Document:

APOLLO GOLD CORPORATION

     

    and

     

    1526735
ALBERTA ULC

     

    and

     

    LINEAR
GOLD CORP.

     

      
        

      

    

    
       

      ARRANGEMENT
AGREEMENT

       

      Dated
as of March 31, 2010

       

        
          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            ARTICLE 1

                                          
	
                                            DEFINITIONS,
      INTERPRETATION AND SCHEDULES

                                          
	 
      	 
      	 	 
      
	
                                            Section 1.1

                                          	
                                            Definitions

                                          	 	
                                            2

                                          
	
                                            Section 1.2

                                          	
                                            Interpretation
      Not Affected by Headings

                                          	 	
                                            9

                                          
	
                                            Section 1.3

                                          	
                                            Number,
      Gender and Persons

                                          	 	
                                            9

                                          
	
                                            Section 1.4

                                          	
                                            Date
      for any Action.

                                          	 	
                                            9

                                          
	
                                            Section 1.5

                                          	
                                            Statutory
      References

                                          	 	
                                            9

                                          
	
                                            Section 1.6

                                          	
                                            Currency

                                          	 	
                                            9

                                          
	
                                            Section 1.7

                                          	
                                            Invalidity
      of Provisions

                                          	 	
                                            9

                                          
	
                                            Section 1.8

                                          	
                                            Accounting
      Matters

                                          	 	
                                            10

                                          
	
                                            Section 1.9

                                          	
                                            Knowledge

                                          	 	
                                            10

                                          
	
                                            Section 1.10

                                          	
                                            Meaning
      of Certain Phrase

                                          	 	
                                            10

                                          
	
                                            Section 1.11

                                          	
                                            Schedules

                                          	 	
                                            10

                                          
	 
      
	
                                            ARTICLE 2

                                          
	
                                            THE
      ARRANGEMENT

                                          
	 
      
	
                                            Section 2.1

                                          	
                                            Arrangement

                                          	 	
                                            11

                                          
	
                                            Section 2.2

                                          	
                                            Effective
      Date

                                          	 	
                                            11

                                          
	
                                            Section 2.3

                                          	
                                            Board
      of Directors

                                          	 	
                                            11

                                          
	
                                            Section 2.4

                                          	
                                            Name
      Change

                                          	 	
                                            11

                                          
	
                                            Section 2.5

                                          	
                                            Management
      Changes

                                          	 	
                                            11

                                          
	
                                            Section 2.6

                                          	
                                            Consultation

                                          	 	
                                            12

                                          
	
                                            Section 2.7

                                          	
                                            Court
      Proceedings

                                          	 	
                                            12

                                          
	
                                            Section 2.8

                                          	
                                            U.S.
      Securities Law Matters

                                          	 	
                                            13

                                          
	
                                            Section 2.9

                                          	
                                            Articles
      of Arrangement

                                          	 	
                                            14

                                          
	
                                            Section 2.10

                                          	
                                            Cancellation
      of Apollo Shares

                                          	 	
                                            14

                                          
	
                                            Section 2.11

                                          	
                                            Closing

                                          	 	
                                            14

                                          
	
                                            Section 2.12

                                          	
                                            U.S.
      Tax Matters

                                          	 	
                                            14

                                          
	 
      
	
                                            ARTICLE 3

                                          
	
                                            REPRESENTATIONS
      AND WARRANTIES

                                          
	 
      
	
                                            Section 3.1

                                          	
                                            Representations
      and Warranties of Linear.

                                          	 	
                                            15

                                          
	
                                            Section 3.2

                                          	
                                            Representations
      and Warranties of Apollo and Apollo Subco.

                                          	 	
                                            26

                                          
	
                                            Section 3.3

                                          	
                                            Survival
      of Representations and Warranties

                                          	 	
                                            38

                                          
	 
      
	
                                            ARTICLE 4

                                          
	
                                            COVENANTS

                                          
	 
      
	
                                            Section 4.1

                                          	
                                            Covenants
      of Linear

                                          	 	
                                            38

                                          
	
                                            Section 4.2

                                          	
                                            Covenants
      of Apollo and Apollo Subco

                                          	 	
                                            46

                                          
	
                                            Section 4.3

                                          	
                                            Linear
      Options

                                          	 	
                                            54

                                          
	
                                            Section 4.4

                                          	
                                            Linear
      Warrants

                                          	 	
                                            54

                                          

                                  

                                

                              

                            

                          

                        

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            Section 4.5

                                          	
                                            Apollo
      Options

                                          	 	
                                            55

                                          
	
                                            Section 4.6

                                          	
                                            Indemnification
      and Insurance

                                          	 	
                                            55

                                          
	 
      
	
                                            ARTICLE 5

                                          
	
                                            CONDITIONS

                                          
	 
      
	
                                            Section 5.1

                                          	
                                            Mutual
      Conditions

                                          	 	
                                            56

                                          
	
                                            Section 5.2

                                          	
                                            Linear
      Conditions

                                          	 	
                                            57

                                          
	
                                            Section 5.3

                                          	
                                            Apollo
      and Apollo Subco Conditions

                                          	 	
                                            59

                                          
	
                                            Section 5.4

                                          	
                                            Notice
      and Cure Provisions

                                          	 	
                                            61

                                          
	
                                            Section 5.5

                                          	
                                            Merger
      of Conditions

                                          	 	
                                            62

                                          
	 
      
	
                                            ARTICLE 6

                                          
	
                                            NON-SOLICITATION
      AND BREAK FEE

                                          
	 
      
	
                                            Section 6.1

                                          	
                                            Mutual
      Covenants Regarding Non-Solicitation

                                          	 	
                                            62

                                          
	
                                            Section 6.2

                                          	
                                            Break
      Fee Event

                                          	 	
                                            66

                                          
	 
      
	
                                            ARTICLE 7

                                          
	
                                            AMENDMENT
      AND TERMINATION

                                          
	 
      
	
                                            Section 7.1

                                          	
                                            Amendment

                                          	 	
                                            67

                                          
	
                                            Section 7.2

                                          	
                                            Mutual
      Understanding Regarding Amendments

                                          	 	
                                            68

                                          
	
                                            Section 7.3

                                          	
                                            Termination

                                          	 	
                                            68

                                          
	 
      
	
                                            ARTICLE 8

                                          
	
                                            GENERAL

                                          
	 
      
	
                                            Section 8.1

                                          	
                                            Notice

                                          	 	
                                            70

                                          
	
                                            Section 8.2

                                          	
                                            Remedies

                                          	 	
                                            71

                                          
	
                                            Section 8.3

                                          	
                                            Indemnification

                                          	 	
                                            71

                                          
	
                                            Section 8.4

                                          	
                                            Privacy
      Matters

                                          	 	
                                            72

                                          
	
                                            Section 8.5

                                          	
                                            Expenses

                                          	 	
                                            72

                                          
	
                                            Section 8.6

                                          	
                                            Time
      of the Essence

                                          	 	
                                            72

                                          
	
                                            Section 8.7

                                          	
                                            Entire
      Agreement

                                          	 	
                                            72

                                          
	
                                            Section 8.8

                                          	
                                            Further
      Assurances

                                          	 	
                                            72

                                          
	
                                            Section 8.9

                                          	
                                            Governing
      Law

                                          	 	
                                            72

                                          
	
                                            Section 8.10

                                          	
                                            Execution
      in Counterparts

                                          	 	
                                            73

                                          
	
                                            Section 8.11

                                          	
                                            Waiver

                                          	 	
                                            73

                                          
	
                                            Section 8.12

                                          	
                                            No
      Personal Liability

                                          	 	
                                            73

                                          
	
                                            Section 8.13

                                          	
                                            Enurement
      and Assignment

                                          	 	
                                            73

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    SCHEDULES

     

    SCHEDULE
“A” PLAN OF ARRANGEMENT UNDER SECTION 193 OF THE

    BUSINESS CORPORATIONS ACT
(ALBERTA)

    SCHEDULE
“B” LINEAR COVERTIBLE SECURITIES

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARRANGEMENT
AGREEMENT

     

    THIS AGREEMENT made as the
31st day
of March, 2010

    

    AMONG
:

    

    
      
        
          	 
      	
                  APOLLO
      GOLD CORPORATION,

                
	 
      	
                  a
      corporation existing under the

                
	 
      	
                  Business Corporations Act
      (Yukon),

                
	 
      	 
      
	 
      	
                  (hereinafter
      referred to as “Apollo”)

                
	 
      	 
      
	 
      	
                  OF
      THE FIRST PART

                
	 
      	
                  -
      and -

                
	 
      	 
      
	 
      	
                  1526735
      ALBERTA ULC,

                
	 
      	
                  an
      unlimited liability company existing under the

                
	 
      	
                  the
      Business Corporations
      Act (Alberta),

                
	 
      	 
      
	 
      	
                  (hereinafter
      referred to as “Apollo
      Subco”)

                
	 
      	 
      
	 
      	
                  OF
      THE SECOND PART

                
	 	 
	 
      	
                  -
      and -

                
	 
      	 
      
	 
      	
                  LINEAR
      GOLD CORP.,

                
	 
      	
                  a
      corporation existing under the

                
	 
      	
                  Canada Business Corporations
      Act,

                
	 
      	 
      
	 
      	
                  (hereinafter
      referred to as “Linear”)

                
	 
      	 
      
	 
      	
                  OF
      THE THIRD PART

                

        

      

    

     

    WITNESSES
THAT:

    

    WHEREAS Apollo Subco is
wholly-owned by Apollo;

    

    AND WHEREAS Apollo,
Apollo Subco and Linear propose to effect a business combination to combine the
business and assets of Linear with those of Apollo;

    

    AND WHEREAS the parties hereto
intend to carry out the proposed business combination by way of a plan of
arrangement under the provisions of the Business Corporations Act
(Alberta);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW THEREFORE in consideration
of the mutual covenants and agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto, the parties hereto hereby covenant
and agree as follows:

    ARTICLE 1

    DEFINITIONS,
INTERPRETATION AND SCHEDULES

     

    
      
        
          	
                  Section
      1.1

                	
                  Definitions

                

        

      

    

     

    In this
Agreement, unless the context otherwise requires, the following words and terms
with the initial letter or letters thereof capitalized shall have the meanings
ascribed to them below:

     

    “ABCA” means the Business Corporations Act
(Alberta), including the regulations promulgated thereunder, as now enacted or
as the same may from time to time be amended, re-enacted or
replaced;

     

    “Acquisition Proposal” means,
with respect to Apollo or Linear, any inquiry or the making of any proposal to
such party or its shareholders, from any person which constitutes, or may
reasonably be expected to lead to (in either case whether in one transaction or
a series of transactions): (i) an acquisition from such party or its
shareholders, of any securities of such party or its subsidiaries; (ii) any
acquisition of a substantial amount of assets of such party or its subsidiaries;
(iii) an amalgamation, arrangement, merger, or consolidation involving such
party or its subsidiaries; or (iv) any take-over bid, issuer bid, exchange
offer, recapitalization, liquidation, dissolution, reorganization into a royalty
trust or income fund or similar transaction involving such party or its
subsidiaries or any other transaction, the consummation of which would or could
reasonably be expected to impede, interfere with, prevent or delay the
transactions contemplated by this Agreement or the Arrangement or which would or
could reasonably be expected to materially reduce the benefits to the other
party under this Agreement or the Arrangement;

     

    “Agreement” means this
arrangement agreement, together with the schedules attached hereto, as amended
or supplemented from time to time;

     

    “Amalgamation” means the
amalgamation of the Amalgamating Corporations as contemplated by the Plan of
Arrangement;

     

     “Amalgamating Corporations”
means, collectively, Apollo Subco and Linear;

     

    “AMEX” means the NYSE Amex
Equities Exchange;

     

    “Apollo” means Apollo Gold
Corporation, a corporation existing under the YBCA;

     

    “Apollo Disclosure Documents”
means all publicly available press releases, material change reports, annual
information forms, information circulars, financial statements and other
documents that have been disclosed by Apollo to the public and filed pursuant to
applicable Securities Laws or otherwise posted on SEDAR or EDGAR after January
1, 2009;

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    “Apollo Employee Plans” has the
meaning ascribed thereto in subsection 3.2(ii);

     

    “Apollo Leased Premises” has
the meaning ascribed thereto in subsection 3.2(dd);

     

    “Apollo Meeting” means the annual and
special meeting, including any adjournments or postponements thereof, of the
Apollo Shareholders to be held, among other things, to consider and, if deemed
advisable, to approve the Arrangement;

     

    “Apollo Options” means the
outstanding options to purchase an aggregate of 11,561,871 Apollo Shares issued
pursuant to the Apollo Stock Option Plan;

     

    “Apollo Material Properties”
means, collectively, those properties commonly referred to as Black Fox,
Grey Fox and Pike River, in which
Apollo has an interest as described in the Apollo Disclosure
Documents;

     

    “Apollo Proxy Circular” means
the management information circular, including all schedules and exhibits
thereto, to be prepared by Apollo with the assistance of Linear in respect of
the Apollo Meeting;

     

    “Apollo Replacement Options”
means the stock options of Apollo to be granted to the holders of Linear Options
on the terms and conditions set out in the Plan of Arrangement;

     

    “Apollo Replacement Warrants”
means the common share purchase warrants of Apollo to be issued to the holders
of Linear Warrants on the terms and conditions set out in the Plan of
Arrangement;

     

    “Apollo Shareholders” means, at any
time, the holders of Apollo Shares;

     

    “Apollo Shares” means the
common shares in the capital of Apollo;

     

    “Apollo Stock Option Plan” means the stock
option plan of Apollo adopted in December 2003 and amended and restated as of
May 7, 2009;

     

    “Apollo Subco” means 1526735
Alberta ULC, a wholly-owned subsidiary of Apollo existing under the
ABCA;

     

    “Apollo Subsidiaries” has
the meaning ascribed thereto in subsection 4.1(b);

     

    “Apollo Support Agreements” means,
collectively, the support agreements between Linear and each of the Apollo
Support Parties;

     

    “Apollo Support Parties” means the
persons who shall execute and deliver to Linear an Apollo Support Agreement
being R. David Russell, Melvyn Williams, Marvin Kaiser, David Peat, Richard
Nanna, Robert Babensee, W.S. Vaughan, Brent Timmons, Timothy Smith, Wendy Yang,
Michael Hobart and Charles Stott;

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

     

    “Arrangement” means the
arrangement under the provisions of Section 193 of the ABCA on the terms and
conditions set forth in the Plan of Arrangement, subject to any amendment or
supplement thereto made in accordance therewith or made at the direction of the
Court in the Final Order;

     

    “Articles of Arrangement” means
articles of arrangement in respect of the Arrangement required by the ABCA to be
filed with the Registrar after the Final Order is made;

     

    “Business Day” means any day,
other than a Saturday, a Sunday or a statutory holiday in Toronto, Ontario or
Calgary, Alberta;

     

    “Canadian GAAP” means
accounting principles generally accepted in Canada;

     

    “CBCA” means the Canada Business Corporations
Act, including
the regulations promulgated thereunder, as now enacted or as the same may from
time to time be amended, re-enacted or replaced;

     

    “Certificate” means the
certificate giving effect to the Amalgamation issued by the Registrar on the
Articles of Amalgamation pursuant to subsection 193(11) of the
ABCA;

     

     “Completion Deadline” means the
date by which the transactions contemplated by this Agreement are to be
completed, which date shall be no later than July 2, 2010;

     

    “Confidentiality Agreement”
means the confidentiality agreement dated January 6, 2010 between Apollo and
Linear;

     

    “Continuance” means the
continuance of Linear to be completed under the ABCA pursuant to the Plan of
Arrangement;

     

    “Court” means the Court of Queen’s
Bench of Alberta;

     

    “Dissent Rights” means the
rights of dissent in respect of the Arrangement described in the Plan of
Arrangement;

     

    “EDGAR” means the SEC’s
Electronic Data Gathering Analysis and Retrieval System;

     

    “Effective Date” means the date
set out in the Certificate as being the effective date in respect of the
Arrangement;

     

    “Effective Time” means 5:00
p.m. (Toronto time) on the Effective Date;

     

    “Environmental Laws” has
the meaning ascribed thereto in subsection 3.1(kk);

     

    “Final Order” means the order
of the Court pursuant to subsection 193(9) of the ABCA approving the
Arrangement, as such order may be amended at any time prior to the Effective
Date or, if appealed, then unless such appeal is withdrawn or denied, as
affirmed;

     

    
      
        
        

      

      
        - 4
-

        
          

        

      

      
        
        

      

    

     

    “Governmental Authority” means
and includes, without limitation, any national, federal, provincial, state,
county or municipal government, governmental or public department, court,
tribunal, commission, board, bureau or agency or any political subdivision of
any of the foregoing, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
corporation or other entity owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing;

     

    “Interim Order” means the
interim order of the Court, as such order may be amended, pursuant to subsection
193(4) of the ABCA made in connection with the Arrangement;

     

    “Laws” means all laws, by-laws,
rules, regulations, orders, ordinances, protocols, codes, guidelines,
directives, instruments, policies, notices, directions and judgments or other
requirements of any Governmental Authority;

     

    “Lender Consent Letter” means
the consent letter, dated as of March 9, 2010, among the Lenders, Linear and
Apollo, pursuant to which, among other things, the Lenders consented to the
Arrangement upon the terms and conditions set out therein;

     

    “Lender Lock-Up Agreements”
means, collectively, the lock-up agreements entered into by each of the Lenders
dated March 18, 2010 pursuant to which each Lender agrees, among other things,
not to, directly or indirectly, exercise or offer, sell, contract to sell, lend,
swap, or enter into any other agreement to transfer the economic consequences of
any of the Apollo Shares or common share purchase warrants of Apollo held by
them until December 31, 2010, or such earlier date specified
therein;

     

    “Lenders” means, collectively,
Macquarie Bank Limited and RMB Australia Holdings Limited, being the lenders to
Apollo under the Project Facility Agreement;

     

    “Lender Support Agreements”
means, collectively, the support agreements entered into by each of the Lenders
dated March 18, 2010 pursuant to which each Lender agrees, among other things,
to support and vote in favour of the Arrangement;

    

    “Letter of Intent” means the
binding letter of intent dated March 9, 2010 between Apollo and Linear, as
amended March 18, 2010, setting out, among other things, the terms and
conditions of the Arrangement;

     

    “Linear” means Linear Gold
Corp., a corporation existing under the CBCA;

     

    “Linear Audited Financial
Statements” has the meaning ascribed thereto in subsection
3.1(n);

     

    “Linear Convertible Securities”
means, collectively, the Linear Options and the Linear Warrants as set out in
Schedule B;

     

    “Linear Disclosure Documents”
means all publicly available press releases, material change reports, annual
information forms, information circulars, financial statements and other
documents that have been disclosed by Linear to the public and filed pursuant to
applicable Securities Laws or otherwise posted on SEDAR after January 1,
2009;

     

    
      
        
        

      

      
        - 5
-

        
          

        

      

      
        
        

      

    

     

    “Linear Employee Plans” has the
meaning ascribed thereto in subsection 3.1(gg);

     

    “Linear Leased Premises” has
the meaning ascribed thereto in subsection 3.1(bb);

     

    “Linear Listed Warrants” means,
collectively, an aggregate of up to 5,203,750 Linear Warrants outstanding on the
date hereof which were issued pursuant to the Linear Warrant
Indenture;

     

    “Linear Meeting” means the
special meeting, including any adjournments or postponements thereof, of the
Linear Shareholders to be held, among other things, to consider and, if deemed
advisable, to approve the Continuance and the Arrangement;

     

    “Linear Options” means,
collectively, an aggregate of up to 2,770,000 options as set out in Schedule
B;

     

    “Linear Material Properties”
means, collectively, those properties commonly referred to as the Box mine and
the Athona deposit, in which Linear has an interest as described in the Linear
Disclosure Documents;

     

    “Linear Proxy Circular” means the
management information circular, including all schedules and exhibits thereto,
to be prepared by Linear with the assistance of Apollo in respect of the Linear
Meeting;

     

    “Linear Securityholders” means,
collectively, the Linear Shareholders, the holders of Linear Options and the
holders of Linear Warrants;

     

    “Linear Shareholders” means, at
any time, the holders of Linear Shares;

     

    “Linear Stock Option Plan” means the stock
option plan of Linear adopted on September 29,
2006;

     

    “Linear Shares” means the
common shares in the capital of Linear;

     

    “Linear Subsidiaries” has
the meaning ascribed thereto in subsection 3.1(b);

     

    “Linear Support Agreements”
means, collectively, the support agreements between Apollo and each of the
Linear Support Parties;

     

    “Linear Support Parties” means the persons
who shall execute and deliver to Apollo a Linear Support Agreement being Wade
Dawe, Brian MacEachen, Keith Abriel, Howard Bird, Michael Sylvestre, Emin Eyi,
Peter Dimmell, Derrick Gill,  Danny Gallivan and Michael
Gross;

     

    “Linear Warrant Indenture”
means the common share purchase warrant indenture between Linear and
Computershare Trust Company of Canada dated November 19, 2009 providing for,
among other things, the issue of up to 5,203,750 Linear Listed
Warrants;

     

    
      
        
        

      

      
        - 6
-

        
          

        

      

      
        
        

      

    

     

    “Linear Warrants” means,
collectively, an aggregate of up to 8,177,764 warrants as set out in
Schedule B;

     

    “Material Adverse Change” when used in connection
with an entity means any change (or any condition, event or development
involving a prospective change) in the business, affairs, operations, results of
operations, assets, capitalization, financial condition, licenses, permits,
concessions, rights, liabilities, prospects or privileges, whether contractual
or otherwise, of such entity which has or is reasonably likely to have a
Material Adverse Effect on such entity and its parent (if applicable) or
subsidiaries, taken as a whole;

     

    “Material Adverse Effect” when
used in connection with an entity means any change (including a decision to
implement such a change made by the board of directors or by senior management
who believe that confirmation of the decision by the board of directors is
probable), event, violation, inaccuracy, circumstance or effect that is
materially adverse to the business, assets (including intangible assets),
liabilities, capitalization, ownership, financial condition or results of
operations of such entity and its parent (if applicable) or subsidiaries, taken
as a whole;

     

    “Mining Rights” has the meaning
ascribed thereto in subsection 3.1(f);

     

    “Plan of Arrangement” means a
plan of arrangement substantially in the form and content of Schedule A attached
hereto and any amendment or variation thereto made in accordance with Section
7.01 of the Plan of Arrangement or Section 7.1 hereof;

     

    “Project Facility Agreement”
means the agreement among Apollo, the Lenders and RMB Resources Inc. dated
February 20, 2009, as amended, relating to Apollo’s credit facility in respect
of Apollo’s Black Fox project;

     

    “Receiving Party” has the
meaning ascribed thereto in subsection 6.1(b)(v)(A);

     

    “Registrar” means the Registrar
of Corporations of Deputy Registrar of Corporations appointed pursuant to
Section 263 of the ABCA;

     

     “Reporting Provinces” means,
collectively, the provinces of British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and
Newfoundland and Labrador;

     

    “Resigning Directors” means,
collectively, those directors of Apollo who shall resign as directors effective
as of the Effective Date and who shall cease to be directors of Apollo upon
completion of the Arrangement;

     

    “Responding Party” has the
meaning ascribed thereto in subsection 6.1(c);

     

    “SEC” means the Securities and
Exchange Commission of the United States of America;

     

    
      
        
        

      

      
        - 7
-

        
          

        

      

      
        
        

      

    

     

    “Section 3(a)(10) Exemption”
means the exemption from the registration requirements of the 1933 Act provided
under Section 3(a)(10) thereof;

     

    “Securities Authorities” means,
collectively, the securities regulatory authorities in the provinces and
territories of Canada and the United States and the states thereof, including
the SEC;

     

    “Securities Laws” means, unless
the context otherwise requires, all applicable securities laws in the provinces
and territories of Canada and the federal laws and
regulations of United States of America and the laws
and regulations of the states thereof and the respective regulations made
thereunder, together with applicable published fee schedules, prescribed forms,
policy statements, national or multilateral instruments, orders, blanket rulings
and other regulatory instruments of the Securities Authorities in such
jurisdictions;

     

    “SEDAR” means the System for
Electronic Document Analysis and Retrieval;

     

    “subsidiary” means, with
respect to a specified body corporate, any body corporate of which the specified
body corporate is entitled to elect a majority of the directors thereof and
shall include any body corporate, partnership, joint venture or other entity
over which such specified body corporate exercises direction or control or which
is in a like relation to such a body corporate, excluding any body corporate in
respect of which such direction or control is not exercised by the specified
body corporate as a result of any existing contract, agreement or
commitment;

     

    “Superior Proposal” has the
meaning ascribed thereto in subsection 6.1(b)(v)(A);

     

    “Tax” and “Taxes” have the meanings
ascribed thereto in subsection 3.1(o);

     

    “Tax Act” means the Income Tax Act
(Canada);

     

    “TSX” means the Toronto Stock
Exchange;

     

    “U.S. GAAP” means accounting
principles generally accepted in the United States of America;

     

    “YBCA” means the Business Corporations Act
(Yukon), including the regulations promulgated thereunder, as now enacted or as
the same may from time to time be amended, re-enacted or replaced;

     

    “1933 Act” means the Securities
Act of 1933, as amended, of the United States of America;

     

    “1934 Act” means the Securities
Exchange Act of 1934, as amended, of the United States of America;
and

     

    “1940 Act” means the Investment
Company Act of 1940, as amended, of the United States of America.

     

    
      
        
        

      

      
        - 8
-

        
          

        

      

      
        
        

      

    

     

    In addition, words and phrases used
herein and defined in the ABCA shall have the same meaning herein as in the
ABCA unless the
context otherwise requires.

     

    
      
        	
                Section
      1.2

              	
                Interpretation
      Not Affected by Headings

              

      

    

     

    The
division of this Agreement into articles, sections, subsections, paragraphs and
subparagraphs and the insertion of headings herein are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement. The terms “this Agreement”, “hereof”, “herein”, “hereto”,
“hereunder” and similar expressions refer to this Agreement and the schedules
attached hereto and not to any particular article, section or other portion
hereof and include any agreement, schedule or instrument supplementary or
ancillary hereto or thereto.

     

    
      
        	
                Section
      1.3

              	
                Number,
      Gender and Persons 

              

      

    

     

    In this
Agreement, unless the context otherwise requires, words importing the singular
only shall include the plural and vice versa, words importing the use of either
gender shall include both genders and neuter, and the word person and all words
importing persons shall include a natural person, firm, trust, partnership,
association, corporation, joint venture or government (including any
Governmental Authority, political subdivision or instrumentality thereof) and
any other entity of any kind or nature whatsoever.

     

    
      
        	
                Section
      1.4

              	
                Date
      for any Action.

              

      

    

     

    If the
date on which any action is required to be taken hereunder by any party hereto
is not a Business Day, such action shall be required to be taken on the next
succeeding day which is a Business Day.

     

    
      
        	
                Section
      1.5

              	
                Statutory
      References

              

      

    

     

    Any
reference in this Agreement to a statute includes all regulations and rules made
thereunder, all amendments to such statute or regulation in force from time to
time and any statute or regulation that supplements or supersedes such statute
or regulation.

     

    
      
        	
                Section
      1.6

              	
                Currency

              

      

    

     

    Unless
otherwise stated, all references in this Agreement to amounts of money are
expressed in lawful money of Canada.

