EXHIBIT 10.1
 
22303354 ONTARIO INC.
951 Wilson Avenue, Suite 17
Toronto, Ontario
M3K 2A7
 

 
PRIVATE & CONFIDENTIAL
 
January 4th 2011

Polar Wireless Corp.
136 Yorkville Avenue
Suite 300
Toronto, ON
M5R 1C2
 
Attention:  G. Kelly O’Dea, Chairman and Chief Executive Officer
 
Dear Sirs:
 
Re:
Business Combination of 2230354 Ontario Inc. (“223”) and Polar Wireless Corp.
(“PWC”)

 
The purpose of this letter is to set forth the terms and conditions of the
indirect purchase by PWC of all of the outstanding shares of 223 from the
shareholders of 223 (the “Transaction”) to be effected by way of amalgamation.
 
Terms of Transaction and Ancillary Matters
 
1.  
Subject only to the conditions precedent set forth herein in paragraph 3, on the
Closing Date (as hereinafter defined), 223 and PWC will enter into (and PWC will
cause Polar Wireless Corporation and/or 2240519 Ontario Limited, as applicable,
to enter into) (i) the amalgamation agreement attached hereto as Schedule “A”,
(ii) the support agreement attached hereto as Schedule “B”, and (iii) the
exchange trust agreement attached hereto as Schedule “C”.

 
2.  
Each of the parties hereto represents and warrants that it has the corporate
power and authority to enter into this letter and to carry out its obligations
hereunder and the execution and delivery of this letter and the completion of
the obligations contemplated hereby have been duly and validly authorized by all
necessary corporate action.

 
Conditions Precedent
 
3.  
The completion of the Transaction shall be subject to the following conditions
precedent being satisfied on or prior to the Closing Date:

 
 
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(a)  
223 shall deliver to PWC (i) audited financial statements for 223 for the period
from the date of incorporation to April 30, 2010, and (ii) unaudited financial
statements for 223 for the six month period ended October 31, 2010, in each
case, prepared in accordance with Canadian generally accepted accounting
principles, which financial statements shall be satisfactory to PWC; and

 
(b)  
No material adverse change shall have occurred in the business, results of
operations, assets, liabilities, financial condition or affairs of 223,
financial or otherwise, between the date hereof and the Closing Date.

 
4.  
 

 
(a)  
The conditions precedent set out in paragraph 3 are for the sole benefit of PWC.
PWC may refuse to proceed with the closing of the Transaction if the conditions
precedent for its benefit are not fulfilled on or prior to the Closing Date, and
it shall incur no liability to 223 by reason of such refusal.

 

(b)  
The said conditions precedent may be waived in whole or in part by PWC in its
absolute discretion.

 

Operating Covenants; Exclusive License
 

5.  
223 agrees from the date hereof until the Closing Date not to enter into any
transaction or contract not in the ordinary course of business and not to engage
in any business enterprise or activity different from that carried on as of the
date hereof, unless written approval of PWC is obtained.

 
6.  
From and after the date hereof until the earlier to occur of the Closing Date
and the Termination Date (as hereinafter defined), 223 hereby grants to the
Company and its subsidiaries a non-transferable, worldwide, royalty-free
exclusive right and license to exploit, market, sell and deploy all of 223’s
intellectual property and all rights therein.

 
Closing
 

7.  
The closing date shall occur within three business days of the satisfaction of
the conditions precedent set forth in paragraph 3 or such other date as is
agreed in writing between the parties (the “Closing Date”).

 
8.  
The parties hereto agree to proceed diligently and in good faith to complete all
transactions contemplated herein as soon as possible in order to ensure that the
Closing Date shall be no later than January 31, 2011.

 
Termination
 
9.  
This letter shall terminate with the parties having no obligations to each other
on the day (the “Termination Date”) on which the earlier of the following events
occurs:

 
(a)  
written agreement of the parties to terminate this letter; and

 
(b)  
PWC notifying 223 in writing that it is not satisfied with 223’s financial
statements or that a material adverse change has occurred.

 
 
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Miscellaneous
 
10.  
This letter constitutes a legally binding commitment of the parties.

 
11.  
This letter shall be governed in all respects, including validity,
interpretation and effect, by the laws of the Province of Ontario and the
federal laws of Canada applicable therein, without giving effect to the
principles of conflicts of laws thereof and the parties hereby irrevocably
attorn to the jurisdiction of the Courts of the Province of Ontario in respect
of any matter arising hereunder or in connection herewith.

 
12.  
This letter may be executed and evidenced by a facsimile copy thereof and all
such counterparts or facsimile counterparts shall constitute one document.

 
Yours very truly,
 
22303354 ONTARIO INC., on behalf of its
 
shareholders
 
/s/ Vladimir Aleynikov
Per: ______________________________
                Vladimir Aleynikov
                Director
 
THE TERMS OF THIS LETTER are hereby accepted as of the 4th day of January, 2011.
 
POLAR WIRELESS CORP.
 
/s/ G. Kelly O’Dea
Per: ______________________________
G. Kelly O’Dea
Chairman and Chief Executive Officer

 
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Schedule “A”

 
POLAR WIRELESS CORPORATION
 
- and -
 
2230354 ONTARIO INC.
 
- and -
 
POLAR WIRELESS CORP.
 
 

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AMALGAMATION AGREEMENT
 

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Dated _________, 2011
 
 
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TABLE OF CONTENTS
 

Article 1 INTERPRETATION     8   1.1   Definitions.     8   1.2   Certain Rules
of Interpretation      12   1.3   Entire Agreement     13                
Article 2 THE AMALGAMATION     14   2.1   Amalgamation     14   2.2   Name    
14   2.3   Registered Office     14   2.4   Business and Powers     14   2.5  
Authorized Share Capital      14   2.6   Share Restrictions      14   2.7  
Number of Directors      14   2.8   Initial Director     14   2.9   By-laws     
15   2.10   Fiscal Year     15   2.11   Initial Officers     15   2.12  
Issuance of Shares on Amalgamation      15   2.13   Share Capital      16   2.14
  Share Certificates      16   2.15   Implementation Steps by the Parties     
17   2.16   Preparation of Filings, etc.     17   2.17   Dissenting
Shareholders      18   2.18   Closing     18   2.19   Withholding     18        
        Article 3 REPRESENTATIONS AND WARRANTIES OF Polar US AND subco     18  
3.1   Organization      18   3.2   Compliance with Laws and Licenses      19  
3.3   Capitalization      19   3.4   Capitalization of Subco     20   3.5  
Authority Relative to this Agreement     20   3.6   No Brokers     21          
      Article 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY     21   4.1  
Organization      21   4.2   Compliance with Laws and Licenses     21   4.3  
Capitalization of the Company     22   4.4   Authority Relative to this
Agreement     22   4.5   Intellectual Property     23   4.6   No Brokers     24
                Article 5 COVENANTS     24   5.1   Conduct of Business by the
Company     24   5.2   Conduct of Business by Polar US     25   5.3   Access
Rights     26   5.4   Termination of IP Sale Agreement      27  

 
 
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Article 6 CONDITIONS OF THE AMALGAMATION     27   6.1   Conditions to the
Obligations of Each Party      27   6.2   Conditions to the Obligations of Polar
US and Subco     28   6.3   Conditions to the Obligation of the Company     28  
6.4   Satisfaction of Conditions      29                 Article 7 OTHER
COVENANTS     29   7.1   Further Assurances      29   7.2   Notification of
Certain Matters      29   7.3   Indemnification     29   7.4   Joint Election  
  30                 Article 8 TERMINATION     31   8.1   Termination      31  
8.2   Effect of Termination     32                 Article 9 GENERAL PROVISIONS
    32   9.1   Expenses     32   9.2   Public Statements     32   9.3   Remedies
    32   9.4   Notices     34   9.5   Assignment     34   9.6   Amendment     34
  9.7   Attornment      34   9.8   Appointment of Agent for Service     34   9.9
  Enurement     34   9.10   Waiver      34   9.11   Counterparts     34  

 
 
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AMALGAMATION AGREEMENT
 
THIS AGREEMENT is made the ___ day of ______________, 2011
 
BETWEEN:
 
POLAR WIRELESS CORPORATION, a corporation existing under the laws of the
Province of Ontario
 
(“Subco”)
 
- and -
 
2230354 ONTARIO INC., a corporation existing under the laws of the Province of
Ontario
 
(the “Company”)
 
- and -
 
POLAR WIRELESS CORP., a corporation existing under the laws
 
of the State of Nevada
 
(“Polar US”)
 
WHEREAS the Company was incorporated under the OBCA by certificate of
incorporation dated January 13, 2010;
 
AND WHEREAS Subco was incorporated under the OBCA by certificate of
incorporation dated January 22, 2010;
 
AND WHEREAS the authorized capital of the Company consists of an unlimited
number of Company Common Shares;
 
AND WHEREAS, as at the date hereof, there are 12,000,000 Company Common Shares
issued and outstanding as fully paid and non-assessable shares;
 
AND WHEREAS the authorized capital of Subco consists of an unlimited number of
Subco Common Shares;
 
AND WHEREAS, as at the date hereof, one Subco Common Share is issued and
outstanding as a fully paid and non-assessable share and is held by 2240519
Ontario Limited (“Callco”), a wholly-owned subsidiary of Polar US;
 
 
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AND WHEREAS the Company and Polar US are parties to an intellectual property
sale agreement dated January 26, 2010 (the “IP Sale Agreement”) pursuant to
which the Company was to sell to Polar US the Intellectual Property relating to
the Roaming Business in consideration for the issuance of 5,000,000 restricted
Polar US Shares;
 
AND WHEREAS the Polar US now desires to acquire the Intellectual Property
relating to the Long-Distance Business in consideration for the issuance of
additional Polar US Shares and Polar US Preferred Shares;
 
AND WHEREAS the shareholders of the Company desire to receive shares of Polar US
on a tax-deferred basis;
 
AND WHEREAS the Company and Polar US have accordingly agreed to terminate the IP
Sale Agreement and enter into this Agreement;
 
AND WHEREAS, subject to the terms and conditions of this Agreement, the Company
and Subco have agreed to amalgamate pursuant to Sections 175 and 176 of the OBCA
upon the terms and conditions set forth in this Agreement;
 
NOW THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Parties hereby agree as follows:
 
 
13. INTERPRETATION
 
(a)  Definitions.
 
Whenever used in this Agreement, the following words and terms shall have the
meanings set out below:
 
“Amalgamating Companies” means, collectively, the Company and Subco.
 
“Amalgamation” means the amalgamation under Sections 175 and 176 of the OBCA of
the Amalgamating Companies pursuant to the Articles of Amalgamation, on the
terms and conditions set forth in this Agreement.
 
“Applicable Law” means, with respect to any Person, any domestic, foreign,
national, federal, provincial, state or local law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
policy or other similar requirement enacted, adopted, promulgated or applied by
a Governmental Entity that is binding upon or applicable to such Person, as
amended unless expressly specified otherwise.
 
“Articles of Amalgamation” means the articles of amalgamation to be filed with
the Director in connection with the Amalgamation.
 
 
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“Authorization” means any authorization, approval, exemption, consent, waiver,
certificate, directive, notice, “no action” letter, license, order, permit,
variance, agreement, instruction, registration or franchise of or from any
Governmental Entity or pursuant to any Applicable Law.
 
“Board” means the board of directors of the Company.
 
 “Business” means, collectively, the Roaming Business and the Long-Distance
Business, and all matters ancillary thereto.
 
“Business Day” means a day, other than a Saturday or Sunday, on which the
principal commercial banks located in the City of Toronto, Ontario are open for
business during normal banking hours.
 
“Certificate of Amalgamation” means the certificate of amalgamation to be issued
by the Director pursuant to Subsection 178(4) of the OBCA in respect of the
Articles of Amalgamation.
 
“Class A Exchangeable Shares” means the exchangeable non-voting shares in the
capital of New Polar.
 
“Class B Exchangeable Shares” means the exchangeable non-voting shares in the
capital of New Polar.
 
“Class A Shares” means the Class A non-voting shares in the capital of New
Polar.
 
“Class B Shares” means the Class B non-voting shares in the capital of New
Polar.
 
“Closing” has the meaning ascribed thereto in Section 2.18.
 
“Closing Date” has the meaning ascribed thereto in Section 2.18.
 
“Common Shares” means the common shares in the capital of New Polar.
 
“Company Common Shares” means the common shares in the capital of the Company.
 
“Director” means the Director appointed under Section 178 of the OBCA to
administer the provisions of the OBCA.
 
“Dissent Rights” means the rights of dissent in favour of registered
Shareholders in respect of the Amalgamation.
 
“Dissenting Holder” means any registered Shareholder who has duly exercised its
Dissent Rights in strict compliance therewith and has not withdrawn or been
deemed to have withdrawn such Dissent Rights.
 
 
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“Effective Date” means the date upon which the Amalgamation becomes effective as
established by the date shown on the Certificate of Amalgamation.
 
“Effective Time” means 12:01 a.m. (Toronto time) on the Effective Date.
 
“Encumbrances” means any pledge, lien, priority, security interest, lease, title
retention agreement, restriction, easement, right-of-way, title defect, option,
adverse claim or encumbrance of any kind or character whatsoever.
 
“Governmental Entity” means any government, regulatory authority, governmental
department, agency, commission, bureau, official, minister, Crown corporation,
court, body, board, tribunal or dispute settlement panel or other law, rule or
regulation-making organization or entity: (a) having jurisdiction on behalf of
any nation, province, territory or state or any other geographic or political
subdivision of any of them; or (b) exercising any administrative, executive,
judicial, legislative, policy, regulatory or taxing authority or power.
 
“Intellectual Property” means all intellectual property of the Company used by
or currently being developed for use in the Business, and all rights of the
Company therein, including all claims for past infringement, worldwide, whether
registered or unregistered, including, without limitation: (a) all patents,
patent applications and other patent rights, including divisional and
continuation patents; (b) all registered and unregistered trade-marks, service
marks, logos, slogans, corporate names, business names and other indicia of
origin, and all applications and registrations therefor; (c) registered and
unregistered copyrights and mask works, including all copyright in and to
computer software programs, including the Software, and applications and
registrations of such copyright; (d) internet domain names, applications and
reservations for internet domain names, uniform resource locators and the
corresponding Internet sites; (e) industrial designs; (f) trade secrets and
proprietary information not otherwise listed in (a) through (d) above,
including, without limitation, all inventions (whether or not patentable),
invention disclosures, moral and economic rights of authors and inventors
(however denominated), confidential information, technical data, customer lists,
corporate and business names, trade names, trade dress, brand names, know-how,
show-how, mask works, circuit topography, formulae, methods (whether or not
patentable), designs, processes, procedures, technology, business methods,
source codes, object codes, computer software programs (in either source code or
object code form), databases, data collections and other proprietary information
or material of any type, and all derivatives, improvements and refinements
thereof, howsoever recorded or unrecorded.
 
“IP Sale Agreement” has the meaning ascribed thereto in the recitals hereof.
 
“Long-Distance Business” means the business carried on by the Company in
connection with the development and commercialization of a low-cost
long-distance mobile telephone solution.
 
“Misrepresentation” has the meaning ascribed thereto in the Securities Act.
 
 
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“New Polar” means the corporation resulting from the Amalgamation.
 
“OBCA” means the Business Corporations Act (Ontario), as now enacted or as the
same may from time to time be amended, re-enacted or replaced.
 
“Outside Date” means ______________, 2011, or such other date as the Parties may
mutually agree in writing.
 
“Party” means a party to this Agreement, and “Parties” means all of them.
 
“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Entity or any
agency, instrumentality or political subdivision of a Governmental Entity, or
any other entity or body.
 
“Polar US Preferred Shares” means the shares of Class A preferred stock, par
value US$0.001 per share, of Polar US, with the rights, privileges, restrictions
and conditions described in Appendix 3.
 
“Polar US Shares” means the shares of common stock, par value US$0.001 per
share, of Polar US.
 
“Roaming Business” means the business carried on by the Company in connection
with the development and commercialization of a mobile telephone solution
involving the elimination of roaming fees and charges.
 
“Securities Act” means the Securities Act (Ontario), as now enacted or as the
same may from time to time be amended, re-enacted or replaced.
 
“Shareholders” means the holders of Company Common Shares.
 
“Subco Common Shares” means the common shares in the capital of Subco.
 
“Subsidiary” or “Subsidiaries” means, with respect to any Person: (a) a
corporation a majority in voting power of whose share capital or capital stock
with voting power, under ordinary circumstances, to elect directors is at the
time, directly or indirectly, owned by such Person, by a Subsidiary of such
Person, or by such Person and one or more Subsidiaries of such Person, whether
or not such power is subject to a voting agreement or similar restriction; (b) a
partnership or limited liability company in which such Person or Subsidiary of
such Person is, at the date of determination, (i) in the case of a partnership,
a general partner of such partnership with the power affirmatively to direct the
policies and management of such partnership, or (ii) in the case of a limited
liability company, the managing member or, in the absence of a managing member,
a member with the power affirmatively to direct the policies and management of
such limited liability company; or (c) any other Person (other than a
corporation, partnership or limited liability company) in which such Person, a
Subsidiary of such Person or such Person and one or more Subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (i)
the power to elect or direct the election of a majority of the members of the
governing body of such Person, whether or not such power is subject to a voting
agreement or similar restriction, or (ii) in the absence of such a governing
body, at least a majority ownership interest.
 
 
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“Support Agreement” means the agreement to be made between Polar US, Callco and
the Company, substantially in the form of Appendix 2 hereto.
 
“Tax Act” means the Income Tax Act (Canada).
 
“Transaction Resolution” means the special resolution of the Shareholders
approving the Amalgamation.
 
(b)  Certain Rules of Interpretation
 
In this Agreement:
 
(I)  
Consent – Whenever a provision of this Agreement requires an approval or consent
and such approval or consent is not delivered within the applicable time limit,
then, unless otherwise specified, the Party whose consent or approval is
required shall be conclusively deemed to have withheld its approval or consent.

 
(II)  
Currency – Unless otherwise specified, all references to money amounts are to
Canadian dollars.

 
(III)  
Governing Law – This Agreement is a contract made under and shall be governed by
and construed in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable in the Province of Ontario.

 
(IV)  
Headings – Headings of Articles and Sections and the insertion of a Table of
Contents are inserted for convenience of reference only and do not affect the
construction or interpretation of this Agreement.

 
(V)  
Including – Where the word “including” or “includes” is used in this Agreement,
it means “including (or includes) without limitation”.

 
(VI)  
No Strict Construction – The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of strict
construction shall be applied against any Party.

 
(VII)  
Number and Gender – Unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender include
all genders.

 
(VIII)  
Severability – If, in any jurisdiction, any provision of this Agreement or its
application to any Party or circumstance is restricted, prohibited or
unenforceable, such provision shall, as to such jurisdiction, be ineffective
only to the extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions of this Agreement and without affecting
the validity or enforceability of such provision in any other jurisdiction or
without affecting its application to other Parties or circumstances.  The
Parties agree to replace any such restricted, prohibited or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the same economic, business and other purposes
of such restricted, prohibited or unenforceable provision.

 
 
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(IX)  
Statutory references – A reference to a statute includes all regulations and
rules made pursuant to such statute and, unless otherwise specified, the
provisions of any statute, regulation or rule which amends, supplements or
supersedes any such statute, regulation or rule.

 
(X)  
Time – Time is of the essence in the performance of the Parties’ respective
obligations.

 
(XI)  
Time Periods – Unless otherwise specified, time periods within or following
which any payment is to be made or act is to be done shall be calculated by
excluding the day on which the period commences and including the day on which
the period ends and by extending the period to the next Business Day following
if the last day of the period is not a Business Day.

