  been sufficiently given if it shall have been


                                     - 56 -

<PAGE>   57



                  given in accordance with applicable law subject to a minimum
                  requirement that such approval be evidenced by resolution
                  passed by not less than 75% of the votes cast on such
                  resolution at a meeting of the holders of the Convertible
                  Shares or the holders of Exchangeable Shares, as the case may
                  be, duly called and held.

          (b)     Any approval or consent given by the holders of the 
                  Convertible Shares and the holders of the Exchangeable Shares
                  on any matter requiring the approval or consent of the
                  holders of the Convertible Shares and the holders of the
                  Exchangeable Shares, other than those expressly set out in
                  Subsection 30.4(a), shall be deemed to have been sufficiently
                  given if it shall have been given in accordance with
                  applicable law subject to a minimum requirement that such
                  approval be evidenced by resolution passed by more than 50%
                  of the votes cast on such resolution at a meeting of the
                  holders of the Convertible Shares or the holders of
                  Exchangeable Shares, as the case may be, duly called and held


                                    PART 31

                    TRUST AGREEMENT AND PARENT COMMON SHARES

31.1      RECIPROCAL CHANGES IN RESPECT OF PARENT COMMON SHARES.

          (a)     Each holder of an Exchangeable Share acknowledges that the
                  Trust Agreement provides, in part, that the Parent will not
                  without the prior approval of the Company and the prior
                  approval of the holders of the Exchangeable Shares given in
                  accordance with Article 30.4:

                  (i)      issue or distribute Parent Common Shares (or 
                           securities exchangeable for or convertible into or
                           carrying rights to acquire Parent Common Shares) to
                           the holders of all or substantially all of the then
                           outstanding Parent Common Shares by way of stock
                           dividend or other distribution, other than an issue
                           of Parent Common Shares (or securities exchangeable
                           for or convertible into or carrying rights to
                           acquire Parent Common Shares) to holders of Parent
                           Common Shares who exercise an option to receive
                           dividends in Parent Common Shares (or securities
                           exchangeable for or convertible into or carrying
                           rights to acquire Parent Common Shares) in lieu of
                           receiving cash dividends; or

                  (ii)     issue or distribute rights, options or warrants to
                           the holders of all or substantially all of the then
                           outstanding Parent Common Shares entitling them to
                           subscribe for or to purchase Parent Common Shares
                           (or securities exchangeable for or convertible into
                           or carrying rights to acquire Parent Common Shares);
                           or

                  (iii)    issue or distribute to the holders of all or
                           substantially all of the then outstanding Parent
                           Common Shares (A) shares or securities of the Parent
                           of any class other than Parent Common Shares (other
                           than shares convertible into or exchangeable for or
                           carrying rights to acquire Parent Common Shares),
                           (B) rights, options or warrants other than those
                           referred to in Subsection 31.1(a)(ii) above, (C)
                           evidences of indebtedness of the Parent or (D)
                           assets of the Parent;



                                     - 57 -

<PAGE>   58



                  unless the economic equivalent on a per share basis of such
                  rights, options, securities, shares, evidences of
                  indebtedness or other assets is issued or distributed
                  simultaneously to the holders of the Exchangeable Shares.

          (b)     Each holder of an Exchangeable Share acknowledges that the
                  Trust Agreement further provides, in part, that the Parent
                  will not without the prior approval of the Company and the
                  prior approval of the holders of the Exchangeable Shares
                  given in accordance with Article 30.4:

                  (i)      subdivide, redivide or change the then outstanding
                           Parent Common Shares into a greater number of Parent
                           Common Shares; or

                  (ii)     reduce, combine or consolidate or change the then
                           outstanding Parent Common Shares into a lesser
                           number of Parent Common Shares; or

                  (iii)    reclassify or otherwise change the Parent Common
                           Shares or effect an amalgamation, merger,
                           reorganization or other transaction affecting the
                           Parent Common Shares;

                  unless the same or an economically equivalent change shall
                  simultaneously be made to, or in the rights of the holders
                  of, the Exchangeable Shares. The Trust Agreement further
                  provides, in part, that the aforesaid provisions of the Trust
                  Agreement shall not be changed without the prior approval of
                  the holders of the Exchangeable Shares given in accordance
                  with Article 30.4.

