EXCHANGEAGREEMENT

EXHIBIT 4.3

EXCHANGE AGREEMENT

MEMORANDUM OF AGREEMENT made as of the 24^th day of March, 2005, between Nexsan Corporation, a corporation existing under the laws of Delaware (hereinafter referred to as “Parent”), 6360319 Canada Inc., a corporation existing under the federal laws of Canada (hereinafter referred to as the “Corporation”), 6360246 Canada Inc., a corporation existing under the federal laws of Canada (hereinafter referred to as “CallCo”) and Thomas F. Gosnell (“Gosnell”).

WHEREAS pursuant to an purchase agreement (the “Purchase Agreement”) dated as of March 142005 by and among Parent, the Corporation, AESign Evertrust Inc.  (“AESign”), Gosnell, Esther Hotter, Rosamaria Koppes, Puneet Mehta and Robert G.  Delamore, the Corporation has agreed to issue exchangeable shares in the capital of the Corporation (the “Exchangeable Shares”) to Gosnell in part consideration for the purchase by the Corporation of all of the issued and outstanding Class A common shares of AESign owned by Gosnell;

AND WHEREAS pursuant to the Purchase Agreement, the parties hereto agreed to execute an exchange agreement substantially in the form of this exchange agreement;

NOW THEREFORE in consideration of the respective covenants and agreements provided in this exchange agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:

ARTICLE 1
DEFINITIONS AND INTERPRETATION

1.1                                 Definitions

In this exchange agreement, the following terms shall have the following meanings:

“Affiliate” of any Person means any other Person directly or indirectly controlling, 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 Exchange Rights” means the benefit of the obligation of Parent to effect the automatic exchange of Parent Common Shares for Exchangeable Shares pursuant to section 3.12.

“Board of Directors” means the Board of Directors of the Corporation or Parent, as the case may be.

“Business Day” means any day on which commercial banks are generally open for business in Woodland Hills, California and Montreal, Quebec, other than a Saturday, a Sunday or a day observed as a holiday in Montreal, Quebec under the laws of the Province of Quebec or the federal laws of Canada or under the laws of the State of California or the federal laws of the United States of America.

“CallCo” means ###-###-#### Canada Inc., a corporation incorporated under the federal laws of Canada and being a direct wholly-owned Subsidiary of Parent.

“Canadian Dollar Equivalent” means, in respect of an amount expressed in a currency other than Canadian dollars (the “Foreign Currency Amount”) at any date, the product obtained by multiplying: (a) the Foreign Currency Amount, by (b) the noon spot exchange rate on such date for such foreign currency expressed in Canadian dollars as reported by the Bank of Canada or, in the event such spot exchange rate is not available, such exchange rate on such date for such foreign currency expressed in Canadian dollars as may be deemed by the Board of Directors to be appropriate for such purpose.

“Corporation” means ###-###-#### Canada Inc., a corporation existing under the federal laws of Canada and being a wholly-owned subsidiary of CallCo.

“Current Market Price” means, in respect of a Parent Common Share on any date, the Canadian Dollar Equivalent of the weighted average of the daily trading prices of Parent Common Shares during a period of 20 consecutive trading days ending not more than three trading days before such date on the principal stock exchange or automated quotation system on which the Parent Common Shares are then listed or quoted, as the case maybe, as may be selected by the Board of Directors of Parent for such purpose; provided, however, that if in the opinion of the Board of Directors of Parent 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 Shares or of the Parent Common Shares are not then listed or quoted on a stock exchange or quotation system, then the Current Market Price of a Parent Common Share shall be determined by the Board of Directors of Parent, acting reasonably and in good faith and in its sole discretion, and provided further that any such selection, opinion or determination by the Board of Directors of Parent shall be conclusive and binding.

“Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, Corporation (including any Corporation limited by shares, limited liability Corporation or joint stock Corporation), firm, society or other enterprise, association, organization or entity.

“Exchange Right” has the meaning ascribed to that term in section 3.1.

“Exchangeable Share” means a share in the class of non-voting exchangeable shares in the capital of the Corporation having the rights, privileges, restrictions and conditions set forth in the Exchangeable Share Provisions.