 
(c)  Entire Agreement
 
This Agreement and the agreements and the other letters and documents required
to be delivered pursuant to this Agreement, constitute the entire agreement
between the Parties and set out all the covenants, promises, warranties,
representations, conditions and agreements between the Parties in connection
with the subject matter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written,
pre-contractual or otherwise.  There are no covenants, promises, warranties,
representations, conditions, understandings or other agreements, whether oral or
written, pre-contractual or otherwise, express, implied or collateral between
the Parties in connection with the subject matter of this Agreement except as
specifically set forth in this Agreement and any other letter or document
required to be delivered pursuant to this Agreement.
 
 
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14. THE AMALGAMATION
 
(a)  Amalgamation
 
The Amalgamating Companies hereby agree to amalgamate effective on the Effective
Date in accordance with the provisions of the OBCA and to continue as one
corporation on the terms and conditions set forth in this Agreement.
 
(b)  Name
 
The name of the amalgamated company shall be “Polar Wireless Corporation”.
 
(c)  Registered Office
 
Unless changed by the directors of New Polar, the address of the registered
office of New Polar shall be 136 Yorkville Avenue, Toronto, Ontario M5R 1C2.
 
(d)  Business and Powers
 
There shall be no restrictions on the business New Polar may carry on or on the
powers it may exercise.
 
(e)  Authorized Share Capital
 
Upon the Amalgamation, New Polar shall be authorized to issue: (a) an unlimited
number of Common Shares; (b) an unlimited number of Class A Shares; (c) an
unlimited number of Class B Shares; (d) an unlimited number of Class A
Exchangeable Shares; and (e) an unlimited number of Class B Exchangeable
Shares.  The Common Shares, the Class A Shares, the Class B Shares, the Class A
Exchangeable Shares and the Class B Exchangeable Shares shall have attached
thereto the rights, privileges, restrictions and conditions respectively as set
out in Appendix 1 hereto.
 
(f)  Share Restrictions
 
There shall be no restrictions on the ownership of shares of New Polar.
 
(g)  Number of Directors
 
The board of directors of New Polar will, until otherwise changed in accordance
with the OBCA, consist of a minimum of one and a maximum of ten directors. The
number of directors of New Polar will initially be three.
 
(h)  Initial Director
 
 
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The first director of New Polar shall be the person whose name, address and
resident Canadian status is set out below:
 
Name
Address
Resident Canadian
Shane G. Carroll
3044 Bloor Street
West, Suite 317
Toronto, Ontario M8X 2Y8
Yes

 
This director will hold office from the Effective Date until the close of
business of the annual meeting of shareholders of New Polar first following the
date of this Agreement or until his successor is elected or appointed.
 
(i)  By-laws
 
The by-laws of New Polar shall be the by-laws of Subco in effect immediately
prior to the Amalgamation.
 
(j)  Fiscal Year
 
The fiscal year of New Polar shall terminate on the 31st day of April in each
year.
 
(k)  Initial Officers
 
Until changed by the directors or until their successors are appointed, from the
Effective Date, the officers of New Polar will be as follows:
 
Name                                                            Office
 
Shane G. Carroll                                          President
 
Shane G. Carroll                                          Secretary
 
(l)  Issuance of Shares on Amalgamation
 
Upon the Amalgamation:
 
 
(a)
each holder of Subco Common Shares outstanding immediately prior to the
Amalgamation will receive one fully paid and non-assessable Common Share for
each Subco Common Share held and the name of each holder thereof shall be added
to the register of holders of Common Shares accordingly and each certificate
representing such Subco Common Shares shall continue to evidence ownership of
Common Shares;

 
 
(b)
each holder of Company Common Shares outstanding immediately prior to the
Amalgamation (other than Dissenting Holders who are ultimately entitled to be
paid the fair value of his Company Common Shares) will receive one fully paid
and non-assessable Class A Share and one fully paid and non-assessable Class B
Share for each Company Common Share held and the name of each holder thereof
shall be added to the register of holders of Class A Shares and Class B Shares
accordingly and each certificate representing Company Common Shares shall
continue to evidence ownership of Class A Shares and Class B Shares, provided
that if, in respect of any such holder, such a transfer would result in the
issue of a fractional Class A Share or Class B Share, then any fractional number
of Class A Shares or Class B Shares, as the case may be, equal to or greater
than 0.5 will be rounded up to the nearest whole number and less than 0.5 will
be rounded down to the nearest whole number; and

 
 
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(c)
each Dissenting Holder will be entitled to be paid the fair value of his Company
Common Shares by New Polar upon completion of the dissent procedures prescribed
by, and in accordance with the provisions of the OBCA, and the Company Common
Shares held by such Dissenting Holder will be cancelled.

 
(m)  Share Capital
 
For purposes of the OBCA and the Tax Act:
 
 
(a)
the stated and paid-up capital of the Common Shares issued in connection with
the Amalgamation will be $100.00; and

 
 
(b)
the stated and paid-up capital of the Class A Shares and the Class B Shares
issued in connection with the Amalgamation will be the aggregate sum of the
aggregate stated and paid-up capital of all of the outstanding shares of all
classes of Subco and the Company for purposes of the Tax Act determined
immediately before the Amalgamation, minus the aggregate amount of the stated
and paid-up capital in respect of the shares held by Dissenting Holders
immediately before the Amalgamation, and minus the amount of stated and paid-up
capital of the Common Shares.

 
(n)  Share Certificates
 
No certificates will be issued in respect of the Class A Shares or the Class B
Shares upon the Amalgamation.
 
Any certificate representing Company Common Shares not deposited with all other
necessary documents prior to the sixth anniversary of the Effective Date shall
cease to represent a claim or interest of any kind or nature against New Polar
or Polar US, as the case may be. On such date, the Class A Shares, the Class B
Shares, the Class A Exchangeable Shares, the Class B Exchangeable Shares, the
Polar US Shares and/or the Polar US Preferred Shares, as the case may be, to
which the former registered holder of such certificate was entitled shall be
deemed to have been surrendered to New Polar or Polar US, together with all
dividends, distributions and any interest held for such former registered
holder.
 
 
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(o)  Implementation Steps by the Parties
 
The Company covenants in favour of Polar US and Subco that the Company shall:
 
 
(a)
subject to the satisfaction or waiver of the conditions set forth in Article
6 (other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions at the
Closing), send to the Director, for endorsement and filing by the Director, the
Articles of Amalgamation and such other documents as may be required in
connection therewith under the OBCA to give effect to the Amalgamation pursuant
to Sections 175 and 176 of the OBCA; and

 
 
(b)
permit Polar US (and its counsel) to review and comment upon drafts of all
materials to be filed by the Company with the Director or any Governmental
Entity in connection with the Amalgamation prior to the filing of such
materials.

 
(p)  Preparation of Filings, etc.
 
(I)  
Polar US, Subco and the Company shall cooperate in: (i) preparation and filing
of any documents required by any of them to discharge their respective
obligations under Applicable Law in connection with the Amalgamation; and (ii)
the taking of all such action as may be required under any applicable securities
laws or the OBCA in connection with the Amalgamation.

 
(II)  
Each of Polar US, Subco and the Company shall furnish to the other, on a timely
basis, all information as may be reasonably required to effect the actions
contemplated by Section 2.16(a), and each covenants that no information so
furnished by it in connection with those actions or otherwise in connection with
the consummation of the Amalgamation will contain any Misrepresentation.

 
(III)  
Each of Polar US, Subco and the Company shall promptly notify the others if, at
any time before the Effective Time, it becomes aware that any filing under
Applicable Law in connection with the Amalgamation contains a Misrepresentation
or otherwise requires an amendment or supplement. In any such event, each of the
Parties will co-operate in the preparation of a supplement or amendment to such
document, as the case may be, that corrects the Misrepresentation, and the
Company will cause the same to be distributed or otherwise communicated to the
any required Persons and filed as required under Applicable Law.

 
 
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(q)  Dissenting Shareholders
 
The Company shall give Polar US prompt notice of any written notice of a
dissent, withdrawal of such notice and any other instruments served pursuant to
such Dissent Rights and received by the Company.
 
(r)  Closing
 
The closing of the transactions contemplated hereby (the “Closing”) shall take
place at the offices of Goodmans LLP, Bay Adelaide Centre, 333 Bay Street, Suite
3400, Toronto, Ontario, as soon as possible following receipt of the Certificate
of Amalgamation, but in any event no later than two Business Days after
satisfaction or waiver of the conditions set forth in Article 6 (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of those conditions at the Closing), or on
such other date or at such other place as Polar US and the Company may mutually
agree in writing (the “Closing Date”).
 
(s)  Withholding
 
New Polar shall be entitled to directly or indirectly deduct and withhold from
any amount otherwise payable pursuant to this Agreement to any Shareholder such
amounts as are entitled or required to be deducted and withheld with respect to
the making of such payment under the Tax Act or any other provision of domestic
or foreign (whether national, federal, provincial, state, local or otherwise)
Applicable Law relating to taxes.  To the extent that amounts are so deducted
and withheld and paid to the appropriate Governmental Entity directly or
indirectly by New Polar, such deducted and withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the Shareholders in
respect of which such deduction and withholding was made by New Polar provided
that such withheld amounts are actually remitted to the appropriate Governmental
Entity within the time required and in accordance with the Tax Act or any other
provision of domestic or foreign (whether national, federal, provincial, state,
local or otherwise) Applicable Law relating to taxes.
 
 
15. REPRESENTATIONS AND WARRANTIES OF Polar US AND subco
 
Each of Polar US and Subco represents and warrants to the Company as follows,
and acknowledges that the Company is relying upon these representations and
warranties in connection with the entering into of this Agreement:
 
(a)  Organization
 
 
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Each of Polar US and Subco is validly existing as a corporation under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to own its assets and conduct its business as currently owned and conducted.
Subco is, and shall be immediately prior to the Effective Time, a “taxable
Canadian corporation” (as such term is defined in the Tax Act).
 
(b)  Compliance with Laws and Licenses
 
Polar US and Subco are in compliance, in all material respects, with all
Applicable Laws, have all licenses, permits, orders or approvals of, and have
made all required registrations with, any Governmental Entity that is required
in connection with the ownership of their assets or the conduct of their
operations and are in compliance, in all material respects, with all such
licenses, permits, orders, approvals and registrations. To the knowledge of
Polar US and Subco, neither Polar US or Subco has received any notice, whether
written or oral, of revocation or non-renewal of any such licenses, permits,
orders, approvals or registrations, or of any intention of any Governmental
Entity to revoke or refuse to renew any of such licenses, permits, orders,
approvals or registrations, and Polar US and Subco have no reason to believe
that all such licenses, permits, orders, approvals and registrations shall not
continue to be effective or any required renewals thereof shall not be available
in order for Polar US and Subco to continue to conduct their respective
businesses as they are currently being conducted.
 
(c)  Capitalization
 
(I)  
As of the date hereof, the authorized share capital of Polar US consists of
200,000,000 Polar US Shares and 10,000,000 Polar US Preferred Shares, of which
68,000,000 Polar US Shares are issued and outstanding.

 
Except as contemplated herein in respect of the issue of Polar US Shares and
Polar Preferred Shares on exchange of Class A Exchangeable Shares and Class B
Exchangeable Shares, respectively, and the issuance of an aggregate of Polar US
Preferred Shares to third parties as part of their finders’ fee in connection
with the transactions contemplated hereby, there are no options, warrants,
conversion privileges or other rights, agreements, arrangements or commitments
obligating Polar US to issue or sell any shares or other equity interest of
Polar US or securities or obligations of any kind convertible into or
exchangeable for any shares or other equity interest of Polar US, nor are there
outstanding any stock appreciation rights, phantom equity or similar rights,
agreements, arrangements or commitments based upon the book value, income or any
other attribute of Polar US.
 
(II)  
All outstanding Polar US Shares have been duly authorized and are validly issued
and outstanding as fully paid and non-assessable shares, free of pre-emptive
rights. There are no outstanding bonds, debentures or other evidences of
indebtedness of Polar US having the right to vote (or that are convertible for
or exercisable into securities having the right to vote) with the holders of
Polar US Shares on any matter. There are no outstanding contractual obligations
of Polar US to repurchase, redeem or otherwise acquire any outstanding Polar US
Shares.

 
 
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(d)  Capitalization of Subco
 
(I)  
As of the date hereof, the authorized share capital of Subco consists of an
unlimited number of Subco Common Shares, of which one Subco Common Share is
issued and outstanding and held by Callco.

 
(II)  
There are no options, warrants, conversion privileges or other rights,
agreements, arrangements or commitments obligating Subco to issue or sell any
shares or other equity interest of Subco or securities or obligations of any
kind convertible into or exchangeable for any shares or other equity interest of
Subco, nor are there outstanding any stock appreciation rights, phantom equity
or similar rights, agreements, arrangements or commitments based upon the book
value, income or any other attribute of Subco.

 
(III)  
All outstanding Subco Common Shares have been duly authorized and are validly
issued and outstanding as fully paid and non-assessable shares, free of
pre-emptive rights. There are no outstanding bonds, debentures or other
evidences of indebtedness of Subco having the right to vote (or that are
convertible for or exercisable into securities having the right to vote) with
the shareholders of Subco on any matter. There are no outstanding contractual
obligations of Subco to repurchase, redeem or otherwise acquire any outstanding
Subco Common Shares.

 
(e)  Authority Relative to this Agreement
 
Each of Polar US and Subco has the requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by each of Polar US and Subco and the
consummation by each of them of the transactions contemplated by this Agreement
have been duly authorized, and no other corporate proceedings on the part of
Polar US or Subco are necessary to authorize this Agreement and the other
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by each of Polar US and Subco and constitutes a valid and
binding obligation of each of them, enforceable against each of them in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other Applicable Law relating to or
affecting creditors’ rights generally and to general principles of equity. The
execution and delivery by each of Polar US and Subco of this Agreement and
performance by each of them of their obligations hereunder and the completion of
the Amalgamation, will not:
 
(I)  result in a material violation or breach of, require any consent to be
obtained (except as contemplated hereunder) under or give rise to any
termination rights under any provision of:
 
(1)  
any Applicable Law; or

 
(2)  
any material contract, agreement, license, franchise or permit to which Polar US
or Subco are bound or are subject;

 
 
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(II)  
give rise to any right of termination or acceleration of any material
indebtedness, or cause any material third party indebtedness to come due before
its stated maturity or cause any material available credit to cease to be
available; or

 
(III)  
result in the imposition of any Encumbrance upon any of Polar US’s or Subco’s
assets or restrict, hinder, impair or limit in any material respect the ability
of either of them to carry on their respective business as and where it is now
being carried on.

 
(f)  No Brokers
 
No broker, finder or investment banker of Polar US or Subco is entitled to any
brokerage, finder’s or other fee or commission, or to the reimbursement of any
of its expenses, in connection with the Amalgamation and the transactions
contemplated hereby.
 
 
16. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company represents and warrants to Polar US and Subco as follows, and
acknowledges that Polar US and Subco are relying upon these representations and
warranties in connection with the entering into of this Agreement:
 
(a)  Organization
 
The Company is validly existing as a corporation under the OBCA and has full
corporate power and authority to own its assets and conduct its business as
currently owned and conducted.  The Company is qualified to carry on its
business as currently conducted, and is in good standing, in each jurisdiction
in which the character of its properties, owned or leased, or the nature of its
activities makes such qualification necessary.
 
(b)  Compliance with Laws and Licenses
 
The Company is in compliance, in all material respects, with all Applicable
Laws, has all licenses, permits, orders or approvals of, and has made all
required registrations with, any Governmental Entity that is required in
connection with the ownership of its assets or the conduct of its operations and
is in compliance in all material respects, with all such licenses, permits,
orders, approvals and registrations. To the knowledge of the Company, the
Company has not received any notice, whether written or oral, of revocation or
non-renewal of any such licenses, permits, orders, approvals or registrations,
or of any intention of any Governmental Entity to revoke or refuse to renew any
of such licenses, permits, orders, approvals or registrations, and the Company
has no reason to believe that all such licenses, permits, orders, approvals and
registrations shall not continue to be effective or any required renewals
thereof shall not be available in order for the Company to continue to conduct
its business as it is currently being conducted.
 
 
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(c)  Capitalization of the Company
 
(I)  
As of the date hereof, the authorized share capital of the Company consists of
an unlimited number of Company Common Shares, of which 12,000,000 Company Common
Shares are issued and outstanding. All Company Common Shares issuable upon the
exercise of outstanding stock options in accordance with their respective terms
will be duly authorized and validly issued, fully paid and non-assessable.

 
(II)  
There are no options, warrants, conversion privileges or other rights,
agreements, arrangements or commitments obligating the Company to issue or sell
any shares or other equity interest of the Company or securities or obligations
of any kind convertible into or exchangeable for any shares or other equity
interest of the Company, nor are there outstanding any stock appreciation
rights, phantom equity or similar rights, agreements, arrangements or
commitments based upon the book value, income or any other attribute of the
Company.

 
(III)  
All outstanding Company Common Shares have been duly authorized and are validly
issued and outstanding as fully paid and non-assessable shares, free of
pre-emptive rights. There are no outstanding bonds, debentures or other
evidences of indebtedness of the Company having the right to vote (or that are
convertible for or exercisable into securities having the right to vote) with
the Shareholders on any matter. There are no outstanding contractual obligations
of the Company to repurchase, redeem or otherwise acquire any outstanding
Company Common Shares.

 
(d)  Authority Relative to this Agreement
 
The Company has the requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement have been duly authorized by the
Board.  Subject to obtaining the Shareholder approvals referred to herein, no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other Applicable Laws relating to or
affecting creditors’ rights generally and to general principles of equity.  The
execution and delivery by the Company of this Agreement and performance by it of
its obligations hereunder and the completion of the Amalgamation, will not:
 
 
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(I)  result in a material violation or breach of, require any consent to be
obtained (except as contemplated hereunder) under or give rise to any
termination rights under any provision of:
 
(1)  
any Applicable Law; or

 
(2)  
any material contract, agreement, license, franchise or permit to which the
Company is bound or is subject;

 
(II)  
give rise to any right of termination or acceleration of any material
indebtedness, or cause any material third party indebtedness to come due before
its stated maturity or cause any material available credit to cease to be
available; or

 
(III)  
result in the imposition of any Encumbrance upon any of the Company’s assets or
restrict, hinder, impair or limit in any material respect the ability of the
Company to carry on their respective business as and where it is now being
carried on.

 
(e)  Intellectual Property
 
 
(a)
The Company has provided Polar US with a full, complete, accurate and true list
of the Intellectual Property.  The Intellectual Property comprises all
intellectual property owned, acquired, discovered, created or developed by or on
behalf of the Company or the Business, or in which the Company has any rights.

 
 
(b)
The Company owns exclusively and has good title to the Intellectual Property. No
Person other than the Company has any rights in any of the Intellectual
Property. The Company has not incorporated or used any Intellectual Property of
any other Person in any of its products or in creating any of the Intellectual
Property.

 
 
(c)
The Intellectual Property is free and clear of all Encumbrances and co-ownership
interests.  No Person other than the Company has any right to use any of the
Intellectual Property.

 
 
(d)
To the knowledge of the Company, the conduct of the Business, and the use of the
Intellectual Property in connection therewith, does not conflict with or
infringe any intellectual property rights of any Person, and the Company has not
received notice from any other Person pertaining to or challenging the right of
the Company to use any of the Intellectual Property.

 
 
(e)
To the knowledge of the Company, no Person is engaging in any activity that
infringes the Intellectual Property.