31.2      ACTIONS BY THE COMPANY UNDER TRUST AGREEMENT.

          (a)     The Company will take all such actions and do all such things
                  as shall be necessary or advisable to perform and comply with
                  and to ensure performance and compliance by the Parent and
                  Holdco with all provisions of the Trust Agreement applicable
                  to the Company, the Parent and Holdco, respectively, in
                  accordance with the terms thereof including, without
                  limitation, taking all such actions and doing all such things
                  as shall be necessary or advisable to enforce to the fullest
                  extent possible for the direct benefit of the Company all
                  rights and benefits in favour of the Company under or
                  pursuant to such agreement.

          (b)     The Company shall not propose, agree to or otherwise give
                  effect to any amendment to, or waiver or forgiveness of its
                  rights or obligations under, the Trust Agreement without the
                  prior approval of the holders of the Exchangeable Shares
                  given in accordance with Article 30.4 other than such
                  amendments, waivers and/or forgiveness as may be necessary or
                  advisable for the purposes of:

                  (i)      adding to the covenants of the other party or
                           parties to such agreement for the protection of the
                           Company, the holders of Convertible Shares or the
                           holders of Exchangeable Shares; or

                  (ii)     making such provisions or modifications not
                           inconsistent with such agreement as may be necessary
                           or desirable with respect to matters or questions
                           arising thereunder which, in the opinion of the
                           Board of Directors, it may be expedient to make,
                           provided that the Board of Directors shall be of the
                           opinion, after


                                     - 58 -

<PAGE>   59

                           consultation with counsel, that such provisions and
                           modifications will not be prejudicial to the
                           interests of the holders of the Convertible Shares
                           or the holders of the Exchangeable Shares; or

                  (iii)    making such changes in or corrections to such
                           agreement which, on the advice of counsel to the
                           Company, are required for the purpose of curing or
                           correcting any ambiguity or defect or inconsistent
                           provision or clerical omission or mistake or
                           manifesterror contained therein, provided that the
                           Board of Directors shall be of the opinion, after
                           consultation with counsel, that such changes or
                           corrections will not be prejudicial to the interests
                           of the holders of the Convertible Shares and the
                           holders of the Exchangeable Shares.


                                    PART 32

                                    NOTICES

32.1      NOTICES TO THE COMPANY. Subject to applicable law, any notice,
          request or other communication to be given to the Company by a holder
          of Common Shares, Convertible Shares or Exchangeable Shares shall be
          in writing and shall be valid and effective if given by mail (postage
          prepaid) or by telecopy or by delivery to the registered office of
          the Company and addressed to the attention of the President. Any such
          notice, request or other communication, if given by mail, telecopy or
          delivery, shall only be deemed to have been given and received upon
          actual receipt thereof by the Company.

32.2      PRESENTATION OF CERTIFICATES. Subject to applicable law, any
          presentation and surrender by a holder of Convertible Shares or
          Exchangeable Shares to the Company of certificates representing
          Convertible Shares or Exchangeable Shares in connection with the
          conversion of Convertible Shares, the liquidation, dissolution or
          winding up of the Company or the retraction or redemption of
          Exchangeable Shares shall be made by registered mail (postage
          prepaid) or by delivery to the registered office of the Company
          addressed to the attention of the President of the Company. Any such
          presentation and surrender of certificates shall only be deemed to
          have been made and to be effective upon actual receipt thereof by the
          Company. Any such presentation and surrender of certificates made by
          registered mail shall be at the sole risk of the holder mailing the
          same.

32.3      NOTICES TO HOLDERS. Subject to applicable law, any notice, request or
          other communication to be given to a holder of Common Shares,
          Convertible Shares or Exchangeable Shares by or on behalf of the
          Company shall be in writing and shall be valid and effective if given
          by mail (postage prepaid) or by delivery to the address of the holder
          recorded in the securities register of the Company or, in the event
          of the address of any such holder not being so recorded, then at the
          last known address of such holder. Any such notice, request or other
          communication, if given by mail, shall be deemed to have been given
          and received on the fifth Business Day following the date of mailing
          and, if given by delivery, shall be deemed to have been given and



                                     - 59 -

<PAGE>   60


          received on the date of delivery. Accidental failure or omission to
          give any notice, request or other communication to one or more
          holders of Common Shares, Convertible Shares or Exchangeable Shares
          shall not invalidate or otherwise alter or affect any action or
          proceeding to be taken by the Company pursuant thereto.


FULL NAME, RESIDENT ADDRESS AND OCCUPATION OF SUBSCRIBER:


---------------------
SHARON L. FUGMAN
3232 Peak Drive
Box 946
Whistler, B.C.
V0N 1B0

Barrister and Solicitor

DATED the 16th day of July, 1998.


                                     - 60 -