     

    
      
        	
                Section
      1.7

              	
                Invalidity
      of Provisions

              

      

    

     

    Each of
the provisions contained in this Agreement is distinct and severable and a
declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof. To the extent permitted by
applicable Law, the parties hereto waive any provision of Law which renders any
provision of this Agreement or any part thereof invalid or unenforceable in any
respect. The parties hereto will engage in good faith negotiations to replace
any provision hereof or any part thereof which is declared invalid or
unenforceable with a valid and enforceable provision or part thereof, the
economic effect of which approximates as much as possible the invalid or
unenforceable provision or part thereof which it replaces.

     

    
      
        
        

      

      
        - 9
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Section
      1.8

              	
                Accounting
      Matters

              

      

    

     

    Unless
otherwise stated, all accounting terms used in this Agreement shall have the
meanings attributable thereto under Canadian GAAP in regard to Linear and under
U.S. GAAP in regard to Apollo and all determinations of an accounting nature
required to be made hereunder shall be made in a manner consistent with Canadian
GAAP in regard to Linear and in a manner consistent with U.S. GAAP in regard to
Apollo.

     

    
      
        	
                Section
      1.9

              	
                Knowledge

              

      

    

     

    Where the
phrases “to the knowledge of Apollo” is used in respect of Apollo or the Apollo
Subsidiaries or “to the knowledge of Linear” is used in respect of Linear or the
Linear Subsidiaries, such phrase shall mean, in respect of each representation
and warranty or other statement which is qualified by such phrase, that such
representation and warranty or other statement is being made based upon: (i) in
the case of Apollo and the Apollo Subsidiaries, the collective actual knowledge
of David Russell and Mel Williams after due enquiry and (ii) in the case of
Linear and the Linear Subsidiaries, the collective actual knowledge of Wade
Dawe, Keith Abriel and Brian MacEachen after due enquiry.

     

    
      
        	
                Section
      1.10

              	
                Meaning
      of Certain Phrase

              

      

    

     

    In this
Agreement the phrase “in the ordinary course of business” shall mean and refer
to those activities that are normally conducted by corporations engaged in the
exploration for and development of precious and base metals and in the
construction and operation of precious and base metal mines, and “including”
means “including, without limitation”.

     

    
      
        	
                Section
      1.11

              	
                Schedules

              

      

    

     

    The
following schedules are attached to, and are deemed to be incorporated into and
form part of, this Agreement:

     

    
      
        
          
            	
                    Schedule

                  	 
      	
                    Matter

                  
	 
      	 
      	 
      
	
                    A

                  	 
      	
                    Plan
      of Arrangement

                  
	
                    B

                  	 
      	
                    Linear
      Convertible
Securities

                  

          

        

      

    

     

    
      
        
        

      

      
        - 10
-

        
          

        

      

      
        
        

      

    

     

    ARTICLE 2

    THE
ARRANGEMENT

     

    
      	
              Section 2.1

            	
              Arrangement

            

    

     

    The
Amalgamating Corporations shall amalgamate by way of arrangement pursuant to
Section 193 of the ABCA on the terms and subject to the conditions contained in
this Agreement and the Plan of Arrangement, and the Arrangement shall be
comprised of substantially the events or transactions, taken in the sequence
indicated, in Schedule A to this Agreement.  

     

    
      	
              Section 2.2

            	
              Effective
      Date

            

    

     

    The
Arrangement shall become effective at the Effective Time and at such time the
Amalgamating Corporations shall amalgamate and continue as one unlimited
liability corporation (the “Surviving Corporation”) on the
terms and subject to the conditions contained in this Agreement and the Plan of
Arrangement.

     

    
      	
              Section 2.3

            	
              Board
      of Directors

            

    

     

    As of the
Effective Time, the board of directors of Apollo (the “New Board”) shall consist of
seven (7) directors appointed as follows:  three (3) current Apollo
board members or Apollo nominees; three (3) Linear nominees (including Wade Dawe
who shall be appointed Chairman of the Board of Directors); and one (1) nominee
who shall be a technical person mutually agreed upon by Apollo and
Linear.  For greater certainty, subject to delivery of customary
mutual releases (in a form acceptable to Linear, acting reasonably), each
of the Resigning Directors shall resign as a director of Apollo effective as of
the Effective Time.

     

    
      	
              Section 2.4

            	
              Name
      Change

            

    

     

    Immediately
following the Effective Time, Apollo shall file articles of amendment with the
Registrar under the YBCA to change the name of Apollo to a name to be agreed to
by Apollo and Linear.

     

    
      	
              Section 2.5

            	
              Management
      Changes

            

    

     

    Apollo
hereby agrees that immediately prior to the completion of the Arrangement Linear
shall effect all management terminations, buyouts, severance payments and
retention bonuses in respect of Linear management and staff in accordance with
management contracts and common law and, subject to the approval of the board of
directors of Linear, in amounts not to exceed an aggregate of
$1,700,000.  Apollo agrees that upon completion of the Arrangement,
Apollo will enter into employment agreements with any Linear management and
staff whose employment shall continue with the Surviving Corporation following
completion of the Arrangement in form and substance satisfactory to each of
Linear and Apollo, each acting reasonably.  Upon completion of the
Arrangement, R. David Russell shall resign as President and Chief Executive
Officer of Apollo and, subject to delivery of customary releases, shall be paid
all termination and other amounts owing pursuant to his employment agreement
(which the parties hereby agree shall not exceed approximately US$1,700,000 in
the aggregate) and an aggregate of 2,231,000 Apollo Options previously granted
to R. David Russell and outstanding on the date hereof will remain in effect for
a period of one year following the Effective Date.  Upon completion of
the Arrangement, R. David Russell shall enter into a consulting agreement with
the Surviving Corporation in form and substance satisfactory to Linear and
Apollo, each acting reasonably.

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

     

    
      	
              Section 2.6

            	
              Consultation

            

    

     

    Apollo
and Linear will consult with the other in issuing any press release or otherwise
making any public statement with respect to this Agreement, the Arrangement or
their respective businesses and in making any filing with any Governmental
Authority, Securities Authority or stock exchange with respect thereto. Each of
Apollo and Linear shall use its commercially reasonable best efforts to enable
the other to review and comment on all such press releases and filings prior to
the release or filing, respectively, thereof.

     

    
      	
              Section 2.7

            	
              Court
      Proceedings

            

    

     

    As soon
as is reasonably practicable after the date of execution of this Agreement,
Linear and Apollo Subco shall apply to the Court pursuant to Section 193 of the
ABCA for an order approving the Arrangement and, in connection with such
application, Linear and Apollo Subco shall:

     

    
      	
              (a)

            	
              file,
      proceed with and diligently prosecute an application to the Court for the
      Interim Order providing for, among other things, the calling and holding
      of the Linear Meeting; and

            

    

     

    
      	
              (b)

            	
              subject
      to obtaining the approvals as contemplated by the Interim Order and as may
      be directed by the Court in the Interim Order, take all steps necessary or
      desirable to submit the Arrangement to the Court and to apply for the
      Final Order.

            

    

     

    The
notices of motion and related materials for the applications referred to in this
section shall be in a form satisfactory to Linear and Apollo Subco, each acting
reasonably, and, in the case of the application to the Court for the Interim
Order, shall request that the Interim Order provide, among other
things:

     

    
      	
              (i)

            	
              for
      the persons to whom notice is to be provided in respect of the Arrangement
      for the Linear Meeting and for the manner in which such notice is to be
      provided;

            

    

     

    
      	
              (ii)

            	
              that
      the requisite approval of the Linear Shareholders for the Arrangement
      shall be two-thirds of the votes cast thereon by Linear Shareholders
      present in person or represented by proxy at the Linear
      Meeting;

            

    

     

    
      	
              (iii)

            	
              that
      in all other respects, the terms, conditions and restrictions of the
      Linear constating documents, including quorum requirements and other
      matters, shall apply in respect of the Linear
  Meeting;

            

    

     

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

     

    
      	
              (iv)

            	
              for
      the grant of the Dissent Rights;

            

    

     

    
      	
              (v)

            	
              for
      notice requirements with respect to the presentation of the application to
      the Court for the Final Order;

            

    

     

    
      	
              (vi)

            	
              that
      the Linear Meeting may be adjourned from time to time by management of
      Linear without the need for additional approval of the Court;
      and

            

    

     

    
      	
              (vii)

            	
              that
      the record date for Linear Shareholders entitled to notice of and to vote
      at the Linear Meeting will not change in respect of any adjournment(s) of
      the Linear Meeting.

            

    

     

    
      	
              Section 2.8

            	
              U.S.
      Securities Law Matters

            

    

     

    The parties agree that the Arrangement
will be carried out with the intention that all Apollo Shares and other
securities of Apollo issued on completion of the Arrangement to the Linear
Securityholders will be issued by Apollo in reliance on the exemption from the
registration requirements of the 1933 Act, provided by the Section 3(a)(10)
Exemption.  In order to ensure the availability of the
Section 3(a)(10) Exemption, the parties agree that the Arrangement will be
carried out on the following basis:

     

    
      	
              (a)

            	
              the
      Arrangement will be subject to the approval of the
  Court;

            

    

    

    
      	
              (b)

            	
              the
      Court will be advised as to the intention of the parties to rely on the
      Section 3(a)(10) Exemption prior to the hearing required to approve the
      Arrangement;

            

    

    

    
      	
              (c)

            	
              the
      Court will be required to satisfy itself as to the fairness of the
      Arrangement to the Linear Securityholders subject to the
      Arrangement;

            

    

    

    
      	
              (d)

            	
              the
      Final Order approving the Arrangement that is obtained from the Court will
      expressly state that the Arrangement is approved by the Court as being
      fair to the Linear Securityholders;

            

    

    

    
      	
              (e)

            	
              Linear
      will ensure that each Linear Securityholder entitled to receive securities
      of Apollo on completion of the Arrangement will be given adequate notice
      advising them of their right to attend the hearing of the Court to give
      approval of the Arrangement and providing them with sufficient information
      necessary for them to exercise that
right;

            

    

    

    
      	
              (f)

            	
              the
      Linear Securityholders will be advised
      that the securities of Apollo issued in the Arrangement have not been
      registered under the 1933 Act and will be issued  by Apollo in
      reliance on the exemption from the registration requirements of the U.S.
      Securities Act provided by the Section 3(a)(10) Exemption and may be
      subject to restrictions on resale under the securities laws of the United
      States, including, as applicable, Rule 144 under the 1933 Act with respect
      to affiliates of Apollo;

            

    

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

    

    

    
      	
              (g)

            	
              the
      Interim Order will specify that each Linear Securityholder will have the
      right to appear before the Court at the hearing of the Court to give
      approval of the Arrangement so long as they enter an appearance within a
      reasonable time; and

            

    

    

    
      	
              (h)

            	
              the
      Final Order shall include a statement to the following
    effect:

            

    

     

    “This
Order will serve as a basis of a claim to an exemption, pursuant to section
3(a)(10) of the United States
Securities Act of 1933, as amended, from the registration requirements
otherwise imposed by that act, regarding the distribution of securities of
Apollo, pursuant to the Plan of Arrangement.”

    

    
      	
              Section 2.9

            	
              Articles
      of Arrangement

            

    

     

    Subject
to the rights of termination contained in Section 7.3 hereof, upon the
Linear Shareholders approving the Continuance in accordance with the CBCA and
the Arrangement in accordance with the Interim Order, the Amalgamating
Corporations obtaining the Final Order, the Apollo Shareholders approving the
Arrangement at the Apollo Meeting as required by this Agreement and applicable
Laws, including the rules and policies of the TSX and AMEX, and the other
conditions contained in Article 5 hereof being complied with or waived, Linear
shall proceed with the Continuance and thereafter the Amalgamating Corporations
shall jointly file Articles of Arrangement, in duplicate, with the Registrar
together with such other documents as may be required in order to effect the
Arrangement.

     

    
      	
              Section 2.10

            	
              Cancellation
      of Apollo Shares

            

    

     

    Effective
as of the Effective Time, an aggregate of 62,500,000 Apollo Shares owned by
Linear shall be cancelled without any payment.

     

    
      	
              Section 2.11

            	
              Closing

            

    

     

    The
closing of the Arrangement will take place at the offices of Fogler, Rubinoff
LLP, 95 Wellington Street West, Suite 1200, Toronto-Dominion Centre, Toronto,
Ontario at 9:00 a.m. on the Effective Date.

     

    
      	
              Section 2.12

            	
              U.S.
      Tax Matters

            

    

     

    The Arrangement is intended to qualify
as a reorganization within the meaning of Section 368(a) of the U.S. Internal
Revenue Code and this Agreement is intended to be a “plan of reorganization”
within the meaning of the Treasury Regulations promulgated under Section 368 of
the U.S. Internal Revenue Code.  Each party, to the extent it is
required to make any filings in the United States, agrees to treat the
Arrangement as a reorganization within the meaning of Section 368(a) of the U.S.
Internal Revenue Code for all U.S. federal income tax purposes, and agrees to
treat this Agreement as a “plan of reorganization” within the meaning of the
Treasury Regulations promulgated under Section 368 of the U.S. Internal Revenue
Code, and to not take any position on any Tax return or otherwise take any Tax
reporting position inconsistent with such treatment, unless otherwise required
by a "determination" within the meaning of Section 1313 of the U.S. Internal
Revenue Code that such treatment is not correct or in connection with the
settlement of a tax controversy.  Each party hereto agrees to act in a
manner that is consistent with the parties’ intention that the Arrangement be
treated as a reorganization within the meaning of Section 368(a) of the U.S.
Internal Revenue Code for all U.S. federal income tax
purposes.  However, neither Apollo nor Apollo Subco makes any
representation or warranty to Linear, any Linear Shareholder, any holder of
Linear Options or any holder of Linear Warrants regarding (a) the qualification
of the amalgamation of Amalgamating Corporations as a “reorganization” within
the meaning of section 368(a)(1) of the U.S. Internal Revenue Code or (b) the
U.S. federal income tax consequences of the amalgamation of the Amalgamating
Corporations.

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

     

    ARTICLE 3

    REPRESENTATIONS
AND WARRANTIES

    

    
      	
              Section 3.1

            	
              Representations
      and Warranties of Linear.

            

    

     

    Linear
hereby represents and warrants to and in favour of Apollo and Apollo Subco and
acknowledges that each of Apollo and Apollo Subco is relying upon such
representations and warranties in connection with entering into this Agreement
and agreeing to complete the Arrangement, as follows:

     

    
      	
               
      

            	
              (a)

            	
              each
      of Linear and each of the Linear Subsidiaries is a corporation duly
      incorporated, continued or amalgamated and validly existing under the laws
      of the jurisdiction in which it was incorporated, continued or
      amalgamated, as the case may be, has all requisite corporate power and
      authority and is duly qualified and holds all necessary material permits,
      licences and authorizations necessary or required to carry on its business
      as now conducted and to own, lease or operate its properties and assets
      and no steps or proceedings have been taken by any person, voluntary or
      otherwise, requiring or authorizing its dissolution or winding up, and
      Linear has all requisite power and authority to enter into this Agreement
      and to carry out its obligations
hereunder;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Linear
      has no subsidiaries other than the following (the “Linear Subsidiaries” and
      each an “Linear
      Subsidiary”) and, other than the acquisition by Linear of an
      aggregate of 62,500,000 Apollo Shares effective March 19, 2010, no
      investment in any person which, for the financial year ended March 31,
      2009 accounted for or which, for the financial year ending March 31, 2010
      is expected to account for, more than five percent of the consolidated
      assets or consolidated revenues of Linear or would otherwise be material
      to the business and affairs of Linear on a consolidated
    basis:

            

    

    

    
      
        
          
            
              
                
                  
                    	
                            Linear Subsidiaries

                          	 	
                            Corporate

                            Jurisdiction

                          	 	
                            Percentage
Ownership

                          	 
	 	 	 	 	 	 
	
                            Linear
      Gold Caribe, S.A.

                          	 	
                            Panama

                          	 	 	100	%
	
                            Linear
      Gold Holdings Corp.

                          	 	
                            Canada

                          	 	 	100	%
	
                            Linear
      Gold Mexico, S.A. de C.V.

                          	 	
                            Mexico

                          	 	 	100	%
	
                            Linear
      Gold Mineracao Ltda.

                          	 	
                            Brazil

                          	 	 	100	%
	
                            Servicios
      Ixhuatán, S.A. de C.V.

                          	 	
                            Mexico

                          	 	 	100	%
	
                            7153945
      Canada Inc.

                          	 	
                            Canada

                          	 	 	100	%

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        - 15
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              Linear
      owns, directly or indirectly, the percentage of issued and outstanding
      shares of each of the Linear Subsidiaries set out above, all of the issued
      and outstanding shares of the Linear Subsidiaries are issued as fully paid
      and non-assessable shares, in each case, other than as disclosed in the
      Linear Disclosure Documents, free and clear of all mortgages, liens,
      charges, pledges, security interests, encumbrances,
      claims or demands whatsoever
      and no person, firm or corporation has any agreement, option, right or
      privilege (whether pre-emptive or contractual) capable of becoming an
      agreement, for the purchase from Linear or any of the Linear Subsidiaries
      of any interest in any of the shares in the capital of any of the Linear
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (d)

            	
              other
      than as disclosed in the Linear Disclosure Documents, Linear and each of
      the Linear Subsidiaries holds all requisite licences, registrations,
      qualifications, permits and consents necessary or appropriate for carrying
      on its business as currently carried on and all such licences,
      registrations, qualifications, permits and consents are valid and
      subsisting and in good standing in all material respects except where the
      failure to hold such licences, registrations, qualifications, permits and
      consents would not have a Material Adverse Effect on Linear or any Linear
      Subsidiary.  In particular, without limiting the generality of
      the foregoing, neither Linear nor any of the Linear Subsidiaries has
      received any notice of proceedings relating to the revocation or adverse
      modification of any material mining or exploration permit or licence, nor
      have any of them received notice of the revocation or cancellation of, or
      any intention to revoke or cancel, any mining claims, groups of claims,
      exploration rights, concessions or leases with respect to any of the
      resource properties described in the Linear Disclosure Documents where
      such revocation or cancellation would have a Material Adverse Effect on
      Linear or any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (e)

            	
              except
      as disclosed in the Linear Disclosure Documents, (A) Linear and the Linear
      Subsidiaries are the absolute legal and beneficial owners of, and have
      good and marketable title to, all of their respective material property or
      assets as described in the Linear Disclosure Documents, and no other
      Mining Rights are necessary for the conduct of the business of Linear or
      any Linear Subsidiary as currently conducted, (B) none of Linear or any
      Linear Subsidiary knows of any claim or the basis for any claim that might
      or could materially and adversely affect the right thereof to use,
      transfer or otherwise exploit such Mining Rights and (C) none of Linear or
      any Linear Subsidiary has any responsibility or obligation to pay any
      material commission, royalty, licence fee or similar payment to any person
      with respect to such Mining
Rights;

            

    

    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (f)

            	
              except
      as disclosed in the Linear Disclosure Documents, Linear and the Linear
      Subsidiaries hold either freehold title, mining leases, mining
      concessions, mining claims or participating interests or other
      conventional property or proprietary interests or rights, recognized in
      the jurisdiction in which a particular property is located (collectively,
      “Mining Rights”),
      in respect of the ore bodies and minerals located in properties in which
      Linear and the Linear Subsidiaries have an interest as described in the
      Linear Disclosure Documents under valid, subsisting and enforceable title
      documents or other recognized and enforceable agreements or instruments,
      sufficient to permit Linear or the applicable Linear Subsidiary to explore
      the minerals relating thereto; all property, leases or claims in which
      Linear or any Linear Subsidiary has an interest or right have been validly
      located and recorded in accordance in all material respects with all
      applicable laws and are valid and subsisting except where the failure to
      be so would not have a Material Adverse Effect on Linear or any Linear
      Subsidiary; Linear and the Linear Subsidiaries have all necessary surface
      rights, access rights and other necessary rights and interests relating to
      the properties in which Linear and the Linear Subsidiaries have an
      interest as described in the Linear Disclosure Documents granting Linear
      or the applicable Linear Subsidiary the right and ability to explore for
      minerals, ore and metals for development purposes as are appropriate in
      view of the rights and interest therein of Linear or the applicable Linear
      Subsidiary, with only such exceptions as do not interfere with the use
      made by Linear or the applicable Linear Subsidiary of the rights or
      interest so held; and each of the proprietary interests or rights and each
      of the documents, agreements and instruments and obligations relating
      thereto referred to above is currently in good standing in the name of
      Linear or a Linear Subsidiary except where the failure to be so would not
      have a Material Adverse Effect on Linear or any Linear Subsidiary. The
      Mining Rights in respect of Linear’s properties, as disclosed in the
      Linear Disclosure Documents, constitute a description of all material
      Mining Rights held by Linear and the Linear
  Subsidiaries;

            

    

    

    
      	
               
      

            	
              (g)

            	
              Linear
      has made available to the respective authors thereof, prior to the
      issuance of the technical reports in respect of each of the Linear
      Material Properties or the purpose of preparing such technical reports,
      all information requested, and to the knowledge and belief of Linear, no
      such information contains any material misrepresentation. Except as
      disclosed in the Linear Disclosure Documents, Linear does not have any
      knowledge of a Material Adverse Change in any production, cost, price,
      reserves or other relevant information provided since the dates that such
      information was so provided;

            

    

    

    
      	
               
      

            	
              (h)

            	
              to
      the best of the knowledge of Linear, except as disclosed in the Linear
      Disclosure Documents, the technical reports in respect of each of the
      Linear Material Properties, as supplemented by the disclosure in respect
      of such properties in the Linear Disclosure Documents, accurately and
      completely set forth all material facts relating to the properties that
      are subject thereto. Since the date of preparation of each of the
      technical reports in respect of each of the Linear Material Properties,
      respectively, except as disclosed in the Linear Disclosure Documents,
      there has been no change of which Linear is aware that would disaffirm any
      aspect of such reports in any material respect, other than a contemplated
      increase in capital
expenditures;

            

    

    
      
         

      

      
        - 17
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (i)

            	
              Linear
      is a reporting issuer under the Securities Laws of each of the
      provinces of British Columbia, Alberta, Manitoba, Ontario, Quebec, Nova
      Scotia, is not in
      default of any requirement of such Securities Laws and Linear is not
      included on a list of defaulting reporting issuers maintained by the
      Securities Authorities of such
provinces;

            

    

    

    
      	
               
      

            	
              (j)

            	
              Linear
      is not subject to any cease trade order or other order of any applicable
      stock exchange or Securities Authority and, to the knowledge of Linear, no
      investigation or other proceedings involving Linear which may operate to
      prevent or restrict trading of any securities of Linear are currently in
      progress or pending before any applicable stock exchange or Securities
      Authority;

            

    

    

    
      	
               
      

            	
              (k)

            	
              the
      execution and delivery of this Agreement, the performance by Linear of its
      obligations hereunder and the consummation of the transactions
      contemplated in this Agreement, do not and will not conflict with or
      result in a breach or violation of any of the terms or provisions of, or
      constitute a default under, (whether after notice or lapse of time or
      both), (A) any statute, rule or regulation applicable to Linear including,
      without limitation, applicable Securities Laws and the policies, rules and
      regulations of the TSX; (B) the constating documents, by-laws or
      resolutions of Linear which are in effect at the date hereof; (C) any
      mortgage, note, indenture, contract, agreement, joint venture,
      partnership, instrument, lease or other document to which Linear is a
      party or by which it is bound; or (D) any judgment, decree or order
      binding Linear, any Linear Subsidiary or the property or assets
      thereof;

            

    

    

    
      	
               
      

            	
              (l)

            	
              Linear
      is in compliance in all material respects with its timely and continuous
      disclosure obligations under the Securities Laws and the rules and
      regulations of the TSX and, without limiting the generality of the
      foregoing, there has not occurred any Material Adverse Change in respect
      of Linear and the Linear Subsidiaries (taken as a whole) since December
      31, 2009, which has not been publicly disclosed on a non-confidential
      basis and all the statements set forth in the Linear Disclosure Documents
      were true, correct and complete in all material respects and did not
      contain any misrepresentation as of the date of such statements and Linear
      has not filed any confidential material change reports since the date of
      such statements which remain confidential as at the date
      hereof;

            

    

    
      
         

      

      
        - 18
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (m)

            	
              except
      as disclosed in the Linear Disclosure Documents, neither Linear nor any
      Linear Subsidiary has approved, or has entered into any agreement in
      respect of, or has any knowledge
of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              the
      purchase of any material property or assets or any interest therein, other
      than the purchase of the residual 16.875% participating interest in the
      Crackingstone Joint Venture for $50,000, or the sale, transfer or other
      disposition of any material property or assets or any interest therein
      currently owned, directly or indirectly, by Linear or any Linear
      Subsidiary whether by asset sale, transfer of shares or
      otherwise;

            

    

     

    
      	
               
      

            	
              (B)

            	
              the
      change in control (by sale, transfer or other disposition of shares or
      sale, transfer, lease or other disposition of all or substantially all of
      the property and assets of Linear) of Linear or any Linear Subsidiary;
      or

            

    

     

    
      	
               
      

            	
              (C)

            	
              a
      proposed or planned disposition of shares by any Linear Shareholder who
      owns, directly or indirectly, 10% or more of the outstanding shares of
      Linear or any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (n)

            	
              the
      audited consolidated financial statements of Linear as at and for the year
      ended March 31, 2009 (the “Linear Audited Financial
      Statements”) and consolidated comparative financial statements for
      the nine months ended December 31, 2009 have been prepared in accordance
      with Canadian GAAP and present fully, fairly and correctly in all material
      respects, the consolidated financial condition of Linear as at the date
      thereof and the results of the operations and the changes in the financial
      position of Linear for the periods then ended and contain and reflect
      adequate provisions or allowance for all reasonably anticipated
      liabilities, expenses and losses of Linear and except as disclosed in the
      Linear Disclosure Documents, there has been no change in accounting
      policies or practices of Linear since December 31,
  2009;

            

    

    

    
      	
               
      

            	
              (o)

            	
              all
      taxes (including income tax, capital tax, payroll taxes, employer health
      tax, workers’ compensation payments, property taxes, custom and land
      transfer taxes), duties, royalties, levies, imposts, assessments,
      deductions, charges or withholdings and all liabilities with respect
      thereto including any penalty and interest payable with respect thereto
      (individually, a “Tax” and, collectively,
      “Taxes”) due and
      payable by Linear and the Linear Subsidiaries have been paid, except where
      the failure to pay such Taxes would not constitute an adverse material
      fact in respect of Linear or any Linear Subsidiary or have a Material
      Adverse Effect on Linear or any Linear Subsidiary.  All Tax
      returns, declarations, remittances and filings required to be filed by
      Linear and the Linear Subsidiaries have been filed with all appropriate
      governmental authorities and all such returns, declarations, remittances
      and filings are complete and accurate and no material fact or facts have
      been omitted therefrom which would make any of them misleading, except
      where the failure to file such documents would not constitute an adverse
      material fact in respect of Linear or have a Material Adverse Effect on
      Linear or any Linear Subsidiary.  To the best of the knowledge
      of Linear, no examination of any Tax return of Linear or any Linear
      Subsidiary is currently in progress and there are no issues or disputes
      outstanding with any governmental authority respecting any taxes that have
      been paid, or may be payable, by Linear or any Linear Subsidiary, in any
      case, except where such examinations, issues or disputes would not
      constitute an adverse material fact in respect of Linear or have a
      Material Adverse Effect on Linear or any Linear
  Subsidiary;

            

    

    
      
         

      

      
        - 19
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (p)

            	
              Linear’s
      auditors who audited the Linear Audited Financial Statements and who
      provided their audit report thereon are independent public accountants as
      required under applicable Securities Laws and there has never been a
      reportable event (within the meaning of National Instrument 51-102 Continuous Disclosure
      Obligations) between Linear and Linear’s auditors or, to the
      knowledge of Linear, any former auditors of
  Linear;