 
 
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(f)
The Intellectual Property is subsisting, valid and enforceable, and has not been
adjudged invalid or unenforceable in whole or part. No cancellation,
termination, expiration or abandonment of the Intellectual Property is
anticipated by the Company.

 
 
(g)
To the knowledge of the Company, there is no suit, action, proceeding, charge,
hearing, investigation, complaint, claim, demand or notice, including appeals
and applications for review, in progress, pending or threatened against or
relating to the Company or the Business or affecting the Intellectual Property,
including challenges to the legality, validity, enforceability, use or ownership
of the Intellectual Property.

 
 
(h)
To the knowledge of the Company, there is not presently outstanding against the
Company or the Business any judgment, decree, injunction, ruling, charge or
order of any Governmental Authority relating to or affecting the Intellectual
Property.

 
 
(i)
The Company has not transferred ownership of, or granted any licence of or right
to use, or authorized the retention of any rights to use any Intellectual
Property to any other Person.

 
(f)  No Brokers
 
Except as referred to herein and disclosed to the parties, no broker, finder or
investment banker of the Company is entitled to any brokerage, finder’s or other
fee or commission, or to the reimbursement of any of its expenses, in connection
with the Amalgamation and the transactions contemplated hereby.
 
 
17. COVENANTS
 
(a)  Conduct of Business by the Company
 
During the period commencing on the date hereof and continuing until the
Effective Time, unless Polar US shall otherwise agree in writing or as otherwise
expressly permitted by this Agreement:
 
 
(a)
the Company shall conduct its business only in, not take any action except in,
and maintain their respective facilities in, the usual, ordinary and regular
course of business consistent with past practice;

 
 
(b)
the Company shall not directly or indirectly do or permit to occur any of the
following: (i) issue, sell, pledge, dispose of, encumber, agree or offer to
issue, sell, pledge, dispose of or encumber (any additional shares of, or any
options, warrants, calls, conversion privileges or rights of any kind to acquire
any shares of, the Company; (ii) amend or propose to amend the articles, by-laws
or other constating documents of the Company; (iii) split, combine or reclassify
any outstanding Company Common Shares, or declare, set aside or pay any dividend
or other distribution payable in cash, stock, property or otherwise with respect
to the Company Common Shares; (iv) redeem, purchase or offer to purchase any
Company Common Shares, options or other securities of the Company; or (v) reduce
the stated capital of the Company;

 
 
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(c)
the Company shall: (i) use its commercially reasonable efforts to preserve
intact its business organization and goodwill, to keep available the services of
its officers and employees as a group and to maintain satisfactory relationships
with suppliers, agents, distributors, customers and others having business
relationships with them; and (ii) not take any action which would, or which
reasonably may be expected to (A) render any representation or warranty made by
it in this Agreement untrue, or (B) interfere with or delay the completion of
the Amalgamation;

 
 
(d)
the Company shall not reorganize, amalgamate or merge the Company with any other
Person; and

 
 
(e)
the Company shall not settle or compromise any (i) material claim, litigation or
arbitration proceeding related to the Company; or (ii) any claim, litigation or
arbitration proceeding brought by any present, former or purported holder of any
securities of the Company in connection with the transactions contemplated by
this Agreement.

 
(b)  Conduct of Business by Polar US
 
During the period commencing on the date hereof and continuing until the
Effective Time, unless the Company shall otherwise agree in writing or as
otherwise expressly permitted by this Agreement:
 
(I)  
Polar US shall, and shall cause each of its Subsidiaries (including Subco) to,
conduct its and their respective businesses only in, not take any action except
in, and maintain their respective facilities in, the usual, ordinary and regular
course of business consistent with past practice;

 
(II)  
Polar US shall not directly or indirectly do or permit to occur any of the
following: (i) issue, sell, pledge, dispose of, encumber, agree or offer to
issue, sell, pledge, dispose of or encumber (or permit any of its Subsidiaries
to issue, sell, pledge, dispose of, encumber, agree or offer to issue, sell,
pledge, dispose of or encumber) any additional shares of, or any options,
warrants, calls, conversion privileges or rights of any kind to acquire any
shares of, Polar US or any of its Subsidiaries; (ii) amend or propose to amend
the articles, by-laws or other constating documents of Polar US or its
Subsidiaries; (iii) split, combine or reclassify any outstanding shares of
common stock of Polar US, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect to such
shares; (iv) redeem, purchase or offer to purchase any shares of common stock,
options or other securities of Polar US; or (v) reduce the stated capital of
Polar US;

 
 
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(III)  
Polar US shall: (i) use its commercially reasonable efforts, and cause each of
its Subsidiaries to use its commercially reasonable efforts, to preserve intact
their respective business organisations and goodwill, to keep available the
services of its and their officers and employees as a group and to maintain
satisfactory relationships with suppliers, agents, distributors, customers and
others having business relationships with them; and (ii) not take any action, or
permit any of its Subsidiaries to take any action, which would, or which
reasonably may be expected to (A) render any representation or warranty made by
it in this Agreement untrue, or (B) interfere with or delay the completion of
the Amalgamation;

 
(IV)  
Polar US shall not, and shall cause each of its Subsidiaries not to, reorganize,
amalgamate or merge Polar US or any of its Subsidiaries with any other Person;
and

 
(V)  
Polar US shall not settle or compromise any (i) material claim, litigation or
arbitration proceeding related to Polar US or any of its Subsidiaries; or (ii)
any claim, litigation or arbitration proceeding brought by any present, former
or purported holder of any securities of Polar US in connection with the
transactions contemplated by this Agreement.

 
(c)  Access Rights
 
 
(a)
Subject to Applicable Law and upon reasonable notice, the Company agrees to
provide Polar US and its representatives with reasonable access (without undue
disruption to the conduct of the Company’s business) during normal business
hours to all books, records, information and files in its possession and
control, its employees and  the properties of the Company and its Subsidiaries
in order to allow Polar US to conduct such reasonable investigations as Polar US
may consider reasonably necessary or advisable for strategic planning and other
valid business reasons.  The Company further agrees to use commercially
reasonable efforts to assist Polar US in any such investigations which Polar US
may wish to conduct, provided that such investigations shall not mitigate,
diminish or affect the representations and warranties of the Company contained
in this Agreement or any document or certificate given pursuant hereto.

 
 
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(b)
Subject to Applicable Law and upon reasonable notice, Polar US agrees to provide
the Company and its representatives with reasonable access (without undue
disruption to the conduct of Polar US’s business) during normal business hours
to all books, records, information and files in its possession and control, its
employees and  the properties of Polar US and its Subsidiaries (including Subco)
in order to allow the Company to conduct such reasonable investigations as the
Company may consider reasonably necessary or advisable for strategic planning
and other valid business reasons.  Polar US further agrees to use commercially
reasonable efforts to assist the Company in any such investigations which the
Company may wish to conduct, provided that such investigations shall not
mitigate, diminish or affect the representations and warranties of Polar US or
Subco contained in this Agreement or any document or certificate given pursuant
hereto.

 
(d)  Termination of IP Sale Agreement
 
Each of the Company and Polar US agree that the IP Sale Agreement is hereby
terminated in its entirety, effective immediately, and neither party has any
obligations outstanding to the other thereunder.
 
18. CONDITIONS OF THE AMALGAMATION
 
(a)  Conditions to the Obligations of Each Party
 
The obligations of Polar US and Subco, on the one hand, and the Company, on the
other hand, to complete the transactions contemplated hereby are subject to the
satisfaction at or before the Effective Time of the following conditions, any of
which may be waived in writing by the mutual consent of Polar US and the
Company:
 
(I)  
the Transaction Resolution shall have been approved;

 
(II)  
no suit, action or proceeding shall be pending or threatened by a Governmental
Entity seeking (i) to prevent consummation of the Amalgamation; (ii) to obtain
from the Parties any material damages directly or indirectly in connection with
the Amalgamation; or (iii) to restrain or prohibit the Company’s or Subco’s
ownership or operation (or that of their respective Subsidiaries) of any
material portion of the business or material assets of the Company or its
Subsidiaries;

 
(III)  
no Applicable Law or order shall prohibit the consummation of the Amalgamation;
and

 
(IV)  
the Articles of Amalgamation shall be in form and content consistent with this
Agreement and satisfactory to each of Polar US and the Company, each acting
reasonably.

 
 
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(b)  Conditions to the Obligations of Polar US and Subco
 
The obligations of Polar US and Subco to complete the transactions contemplated
hereby are subject to the satisfaction at or before the Effective Time of the
following further conditions for the exclusive benefit of Polar US and Subco,
any of which may be waived in writing by Polar US and Subco (in their sole
discretion):
 
(I)  
the representations and warranties of the Company set forth in Article 4 shall
be true and correct at and as of the date of this Agreement and as of the
Closing Date as if made at and as of such date (except to the extent that such
representations and warranties refer specifically to an earlier date, in which
case as of such earlier date);

 
(II)  
the Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing
Date;

 
(III)  
all Authorizations that are necessary to implement the Amalgamation shall have
been obtained or received on terms that are satisfactory to Polar US, acting
reasonably, and evidence of same shall have been delivered to Polar US;

 
(IV)  
Shareholders shall not have exercised Dissent Rights in connection with the
transactions contemplated hereby, other than Shareholders holding in the
aggregate no more than 5% of the outstanding Company Common Shares as of the
Effective Time; and

 
(V)  
Polar US shall have received resignations and releases in favour of the Company,
to be effective as of the Closing Date, from each of the members of the Board.

 
(c)  Conditions to the Obligation of the Company
 
The obligation of the Company to complete the transactions contemplated hereby
is subject to the satisfaction at or before the Effective Time of the following
further conditions for the exclusive benefit of the Company, any of which may be
waived in writing by the Company (in its sole discretion):
 
(I)  
the representations and warranties of Polar US and Subco set forth in Article 3
shall be true and correct at and as of the date of this Agreement and as of the
Closing Date as if made at and as of such date (except to the extent that such
representations and warranties refer specifically to an earlier date, in which
case as of such earlier date);

 
(II)  
Polar US and Subco shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date; and

 
(III)  
Polar US and Callco shall have executed and delivered the Support Agreement.

 
 
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(d)  Satisfaction of Conditions
 
Each Party shall use its commercially reasonable efforts to satisfy the
conditions contained in this Article 6. No Party may rely upon the failure to
satisfy any of the conditions precedent in  this Article 6 if the condition
precedent would have been satisfied but for a material default by such Party in
complying with its obligations set forth in this Agreement.
 
19. OTHER COVENANTS
 
(a)  Further Assurances
 
Subject to the conditions herein provided, each Party agrees to use its
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as is practicable the transactions contemplated
by the Amalgamation and this Agreement, including the execution and delivery of
such documents as the other Parties may reasonably require, and using
commercially reasonable efforts to obtain all necessary waivers, consents,
rulings, orders and approvals and to effect all necessary registrations and
filings, including  filings under Applicable Law and submissions of information
requested by Governmental Entities in connection with the Amalgamation.
 
(b)  Notification of Certain Matters
 
Each Party shall give prompt notice to the others of:  (a) any failure of such
Party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; or (b) the occurrence or existence
of any fact or circumstance which would, or which reasonably may be expected to,
render any representation or warranty made by it hereunder untrue.
 
(c)  Indemnification
 
(I)  
The Parties agree that all rights to indemnification existing in favour of the
present and former directors and officers of the Company and present and former
directors and officers of the Company serving or who served at the request of
the Company as a director, officer, employee, agent or representative of another
corporation, partnership, joint venture, trust, employee benefit plan or other
entity or enterprise (each such present or former director or officer of the
Company being herein referred to as an “Indemnified Party” and such Persons
collectively being referred to as the “Indemnified Parties”) as in effect as of
the Effective Time shall survive and shall continue in full force and effect and
without modification, and Polar US shall cause the Company, and any successor to
the Company, to honour such rights of indemnification and indemnify in favour of
the Indemnified Parties pursuant thereto, with respect to actions or omissions
of the Indemnified Parties occurring prior to the Effective Time, for a period
of not less than the limitation period under the statutes of limitation
applicable to such matters.

 
 
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(II)  
In the event that Polar US or any of its successors or assigns: (i) consolidates
with or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger; or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person,
then, and in each such case, proper provision will be made so that the successor
or assignee of Polar US (as the case may be) assumes the obligations set forth
in this Section 7.3.

 
(III)  
The provisions of this Section 7.3 are:  (i) intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party, his or her heirs,
executors, administrators and other legal representatives; and (ii) are in
addition to, and not in substitution for, any other rights to indemnification or
contribution that any such Person may have by contract or otherwise, and such
rights shall be held by the Company, and any successor to the Company, in trust
for such Persons, provided however that no approval of any beneficiary of such
trust shall be required in connection with an amendment or variation of this
Section 7.3 prior to the Effective Date.

 
(d)  Joint Election
 
Eligible holders of Class A Shares who receive Class A Exchangeable Shares on
the redemption of their Class A Shares shall be entitled to make an income tax
election pursuant to section 85 of the Tax Act (and the analogous provision of
provincial income tax law) with respect to the transfer of their Class A Shares
to New Polar by providing two signed copies of the necessary election forms to
New Polar within sixty (60) days following the Effective Time, duly completed
with the details of the number of shares transferred and the applicable agreed
amounts for the purposes of such elections. Thereafter, subject to the election
forms complying with the provisions of the Tax Act (or applicable provincial
income tax law), Polar US will cause the forms to be signed by New Polar and
returned to such holders of Class A Exchangeable Shares (within 30 days after
the receipt thereof) for filing with Canada Revenue Agency (or the applicable
provincial taxing authority). With the exception of execution or causing
execution of the election by New Polar, compliance with the requirements for a
valid election shall be the sole responsibility of the holder making the
election.
 
Eligible holders of Class B Shares who receive Class B Exchangeable Shares on
the redemption of their Class B Shares shall be entitled to make an income tax
election pursuant to section 85 of the Tax Act (and the analogous provision of
provincial income tax law) with respect to the transfer of their Class B Shares
to New Polar by providing two signed copies of the necessary election forms to
New Polar within sixty (60) days following the Effective Time, duly completed
with the details of the number of shares transferred and the applicable agreed
amounts for the purposes of such elections. Thereafter, subject to the election
forms complying with the provisions of the Tax Act (or applicable provincial
income tax law), Polar US will cause the forms to be signed by New Polar and
returned to such holders of Class B Exchangeable Shares (within 30 days after
the receipt thereof) for filing with Canada Revenue Agency (or the applicable
provincial taxing authority). With the exception of execution or causing
execution of the election by New Polar, compliance with the requirements for a
valid election shall be the sole responsibility of the holder making the
election.
 
 
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20. TERMINATION
 
(a)  Termination
 
This Agreement may be terminated at any time prior to the Effective Time:
 
(I)  
by mutual written consent of Polar US and the Company;

 
(II)  
by Polar US or the Company, if:

 
(1)  
the Effective Date has not occurred on or before the Outside Date; provided,
however, that the right to terminate this Agreement under this Section 8.1(b)
shall not be available to a Party whose breach of any representation and
warranty or failure to fulfill any obligation, covenant or agreement set forth
in this Agreement or whose other action has been the cause of, or resulted in,
the failure of the Effective Date to occur on or before such Outside Date; or

 
(2)  
a Governmental Entity shall have issued, enacted, promulgated, enforced or
entered any Applicable Law or taken any other action, in any case having the
effect of making illegal or permanently restraining, enjoining or otherwise
prohibiting the consummation of the Amalgamation;

 
(III)  
by Polar US, if the Company has breached or failed to perform any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach or failure to perform: (i) would cause any of the
conditions set forth in Section 6.2 not to be satisfied; and (ii) cannot be
cured or, if curable, is not cured within thirty (30) days after written notice
of such breach is given to the Company by Polar US; or

 
(IV)  
by the Company, if Polar US or Subco has breached or failed to perform any of
its representations, warranties, covenants or agreements contained in this
Agreement, which breach or failure to perform: (i) would cause any of the
conditions set forth in Section 6.3 not to be satisfied; and (ii) cannot be
cured or, if curable, is not cured within thirty (30) days after written notice
of such breach is given to Polar US and Subco by the Company.

 
 
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(b)  Effect of Termination
 
If this Agreement is terminated as provided in Section 8.1, there shall be no
liability or further obligation on the part of any Party or any of their
respective shareholders, officers or directors, except for:
 
(I)  
liability arising from a breach of any representations, warranties or covenants
in this Agreement or common law fraud; and

 
(II)  
the provisions of Section 9.1 and the obligation of Polar US under Section 7.4
in connection therewith, each of which shall remain in full force and effect and
shall survive any such termination.

 
21. GENERAL PROVISIONS
 
(a)  Expenses
 
Each Party shall bear and pay all costs, expenses and fees incurred by it in
connection with the transactions contemplated hereby. Provided that the
Amalgamation is completed, New Polar shall pay the holders of Company Common
Shares who duly exercise their Dissent Rights in accordance with the OBCA,
instead of the Company.
 
(b)  Public Statements
 
Except as required by Applicable Law or stock exchange rules, none of the
Parties shall make any public announcement or any general communications to the
Company’s employees with respect to the Amalgamation or this Agreement without
the approval of Polar US and the Company (such approval not to be unreasonably
withheld or delayed). Moreover, in any event, each Party agrees to give prior
notice to the other of any public announcement relating to the Amalgamation and
agrees to consult with each other prior to issuing each such public
announcement.
 
(c)  Remedies
 
The Parties acknowledge and agree that an award of money damages may be
inadequate for any breach of this Agreement by any Party and any such breach
would cause the non-breaching Parties irreparable harm.  Accordingly, the
Parties agree that, in the event of any breach or threatened breach of this
Agreement by one of the Parties, the non-breaching Parties will also be
entitled, without the requirement of posting a bond or other security, to
equitable relief, including injunctive relief and specific performance.  Such
remedies will not be the exclusive remedies for any breach of this Agreement but
will be in addition to all other remedies available at law or equity to each of
the Parties.
 
 
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(d)  Notices
 
Any notice, consent, waiver, direction or other communication required or
permitted to be given under this Agreement by a Party shall be in writing and
may be given by delivering same or sending same by facsimile transmission or by
delivery addressed to the Party to which the notice is to be given at its
address for service herein. Any notice, consent, waiver, direction or other
communication aforesaid shall, if delivered, be deemed to have been given and
received on the date on which it was delivered to the address provided herein
(if a Business Day, if not, then the next succeeding Business Day) and if sent
by facsimile transmission be deemed to have been given and received at the time
of receipt (if a Business Day, if not then the next succeeding Business Day)
unless actually received after 5:00 p.m. (Toronto time) at the point of delivery
in which case it shall be deemed to have been given and received on the next
Business Day.
 
The address for service for each of the Parties shall be as follows:
 
(I)  
if to the Company:

 
22303354 Ontario Inc.
951 Wilson Avenue
Suite 17
Toronto, Ontario
M3K 2A7
Attention:    Vladimir Aleynikov
 
(II)  
if to Polar US or Subco:

 
Polar US, Inc.
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
Attention:    Shane G. Carroll
 
With a copy to:
 
Goodmans LLP
Suite 3400
Bay Adelaide Centre
333 Bay Street
Toronto, ON  M5H 2S7
Attention:    Avi S. Greenspoon
Fax:    (416) 979-1234
 
 
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(e)  Assignment
 
This Agreement: (a) is not intended to confer upon any other Person any rights
or remedies hereunder, except for the indemnification rights referred to in
Section 7.3; and (b) shall not be assigned by operation of law or otherwise.
 
(f)  Amendment
 
This Agreement may not be amended except by a document signed by each of the
Parties.
 