“Exchangeable Shareholder” means Gosnell, or any subsequent registered holder of the Exchangeable Shares, other than Parent and the Parent Affiliates.

“Exchangeable Share Provisions” means the rights, privileges, restrictions and conditions attaching to the Exchangeable Shares.

2

“Exchangeable Share Support Agreement” means the exchangeable share support agreement made as of even date herewith among the Corporation, CallCo and Parent.

“Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, provincial, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal).

“Insolvency Event” means the institution by the Corporation of any proceeding to be adjudicated a bankrupt or insolvent or to be wound up, or the consent of the Corporation to the institution of bankruptcy, insolvency or winding-up proceedings against the Corporation, or the filing of any proceeding seeking dissolution or winding-up under any bankruptcy, insolvency or analogous laws, including without limitation the Companies’ Creditors Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), and the failure by the Corporation to contest in good faith any such proceedings commenced in respect of the Corporation within 30 days of becoming aware thereof, or the consent by the Corporation to the commencement of any such proceeding or to the appointment of a receiver, or the making by the Corporation of a general assignment for the benefit of creditors, or the admission in writing by the Corporation of its inability to pay its debts generally as they become due, or the Corporation not being permitted, pursuant to solvency requirements of applicable law, to redeem any Retracted Shares pursuant to section 6.6 of the Exchangeable Share Provisions.

“Liquidation Call Right” has the meaning ascribed to that term in section 5.4 of the Exchangeable Share Provisions.

“Liquidation Event” has the meaning ascribed to that term in section 3.12(1).

“Liquidation Event Effective Date” has the meaning ascribed to that term in section 3.12(c).

“Officer’s Certificate” means, with respect to Parent or the Corporation, as the case may be, a certificate signed by any one of the authorized signatories of Parent or the Corporation, as the case may be.

“Parent” means Nexsan Corporation, a corporation existing under the laws of the State of Delaware, and includes any successor thereto.

“Parent Affiliates” means Affiliates of Parent.

“Parent Common Share” means a share of common stock in the capital of Parent, and any other security into which such share may be changed.

“Parent Special Voting Share” means the one (1) Series B Preferred Share of Parent that entitles the holder of record of the share, subject to adjustment, to one (1) vote for each Exchangeable Share so held by it at meetings of the holders of Parent Common Shares.

3

“Parent Successor” has the meaning ascribed to that term in section 5.1.

“Person” means any individual, Entity or Governmental Body.

“Purchase Agreement” means the agreement made as of March 14, 2005 between Parent, the Corporation, AESign Evertrust Inc., Gosnell, Esther Hotter, Rosamaria Koppes, Puneet Mehta and Robert G.  Delamore as amended, supplemented and/or restated in accordance therewith.

“Redemption Call Right” has the meaning ascribed to that term in section 7.4 of the Exchangeable Share Provisions.

“Retracted Shares” has the meaning ascribed to that term in section 3.6.

“Retraction Call Right” has the meaning ascribed to that term in section 6.1(c) of the Exchangeable Share Provisions.

1.2                                 Interpretation Not Affected by Headings, etc.

The division of this exchange agreement into Articles, sections and other portions and the insertion of headings are for convenience of reference only and should not affect the construction or interpretation of this exchange agreement.  Unless otherwise indicated, all references to an “Article” or “section” followed by a number and/or a letter refer to the specified Article or section of this exchange agreement.  The terms “this exchange agreement”, “hereof’, “herein” and “hereunder” and similar expressions refer to this exchange agreement and not to any particular Article, section or other portion hereof and include any agreement or instrument supplementary or ancillary hereto.

1.3                                 Number, Gender, etc.

Words importing the singular number only shall include the plural and vice versa.  Words importing any gender shall include all genders.

1.4                                 Date for any Action.

If any date on which any action is required to be taken under this exchange agreement is not a Business Day, such action shall be required to be taken on the next succeeding Business Day.

ARTICLE 2
TRANSFERS

2.1                                 Restrictions on Transfer of Exchangeable Shares.

(a)                                  The Exchangeable Shareholder agrees not to transfer, assign or sell any of the Exchangeable Shares except as specifically provided in the Exchangeable Share Provisions or with the written consent of Parent.