            

    

    

    
      	
               
      

            	
              (q)

            	
              other
      than: (i) 2,770,000 Linear Shares issuable pursuant to outstanding stock
      options of Linear; and (ii) 8,177,764 Linear Shares issuable pursuant to
      the Linear Warrants, no person, firm or corporation has or will have at
      the Effective Date any agreement or option, or right or privilege (whether
      pre-emptive or contractual) capable of becoming an agreement or option,
      for the purchase of any unissued shares or securities of Linear or of any
      of the Linear Subsidiaries;

            

    

    

    
      	
               
      

            	
              (r)

            	
              to
      Linear’s knowledge, other than the Linear Support Agreements, there is no
      agreement in force or effect which in any manner affects or will affect
      the voting or control of any of the securities of Linear or of the Linear
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (s)

            	
              except
      as disclosed in the Linear Disclosure Documents, none of the officers or
      employees of Linear or of any Linear Subsidiary, any person who owns,
      directly or indirectly, more than 10% of any class of securities of Linear
      or securities of any person exchangeable for more than 10% of any class of
      securities of Linear, or any associate or affiliate of any of the
      foregoing, had or has any material interest, direct or indirect, in any
      transaction or any proposed transaction (including, without limitation,
      any loan made to or by any such person) with Linear or any of the Linear
      Subsidiaries which, as the case may be, materially affects, is material to
      or will materially affect Linear on a consolidated
  basis;

            

    

    

    
      	
               
      

            	
              (t)

            	
              except
      as disclosed in the Linear Disclosure Documents, no legal or governmental
      proceedings or inquiries are pending to which Linear or any Linear
      Subsidiary is a party or to which its property is subject that would
      result in the revocation or modification of any material certificate,
      authority, permit or license necessary to conduct the business now owned
      or operated by Linear and the Linear Subsidiaries which, if the subject of
      an unfavourable decision, ruling or finding would have a Material Adverse
      Effect on Linear or any Linear Subsidiary and, to the knowledge of Linear,
      no such legal or governmental proceedings or inquiries have been
      threatened against or are contemplated with respect to Linear or with
      respect to its properties;

            

    

    
      
         

      

      
        - 20
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (u)

            	
              except
      as disclosed in the Linear Disclosure Documents, there are no actions,
      suits, judgments, investigations or proceedings of any kind whatsoever
      outstanding, pending or, to the best of Linear’s knowledge, threatened
      against or affecting Linear, the Linear Subsidiaries, or their respective
      directors, officers or employees, at law or in equity or before or by any
      commission, board, bureau or agency of any kind whatsoever and, to the
      best of Linear’s knowledge, there is no basis therefor and neither Linear
      nor any Linear Subsidiary is subject to any judgment, order, writ,
      injunction, decree, award, rule, policy or regulation of any governmental
      authority, which, either separately or in the aggregate, may have a
      Material Adverse Effect on Linear or any Linear Subsidiary or that would
      adversely affect the ability of Linear to perform its obligations under
      this Agreement;

            

    

    

    
      	
               
      

            	
              (v)

            	
              none
      of Linear nor any of the Linear Subsidiaries is in violation of its
      constating documents or, except as disclosed in the Linear Disclosure
      Documents, in default of the performance or observance of any material
      obligation, agreement, covenant or condition contained in any contract,
      indenture, trust deed, mortgage, loan agreement, note, lease or other
      agreement or instrument to which it is a party or by which it or its
      property may be bound;

            

    

    

    
      	
               
      

            	
              (w)

            	
              Linear
      and each of the Linear Subsidiaries owns or has the right to use under
      licence, sub-licence or otherwise all material intellectual property used
      by Linear and the Linear Subsidiaries in its business, including
      copyrights, industrial designs, trade marks, trade secrets, know how and
      proprietary rights, free and clear of any and all
      encumbrances;

            

    

    

    
      	
               
      

            	
              (x)

            	
              except
      as disclosed in the Linear Disclosure Documents, any and all of the
      agreements and other documents and instruments pursuant to which Linear
      and the Linear Subsidiaries hold the property and assets thereof
      (including any interest in, or right to earn an interest in, any property)
      are valid and subsisting agreements, documents or instruments in full
      force and effect, enforceable in accordance with the terms thereof,
      neither Linear nor any Linear Subsidiary is in default of any of the
      material provisions of any such agreements, documents or instruments nor
      has any such default been alleged and such properties and assets are in
      good standing under the applicable statutes and regulations of the
      jurisdictions in which they are situated.  All material leases,
      licences and other agreements pursuant to which Linear or any Linear
      Subsidiary derives the interests thereof in such property and assets are
      in good standing and there has been no material default under any such
      lease, licence or agreement.  None of the properties (or any
      interest in, or right to earn an interest in, any property) of Linear or
      any Linear Subsidiary is subject to any right of first refusal or purchase
      or acquisition right which is not disclosed in the Linear Disclosure
      Documents;

            

    

    
      
         

      

      
        - 21
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (y)

            	
              this
      Agreement has been duly authorized and executed and delivered by Linear
      and constitutes a valid and binding obligation of Linear and is
      enforceable against Linear in accordance with its terms, except as
      enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other laws relating to or affecting the
      rights of creditors generally and except as limited by the application of
      equitable principles when equitable remedies are sought, and by the fact
      that rights to indemnity, contribution and waiver, and the ability to
      sever unenforceable terms, may be limited by applicable
    law;

            

    

    

    
      	
               
      

            	
              (z)

            	
              the
      authorized capital of Linear consists of an unlimited number of Linear
      Shares, of which, as at the close of business on March 29, 2010,
      44,222,573 Linear Shares were issued and outstanding as fully paid and
      non-assessable shares of Linear;

            

    

    

    
      	
               
      

            	
              (aa)

            	
              other
      than as set out in the Linear Disclosure Documents, neither Linear nor any
      of the Linear Subsidiaries has made any loans to or guaranteed the
      obligations of any person;

            

    

    

    
      	
               
      

            	
              (bb)

            	
              with
      respect to those leased premises of Linear or the Linear Subsidiaries
      which are material to Linear and the Linear Subsidiaries on a consolidated
      basis and which Linear or any of the Linear Subsidiaries occupies as
      tenant (the “Linear
      Leased Premises”), Linear or such Linear Subsidiary occupies the
      Linear Leased Premises and has the exclusive right to occupy and use the
      Linear Leased Premises and each of the leases pursuant to which Linear
      and/or the Linear Subsidiaries occupies the Linear Leased Premises is in
      good standing and in full force and
effect;

            

    

    

    
      	
               
      

            	
              (cc)

            	
              the
      assets of Linear and the Linear Subsidiaries and their business and
      operations are insured against loss or damage with responsible insurers on
      a basis consistent with insurance obtained by reasonably prudent
      participants in comparable businesses, and such coverage is in full force
      and effect, and Linear has not failed to promptly give any notice of any
      material claim thereunder;

            

    

    

    
      	
               
      

            	
              (dd)

            	
              each
      of Linear and each of the Linear Subsidiaries is in compliance with all
      Laws respecting employment and employment practices, terms and conditions
      of employment, pay equity and wages, except where non-compliance with such
      Laws could not reasonably be expected to have a Material Adverse Effect on
      Linear or any Linear Subsidiary, and has not and is not engaged in any
      unfair labour practice;

            

    

    
      
         

      

      
        - 22
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ee)

            	
              there
      has not been in the last two years and there is not currently any labour
      disruption, grievance, arbitration proceeding or other conflict which
      could reasonably be expected to have a Material Adverse Effect on Linear’s
      or any of the Linear Subsidiaries’ business, taken as a whole, and each of
      Linear and each of the Linear Subsidiaries is in compliance with all
      provisions of all federal, provincial, local and foreign Laws and
      regulations respecting employment and employment practices, terms and
      conditions of employment and wages and hours, except where non-compliance
      with any such provisions would not have a Material Adverse Effect on
      Linear or any of the Linear
Subsidiaries;

            

    

    

    
      	
               
      

            	
              (ff)

            	
              no
      union has been accredited or otherwise designated to represent any
      employees of Linear or any of the Linear Subsidiaries and, to the
      knowledge of Linear, no accreditation request or other representation
      question is pending with respect to the employees of Linear or any of the
      Linear Subsidiaries and no collective agreement or collective bargaining
      agreement or modification thereof has expired or is in effect in any of
      Linear’s facilities and none is currently being negotiated by Linear or
      any Linear Subsidiary;

            

    

    

    
      	
               
      

            	
              (gg)

            	
              the
      Linear Disclosure Documents disclose, to the extent required by applicable
      Securities Laws, each material plan for retirement, bonus, stock purchase,
      profit sharing, stock option, deferred compensation, severance or
      termination pay, insurance, medical, hospital, dental, vision care, drug,
      sick leave, disability, salary continuation, legal benefits, unemployment
      benefits, vacation, incentive or otherwise contributed to, or required to
      be contributed to, by Linear for the benefit of any current or former
      director, officer, employee or consultant of Linear (the “Linear Employee Plans”),
      each of which has been maintained in all material respects with its terms
      and with the requirements prescribed by any and all statutes, orders,
      rules and regulations that are applicable to such Linear Employee
      Plans;

            

    

    

    
      	
               
      

            	
              (hh)

            	
              Linear
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurances that (A) transactions are executed in accordance
      with management’s general or specific authorization, and (B) transactions
      are recorded as necessary to permit preparation of financial statements in
      conformity with Canadian GAAP and to maintain accountability for
      assets.  Linear has disclosed, based on the most recent
      evaluation of its chief executive officer and its chief financial officer
      prior to the date hereof, to Linear’s auditors and the audit committee of
      Linear’s board of directors (i) any significant deficiencies in the design
      or operation of its internal controls over financial reporting that are
      reasonably likely to adversely affect Linear’s ability to record, process,
      summarize and report financial information and has identified for Linear’s
      auditors and Linear’s board of directors any material weaknesses in
      internal control over financial reporting and (ii) any fraud, whether or
      not material, that involves management or other employees who have a
      significant role in Linear’s internal control over financial
      reporting;

            

    

    
      
         

      

      
        - 23
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ii)

            	
              management
      of Linear has established and maintained a system of disclosure controls
      and procedures designed to provide reasonable assurance that information
      required to be disclosed by Linear in its annual filings, interim filings
      or other reports filed, furnished or submitted by it under applicable
      Securities Law is recorded, processed, summarized and reported within the
      time periods specified in such legislation, laws and rules. Such
      disclosure controls and procedures include, without limitation, controls
      and procedures designed to ensure that information required to be
      disclosed by Linear in its annual filings, interim filings or other
      reports filed, furnished or submitted under applicable Securities Law is
      accumulated and communicated to Linear’s management, including its chief
      executive officer and chief financial officer (or persons performing
      similar functions), as appropriate to allow timely decisions regarding
      required disclosure;

            

    

    

    
      	
               
      

            	
              (jj)

            	
              except
      as disclosed in the Linear Disclosure Documents, none of the directors,
      officers or employees of Linear or any associate or affiliate of any of
      the foregoing had or has any material interest, direct or indirect, in any
      material transaction or any proposed material transaction with Linear or
      its Linear Subsidiaries which materially affects, is material to or will
      materially affect Linear or any Linear
  Subsidiary;

            

    

    

    
      	
               
      

            	
              (kk)

            	
              the
      minute books and records of Linear and the Linear Subsidiaries made
      available to Apollo and its counsel in
      connection with their due diligence investigation of Linear for the
      periods from January 1, 2007 to the date hereof are all of the minute
      books and records of Linear and the Linear Subsidiaries and contain copies
      of all material proceedings (or certified copies thereof or drafts thereof
      pending approval) of the shareholders, the directors and all committees of
      directors of Linear and the Linear Subsidiaries to the date of review of
      such corporate records and minute books and there have been no other
      meetings, resolutions or proceedings of the shareholders, directors or any
      committees of the directors of Linear or any of its Linear Subsidiaries to
      the date hereof not reflected in such minute books and other
      records;

            

    

    

    
      	
               
      

            	
              (ll)

            	
              neither
      Linear  nor any of its Linear Subsidiaries has been in violation
      of, in connection with the ownership, use, maintenance or operation of its
      property and assets, including the Linear Leased Premises, any applicable
      federal, provincial, state, municipal or local laws, by-laws, regulations,
      orders, policies, permits, licences, certificates or approvals having the
      force of law, domestic or foreign, relating to environmental, health or
      safety matters (collectively the “Environmental Laws”)
      which would have a Material Adverse Effect on Linear or any of its Linear
      Subsidiaries;

            

    

    
      
         

      

      
        - 24
-

        
          

        

      

      
         

      

    

    
      	
            	
              (mm)

            	
              without
      limiting the generality of the immediately preceding paragraph, neither
      Linear nor any of the Linear Subsidiaries have any knowledge of, and
      have not received any notice of, any currently outstanding material claim,
      judicial or administrative proceeding, pending or threatened against, or
      which may affect, either Linear or any Linear Subsidiary or any of the
      property, assets or operations thereof, relating to, or alleging any
      violation of any Environmental Laws, Linear is not aware of any facts
      which could give rise to any such claim or judicial or administrative
      proceeding and to the knowledge of Linear neither Linear, nor any Linear
      Subsidiary nor any of the property, assets or operations thereof is the
      subject of any investigation, evaluation, audit or review by any
      governmental authority to determine whether any violation of any
      Environmental Laws has occurred or is occurring or whether any remedial
      action is needed in connection with a release of any contaminant into the
      environment, except for compliance investigations conducted in the normal
      course by any governmental authority, in each case which could reasonably
      be expected to have a Material Adverse Effect on Linear or any of its
      Linear Subsidiaries;

            

    

    

    
      	
               
      

            	
              (nn)

            	
              there
      are no orders, rulings or directives issued, pending or, to the best of
      Linear’s knowledge reasonably held, being based on due direction and
      enquiry of its personnel and advisors, threatened against Linear or any of
      the Linear Subsidiaries under or pursuant to any Environmental Laws
      requiring any work, repairs, construction or capital expenditures with
      respect to the property or assets of Linear or any of the Linear
      Subsidiaries (including the Linear Leased Premises) which would have a
      Material Adverse Effect on Linear or any of its Linear
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (oo)

            	
              Linear
      and the Linear Subsidiaries are not subject to any contingent or other
      liability relating to the restoration or rehabilitation of land, water or
      any other part of the environment (except for those derived from normal
      exploration activities and those arising under permits, licenses or
      approvals from applicable Governmental Authorities) or non-compliance with
      Environmental Laws which could reasonably be expected to have a Material
      Adverse Effect on Linear or any of the Linear
  Subsidiaries;

            

    

    

    
      	
               
      

            	
              (pp)

            	
              all
      information which has been prepared by Linear and the Linear Subsidiaries
      relating to Linear and the Linear Subsidiaries and the business, property
      and liabilities thereof and either publicly disclosed, provided or made
      available to Apollo, including all financial, marketing, sales and
      operational information provided to Apollo is, as of the date of such
      information, true and correct in all material respects, taken as a whole,
      and no fact or facts have been omitted therefrom which would make such
      information materially
misleading;

            

    

    
      
         

      

      
        - 25
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (qq)

            	
              Linear
      is not aware of any circumstances presently existing under which liability
      is or could reasonably be expected to be incurred under Part XXIII – Civil
      Liability for Secondary Market Disclosure of the Securities Act
      (Ontario);

            

    

    

    
      	
               
      

            	
              (rr)

            	
              Linear
      has not entered into any arrangement whereby Linear will have any
      liability for financial advisor’s, broker’s or finder’s fees (including,
      without limitation, any disbursements, expenses or fairness opinion) in
      respect of the Arrangement, except for Linear’s fees and disbursements to
      its financial advisors.  Linear has provided to Apollo true and
      correct copies of its agreements with each of its financial
      advisors;

            

    

    

    
      	
               
      

            	
              (ss)

            	
              Linear
      is not in material breach of, and has complied in all material respects
      with all of its covenants and other obligations set out in, the
      Letter of Intent as of the date of this Agreement;
  and

            

    

    

    
      	
               
      

            	
              (tt)

            	
              other
      than any Tax payable by Linear resulting from the anticipated deemed
      disposition of the outstanding shares of Linear Gold Mexico, S.A. de C.V.
      occurring as a result of the completion of the Arrangement, which, to the
      knowledge of Linear and based on currently available information, Linear
      believes will not result in a material Tax liability or material
      withholding Tax obligation in respect of Linear or any Linear Subsidiary,
      the transactions contemplated by this Agreement will not cause Apollo
      Subco, Linear, any Linear Subsidiary or the Surviving Corporation to incur
      any Tax liability or be subject to any withholding Tax obligation with
      respect to any Linear Subsidiary in any jurisdiction in which such Linear
      Subsidiary is organized, conducts business or owns real
      property.

            

    

    

    
      
        	
                Section
      3.2

              	
                Representations
      and Warranties of Apollo and Apollo
Subco.

              

      

    

     

    Apollo
and Apollo Subco hereby jointly and severally represent and warrant to and in
favour of Linear and acknowledge that Linear is relying upon such
representations and warranties in connection with entering into this Agreement
and agreeing to complete the Arrangement, as follows:

     

    
      	
               
      

            	
              (a)

            	
              each
      of Apollo and each of the Apollo Subsidiaries is a corporation duly
      incorporated, continued or amalgamated and validly existing under the Laws
      of the jurisdiction in which it was incorporated, continued or
      amalgamated, as the case may be, has all requisite corporate power and
      authority and is duly qualified and holds all necessary material permits,
      licences and authorizations necessary or required to carry on its business
      as now conducted and to own, lease or operate its properties and assets
      and no steps or proceedings have been taken by any person, voluntary or
      otherwise, requiring or authorizing its dissolution or winding up, and
      each of Apollo and Apollo Subco has all requisite power and authority to
      enter into this Agreement and to carry out their respective obligations
      hereunder;

            

    

    
      
         

      

      
        - 26
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              Apollo
      has no subsidiaries other than the following (the “Apollo Subsidiaries” and
      each an “Apollo
      Subsidiary”) and, other than the transactions contemplated by this
      Agreement, no investment in any person which, for the financial year ended
      December 31, 2009 accounted for or which, for the financial year ending
      December 31, 2010 is expected to account for, more than five percent of
      the consolidated assets or consolidated revenues of Apollo or would
      otherwise be material to the business and affairs of Apollo on a
      consolidated basis:

            

    

    

    
      
        
          
            
              
                	
                        Apollo Subsidiaries

                      	 	
                        Corporate

                        Jurisdiction

                      	 	
                        Percentage

                        Ownership

                      	 
	 
      	 	 
      	 	 	 
	
                        Apollo
      Gold, Inc.

                      	 	
                        Delaware

                      	 	 	100	%
	
                        Mine
      Development Finance, Inc.

                      	 	
                        Delaware

                      	 	 	100	%
	
                        Minera
      Sol de ORO S.A. de C.V.

                      	 	
                        Mexico

                      	 	 	100	%
	
                        Minas
      de Argonautas S de R.L. de C.V.

                      	 	
                        Mexico

                      	 	 	100	%
	
                        1526735
      Alberta ULC

                      	 	
                        Alberta

                      	 	 	100	%

              

            

          

        

      

    

     

    
      	
               
      

            	
              (c)

            	
              Apollo
      owns, directly or indirectly, the percentage of issued and outstanding
      shares of each of the Apollo Subsidiaries set out above, all of the issued
      and outstanding shares of the Apollo Subsidiaries are issued as fully paid
      and non-assessable shares, in each case, other than as disclosed in the
      Apollo Disclosure Documents, free and clear of all mortgages, liens,
      charges, pledges, security interests, encumbrances,
      claims or demands whatsoever
      and no person, firm or corporation has any agreement, option, right or
      privilege (whether pre-emptive or contractual) capable of becoming an
      agreement, for the purchase from Apollo or any of the Apollo Subsidiaries
      of any interest in any of the shares in the capital of any of the Apollo
      Subsidiaries.

            

    

    

    
      	
               
      

            	
              (d)

            	
              other
      than as disclosed in the Apollo Disclosure Documents, each of Apollo and
      each of the Apollo Subsidiaries holds all requisite licences,
      registrations, qualifications, permits and consents necessary or
      appropriate for carrying on its business as currently carried on and all
      such licences, registrations, qualifications, permits and consents are
      valid and subsisting and in good standing in all material respects except
      where the failure to hold such licences, registrations, qualifications,
      permits and consents would not have a Material Adverse Effect on Apollo or
      any Apollo Subsidiary.  In particular, without limiting the
      generality of the foregoing, neither Apollo nor any of the Apollo
      Subsidiaries has received any notice of proceedings relating to the
      revocation or adverse modification of any material mining or exploration
      permit or licence, nor have any of them received notice of the revocation
      or cancellation of, or any intention to revoke or cancel, any mining
      claims, groups of claims, exploration rights, concessions or leases with
      respect to any of the resource properties described in the Apollo
      Disclosure Documents where such revocation or cancellation would have a
      Material Adverse Effect on Apollo or any Apollo
  Subsidiary;

            

    

    
      
         

      

      
        - 27
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (e)

            	
              except
      as disclosed in the Apollo Disclosure Documents, (A) Apollo and the Apollo
      Subsidiaries are the absolute legal and beneficial owners of, and have
      good and marketable title to, all of their respective material property or
      assets as described in the Apollo Disclosure Documents, and no other
      Mining Rights are necessary for the conduct of the business of Apollo or
      any Apollo Subsidiary as currently conducted, (B) none of Apollo or any
      Apollo Subsidiary knows of any claim or the basis for any claim that might
      or could materially and adversely affect the right thereof to use,
      transfer or otherwise exploit such Mining Rights, and (C) none of Apollo
      or any Apollo Subsidiary has any responsibility or obligation to pay any
      material commission, royalty, licence fee or similar payment to any person
      with respect to such Mining Rights;

            

    

    

    
      	
               
      

            	
              (f)

            	
              except
      as disclosed in the Apollo Disclosure Documents, Apollo and the Apollo
      Subsidiaries hold Mining Rights in respect of the ore bodies and minerals
      located in properties in which Apollo and the Apollo Subsidiaries have an
      interest as described in the Apollo Disclosure Documents under valid,
      subsisting and enforceable title documents or other recognized and
      enforceable agreements or instruments, sufficient to permit Apollo or the
      applicable Apollo Subsidiary to explore the minerals relating thereto; all
      property, leases or claims in which Apollo or any Apollo Subsidiary has an
      interest or right have been validly located and recorded in accordance in
      all material respects with all applicable Laws and are valid and
      subsisting except where the failure to be so would not have a Material
      Adverse Effect on Apollo or any Apollo Subsidiary; Apollo and the Apollo
      Subsidiaries have all necessary surface rights, access rights and other
      necessary rights and interests relating to the properties in which Apollo
      and the Apollo Subsidiaries have an interest as described in the Apollo
      Disclosure Documents granting Apollo or the applicable Apollo Subsidiary
      the right and ability to explore for minerals, ore and metals for
      development purposes as are appropriate in view of the rights and interest
      therein of Apollo or the applicable Apollo Subsidiary, with only such
      exceptions as do not interfere with the use made by Apollo or the
      applicable Apollo Subsidiary of the rights or interest so held; and each
      of the proprietary interests or rights and each of the documents,
      agreements and instruments and obligations relating thereto referred to
      above is currently in good standing in the name of Apollo or an Apollo
      Subsidiary except where the failure to be so would not have a Material
      Adverse Effect on Apollo or any Apollo Subsidiary. The Mining Rights in
      respect of Apollo’s properties, as disclosed in the Apollo Disclosure
      Documents, constitute a description of all material Mining Rights held by
      Apollo and the Apollo
Subsidiaries;

            

    

    
      
         

      

      
        - 28
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)

            	
              Apollo
      has made available to the respective authors thereof, prior to the
      issuance of the technical reports in respect of each of the Apollo
      Material Properties for the purpose of preparing such technical reports,
      all information requested, and to the knowledge and belief of Apollo, no
      such information contains any material misrepresentation. Except as
      disclosed in the Apollo Disclosure Documents, Apollo does not have any
      knowledge of a Material Adverse Change in any production, cost, price,
      reserves or other relevant information provided since the dates that such
      information was so provided;

            

    

    

    
      	
               
      

            	
              (h)

            	
              to
      the best of the knowledge of Apollo, except as disclosed in the Apollo
      Disclosure Documents, the technical reports in respect of each of the
      Apollo Material Properties, as supplemented by the disclosure in respect
      of such properties in the Apollo Disclosure Documents, accurately and
      completely set forth all material facts relating to the properties that
      are subject thereto. Since the date of preparation of each of the
      technical reports in respect of each of the Apollo Material Properties,
      respectively, except as disclosed in the Apollo Disclosure Documents,
      there has been no change of which Apollo is aware that would disaffirm any
      aspect of such reports in any material
respect;

            

    

    

    
      	
               
      

            	
              (i)

            	
              Apollo
      is a reporting issuer under the Securities Laws of each of the
      Reporting Provinces, is not in default of any requirement of such
      Securities Laws and Apollo is not
      included on a list of defaulting reporting issuers maintained by the
      Securities Authorities of such
provinces;

            

    

    

    
      	
               
      

            	
              (j)

            	
              Apollo
      is not subject to any cease trade order or other order of any applicable
      stock exchange or Securities Authority and, to the knowledge of Apollo, no
      investigation or other proceedings involving Apollo which may operate to
      prevent or restrict trading of any securities of Apollo are currently in
      progress or pending before any applicable stock exchange or Securities
      Authority;

            

    

    

    
      	
               
      

            	
              (k)

            	
              the
      execution and delivery of this Agreement, the performance by each of
      Apollo and Apollo Subco of their respective obligations hereunder and the
      consummation of the transactions contemplated in this Agreement, do not
      and will not conflict with or result in a breach or violation of any of
      the terms or provisions of, or constitute a default under, (whether after
      notice or lapse of time or both), (A) any statute, rule or regulation
      applicable to Apollo or Apollo Subco including, without limitation,
      applicable Securities Laws and the policies, rules and regulations of the
      TSX and the AMEX; (B) the constating documents, by-laws or resolutions of
      Apollo or Apollo Subco which are in effect at the date hereof; (C) any
      mortgage, note, indenture, contract, agreement, joint venture,
      partnership, instrument, lease or other document to which either Apollo or
      Apollo Subco is a party or by which they are bound; or (D) any judgment,
      decree or order binding Apollo, any Apollo Subsidiary, or the property or
      assets thereof;

            

    

    
      
         

      

      
        - 29
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (l)

            	
              Apollo
      is in compliance in all material respects with its timely and continuous
      disclosure obligations under the Securities Laws and the rules and
      regulations of the TSX and AMEX and, without limiting the generality of
      the foregoing, there has not occurred any Material Adverse Change in
      respect of Apollo and the Apollo Subsidiaries (taken as a whole) since
      December 31, 2009, which has not been publicly disclosed on a
      non-confidential basis and all the statements set forth in the Apollo
      Disclosure Documents were true, correct and complete in all material
      respects and did not contain any misrepresentation as of the date of such
      statements and Apollo has not filed any confidential material change
      reports since the date of such statements which remain confidential as at
      the date hereof;

            

    

    

    
      	
               
      

            	
              (m)

            	
              except
      as disclosed in the Apollo Disclosure Documents, neither Apollo nor any
      Apollo Subsidiary has approved, or has entered into any agreement in
      respect of, or has any knowledge
of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              the
      purchase of any material property or assets or any interest therein or the
      sale, transfer or other disposition of any material property or assets or
      any interest therein currently owned, directly or indirectly, by Apollo or
      any Apollo Subsidiary whether by asset sale, transfer of shares or
      otherwise;

            

    

     

    
      	
               
      