(g)  Attornment
 
For the purpose of all legal proceedings this Agreement will be deemed to have
been performed in the Province of Ontario and the courts of the Province of
Ontario will have jurisdiction to entertain any action arising under this
Agreement.  Each of the Parties attorns to the jurisdiction of the courts of the
Province of Ontario.
 
(h)  Appointment of Agent for Service
 
Polar US hereby nominates, constitutes and appoints Goodmans LLP, of the City of
Toronto, its true and lawful agent to accept service of process and to receive
all lawful notices in respect of any action arising under this Agreement (other
than any notice that is to be given by one Party to another pursuant to Section
9.4).  Until due and lawful notice of the appointment of another and subsequent
agent in the Province of Ontario has been given to and accepted by the Company,
service of process or of papers and such notices upon Goodmans LLP will be
accepted by Polar US as sufficient service.
 
(i)  Enurement
 
This Agreement will enure to the benefit of and be binding upon the respective
successors and permitted assigns of the Parties.
 
(j)  Waiver
 
At any time prior to the Effective Time, any Party may: (a) extend the time for
the performance of any of the obligations or other acts of the other Parties; or
(b) waive compliance with any of the agreements of the other Party or with any
conditions to its own obligations, in each case only to the extent such
obligations, agreements and conditions are intended for its benefit.
 
(k)  Counterparts
 
This Agreement may be executed by the Parties in counterparts and may be
executed and delivered by facsimile and all such counterparts and facsimiles
shall together constitute one and the same agreement.
 
*                      *                      *
 
 
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
Parties as of the date first above written.
 

 
POLAR WIRELESS CORPORATION
 
 
Per:
     
Name: Shane G. Carroll
Title: President
 

 

 
2230354 ONTARIO INC.
 
 
Per:
     
Name: Vladimir Aleynikov
Title:  Director
 

 

 
POLAR WIRELESS CORP.
 
 
Per:
     
Name:
Title:
 

 

 
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APPENDIX 1
 

 
 
 
 
 

 
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APPENDIX 2
 
 
 
 
 
 
 
 
 
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APPENDIX 3
 
Class A Preferred Stock
 
1.  Non-Voting
 
Subject to the provisions of the laws governing the Corporation, as now existing
or hereafter amended, the holders of the Class A Preferred Stock shall not be
entitled as such to receive notice of or to attend any meeting of stockholders
of the Corporation and shall not be entitled to vote at any such meeting.
 
  2.  Dividends
 
Subject to the prior rights of the holders of any stock ranking senior to the
Class A Preferred Stock with respect to priority in the payment of dividends,
but in priority to the holders of the Common Stock, the holders of the Class A
Preferred Stock shall be entitled to receive dividends and the Corporation shall
pay dividends thereon, if, as and when declared by the directors out of the
moneys of the Corporation 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 which the directors may declare on the Class A
Preferred Stock shall be declared and paid in equal amounts per stock on all
Class A Preferred Stock at the time outstanding.
 
3.  Right of Conversion
 
The holders of Class A Preferred Stock have the right, at the option of the
holder, at any time and from time to time, to convert such shares of Class A
Preferred Stock into fully paid and non-assessable Common Stock on the basis of
one share of Common Stock for each share of Class A Preferred Stock converted at
the exercise price of US$1.00 per share of Class A Preferred Stock being
converted into Common Stock (the “Exercise Price”).
 
4.  Conversion Procedure
 
The conversion rights provided for in Section 3 may be exercised by notice in
writing given to the Corporation at its registered office, accompanied by the
certificate or certificates representing the shares of Class A Preferred Stock
in respect of which the holder thereof desires to exercise such right of
conversion and payment of the Exercise Price.  The notice shall be signed by
such holder or its duly authorized attorney, as applicable, and shall specify
the number of shares of Class A Preferred Stock that the holder desires to
convert. If less than all the Class A Preferred Stock represented by any
certificate or certificates accompanying any such notice are to be converted,
the holder shall be entitled to receive, at the expense of the Corporation, a
new certificate representing the Class A Preferred Stock which are not to be
converted. On any conversion of Class A Preferred Stock, the Common Stock
resulting therefrom shall be registered in the name of the registered holder of
the Class A Preferred Stock converted or, subject to payment by the registered
holder of any stock transfer or other applicable taxes, in such name or names as
such registered holder may direct in writing. The right of a registered holder
of Class A Preferred Stock to convert such stock into Common Stock shall be
deemed to have been exercised, and the registered holder of the Class A
Preferred Stock to be converted (or any person or persons in whose name or names
such registered holder shall have directed Common Stock to be registered) shall
be deemed to have become a holder of Common Stock of record for all purposes, on
the date of surrender of the certificate(s) representing the Class A Preferred
Stock to be converted accompanied by notice in writing as referred to above.
 
 
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5.  Redemption at the Option of the Corporation
 
(i)  
The Corporation may, at any time, and from time to time, upon giving notice as
hereinafter provided, redeem the whole or any part of the Class A Preferred
Stock then outstanding at a price per share of Class A Preferred Stock equal to
US$1.90, together with all declared and unpaid dividends thereon, if any, less
any amount distributed in respect of such Class A Preferred Stock as a reduction
of stated capital (the “Class A Redemption Amount”).

 
(ii)  
Before redeeming any Class A Preferred Stock, the Corporation shall give not
less than seven (7) days’ notice in writing of such redemption to the registered
holders of the stock to be redeemed; such notice shall set out the Class A
Redemption Amount, the date on which the redemption is to take place (the “Class
A Redemption Date”) and, if only part of the shares held by the person to whom
it is addressed is to be redeemed, the number thereof so to be redeemed.  On or
after the Class A Redemption Date, the Corporation shall pay or cause to be paid
to the registered holders of the shares to be redeemed the Class A Redemption
Amount in respect of each share to be redeemed, on presentation and surrender of
the certificates for the shares so called for redemption at such place or places
as may be specified in such notice, and the certificates for such shares shall
thereupon be cancelled, and the shares represented thereby shall thereupon be
redeemed.  In case a part only of the outstanding Class A Preferred Stock is at
any time to be redeemed, the shares to be redeemed shall be selected, at the
option of the directors, either by lot in such manner as the directors in their
sole discretion shall determine, or as nearly as may be pro rata (disregarding
fractions) according to the number of Class A Preferred Stock held by each
holder.

 
(iii)  
Payment of the aggregate Class A Redemption Amount for such shares being
redeemed shall be made by check payable at any branch of the Corporation’s
bankers for the time being in the United States of America.

 
(iv)  
The Corporation shall have the right, exercisable at any time, to deposit the
aggregate Class A Redemption Amount of the shares called for redemption and not
yet redeemed at the date on which such deposit is made, in a special account
with any bank or trust company in the United States of America named in the
notice of redemption to be paid, without interest, to or to the order of the
respective holders of such shares called for redemption upon presentation and
surrender of the certificates representing the same and, upon the later of the
date on which such deposit is made and the Class A Redemption Date the shares in
respect whereof such deposit shall have been made shall be redeemed and the
rights of the several holders thereof, after such deposit, shall be limited to
receiving, out of the moneys so deposited, without interest, the aggregate Class
A Redemption Amount applicable to their respective shares against presentation
and surrender of the certificates representing such shares.  Any amounts so
deposited and not claimed by a holder of Class A Preferred Stock entitled
thereto within six (6) years from the date specified for redemption, shall be
returned to the Corporation without prejudice to any right a stockholder may
have to receive payment in respect thereof.

 
 
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(v)  
From and after the Class A Redemption Date, the holders of each of the shares
called for redemption shall cease to be entitled to dividends thereon and shall
not be entitled to any rights in respect of such shares, except to receive the
Class A Redemption Amount, unless payment of the Class A Redemption Amount shall
not be made by the Corporation in accordance with the foregoing provisions, in
which case the rights of the holders of such shares shall remain unaffected.

 
6.  Redemption at the Option of the Holder
 
 
(a)
A holder of a Class A Preferred Stock shall be entitled at any time and from
time to time, after _____, 2011, to require the Corporation to redeem any Class
A Preferred Stock registered in the name of such holder at a price per share
equal to the Class A Redemption Amount, by delivering to the Corporation at its
registered office a written notice (the “Class A Retraction Notice”) specifying:

 
(A)  
that the holder desires to have all or a specified number of shares of such
Class A Preferred Stock redeemed by the Corporation on a business day at least
seven (7) days from the date of such written notice; and

 
(B)  
the certificate number or numbers representing such shares to be redeemed.

 
 
(b)
On or prior to the date specified in the Class A Retraction Notice, the holder
shall deliver to the Corporation the certificate or certificates representing
the shares of Class A Preferred Stock that are requested to be redeemed, and
subject to the provisions of the laws governing the Corporation, as now existing
or hereafter amended, and to the provisions hereof, the Corporation shall, on
the date specified in the Class A Retraction Notice or such earlier date as
agreed to by the Corporation and the holder (the “Class A Retraction Date”),
redeem such Class A Preferred Stock, by paying to the holder the aggregate Class
A Redemption Amount therefor.

 
 
Payment of the Class A Redemption Amount for the shares of Class A Preferred
Stock being redeemed shall be made by check payable at any branch of the
Corporation’s banker for the time being in the United States of America.

 
 
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(vi)  
If the Corporation is unable to pay the Redemption Amount for any Class A
Preferred Stock duly presented and surrendered to the Corporation for redemption
in accordance with the foregoing, subject to the provisions of the laws
governing the Corporation, as now existing or hereinafter amended, it will
declare and pay to the holders of such Class A Preferred Stock a dividend in an
amount equal to 7% of the Class A Redemption Amount per annum commencing on the
first anniversary following such presentation and surrender.

 
(vii)  
Subject to paragraphs 6(f) and 6(g) below, a share of Class A Preferred Stock so
presented and surrendered for redemption shall be, and shall be deemed to be,
redeemed on the Class A Retraction Date.  From and after the Class A Retraction
Date, the holder of any Class A Preferred Stock represented by a certificate so
presented and surrendered to the Corporation for redemption shall cease to be
entitled to dividends and shall not be entitled to exercise any of the rights of
a stockholder in respect thereof, except to receive the Class A Redemption
Amount, unless payment of the Class A Redemption Amount is not duly made by or
on behalf of the Corporation in accordance with the foregoing provisions, in
which case the rights of the holder of such shares shall remain unaffected.

 
(viii)  
If the Corporation is prohibited by the laws governing the Corporation, as now
existing or hereafter amended, from redeeming on the Class A Retraction Date all
Class A Preferred Stock duly presented and surrendered to the Corporation for
redemption, it will redeem such number of shares thereof as it is then permitted
to redeem, which shall be selected as nearly as may be pro rata from all shares
requested to be redeemed (disregarding fractions), and the Corporation shall,
unless otherwise required by any holder thereof as set forth in paragraph 6(g)
below, continue to hold the certificates representing the Class A Preferred
Stock requested to be redeemed and not so redeemed, and on each fiscal quarter
thereafter, to the extent it is permitted to do so by the laws governing the
Corporation, as now existing or hereafter amended, and by the provisions hereof,
the Corporation shall redeem such number of such Class A Preferred Stock not
theretofore redeemed or withdrawn, as the directors of the Corporation determine
the Corporation is permitted to redeem on such date, until all such shares of
Class A Preferred Stock have been so redeemed.  Payment of the Class A
Redemption Amount therefor shall be made in the manner as aforesaid.  Upon such
payment, the Class A Preferred Stock to be redeemed shall be, and shall be
deemed to be, redeemed and such holder shall cease to be entitled to dividends
and shall not be entitled to exercise any of the rights of a stockholder in
respect thereof.

 
 
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(ix)  
A holder of a share of Class A Preferred Stock represented by a certificate
surrendered to the Corporation for redemption on a Class A Retraction Date which
is not so redeemed shall continue to be entitled to exercise all of the rights
of a stockholder in respect of such Class A Preferred Stock.  A holder of a
share of Class A Preferred Stock duly presented and surrendered to the
Corporation for redemption which is not so redeemed may, at any time before such
share is redeemed, by written notice, advise the Corporation that the holder no
longer desires such share to be redeemed and require the Corporation to return a
certificate for such share, and upon receipt of such written notice, the
Corporation shall promptly send to such holder a certificate for such Class A
Preferred Stock and thereupon the Corporation shall cease to have any obligation
to redeem such share hereunder unless such share is again tendered for
redemption by the holder in accordance with the provisions hereof.

 
7.  Dissolution
 
In the event of the dissolution, liquidation or winding-up of the Corporation,
whether voluntary or involuntary, or any other distribution of assets of the
Corporation among its stockholders for the purpose of winding up its affairs,
subject to the prior rights of the holders of any stock ranking senior to the
Class A Preferred Stock with respect to priority in the distribution of assets
upon dissolution, liquidation or winding-up, but in priority to the holders of
the Common Stock, the holders of the Class A Preferred Stock shall be entitled
to receive a sum per stock equal to the Class A Redemption Amount and after
payment of such amounts so payable to them they shall not be entitled to share
in any further distribution of the property or assets of the Corporation.
 
 
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Schedule “B”
 
SUPPORT AGREEMENT
 
THIS AGREEMENT is made as of the ______ day of ______________, 2011
 
AMONG:
 
POLAR WIRELESS CORP., a corporation existing under the laws of the State of
Nevada
 
(“Polar US”)
 
- and -
 
2240519 ONTARIO LIMITED, a corporation existing under the laws of the Province
of Ontario
 
(“Callco”)
 
- and -
 
2230354 ONTARIO INC., a corporation existing under the laws of the Province of
Ontario
 
(the “Company”)
 
WHEREAS pursuant to an amalgamation agreement dated the date hereof (the
“Amalgamation Agreement”) among Polar Wireless Corporation (“Subco”), Polar US
and the Company, the company formed by the amalgamation of Subco and the Company
(“New Polar”) is to issue Class A non-voting shares (exercisable into Class A
Exchangeable Shares) and Class B non-voting shares (exercisable into Class B
Exchangeable Shares) to holders of common shares of the Company pursuant to the
amalgamation (the “Amalgamation”) contemplated by the Amalgamation Agreement;
 
AND WHEREAS it is a condition to the Amalgamation Agreement that Polar US and
Callco execute this Agreement;
 
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
hereby covenant and agree as follows:
 
 
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22. DEFINITIONS AND INTERPRETATION
 
(a)  
Defined Terms

 
Terms defined in the rights, privileges, restrictions and conditions
(collectively, the “Exchangeable Share Provisions”) attaching to the Class A
Exchangeable Shares and the Class B Exchangeable Shares attached as Appendix 1
to the Amalgamation Agreement and as set out in the Articles of Amalgamation of
New Polar shall have the same meaning when such capitalized terms are used
herein, unless the context requires otherwise.
 
(b)  
Interpretation Not Affected by Headings

 
The division of this Agreement into Articles, sections and other portions and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this 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 Agreement. The
terms “this Agreement”, “hereof”, “herein” and “hereunder” and similar
expressions refer to this agreement and not to any particular Article, section
or other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
 
(c)  
Number, Gender

 
Words importing the singular number only shall include the plural and vice
versa. Words importing any gender shall include all genders.
 
(d)  
Date for any Action

 
If any date on which any action is required to be taken under this Agreement is
not a Business Day, such action shall be required to be taken on the next
succeeding Business Day. For the purposes of this Agreement, a “Business Day”
means any day other than a Saturday, Sunday or civic or statutory holiday in the
City of Toronto, Ontario.
 
 
23. COVENANTS OF polar us AND New Polar
 
(a)  
Covenants Regarding Class A Exchangeable Shares

 
So long as any Class A Exchangeable Shares not owned by Polar US or its
Affiliates are outstanding, Polar US will:
 
(I)  
not declare or pay any dividend on the Polar US Shares unless: (i) New Polar
shall simultaneously declare or pay, as the case may be, an equivalent dividend
(as provided for in the Exchangeable Share Provisions) on the Class A
Exchangeable Shares; and (ii) New Polar shall have sufficient money or other
assets or authorized but unissued securities available to enable the due
declaration and the due and punctual payment, in accordance with applicable law,
of any such dividend on the Class A Exchangeable Shares;

 
 
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(II)  
advise New Polar sufficiently in advance of the declaration by Polar US of any
dividend on Polar US Shares and take all such other actions as are reasonably
necessary, in cooperation with New Polar, to ensure that the respective
declaration date, record date and payment date for a dividend on the Class A
Exchangeable Shares shall be the same as the declaration date, record date and
payment date for the corresponding dividend on the Polar US Shares;

 
(III)  
ensure that the record date for any dividend declared on Polar US Shares is not
less than 10 Business Days after the declaration date of such dividend;

 
(IV)  
take all such actions and do all such things as are reasonably necessary or
desirable to enable and permit New Polar, in accordance with applicable law, to
pay and otherwise perform its obligations with respect to the satisfaction of
the Liquidation Amount, the Retraction Price or the Redemption Price in respect
of each issued and outstanding Class A Exchangeable Share (other than Class A
Exchangeable Shares owned by Polar US or its Affiliates) upon the liquidation,
dissolution or winding-up of New Polar, the delivery of a Retraction Request by
a holder of Class A Exchangeable Shares or a redemption of Class A Exchangeable
Shares by New Polar, as the case may be, including, without limitation, all such
actions and all such things as are necessary or desirable to enable and permit
New Polar to cause to be delivered Polar US Shares to the holders of Class A
Exchangeable Shares in accordance with the provisions of Article 5, 6 or 7, as
the case may be, of the Exchangeable Share Provisions;

 
(V)  
take all such actions and do all such things as are reasonably necessary or
desirable to enable and permit Callco, in accordance with applicable law, to
perform its obligations arising upon the exercise by it of the Liquidation Call
Right, the Retraction Call Right and the Redemption Call Right including,
without limitation, all such actions and all such things as are necessary or
desirable to enable and permit Callco to cause to be delivered Polar US Shares
to the holders of Class A Exchangeable Shares in accordance with the provisions
of the Liquidation Call Right, the Retraction Call Right or the Redemption Call
Right, as the case may be;

 
(VI)  
not (and will ensure that Callco and its Affiliates do not) exercise its vote as
a shareholder of New Polar to initiate the voluntary liquidation, dissolution or
winding-up of New Polar (or any other distribution of the assets of New Polar
among its shareholders for the purpose of winding-up its affairs) nor take any
action or omit to take any action (and will not permit Callco or any of its
Affiliates to take any action or omit to take any action) that is designed to
result in the liquidation, dissolution, or winding-up of New Polar or any other
distribution of the assets of New Polar among its shareholders for the purpose
of winding-up its affairs; and

 
 
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(VII)  
waive (and will ensure that Callco and its Affiliates will waive) any
entitlement to receive any dividends declared and paid on any Class A
Exchangeable Shares held by Polar US and its Affiliates.