4

(b)                                 Unless Parent otherwise determines, it shall be a condition of any consent by Parent given under section 2.1(a) that the Exchangeable Shareholder must transfer, assign or sell all Exchangeable Shares then held by the Exchangeable Shareholder and to the same transferee, assignee or purchaser, and concurrently transfer, assign or sell the Parent Special Voting Share then held by the Exchangeable Shareholder to such transferee, assignee or purchaser, and

(c)                                  Notwithstanding the provisions of section 2.1(a) but subject to the condition contained in the section 2.1(b), Gosnell shall have the right, without the prior written consent of Parent, to transfer all of his Exchangeable Shares (i) by will or the laws of decent and distribution, in which event each such transferee shall be bound by all of the provisions of this exchange agreement to the same extent as if such transferee were Gosnell, or (ii) to a company wholly-owned directly or indirectly only by Gosnell, his spouse and/or his issue for tax planning purposes, provided any such transfer is completed on an income tax deferred basis and written notice thereof shall have been given by Gosnell to Parent.

(d)                                 No transfer of Exchangeable Shares on the consent of Parent or pursuant to section 2.1(c)(ii) shall, however, be permitted or be valid or effective until written notice thereof shall have been given by Gosnell to Parent and until the transferee of the Exchangeable Shares shall have entered into an agreement with the other parties hereto consenting to the terms hereof and agreeing to assume and be bound by all of the obligations of Gosnell herein as though such transferee were Gosnell, in which event such transferee shall, subject to the terms hereof, be entitled to all of the rights and be subject to all of the obligations of Gosnell herein mutatis mutandis.

(e)                                  Gosnell covenants that in the event of a transfer of Exchangeable Shares by Gosnell to a company wholly-owned directly or indirectly by Gosnell, his spouse and/or his issue pursuant to section 2.1(c)(ii), for so long as the transferee is the holder of Exchangeable Shares, Gosnell shall not and Gosnell shall cause his spouse and/or issue not to transfer any direct or indirect interest in the transferee; and (ii) Gosnell shall cause the transferee not to take part in any amalgamation, merger, reorganization or similar proceeding, the effect of which would result in the transferee or the resulting body corporate not being wholly-owned directly or indirectly by Gosnell, his spouse and/or his issue.

2.2                                 Restrictions on Transfer of Parent Special Voting Share.

The Exchangeable Shareholder agrees not to transfer, assign or sell the Parent Special Voting Share, except as required by sections 2.1 and 2.4 of this exchange agreement.

2.3                                 Restrictions on Pledge of Exchangeable Shares and Parent Special Voting Share.

The Exchangeable Shareholder agrees not to pledge, mortgage, or charge any of, or any interest in, the Exchangeable Shares or the Parent Special Voting Share without the prior written consent of Parent.

5

2.4                                 Automatic Redemption of the Parent Special Voting Share.

The Exchangeable Shareholder acknowledges that upon the exchange of all Exchangeable Shares held by the Exchangeable Shareholder including, without limitation, pursuant to the exercise by an Exchangeable Shareholder of the Exchange Right or the occurrence of the automatic exchange of Exchangeable Shares for Parent Common Shares, as specified in Article 4 (unless, in either case, Parent shall not have delivered the requisite Parent Common Shares issuable in exchange for the Exchangeable Shares to the Exchangeable Shareholder), or upon the redemption of Exchangeable Shares pursuant to Article 6 or 7 of the Exchangeable Share Provisions, or upon the effective date of the liquidation, dissolution or winding-up of the Corporation pursuant to Article 5 of the Exchangeable Share Provisions, or upon the purchase of Exchangeable Shares from the holder thereof by CallCo pursuant to the exercise by CallCo of the Retraction Call Right, the Redemption Call Right or the Liquidation Call Right, or upon the purchase of the Exchangeable Shares from the holder thereof by the Corporation pursuant to Article 8 of the Exchangeable Share Provisions, the Parent Special Voting Share shall be automatically redeemed pursuant to the terms and conditions attaching to the Parent Special Voting Share and thereafter the Exchangeable Shareholder shall cease to be a holder of the Parent Special Voting Share and shall not be entitled to exercise any of the rights in respect thereof.