            	
              (B)

            	
              the
      change in control (by sale, transfer or other disposition of shares or
      sale, transfer, lease or other disposition of all or substantially all of
      the property and assets of Apollo) of Apollo or any Apollo Subsidiary;
      or

            

    

     

    
      	
               
      

            	
              (C)

            	
              a
      proposed or planned disposition of shares by any Apollo Shareholder who
      owns, directly or indirectly, 10% or more of the outstanding shares of
      Apollo or any Apollo Subsidiary;

            

    

    

    
      	
               
      

            	
              (n)

            	
              the
      audited consolidated financial statements of Apollo as at and for the year
      ended December 31, 2009 (the “Apollo Audited Financial
      Statements”) have been prepared in accordance with U.S. GAAP and
      present fully, fairly and correctly in all material respects, the
      consolidated financial condition of Apollo as at the date thereof and the
      results of the operations and the changes in the financial position of
      Apollo for the periods then ended and contain and reflect adequate
      provisions or allowance for all reasonably anticipated liabilities,
      expenses and losses of Apollo and, except as disclosed in the Apollo
      Disclosure Documents, there has been no change in accounting policies or
      practices of Apollo since December 31,
2009;

            

    

    
      
         

      

      
        - 30
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (o)

            	
              all
      Taxes due and payable by Apollo and the Apollo Subsidiaries have been
      paid, except where the failure to pay such Taxes would not constitute an
      adverse material fact in respect of Apollo or any Apollo Subsidiary or
      have a Material Adverse Effect on Apollo or any Apollo
      Subsidiary.  All Tax returns, declarations, remittances and
      filings required to be filed by Apollo and the Apollo Subsidiaries have
      been filed with all appropriate governmental authorities and all such
      returns, declarations, remittances and filings are complete and accurate
      and no material fact or facts have been omitted therefrom which would make
      any of them misleading, except where the failure to file such documents
      would not constitute an adverse material fact in respect of Apollo or have
      a Material Adverse Effect on Apollo or any Apollo
      Subsidiary.  To the best of the knowledge of Apollo, no
      examination of any Tax return of Apollo or any Apollo Subsidiary is
      currently in progress and there are no issues or disputes outstanding with
      any governmental authority respecting any taxes that have been paid, or
      may be payable, by Apollo or any Apollo Subsidiary, in any case, except
      where such examinations, issues or disputes would not constitute an
      adverse material fact in respect of Apollo or have a Material Adverse
      Effect on Apollo or any Apollo
Subsidiary;

            

    

    

    
      	
               
      

            	
              (p)

            	
              Apollo’s
      auditors who audited the Apollo Audited Financial Statements and who
      provided their audit report thereon are independent public accountants as
      required under applicable Securities Laws and there has never been a
      reportable event (within the meaning of National Instrument 51-102 Continuous Disclosure
      Obligations) between Apollo and Apollo’s auditors or, to the
      knowledge of Apollo, any former auditors of
  Apollo;

            

    

    

    
      	
               
      

            	
              (q)

            	
              other
      than: (i) 11,594,371 Apollo Shares issuable pursuant to outstanding stock
      options of Apollo and an additional 85,000 Apollo Shares issuable pursuant
      to stock options of Apollo to be granted after public announcement of the
      Arrangement; (ii) 104,138,178 Apollo Shares issuable pursuant to
      outstanding common share purchase warrants of Apollo; (iii) 1,592,733
      Apollo Shares issuable to Duane Duffy, Glenn Duffy, Luke Garvey and James
      Ober pursuant to a letter of intent dated February 22, 2010 among Apollo,
      Calais Resources, Inc.; (iv) 8,580,000 Apollo Shares issuable pursuant to
      convertible debentures; and (v) 2,448,390 Apollo Shares issuable pursuant
      to agents’ compensation units, and the foregoing persons, no person, firm
      or corporation has or will have at the Effective Date any agreement or
      option, or right or privilege (whether pre-emptive or contractual) capable
      of becoming an agreement or option, for the purchase of any unissued
      shares or securities of Apollo or of any of the Apollo
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (r)

            	
              to
      Apollo's knowledge, other than the Apollo Support Agreements, the Lender
      Support Agreements and the Lender Lock-Up Agreements, there is no
      agreement in force or effect which in any manner affects or will affect
      the voting or control of any of the securities of Apollo or of the Apollo
      Subsidiaries;

            

    

    
      
         

      

      
        - 31
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (s)

            	
              except
      than as set forth in the Apollo Disclosure Documents, none of the officers
      or employees of Apollo or of any Apollo Subsidiary, any person who owns,
      directly or indirectly, more than 10% of any class of securities of Apollo
      or securities of any person exchangeable for more than 10% of any class of
      securities of Apollo, or any associate or affiliate of any of the
      foregoing, had or has any material interest, direct or indirect, in any
      transaction or any proposed transaction (including, without limitation,
      any loan made to or by any such person) with Apollo or any of the Apollo
      Subsidiaries which, as the case may be, materially affects, is material to
      or will materially affect Apollo on a consolidated
  basis;

            

    

    

    
      	
               
      

            	
              (t)

            	
              except
      as disclosed in the Apollo Disclosure Documents, no legal or governmental
      proceedings or inquiries are pending to which Apollo or any Apollo
      Subsidiary is a party or to which its property is subject that would
      result in the revocation or modification of any material certificate,
      authority, permit or license necessary to conduct the business now owned
      or operated by Apollo and the Apollo Subsidiaries which, if the subject of
      an unfavourable decision, ruling or finding would have a Material Adverse
      Effect on Apollo or any Apollo Subsidiary and, to the knowledge of Apollo,
      no such legal or governmental proceedings or inquiries have been
      threatened against or are contemplated with respect to Apollo or with
      respect to its properties;

            

    

    

    
      	
               
      

            	
              (u)

            	
              except
      as disclosed in the Apollo Disclosure Documents, there are no actions,
      suits, judgments, investigations or proceedings of any kind whatsoever
      outstanding, pending or, to the best of Apollo’s knowledge, threatened
      against or affecting Apollo, the Apollo Subsidiaries, or their respective
      directors, officers or employees, at law or in equity or before or by any
      commission, board, bureau or agency of any kind whatsoever and, to the
      best of Apollo’s knowledge, there is no basis therefor and neither Apollo
      nor any Apollo Subsidiary is subject to any judgment, order, writ,
      injunction, decree, award, rule, policy or regulation of any governmental
      authority, which, either separately or in the aggregate, may have a
      Material Adverse Effect on Apollo or any Apollo Subsidiary or that would
      adversely affect the ability of Apollo or Apollo Subco to perform their
      respective obligations under this
Agreement;

            

    

    

    
      	
               
      

            	
              (v)

            	
              none
      of Apollo nor any of the Apollo Subsidiaries is in violation of its
      constating documents or, except as disclosed in the Apollo Disclosure
      Documents, in default of the performance or observance of any material
      obligation, agreement, covenant or condition contained in any contract,
      indenture, trust deed, mortgage, loan agreement, note, lease or other
      agreement or instrument to which it is a party or by which it or its
      property may be bound;

            

    

    
      
         

      

      
        - 32
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (w)

            	
              Apollo
      or one of the Apollo Subsidiaries owns or has the right to use under
      licence, sub-licence or otherwise all material intellectual property used
      by Apollo and the Apollo Subsidiaries in its business, including
      copyrights, industrial designs, trade marks, trade secrets, know how and
      proprietary rights, free and clear of any and all
      encumbrances;

            

    

    

    
      	
               
      

            	
              (x)

            	
              except
      as disclosed in the Apollo Disclosure Documents, any and all of the
      agreements and other documents and instruments pursuant to which Apollo
      and the Apollo Subsidiaries hold the property and assets thereof
      (including any interest in, or right to earn an interest in, any property)
      are valid and subsisting agreements, documents or instruments in full
      force and effect, enforceable in accordance with the terms thereof,
      neither Apollo nor any Apollo Subsidiary is in default of any of the
      material provisions of any such agreements, documents or instruments nor
      has any such default been alleged and such properties and assets are in
      good standing under the applicable statutes and regulations of the
      jurisdictions in which they are situated.  All material leases,
      licences and other agreements pursuant to which Apollo or any Apollo
      Subsidiary derives the interests thereof in such property and assets are
      in good standing and there has been no material default under any such
      lease, licence or agreement.  None of the properties (or any
      interest in, or right to earn an interest in, any property) of Apollo or
      any Apollo Subsidiary is subject to any right of first refusal or purchase
      or acquisition right which is not disclosed in the Apollo Disclosure
      Documents;

            

    

    

    
      	
               
      

            	
              (y)

            	
              this
      Agreement has been duly authorized and executed and delivered by each of
      Apollo and Apollo Subco and constitutes a valid and binding obligation of
      each of Apollo and Apollo Subco and is enforceable against each of Apollo
      and Apollo Subco in accordance with its terms, except as enforcement
      thereof may be limited by bankruptcy, insolvency, reorganization,
      moratorium and other Laws relating to or affecting the rights of creditors
      generally and except as limited by the application of equitable principles
      when equitable remedies are sought, and by the fact that rights to
      indemnity, contribution and waiver, and the ability to sever unenforceable
      terms, may be limited by applicable
Law;

            

    

    

    
      	
               
      

            	
              (z)

            	
              the
      authorized capital of Apollo consists of an unlimited number of Apollo
      Shares, of which, as at the close of business on March 29, 2010,
      337,973,660 Apollo Shares were issued and outstanding as fully paid and
      non-assessable shares of Apollo;

            

    

    

    
      	
               
      

            	
              (aa)

            	
              the
      authorized capital of Apollo Subco consists of an unlimited number of
      common shares (“Subco
      Common
      Shares”)
      and an unlimited number of preferred shares issuable in series, of which,
      as at the close of business on March 29, 2010, one Subco Common
      Share and no preferred shares were issued and outstanding as fully
      paid and non-assessable shares of Apollo
Subco;

            

    

    
      
         

      

      
        - 33
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (bb)

            	
              the
      Apollo Shares to be issued in exchange for Linear Shares pursuant to the
      Arrangement will, upon issue, be issued as fully paid and non-assessable
      shares in the capital of Apollo and the Apollo Shares issuable upon
      exercise of the Apollo Replacement Options and the Apollo Replacement
      Warrants will be issued as fully paid and non-assessable shares in the
      capital of Apollo on payment of the purchase price
    therefor;

            

    

    

    
      	
               
      

            	
              (cc)

            	
              other
      than as set out in the Apollo Disclosure Documents, neither Apollo nor any
      of the Apollo Subsidiaries has made any loans to or guaranteed the
      obligations of any person; 

            

    

    

    
      	
               
      

            	
              (dd)

            	
              with
      respect to those leased premises of Apollo or the Apollo Subsidiaries
      which are material to Apollo and the Apollo Subsidiaries on a consolidated
      basis and which Apollo or any of the Apollo Subsidiaries occupies as
      tenant (the “Apollo
      Leased Premises”), Apollo or such Apollo Subsidiary occupies the
      Apollo Leased Premises and has the exclusive right to occupy and use the
      Apollo Leased Premises and each of the leases pursuant to which Apollo
      and/or the Apollo Subsidiaries occupies the Apollo Leased Premises is in
      good standing and in full force and
effect;

            

    

    

    
      	
               
      

            	
              (ee)

            	
              the
      assets of Apollo and the Apollo Subsidiaries and their business and
      operations are insured against loss or damage with responsible insurers on
      a basis consistent with insurance obtained by reasonably prudent
      participants in comparable businesses, and such coverage is in full force
      and effect, and Apollo has not failed to promptly give any notice of any
      material claim thereunder;

            

    

    

    
      	
               
      

            	
              (ff)

            	
              each
      of Apollo and each of the Apollo Subsidiaries is in compliance with all
      Laws respecting employment and employment practices, terms and conditions
      of employment, pay equity and wages, except where non-compliance with such
      Laws could not reasonably be expected to have a Material Adverse Effect on
      Apollo or any Apollo Subsidiary, and has not and is not engaged in any
      unfair labour practice;

            

    

    

    
      	
               
      

            	
              (gg)

            	
              there
      has not been in the last two years and there is not currently any labour
      disruption, grievance, arbitration proceeding or other conflict which
      could reasonably be expected to have a Material Adverse Effect on Apollo’s
      or any of the Apollo Subsidiaries’ business, taken as a whole, and Apollo
      and each of the Apollo Subsidiaries is in compliance with all provisions
      of all federal, provincial, local and foreign Laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where non-compliance with any such
      provisions would not have a Material Adverse Effect on Apollo or any of
      the Apollo Subsidiaries;

            

    

    
      
         

      

      
        - 34
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (hh)

            	
              no
      union has been accredited or otherwise designated to represent any
      employees of Apollo or any of the Apollo Subsidiaries and, to the
      knowledge of Apollo, no accreditation request or other representation
      question is pending with respect to the employees of Apollo or any of the
      Apollo Subsidiaries and no collective agreement or collective bargaining
      agreement or modification thereof has expired or is in effect in any of
      Apollo’s facilities and none is currently being negotiated by Apollo or
      any Apollo Subsidiary;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      Apollo Disclosure Documents disclose, to the extent required by applicable
      Securities Laws, each material plan for retirement, bonus, stock purchase,
      profit sharing, stock option, deferred compensation, severance or
      termination pay, insurance, medical, hospital, dental, vision care, drug,
      sick leave, disability, salary continuation, legal benefits, unemployment
      benefits, vacation, incentive or otherwise contributed to, or required to
      be contributed to, by Apollo for the benefit of any current or former
      director, officer, employee or consultant of Apollo (the “Apollo Employee Plans”),
      each of which has been maintained in all material respects with its terms
      and with the requirements prescribed by any and all statutes, orders,
      rules and regulations that are applicable to such Apollo Employee
      Plans;

            

    

    

    
      	
               
      

            	
              (jj)

            	
              Apollo
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurances that (A) transactions are executed in accordance
      with management’s general or specific authorization, and (B) transactions
      are recorded as necessary to permit preparation of financial statements in
      conformity with U.S. GAAP and to maintain accountability for
      assets.  Apollo has disclosed, based on the most recent
      evaluation of its chief executive officer and its chief financial officer
      prior to the date hereof, to Apollo’s auditors and the audit committee of
      Apollo’s board of directors (i) any significant deficiencies in the design
      or operation of its internal controls over financial reporting that are
      reasonably likely to adversely affect Apollo’s ability to record, process,
      summarize and report financial information and has identified for Apollo’s
      auditors and Apollo’s board of directors any material weaknesses in
      internal control over financial reporting and (ii) any fraud, whether or
      not material, that involves management or other employees who have a
      significant role in Apollo’s internal control over financial
      reporting;

            

    

    

    
      	
               
      

            	
              (kk)

            	
              management
      of Apollo has established and maintained a system of disclosure controls
      and procedures designed to provide reasonable assurance that information
      required to be disclosed by Apollo in its annual filings, interim filings
      or other reports filed, furnished or submitted by it under applicable
      Securities Law is recorded, processed, summarized and reported within the
      time periods specified in such legislation, laws and rules. Such
      disclosure controls and procedures include, without limitation, controls
      and procedures designed to ensure that information required to be
      disclosed by Apollo in its annual filings, interim filings or other
      reports filed, furnished or submitted under applicable Securities Law is
      accumulated and communicated to Apollo’s management, including its chief
      executive officer and chief financial officer (or persons performing
      similar functions), as appropriate to allow timely decisions regarding
      required disclosure;

            

    

    
      
         

      

      
        - 35
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ll)

            	
              following
      completion of the Arrangement pursuant to the terms and conditions of this
      Agreement and the Plan of Arrangement, Apollo will not be required to
      register as an “investment company” pursuant to the 1940
    Act;

            

    

    

    
      	
            	
              (mm)

            	
              except
      as disclosed in the Apollo Disclosure Documents, none of the directors,
      officers or employees of Apollo or any associate or affiliate of any of
      the foregoing had or has any material interest, direct or indirect, in any
      material transaction or any proposed material transaction with Apollo or
      its Apollo Subsidiaries which materially affects, is material to or will
      materially affect Apollo or any Apollo
  Subsidiary;

            

    

    

    
      	
               
      

            	
              (nn)

            	
              the
      minute books and records of Apollo and the Apollo Subsidiaries made
      available to Linear and its counsel in connection with their due diligence
      investigation of Apollo for the periods from January 1, 2007 to the date
      hereof are all of the minute books and records of Apollo and the Apollo
      Subsidiaries and contain copies of all material proceedings (or certified
      copies thereof or drafts thereof pending approval) of the shareholders,
      the directors and all committees of directors of Apollo and the Apollo
      Subsidiaries to the date of review of such corporate records and minute
      books and there have been no other meetings, resolutions or proceedings of
      the shareholders, directors or any committees of the directors of Apollo
      or any of its Apollo Subsidiaries to the date hereof not reflected in such
      minute books and other records;

            

    

    

    
      	
               
      

            	
              (oo)

            	
              neither
      Apollo  nor any of its Apollo Subsidiaries has been in violation
      of, in connection with the ownership, use, maintenance or operation of its
      property and assets, including the Apollo Leased Premises, any
      Environmental Laws which would have a Material Adverse Effect on Apollo or
      any of its Apollo Subsidiaries;

            

    

    

    
      	
               
      

            	
              (pp)

            	
              without
      limiting the generality of the immediately preceding paragraph, Apollo and
      each of the Apollo Subsidiaries do not have any knowledge of, and have not
      received any notice of, any currently outstanding material claim, judicial
      or administrative proceeding, pending or threatened against, or which may
      affect, either Apollo or any Apollo Subsidiary or any of the property,
      assets or operations thereof, relating to, or alleging any violation of
      any Environmental Laws, Apollo is not aware of any facts which could give
      rise to any such claim or judicial or administrative proceeding and to the
      knowledge of Apollo neither Apollo, nor any Apollo Subsidiary nor any of
      the property, assets or operations thereof is the subject of any
      investigation, evaluation, audit or review by any governmental authority
      to determine whether any violation of any Environmental Laws has occurred
      or is occurring or whether any remedial action is needed in connection
      with a release of any contaminant into the environment, except for
      compliance investigations conducted in the normal course by any
      governmental authority, in each case which could reasonably be expected to
      have a Material Adverse Effect on Apollo or any of its Apollo
      Subsidiaries;

            

    

    
      
         

      

      
        - 36
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (qq)

            	
              there
      are no orders, rulings or directives issued, pending or, to the best of
      Apollo’s knowledge reasonably held, being based on due direction and
      enquiry of its personnel and advisors, threatened against Apollo or any of
      the Apollo Subsidiaries under or pursuant to any Environmental Laws
      requiring any work, repairs, construction or capital expenditures with
      respect to the property or assets of Apollo or any of the Apollo
      Subsidiaries (including the Apollo Leased Premises) which would have a
      Material Adverse Effect on Apollo or any of the Apollo
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (rr)

            	
              Apollo
      and the Apollo Subsidiaries are not subject to any contingent or other
      liability relating to the restoration or rehabilitation of land, water or
      any other part of the environment (except for those derived from normal
      exploration, development and mining activities and those arising under
      permits, licenses or approvals from applicable Governmental Authorities)
      or non-compliance with Environmental Laws which could reasonably be
      expected to have a Material Adverse Effect on Apollo or any of the Apollo
      Subsidiaries;

            

    

    

    
      	
               
      

            	
              (ss)

            	
              all
      information which has been prepared by Apollo and the Apollo Subsidiaries
      relating to Apollo and the Apollo Subsidiaries and the business, property
      and liabilities thereof and either publicly disclosed, provided or made
      available to Linear, including all financial, marketing, sales and
      operational information provided to Linear is, as of the date of such
      information, true and correct in all material respects, taken as a whole,
      and no fact or facts have been omitted therefrom which would make such
      information materially misleading;

            

    

    

    
      	
               
      

            	
              (tt)

            	
              Apollo
      is not aware of any circumstances presently existing under which liability
      is or could reasonably be expected to be incurred under Part XXIII – Civil
      Liability for Secondary Market Disclosure of the Securities Act
      (Ontario);

            

    

    

    
      	
               
      

            	
              (uu)

            	
              Apollo
      has not entered into any arrangement whereby Apollo will have any
      liability for financial advisor’s, broker’s or finder’s fees (including,
      without limitation, any disbursements, expenses or fairness opinion) in
      respect of the Arrangement, except for Apollo’s fees and disbursements to
      its financial advisors.  Apollo has provided to Linear true and
      correct copies of its agreements with each of its financial
      advisors;

            

    

     

    
      
        
        

      

      
        - 37
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (vv)

            	
              Apollo
      is not in material breach of, and has complied in all material respects
      with all its covenants and other obligations set out in, the Letter of
      Intent as of the date of this Agreement;
and

            

    

    

    
      	 	
              (ww)

            	
              the
      transactions contemplated by this Agreement will not cause Apollo, any
      Apollo Subsidiary or the Surviving Corporation to incur any Tax liability
      or be subject to any withholding Tax obligation with respect to Apollo or
      any Apollo Subsidiary in any jurisdiction in which Apollo or such Apollo
      Subsidiary is organized, conducts business or owns real
      property.

            

    

    

    
      
        	
                Section
      3.3

              	
                Survival
      of Representations and
Warranties

              

      

    

     

    The representations and warranties
contained in this Agreement shall survive the execution and delivery of this
Agreement and shall expire and be terminated and extinguished on the Effective
Date. Any investigation by Apollo or Linear and their respective advisors shall
not mitigate, diminish or affect the representations and warranties contained in
this Agreement.

     

    ARTICLE 4

    COVENANTS

     

    
      
        	
                Section
      4.1

              	
                Covenants
      of Linear

              

      

    

     

    Subject
to Section 6.1 and Section 6.2, Linear hereby covenants and agrees with Apollo
and Apollo Subco as follows:

     

    
      
        	 	
                (a)

              	
                as
      soon as practicable following the execution of this Agreement, Linear
      shall, jointly with Apollo Subco, file, proceed with and diligently
      prosecute an application to the Court for the Interim Order on terms and
      conditions acceptable to Apollo and Apollo Subco, acting
      reasonably;

              

      

    

     

    
      
        	 	
                (b)

              	
                in
      a timely and expeditious manner, Linear
shall:

              

      

    

     

    
      	
               
      

            	
              (i)

            	
              forthwith
      carry out such terms of the Interim Order as are required under the terms
      thereof to be carried out by
Linear;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              prepare
      with the assistance of Apollo, and file as promptly as reasonably
      practicable, the Linear Proxy Circular (which shall be in a form
      satisfactory to Apollo, acting reasonably), together with any other
      documents required by applicable Laws, in all jurisdictions where the
      Linear Proxy Circular is required to be filed and mail the Linear Proxy
      Circular, as ordered by the Interim Order and in accordance with all
      applicable Laws, including the rules and policies of the TSX, in and to
      all jurisdictions where the Linear Proxy Circular is required to be
      mailed, complying in all material respects with all applicable Laws,
      including the rules and policies of the TSX, on the date of the mailing
      thereof and in the form and containing the information required by all
      applicable Laws, including all applicable corporate and securities
      legislation and requirements and the rules and policies of the TSX, and
      not containing any misrepresentation (as defined under applicable
      Securities Laws) with respect thereto, other than with respect to any
      information relating to and provided by Apollo for which neither Linear
      nor its directors or officers assume any responsibility for the accuracy
      or completeness of;

            

    

     

    
      
        
        

      

      
        - 38
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (iii)

            	
              subject
      to the terms of this Agreement: (a) take all commercially reasonable
      lawful action to solicit Linear Shareholders to vote in favour of the
      Continuance and the Arrangement including, without
      limitation, if deemed advisable, retaining a proxy solicitation agent to
      solicit Linear Shareholders to vote in favour of the Arrangement (on
      condition such agent can be engaged at reasonable expense); (b) recommend
      to all holders of Linear Shares that they vote in favour of the
      Continuance and the Arrangement and the other transactions contemplated
      hereby or thereby; and (c) not withdraw, modify or qualify, or publicly
      propose to or publicly state that it intends to withdraw, modify or
      qualify in any manner adverse to Apollo such recommendation except as
      expressly permitted by Sections 6.1 and 6.2
  hereof;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              use
      reasonable efforts to deliver or cause to be delivered to Apollo or its
      legal counsel all certificates and legal, tax and other opinions necessary
      to support the disclosure contained or to be contained in the Linear Proxy
      Circular;

            

    

     

    
      	
               
      

            	
              (v)

            	
              convene
      the Linear Meeting on such date as provided in the Interim Order or such
      later date that may be mutually agreed upon with
  Apollo;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              provide
      notice to Apollo of the Linear Meeting and allow representatives of Apollo
      to attend the Linear Meeting;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              conduct
      the Linear Meeting in accordance with the Interim Order, the CBCA, the
      by-laws of Linear and as otherwise required by applicable Laws;
      and

            

    

     

    
      	
               
      

            	
              (viii)

            	
              take
      all such actions as may be required under the CBCA and the ABCA in
      connection with the transactions contemplated by this Agreement and the
      Plan of Arrangement;

            

    

     

    
      
        	 	
                (c)

              	
                Linear
      shall not adjourn, postpone or cancel the Linear Meeting (or propose to do
      so), except: (i) if a quorum is not present at the Linear Meeting; (ii) if
      required by applicable Laws; or (iii) if required by the Linear
      Shareholders;

              

      

    

     

    
      
        
        

      

      
        - 39
-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                (d)

              	
                in
      a timely and expeditious manner, Linear shall prepare (in consultation
      with Apollo), and file any mutually agreed (or as otherwise required by
      applicable Laws) amendments or supplements to the Linear Proxy Circular
      (which amendments or supplements shall be in a form satisfactory to
      Apollo, acting reasonably) with respect to the Linear Meeting and mail
      such amendments or supplements, as required by the Interim Order and in
      accordance with all applicable Laws, in and to all jurisdictions where
      such amendments or supplements are required to be mailed, complying in all
      material respects with all applicable Laws on the date of the mailing
      thereof;

              

      

    

     

    
      	 	
              
                (e)

              

            	
              
                subject
      to the approval at the Linear Meeting of the Continuance in accordance
      with the CBCA and the Arrangement in accordance with the provisions of the
      Interim Order and the approval of the Arrangement at the Apollo Meeting in
      accordance with applicable Laws, including the rules and policies of the
      TSX and AMEX, Linear shall complete the Continuance and shall, jointly
      with Apollo Subco, forthwith file, proceed with and diligently prosecute
      an application for the Final Order, which application shall be in a form
      and substance satisfactory to the parties hereto, acting
      reasonably;

              

            

    

     

    
      	 	
              
                (f)

              

            	
              
                Linear
      shall forthwith carry out the terms of the Final Order and, following the
      issue of the Final Order and the satisfaction, fulfillment or waiver of
      the conditions in favour of Linear, Apollo and Apollo Subco set forth
      herein, at a time and on a date to be agreed by Apollo and Linear, file
      the Articles of Arrangement with the Registrar in order for the
      Arrangement to become
effective;

              

            

    

     

    
      	 	
              
                (g)

              

            	
              
                except
      for proxies and other non-substantive communications, Linear shall furnish
      promptly to Apollo a copy of each notice, report, schedule or other
      document or communication delivered, filed or received by Linear in
      connection with this Agreement, the Arrangement, the Interim Order or the
      Linear Meeting or any other meeting at which all Linear Shareholders are
      entitled to attend relating to special business, any filings made under
      any applicable Law and any dealings or communications with any
      Governmental Authority, Securities Authority or stock exchange in
      connection with, or in any way affecting, the transactions contemplated by
      this Agreement;

              

            

    

     

    
      	 	
              
                (h)

              