 
(b)  
Covenants Regarding Class B Exchangeable Shares

 
So long as any Class B Exchangeable Shares not owned by Polar US or its
Affiliates are outstanding, Polar US will:
 
(I)  
take all such actions and do all such things as are reasonably necessary or
desirable to enable and permit New Polar, in accordance with applicable law, to
pay and otherwise perform its obligations with respect to the satisfaction of
the Liquidation Amount, the Retraction Price or the Redemption Price in respect
of each issued and outstanding Class B Exchangeable Share (other than Class B
Exchangeable Shares owned by Polar US or its Affiliates) upon the liquidation,
dissolution or winding-up of New Polar, the delivery of a Retraction Request by
a holder of Class B Exchangeable Shares or a redemption of Class B Exchangeable
Shares by New Polar, as the case may be, including, without limitation, all such
actions and all such things as are necessary or desirable to enable and permit
New Polar to cause to be delivered Polar US Preferred Shares to the holders of
Class B Exchangeable Shares in accordance with the provisions of Article 5, 6 or
7, as the case may be, of the Exchangeable Share Provisions (once such Polar US
Preferred Shares are created);

 
(II)  
take all such actions and do all such things as are reasonably necessary or
desirable to enable and permit Callco, in accordance with applicable law, to
perform its obligations arising upon the exercise by it of the Liquidation Call
Right, the Retraction Call Right and the Redemption Call Right including,
without limitation, all such actions and all such things as are necessary or
desirable to enable and permit Callco to cause to be delivered Polar US
Preferred Shares to the holders of Class B Exchangeable Shares in accordance
with the provisions of the Liquidation Call Right, the Retraction Call Right or
the Redemption Call Right, as the case may be (once such Polar US Preferred
Shares are created); and

 
(III)  
not (and will ensure that Callco and its Affiliates do not) exercise its vote as
a shareholder of New Polar to initiate the voluntary liquidation, dissolution or
winding-up of New Polar (or any other distribution of the assets of New Polar
among its shareholders for the purpose of winding-up its affairs) nor take any
action or omit to take any action (and will not permit Callco or any of its
Affiliates to take any action or omit to take any action) that is designed to
result in the liquidation, dissolution, or winding-up of New Polar or any other
distribution of the assets of New Polar among its shareholders for the purpose
of winding-up its affairs.

 
 
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(c)  
Segregation of Funds

 
Polar US will cause New Polar to deposit a sufficient amount of funds in a
separate account of New Polar and segregate a sufficient amount of such other
assets and property as is necessary to enable New Polar to pay dividends when
due and to pay or otherwise satisfy its respective obligations under Article 5,
6 or 7 of the Exchangeable Share Provisions, as applicable.
 
(d)  
Reservation of Polar US Shares and Polar US Preferred Shares

 
Polar US hereby represents, warrants and covenants in favour of New Polar and
Callco that Polar US will, at all times while any Class A Exchangeable Shares
(other than Class A Exchangeable Shares held by Polar US or its Affiliates) are
outstanding, keep available, free from pre-emptive and other rights out of its
authorized and unissued capital, such number of Polar US Shares (or other shares
or securities into which Polar US Shares may be reclassified or changed as
contemplated by section 2.7 hereof) (a) as is equal to the sum of (i) the number
of Class A Exchangeable Shares issued and outstanding from time to time, and
(ii) the number of Class A Exchangeable Shares issuable upon the exercise of all
rights to acquire Class A Exchangeable Shares outstanding from time to time; and
(b) as are now and may hereafter be required to enable and permit Polar US to
meet its obligations under any security or commitment pursuant to which Polar US
may now or hereafter be required to issue Polar US Shares to enable and permit
Callco to meet its obligations under each of the Liquidation Call Right, the
Retraction Call Right and the Redemption Call Right and to enable and permit New
Polar to meet its obligations hereunder and under the Exchangeable Share
Provisions.
 
Polar US hereby further represents, warrants and covenants in favour of New
Polar and Callco that, once such Polar US Preferred Shares are created, Polar US
will, at all times while any Class B Exchangeable Shares (other than Class B
Exchangeable Shares held by Polar US or its Affiliates) are outstanding, keep
available, free from pre-emptive and other rights out of its authorized and
unissued capital, such number of Polar US Preferred Shares (or other shares or
securities into which Polar US Preferred Shares may be reclassified or changed
as contemplated by section 2.7 hereof) (a) as is equal to the sum of (i) the
number of Class B Exchangeable Shares issued and outstanding from time to time,
and (ii) the number of Class B Exchangeable Shares issuable upon the exercise of
all rights to acquire Class B Exchangeable Shares outstanding from time to time;
and (b) as are now and may hereafter be required to enable and permit Polar US
to meet its obligations under any security or commitment pursuant to which Polar
US may now or hereafter be required to issue Polar US Preferred Shares to enable
and permit Callco to meet its obligations under each of the Liquidation Call
Right, the Retraction Call Right and the Redemption Call Right and to enable and
permit New Polar to meet its obligations hereunder and under the Exchangeable
Share Provisions.
 
 
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(e)  
Notification of Certain Events

 
In order to assist Polar US to comply with its obligations hereunder and to
permit Callco to exercise the Liquidation Call Right, the Retraction Call Right
and the Redemption Call Right, New Polar will notify Polar US and Callco of each
of the following events at the time set forth below:
 
(I)  
in the event of any determination by the Board of Directors to institute
voluntary liquidation, dissolution or winding-up proceedings with respect to New
Polar or to effect any other distribution of the assets of New Polar 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;

 
(II)  
promptly, upon the earlier of receipt by New Polar of notice of and New Polar
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 New Polar or to effect any other distribution of the assets of New
Polar among its shareholders for the purpose of winding up its affairs;

 
(III)  
immediately, upon receipt by New Polar of a Retraction Request;

 
(IV)  
on the same date on which notice of redemption is given to holders of Class A
Exchangeable Shares, upon the determination of a Redemption Date in accordance
with the Exchangeable Share Provisions;

 
(V)  
on the same date on which notice of redemption is given to holders of Class B
Exchangeable Shares, upon the determination of a Redemption Date in accordance
with the Exchangeable Share Provisions;

 
(VI)  
as soon as practicable upon the issuance by New Polar of any Class A
Exchangeable Shares or rights to acquire Class A Exchangeable Shares (other than
the issuance of Class A Exchangeable Shares and rights to acquire Class A
Exchangeable Shares in connection with the redemption of the outstanding Class A
non-voting common shares in the capital of New Polar following the
Amalgamation); and

 
(VII)  
as soon as practicable upon the issuance by New Polar of any Class B
Exchangeable Shares or rights to acquire Class B Exchangeable Shares (other than
the issuance of Class B Exchangeable Shares and rights to acquire Exchangeable
Shares in connection with the redemption of the outstanding Class B non-voting
common shares in the capital of New Polar following the Amalgamation).

 
 
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(f)  
Delivery of Polar US Shares and Polar US Preferred Shares to New Polar and
Callco

 
In furtherance of its obligations under Sections 2.1(d) and (e) and Sections
2.2(a) and (b) hereof, upon notice from New Polar or Callco of any event that
requires New Polar or Callco to cause to be delivered Polar US Shares or Polar
US Preferred Shares to any holder of Class A Exchangeable Shares or Class B
Exchangeable Shares, as the case may be, Polar US shall forthwith issue and
deliver or cause to be delivered to New Polar or Callco the requisite number of
Polar US Shares or (once such Polar US Preferred Shares are created)Polar US
Preferred Shares to be received by, and issued to or to the order of, the former
holder of the surrendered Class A Exchangeable Shares or Class B Exchangeable
Shares, as the case may be, as New Polar or Callco shall direct. All such Polar
US Shares or Polar US Preferred Shares (once such Polar US Preferred Shares are
created) shall be duly authorized and validly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim or encumbrance. In
consideration of the issuance and delivery of each such Polar US Shares or Polar
US Preferred Shares, New Polar or Callco, as the case may be, shall pay a cash
purchase price (or shall issue shares of New Polar or Callco having a fair
market value) equal to the fair market value of such Polar US Shares or Polar US
Preferred Shares (once such Polar US Preferred Shares are created), to Polar US,
or as Polar US shall direct.
 
(g)  
Economic Equivalence

 
So long as Class A Exchangeable Shares not owned by Polar US or its Affiliates
are outstanding:
 
(I)  
Polar US will not, without prior approval of New Polar and the prior approval of
the holders of the Class A Exchangeable Shares given in accordance with section
10.2 of the Exchangeable Share Provisions:

 
(1)   
issue or distribute Polar US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Polar US Shares) to the holders
of all of the then outstanding Polar US Shares by way of stock dividend or other
distribution, other than an issue of Polar US Shares (or securities exchangeable
for or convertible into or carrying rights to acquire Polar US Shares) to
holders of Polar US Shares who exercise an option to receive dividends in Polar
US Shares (or securities exchangeable for or convertible into or carrying rights
to acquire Polar US Shares) in lieu of receiving cash dividends;

 
(2)   
issue or distribute rights, options or warrants to the holders of all of the
then outstanding Polar US Shares entitling them to subscribe for or to purchase
Polar US Shares (or securities exchangeable for or convertible into or carrying
rights to acquire Polar US Shares); or

 
(3)   
issue or distribute to the holders of all of the then outstanding Polar US
Shares: (A) shares or securities of Polar US of any class other than Polar US
Shares (other than shares convertible into or exchangeable for or carrying
rights to acquire Polar US Shares); (B) rights, options or warrants other than
those referred to in section 2.7(a)(i) above; (C) evidences of indebtedness of
Polar US; or (D) assets of Polar US,

 
 
49

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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 holders of the Class A Exchangeable Shares.
 
(II)  
Polar US will not, without the prior approval of New Polar and the prior
approval of the holders of the Class A Exchangeable Shares given in accordance
with section 10.2 of the Exchangeable Share Provisions:

 
(1)   
subdivide, redivide or change the then outstanding Polar US Shares into a
greater number of Polar US Shares;

 
(2)   
reduce, combine, consolidate or change the then outstanding Polar US Shares into
a lesser number of Polar US Shares; or

 
(3)   
reclassify or otherwise change Polar US Shares or effect an amalgamation,
merger, reorganization or other transaction affecting Polar US Shares,

 
unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Class A Exchangeable Shares.
 
(III)  
Polar US will ensure that the record date for any event referred to in section
2.7(a) or 2.7(b) above, or (if no record date is applicable for such event) the
effective date for any such event, is not less than five Business Days after the
date on which such event is declared or announced by Polar US (with
contemporaneous notification thereof by Polar US to New Polar).

 
(IV)  
The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of any event referred to in
section 2.7(a) or 2.7(b) above and each such determination shall be conclusive
and binding on Polar US. In making each such determination, the following
factors shall, without excluding other factors determined by the Board of
Directors to be relevant, be considered by the Board of Directors:

 
(1)   
in the case of any stock dividend or other distribution payable in Polar US
Shares, the number of such shares issued in proportion to the number of Polar US
Shares previously outstanding;

 
 
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(2)   
in the case of the issuance or distribution of any rights, options or warrants
to subscribe for or purchase Polar US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Polar US Shares), the
relationship between the Canadian Dollar Equivalent of the exercise price of
each such right, option or warrant and the Current Market Price of a Polar US
Share;

 
(3)   
in the case of the issuance or distribution of any other form of property
(including without limitation any shares or securities of Polar US of any class
other than Polar US Shares, any rights, options or warrants other than those
referred to in section 2.7(d)(ii) above, any evidences of indebtedness of Polar
US or any assets of Polar US), the relationship between the fair market value
(as determined by the Board of Directors in the manner above contemplated) of
such property to be issued or distributed with respect to each outstanding Polar
US Share and the Current Market Price of a Polar US Share;

 
(4)   
in the case of any subdivision, redivision or change of the then outstanding
Polar US Shares into a greater number of Polar US Shares or the reduction,
combination, consolidation or change of the then outstanding Polar US Shares
into a lesser number of Polar US Shares or any amalgamation, merger,
reorganization or other transaction affecting Polar US Shares, the effect
thereof upon the then outstanding Polar US Shares; and

 
(5)   
in all such cases, the general taxation consequences of the relevant event to
holders of Class A Exchangeable Shares to the extent that such consequences may
differ from the taxation consequences to holders of Polar US Shares as a result
of differences between taxation laws of Canada and the United States (except for
any differing consequences arising as a result of differing marginal taxation
rates and without regard to the individual circumstances of holders of Class A
Exchangeable Shares).

 
(V)  
New Polar agrees that, to the extent required, upon due notice from Polar US, it
will use its best efforts to take or cause to be taken such steps as may be
necessary for the purposes of ensuring that appropriate dividends are paid or
other distributions are made by New Polar, or subdivisions, redivisions or
changes are made to the Class A Exchangeable Shares, in order to implement the
required economic equivalence with respect to the Polar US Shares and Class A
Exchangeable Shares as provided for in this section 2.7.

 
 
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So long as Class B Exchangeable Shares not owned by Polar US or its Affiliates
are outstanding:
 
 
Polar US will not, without prior approval of New Polar and the prior approval of
the holders of the Class B Exchangeable Shares given in accordance with section
10.2 of the Exchangeable Share Provisions:

 
(1)   
issue or distribute Polar US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Polar US Shares) to the holders
of all of the then outstanding Polar US Shares by way of stock dividend or other
distribution, other than an issue of Polar US Shares (or securities exchangeable
for or convertible into or carrying rights to acquire Polar US Shares) to
holders of Polar US Shares who exercise an option to receive dividends in Polar
US Shares (or securities exchangeable for or convertible into or carrying rights
to acquire Polar US Shares) in lieu of receiving cash dividends;

 
(2)   
issue or distribute rights, options or warrants to the holders of all of the
then outstanding Polar US Shares entitling them to subscribe for or to purchase
Polar US Shares (or securities exchangeable for or convertible into or carrying
rights to acquire Polar US Shares); or

 
(3)   
issue or distribute to the holders of all of the then outstanding Polar US
Shares: (A) shares or securities of Polar US of any class other than Polar US
Shares (other than shares convertible into or exchangeable for or carrying
rights to acquire Polar US Shares); (B) rights, options or warrants other than
those referred to in section 2.7(a)(i) above; (C) evidences of indebtedness of
Polar US; or (D) assets of Polar US,

 
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 holders of the Class B Exchangeable Shares.
 
(VI)  
Polar US will not, without the prior approval of New Polar and the prior
approval of the holders of the Class B Exchangeable Shares given in accordance
with section 10.2 of the Exchangeable Share Provisions:

 
(1)   
subdivide, redivide or change the then outstanding Polar US Shares into a
greater number of Polar US Shares;

 
(2)   
reduce, combine, consolidate or change the then outstanding Polar US Shares into
a lesser number of Polar US Shares; or

 
 
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(3)   
reclassify or otherwise change Polar US Shares or effect an amalgamation,
merger, reorganization or other transaction affecting Polar US Shares,

 
unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Class B Exchangeable Shares.
 
(VII)  
Polar US will ensure that the record date for any event referred to in section
2.7(a) or 2.7(b) above, or (if no record date is applicable for such event) the
effective date for any such event, is not less than five Business Days after the
date on which such event is declared or announced by Polar US (with
contemporaneous notification thereof by Polar US to New Polar).

 
(VIII)  
The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of any event referred to in
section 2.7(a) or 2.7(b) above and each such determination shall be conclusive
and binding on Polar US. In making each such determination, the following
factors shall, without excluding other factors determined by the Board of
Directors to be relevant, be considered by the Board of Directors:

 
(1)   
in the case of any stock dividend or other distribution payable in Polar US
Shares, the number of such shares issued in proportion to the number of Polar US
Shares previously outstanding;

 
(2)   
in the case of the issuance or distribution of any rights, options or warrants
to subscribe for or purchase Polar US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Polar US Shares), the
relationship between the Canadian Dollar Equivalent of the exercise price of
each such right, option or warrant and the Current Market Price of a Polar US
Share;

 
(3)   
in the case of the issuance or distribution of any other form of property
(including without limitation any shares or securities of Polar US of any class
other than Polar US Shares, any rights, options or warrants other than those
referred to in section 2.7(d)(ii) above, any evidences of indebtedness of Polar
US or any assets of Polar US), the relationship between the fair market value
(as determined by the Board of Directors in the manner above contemplated) of
such property to be issued or distributed with respect to each outstanding Polar
US Share and the Current Market Price of a Polar US Share;

 
(4)   
in the case of any subdivision, redivision or change of the then outstanding
Polar US Shares into a greater number of Polar US Shares or the reduction,
combination, consolidation or change of the then outstanding Polar US Shares
into a lesser number of Polar US Shares or any amalgamation, merger,
reorganization or other transaction affecting Polar US Shares, the effect
thereof upon the then outstanding Polar US Shares; and

 
 
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(5)   
in all such cases, the general taxation consequences of the relevant event to
holders of Class B Exchangeable Shares to the extent that such consequences may
differ from the taxation consequences to holders of Polar US Shares as a result
of differences between taxation laws of Canada and the United States (except for
any differing consequences arising as a result of differing marginal taxation
rates and without regard to the individual circumstances of holders of Class B
Exchangeable Shares).

 
(IX)  
New Polar agrees that, to the extent required, upon due notice from Polar US, it
will use its best efforts to take or cause to be taken such steps as may be
necessary for the purposes of ensuring that appropriate dividends are paid or
other distributions are made by New Polar, or subdivisions, redivisions or
changes are made to the Class B Exchangeable Shares, in order to implement the
required economic equivalence with respect to the Polar US Shares and Class B
Exchangeable Shares as provided for in this section 2.7.

 
(h)  
Tender Offers

 
In the event that a tender offer, share exchange offer, issuer bid, take-over
bid or similar transaction with respect to Polar US Shares (an “Offer”) is
proposed by Polar US or is proposed to Polar US or its shareholders and is
recommended by the board of directors of Polar US, or is otherwise effected or
to be effected with the consent or approval of the board of directors of Polar
US, and the Class A Exchangeable Shares are not redeemed by New Polar or
purchased by Callco pursuant to the Redemption Call Right, Polar US will use its
commercially reasonable efforts expeditiously and in good faith to take all such
actions and do all such things as are necessary or desirable to enable and
permit holders of Class A Exchangeable Shares (other than Polar US and its
Affiliates) to participate in such Offer to the same extent and on an
economically equivalent basis as the holders of Polar US Shares, without
discrimination. Without limiting the generality of the foregoing, Polar US will
use its commercially reasonable efforts expeditiously and in good faith to
ensure that holders of Class A Exchangeable Shares may participate in all such
Offers without being required to retract Class A Exchangeable Shares as against
New Polar (or, if so required, to ensure that any such retraction shall be
effective only upon, and shall be conditional upon, the closing of the Offer and
only to the extent necessary to tender or deposit to the Offer). Nothing herein
shall affect the rights of New Polar to redeem (or Callco to purchase pursuant
to the Redemption Call Right) Class A Exchangeable Shares, as applicable, in the
event of a Polar US Control Transaction.
 
 
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(i)  
Ownership of Outstanding Shares

 
Without the prior approval of New Polar and the prior approval of the holders of
the Class A Exchangeable Shares given in accordance with section 10.2 of the
Exchangeable Share Provisions, Polar US covenants and agrees in favour of New
Polar that, as long as any outstanding Class A Exchangeable Shares are owned by
any person other than Polar US or any of its Affiliates, Polar US will be and
remain the direct or indirect beneficial owner of all issued and outstanding
voting shares in the capital of New Polar and Callco.
 
Without the prior approval of New Polar and the prior approval of the holders of
the Class B Exchangeable Shares given in accordance with section 10.2 of the
Exchangeable Share Provisions, Polar US covenants and agrees in favour of New
Polar that, as long as any outstanding Class B Exchangeable Shares are owned by
any person other than Polar US or any of its Affiliates, Polar US will be and
remain the direct or indirect beneficial owner of all issued and outstanding
voting shares in the capital of New Polar and Callco.
 
(j)  
Polar US and Affiliates Not to Vote Exchangeable Shares

 
Polar US covenants and agrees that it will appoint and cause to be appointed
proxyholders with respect to all Class A Exchangeable Shares held by it and its
Affiliates for the sole purpose of attending each meeting of holders of Class A
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. Polar US further covenants and agrees that it will not, and will cause
its Affiliates not to, exercise any voting rights which may be exercisable by
holders of Class A Exchangeable Shares from time to time pursuant to the
Exchangeable Share Provisions or pursuant to the provisions of the OBCA (or any
successor or other corporate statute by which New Polar may in the future be
governed) with respect to any Class A Exchangeable Shares held by it or by its
Affiliates in respect of any matter considered at any meeting of holders of
Class A Exchangeable Shares.
 