2.5                                 Legended Share Certificates.

The Corporation will cause each certificate representing Parent Special Voting Share to bear an appropriate legend notifying the Exchangeable Shareholder of restrictions applicable to such Parent Special Voting Share and any other legend that is required or as may be reasonably necessary having regard to the provisions of any state, provincial, local or foreign law governing such securities.

ARTICLE 3
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE

3.1                                 Grant and Ownership of the Exchange Right.

Parent hereby grants to the Exchangeable Shareholder the right (the “Exchange Right”), exercisable upon the occurrence and during the continuance of (a) an Insolvency Event, or (b) the failure of the Corporation or CallCo, as the case maybe, by reason other than an Insolvency Event to purchase the Retracted Shares pursuant to a duly completed and delivered Retraction Request (as such term is defined in the Exchangeable Share Provisions), to require Parent to purchase from the Exchangeable Shareholder all or any part of the Exchangeable Shares held by the Exchangeable Shareholder and the Automatic Exchange Rights, all in accordance with the provisions of this exchange agreement.  Parent hereby acknowledges receipt from the Exchangeable Shareholder of good and valuable consideration (and the adequacy thereof) for the grant of the Exchange Right and the Automatic Exchange Rights by Parent to the Exchangeable Shareholder.  The obligations of Parent to issue Parent Common Shares pursuant to the Exchange Right or Automatic Exchange Rights are subject to all applicable laws and regulatory and stock exchange requirements.

6

3.2                                 Legended Share Certificates.

Parent will cause each certificate representing Exchangeable Shares to bear an appropriate legend notifying the Exchangeable Shareholder of:

(a)                                  his right to the exercise of the Exchange Right in respect of the Exchangeable Shares held by the Exchangeable Shareholder;

(b)                                 the Automatic Exchange Rights; and

(c)                                  any other legend that is required or as may be reasonably necessary having regard to the provisions of any federal, state, provincial, local or foreign law governing such securities.

3.3                                 Purchase Price.

The purchase price payable by Parent for each Exchangeable Share to be purchased by Parent under the Exchange Right shall be an amount per share equal to (a) the Current Market Price of a Parent Common Share on the last Business Day prior to the day of closing of the purchase and sale of such Exchangeable Share under the Exchange Right, which shall be satisfied in full by Parent causing to be sent to such holder one Parent Common Share, plus (b) to the extent not paid by the Corporation, an additional amount equivalent to the full amount of all declared and unpaid dividends on each such Exchangeable Share held by such holder on any dividend record date which occurred prior to the closing of the purchase and sale.  In connection with each exercise of the Exchange Right, Parent shall provide to the Exchangeable Shareholder an Officer’s Certificate setting forth the calculation of the purchase price for each Exchangeable Share.  The purchase price for each such Exchangeable Share so purchased may be satisfied only by Parent issuing and delivering or causing to be delivered to the Exchangeable Shareholder, one Parent Common Share and on the applicable payment date a cheque for the balance, if any, of the purchase price without interest (but less any amounts withheld pursuant to section 4.13).  Upon payment of such purchase price, the Exchangeable Shareholder shall cease to have any right to be paid by the Corporation or Parent any amount in respect of declared and unpaid dividends on each such Exchangeable Share.

3.4                                 Exercise Instructions.

Subject to the terms and conditions herein set forth, the Exchangeable Shareholder shall be entitled, upon the occurrence and during the continuance of an Insolvency Event, to exercise the Exchange Right with respect to all or any part of the Exchangeable Shares registered in the name of such Exchangeable Shareholder on the books of the Corporation.  To cause the exercise of the Exchange Right, the Exchangeable Shareholder shall deliver to Parent, in person or by certified or registered mail, at its principal office in Woodland Hills, California or at such other places as Parent may from time to time designate by written notice to the Exchangeable Shareholder, the certificates representing the Exchangeable Shares which such Exchangeable Shareholder desires Parent to purchase, duly endorsed in blank for transfer, and accompanied by such other documents and instruments as may be necessary or advisable to effect a transfer of Exchangeable Shares together with (a) a duly completed form of notice of exercise of the Exchange Right, contained on the reverse of or attached to the Exchangeable Share certificates, stating (i) that the