            	
              
                other
      than in contemplation of or as required to give effect to the transactions
      contemplated by this Agreement, Linear shall, and shall cause the Linear
      Subsidiaries to, conduct business only in the usual and ordinary course of
      business and consistent with past practice, and Linear shall use all
      reasonable commercial efforts to maintain and preserve Linear’s and the
      Linear Subsidiaries’ business, assets and advantageous business
      relationships, provided that it shall be entitled and authorized to comply
      with all pre-emptive rights, first purchase rights or rights of first
      refusal that are applicable to its assets and become operative by virtue
      of this Agreement or any of the transactions contemplated by this
      Agreement;

              

            

    

     

    
      	 	
              
                (i)

              

            	
              
                other
      than in contemplation of or as required to give effect to the transactions
      contemplated by this Agreement, Linear shall
  not:

              

            

    

     

    
      
        
        

      

      
        - 40
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (i)

            	
              except
      in connection with an internal reorganization implemented in conjunction
      with the Arrangement: (A) amend Linear’s or any Linear Subsidiary’s
      constating documents; (B) declare, set aside or pay any dividend or make
      any other distribution or payment (whether in cash, shares, or property)
      in respect of its outstanding securities; (C) issue or agree to issue any
      shares or securities convertible into or exchangeable or exercisable for,
      or otherwise evidencing a right to acquire, shares, other than the
      issuance of shares pursuant to the exercise of currently outstanding
      rights to acquire shares or to employees hired after the date hereof in a
      manner consistent with past practice; (D) redeem, purchase or otherwise
      acquire any of its outstanding shares or other securities (other than
      redemptions required pursuant to its constating documents); (E) split,
      combine or reclassify any of its securities; (F) adopt a plan of
      liquidation or resolutions providing for its liquidation, dissolution,
      merger, consolidation or reorganization; or (G) enter into or modify any
      contract, agreement, commitment or arrangement with respect to any of the
      foregoing;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              except
      as previously disclosed in writing to Apollo or expressly publicly
      disclosed by Linear in documents filed on SEDAR prior to the date hereof,
      without prior consultation with and the consent of Apollo, such consent
      not to be unreasonably withheld, directly or indirectly: (A) sell, pledge,
      dispose of or encumber any assets other than in the ordinary course of
      business for consideration in excess of US$500,000 individually or
      US$1,000,000 in the aggregate; (B) expend or commit to expend more than
      US$1,000,000 individually or US$2,000,000 in the aggregate with respect to
      any capital expenditures prior to the date hereof; (C) expend or commit to
      expend any amounts with respect to any operating expenses other than in
      the ordinary course of business or pursuant to the Arrangement; (D)
      acquire (by merger, amalgamation, consolidation or acquisition of shares
      or assets) any corporation, partnership or other business organization or
      division thereof which is not a subsidiary or affiliate of such party, or
      make any investment therein either by purchase of shares or securities,
      contributions of capital or property transfer with an acquisition cost in
      excess of US$1,000,000 in the aggregate; (E) acquire any assets with an
      acquisition cost in excess of US$1,000,000 in the aggregate; (F) incur any
      indebtedness for borrowed money in excess of existing credit facilities,
      or any other material liability or obligation or issue any debt securities
      or assume, guarantee, endorse or otherwise become responsible for, the
      obligations of any other individual or entity, or make any loans or
      advances, other than in respect of fees payable to legal, financial and
      other advisors in the ordinary course of business or in respect of the
      Arrangement; (G) authorize, recommend or propose any release or
      relinquishment of any material contract right; (H) waive, abandon,
      release, grant or transfer any material assets or rights of value or
      modify or change in any material respect any existing material license,
      lease, contract or other material document; (I) enter into or terminate
      any hedges, swaps or other financial instruments or like transactions; or
      (J) authorize or propose any of the foregoing, or enter into or modify any
      contract, agreement, commitment or arrangement to do any of the
      foregoing;

            

    

     

    
      
        
        

      

      
        - 41
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (iii)

            	
              other
      than the payments contemplated by Section 2.5, make any payment to any
      employee, officer or director outside of its ordinary and usual
      compensation for services provided, except to the extent that any such
      entitlement to payment to a former employee or officer has accrued prior
      to the date hereof and has been disclosed to, and consented to by,
      Apollo;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              (A)
      grant any officer, director or employee an increase in compensation in any
      form; (B) grant any general salary increase; (C) take any action with
      respect to the amendment or grant of any severance or termination pay
      policies or arrangement for any directors, officers or employees; (D)
      amend any stock option plan or trust unit incentive plan or the terms of
      any outstanding options or rights thereunder; nor (E) advance any loan to
      any officer, director or any other party not at arm's length, other than
      as may be agreed to by Linear and
Apollo;

            

    

     

    
      	
               
      

            	
              (v)

            	
              adopt
      or amend or make any contribution to any bonus, employee benefit plan,
      profit sharing, share or deferred compensation, insurance, incentive
      compensation, other compensation or other similar plan, agreement, share
      or incentive or purchase plan, fund or arrangement for the benefit of
      employees, except as is necessary to comply with the law or with respect
      to existing provisions of any such plans, programs, arrangement or
      agreements;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              take
      any action, refrain from taking any action, permit any action to be taken
      or not taken, inconsistent with this Agreement, which might directly or
      indirectly interfere or affect the consummation of the Arrangement or that
      could reasonably be expected to render, any representation or warranty
      made by Linear in this Agreement untrue or inaccurate in any material
      respect at any time prior to the Effective Time if then made, or which
      would or could have a Material Adverse Effect on
  Linear;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              other
      than pursuant to obligations or rights under existing contracts,
      agreements and commitments (to the extent such rights have been exercised
      or initiated by other persons), sell, lease or otherwise dispose of any
      property or assets or enter into any agreement or commitment in respect of
      any of the foregoing;

            

    

     

    
      
        
        

      

      
        - 42
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (viii)

            	
              except
      as required by Canadian GAAP, any other generally accepted accounting
      principle to which any Linear Subsidiary may be subject or any applicable
      Law, make any changes to the existing accounting practices of Linear or
      make any material tax election inconsistent with past practice;
      or

            

    

     

    
      	
               
      

            	
              (ix)

            	
              permit
      or cause any of the Linear Subsidiaries to effect any of the
      foregoing;

            

    

     

    
      
        	 	
                (j)

              	
                other
      than the payments set out in Section 2.5, without the prior written
      consent of Apollo, Linear shall not, and shall cause the Linear
      Subsidiaries not to, enter into or modify any employment, consulting,
      severance, collective bargaining or similar agreement, policy or
      arrangement with, or grant any bonus, salary increase, option to purchase
      shares, pension or supplemental pension benefit, profit sharing,
      retirement allowance, deferred compensation, incentive compensation,
      severance, change of control or termination pay to, or make any loan to,
      any officer, director, employee or consultant of Linear or any of the
      Linear Subsidiaries;

              

      

    

     

    
      
        	 	
                (k)

              	
                Linear
      shall use its commercially reasonable best efforts, and shall cause the
      Linear Subsidiaries to use their commercially reasonable best efforts, to
      cause their respective current insurance (or reinsurance) policies not to
      be cancelled or terminated or any of the coverage thereunder to lapse,
      unless simultaneously with such termination, cancellation or lapse,
      replacement policies underwritten by insurance and re-insurance companies
      of internationally recognized standing providing coverage equal to or
      greater than the coverage under the cancelled, terminated or lapsed
      policies for substantially similar premiums are in full force and
      effect;

              

      

    

     

    
      
        	 	
                (l)

              	
                Linear
      shall promptly notify Apollo in writing of (i) any significant development
      or material change relating to Linear’s business, operations, assets or
      prospects promptly after becoming aware of any such development or change;
      or (ii) any event or state of facts of which the occurrence or failure
      would, or would reasonably be likely to: (A) cause any of the
      representations or warranties of Linear contained in this Agreement to be
      untrue or inaccurate in any material respect on the date of this Agreement
      or at the Effective Date (provided that this subsection 4.1(l) shall not
      apply in the case of an event or state of facts resulting from actions or
      omissions of Linear which are permitted or required by this Agreement); or
      (B) result in the failure to comply with or satisfy any covenant,
      condition or agreement to be complied with or satisfied by Linear prior to
      the Effective Date.  Linear shall use commercially reasonable
      best efforts to confer with and obtain Apollo’s approval (not to be
      unreasonably withheld or delayed), prior to taking action (other than in
      emergency situations) with respect to any operational matters involved in
      Linear’s business which may constitute a material change for
      Linear;

              

      

    

     

    
      
        
        

      

      
        - 43
-

        
          

        

      

      
        
        

      

    

    
      
        	 	
                (m)

              	
                Linear
      shall not, and shall cause the Linear Subsidiaries not to, settle or
      compromise any claim brought by any present, former or purported holder of
      any securities of Linear in connection with the transactions contemplated
      by this Agreement prior to the Effective Time without the prior written
      consent of Apollo;

              

      

    

     

    
      
        	 	
                (n)

              	
                Linear
      shall not, and shall cause the Linear Subsidiaries not to, enter into,
      renew or modify in any respect any material contract, agreement, lease,
      commitment or arrangement to which Linear or any of the Linear
      Subsidiaries is a party or by which any of them is bound, except insofar
      as may be necessary to permit or provide for the completion of the
      Arrangement;

              

      

    

     

    
      
        	 	
                (o)

              	
                Linear
      shall use all commercially reasonable best efforts to satisfy, or cause to
      be satisfied, all conditions precedent to its obligations to the extent
      that the same is within its control and to take, or cause to be taken, all
      other action and to do, or cause to be done, all other things necessary,
      proper or advisable under all applicable Laws to complete the transactions
      contemplated by this Agreement, including using its commercially
      reasonable best efforts to:

              

      

    

     

    
      	
               
      

            	
              (i)

            	
              obtain
      the approval of Linear Shareholders for the Continuance and the
      Arrangement in accordance with the provisions of the CBCA, the Interim
      Order, and the requirements of any applicable regulatory
      authority;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              obtain
      all other consents, approvals and authorizations as are required to be
      obtained by Linear or any of the Linear Subsidiaries under any applicable
      Law or from any Governmental Authority which would, if not obtained,
      materially impede the completion of the transactions contemplated by this
      Agreement or have a Material Adverse Effect on
  Linear;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              effect
      all necessary registrations, filings and submissions of information
      requested by Governmental Authorities required to be effected by it in
      connection with the transactions contemplated by this Agreement and
      participate and appear in any proceedings of any party hereto before any
      Governmental Authority;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              oppose,
      lift or rescind any injunction or restraining order or other order or
      action challenging or affecting this Agreement, the transactions
      contemplated hereby or seeking to stop, or otherwise adversely affecting
      the ability of the parties hereto to consummate, the transactions
      contemplated hereby;

            

    

     

    
      	
               
      

            	
              (v)

            	
              fulfill
      all conditions and satisfy all provisions of this Agreement and the Plan
      of Arrangement required to be fulfilled or satisfied by Linear;
      and

            

    

     

    
      
        
        

      

      
        - 44
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (vi)

            	
              cooperate
      with Apollo and Apollo Subco in connection with the performance by each of
      them of their respective obligations hereunder, provided however that the
      foregoing shall not be construed to obligate Linear to pay or cause to be
      paid any monies to cause such performance to
  occur;

            

    

     

    
      
        	 	
                (p)

              	
                Linear
      shall make, or cooperate as necessary in the making of, all necessary
      filings and applications under all applicable Laws required in connection
      with the transactions contemplated hereby and take all reasonable action
      necessary to be in compliance with such
Laws;

              

      

    

     

    
      
        	 	
                (q)

              	
                Linear
      shall use its commercially reasonable best efforts to conduct its affairs
      and to cause the Linear Subsidiaries to conduct their affairs so that all
      of the representations and warranties of Linear contained herein shall be
      true and correct on and as of the Effective Date as if made on and as of
      such date;

              

      

    

     

    
      
        	 	
                (r)

              	
                Linear
      shall continue to make available and cause to be made available to Apollo,
      the Lenders and the agents and advisors thereto all documents, agreements,
      corporate records and minute books as may be necessary to enable Apollo to
      effect a thorough examination of Linear and the Linear Subsidiaries and
      the business, properties and financial status thereof and shall cooperate
      with Apollo in securing access for Apollo to any documents, agreements,
      corporate records or minute books not in the possession or under the
      control of Linear. Subject to applicable Laws, upon reasonable notice,
      Linear shall, and shall cause the Linear Subsidiaries to, afford officers,
      employees, counsel, accountants and other authorized representatives and
      advisors of Apollo and the Lenders reasonable access, during normal
      business hours from the date hereof until the earlier of the Effective
      Time or the termination of this Agreement, to the properties, books,
      contracts and records as well as to the management personnel of Linear and
      the Linear Subsidiaries, and, during such period, Linear shall, and shall
      cause the Linear Subsidiaries to, furnish promptly to Apollo all
      information concerning the business, properties and personnel of Linear
      and the Linear Subsidiaries as Apollo may reasonably
    request;

              

      

    

     

    
      
        	 	
                (s)

              	
                Linear
      shall deliver title opinions with respect to each of the Linear Material
      Properties; and

              

      

    

     

    
      
        	 	
                (t)

              	
                Linear
      shall execute and deliver, or cause to be executed and delivered, at the
      closing of the transactions contemplated hereby such customary agreements,
      certificates, resolutions, opinions and other closing documents as may be
      required by the other parties hereto, all in form satisfactory to the
      other parties hereto, acting
reasonably.

              

      

    

     

    
      
        
        

      

      
        - 45
-

        
          

        

      

      
        
        

      

    

    
      
        	
                Section
      4.2

              	
                Covenants
      of Apollo and Apollo Subco

              

      

    

     

    Subject
to Section 6.1 and Section 6.2, each of Apollo and Apollo Subco hereby covenants
and agrees with Linear as follows:

     

    
      
        	 	
                (a)

              	
                as
      soon as practicable following the execution of this Agreement, Apollo
      Subco shall, jointly with Linear, file, proceed with and diligently
      prosecute an application to the Court for the Interim Order on terms and
      conditions acceptable to Linear, acting
  reasonably;

              

      

    

     

    
      	 	
              
                (b)

              

            	
              
                in
      a timely and expeditious manner, Apollo and Apollo Subco shall take all
      such actions and do all such acts and things as are specified in the
      Interim Order, the Plan of Arrangement (including issuing the Apollo
      Shares, the Apollo Replacement Options and the Apollo Replacement Warrants
      as contemplated in the Plan of Arrangement) and the Final Order to be
      taken or done by Apollo and Apollo Subco, as
    applicable;

              

            

    

     

    
      	 	
              
                (c)

              

            	
              
                in
      a timely and expeditious manner, Apollo and Apollo Subco
      shall:

              

            

    

     

    
      	
               
      

            	
              (i)

            	
              forthwith
      carry out such terms of the Interim Order as are required under the terms
      thereof to be carried out by Apollo and Apollo
  Subco;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              subject
      to the terms of this Agreement: (a) take all commercially reasonable
      lawful action to solicit Apollo Shareholders to vote in favour of the
      Arrangement including, without
      limitation, if deemed advisable, retaining a proxy solicitation agent to
      solicit Apollo Shareholders to vote in favour of the Arrangement (on
      condition such agent can be engaged at reasonable expense); (b) recommend
      to all holders of Apollo Shares that they vote in favour of the
      Arrangement and the other transactions contemplated hereby or thereby; and
      (c) not withdraw, modify or qualify, or publicly propose to or publicly
      state that it intends to withdraw, modify or qualify in any manner adverse
      to Linear such recommendation except as expressly permitted by Sections
      6.1 and 6.2 hereof;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              use
      reasonable efforts to deliver or cause to be delivered to Linear or its
      legal counsel all certificates and legal, tax and other opinions necessary
      to support the disclosure contained or to be contained in the Apollo Proxy
      Circular;

            

    

     

    
      
        
        

      

      
        - 46
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (iv)

            	
              prepare
      with the assistance of Linear, and file, as promptly as reasonably
      practicable (after resolution of any SEC comments thereon), the Apollo
      Proxy Circular (which shall be in a form satisfactory to Linear, acting
      reasonably), together with any other documents required by applicable
      Laws, in all jurisdictions where the Apollo Proxy Circular is required to
      be filed and mail the Apollo Proxy Circular, in accordance with all
      applicable Laws, including the rules and policies of the TSX and AMEX, in
      and to all jurisdictions where the Apollo Proxy Circular is required to be
      mailed, complying in all material respects with all applicable Laws,
      including the rules and policies of the TSX and AMEX, on the date of the
      mailing thereof and in the form and containing the information required by
      all applicable Laws, including all applicable corporate and securities
      legislation and requirements and the rules and policies of the TSX and
      AMEX, and not containing any misrepresentation (as defined under
      applicable Securities Laws) with respect thereto, other than with respect
      to any information relating to and provided by Linear for which none of
      Apollo, Apollo Subco nor their respective directors or officers assume any
      responsibility for the accuracy or completeness
  of;

            

    

     

    
      	
               
      

            	
              (v)

            	
              use
      reasonable efforts to file a registration statement with the United States
      Securities and Exchange Commission prior to the Linear Meeting,
      registering under the 1933 Act the Apollo Shares issuable upon exercise of
      the Apollo Replacement Warrants and Apollo Replacement Options (but only
      with respect to those Apollo Replacement Options that are not eligible for
      registration on Apollo’s registration statement on Form S-8 filed with the
      SEC on October 16, 2009) to be issued pursuant to this Agreement and the
      Arrangement and to use reasonable efforts to bring such registration
      statement effective prior to the Effective Date of the Arrangement (it
      being understood that Apollo may satisfy this requirement by maintaining
      the effectiveness of its currently effective shelf registration statement
      on Form S-3 filed with the SEC on April 24, 2008 (the “Shelf Registration
      Statement”) and using reasonable efforts to file a supplement
      thereto pursuant to Rule 424 of the 1933 Act registering the issuance of
      common shares of Apollo upon exercise of the Apollo Replacement Warrants
      and Apollo Replacement Options (but only with respect to those Apollo
      Replacement Options that are not eligible for registration on Apollo’s
      registration statement on Form S-8 filed with the SEC on October 16, 2009)
      prior to the Effective Date of the Arrangement (the “Shelf Registration Statement
      Supplement”);

            

    

     

    
      	
               
      

            	
              (vi)

            	
              convene
      the Apollo Meeting on the date specified for the Linear Meeting as
      provided in the Interim Order or such later date that may be mutually
      agreed upon with Linear;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              provide
      notice to Linear of the Apollo Meeting and allow representatives of Linear
      to attend the Apollo Meeting;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              conduct
      the Apollo Meeting in accordance with the YBCA, the by-laws of Apollo and
      as otherwise required by applicable Laws, including the rules and policies
      of the TSX and AMEX; and

            

    

     

    
      
        
        

      

      
        - 47
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (ix)

            	
              take
      all such actions as may be required under the YBCA and pursuant to the
      rules and policies of the TSX and AMEX in connection with the transactions
      contemplated by this Agreement and the Plan of
  Arrangement;

            

    

     

    
      
        	 	
                (d)

              	
                in
      its capacity as sole shareholder of Apollo Subco, Apollo shall take all
      necessary action to approve the amalgamation of Apollo Subco and Linear
      and to otherwise approve the
Arrangement.

              

      

    

     

    
      
        	 	
                (e)

              	
                Apollo
      shall not adjourn, postpone or cancel the Apollo Meeting (or propose to do
      so), except: (i) if a quorum is not present at the Apollo Meeting; (ii) if
      required by applicable Laws; or (iii) if required by the Apollo
      Shareholders;

              

      

    

     

    
      
        	 	
                (f)

              	
                in
      a timely and expeditious manner, Apollo and Apollo Subco shall prepare (in
      consultation with Linear), and file any mutually agreed (or as otherwise
      required by applicable Laws) amendments or supplements to the Apollo Proxy
      Circular (which amendments or supplements shall be in a form satisfactory
      to Linear, acting reasonably) with respect to the Apollo Meeting and mail
      such amendments or supplements, and in accordance with all applicable
      Laws, including the rules and policies of the TSX and AMEX, in and to all
      jurisdictions where such amendments or supplements are required to be
      mailed, complying in all material respects with all applicable Laws on the
      date of the mailing thereof;

              

      

    

     

    
      	 	
              
                (g)

              

            	
              
                subject
      to the approval of the Continuance and, in accordance with the provisions
      of the Interim Order, the Arrangement at the Linear Meeting and the
      approval of the Arrangement at the Apollo Meeting in accordance with
      applicable Laws, including the rules and policies of the TSX and AMEX,
      Apollo Subco shall, jointly with Linear, forthwith file, proceed with and
      diligently prosecute an application for the Final Order, which application
      shall be in a form and substance satisfactory to the parties hereto,
      acting reasonably;

              

            

    

     

    
      	 	
              
                (h)

              

            	
              
                except
      for proxies and other non-substantive communications, Apollo and Apollo
      Subco shall furnish promptly to Linear a copy of each notice, report,
      schedule or other document or communication delivered, filed or received
      by Apollo or Apollo Subco in connection with the Arrangement or the
      Interim Order, any filing under any applicable Law and any dealings or
      communications with any Governmental Authority, Securities Authority or
      stock exchange in connection with, or in any way affecting, the
      transactions contemplated by this
  Agreement;

              

            

    

     

    
      	 	
              
                (i)

              

            	
              
                other
      than in contemplation of or as required to give effect to the transactions
      contemplated by this Agreement, Apollo shall, and shall cause the Apollo
      Subsidiaries to, conduct business only in the usual and ordinary course of
      business and consistent with past practice, and Apollo shall use all
      reasonable commercial efforts to maintain and preserve Apollo’s and the
      Apollo Subsidiaries’ business, assets and advantageous business
      relationships, provided that it shall be entitled and authorized to comply
      with all pre-emptive rights, first purchase rights or rights of first
      refusal that are applicable to its assets and become operative by virtue
      of this Agreement or any of the transactions contemplated by this
      Agreement;

              

            

    

     

    
      
        
        

      

      
        - 48
-

        
          

        

      

      
        
        

      

    

    
      
        	 	
                (j)

              	
                other
      than in contemplation of or as required to give effect to the transactions
      contemplated by this Agreement, Apollo shall
  not:

              

      

    

     

    
      	
               
      

            	
              (i)

            	
              except
      in connection with an internal reorganization implemented in conjunction
      with the Arrangement: (A) amend Apollo’s or any Apollo Subsidiary’s
      constating documents; (B) declare, set aside or pay any dividend or make
      any other distribution or payment (whether in cash, shares, or property)
      in respect of its outstanding securities; (C) issue or agree to issue any
      shares or securities convertible into or exchangeable or exercisable for,
      or otherwise evidencing a right to acquire, shares, other than the
      issuance of shares pursuant to the exercise of currently outstanding
      rights to acquire shares or to employees hired after the date hereof in a
      manner consistent with past practice and other than in connection with the
      Duffy Issuance; (D) redeem, purchase or otherwise acquire any of its
      outstanding shares or other securities (other than redemptions required
      pursuant to its constating documents); (E) split, combine or reclassify
      any of its securities; (F) adopt a plan of liquidation or resolutions
      providing for its liquidation, dissolution, merger, consolidation or
      reorganization; or (G) enter into or modify any contract, agreement,
      commitment or arrangement with respect to any of the
      foregoing;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              except
      as previously disclosed in writing to Linear or expressly publicly
      disclosed by Apollo in documents filed on SEDAR or EDGAR prior to the date
      hereof, without prior consultation with and the consent of Linear, such
      consent not to be unreasonably withheld, directly or indirectly: (A) sell,
      pledge, dispose of or encumber any assets other than in the ordinary
      course of business for consideration in excess of US$500,000 individually
      or US$1,000,000 in the aggregate; (B) expend or commit to expend more than
      US$1,000,000 individually or US$2,000,000 in the aggregate with respect to
      any capital expenditures prior to the date hereof; (C) expend or commit to
      expend any amounts with respect to any operating expenses other than in
      the ordinary course of business or pursuant to the Arrangement; (D)
      acquire (by merger, amalgamation, consolidation or acquisition of shares
      or assets) any corporation, partnership or other business organization or
      division thereof which is not a subsidiary or affiliate of such party, or
      make any investment therein either by purchase of shares or securities,
      contributions of capital or property transfer with an acquisition cost in
      excess of US$1,000,000 in the aggregate; (E) acquire any assets with an
      acquisition cost in excess of US$1,000,000 in the aggregate; (F) incur any
      indebtedness for borrowed money in excess of existing credit facilities,
      or any other material liability or obligation or issue any debt securities
      or assume, guarantee, endorse or otherwise become responsible for, the
      obligations of any other individual or entity, or make any loans or
      advances, other than in respect of fees payable to legal, financial and
      other advisors in the ordinary course of business or in respect of the
      Arrangement; (G) authorize, recommend or propose any release or
      relinquishment of any material contract right; (H) waive, abandon,
      release, grant or transfer any material assets or rights of value or
      modify or change in any material respect any existing material license,
      lease, contract or other material document; (I) enter into or terminate
      any hedges, swaps or other financial instruments or like transactions,
      other than the termination of certain existing hedges as contemplated in
      the Lender Consent Letter or a restructuring of such hedges with the
      consent of Linear; or (J) authorize or propose any of the foregoing, or
      enter into or modify any contract, agreement, commitment or arrangement to
      do any of the foregoing;

            

    

     

    
      
         

      

      
        - 49
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)

            	
              make
      any payment to any employee, officer or director outside of its ordinary
      and usual compensation for services provided, except to the extent that
      any such entitlement to payment to a former employee or officer has
      accrued prior to the date hereof and has been disclosed in writing to, and
      consented to by, Linear;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              (A)
      grant any officer, director or employee an increase in compensation in any
      form; (B) grant any general salary increase; (C) take any action with
      respect to the amendment or grant of any severance or termination pay
      policies or arrangement for any directors, officers or employees; (D)
      amend any stock option plan or trust unit incentive plan or the terms of
      any outstanding options or rights thereunder; nor (E) advance any loan to
      any officer, director or any other party not at arm's length, other than
      as may be agreed to by Linear and
Apollo;

            

    

     

    
      	
               
      

            	
              (v)

            	
              adopt
      or amend or make any contribution to any bonus, employee benefit plan,
      profit sharing, share or deferred compensation, insurance, incentive
      compensation, other compensation or other similar plan, agreement, share
      or incentive or purchase plan, fund or arrangement for the benefit of
      employees, except as is necessary to comply with the law or with respect
      to existing provisions of any such plans, programs, arrangement or
      agreements;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              take
      any action, refrain from taking any action, permit any action to be taken
      or not taken, inconsistent with this Agreement, which might directly or
      indirectly interfere or affect the consummation of the Arrangement or that
      could reasonably be expected to render, any representation or warranty
      made by Apollo in this Agreement untrue or inaccurate in any material
      respect at any time prior to the Effective Time if then made, or which
      would or could have a Material Adverse Effect on
  Apollo;

            

    

     

    
      
        
        

      

      
        - 50
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (vii)

            	
              other
      than pursuant to obligations or rights under existing contracts,
      agreements and commitments (to the extent such rights have been exercised
      or initiated by other persons), sell, lease or otherwise dispose of any
      property or assets or enter into any agreement or commitment in respect of
      any of the foregoing;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              except
      as required by U.S. GAAP, any other generally accepted accounting
      principle to which any Apollo Subsidiary may be subject or any applicable
      Law, make any changes to the existing accounting practices of Apollo or
      make any material tax election inconsistent with past practice;
      and

            

    

     

    
      	
               
      

            	
              (ix)

            	
              permit
      or cause any of the Apollo Subsidiaries to effect any of the
      foregoing;

            

    

     

    
      	
              (k)