Polar US further covenants and agrees that it will appoint and cause to be
appointed proxyholders with respect to all Class B Exchangeable Shares held by
it and its Affiliates for the sole purpose of attending each meeting of holders
of Class B Exchangeable Shares in order to be counted as part of the quorum for
each such meeting. Polar US further covenants and agrees that it will not, and
will cause its Affiliates not to, exercise any voting rights which may be
exercisable by holders of Class B Exchangeable Shares from time to time pursuant
to the Exchangeable Share Provisions or pursuant to the provisions of the OBCA
(or any successor or other corporate statute by which New Polar may in the
future be governed) with respect to any Class B Exchangeable Shares held by it
or by its Affiliates in respect of any matter considered at any meeting of
holders of Class B Exchangeable Shares.
 
 
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(k)  
Specified Amount

 
The specified amount with respect to a Class A Exchangeable Share for the
purposes of subsection 191(4) of the Income Tax Act (Canada) is $1.00, which
amount is the fair market value of the consideration for which the Class A
Exchangeable Share is issued.
 
The specified amount with respect to a Class B Exchangeable Share for the
purposes of subsection 191(4) of the Income Tax Act (Canada) is $1.00, which
amount is the fair market value of the consideration for which the Class B
Exchangeable Share is issued.
 
24. POLAR US SUCCESSORS
 
(a)  
Certain Requirements in Respect of Combination, etc.

 
Polar US shall not consummate any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other person or in the case of a merger, of the
continuing corporation resulting therefrom unless, but may do so if:
 
(I)  
such other person or continuing corporation (the “Polar US Successor”) by
operation of law, becomes, without more, bound by the terms and provisions of
this Agreement or, if not so bound, executes, prior to or contemporaneously with
the consummation of such transaction, an agreement supplemental hereto and such
other instruments (if any) as are reasonably necessary or advisable to evidence
the assumption by the Polar US Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such Polar US Successor to
pay and deliver or cause to be delivered the same and its agreement to observe
and perform all the covenants and obligations of Polar US under this Agreement;
and

 
(II)  
such transaction shall be upon such terms and conditions as substantially to
preserve and not to impair in any material respect any of the rights, duties,
powers and authorities of the other parties hereunder.

 
(b)  
Vesting of Powers in Successor

 
Whenever the conditions of section 3.1 have been duly observed and performed,
the parties, if required by section 3.1, shall execute and deliver a
supplemental agreement hereto and thereupon such Polar US Successor shall
possess and from time to time may exercise each and every right and power of
Polar US under this Agreement in the name of Polar US or otherwise and any act
or proceeding by any provision of this Agreement required to be done or
performed by the board of directors of Polar US or any officers of Polar US may
be done and performed with like force and effect by the directors or officers of
such Polar US Successor.
 
 
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(c)  
Wholly-Owned Subsidiaries

 
Nothing herein shall be construed as preventing the amalgamation or merger of
any wholly-owned direct or indirect subsidiary of Polar US with or into Polar US
or the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
Polar US provided that all of the assets of such subsidiary are transferred to
Polar US or another wholly-owned direct or indirect subsidiary of Polar US and
any such transactions are expressly permitted by this Article 3.
 
25. GENERAL
 
(a)  
Term

 
This Agreement shall come into force and be effective as of the date hereof and
shall terminate and be of no further force and effect at such time as no Class A
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Class A Exchangeable Shares) or Class B
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Class B Exchangeable Shares) are held by any
person other than Polar US and any of its Affiliates.
 
(b)  
Changes in Capital of Polar US and New Polar

 
At all times after the occurrence of any event contemplated pursuant to sections
2.7 or 2.8 hereof or otherwise, as a result of which Polar US Shares, Polar US
Preferred Shares, Class A Exchangeable Shares, Class B Exchangeable Shares or
any of them are in any way changed, this Agreement shall forthwith be amended
and modified as necessary in order that it shall apply with full force and
effect, mutatis mutandis, to all new securities into which the Polar US Shares,
the Polar US Preferred Shares, the Class A Exchangeable Shares and/or the Class
B Exchangeable Shares are so changed and the parties hereto shall execute and
deliver an agreement in writing giving effect to and evidencing such necessary
amendments and modifications.
 
(c)  
Severability

 
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
 
(d)  
Amendments, Modifications

 
This Agreement may not be amended or modified except by an agreement in writing
executed by New Polar, Callco and Polar US and approved by, as applicable, the
holders of the Class A Exchangeable Shares in accordance with section 10.2 of
the Exchangeable Share Provisions or the holders of the Class B Exchangeable
Shares in accordance with section 10.2 of the Exchangeable Share Provisions.
 
 
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(e)  
Administrative Amendments

 
Notwithstanding the provisions of section 4.4, the parties may in writing at any
time and from time to time, without the approval of, as applicable, the holders
of the Class A Exchangeable Shares or the Class B Exchangeable Shares, amend or
modify this Agreement for the purposes of:
 
(I)  
adding to the covenants of any or all parties provided that the board of
directors of each of New Polar, Callco and Polar US shall be of the good faith
opinion that such additions will not be prejudicial to the rights or interests
of the holders of the Class A Exchangeable Shares or the Class B Exchangeable
Shares;

 
(II)  
making such amendments or modifications not inconsistent with this Agreement as
may be necessary or desirable with respect to matters or questions which, in the
good faith opinion of the board of directors of each of New Polar, Callco and
Polar US, it may be expedient to make, provided that each such board of
directors shall be of the good faith opinion that such amendments or
modifications will not be prejudicial to the rights or interests of the holders
of the Class A Exchangeable Shares or the Class B Exchangeable Shares; or

 
(III)  
making such changes or corrections which, on the advice of counsel to New Polar,
Callco and Polar US, are required for the purpose of curing or correcting any
ambiguity or defect or inconsistent provision or clerical omission or mistake or
manifest error, provided that the Boards of Directors of each of New Polar,
Callco and Polar US shall be of the good faith opinion that such changes or
corrections will not be prejudicial to the rights or interests of the holders of
the Class A Exchangeable Shares or the Class B Exchangeable Shares.

 
(f)  
Meeting to Consider Amendments

 
New Polar, at the request of Polar US, shall call a meeting or meetings of the
holders of the Class A Exchangeable Shares and/or or the Class B Exchangeable
Shares for the purpose of considering any proposed amendment or modification
requiring approval pursuant to section 4.4 hereof. Any such meeting or meetings
shall be called and held in accordance with the bylaws of New Polar, the
Exchangeable Share Provisions and all applicable laws.
 
(g)  
Amendments Only in Writing

 
No amendment to or modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.
 
 
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(h)  
Enurement

 
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and assigns.
 
(i)  
Notices to Parties

 
All notices and other communications between the parties to this Agreement shall
be in writing and shall be deemed to have been given if delivered personally or
by confirmed telecopy to the parties at the following addresses (or at such
other address for any such party as shall be specified in like notice):
 
(a)           if to Polar US or to Callco, to:
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
Attention:   Shane G. Carroll
with a copy (which shall not constitute notice) to:
 
Goodmans LLP
Suite 3400
Bay Adelaide Centre
333 Bay Street
Toronto, ON  M5H 2S7
Attention:   Avi S. Greenspoon
Fax:  (416) 979-1234
 
 (b)           if to New Polar, to:
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
Attention:   Shane G. Carroll
 
Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of confirmed receipt thereof
unless such day is not a Business Day in which case it shall be deemed to have
been given and received upon the immediately following Business Day.
 
(j)  
Counterparts

 
This Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.
 
 
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(k)  
Jurisdiction

 
This Agreement shall be construed and enforced in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.
 
(l)  
Attornment

 
Polar US agrees that any action or proceeding arising out of or relating to this
Agreement may be instituted in the courts of Ontario, waives any objection which
it may have now or hereafter to the venue of any such action or proceeding,
irrevocably submits to the jurisdiction of the said courts in any such action or
proceeding, agrees to be bound by any final judgment of the said court, and not
to seek, and hereby waives any review of the merits of any such judgment by the
courts of any other jurisdiction. Polar US hereby appoints New Polar at its
registered office in the Province of Ontario as attorney for service of process.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 

  POLAR WIRELESS CORP.            
Per:
        Name:        Title:   

 

  2240519 ONTARIO LIMITED            
Per:
        Name: Shane G. Carroll       Title: President  

 

  2230354 ONTARIO INC.            
Per:
        Name:  Vladimir Aleynikov       Title:  Director  

 
 
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Schedule “C”
 
EXCHANGE TRUST AGREEMENT
 
THIS AGREEMENT made as of this ____ day of _________________, 2011
 
AMONG:
 
2230354 ONTARIO INC., a corporation existing under the laws of the Province of
Ontario
 
(the “Company”)
 
- and -
 
POLAR WIRELESS CORP., a corporation existing under the laws of the State of
Nevada
 
(“Polar US”)
 
- and -
 
2240519 ONTARIO LIMITED, a corporation existing under the laws of the Province
of Onatrio
 
(the “Trustee”)
 
WHEREAS pursuant to an amalgamation agreement dated the date hereof (the
“Amalgamation Agreement”) among Polar Wireless Corporation (“Subco”), Polar US
and the Company, the company formed by the amalgamation of Subco and the Company
(“New Polar”) is to issue Class A non-voting shares (which are exercisable into
Class A Exchangeable Shares) and Class B non-voting shares (which are
exercisable into Class B Exchangeable Shares) to holders of common shares of the
Company pursuant to the amalgamation contemplated by the Amalgamation Agreement;
 
AND WHEREAS it is a condition to the Amalgamation Agreement that Polar US and
the Trustee execute this Agreement;
 
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
hereby covenant and agree as follows:
 
 
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26. DEFINITIONS AND INTERPRETATION
 
(a)  
Definitions

 
In this Agreement, the following terms shall have the following meanings:
 
“Affiliate” means an affiliated body corporate; one body corporate is affiliated
with another body corporate if one of them is the subsidiary of the other or
both are subsidiaries of the same body corporate or each of them is controlled
by the same person, and if two bodies corporate are affiliated with the same
body corporate at the same time, they are deemed to be affiliated with each
other.
 
“Automatic Exchange Right” means the benefit of the obligation of Polar US to
effect the automatic exchange of Polar US Shares for Class A Exchangeable Shares
pursuant to section 3.11.
 
“Polar US Affiliates” means Affiliates of Polar US.
 
“Polar US Liquidation Event” has the meaning ascribed thereto in section
3.11(b).
 
“Polar US Liquidation Event Effective Date” has the meaning ascribed thereto in
section 3.11(c).
 
“Polar US Shares” has the meaning ascribed thereto in the Amalgamation
Agreement.
 
“Polar US Successor” has the meaning ascribed thereto in section 8.1(a).
 
“Beneficiaries” means the registered holders, from time to time, of Class A
Exchangeable Shares and Class B Exchangeable Shares, other than Polar US and its
Affiliates.
 
“Board of Directors” means the Board of Directors of New Polar.
 
“Business Day” means any day other than a Saturday, Sunday or civic or statutory
holiday in the City of Toronto, Ontario.
 
“Callco” means 2240519 Ontario Limited, a corporation existing under the laws of
the Province of Ontario, and a direct wholly-owned subsidiary of Polar US.
 
“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.
 
 
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“Class A Exchangeable Shares” means the Class A exchangeable shares in the
capital of New Polar, having the rights, privileges, restrictions and conditions
set out in Appendix 1 to the Amalgamation Agreement.
 
“Class B Exchangeable Shares” means the Class B exchangeable shares in the
capital of New Polar, having the rights, privileges, restrictions and conditions
set out in Appendix 1 to the Amalgamation Agreement.
 
“Court” means the Superior Court of Justice (Ontario).
 
“Current Market Price” means, in respect of a Polar US Share on any date, the
Canadian Dollar Equivalent of the average of the closing prices of Polar US
Shares on such stock exchange or automated quotation system on which the Polar
US Shares are listed or quoted, as the case may be, as may be selected by the
Board of Directors for such purpose, on each of the thirty (30) consecutive
trading days ending not more than five trading days before such date; provided,
however, that if there is no public distribution or trading activity of Polar US
Shares during such period, then the Current Market Price of a Polar US Share
shall be determined by the Board of Directors in good faith, and provided
further that any such determination by the Board of Directors shall be
conclusive and binding.
 
“Exchange Right” has the meaning ascribed thereto in section 3.1.
 
“Exchangeable Share Provisions” means the rights, privileges, restrictions and
conditions attaching to the Class a Exchangeable Shares and the Class B
Exchangeable Shares.
 
“Indemnified Parties” has the meaning ascribed thereto in section 6.1.
 
“Insolvency Event” means the institution by New Polar of any proceeding to be
adjudicated a bankrupt or insolvent or to be wound up, or the consent of New
Polar to the institution of bankruptcy, insolvency or winding-up proceedings
against it, or the filing of a petition, answer or consent 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 New Polar to contest
in good faith any such proceedings commenced in respect of New Polar within 30
days of becoming aware thereof, or the consent by New Polar to the filing of any
such petition or to the appointment of a receiver, or the making by New Polar of
a general assignment for the benefit of creditors, or the admission in writing
by New Polar of its inability to pay its debts generally as they become due, or
New Polar 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 thereto in the Exchangeable
Share Provisions.
 
“OBCA” means the Business Corporations Act (Ontario), as amended.
 
 
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“Officer’s Certificate” means, with respect to Polar US or New Polar, as the
case may be, a certificate signed by any one officer of Polar US or New Polar,
as the case may be.
 
“Person” includes any individual, firm, partnership, limited liability company,
unlimited liability company, joint venture, venture capital fund, association,
trust, trustee, executor, administrator, legal personal representative, estate,
group, body corporate, corporation, unincorporated association or organization,
governmental entity, syndicate or other entity, whether or not having legal
status.
 
“Redemption Call Right” has the meaning ascribed thereto in the Exchangeable
Share Provisions.
 
“Retracted Shares” has the meaning ascribed thereto in section 3.6.
 
“Retraction Call Right” has the meaning ascribed thereto in the Exchangeable
Share Provisions.
 
“Support Agreement” means the support agreement dated the date hereof between
New Polar, Callco and Polar US, substantially in the form and content of
Appendix 2 to the Amalgamation Agreement, as the same may be amended from time
to time pursuant to the terms of the Support Agreement.
 
“Trust” means the trust created by this Agreement.
   
“Trust Estate” means the the Exchange Right, the Automatic Exchange Right and
any money or other securities or property which may be held by the Trustee from
time to time pursuant to this Agreement.
 
“Trustee” means 2240519 Ontario Limited and, subject to the provisions of
Article 7 hereof, includes any successor trustee.
 
(b)  
Interpretation Not Affected by Headings

 
The division of this Agreement into Articles, sections and other portions and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this 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 Agreement. The
terms “this Agreement”, “hereof”, “herein” and “hereunder” and similar
expressions refer to this Agreement and not to any particular Article, section
or other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
 
(c)  
Number, Gender etc.

 
Words importing the singular number only shall include the plural and vice
versa. Words importing any gender shall include all genders.
 
 
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(d)  
Date for any Action

 
If any date on which any action is required to be taken under this Agreement is
not a Business Day, such action shall be required to be taken on the next
succeeding Business Day.
 
27. PURPOSE OF AGREEMENT
 
(a)  
Establishment of Trust

 
The purpose of this Agreement is to create the Trust for the benefit of the
Beneficiaries, as herein provided. The Trustee will hold the Exchange Right and
the Automatic Exchange Right in order to enable the Trustee to exercise such
rights, in each case as trustee for and on behalf of the Beneficiaries as
provided in this Agreement.
 
28. EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
 
(a)  
Grant and Ownership of the Exchange Right

 
Polar US hereby grants to the Trustee as trustee for and on behalf of, and for
the use and benefit of the Beneficiaries, the right (the “Exchange Right”), upon
the occurrence and during the continuance of an Insolvency Event, to require
Polar US to purchase from each or any Beneficiary all or any part of the Class A
Exchangeable Shares held by the Beneficiary and the Automatic Exchange Right,
all in accordance with the provisions of this Agreement. Polar US hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Right by Polar US to
the Trustee. During the term of the Trust and subject to the terms and
conditions of this Agreement, the Trustee shall possess and be vested with full
legal ownership of the Exchange Right and the Automatic Exchange Right and shall
be entitled to exercise all of the rights and powers of an owner with respect to
the Exchange Right and the Automatic Exchange Right, provided that the Trustee
shall:
 
(I)  
hold the Exchange Right and the Automatic Exchange Right and the legal title
thereto as trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and

 
(II)  
except as specifically authorized by this Agreement, have no power or authority
to exercise or otherwise deal in or with the Exchange Right or the Automatic
Exchange Right, and the Trustee shall not exercise any such rights for any
purpose other than the purposes for which the Trust is created pursuant to this
Agreement, and shall not assign or transfer such rights except to a successor
trustee hereunder.

 
 
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(b)  
General Exercise of Exchange Right

 
The Exchange Right shall be and remain vested in and exercisable by the Trustee.
Subject to section 4.13, the Trustee shall exercise the Exchange Right only on
the basis of instructions received pursuant to this Article 3 from Beneficiaries
entitled to instruct the Trustee as to the exercise thereof. To the extent that
no instructions are received from a Beneficiary with respect to the Exchange
Right, the Trustee shall not exercise or permit the exercise of the Exchange
Right.
 
(c)  
Purchase Price

 
The purchase price payable by Polar US for each Class A Exchangeable Share to be
purchased by Polar US under the Exchange Right shall be an amount per share
equal to: (a) the Current Market Price of a Polar US Share on the last Business
Day prior to the day of closing of the purchase and sale of such Class A
Exchangeable Share under the Exchange Right, which shall be satisfied in full by
Polar US causing to be sent to such holder one Polar US Share; plus (b) to the
extent not paid by New Polar an additional amount equal to the full amount of
all declared and unpaid dividends on each such Class A 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, Polar US shall provide to the Trustee an Officer’s Certificate setting
forth the calculation of the purchase price for each Class A Exchangeable Share.
The purchase price for each such Class A Exchangeable Share so purchased may be
satisfied only by Polar US issuing and delivering or causing to be delivered to
the Trustee, on behalf of the relevant Beneficiary, one Polar US 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 3.12).
Upon payment by Polar US of such purchase price, the relevant Beneficiary shall
cease to have any right to be paid any amount in respect of declared and unpaid
dividends on each such Class A Exchangeable Share by Polar US.
 
(d)  
Exercise Instructions

 
Subject to the terms and conditions herein set forth, a Beneficiary shall be
entitled, upon the occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with respect to all or
any part of the Class A Exchangeable Shares registered in the name of such
Beneficiary on the books of New Polar. To cause the exercise of the Exchange
Right by the Trustee, the Beneficiary shall deliver to the Trustee, in person or
by certified or registered mail, at its principal office in Toronto, Ontario or
at such other places in Canada as the Trustee may from time to time designate by
written notice to the Beneficiaries, the certificates representing the Class A
Exchangeable Shares which such Beneficiary desires Polar US to purchase, duly
endorsed in blank for transfer, and accompanied by such other documents and
instruments as may be required to effect a transfer of Class A Exchangeable
Shares under the laws applicable to New Polar and the bylaws of New Polar and
such additional documents and instruments as the Trustee may reasonably require
together with: (a) a duly completed form of notice of exercise of the Exchange
Right, contained on the reverse of or attached to the Class A Exchangeable Share
certificates, stating: (i) that the Beneficiary thereby instructs the Trustee to
exercise the Exchange Right so as to require Polar US to purchase from the
Beneficiary the number of Class A Exchangeable Shares specified therein; (ii)
that such Beneficiary has good title to and owns all such Class A Exchangeable
Shares to be acquired by Polar US free and clear of all liens, claims and
encumbrances; (iii) the names in which the certificates representing Polar US
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 Trustee, Polar US and New Polar of payment) of the taxes (if any) payable as
contemplated by section 3.7. If only a part of the Class A Exchangeable Shares
represented by any certificate or certificates delivered to the Trustee are to
be purchased by Polar US under the Exchange Right, a new certificate for the
balance of such Class A Exchangeable Shares shall be issued to the holder at the
expense of New Polar.
 