7

Exchangeable Shareholder hereby exercises the Exchange Right so as to require Parent to purchase from the Exchangeable Shareholder the number of Exchangeable Shares specified therein, (ii) that the Exchangeable Shareholder has good title to and owns all such Exchangeable Shares to be acquired by Parent free and clear of all liens, claims, security interests, adverse claims and encumbrances, (iii) the names in which the certificates representing Parent Common Shares issuable in connection with the exercise of the Exchange Right are to be issued, and (iv) the names and addresses of the Persons to whom such new certificates should be delivered and (b) payment (or evidence satisfactory to the Corporation and Parent of payment) of the taxes (if any) payable as contemplated by section 3.7 of this exchange agreement.  If only a part of the Exchangeable Shares represented by any certificate or certificates delivered to Parent are to be purchased by Parent under the Exchange Right, a new certificate for the balance of such Exchangeable Shares shall be issued to the holder at the expense of the Corporation.

3.5                                 Delivery of Parent Common Shares; Effect of Exercise.

Within ten (10) Business Days after receipt of the certificates representing the Exchangeable Shares which the Exchangeable Shareholder desires Parent to purchase under the Exchange Right, together with such documents and instruments of transfer and a duly completed form of notice of exercise of the Exchange Right (and payment of taxes, if any, payable as contemplated by section 3.7 or evidence thereof), duly endorsed for transfer to Parent, Parent shall promptly thereafter deliver or cause to be delivered to the Exchangeable Shareholder such Exchangeable Shares (or to such other Persons, if any, properly designated by such Exchangeable Shareholder) the number of Parent Common Shares issuable in connection with the exercise of the Exchange Right, and on the applicable payment date cheques for the balance, if any, of the total purchase price therefor without interest (but less any amounts withheld pursuant to section 3.13); provided, however, that no such delivery shall be made unless and until the Exchangeable Shareholder requesting the same shall have paid (or provided evidence satisfactory to the Corporation and Parent of the payment of) the taxes (if any) payable as contemplated by section 3.7 of this exchange agreement.  Immediately upon the giving of notice by the Exchangeable Shareholder to Parent and the Corporation of the exercise of the Exchange Right as provided in this section 3.5, the closing of the transaction of purchase and sale contemplated by the Exchange Right shall be deemed to have occurred and the holder of such Exchangeable Shares shall be deemed to have transferred to 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 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 purchase price for those Exchangeable Shares (together with a cheque for the balance, if any, of the total purchase price therefor without interest (but less any amounts withheld pursuant to section 3.12)), unless the requisite number of Parent Common Shares is not allotted, issued and delivered by Parent to the Exchangeable Shareholder within ten Business Days of the date of the giving of such notice by the Exchangeable Shareholder and cheque for the balance, if any, of the total purchase price for such Exchangeable Shares is not issued and delivered to the Exchangeable Shareholder on the applicable payment date, in which case the rights of the Exchangeable Shareholder shall remain unaffected until such Parent Common Shares are so allotted, issued and delivered by Parent and any such cheque is issued and delivered by Parent.  Concurrently with the Exchangeable Shareholder ceasing to be a holder of Exchangeable Shares, the Exchangeable Shareholder shall be considered and deemed for all purposes to be the holder of the Parent Common Shares delivered to it pursuant to the Exchange Right.

8

3.6                                 Exercise of Exchange Right Subsequent to Retraction.

In the event that the Exchangeable Shareholder has exercised his right under Article 6 of the Exchangeable Share Provisions to require the Corporation to redeem any or all of the Exchangeable Shares held by the Exchangeable Shareholder (the “Retracted Shares”) and is notified by the Corporation pursuant to section 6.6 of the Exchangeable Share Provisions that the Corporation will not be permitted as a result of solvency requirements of applicable law to redeem all such Retracted Shares, and provided that CallCo shall not have exercised the Retraction Call Right with respect to the Retracted Shares and that the Exchangeable Shareholder has not revoked the retraction request delivered by the Exchangeable Shareholder to the Corporation pursuant to section 6.1 of the Exchangeable Share Provisions, the retraction request will constitute and will be deemed to constitute notice from the Exchangeable Shareholder to Parent exercising the Exchange Right with respect to those Retracted Shares that the Corporation is unable to redeem.