            	
              without
      the prior written consent of Linear and other than as contemplated in
      Section 2.5, Apollo shall not, and shall cause the Apollo Subsidiaries not
      to, enter into or modify any employment, consulting, severance, collective
      bargaining or similar agreement, policy or arrangement with, or grant any
      bonus, salary increase, option to purchase shares, pension or supplemental
      pension benefit, profit sharing, retirement allowance, deferred
      compensation, incentive compensation, severance, change of control or
      termination pay to, or make any loan to, any officer, director, employee
      or consultant of Apollo or any of the Apollo
  Subsidiaries;

            

    

     

    
      	
              (l)

            	
              Apollo
      shall promptly notify Linear in writing of (A) any significant development
      or material change relating to Apollo’s business, operations, assets or
      prospects promptly after becoming aware of any such development or change;
      or (B) any event or state of facts of which the occurrence or failure
      would, or would reasonably be likely to: (i) cause any of the
      representations or warranties of Apollo or Apollo Subco contained in this
      Agreement to be untrue or inaccurate in any material respect on the date
      of this Agreement or at the Effective Date (provided that this subsection
      4.2(k) shall not apply in the case of an event or state of facts resulting
      from actions or omissions of Apollo or Apollo Subco which are permitted or
      required by this Agreement); or (ii) result in the failure to comply with
      or satisfy any covenant, condition or agreement to be complied with or
      satisfied by Apollo or Apollo Subco prior to the Effective
      Date.  Each of Apollo and Apollo Subco shall use commercially
      reasonable best efforts to confer with and obtain Linear’s approval (not
      to be unreasonably withheld or delayed), prior to taking action (other
      than in emergency situations) with respect to any operational matters
      involved in Apollo’s or Apollo Subco’s business which may constitute a
      material change for Apollo;

            

    

     

    
      
        
        

      

      
        - 51
-

        
          

        

      

      
        
        

      

    

     

    
      	
              (m)

            	
              Apollo
      shall not, and shall cause the Apollo Subsidiaries not to, settle or
      compromise any claim brought by any present, former or purported holder of
      any securities of Apollo in connection with the transactions contemplated
      by this Agreement prior to the Effective Time without the prior written
      consent of Linear;

            

    

     

    
      
        	
                (n)

              	
                Apollo
      shall not, and shall cause the Apollo Subsidiaries not to, enter into,
      renew or modify in any respect any material contract, agreement, lease,
      commitment or arrangement to which Apollo or any of the Apollo
      Subsidiaries is a party or by which any of them is bound, except insofar
      as may be necessary to permit or provide for the completion of the
      Arrangement;

              

      

    

     

    
      
        	
                (o)

              	
                Apollo
      and Apollo Subco shall use all commercially reasonable best efforts to
      satisfy, or cause to be satisfied, all of the conditions precedent to
      their obligations to the extent the same is within their control and to
      take, or cause to be taken, all other actions and to do, or cause to be
      done, all other things necessary, proper or advisable under all applicable
      Laws to complete the transactions contemplated by this Agreement,
      including using their commercially reasonable best efforts
    to:

              

      

    

     

    
      	
               
      

            	
              (i)

            	
              obtain
      the approval of the Apollo Shareholders for the Arrangement in accordance
      with the provisions of the YBCA, the rules and policies of the TSX and
      AMEX and any other applicable regulatory
  authority;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              obtain
      all consents, approvals and authorizations as are required to be obtained
      by Apollo or any of the Apollo Subsidiaries under any applicable Law or
      from any Governmental Authority which would, if not obtained, materially
      impede the completion of the transactions contemplated hereby or have a
      Material Adverse Effect on Apollo;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              effect
      all necessary registrations, filings and submissions of information
      requested by Governmental Authorities required to be effected by them in
      connection with the transactions contemplated by this Agreement and
      participate, and appear in any proceedings of, any party hereto before any
      Governmental Authority;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              oppose,
      lift or rescind any injunction or restraining order or other order or
      action challenging or affecting this Agreement, the transactions
      contemplated hereby or seeking to stop, or otherwise adversely affecting
      the ability of the parties hereto to consummate, the transactions
      contemplated hereby;

            

    

     

    
      	
               
      

            	
              (v)

            	
              fulfill
      all conditions and satisfy all provisions of this Agreement and the Plan
      of Arrangement required to be fulfilled or satisfied by them;
      and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              cooperate
      with Linear in connection with the performance by Linear of its
      obligations hereunder, provided however that the foregoing shall not be
      construed to obligate Apollo to pay or cause to be paid any monies to
      cause such performance to occur;

            

    

     

    
      
        
        

      

      
        - 52
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (p)

              	
                Apollo
      and Apollo Subco shall make, or cooperate as necessary in the making of,
      all necessary filings and applications under all applicable Laws required
      in connection with the transactions contemplated hereby and take all
      reasonable action necessary to be in compliance with such
      Laws;

              

      

    

     

    
      
        	
                (q)

              	
                Apollo
      and Apollo Subco shall use commercially reasonable best efforts to conduct
      their affairs and to cause the Apollo Subsidiaries to conduct their
      affairs so that all of the representations and warranties of Apollo and
      Apollo Subco contained herein shall be true and correct on and as of the
      Effective Date as if made on and as of such
  date;

              

      

    

     

    
      
        	
                (r)

              	
                Apollo
      shall continue to make available and cause to be made available to Linear
      and the agents and advisors thereto all documents, agreements, corporate
      records and minute books as may be necessary to enable Linear to effect a
      thorough examination of Apollo and the Apollo Subsidiaries and the
      business, properties and financial status thereof and shall cooperate with
      Linear in securing access for Linear to any documents, agreements,
      corporate records or minute books not in the possession or under the
      control of Apollo. Subject to applicable Laws, upon reasonable notice,
      Apollo shall, and shall cause the Apollo Subsidiaries to, afford officers,
      employees, counsel, accountants and other authorized representatives and
      advisors of Linear reasonable access, during normal business hours from
      the date hereof until the earlier of the Effective Time or the termination
      of this Agreement, to the properties, books, contracts and records as well
      as to the management personnel of Apollo and the Apollo Subsidiaries, and,
      during such period, Apollo shall, and shall cause the Apollo Subsidiaries
      to, furnish promptly to Linear all information concerning the business,
      properties and personnel of Apollo and the Apollo Subsidiaries as Linear
      may reasonably request;

              

      

    

     

    
      
        	
                (s)

              	
                Apollo
      shall deliver title opinions with respect to each of the Apollo Material
      Properties;

              

      

    

     

    
      
        	
                (t)

              	
                immediately
      following the Effective Time, Apollo shall file articles of amendment with
      the Registrar under the YBCA to change the name of Apollo to a name to be
      mutually agreed to by Apollo and Linear;
and

              

      

    

     

    
      
        	
                (u)

              	
                Apollo
      and Apollo Subco shall execute and deliver, or cause to be executed and
      delivered at the closing of the transactions contemplated hereby such
      customary agreements, certificates, opinions, resolutions and other
      closing documents as may be required by Linear, all in form satisfactory
      to Linear, acting reasonably.

              

      

    

     

    
      
        
        

      

      
        - 53
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Section 4.3

              	
                Linear
      Options

              

      

    

     

    
      	
              (a)

            	
              In
      accordance with the terms of the Plan of Arrangement, each Linear Option
      outstanding immediately prior to the Effective Time shall be exchanged for
      an Apollo Replacement Option issued under the Apollo Stock Option Plan
      which shall be exercisable to acquire, on the terms and conditions set
      forth in the Apollo Stock Option Plan, provided that the rights of the
      holders under the Apollo Replacement Options shall not (as mutually agreed
      to by Apollo and Linear, each acting reasonably) materially adversely
      differ from the rights of the holders of such Linear Options outstanding
      immediately prior to the Effective Time (and provided further that the
      current employees of Linear holding Linear Options whose employment is
      terminated in connection with the Arrangement shall have their Linear
      Options exchanged for Apollo Replacement Options which shall expire on the
      earlier of: (i) the current expiry date of the corresponding Linear
      Options; and (ii) the first anniversary of the date of completion of the
      Arrangement), the number of Apollo Shares (rounded to the nearest whole
      number) equal to the product of: (A) the number of Linear Shares subject
      to such Linear Option immediately prior to the Effective Time and (B)
      5.4742. The exercise price per Apollo Share subject to any such Apollo
      Replacement Option shall be an amount (rounded to the nearest cent) equal
      to the quotient of: (A) the exercise price per Linear Share subject to
      such Linear Option immediately prior to the Effective Time divided by (B)
      5.4742.  The obligations of Linear under the Linear Options as
      so exchanged shall be assumed by
Apollo.

            

    

     

    
      	
              (b)

            	
              Apollo
      shall take all corporate action necessary to reserve for issuance a
      sufficient number of Apollo Shares for delivery upon the exercise of the
      Apollo Replacement Options including, without limitation, seeking and
      obtaining the approval of the Apollo Shareholders at the Apollo Meeting in
      respect of any amendments to the Apollo Stock Option Plan necessary in
      order for Apollo to comply with its obligations under the Apollo
      Replacement Options.

            

    

     

    
      
        	
                Section 4.4

              	
                Linear
      Warrants

              

      

    

     

    In accordance with the terms of the
Plan of Arrangement, each Linear Warrant outstanding immediately prior to the
Effective Time shall be exchanged for an Apollo Replacement Warrant which shall
be exercisable to acquire, on the same terms and conditions as were applicable
to such Linear Warrant immediately prior to the Effective Time, the number of
Apollo Shares (rounded to the nearest whole number) equal to the product of: (A)
the number of Linear Shares subject to such Linear Warrant immediately prior to
the Effective Time; and (B) 5.4742.  The exercise price per Apollo
Share subject to any such Apollo Replacement Warrants shall be an amount
(rounded to the nearest cent) equal to the quotient of: (A) the exercise price
per Linear Share subject to the such Linear Warrant immediately prior to the
Effective Time divided by (B) 5.4742.  The obligations of Linear under
the Linear Warrants as so exchanged shall be assumed by Apollo and Apollo agrees
to use commercially reasonable best efforts to arrange for the Apollo
Replacement Warrants issued upon exchange of the Linear Listed Warrants to be
listed on the TSX and to maintain such listing until 5:00 p.m. (Halifax time) on
November 19, 2014.

     

    
      
        
        

      

      
        - 54
-

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Section
      4.5

                	
                  Apollo
      Options

                

        

      

    

     

    Subject
to the approval of the TSX and, if applicable, AMEX, immediately prior to the
Effective Date:

     

    
      	
              (a)

            	
              the
      terms of the Apollo Options held by the Resigning Directors shall be
      amended to provide that such Apollo Options shall expire on the earlier
      of: (i) the current expiry date of such Apollo Options; and (ii) the first
      anniversary of the Effective Date regardless of whether such Resigning
      Directors are “eligible persons” under the terms of the Apollo Stock
      Option Plan or applicable TSX rules;
and

            

    

     

    
      	
              (b)

            	
              an
      aggregate of 2,231,000 Apollo Options previously granted to R. David
      Russell and outstanding on the date hereof will remain in effect for a
      period of one year following the Effective
Date.

            

    

     

    
      
        
          	
                  Section
      4.6

                	
                  Indemnification
      and Insurance

                

        

      

    

     

    
      
        	
                (a)

              	
                Apollo
      hereby covenants and agrees that all rights to indemnification or
      exculpation in favour of the current and former directors and officers of
      Linear and the Linear Subsidiaries provided in the articles or by-laws of
      Linear or any Linear Subsidiary, or in any indemnity agreements entered
      into between Linear and such directors and officers shall survive the
      completion of the Arrangement and shall be binding upon Apollo and
      continue in full force and effect and Apollo undertakes to ensure that
      this covenant shall remain binding upon its successors and
      assigns.

              

      

    

     

    
      
        	
                (b)

              	
                Apollo
      hereby covenants that prior to the Effective Date, Apollo shall purchase
      and maintain director and officer liability “run-off” insurance for the
      benefit of the former directors and officers of Linear and Apollo for a
      period of not less than six (6) years following the Effective Date with
      coverage of not less than $10,000,000 with respect to claims arising from
      facts or events that occurred on or before the Effective Date, including
      with respect to the Arrangement.  Such insurance shall be at all
      times no less favourable than any insurance coverage Apollo purchases and
      maintains for the benefit of its then current directors and officers from
      time to time and Apollo covenants and agrees to maintain such insurance in
      full force and effect and not to take any action to diminish the scope and
      extent of such insurance coverage for and throughout such
      period.  Apollo undertakes to ensure that this covenant shall
      remain binding upon its successors and
assigns.

              

      

    

     

    
      
        	
                (c)

              	
                Linear
      shall act as agent and trustee of the benefits of the foregoing
      subsections 4.6(a) and 4.6(b) for its directors and officers and those of
      the Linear Subsidiaries for the purpose of this Section
    4.6.

              

      

    

     

    
      
        	
                (d)

              	
                This
      Section 4.6 shall survive the execution and delivery of this Agreement and
      the completion of the Arrangement and shall be enforceable against Apollo
      by the persons described in subsections 4.6(a) and 4.6(b)
      hereof.

              

      

    

     

    
      
        
        

      

      
        - 55
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    ARTICLE 5

    CONDITIONS

     

    
      
        	
                Section 5.1

              	
                Mutual
      Conditions

              

      

    

     

    The
respective obligations of Linear, Apollo and Apollo Subco to complete the
transactions contemplated herein are subject to the fulfillment of the following
conditions at or before the Effective Time or such other time as is specified
below:

    

    
      
        	
                (a)

              	
                the
      Interim Order shall have been granted in form and substance satisfactory
      to each of the parties hereto, acting reasonably, and shall not have been
      set aside or modified in a manner unacceptable to the parties hereto,
      acting reasonably, on appeal or
otherwise;

              

      

    

     

    
      
        	
                (b)

              	
                the
      Arrangement and, if required, all other material transactions contemplated
      herein or necessary to complete the Arrangement, including the
      Continuance, with or without amendment, shall have been approved at the
      Linear Meeting by the Linear Shareholders in accordance with the
      provisions of the CBCA, the Interim Order and the requirements of any
      applicable regulatory
authority;

              

      

    

     

    
      
        	
                (c)

              	
                the
      Arrangement and, if required, all other material transactions contemplated
      herein or necessary to complete the Arrangement, with or without
      amendment, shall have been approved at the Apollo Meeting by the Apollo
      Shareholders in accordance with the provisions of the YBCA and the
      requirements of any applicable regulatory authority, including the rules
      and policies of the TSX and
AMEX;

              

      

    

     

    
      
        	
                (d)

              	
                the
      Final Order shall have been granted in form and substance satisfactory to
      the parties hereto, acting reasonably, and shall not have been set aside
      or modified in a manner unacceptable to such parties, acting reasonably,
      on appeal or otherwise;

              

      

    

     

    
      
        	
                (e)

              	
                the
      Articles of Arrangement shall be in form and substance satisfactory to the
      parties hereto, acting
reasonably;

              

      

    

     

    
      
        	
                (f)

              	
                there
      shall not be in force any Law, ruling, order or decree, and there shall
      not have been any action taken under any Law or by any Governmental
      Authority or other regulatory authority, that makes it illegal or
      otherwise directly or indirectly restrains, enjoins or prohibits the
      consummation of the Arrangement in accordance with the terms hereof or
      results or could reasonably be expected to result in a judgment, order,
      decree or assessment of damages, directly or indirectly, relating to the
      Arrangement which has, or could reasonably be expected to have, a Material
      Adverse Effect on Linear or
Apollo;

              

      

    

     

    
      
        	
                (g)

              	
                (i)
      the TSX shall have conditionally approved the listing thereon, and the
      AMEX shall have authorized for listing, subject to official notice of
      issuance, of the Apollo Shares to be issued in exchange for Linear Shares
      pursuant to the Arrangement and the Apollo Shares which, as a result of
      the Arrangement, are issuable upon the exercise of the Apollo Replacement
      Options and the Apollo Replacement Warrants, as of the Effective Date, or
      as soon as possible thereafter, and (ii) the TSX shall have, if required,
      accepted notice for filing of all transactions of Linear contemplated
      herein or necessary to complete the Arrangement, subject only to
      compliance with the usual requirements of the TSX and AMEX as
      applicable;

              

      

    

     

    
      
        
        

      

      
        - 56
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (h)

              	
                the
      Apollo Shares, Apollo Replacement Options and Apollo Replacement Warrants
      to be issued in the United States pursuant to the Arrangement are exempt
      from registration requirements under Section 3(a)(10) of the 1933 Act and
      the Apollo Shares, Apollo Replacement Options and Apollo Replacement
      Warrants to be distributed in the United States pursuant to the
      Arrangement are not subject to resale restrictions in the United States
      under the 1933 Act, (other than as may be prescribed by Rule 144 and Rule
      145 under the 1933 Act);

              

      

    

     

    
      
        	
                (i)

              	
                the
      registration statement of Apollo as filed with the United States
      Securities and Exchange Commission regarding the issuance of Apollo Shares
      upon exercise of the Apollo Replacement Warrants and Apollo Replacement
      Options shall have been declared effective by the SEC or the Shelf
      Registration Statement shall be effective and the Shelf Registration
      Statement Supplement shall have been filed with the SEC pursuant to Rule
      424 of the 1933 Act; and

              

      

    

     

    
      
        	
                (j)

              	
                this
      Agreement shall not have been terminated pursuant to Section 7.3
      hereof.

              

      

    

     

    The
foregoing conditions are for the mutual benefit of the parties hereto and may be
waived by mutual consent of Apollo and Linear in writing at any time. If any of
such conditions shall not be complied with or waived as aforesaid on or before
the Completion Deadline or, if earlier, the date required for the performance
thereof, then, subject to Section 5.4 hereof, any party hereto may terminate
this Agreement in accordance with Section 7.3 in circumstances where the failure
to satisfy any such condition is not the result, directly or indirectly, of a
breach of this Agreement by such rescinding party hereto.

     

    
      
        	
                Section 5.2

              	
                Linear
      Conditions

              

      

    

     

    The
obligation of Linear to complete the transactions contemplated herein is subject
to the fulfillment of the following additional conditions at or before the
Effective Date or such other time as is specified below:

     

    
      
        	
                (a)

              	
                the
      representations and warranties made by Apollo and Apollo Subco in this
      Agreement shall be true and correct in all material respects as of the
      Effective Date as if made on and as of such date (except (i) to the extent
      such representations and warranties speak as of an earlier date; (ii)
      except as affected by transactions contemplated or permitted by this
      Agreement; or (iii) as affected by the occurrence of one or more Apollo
      Exclusions (as hereinafter defined)), and each of Apollo and Apollo Subco
      shall have provided to Linear a certificate of two senior officers
      certifying such accuracy on the Effective
Date;

              

      

    

     

    
      
        	
                (b)

              	
                Apollo
      and Apollo Subco shall have complied in all material respects with its
      covenants and other obligations herein and each of Apollo and Apollo Subco
      shall have provided to Linear a certificate of two senior officers
      certifying compliance with such covenants on the Effective
      Date;

              

      

    

     

    
      
        
        

      

      
        - 57
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (c)

              	
                no
      Material Adverse Change shall have occurred in respect of Apollo and the
      Apollo Subsidiaries, taken as a whole, from and after the date hereof and
      prior to the Effective Date, and no Material Adverse Change in respect of
      Apollo and the Apollo Subsidiaries, taken as a whole, shall have occurred
      prior to the date hereof or shall occur from and after the date hereof and
      prior to the Effective Date from that reflected in the audited
      consolidated financial statements of Apollo as at and for the fiscal year
      ending December 31, 2009 (other than a Material Adverse Change resulting
      from: (i) conditions affecting the gold industry generally in
      jurisdictions in which they carry on business, including changes in prices
      or taxes; (ii) general or economic, financial, currency, exchange,
      securities or commodities market conditions; or (iii) any matter permitted
      by this Agreement, or consented to by Linear including, without
      limitation, the public announcement of the Arrangement (collectively, the
      “Apollo
      Exclusions”));

              

      

    

     

    
      
        	
                (d)

              	
                no
      act, action, suit, proceeding, objection or opposition shall have been
      threatened or taken before or by any Governmental Authority by any elected
      or appointed public official or private person in Canada or elsewhere,
      whether or not having the force of law and no Law shall have been
      proposed, enacted, promulgated, amended or applied, in either case has had
      or, if the Arrangement was consummated, would result in a Material Adverse
      Change in respect of Apollo or would have a material adverse effect on the
      ability of the parties to complete the
  Arrangement;

              

      

    

     

    
      
        	
                (e)

              	
                (i)
      all consents, waivers, permits, exemptions, orders and approvals of, and
      any registrations and filings with, any Governmental Authority (including,
      without limitation, under the Competition Act
      (Canada) and those of the TSX, the AMEX or other Securities Authorities),
      and all applicable statutory or regulatory waiting periods shall have
      expired or been terminated and the expiry of any waiting periods, in
      connection with, or required to permit, the completion of the Arrangement,
      and (ii) all third person and other consents, waivers, permits,
      exemptions, orders, approvals, agreements and amendments and modifications
      to agreements, indentures or arrangements, the failure of which to obtain
      or the non-expiry of which would, or could reasonably be expected to have,
      a Material Adverse Effect on Apollo or Apollo Subco or materially impede
      the completion of the Arrangement, shall have been obtained or received on
      terms that are reasonably satisfactory to
  Linear;

              

      

    

     

    
      
        	
                (f)

              	
                all
      directors and officers of Apollo shall have entered into an Apollo Support
      Agreement (in form and substance satisfactory to Linear) with Linear and
      none of such persons shall have breached, in any material respect, any of
      the representations, warranties and covenants
  thereof;

              

      

    

     

    
      
        	
                (g)

              	
                the
      Lender Consent Letter, the Lender Support Agreements and the Lender
      Lock-Up Agreements shall be in full force and effect and, other than as
      otherwise may be agreed to by Linear, unamended as of the Effective
      Date;

              

      

    

     

    
      
        
        

      

      
        - 58
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (h)

              	
                the
      directors of each of Apollo and Apollo Subco shall have adopted all
      necessary resolutions and all other necessary corporate action shall have
      been taken by each of Apollo and Apollo Subco to permit the consummation
      of the Arrangement;

              

      

    

     

    
      
        	
                (i)

              	
                the
      New Board shall be constituted as set out in Section
  2.3;

              

      

    

     

    
      
        	
                (j)

              	
                the
      directors of Apollo shall not have withdrawn or modified in a manner
      adverse to Linear their approval or recommendation to Apollo Shareholders
      of the transaction contemplated
hereby;

              

      

    

     

    
      
        	
                (k)

              	
                R.
      David Russell shall have tendered his resignation as President and Chief
      Executive Officer of Apollo (or, alternatively, R. David Russell
      shall  have been terminated as President and Chief Executive
      Officer of Apollo) and all amounts owing to R. David Russell pursuant to
      his employment agreement, to a maximum of US$1,700,000, shall have been
      paid (or arrangements satisfactory to Linear shall have been made to pay
      such amounts following the Effective Date) to him, and all steps, actions
      and proceedings necessary to appoint Wade Dawe as President and Chief
      Executive Officer of Apollo shall have been taken;
  and

              

      

    

     

    
      
        	
                (l)

              	
                Apollo
      shall have provided to Linear evidence of the director and liability
      insurance required pursuant to subsection
  4.6(b).

              

      

    

     

    The
foregoing conditions are for the benefit of Linear and may be waived, in whole
or in part, by Linear in writing at any time. If any of such conditions shall
not be complied with or waived by Linear on or before the Completion Deadline
or, if earlier, the date required for the performance thereof, then, subject to
section 5.4 hereof, Linear may terminate this Agreement in accordance with
Section 7.3 in circumstances where the failure to satisfy any such condition is
not the result, directly or indirectly, of a breach of this Agreement by
Linear.

     

    
      
        	
                Section 5.3

              	
                Apollo
      and Apollo Subco Conditions

              

      

    

     

    The
obligation of Apollo and Apollo Subco to complete the transactions contemplated
herein is subject to the fulfillment of the following additional conditions at
or before the Effective Date or such other time as is specified
below:

     

    
      
        	
                (a)

              	
                the
      representations and warranties made by Linear in this Agreement shall be
      true and correct in all material respects as of the Effective Date as if
      made on and as of such date (except (i) to the extent such representations
      and warranties speak as of an earlier date; (ii) except as affected by
      transactions contemplated or permitted by this Agreement; or (iii) as
      affected by the occurrence of one or more Linear Exclusions (as
      hereinafter defined)), and Linear shall have provided to Apollo a
      certificate of two senior officers certifying such accuracy on the
      Effective Date;

              

      

    

     

    
      
        	
                (b)

              	
                Linear
      shall have complied in all material respects with its covenants and other
      obligations herein and Linear shall have provided to Apollo a certificate
      of two senior officers certifying compliance with such covenants on the
      Effective Date;

              

      

    

     

    
      
        
        

      

      
        - 59
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (c)

              	
                no
      Material Adverse Change shall have occurred in respect of Linear and the
      Linear Subsidiaries, taken as a whole, from and after the date hereof and
      prior to the Effective Date, and no Material Adverse Change in respect of
      Linear and the Linear Subsidiaries, taken as a whole, shall have occurred
      prior to the date hereof or shall occur from and after the date hereof and
      prior to the Effective Date from that reflected in the audited
      consolidated financial statements of Linear as at and for the fiscal year
      ending March 31, 2009 or in the unaudited financial statements of Linear
      as at and for the nine months ending December 31, 2009 (other than a
      Material Adverse Change resulting from: (i) conditions affecting the gold
      industry generally in jurisdictions in which they carry on business,
      including changes in prices or taxes; (ii) general or economic, financial,
      currency, exchange, securities or commodities market conditions; (iii) any
      matter permitted by this Agreement, or consented to by Apollo including,
      without limitation, the public announcement of the Arrangement; or (iv)
      Linear’s obligations under an agreement between Linear and Yantai Jinyan
      Mining Machinery Co. Ltd. (collectively, the “Linear
      Exclusions”);

              

      

    

     

    
      
        	
                (d)

              	
                no
      act, action, suit, proceeding, objection or opposition shall have been
      threatened or taken before or by any Governmental Authority by any elected
      or appointed public official or private person in Canada or elsewhere,
      whether or not having the force of law and no Law shall have been
      proposed, enacted, promulgated, amended or applied, in either case has had
      or, if the Arrangement was consummated, would result in a Material Adverse
      Change in respect of Linear or would have a material adverse effect on the
      ability of the parties to complete the
  Arrangement;

              

      

    

     

    
      
        	
                (e)

              	
                (i)
      all consents, waivers, permits, exemptions, orders and approvals of, and
      any registrations and filings with, any Governmental Authority (including,
      without limitation, under the Competition Act
      (Canada) and those of the TSX, the AMEX or other Securities Authorities),
      and all applicable statutory or regulatory waiting periods shall have
      expired or been terminated and the expiry of any waiting periods, in
      connection with, or required to permit, the completion of the Arrangement,
      and (ii) all third person and other consents, waivers, permits,
      exemptions, orders, approvals, agreements and amendments and modifications
      to agreements, indentures or arrangements, the failure of which to obtain
      or the non-expiry of which would, or could reasonably be expected to have,
      a Material Adverse Effect on Linear or materially impede the completion of
      the Arrangement, shall have been obtained or received on terms that are
      reasonably satisfactory to Apollo and Apollo
  Subco;

              

      

    

     

    
      
        	
                (f)

              	
                if
      Dissent Rights are granted to Linear Shareholders by the Court in
      connection with the Arrangement, holders of not more than 5% of the issued
      and outstanding Linear Shares shall have exercised rights of dissent in
      relation to the Arrangement;

              

      

    

     

    
      
        	
                (g)

              	
                the
      Lender Consent Letter, the Lender Support Agreements and the Lender
      Lock-Up Agreements shall be in full force and effect and, other than as
      otherwise may be agreed to by Apollo, unamended as of the Effective
      Date;

              

      

    

     

    
      
        
        

      

      
        - 60
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                (h)

              	
                all
      directors and officers of Linear shall have entered into a Linear Support
      Agreement (in form and substance satisfactory to Apollo) with Apollo and
      none of such persons shall have breached, in any material respect, any of
      the representations, warranties and covenants
  thereof;

              

      

    

     

    
      
        	
                (i)

              	
                the
      directors of Linear shall have adopted all necessary resolutions and all
      other necessary corporate action shall have been taken by Linear and the
      Linear Subsidiaries to permit the consummation of the Arrangement;
      and

              

      

    

     

    
      
        	
                (j)

              	
                the
      directors of Linear shall not have withdrawn or modified in a manner
      adverse to Apollo their approval or recommendation to Linear Shareholders
      of the transaction contemplated
hereby.