 
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(e)  
Delivery of Polar US Shares; Effect of Exercise

 
Promptly after receipt of the certificates representing the Class A Exchangeable
Shares which the Beneficiary desires Polar US 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 Polar US, the Trustee shall notify Polar US and New
Polar of its receipt of the same, which notice to Polar US and New Polar shall
constitute exercise of the Exchange Right by the Trustee on behalf of the holder
of such Class A Exchangeable Shares, and Polar US shall promptly thereafter
deliver or cause to be delivered to the Trustee, for delivery to the Beneficiary
of such Class A Exchangeable Shares (or to such other persons, if any, properly
designated by such Beneficiary) the number of Polar US 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
3.12); provided, however, that no such delivery shall be made unless and until
the Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee, Polar US and New Polar of the payment of) the taxes
(if any) payable as contemplated by section 3.7 of this Agreement. Immediately
upon the giving of notice by the Trustee to Polar US and New Polar 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 Class A Exchangeable Shares shall
be deemed to have transferred to Polar US all of such holder’s right, title and
interest in and to such Class A Exchangeable Shares and the related interest in
the Trust Estate and shall cease to be a holder of such Class A 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 therefor unless the requisite number of Polar US Shares is
not allotted, issued and delivered by Polar US to the Trustee within 5 Business
Days of the date of the giving of such notice by the Trustee in which case the
rights of the Beneficiary shall remain unaffected until such Polar US Shares are
so allotted, issued and delivered by Polar US. Upon delivery by Polar US to the
Trustee of such Polar US Shares, the Trustee shall deliver such Polar US Shares
to such Beneficiary (or to such other persons, if any, properly designated by
such Beneficiary). Concurrently with such Beneficiary ceasing to be a holder of
Class A Exchangeable Shares, the Beneficiary (or such other person, if any,
properly designated by such Beneficiary) shall be considered and deemed for all
purposes to be the holder of the Polar US Shares delivered to it pursuant to the
Exchange Right.
 
 
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(f)  
Exercise of Exchange Right Subsequent to Retraction

 
In the event that a Beneficiary has exercised its right under Article 6 of the
Exchangeable Share Provisions to require New Polar to redeem any or all of the
Class A Exchangeable Shares held by the Beneficiary (the “Retracted Shares”) and
is notified by New Polar pursuant to section 6.6 of the Exchangeable Share
Provisions that New Polar 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 Beneficiary has not revoked the retraction
request delivered by the Beneficiary to New Polar pursuant to section 6.1 of the
Exchangeable Share Provisions, and provided further that the Trustee has
received a written notice of same from Polar US or New Polar, the retraction
request will constitute and will be deemed to constitute notice from the
Beneficiary to the Trustee instructing the Trustee to exercise the Exchange
Right with respect to those Retracted Shares that New Polar is unable to redeem.
In any such event, New Polar hereby agrees with the Trustee and in favour of the
Beneficiary promptly to forward or cause to be forwarded to the Trustee all
relevant materials delivered by the Beneficiary to New Polar or to the transfer
agent of the Class A Exchangeable Shares (including, without limitation, a copy
of the retraction request delivered pursuant to section 6.1 of the Exchangeable
Share Provisions) in connection with such proposed redemption of the Retracted
Shares and the Trustee will thereupon exercise the Exchange Right with respect
to the Retracted Shares that New Polar is not permitted to redeem and will
require Polar US to purchase such shares in accordance with the provisions of
this Article 3.
 
(g)  
Stamp or Other Transfer Taxes

 
Upon any sale of Class A Exchangeable Shares to Polar US pursuant to the
Exchange Right or the Automatic Exchange Right, the share certificate or
certificates representing Polar US Shares to be delivered in connection with the
payment of the total purchase price therefor shall be issued in the name of the
Beneficiary of the Class A Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing without charge to the holder of the
Class A Exchangeable Shares so sold; provided, however, that such Beneficiary:
(a) shall pay (and none of Polar US, New Polar or the Trustee shall be required
to pay) any documentary, stamp, transfer or other taxes that may be payable in
respect of any transfer involved in the issuance or delivery of such shares to a
person other than such Beneficiary; and (b) shall have evidenced to the
satisfaction of the Trustee, Polar US and New Polar that such taxes, if any,
have been paid.
 
 
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(h)  
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, Polar US and New Polar shall give written notice thereof to
the Trustee. As soon as practicable following the receipt of notice from Polar
US and New Polar of the occurrence of an Insolvency Event or upon the Trustee
becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of Polar US, a notice of such Insolvency Event to be
provided by Polar US which notice shall contain a brief statement of the rights
of the Beneficiaries with respect to the Exchange Right.
 
(i)  
Listing/Quotation of Polar US Shares

 
Polar US will in good faith, using its commercially reasonable efforts,
expeditiously take all such actions and do all such things as are reasonably
necessary or desirable to cause all Polar US Shares to be delivered pursuant to
the Exchange Right or the Automatic Exchange Right to be listed, quoted or
posted for trading on all stock exchanges and quotation systems on which
outstanding Polar US Shares are listed or quoted at such time.
 
(j)  
Polar US Shares

 
Polar US hereby represents, warrants and covenants that the Polar US Shares
issuable as described herein will be duly authorized, validly issued and, upon
issuance pursuant to this Agreement, fully paid and non-assessable and, to Polar
US’s knowledge, shall be free and clear of any lien, claim or encumbrance.
 
(k)  
Automatic Exchange on Liquidation of Polar US

 
(I)  
Polar US will give the Trustee written notice of each of the following events at
the time set forth below:

 
(1)   
in the event of any determination by the board of directors of Polar US to
institute voluntary liquidation, dissolution or winding-up proceedings with
respect to Polar US or to effect any other distribution of assets of Polar US
among its stockholders 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

 
(2)   
as soon as practicable following the earlier of: (A) receipt by Polar US of
notice of; and (B) Polar US 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 Polar US or to effect any
other distribution of assets of Polar US among its stockholders for the purpose
of winding up its affairs, in each case where Polar US has failed to contest in
good faith any such proceeding commenced in respect of Polar US within 30 days
of becoming aware thereof.

 
 
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(II)  
As soon as practicable following receipt by the Trustee from Polar US of notice
of any event (a “Polar US Liquidation Event”) contemplated by section 3.11(a)(i)
or 3.11(a)(ii)above, the Trustee will give notice thereof to the Beneficiaries.
Such notice shall be provided to the Trustee by Polar US and shall include a
brief description of the automatic exchange of Class A Exchangeable Shares for
Polar US Shares provided for in section 3.11(c).

 
(III)  
In order that the Beneficiaries will be able to participate on a pro rata basis
with the holders of Polar US Shares in the distribution of assets of Polar US in
connection with a Polar US Liquidation Event, on the fifth Business Day prior to
the effective date (the “Polar US Liquidation Event Effective Date”) of a Polar
US Liquidation Event all of the then outstanding Class A Exchangeable Shares
shall be automatically exchanged for Polar US Shares. To effect such automatic
exchange, Polar US shall purchase on the fifth Business Day prior to the Polar
US Liquidation Event Effective Date each Class A Exchangeable Share then
outstanding and held by Beneficiaries, and each Beneficiary shall sell the Class
A Exchangeable Shares held by it at such time, for a purchase price per share
equal to: (a) the Current Market Price of a Polar US Share on the fifth Business
Day prior to the Polar US Liquidation Event Effective Date, which shall be
satisfied in full by Polar US issuing to the Beneficiary one Polar US Share, and
(b) to the extent not paid by New Polar, an additional amount equivalent to the
full amount of all declared and unpaid dividends on each such Class A
Exchangeable Share held by such holder on any dividend record date which
occurred prior to the date of the exchange (less any applicable withholding
taxes). Polar US shall provide the Trustee with an Officer’s Certificate in
connection with each automatic exchange setting forth the calculation of the
purchase price for each Class A Exchangeable Share.

 
(IV)  
On the fifth Business Day prior to the Polar US Liquidation Event Effective
Date, the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Class A Exchangeable Shares for Polar US Shares shall be
deemed to have occurred, and each Beneficiary shall be deemed to have
transferred to Polar US all of the Beneficiary’s right, title and interest in
and to such Beneficiary’s Class A Exchangeable Shares and the related interest
in the Trust Estate and shall cease to be a holder of such Class A Exchangeable
Shares and Polar US shall issue to the Beneficiary the Polar US Shares issuable
upon the automatic exchange of Class A Exchangeable Shares for Polar US Shares
and on the applicable payment date shall deliver to the Trustee for delivery to
the Beneficiary a cheque in the amount of such dividends, if any, without
interest but less any amounts withheld pursuant to section 3.12. Concurrently
with such Beneficiary ceasing to be a holder of Class A Exchangeable Shares, the
Beneficiary shall be considered and deemed for all purposes to be the holder of
the Polar US Shares issued pursuant to the automatic exchange of Class A
Exchangeable Shares for Polar US Shares and the certificates held by the
Beneficiary previously representing the Class A Exchangeable Shares exchanged by
the Beneficiary with Polar US pursuant to such automatic exchange shall
thereafter be deemed to represent Polar US Shares issued to the Beneficiary by
Polar US pursuant to such automatic exchange. Upon the request of a Beneficiary
and the surrender by the Beneficiary of Class A Exchangeable Share certificates
deemed to represent Polar US Shares, duly endorsed in blank and accompanied by
such instruments of transfer as Polar US may reasonably require, Polar US shall
deliver or cause to be delivered to the Beneficiary certificates representing
Polar US Shares of which the Beneficiary is the holder.

 
 
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(l)  
Withholding Rights

 
Polar US, New Polar and the Trustee shall be entitled to deduct and withhold
from any consideration otherwise payable under this Agreement to any holder of
Class A Exchangeable Shares or Polar US Shares such amounts as Polar US, New
Polar or the Trustee is required or permitted to deduct and withhold with
respect to such payment under the Income Tax Act (Canada), or any provision of
provincial, local or foreign tax law, in each case as amended or succeeded or
would be permitted to withhold if an equal amount were remitted to the
appropriate taxing authority. The Trustee may act on the advice of counsel with
respect to such matters. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes as having been paid to the
holder of the shares in respect of which such deduction and withholding was
made, provided that such withheld amounts (or equivalent amounts, if applicable)
are actually remitted to the appropriate taxing authority. To the extent that
the amount so required or permitted or which would be permitted to be deducted
or withheld from any payment to a holder exceeds the cash portion of the
consideration otherwise payable to the holder, Polar US, New Polar and the
Trustee are hereby authorized to sell or otherwise dispose of such portion of
the consideration as is necessary to provide sufficient funds to Polar US, New
Polar or the Trustee, as the case may be, to enable it to comply with such
deduction or withholding requirement and Polar US, New Polar or the Trustee
shall notify the holder thereof and remit to such holder any unapplied balance
of the net proceeds of such sale. Polar US represents and warrants that, based
upon facts currently known to it, it has no current intention, as at the date of
this Agreement, to deduct or withhold from any dividend paid to holders of Class
A Exchangeable Shares any amounts under any applicable taxing legislation.
 
29. CONCERNING THE TRUSTEE
 
(a)  
Powers and Duties of the Trustee

 
The rights, powers, duties and authorities of the Trustee under this Agreement,
in its capacity as Trustee of the Trust, shall include:
 
 
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(I)  
receiving the grant of the Exchange Right and the Automatic Exchange Right from
Polar US as Trustee for and on behalf of the Beneficiaries in accordance with
the provisions of this Agreement;

 
(II)  
exercising the Exchange Right and enforcing the benefit of the Automatic
Exchange Right in each case in accordance with the provisions of this Agreement,
and in connection therewith receiving from Beneficiaries Class A Exchangeable
Shares and other requisite documents and distributing to such Beneficiaries
Polar US Shares and cheques, if any, to which such Beneficiaries are entitled
upon the exercise of the Exchange Right or pursuant to the Automatic Exchange
Right, as the case may be;

 
(III)  
holding title to the Trust Estate;

 
(IV)  
investing any moneys forming, from time to time, a part of the Trust Estate as
provided in this Agreement;

 
(V)  
taking action on its own initiative or at the direction of a Beneficiary or
Beneficiaries to enforce the obligations of Polar US and New Polar under this
Agreement; and

 
(VI)  
taking such other actions and doing such other things as are specifically
provided in this Agreement.

 
In the exercise of such rights, powers, duties and authorities the Trustee shall
have (and is granted) such incidental and additional rights, powers and
authorities not in conflict with any of the provisions of this Agreement as the
Trustee, acting in good faith and in the reasonable exercise of its discretion,
may deem necessary, appropriate or desirable to effect the purpose of the Trust.
Any exercise of such discretionary rights, powers, duties and authorities by the
Trustee shall be final, conclusive and binding upon all persons. For greater
certainty, the Trustee shall have only those duties as are specifically set out
in this Agreement.
 
The Trustee in exercising its rights, powers, duties and authorities hereunder
shall act honestly and in good faith and with a view to the best interests of
the Beneficiaries and shall exercise the care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances.
 
The Trustee shall not be bound to give notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until it
shall be specifically required to do so under the terms hereof; nor shall the
Trustee be required to take any notice of, or to do, or to take any act, action
or proceeding as a result of any default or breach of any provision hereunder,
unless and until notified in writing of such default or breach which notices
shall distinctly specify the default or breach desired to be brought to the
attention of the Trustee, and in the absence of such notice the Trustee may for
all purposes of this Agreement conclusively assume that no default or breach has
been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
 
 
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(b)  
No Conflict of Interest

 
The Trustee represents to Polar US and New Polar that at the date of execution
and delivery of this Agreement there exists no material conflict of interest in
the role of the Trustee as a fiduciary hereunder and the role of the Trustee in
any other capacity. The Trustee shall, within 90 days after it becomes aware
that such material conflict of interest exists, either eliminate such material
conflict of interest or resign in the manner and with the effect specified in
Article 7. If, notwithstanding the foregoing provisions of this section 4.2, the
Trustee has such a material conflict of interest, the validity and
enforceability of this Agreement shall not be affected in any manner whatsoever
by reason only of the existence of such material conflict of interest. If the
Trustee contravenes the foregoing provisions of this section 4.2, any interested
party may apply to the Court for an order that the Trustee be replaced as
Trustee hereunder.
 
(c)  
Dealings with Transfer Agents, Registrars, etc.

 
Polar US and New Polar irrevocably authorize the Trustee, from time to time, to:
 
(I)  
consult, communicate and otherwise deal with the respective registrars and
transfer agents, and with any such subsequent registrar or transfer agent, of
the Class A Exchangeable Shares and Polar US Shares; and

 
(II)  
requisition, from time to time: (i) from any such registrars or transfer agents
any information readily available from the records maintained by it which the
Trustee may reasonably require for the discharge of its duties and
responsibilities under this Agreement; and (ii) from the Canadian transfer agent
of the Polar US Shares, and any subsequent transfer agent of such shares, the
share certificates issuable upon the exercise from time to time of the Exchange
Right and pursuant to the Automatic Exchange Right.

 
Polar US and New Polar irrevocably authorize their respective registrars and
transfer agents to comply with all such requests. Polar US covenants that it
will supply its Canadian transfer agent with duly executed share certificates
for the purpose of completing the exercise from time to time of the Exchange
Right and the Automatic Exchange Right.
 
(d)  
Books and Records

 
The Trustee shall keep available for inspection by Polar US and New Polar at the
Trustee’s principal office in Toronto, Ontario correct and complete books and
records of account relating to the Trust created by this Agreement, including,
without limitation, all relevant data relating to mailings and instructions to
and from Beneficiaries and all transactions pursuant to the Exchange Right and
the Automatic Exchange Right.
 
 
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(e)  
Income Tax Returns and Reports

 
The Trustee shall, to the extent necessary, prepare and file on behalf of the
Trust appropriate Canadian income tax returns and any other returns or reports
as may be required by applicable law or pursuant to the rules and regulations of
any securities exchange or other trading system through which the Class A
Exchangeable Shares are traded. In connection therewith, the Trustee may obtain
the advice and assistance of such experts or advisors as the Trustee considers
necessary or advisable (who may be experts or advisors to Polar US or New
Polar). Polar US or New Polar shall retain qualified experts or advisors for the
purpose of providing such tax advice or assistance. Such qualified experts and
advisors shall be responsible for preparing and distributing to each Beneficiary
all necessary forms for such Beneficiaries to complete their Canadian income tax
returns.
 
(f)  
Indemnification Prior to Certain Actions by Trustee

 
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred by the Trustee therein or thereby, and, if so requested by the Trustee,
sufficient funds to cover the costs, expenses and liabilities which may be
incurred by the Trustee, provided that no Beneficiary shall be obligated to
furnish to the Trustee any such security or indemnity in connection with the
exercise by the Trustee of any of its rights, duties, powers and authorities
with respect to the Exchange Right pursuant to Article 3, subject to section
4.13, and with respect to the Automatic Exchange Right pursuant to Article 3.
 
None of the provisions contained in this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
exercise of any of its rights, powers, duties, or authorities unless funded,
given security and indemnified as aforesaid.
 
(g)  
Action of Beneficiaries

 
No Beneficiary shall have the right to institute any action, suit or proceeding
or to exercise any other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust or power hereunder
unless the Beneficiary has requested the Trustee to take or institute such
action, suit or proceeding and furnished the Trustee with the security or
indemnity referred to in section 4.6 and, if so requested by the Trustee,
sufficient funds to cover the costs, expenses and liabilities which may be
incurred by the Trustee, and the Trustee shall have failed to act within a
reasonable time thereafter. In such case, but not otherwise, the Beneficiary
shall be entitled to take proceedings in any court of competent jurisdiction
such as the Trustee might have taken; it being understood and intended that no
one or more Beneficiaries shall have any right in any manner whatsoever to
affect, disturb or prejudice the rights hereby created by any such action, or to
enforce any right hereunder or the Exchange Right or the Automatic Exchange
Right except subject to the conditions and in the manner herein provided and
that all powers and trusts hereunder shall be exercised and all proceedings at
law shall be instituted, had and maintained by the Trustee, except only as
herein provided, and in any event for the equal benefit of all Beneficiaries.
 
 
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(h)  
Reliance Upon Declaration

 
The Trustee shall not be considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it acts and relies
in good faith upon statutory declarations, certificates, opinions or reports
furnished pursuant to the provisions hereof or required by the Trustee to be
furnished to it in the exercise of its rights, powers, duties and authorities
hereunder if such statutory declarations, certificates, opinions or reports
comply with the provisions of section 4.9, if applicable, and with any other
applicable provisions of this Agreement.
 
(i)  
Evidence and Authority to Trustee

 
Polar US and/or New Polar shall furnish to the Trustee evidence of compliance
with the conditions provided for in this Agreement relating to any action or
step required or permitted to be taken by Polar US and/or New Polar or the
Trustee under this Agreement or as a result of any obligation imposed under this
Agreement, including, without limitation, in respect of the Exchange Right or
the Automatic Exchange Right and the taking of any other action to be taken by
the Trustee at the request of or on the application of Polar US and/or New Polar
promptly if and when:
 
(I)  
such evidence is required by any other section of this Agreement to be furnished
to the Trustee in accordance with the terms of this section 4.9; or

 
(II)  
the Trustee, in the exercise of its rights, powers, duties and authorities under
this Agreement, gives Polar US and/or New Polar written notice requiring it to
furnish such evidence in relation to any particular action or obligation
specified in such notice.