3.7                                 Stamp or Other Transfer Taxes.

Upon any sale of Exchangeable Shares to Parent pursuant to the Exchange Right or the Automatic Exchange Rights, the share certificate or certificates representing Parent Common Shares to be delivered in connection with the payment of the total purchase price therefor shall be issued in the name of the Exchangeable Shareholder of the Exchangeable Shares so sold; provided, however, that such Exchangeable Shareholder (a) shall pay (and none of Parent or the Corporation shall be required to pay) any documentary, stamp, transfer or other taxes that may be payable in respect of any transfer of such Exchangeable Shares to Parent or in respect of the issuance or delivery of such Parent Common Shares to the Exchangeable Shareholder including, without limitation, in the event the Parent Common Shares are being issued or transferred in the name of a clearing service or depository or a nominee thereof, or (b) shall have evidenced to the satisfaction of Parent and the Corporation that such taxes, if any, have been paid.

3.8                                 Notice of Insolvency Event.

As soon as practicable following the occurrence of an Insolvency Event or any event that with the giving of notice or the passage of time or both would be an Insolvency Event, the Corporation and Parent shall give written notice thereof to the Exchangeable Shareholder, which notice shall contain a brief statement of the rights of the Exchangeable Shareholder with respect to the Exchange Right.

3.9                                 Parent Common Shares.

Parent hereby represents, warrants and covenants that the Parent Common Shares issuable as described herein will be duly authorized and validly issued as fully paid and non-assessable and shall be free and clear of any lien, claim or encumbrance.

9

3.10                          Prohibition on Voluntary Liquidation.

Parent covenants that it shall not, and agrees to cause CallCo to not, take any action relating to a voluntary liquidation, dissolution or winding-up of the Corporation or its successors or CallCo or its successors, as the case may be, prior to the Redemption Date (as defined in the Exchangeable Share Provisions) unless prior to such liquidation, dissolution or winding-up Parent shall have taken such actions to ensure that it is possible for holders of Exchangeable Shares to extend through to the Redemption Date (subject to the continuing effect of other provisions of this exchange agreement which may permit the redemption or other termination of the Exchangeable Shares prior to the Redemption Date) the deferral of any gain incurred by such holders that would otherwise have been recognized at the Closing Date as a result of the consummation of the transactions contemplated by the Purchase Agreement.

3.11                           Automatic Exchange on Liquidation of Parent.

(a)                                  Parent will give the Exchangeable Shareholder notice of each of the following events (each, a “Liquidation Event”) at the time set forth below:

(i)                                     in the event of any determination by the Board of Directors of Parent to institute voluntary liquidation, dissolution or winding-up proceedings with respect to Parent or to effect any other distribution of assets of Parent among its shareholders for the purpose of winding up its affairs, at least 60 days prior to the proposed effective date of such liquidation, dissolution, winding-up or other distribution; and

(ii)                                  as soon as practicable following the earlier of (A) receipt by Parent of notice of, and (B) Parent otherwise becoming aware of, any threatened or instituted claim, suit, petition or other proceedings with respect to the involuntary liquidation, dissolution or winding-up of Parent or to effect any other distribution of assets of Parent among its shareholders for the purpose of winding up its affairs, in each case where Parent has failed to contest in good faith any such proceeding commenced in respect of Parent within 30 days of becoming aware thereof.

(b)                                 Such notice shall include a brief description of the automatic exchange of Exchangeable Shares for Parent Common Shares provided for in section 3.11(c).