              

      

    

     

    The
foregoing conditions are for the benefit of Apollo and Apollo Subco and may be
waived, in whole or in part, by Apollo and Apollo Subco in writing at any time.
If any of such conditions shall not be complied with or waived by Apollo and
Apollo Subco on or before the Completion Deadline or, if earlier, the date
required for the performance thereof, then, subject to Section 5.4 hereof,
Apollo and Apollo Subco may terminate this Agreement in accordance with Section
7.3 in circumstances where the failure to satisfy any such condition is not the
result, directly or indirectly, of a breach of this Agreement by Apollo or
Apollo Subco.

     

    
      
        	
                Section 5.4

              	
                Notice
      and Cure Provisions

              

      

    

     

    Each
party hereto shall give prompt notice to the others of them of the occurrence,
or failure to occur, at any time from the date hereof until the Effective Date,
of any event or state of facts which occurrence or failure would, would be
likely to or could:

     

    
      
        	
                (a)

              	
                cause
      any of the representations or warranties of such party hereto contained
      herein to be untrue or inaccurate in any respect on the date hereof or on
      the Effective Date;

              

      

    

     

    
      
        	
                (b)

              	
                result
      in the failure to comply with or satisfy any covenant or agreement to be
      complied with or satisfied by such party hereto prior to the Effective
      Date; or

              

      

    

     

    
      
        	
                (c)

              	
                result
      in the failure to satisfy any of the conditions precedent in favour of the
      other parties hereto contained in Sections 5.1, 5.2 or 5.3 hereof, as the
      case may be.

              

      

    

     

    Subject
as herein provided, a party hereto may (a) elect not to complete the
transactions contemplated hereby by virtue of the conditions contained in
Sections 5.1, 5.2 or 5.3 hereof not being satisfied or waived or (b) exercise
any termination right arising therefrom; provided, however, that (i) promptly
and in any event prior to the filing of the Articles of Arrangement with the
Registrar, the party hereto intending to rely thereon has delivered a written
notice to the other parties hereto specifying in reasonable detail the breaches
of covenants or untruthfulness or inaccuracy of representations and warranties
or other matters which the party hereto delivering such notice is asserting as
the basis for the exercise of the termination right, as the case may be, and
(ii) if any such notice is delivered, and a party hereto is proceeding
diligently, at its own expense, to cure such matter, if such matter is
susceptible to being cured, the party hereto which has delivered such notice may
not terminate this Agreement until the earlier of the Completion Deadline and
the expiration of a period of 15 days from date of delivery of such
notice.  If such notice has been delivered prior to the date of the
Linear Meeting or the Apollo Meeting, the Linear Meeting or Apollo Meeting, as
applicable, shall be adjourned or postponed until the expiry of such
period.

     

    
      
        
        

      

      
        - 61
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Section 5.5

              	
                Merger
      of Conditions

              

      

    

     

    The
conditions set out in sections 5.1, 5.2 or 5.3 hereof shall be conclusively
deemed to have been satisfied, fulfilled or waived upon the issue of the
Certificate. Linear and Apollo each acknowledge and agree that it shall have no
right to file the Articles of Arrangement with the Registrar unless such
conditions have been satisfied, fulfilled or waived.

     

    ARTICLE 6

    NON-SOLICITATION AND BREAK
FEE

     

    
      
        	
                Section 6.1

              	
                Mutual
      Covenants Regarding
Non-Solicitation

              

      

    

     

    
      	
              (a)

            	
              Each
      of Apollo and Linear shall continue to comply with the terms and
      conditions set out in the Letter of Intent with respect to
      non-solicitation and shall continue to refrain from entering into
      discussions and negotiations (including, without limitation, through any
      advisors or other parties on its behalf) with any parties conducted before
      the date of the Letter of Intent with respect to any Acquisition Proposal
      and shall continue to use all reasonable commercial efforts to ensure that
      their respective requests for the return or destruction of all information
      provided to any third parties who have entered into a confidentiality
      agreement with such party relating to an Acquisition Proposal are
      honoured.

            

    

     

    
      	
              (b)

            	
              Neither
      Apollo nor Linear shall, directly or indirectly, do or authorize or permit
      any of its officers, directors or employees or any financial advisor,
      expert or other representative retained by it to do, any of the
      following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              solicit,
      facilitate, initiate or encourage any Acquisition
  Proposal;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              enter
      into or participate in any discussions or negotiations regarding an
      Acquisition Proposal, or furnish to any other person any information with
      respect to its businesses, properties, operations, prospects or conditions
      (financial or otherwise) in connection with an Acquisition Proposal or
      otherwise cooperate in any way with, or assist or participate in,
      facilitate or encourage any effort or attempt of any other person to do or
      seek to do any of the foregoing;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              waive,
      or otherwise forbear in the enforcement of, or enter into or participate
      in any discussions, negotiations or agreements to waive or otherwise
      forbear in respect of, any rights or other benefits under confidential
      information agreements, including, without limitation, any “standstill
      provisions” thereunder; or

            

    

     

    
      
        
        

      

      
        - 62
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (iv)

            	
              accept,
      recommend, approve or enter into an agreement to implement an Acquisition
      Proposal;

            

    

     

    provided,
however, that notwithstanding any other provision hereof, each of Apollo and
Linear and its officers, directors and advisers may:

     

    
      	
               
      

            	
              (v)

            	
              enter
      into or participate in any discussions or negotiations with a third party
      who (without any solicitation, initiation or encouragement, directly or
      indirectly, after the date of this Agreement, by such party or any of its
      officers, directors or employees or any financial advisor, expert or other
      representative retained by it) seeks to initiate such discussions or
      negotiations and, subject to execution of a confidentiality and standstill
      (provided that such confidentiality agreement shall provide for disclosure
      thereof (along with all information provided thereunder) to the other
      parties hereto as set out below) may furnish to such third party
      information concerning such party and its business, properties and assets,
      in each case if, and only to the extent
that:

            

    

     

    
      	
               
      

            	
              (A)

            	
              the
      third party has first made a written bona fide Acquisition Proposal which
      the board of directors of the party to which such Acquisition Proposal is
      made (the “Receiving
      Party”) determines in good faith: (1) that funds or other
      consideration necessary for the Acquisition Proposal are available; (2)
      (after consultation with its financial advisor) would, if consummated in
      accordance with its terms, result in a transaction financially superior
      for securityholders of the Receiving Party than the transaction
      contemplated by this Agreement; (3) after receiving the advice of outside
      counsel as reflected in minutes of the board of directors of the Receiving
      Party, that the taking of such action is necessary for the board of
      directors in discharge of its fiduciary duties under applicable Laws; (4)
      that is reasonably capable of being completed without undue delay, taking
      into account all legal, financial, regulatory and other aspects of such
      proposal and the party making such proposal; (5) which is not subject to a
      due diligence and/or access condition which would allow access to the
      books, records, personnel or properties of the Receiving Party or
      its  respective officers and employees beyond 5:00 p.m. (Toronto
      time) on the fifth Business Day after which access is afforded to the
      third party making the Acquisition Proposal (provided, however, that the
      foregoing shall not restrict the ability of such person to continue to
      review information provided to it by such party during such five Business
      Day period); (6) that the board of directors of the Receiving Party has
      determined to recommend to the shareholders of such party, and (7)
      that was not solicited in contravention of the Letter of Intent or this
      Agreement (a “Superior Proposal”);
      and

            

    

     

    
      
         

      

      
        - 63
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (B)

            	
              prior
      to furnishing such information to or entering into or participating in any
      such discussions or negotiations with such third party, the Receiving
      Party provides prompt notice to the other party to the effect that it is
      furnishing information to or entering into or participating in discussions
      or negotiations with such person or entity together with a copy of the
      confidentiality agreement referenced above and if not previously provided
      to the other party, copies of all information provided to such third party
      concurrently with the provision of such information to such third party,
      and provided further that the Receiving Party shall notify the other
      parties orally and in writing of any inquiries, offers or proposals with
      respect to a Superior Proposal from such third party (which written notice
      shall include, without limitation, a copy of any such proposal (and any
      amendments or supplements thereto), the identity of the person making it,
      if not previously provided to the other parties, copies of all information
      provided to such party and all other information reasonably requested by
      the other parties), within 24 hours of the receipt thereof, shall keep the
      other party informed of the status and details of any such inquiry, offer
      or proposal and answer the other party's questions with respect thereto;
      or

            

    

     

    
      	
               
      

            	
              (vi)

            	
              comply
      with Canadian Securities Administrators' Multilateral Instrument 62-104
      and OSC Rule 62-504 (as applicable) relating to the provision of
      directors' circulars and make appropriate disclosure with respect thereto
      to its securityholders; and

            

    

     

    
      	
               
      

            	
              (vii)

            	
              accept,
      recommend, approve or enter into an agreement to implement a Superior
      Proposal from a third party, but only if: (1) prior to such acceptance,
      recommendation, approval or implementation, the board of directors shall
      have concluded in good faith, after considering all proposals to adjust
      the terms and conditions of this Agreement in accordance with subsection
      6.1(c) and after receiving the advice of outside counsel as reflected in
      minutes of the board of directors of such party, that the taking of such
      action is necessary for the board of directors in discharge of its
      fiduciary duties under applicable Laws; (2) such party has complied with
      its obligations set forth in paragraph Section 6.1(c); and (3) such
      party terminates this Agreement in accordance with Section
      7.3.

            

    

     

    
      
         

      

      
        - 64
-

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              the
      Receiving Party shall give the other party (the “Responding Party”),
      orally and in writing, at least 72 hours advance notice of any decision by
      its board of directors to accept, recommend, approve or enter into an
      agreement to implement such Superior Proposal, which notice shall confirm
      that the board of directors of the Receiving Party has determined that
      such Acquisition Proposal constitutes a Superior Proposal, shall identify
      the third party making the Superior Proposal and shall provide a true and
      complete copy thereof and any amendments thereto. During such 72 hour
      period, the Receiving Party agrees not to accept, recommend, approve or
      enter into any agreement to implement such Superior Proposal and not to
      release the party making the Superior Proposal from any confidentiality or
      standstill provisions and shall not withdraw, redefine, modify or change
      its recommendation in respect of the Arrangement. In addition, during such
      72 hour period the Receiving Party shall, and shall cause its financial
      and legal advisors to, negotiate in good faith with the Responding Party
      and their financial and legal advisors to make such adjustments in the
      terms and conditions of this Agreement and the Arrangement as would cause
      such Acquisition Proposal to no longer constitute a Superior Proposal
      hereunder. In the event the Responding Party offers in writing to amend
      this Agreement and the Arrangement prior to the expiry of such 72 hour
      period, the board of directors of the Receiving Party shall review such
      offer and determine in good faith if the Acquisition Proposal would no
      longer constitute a Superior Proposal, in which event (i) the parties
      hereto will enter into an amendment to this Agreement to reflect such
      offer, and (ii) the board of directors of the Receiving Party shall not
      accept, recommend, approve or enter into any agreement to implement such
      Superior Proposal and shall not release the party making the Superior
      Proposal from any confidentiality or standstill provisions and shall not
      withdraw, redefine, modify or change its recommendation in respect of the
      Arrangement;

            

    

     

    
      	
              (d)

            	
              each
      party agrees that all information that may be provided to it by the other
      party with respect to any Superior Proposal pursuant to this Section 6.1
      shall be treated as if it were “Confidential Information” as that term is
      defined in the Confidentiality
Agreement;

            

    

     

    
      	
              (e)

            	
              each
      party hereby represents and warrants to the other party that, as of the
      date hereof, it is not in active discussions or negotiations with any
      person (other than the other party to this Agreement) with respect to any
      actual or potential Acquisition Proposal.  Except to the extent
      otherwise permitted pursuant to subsection 6.1(b), each party shall deny
      access to non-public information under any confidentiality agreement, and
      shall not consent in favour of, or release from or fail to enforce
      against, any person under any confidentiality agreement or standstill
      agreement or similar obligation in favour of such party;
    and

            

    

     

    
      	
              (f)

            	
              each
      party shall ensure that its officers, directors and employees and any
      investment bankers or other advisers or representatives retained by it are
      aware of the provisions of this Section 6.1. Each party shall be
      responsible for any breach of this Section 6.1 by its officers, directors,
      employees, investment bankers, advisers or
  representatives.

            

    

     

    
      
        
        

      

      
        - 65
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Section
      6.2

              	
                Break
      Fee Event

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              In
      the event that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              this
      Agreement is terminated pursuant to subsection 7.3(a)(ii) as a result of
      the Apollo Shareholders failing to approve the Arrangement at the Apollo
      Meeting as contemplated in Section
5.1(c);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              this
      Agreement is terminated by Linear pursuant to subsection 7.3(a)(v) and
      such Acquisition Proposal or Superior Proposal (as applicable) is
      consummated; or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              this
      Agreement is terminated by Apollo pursuant to subsection
      7.3(a)(vi),

            

    

     

    then
Apollo shall pay to Linear an amount equal to $4,000,000 (the “Apollo Break Fee”) in
immediately available funds (A) in the circumstances set forth in subsection
6.2(a)(i), within five (5) Business Days following the date of the Apollo
Meeting; (B) in the circumstances set forth in subsection 6.2(a)(ii), within
five (5) Business Days following the completion of such Acquisition Proposal or
Superior Proposal (as applicable); and (C) in the circumstances set forth in
subsection 6.2(a)(iii), concurrently with the delivery of Apollo’s notice of
termination of this Agreement contemplated by subsection 7.3(b).

     

    
      	
               
      

            	
              (b)

            	
              In
      the event that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              this
      Agreement is terminated pursuant to subsection 7.3(a)(ii) as a result of
      the Linear Shareholders failing to approve the Continuance or the
      Arrangement at the Linear Meeting as contemplated in Section
      5.1(b);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              this
      Agreement is terminated by Apollo pursuant to subsection 7.3(a)(iii) and
      such Acquisition Proposal or Superior Proposal (as applicable) is
      consummated; or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              this
      Agreement is terminated by Linear pursuant to subsection
      7.3(a)(iv),

            

    

     

    then
Linear shall pay to Apollo an amount equal to $4,000,000 (the “Linear Break Fee”) in
immediately available funds (A) in the circumstances set forth in subsection
6.2(b)(i), within five (5) Business Days following the date of the Apollo
Meeting; (B) in the circumstances set forth in subsection 6.2(b)(ii), within
five (5) Business Days following the completion of such Acquisition Proposal or
Superior Proposal (as applicable); and (C) in the circumstances set forth in
subsection 6.2(b)(iii), concurrently with the delivery of Linear’s notice of
termination of this Agreement contemplated by subsection
7.3(b).

    
      
         

      

      
        - 66
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              Each
      of Linear and Apollo hereby acknowledges that the amount of the Linear
      Break Fee and Apollo Break Fee set out in this Section 6.2 shall be a
      payment of liquidated damages which are a genuine pre-estimate of the
      damages which Linear or Apollo, as applicable, will suffer or incur as a
      result of the event giving rise to such damages and the resultant
      non-completion of the Arrangement and are not penalties. Each of Linear
      and Apollo hereby irrevocably waives any right it may have to raise as a
      defence that any such liquidated damages are excessive or punitive. Upon
      receipt of payment of the amount set out in this subsection, the receiving
      party shall have no further claim against the payor party in respect of
      the failure to complete the Arrangement and the payor party shall have no
      further liabilities arising hereunder other than for a breach of any
      section of this Agreement.

            

    

     

    ARTICLE 7

    AMENDMENT
AND TERMINATION

     

    
      
        	
                Section
      7.1

              	
                Amendment

              

      

    

     

    This
Agreement may, at any time and from time to time before or after the holding of
the Linear Meeting or the Apollo Meeting be amended by mutual written agreement
of the parties hereto without, subject to applicable Law, further notice to or
authorization on the part of the Linear Shareholders or the Apollo Shareholders
and any such amendment may, without limitation:

     

    
      	
               
      

            	
              (a)

            	
              change
      the time for the performance of any of the obligations or acts of any of
      the parties hereto;

            

    

     

    
      	
               
      

            	
              (b)

            	
              waive
      any inaccuracies in or modify any representation or warranty contained
      herein or in any document delivered pursuant
  hereto;

            

    

     

    
      	
               
      

            	
              (c)

            	
              waive
      compliance with or modify any of the covenants herein contained and waive
      or modify the performance of any of the obligations of any of the parties
      hereto; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              waive
      compliance with or modify any condition herein
  contained,

            

    

     

    provided,
however, that notwithstanding the foregoing, the terms of subsection 3.01(d) of
the Plan of Arrangement shall not be amended without the approval of the Linear
Shareholders given in the same manner as required for the approval of the
Arrangement or as may be ordered by the Court. This Agreement and the Plan of
Arrangement may be amended in accordance with the Final Order, but in the event
that the terms of the Final Order require any such amendment, the rights of the
parties hereto under Sections 5.1, 5.2, 5.3, 6.2 and Article Seven hereof shall
remain unaffected.

     

    
      
        
        

      

      
        - 67
-

        
          

        

      

      
        
        

      

    

    
       

      
        	
                Section
      7.2

              	
                Mutual
      Understanding Regarding
Amendments

              

      

    

    
      	
               
      

            	
              (a)

            	
              In
      addition to the transactions contemplated hereby or at the request of a
      party hereto, the parties hereto will continue from and after the date
      hereof and through and including the Effective Date to use their
      respective commercially reasonable best efforts to maximize present and
      future planning opportunities for Linear, the Linear Shareholders, the
      Linear Subsidiaries, Apollo, the Apollo Shareholders and the Apollo
      Subsidiaries as and to the extent that the same shall not prejudice any
      party hereto or the shareholders thereof. The parties hereto will ensure
      that such planning activities do not impede the progress of the
      Arrangement in any material way.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      parties hereto mutually agree that if a party hereto proposes any other
      amendment or amendments to this Agreement or to the Plan of Arrangement,
      Linear on the one hand, and Apollo and Apollo Subco on the other hand,
      will act reasonably in considering such amendment and if the other of them
      and the shareholders thereof are not prejudiced by reason of any such
      amendment they will co-operate in a reasonable fashion with the party
      hereto proposing the amendment so that such amendment can be effected
      subject to applicable Laws and the rights of the Linear Shareholders and
      the Apollo Shareholders.

            

    

     

    
      
        	
                Section
      7.3

              	
                Termination

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              This
      Agreement may be terminated at any time prior to the Effective
      Date:

            

    

     

    
      	
               
      

            	
              (i)

            	
              by
      the mutual written consent of the parties
  hereto;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              (A)
      by Apollo if any of the conditions set forth in Sections 5.1 and 5.3 are
      not satisfied, and such condition is incapable of being satisfied, by the
      Completion Deadline; or (B) by Linear if any of the conditions set forth
      in Sections 5.1 or 5.2 are not satisfied, and such condition is incapable
      of being satisfied, by the Completion
Deadline;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              by
      Apollo and Apollo Subco if there is an Acquisition Proposal in respect of
      Linear and (A) the directors of Linear shall have withdrawn or modified in
      a manner adverse to Apollo and Apollo Subco their approval or
      recommendation of the Arrangement or shall have failed, after being
      requested by Apollo in writing, to reaffirm their approval or
      recommendation of the Arrangement and the transactions contemplated herein
      as promptly as possible (but in any event within two (2) Business Days)
      after receipt of such written request from Apollo; or (B) such Acquisition
      Proposal constitutes a Superior Proposal and Linear shall have accepted,
      recommended, approved or entered into an agreement to implement such
      Superior Proposal in accordance with Section
  6.1;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              by
      Linear in the event that, prior to the Linear Meeting, Linear’s board of
      directors authorizes Linear, subject to complying with the terms of this
      Agreement, to enter into a legally binding agreement, undertaking or
      arrangement with respect to a Superior Proposal received at any time
      following the date of this Agreement and prior to the Linear Meeting;
      provided that prior to such termination, Linear pays the Linear Break Fee
      payable pursuant to subsection
6.2(b);

            

    

     

    
      
         

      

      
        - 68
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (v)

            	
              by
      Linear if there is an Acquisition Proposal in respect of Apollo and (A)
      the directors of Apollo shall have withdrawn or modified in a manner
      adverse to Linear their approval or recommendation of the Arrangement or
      shall have failed, after being requested by Linear in writing, to reaffirm
      their approval or recommendation of the Arrangement and the transactions
      contemplated herein as promptly as possible (but in any event within two
      (2) Business Days) after receipt of such written request from Linear; or
      (B) such Acquisition Proposal constitutes a Superior Proposal and Apollo
      shall have accepted, recommended, approved or entered into an agreement to
      implement such Superior Proposal in accordance with Section
      6.1;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              by
      Apollo in the event that, prior to the Apollo Meeting, Apollo’s board of
      directors authorizes Apollo, subject to complying with the terms of this
      Agreement, to enter into a legally binding agreement, undertaking or
      arrangement with respect to a Superior Proposal received at any time
      following the date of this Agreement and prior to the Apollo Meeting;
      provided that Apollo pays the Apollo Break Fee payable pursuant to
      subsection 6.2(a);

            

    

     

    
      	
               
      

            	
              (vii)

            	
              if
      any of the parties is in breach or default of any of its obligations or
      covenants set forth in Section 6.1;
or

            

    

     

    
      	
               
      

            	
              (viii)

            	
              by
      either Apollo or Linear if the Arrangement shall not have been completed
      by the Completion Deadline.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Any
      termination by a party hereto shall be made by such party delivering
      written notice thereof to the other party or parties hereto prior to the
      Effective Date and specifying therein in reasonable detail the matter or
      matters giving rise to such termination
right.

            

    

     

    
      	
               
      

            	
              (c)

            	
              In
      the event of any termination in accordance with this Section 7.3, subject
      to the obligations of Apollo and Linear contained in Article 6 hereof,
      including the payment of the Apollo Break Fee or the Linear Break Fee
      required by Section 6.2 hereof, as applicable, each party hereto shall be
      deemed to have released, remised and forever discharged the other parties
      hereto in respect of any and all claims arising in respect of this
      Agreement, except as otherwise provided
herein.

            

    

     

    
      
         

      

      
        - 69
-

        
          

        

      

      
         

      

    

     

    ARTICLE 8

    GENERAL

     

    
      
        	
                Section
      8.1

              	
                Notice

              

      

    

     

    Any
notice, consent, waiver, direction or other communication required or permitted
to be given under this Agreement by a party hereto shall be in writing and shall
be delivered by hand to the party hereto to which the notice is to be given at
the following address or sent by facsimile to the following numbers or to such
other address or facsimile number as shall be specified by a party hereto by
like notice. 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
or, if not, then the next succeeding Business Day) and if sent by facsimile be
deemed to have been given and received at the time of receipt (if a Business Day
or, if not, then the next succeeding Business Day) unless actually received
after 4:00 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 of each of the parties hereto shall be as
follows:

     

    
      	
            	
              (a)

            	
              if
      to Linear:

            

    

    

    Linear Gold Corp.

    Suite 502, 2000 Barrington
Street

    Halifax, Nova Scotia

    B3J 3K1

    

    Attention: Wade K. Dawe

    Facsimile: (902) 491-4281

    

    with a
copy (which shall not constitute notice) to:

    

    Wildeboer
Dellelce LLP

    Suite
800, 365 Bay Street

    Toronto,
Ontario

    M5H
2V1

    

    Attention:
Troy Pocaluyko

    Facsimile:
(416) 361-1790

    
      
         

      

      
        - 70
-

        
          

        

      

      
         

      

    

    
      	
            	
              (b)

            	
              if
      to Apollo or Apollo Subco:

            

    

    

    Apollo Gold Corporation

    5655 S. Yosemite Street, Suite
200

    Greenwood Village,
Colorado

    801111

    

    Attention: David Russell

    Facsimile: (720) 482-0957

    

    with a
copy (which shall not constitute notice) to:

    

    Fogler,
Rubinoff, LLP

    95
Wellington Street West, Suite 1200

    Toronto-Dominion
Centre

    Toronto,
Ontario

    M5J
2Z9

    

    Attention:
Michael Hobart

    Facsimile:
(416) 941-8852

    

    
      
        	
                Section
      8.2

              	
                Remedies

              

      

    

     

    The
parties hereto acknowledge and agree that an award of money damages may be
inadequate for any breach of this Agreement by any party hereto or its
representatives and advisors and that such breach may cause the non-breaching
party hereto irreparable harm. Accordingly, the parties hereto agree that, in
the event of any such breach or threatened breach of this Agreement by one of
the parties hereto, Linear (if either Apollo or Apollo Subco is the breaching
party) or Apollo and Apollo Subco (if Linear is the breaching party) will be
entitled, without the requirement of posting a bond or other security, to seek
equitable relief, including injunctive relief and specific performance. Subject
to any other provision hereof including, without limitation, Section 6.3 hereof,
such remedies will not be the exclusive remedies for any breach of this
Agreement but will be in addition to all other remedies available hereunder or
at law or in equity to each of the parties hereto.

     

    
      
        	
                Section
      8.3

              	
                Indemnification

              

      

    

     

    Each of
Apollo and Linear hereby agree to indemnify and hold harmless the other (and its
respective directors, officers and advisers) (collectively, the “Indemnified Persons”) from and
against all claims, damages, liabilities, actions or demands to which the
Indemnified Persons may be subject insofar as such claims, damages, liabilities,
actions or demands arise out of or are based upon the information supplied by
Apollo or Linear, as applicable, and contained in the Linear Proxy Circular or
the Apollo Proxy Circular, as applicable, having contained a
misrepresentation.

    
      
         

      

      
        - 71
-

        
          

        

      

      
         

      

    

     

    
      
        	
                Section 8.4

              	
                Privacy
      Matters

              

      

    

     

    The
parties acknowledge that they are responsible for compliance at all times with
applicable privacy laws which govern the collection, use and disclosure of
personal information acquired by or disclosed to the parties pursuant to or in
connection with this Agreement (the “Disclosed Personal
Information”). None of the parties shall use the Disclosed Personal
Information for any purposes other than those relating to the performance of
this Agreement and the completion of the Arrangement.

     

    
      
        	
                Section
      8.5

              	
                Expenses

              

      

    

     

    The
parties hereto agree that all out-of-pocket expenses incurred in connection with
this Agreement and the transactions contemplated hereby, the Linear Meeting, the
Apollo Meeting and the preparation and mailing of the Linear Proxy Circular and
the Apollo Proxy Circular, including legal and
accounting fees, printing costs, financial advisor fees and all disbursements by
advisors, shall be paid by the party hereto incurring such expense and that
nothing in this Agreement shall be construed so as to prevent the payment of
such expenses. The provisions of this section 8.5 shall survive the termination
of this Agreement.