 
Such evidence shall consist of an Officer’s Certificate of Polar US and/or New
Polar or a statutory declaration or a certificate made by persons entitled to
sign an Officer’s Certificate stating that any such condition has been complied
with in accordance with the terms of this Agreement.
 
Whenever such evidence relates to a matter other than the Exchange Right or the
Automatic Exchange Right or the taking of any other action to be taken by the
Trustee at the request or on the application of Polar US and/or New Polar, and
except as otherwise specifically provided herein, such evidence may consist of a
report or opinion of any solicitor, attorney, auditor, accountant, appraiser,
valuer, engineer or other expert or any other Person whose qualifications give
authority to a statement made by him provided that if such report or opinion is
furnished by a director, officer or employee of Polar US and/or New Polar it
shall be in the form of an Officer’s Certificate or a statutory declaration.
 
Each statutory declaration, Officer’s Certificate, opinion or report furnished
to the Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the Person giving the evidence:
 
 
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declaring that he has read and understands the provisions of this Agreement
relating to the condition in question;

 
(III)  
describing the nature and scope of the examination or investigation upon which
he based the statutory declaration, certificate, statement or opinion; and

 
(IV)  
declaring that he has made such examination or investigation as he believes is
necessary to enable him to make the statements or give the opinions contained or
expressed therein.

 
(j)  
Experts, Advisers and Agents

 
The Trustee may:
 
(I)  
in the discharge of its powers and duties and the determination of its rights
hereunder rely on the opinion or advice of or information obtained from any duly
qualified and licensed solicitor, attorney, auditor, accountant, appraiser,
valuer, engineer or other expert, whether retained by the Trustee or by Polar US
and/or New Polar or otherwise, (and may employ such assistants not regularly in
the employ of the Trustee as may be necessary to the proper discharge of its
powers and duties and determination of its rights hereunder) the reasonable and
proper costs of which shall be borne by Polar US and New Polar jointly and
severally; and

 
(II)  
employ such agents and other assistants not regularly in the employ of the
Trustee as it may reasonably require for the proper discharge of its powers and
duties hereunder the reasonable and proper costs of which shall be borne by
Polar US and New Polar jointly and severally.

 
(k)  
Trustee Not Required to Give Security

 
The Trustee shall not be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and authorities of this
Agreement or otherwise.
 
(l)  
Trustee Not Bound to Act on Request

 
Except as in this Agreement otherwise specifically provided, the Trustee shall
not be bound to act in accordance with any direction or request of Polar US
and/or New Polar or of the directors thereof until a duly authenticated copy of
the instrument or resolution containing such direction or request shall have
been delivered to the Trustee and the Trustee shall be empowered to act upon any
such copy purporting to be authenticated and believed by the Trustee to be
genuine.
 
 
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(m)  
Conflicting Claims

 
If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Class A Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any Class A
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Exchange Right or
Automatic Exchange Right subject to such conflicting claims or demands and, in
so doing, the Trustee shall not be or become liable to any Person on account of
such election or its failure or refusal to comply with any such conflicting
claims or demands. The Trustee shall be entitled to continue to refrain from
acting and to refuse to act until:
 
(I)  
the rights of all adverse claimants with respect to the Exchange Right or
Automatic Exchange Right subject to such conflicting claims or demands have been
adjudicated by a final judgment of a court of competent jurisdiction; or

 
(II)  
all differences with respect to the Exchange Right or Automatic Exchange Right
subject to such conflicting claims or demands have been conclusively settled by
a valid written agreement binding on all such adverse claimants, and the Trustee
shall have been furnished with an executed copy of such agreement certified to
be in full force and effect.

 
If the Trustee elects to recognize any claim or comply with any demand made by
any such adverse claimant, it may in its discretion require such claimant to
furnish such surety bond or other security satisfactory to the Trustee as it
shall deem appropriate to fully indemnify it as between all conflicting claims
or demands.
 
(n)  
Acceptance of Trust

 
The Trustee hereby accepts the Trust created and provided for by and in this
Agreement and agrees to perform the same upon the terms and conditions herein
set forth and to hold all rights, privileges and benefits conferred hereby and
by law in trust for the various persons who shall from time to time be
Beneficiaries, subject to all the terms and conditions herein set forth.
 
30. COMPENSATION
 
(a)  
Fees and Expenses of the Trustee

 
Polar US and New Polar jointly and severally agree to pay the Trustee reasonable
compensation for all of the services rendered by it under this Agreement and
will reimburse the Trustee for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in the administration of the trusts
created hereby (including taxes other than taxes based on the net income of the
Trustee) and including the reasonable compensation and disbursements of counsel
and all other assistants or advisors not regularly in its employ, and further
including reasonable fees and expenses for attendance at any meeting of
stockholders, if so requested by Polar US or New Polar and disbursements,
including the cost and expense of any suit or litigation of any character and
any proceedings before any governmental agency reasonably incurred by the
Trustee in connection with its duties under this Agreement; provided that Polar
US and New Polar shall have no obligation to reimburse the Trustee for any
expenses or disbursements paid, incurred or suffered by the Trustee in any suit
or litigation in which the Trustee is determined to have acted in bad faith or
with negligence, recklessness or wilful misconduct. The Trustee shall be obliged
to provide only one account or invoice to New Polar from time to time in
connection with its appointment hereunder.
 
 
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31. INDEMNIFICATION AND LIMITATION OF LIABILITY
 
(a)  
Indemnification of the Trustee

 
Polar US and New Polar jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement (collectively, the
“Indemnified Parties”) against all claims, losses, damages, reasonable costs,
penalties, fines and reasonable expenses (including reasonable expenses of the
Trustee’s legal counsel) which, without fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid
incurred or suffered by the Indemnified Party by reason or as a result of the
Trustee’s acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instruction delivered
to the Trustee by Polar US or New Polar pursuant hereto. This indemnity shall
survive the resignation or removal of the Trustee and the termination of the
trusts created hereby.
 
In no case shall Polar US or New Polar be liable under this indemnity for any
claim against any of the Indemnified Parties unless Polar US and New Polar shall
be notified by the Trustee of the written assertion of a claim or of any action
commenced against the Indemnified Parties, promptly after any of the Indemnified
Parties shall have received any such written assertion of a claim or shall have
been served with a summons or other first legal process giving information as to
the nature and basis of the claim. Subject to (ii) below, Polar US and New Polar
shall be entitled to participate at their own expense in the defence and, if
Polar US and New Polar so elect at any time after receipt of such notice, either
of them may assume the defence of any suit brought to enforce any such claim.
The Trustee shall have the right to employ separate counsel in any such suit and
participate in the defence thereof but the fees and expenses of such counsel
shall be at the expense of the Trustee unless: (i) the employment of such
counsel has been authorized by Polar US or New Polar; or (ii) the named parties
to any such suit include both the Trustee and Polar US or New Polar and the
Trustee shall have been advised by counsel acceptable to Polar US or New Polar
that there may be one or more legal defences available to the Trustee that are
different from or in addition to those available to Polar US or New Polar and
that, in the judgment of such counsel, would present a conflict of interest were
a joint representation to be undertaken (in which case Polar US and New Polar
shall not have the right to assume the defence of such suit on behalf of the
Trustee but shall be liable to pay the reasonable fees and expenses of counsel
for the Trustee). Neither Polar US nor New Polar shall be liable for any
settlement effected without its written consent.
 
 
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(b)  
Limitation of Liability

 
The Trustee shall not be held liable for any loss which may occur by reason of
depreciation of the value of any part of the Trust Estate or any loss incurred
on any investment of funds pursuant to this Agreement, except to the extent that
such loss is attributable to the fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of the Trustee.
 
32. CHANGE OF TRUSTEE
 
(a)  
Resignation

 
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Polar US and New Polar specifying
the date on which it desires to resign, provided that such notice shall not be
given less than one month before such desired resignation date unless Polar US
and New Polar otherwise agree and provided further that such resignation shall
not take effect until the date of the appointment of a successor trustee and the
acceptance of such appointment by the successor trustee. Upon receiving such
notice of resignation, Polar US and New Polar shall promptly appoint a successor
trustee which shall be a corporation organized and existing under the laws of
Canada and authorized to carry on the business necessary to fulfill the rights,
obligations and duties of a trustee pursuant to this Agreement in all provinces
of Canada, by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the successor trustee.
 
Failing the appointment by Polar US and New Polar of a successor trustee as
aforesaid and the acceptance of such appointment by a successor trustee, a
successor trustee may be appointed by order of a court of competent jurisdiction
in the Province of Ontario upon application of one or more of the parties to
this Agreement. If the retiring trustee is the party initiating an application
for the appointment of a successor trustee by order of a court of competent
jurisdiction, Polar US and New Polar shall be jointly and severally liable to
reimburse the retiring trustee for its legal costs and expenses in connection
with same.
 
(b)  
Removal

 
The Trustee, or any trustee hereafter appointed may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days’ prior
notice by written instrument executed by Polar US and New Polar, in duplicate,
one copy of which shall be delivered to the trustee so removed and one copy to
the successor trustee.
 
(c)  
Successor Trustee

 
Any successor trustee appointed as provided under this Agreement shall execute,
acknowledge and deliver to Polar US and New Polar and to its predecessor trustee
an instrument accepting such appointment. Thereupon, the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, duties and obligations of its predecessor under this Agreement,
with the like effect as if originally named as trustee in this Agreement.
However, on the written request of Polar US and New Polar or of the successor
trustee, the trustee ceasing to act shall, upon payment of any amounts then due
it pursuant to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon the request of any such successor trustee,
Polar US, New Polar and such predecessor trustee shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers.
 
 
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(d)  
Notice of Successor Trustee

 
Upon acceptance of appointment by a successor trustee as provided herein, Polar
US and New Polar shall cause to be mailed notice of the succession of such
trustee hereunder to each Beneficiary. If Polar US or New Polar shall fail to
cause such notice to be mailed within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
mailed at the expense of Polar US and New Polar.
 
(e)  
Change of Control of Trustee

 
Any corporation into or with which the Trustee may be merged or consolidated or
amalgamated or any corporation resulting therefrom, or any corporation
succeeding to the trust business of the Trustee shall be the successor to the
Trustee without any further act on its part or any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
trustee under the provisions of this Agreement.
 
33. POLAR US SUCCESSORS
 
(a)  
Certain Requirements in Respect of Combination, etc.

 
Polar US shall not consummate any transaction (whether by way of reconstruction,
reorganization consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other Person or, in the case of a merger, of the
continuing corporation resulting therefrom unless:
 
(I)  
such other Person or continuing corporation (the “Polar US Successor”) by
operation of law becomes without more, bound by the terms and provisions of this
Agreement or, if not so bound executes prior to or contemporaneously with the
consummation of such transaction, an agreement supplemental hereto and such
other instruments (if any) as are satisfactory to the Trustee, acting
reasonably, and in the opinion of legal counsel to the Trustee are reasonably
necessary or advisable to evidence the assumption by the Polar US Successor of
liability for all moneys payable and property deliverable hereunder and the
covenant of such Polar US Successor to pay and deliver or cause to be delivered
the same and its agreement to observe and perform all the covenants and
obligations of Polar US under this Agreement; and

 
 
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(II)  
such transaction shall, to the satisfaction of the Trustee, acting reasonably,
and in the opinion of legal counsel to the Trustee, be upon such terms and
conditions as substantially to preserve and not to impair in any material
respect any of the rights, duties, powers and authorities of the Trustee or of
the Beneficiaries.

 
(b)  
Vesting of Powers in Successor

 
Whenever the conditions of section 8.1 have been duly observed and performed,
the Trustee and, if required by section 8.1, the Polar US Successor and New
Polar shall execute and deliver the supplemental agreement provided for in
Article 9 and thereupon the Polar US Successor shall possess and from time to
time may exercise each and every right and power of Polar US under this
Agreement in the name of Polar US or otherwise and any act or proceeding by any
provision of this Agreement required to be done or performed by the board of
directors of Polar US or any officers of Polar US may be done and performed with
like force and effect by the directors or officers of such Polar US Successor.
 
(c)  
Wholly-Owned Subsidiaries

 
Nothing herein shall be construed as preventing the amalgamation or merger of
any wholly-owned direct or indirect subsidiary of Polar US with or into Polar US
or the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
Polar US provided that all of the assets of such subsidiary are transferred to
Polar US or another wholly-owned direct or indirect subsidiary of Polar US. Any
such transactions are expressly permitted by this Article 8.
 
34. AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
 
(a)  
Amendments, Modifications, etc.

 
This Agreement may not be amended or modified except by an agreement in writing
executed by Polar US, New Polar and the Trustee and approved by the
Beneficiaries in accordance with section 10.2 of the Exchangeable Share
Provisions.
 
(b)  
Ministerial Amendments

 
Notwithstanding the provisions of section 9.1, the parties to this Agreement may
in writing, at any time and from time to time, without the approval of the
Beneficiaries, amend or modify this Agreement for the purposes of:
 
(I)  
adding to the covenants of any or all parties hereto for the protection of the
Beneficiaries hereunder provided that the board of directors of each of Polar US
and New Polar shall be of the good faith opinion that such additions will not be
prejudicial to the rights or interests of the Beneficiaries;

 
 
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(II)  
making such amendments or modifications not inconsistent with this Agreement as
may be necessary or desirable with respect to matters or questions which, in the
good faith opinion of the board of directors of each of Polar US and New Polar
and in the opinion of the Trustee, having in mind the best interests of the
Beneficiaries, it may be expedient to make, provided that such boards of
directors and the Trustee, acting on advice of legal counsel, shall be of the
opinion that such amendments and modifications will not be prejudicial to the
interests of the Beneficiaries; or

 
(III)  
making such changes or corrections which, on the advice of counsel to Polar US,
New Polar and the Trustee, are required for the purpose of curing or correcting
any ambiguity or defect or inconsistent provision or clerical omission or
mistake or manifest error, provided that the Trustee and the board of directors
of each of Polar US and New Polar, each acting on advice of legal counsel, shall
be of the opinion that such changes or corrections will not be prejudicial to
the rights and interests of the Beneficiaries.

 
(c)  
Meeting to Consider Amendments

 
New Polar, at the request of Polar US, shall call a meeting or meetings of the
Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of New Polar, the
Exchangeable Share Provisions and all applicable laws.
 
(d)  
Changes in Capital of Polar US and New Polar

 
At all times after the occurrence of any event contemplated pursuant to section
2.7 or 2.8 of the Support Agreement or otherwise, as a result of which either
Polar US Shares or the Class A Exchangeable Shares or both are in any way
changed, this Agreement shall forthwith be amended and modified as necessary in
order that it shall apply with full force and effect, mutatis mutandis, to all
new securities into which the Polar US Shares or the Class A Exchangeable Shares
or both are so changed and the parties hereto shall execute and deliver a
supplemental agreement giving effect to and evidencing such necessary amendments
and modifications 11.5 Execution of Supplemental Trust Agreements
 
No amendment to or modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto. From time to time New Polar,
Polar US (provided each of New Polar and Polar US shall have been authorized by
their respective boards) and the Trustee may, subject to the provisions of this
Agreement and they shall, when so directed by this Agreement, execute and
deliver by their proper officers, agreements or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more of the
following purposes,
 
 
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(I)  
evidencing the succession of Polar US Successors and the covenants of and
obligations assumed by each such Polar US Successor in accordance with the
provisions of Article 8 and the successors of any successor trustee in
accordance with the provisions of Article 7;

 
(II)  
making any additions to, deletions from or alterations of the provisions of this
Agreement or the Exchange Right or the Automatic Exchange Right which, in the
opinion of the Trustee, will not be prejudicial to the interests of the
Beneficiaries or are, in the opinion of counsel to the Trustee, necessary or
advisable in order to incorporate, reflect or comply with any legislation the
provisions of which apply to Polar US, New Polar, the Trustee or this Agreement;
and

 
(III)  
for any other purposes not inconsistent with the provisions of this Agreement,
including, without limitation, to make or evidence any amendment or modification
to this Agreement as contemplated hereby, provided that, in the opinion of the
Trustee, the rights of the Trustee and Beneficiaries will not be prejudiced
thereby.

 
35. TERMINATION
 
(a)  
Term

 
The Trust created by this Agreement shall continue until the earliest to occur
of the following events:
 
(I)  
no outstanding Class A Exchangeable Shares are held by a Beneficiary;

 
(II)  
each of Polar US and New Polar elects in writing to terminate the Trust and such
termination is approved by the Beneficiaries in accordance with section 10.2 of
the Exchangeable Share Provisions; and

 
(III)  
21 years after the date of this Agreement.

 
(b)  
Survival of Agreement

 
This Agreement shall survive any termination of the Trust and shall continue
until there are no Class A Exchangeable Shares outstanding held by a
Beneficiary; provided, however that the provisions of Article 6 and Article 7
shall survive any such termination of this Agreement.
 
 
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36. GENERAL
 
(a)  
Severability

 
If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired thereby and this
Agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
 
(b)  
Enurement

 
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and permitted assigns and to the benefit
of the Beneficiaries.
 
(c)  
Notices to Parties

 
All notices and other communications between the parties hereunder shall be in
writing and shall be deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses (or at such other
address for such party as shall be specified in like notice):
 
(I)  
if to Polar US:

 
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
 
Attention:  Shane G. Carroll
 
with a copy (which shall not constitute notice) to:
 
Goodmans LLP
Suite 3400
Bay Adelaide Centre
333 Bay Street
Toronto, ON  M5H 2S7
 
Attention:   Avi S. Greenspoon
Fax:   (416) 979-1234
 
(II)  
if to New Polar

 
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
 
Attention:   Shane G. Carroll
 
 
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(III)  
if to the Trustee:

 
c/o 136 Yorkville Avenue
Toronto, Ontario
M5R 1C2
 
Attention:   Shane G. Carroll
 
Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
 
(d)  
Notice to Beneficiaries

 
Any and all notices to be given and any documents to be sent to any
Beneficiaries may be given or sent to the address of such Beneficiary shown on
the register of holders of Class A Exchangeable Shares in any manner permitted
by the bylaws of New Polar from time to time in force in respect of notices to
shareholders (such manner to be confirmed in writing by New Polar to the Trustee
prior to any mailing) and shall be deemed to be received (if given or sent in
such manner) at the time specified in such bylaws, the provisions of which
bylaws shall apply mutatis mutandis to notices or documents as aforesaid sent to
such Beneficiaries.
 
(e)  
Counterparts

 
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
 
(f)  
Jurisdiction

 
This Agreement shall be construed and enforced in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.
 
(g)  
Attornment

 
Each of the Trustee and Polar US and New Polar agrees that any action or
proceeding arising out of or relating to this Agreement may be instituted in the
courts of Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably submits to the
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any final judgment of the said court, and not to seek, and hereby
waives any review of the merits of any such judgment by the courts of any other
jurisdiction and Polar US hereby appoints New Polar at its registered office in
the Province of Ontario as attorney for service of process.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 

  2230354 ONTARIO INC.            
Per:
        Name:  Vladimir Aleynikov       Title:  Director  

 

  POLAR WIRELESS CORP.            
Per:
        Name:        Title:   

 

  2240519 ONTARIO LIMITED            
Per:
        Name: Shane G. Carroll       Title: President  

 
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