(c)                                  In order that the Exchangeable Shareholder will be able to participate on a pro rata basis with the holders of Parent Common Shares in the distribution of assets of Parent in connection with a Liquidation Event, on the fifth Business Day prior to the effective date (the “Liquidation Event Effective Date”) of a Liquidation Event all of the then outstanding Exchangeable Shares shall be automatically exchanged for Parent Common Shares.  To effect such automatic exchange, Parent shall purchase on the fifth Business Day prior to the Liquidation Event Effective Date each Exchangeable Share then outstanding and held by the Exchangeable Shareholder, and the Exchangeable Shareholder shall sell the Exchangeable Shares held by it at such time, for a total purchase price per share equal to (a) the

10

Current Market Price of a Parent Common Share on the fifth Business Day prior to the Liquidation Event Effective Date, which shall be satisfied in full by Parent issuing to the Exchangeable Shareholder one Parent Common Share, and (b) to the extent not paid by the Corporation, an additional amount equivalent to the full amount of all declared and unpaid dividends on each such Exchangeable Share held by such holder on any dividend record date which occurred prior to the date of the exchange.  In connection with such automatic exchange, Parent will provide to the Exchangeable Shareholder an Officer’s Certificate setting forth the calculation of the purchase price for each Exchangeable Share.

(d)                                 On the fifth Business Day prior to the 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 the Exchangeable Shareholder shall be deemed to have transferred to Parent all of the Exchangeable Shareholder’s right, title and interest in and to the Exchangeable Shareholder’s Exchangeable Shares and shall cease to be a holder of such Exchangeable Shares and Parent shall issue to the Exchangeable Shareholder the Parent Common Shares issuable upon the automatic exchange of Exchangeable Shares for Parent Common Shares and on the applicable payment date shall deliver to the Exchangeable Shareholder a cheque for the balance, if any, of the total purchase price for such Exchangeable Shares without interest but less any amounts withheld pursuant to section 3.12.  Concurrently with the Exchangeable Shareholder ceasing to be a holder of Exchangeable Shares, the Exchangeable Shareholder shall be considered and deemed for all purposes to be the holder of the Parent Common Shares issued pursuant to the automatic exchange of Exchangeable Shares for Parent Common Shares and the certificates held by the Exchangeable Shareholder previously representing the Exchangeable Shares exchanged by the Exchangeable Shareholder with Parent pursuant to such automatic exchange shall thereafter be deemed to represent Parent Common Shares issued to the Exchangeable Shareholder by Parent pursuant to such automatic exchange.  Upon the request of the Exchangeable Shareholder and the surrender by the Exchangeable Shareholder of Exchangeable Share certificates deemed to represent Parent Common Shares, duly endorsed in blank and accompanied by such instruments of transfer as Parent may reasonably require, Parent shall deliver or cause to be delivered to the Exchangeable Shareholder certificates representing Parent Common Shares of which the Exchangeable Shareholder is the holder.

3.12                           Withholding Rights.

(a)                                  The Exchangeable Shareholder hereby represents and warrants that he is not a non-resident of Canada within the meaning of the Income Tax Act (Canada).  The Exchangeable Shareholder covenants and agrees that at the time of the exchange of all Exchangeable Shares held by the Exchangeable Shareholder including, without limitation, pursuant to the exercise by an Exchangeable Shareholder of the Exchange Right or the occurrence of the automatic exchange of Exchangeable Shares for Parent Common Shares, as specified in Article 4 (unless, in either case,

11

Parent shall not have delivered the requisite Parent Common Shares issuable in exchange for the Exchangeable Shares to the Exchangeable Shareholder), or upon the redemption of Exchangeable Shares pursuant to Article 6 or 7 of the Exchangeable Share Provisions, or upon the effective date of the liquidation, dissolution or winding-up of the Corporation pursuant to Article 5 of the Exchangeable Share Provisions, or upon the purchase of Exchangeable Shares from the holder thereof by CallCo pursuant to the exercise by CallCo of the Retraction Call Right, the Redemption Call Right or the Liquidation Call Right, or upon the purchase of the Exchangeable Shares from the holder thereof by the Corporation pursuant to Article 8 of the Exchangeable Share Provisions, the Exchangeable Shareholder shall deliver to the Corporation, CallCo or Parent, as the case maybe, a certificate contained a representation and warranty that such Exchangeable Shareholder in not a non-resident of Canada within the meaning the Income Tax Act (Canada) or failing which, the Exchangeable Shareholder shall deliver a certificate issued by the Canada Revenue Agency pursuant to section 116 of the Income Tax Act (Canada) having a “certificate limit” (as defined therein) of not less than the value of the securities to be received.