     

    
      
        	
                Section8.6

              	
                Time
      of the Essence

              

      

    

     

    Time
shall be of the essence in this Agreement.

     

    
      
        	
                Section
      8.7

              	
                Entire
      Agreement

              

      

    

     

    This
Agreement, together with the agreements and other documents herein or therein
referred to, constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, between
the parties hereto with respect to the subject matter hereof. There are no
representations, warranties, covenants or conditions with respect to the subject
matter hereof except as contained herein.

     

    
      
        	
                Section
      8.8

              	
                Further
      Assurances

              

      

    

     

    Each
party hereto shall, from time to time, and at all times hereafter, at the
request of the other of them, but without further consideration, do, or cause to
be done, all such other acts and execute and deliver, or cause to be executed
and delivered, all such further agreements, transfers, assurances, instruments
or documents as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof including, without limitation, the Plan of
Arrangement.

     

    
      
        	
                Section
      8.9

              	
                Governing
      Law

              

      

    

     

    This
Agreement shall be governed by, and be construed in accordance with, the Laws of
the Province of Ontario and the Laws of Canada applicable therein but the
reference to such Laws shall not, by conflict of laws rules or otherwise,
require the application of the Law of any jurisdiction other than the Province
of Ontario.

    
      
         

      

      
        - 72
-

        
          

        

      

      
         

      

    

     

    
      
        	
                Section
      8.10

              	
                Execution
      in Counterparts

              

      

    

     

    This
Agreement may be executed in one or more counterparts, each of which shall
conclusively be deemed to be an original and all such counterparts collectively
shall be conclusively deemed to be one and the same. Delivery of an executed
counterpart of the signature page to this Agreement by a facsimile or electronic
(PDF) copy shall be effective as delivery of a manually executed counterpart of
this Agreement, and any party delivering an executed counterpart of the
signature page to this Agreement by facsimile or electronically to any other
party shall thereafter also promptly deliver a manually executed original
counterpart of this Agreement to such other party, but the failure to deliver
such manually executed original counterpart shall not affect the validity,
enforceability or binding effect of this Agreement.

     

    
      
        	
                Section
      8.11

              	
                Waiver

              

      

    

     

    No waiver
or release by any party hereto shall be effective unless in writing and executed
by the party granting such waiver or release and any waiver or release shall
affect only the matter, and the occurrence thereof, specifically identified and
shall not extend to any other matter or occurrence. Waivers may only be granted
upon compliance with the provisions governing amendments set forth in Section
7.1 hereof.

     

    
      
        	
                Section
      8.12

              	
                No
      Personal Liability

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              No
      director or officer of Linear shall have any personal liability whatsoever
      (other than in the case of fraud, negligence or willful misconduct) to
      Apollo or Apollo Subco under this Agreement or any other document
      delivered in connection with this Agreement or the Arrangement by or on
      behalf of Linear.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      director or officer of Apollo or Apollo Subco shall have any personal
      liability whatsoever (other than in the case of fraud, negligence or
      willful misconduct) to Linear under this Agreement or any other document
      delivered in connection with this Agreement or the Arrangement by or on
      behalf of Apollo or Apollo Subco.

            

    

     

    
      
        	
                Section
      8.13

              	
                Enurement
      and Assignment

              

      

    

     

    This
Agreement shall enure to the benefit of the parties hereto and their respective
successors and permitted assigns and shall be binding upon the parties hereto
and their respective successors. This Agreement may not be assigned by any party
hereto without the prior written consent of each of the other parties
hereto.

    
      
         

      

      
        - 73
-

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF the parties hereto have executed this Agreement as of the date
first above written.

     

    
      
        
          	 
      	
                  APOLLO
      GOLD CORPORATION

                
	 
      	 
      
	 
      	
                  Per:

                	/s/
      R. David Russell	 
      
	 
      	
                  Name:
      R. David Russell

                
	 
      	
                  Title:
      President and Chief Executive Officer

                
	 
      	 
      
	 
      	
                  1526735
      ALBERTA ULC

                
	 
      	 
      
	 
      	
                  Per:

                	/s/
      R. David Russell	 
      
	 
      	
                  Name:
      R. David Russell

                
	 
      	
                  Title:
      President

                
	 
      	 
      
	 
      	
                  LINEAR
      GOLD CORP.

                
	 
      	 
      
	 
      	
                  Per:

                	/s/
      Wade Dawe	 
      
	 
      	
                  Name:
      Wade Dawe

                
	 
      	
                  Title:  President
      and Chief Executive
Officer

                

        

      

    

     

    
      
         

      

      
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    SCHEDULE
“A”

    PLAN
OF ARRANGEMENT UNDER SECTION 193 OF THE

    BUSINESS CORPORATIONS ACT
(ALBERTA)

    

    ARTICLE
1

    DEFINITIONS
AND INTERPRETATION

    

    Section
1.01   Definitions

     

    In this
Plan of Arrangement, unless the context otherwise requires, the following words
and terms with the initial letter or letters thereof capitalized shall have the
meanings ascribed to them below:

    

    “ABCA” means the Business Corporations Act
(Alberta), including the regulations promulgated thereunder, as now enacted or
as the same may from time to time be amended, re-enacted or
replaced;

     

    “Amalgamating Corporations”
means, collectively, Apollo Subco and Linear and “Amalgamating Corporation”
means either one of them;

     

    “Amalgamation” has the meaning
ascribed thereto in section 3.01(b) hereof;

     

    “Apollo” means Apollo Gold
Corporation, a corporation existing under the YBCA;

     

    “Apollo Replacement Option” has
the meaning ascribed thereto in section 3.01(f) hereof;

     

    “Apollo Replacement Warrant”
has the meaning ascribed thereto in section 3.01(g) hereof;

     

    “Apollo Shares” means the
common shares in the capital of Apollo;

     

    “Apollo Stock Option Plan” means the stock
option plan of Apollo adopted in December 2003 and amended and restated as of
May 7, 2009;

     

    “Apollo Subco” means 1526735
Alberta ULC, a wholly-owned subsidiary of Apollo existing under the
ABCA;

     

    “Arrangement” means the
arrangement under the provisions of Section 193 of the ABCA on the terms and
subject to the conditions set forth in this Plan of Arrangement, subject to any
amendment or supplement hereto made in accordance with the provisions hereof or
at the direction of the Court in the Final Order;

     

    “Arrangement Agreement” means
the arrangement agreement dated as of March 31, 2010 among Apollo, Apollo Subco
and Linear, as amended or supplemented prior to the Effective Date, entered into
in connection with the Arrangement;

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    “Articles of Amalgamation”
means articles of amalgamation in respect of the Amalgamation by way of
Arrangement required by the ABCA to be filed with the Registrar after the Final
Order is made in order for the Amalgamation to become effective;

     

    “Business Day” means any day,
other than a Saturday, a Sunday or a statutory holiday in Toronto, Ontario or
Calgary, Alberta;

     

    “CBCA” means the Canada Business Corporations
Act;

     

    “Certificate” means the
certificate giving effect to the Amalgamation issued by the Registrar on the
Articles of Amalgamation pursuant to subsection 193(11) of the
ABCA;

     

    “Common Shares” means the
common shares which the Corporation is authorized to issue and having the
rights, privileges, restrictions and conditions set forth in Section 4.04
hereof;

     

    “Corporation” means the
corporation continuing from the Amalgamation;

     

    “Court” means the Court of
Queen’s Bench of Alberta;

     

    “Depositary” means CIBC Mellon
Trust Company, being the depositary appointed by Apollo for the purpose of,
among other things, exchanging certificates representing Linear Shares for
Apollo Shares in connection with the Arrangement;

     

    “Dissent Procedures” means the
procedures set forth in Section 191 of the ABCA required to be taken by a
registered holder of Linear Shares to exercise the right of dissent in respect
of such Linear Shares in connection with the Arrangement;

     

    “Dissenting Shareholders” means
the registered holders of Linear Shares who dissent in respect of the
Arrangement in strict compliance with the Dissent Procedures;

     

    “Effective Date” means the date
set out in the Certificate as being the effective date in respect of the
Arrangement;

     

    “Effective Time” means 5:00
p.m. (Toronto time) on the Effective Date;

     

    “Final Order” means the order
of the Court pursuant to subsection 193(9) of the ABCA approving the
Arrangement, as such order may be amended at any time prior to the Effective
Date or, if appealed, then unless such appeal is withdrawn or denied, as
affirmed;

     

    “Former Linear Shareholders”
means the holders of Linear Shares immediately prior to the Effective
Time;

     

    “Interim Order” means the
interim order of the Court, as such order may be amended, pursuant to subsection
193(4) of the ABCA made in connection with the Arrangement;

     

    “Letter of Transmittal” means
the letter of transmittal to be sent by Linear to the Former Linear Shareholders
to be used by the Former Linear Shareholders to surrender the certificates
representing their Linear Shares to receive certificates for the Apollo Shares
issued to them pursuant to the Arrangement;

    
      
         

      

      
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    “Linear” means Linear Gold
Corp., a corporation existing under the CBCA;

     

    “Linear Meeting” means the
special meeting, including any adjournments or postponements thereof, of the
holders of Linear Shares held, among other things, to consider and, if deemed
advisable, approve the Arrangement;

     

    “Linear Options” means the
outstanding options to purchase an aggregate of 2,770,000 Linear Shares issued
pursuant to the Linear Stock Option Plan;

     

    “Linear Shares” means the
common shares in the capital of Linear;

     

    “Linear Stock Option Plan”
means the amended share option plan of Linear adopted on September 29,
2006;

     

    “Linear Warrants” means the
outstanding warrants to purchase an aggregate of 8,177,764 Linear
Shares;

     

    “Plan of Arrangement” means
this plan of arrangement, as amended, modified or supplemented from time to time
in accordance herewith and with any order of the Court;

     

    “Proxy Circular” means the
management information circular, including all schedules and exhibits thereto,
prepared by Linear with the assistance of Apollo in respect of the Linear
Meeting;

     

    “Registrar” means the Registrar
of Corporations or Deputy Registrar of Corporations appointed pursuant to
Section 263 of the ABCA; and

     

     “YBCA” means the Business Corporations Act
(Yukon).

     

    In
addition, words and phrases used herein and defined in the ABCA shall have the
same meaning herein as in the ABCA unless the context otherwise
requires.

    

    Section
1.02     Interpretation Not Affected by Headings

     

    The division of this Plan of
Arrangement into articles, sections, paragraphs and subparagraphs and the
insertion of headings herein are for convenience of reference only and shall not
affect the construction or interpretation of this Plan of Arrangement. The terms
“this Plan of Arrangement”, “hereof”, “herein”, “hereto”, “hereunder” and
similar expressions refer to this Plan of Arrangement and not to any particular
article, section or other portion hereof and include any instrument
supplementary or ancillary hereto.

    
      
         

      

      
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    Section
1.03     Number, Gender and Persons

     

    In this Plan of Arrangement, unless the
context otherwise requires, words importing the singular shall include the
plural and vice versa, words importing the use of either gender shall include
both genders and neuter and the word person and words importing persons shall
include a natural person, firm, trust, partnership, association, corporation,
joint venture or government (including any governmental agency, political
subdivision or instrumentality thereof) and any other entity of any kind or
nature whatsoever.

    

    Section
1.04     Date for any Action

     

    If the date on which any action is
required to be taken hereunder is not a Business Day, such action shall be
required to be taken on the next succeeding day which is a Business
Day.

    

    Section
1.05     Statutory References

     

    Any reference in this Plan of
Arrangement to a statute includes all regulations made thereunder, all
amendments to such statute or regulation in force from time to time and any
statute or regulation that supplements or supersedes such statute or
regulation.

    

    Section
1.06     Time

     

    Time shall be of the essence in every
matter or action contemplated hereunder.

    

    Section
1.07     Currency

     

    Unless otherwise stated, all references
herein to amounts of money are expressed in lawful money of Canada.

    

    ARTICLE
2

    ARRANGEMENT
AGREEMENT

    

    Section
2.01     Arrangement Agreement

     

    This Plan of Arrangement is made
pursuant to, and is subject to the provisions of, the Arrangement
Agreement.

    

    Section
2.02     Effect of Arrangement

     

    This Plan of Arrangement will become
effective at, and be binding at and after the Effective Time on the Former
Linear Shareholders, the holders of Linear Options and the holders of Linear
Warrants.

    
      
         

      

      
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    ARTICLE
3

    ARRANGEMENT

    

    Section
3.01     Arrangement

     

    On the Effective Date, the following
shall occur and shall be deemed to occur in the following order without any
further act or formality:

    

    (a) 
         immediately prior to the
Effective Time, each Linear Share in respect of which Dissent Procedures have
been exercised shall be deemed to be transferred by the holder thereof, without
any further act or formality on its part, free and clear of all liens, claims
and encumbrances, to Apollo, with Apollo being obliged to pay therefor the
amount determined and payable in accordance with Article 5 hereof, and the name
of such holder will be removed from the register of holders of Linear Shares and
Apollo will be recorded as the registered holder of the Linear Shares so
transferred and will be deemed to be the legal and beneficial owner of such
Linear Shares;

    

    (b)          at
the Effective Time, the Amalgamating Corporations shall be amalgamated and
continue as one unlimited liability corporation under the ABCA on the terms
prescribed in this Plan of Arrangement (the “Amalgamation”)
and:

    

    
      	
               
      

            	
              (i)

            	
              the
      property of each Amalgamating Corporation continues to be the property of
      the Corporation;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Corporation continues to be liable for the obligations of each
      Amalgamating Corporation;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              an
      existing cause of action, claim or liability to prosecution is
      unaffected;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              a
      civil, criminal or administrative action or proceeding pending by or
      against an Amalgamating Corporation may be continued to be prosecuted by
      or against the Corporation;

            

    

     

    
      	
               
      

            	
              (v)

            	
              a
      conviction against, or ruling, order or judgment in favour of or against,
      an Amalgamating Corporation may be enforced by or against the Corporation;
      and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Articles of Amalgamation are deemed to be the articles of incorporation of
      the Corporation and the Certificate is deemed to be the certificate of
      incorporation of the Corporation.

            

    

     

    
      (c)           immediately
upon the Amalgamation as set forth in subsection (b), all Linear Shares held by
Apollo Subco (if any) shall be cancelled without any repayment of capital in
respect thereof;

    

    
      
         

      

      
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    (d)          immediately
upon the Amalgamation as set forth in subsection (b), all Linear Shares (other
than Linear Shares acquired by Apollo in accordance with subsection (a)) held by
Former Linear Shareholders (other than Dissenting Shareholders) shall be
exchanged with Apollo for Apollo Shares on the basis of 5.4742 Apollo Shares for
each Linear Share, subject to sections 3.03 and 5.01 hereof, and shall
thereafter be cancelled without any repayment of capital in respect
thereof.  Each Former Linear Shareholder shall cease to be a holder of
Linear Shares and the name of such holder shall be removed from the securities
register of holders of Linear Shares and each Former Linear Shareholder shall be
added to the securities register of holders of Apollo Shares showing such holder
as the registered holder of the Apollo Shares so issued;

    

    (e)           immediately
upon the Amalgamation as set forth in subsection (b), each Linear Share acquired
by Apollo in accordance with subsection (a) shall be cancelled;

    

    (f)           immediately
upon the Amalgamation as set forth in subsection (b), each Linear Option
outstanding immediately prior to the Effective Time shall be exchanged for an
option (an “Apollo Replacement
Option”) to acquire, on the terms and conditions set forth in the Apollo
Stock Option Plan, provided that the rights
of the holders under the Apollo Replacement Options shall not (as mutually
agreed to by Apollo and Linear, each acting reasonably) materially adversely
differ from the rights of the holders of such Linear Options outstanding
immediately prior to the Effective Time (and provided further that the
current employees of Linear holding Linear Options whose employment is
terminated in connection with the Arrangement shall have their Linear Options
exchanged for Apollo Replacement Options which shall expire on the earlier of:
(i) the current expiry date of the corresponding Linear Options; and (ii) the
first anniversary of the date of completion of the Arrangement), the number of
Apollo Shares (rounded to the nearest whole number) equal to the product of: (A)
the number of Linear Shares subject to such Linear Option immediately prior to
the Effective Time and (B) 5.4742.  The exercise price per Apollo
Share subject to any such Apollo Replacement Option shall be an amount (rounded
to the nearest cent) equal to the quotient of: (A) the exercise price per Linear
Share subject to such Linear Option immediately prior to the Effective Time
divided by (B) 5.4742.  The obligations of Linear under the Linear
Options as so exchanged shall be assumed by Apollo;

    

    (g)          immediately
upon the Amalgamation as set forth in subsection (b), each Linear Warrant
outstanding immediately prior to the Effective Time shall be exchanged for a
common share purchase warrant of Apollo (an “Apollo Replacement Warrant”)
exercisable to acquire, on the same terms and conditions as were applicable to
such Linear Warrant immediately prior to the Effective Time, the number of
Apollo Shares (rounded down to the nearest whole number) equal to the product
of: (A) the number of Linear Shares subject to such Linear Warrant immediately
prior to the Effective Time; and (B) 5.4742.  The exercise price per
Apollo Share subject to any such Apollo Replacement Warrants shall be an amount
(rounded up to the nearest cent) equal to the quotient of: (A) the exercise
price per Linear Share subject to the such Linear Warrant immediately prior to
the Effective Time divided by (B) 5.4742.  The obligations of Linear
under the Linear Warrants as so exchanged shall be assumed by Apollo and Apollo
agrees to use commercially reasonable best efforts to arrange for the Apollo
Replacement Warrants issued upon exchange of the Linear Listed Warrants to be
listed on the Toronto Stock Exchange and to maintain such listing until 5:00
p.m. (Halifax time) on November 19, 2014;

    
      
         

      

      
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    (h)          immediately
upon the Amalgamation as set forth in subsection (b), each Apollo Share held by
Linear shall be cancelled without the payment of any consideration;

    

    (i)           immediately
upon the Amalgamation as set forth in subsection (b), each common share of
Apollo Subco shall be exchanged for one Common Share; and

    

    (j)           immediately
upon the Amalgamation as set forth in subsection (b), the Corporation shall be a
wholly-owned subsidiary of Apollo and there shall not be any issued or
outstanding options, warrants or other rights or privileges to acquire
securities of the Corporation.

    

    Section
3.02     Post-Effective Time Procedures

    

    (a)           On
or promptly after the Effective Date, Apollo shall issue from treasury and
deliver or arrange to be delivered to the Depositary certificates representing
the Apollo Shares required to be issued to Former Linear Shareholders in
accordance with the provisions of section 3.01 hereof, which certificates shall
be held by the Depositary as agent and nominee for such Former Linear
Shareholders for distribution to such Former Linear Shareholders in accordance
with the provisions of Article 6 hereof.

    

    (b)           Subject
to the provisions of Article 6 hereof, Former Linear Shareholders shall be
entitled to receive delivery of the certificates representing the Apollo Shares
to which they are entitled pursuant to subsection 3.01(d)
hereof.  Certificates representing former Linear Shares, other than
those to which Article 5 applies, shall represent only the right to receive the
Apollo Shares to which the Former Linear Shareholder is entitled to receive
pursuant to the Arrangement.

    

    (c)           Apollo
shall, as soon as practicable following the later of the Effective Date and date
of deposit by a Former Linear Shareholder of a duly completed Letter of
Transmittal and the certificates representing such Linear shares,
either:

    

    
      	
               
      

            	
              (i)

            	
              forward
      or cause to be forwarded by first class mail (postage prepaid) to such
      Former Linear Shareholder at the address specified in the Letter of
      Transmittal; or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              if
      requested by such Former Linear Shareholder in the Letter of Transmittal,
      make available or cause to be made available at the Depository for pick-up
      by such Former Linear Shareholder,

            

    

    

    certificates
representing the number of Apollo Shares issued to such Former Linear
Shareholder under the Arrangement.

    
      
         

      

      
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              (d)

            	
              After
      the Effective Time, the certificates representing the former Linear Shares
      to which Article 5 herein applies shall represent only the right to
      receive payment which the Dissenting Shareholders are entitled to receive
      pursuant to Article 5.

            

    

    

    Section
3.03     No Fractional Apollo Shares

     

    No fractional Apollo Shares shall be
issued to Former Linear Shareholders. Any fractional number of Apollo Shares
shall be rounded up or down to the nearest whole number.

    

    ARTICLE
4

    THE
CORPORATION

    

    Section
4.01     Name

     

    The name of the Corporation shall be
Linear Gold ULC or such number company name as may be assigned to the
Corporation.

    

    Section
4.02     Registered Office

     

    The registered office of the
Corporation shall be located in the City of Calgary in the Province of Alberta
and the address of the registered office of the Corporation shall be 1600,
333-7th Avenue
S.W., Calgary Alberta, T2P 2Z1.

    

    Section
4.03     Authorized Capital

     

    The Corporation shall be authorized to
issue an unlimited number of common shares (being the Common
Shares).

    

    Section
4.04     Share Provisions

     

    The rights, privileges, restrictions
and conditions attaching to the Common Shares shall be as follows:

    

    (a)           Voting. The holders of Common
Shares shall be entitled to receive notice of, and to vote at every meeting of
the shareholders of the Corporation and shall have one (1) vote thereat for each
such Common Share so held.

    

    (b)           Dividends. The holders of
Common Shares shall be entitled to receive such dividend as the directors may
from time to time, by resolution, declare.

    

    (c)           Liquidation. In the event of
liquidation, dissolution or winding up of the Corporation or upon any
distribution of the assets of the Corporation among shareholders being made
(other than by way of dividend out of monies properly applicable to the payment
of dividends) the holders of Common Shares shall be entitled to share pro
rata.

    
      
         

      

      
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    Section
4.05     Restrictions on Transfer

     

    No transfer of shares of the
Corporation shall occur or be registered unless and until the directors have, by
a resolution, approved the transfer and the directors shall be under no
obligation to give such approval or to give any reason for withholding the
same.

     

    Section
4.06     Stated Capital

     

    At the Effective Time, the Corporation
shall add to the stated capital account maintained by the Corporation for the
Common Shares an amount equal to the aggregate of the amount of the stated
capital account maintained by Apollo Subco in respect of the common shares of
Apollo Subco immediately prior to the Effective Time and the amount of the
stated capital account maintained by Linear in respect of the Linear Shares
immediately prior to the Effective Time.

    

    Section
4.07     Directors

     

    (a)    
  The directors of the Corporation shall, until otherwise changed in
accordance with the ABCA, consist of a minimum number of one and a maximum
number of fifteen directors.

    

    (b)     
 The number of directors on the board of directors shall initially be set
at one.  The initial director of the Corporation immediately following
the Amalgamation shall be the person whose name and residential address appears
below:

    

    
      
        
          	
                  Name

                	 
      	
                  Municipality of
Residence

                
	 
      	 
      	 
      
	
                  Wade
      K. Dawe

                	
                    

                	
                  Halifax,
      Nova Scotia

                

        

      

    

    

    The
initial director shall hold office until the next annual meeting of the
shareholders of the Corporation or until his successors are elected or
appointed.

    

    Section
4.08     Business and Powers

     

    There shall be no restriction on the
business which the Corporation is authorized to carry on or on the powers which
the Corporation may exercise.

    

    Section
4.09     By-Laws

     

    The by-laws of the Corporation, until
repealed, amended or altered, shall be the by-laws of Apollo
Subco.

    
      
         

      

      
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    ARTICLE
5

    DISSENT
PROCEDURES

    

    Section
5.01     Dissent Procedures

     

    Holders of Linear Shares may exercise
Dissent Procedures with respect to Linear Shares in connection with the
Arrangement, provided that, notwithstanding the Dissent Procedures, the written
objection to the special resolution to approve the Arrangement contemplated by
Section 191 of the ABCA must be received by Linear no later than 5:00 p.m.
(Toronto time) on the Business Day immediately prior to the date of the Linear
Meeting or any date to which the Linear Meeting may be postponed or adjourned
and provided further that holders who exercise such rights of dissent and
who:

    

    (a)     
 are ultimately entitled to be paid fair value for their Linear Shares,
which fair value shall be determined as of the close of business on the day
before the Final Order becomes effective, shall be paid an amount equal to such
fair value by Apollo; and

    

    (b)    
  are ultimately not entitled, for any reason, to be paid fair value
for their Linear Shares shall be deemed to have participated in the Arrangement,
as of the Effective Time, on the same basis as a non-dissenting holder of Linear
Shares and shall be entitled to receive only the consideration contemplated in
subsection 3.01(d) hereof which such holder would have received pursuant to the
Arrangement if such holder had not exercised Dissent Procedures,

    

    but
further provided that in no case shall Apollo, Apollo Subco, Linear or any other
person be required to recognize Dissenting Shareholders as holders of Linear
Shares after the Effective Time, and the names of such Dissenting Shareholders
shall be deleted from the register of holders of Linear Shares at the Effective
Time.

    

    ARTICLE
6

    DELIVERY
OF APOLLO SHARES

    

    Section
6.01     Delivery of Apollo Shares

     

    (a)   
   Upon surrender to the Depositary, as specified in the Letter
of Transmittal, for cancellation of a certificate which immediately prior to the
Effective Time represented one or more outstanding Linear Shares which were
exchanged for Apollo Shares in accordance with section 3.01 hereof, together
with a completed Letter of Transmittal and such other documents and instruments
as would have been required to effect the transfer of the Linear Shares formerly
represented by such certificate and such additional documents and instruments as
the Depositary may reasonably require, the holder of such surrendered
certificate shall be entitled to receive in exchange therefor, and the
Depositary shall deliver to such holder following the Effective Time, a
certificate representing the Apollo Shares which such holder is entitled to
receive in accordance with section 3.02 hereof.

    
      
         

      

      
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    (b)       After
the Effective Time and until surrendered for cancellation as contemplated by
subsection 6.01(a) hereof, each certificate which immediately prior to the
Effective Time represented one or more Linear Shares shall be deemed at all
times to represent only the right to receive in exchange therefor a certificate
representing the Apollo Shares which the holder of such certificate is entitled
to receive in accordance with section 6.01(a) hereof.

    

    Section
6.02     Lost Certificates

     

    In the event that any certificate which
immediately prior to the Effective Time represented one or more outstanding
Linear Shares which were exchanged for Apollo Shares in accordance with section
3.01 hereof shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the holder claiming such certificate to be lost,
stolen or destroyed, the Depositary shall deliver in exchange for such lost,
stolen or destroyed certificate, a certificate representing the Apollo Shares
which such holder is entitled to receive in accordance with section 3.02 hereof.
When authorizing such delivery of a certificate representing the Apollo Shares
which such holder is entitled to receive in exchange for such lost, stolen or
destroyed certificate, the holder to whom a certificate representing such Apollo
Shares is to be delivered shall, as a condition precedent to the delivery of
such Apollo Shares, give a bond satisfactory to Apollo and the Depositary in
such amount as Apollo and the Depositary may direct, or otherwise indemnify
Apollo, Apollo Subco and the Depositary in a manner satisfactory to Apollo and
the Depositary, against any claim that may be made against Apollo, Apollo Subco
or the Depositary with respect to the certificate alleged to have been lost,
stolen or destroyed and shall otherwise take such actions as may be required by
the by-laws of the Corporation.

    

    Section
6.03     Distributions with Respect to Unsurrendered
Certificates

     

    No dividend or other distribution
declared or made after the Effective Time with respect to Apollo Shares with a
record date after the Effective Time shall be delivered to the holder of any
unsurrendered certificate which, immediately prior to the Effective Time,
represented outstanding Linear Shares unless and until the holder of such
certificate shall have complied with the provisions of section 6.01 or section
6.02 hereof. Subject to applicable law and to section 6.04 hereof, at the time
of such compliance, there shall, in addition to the delivery of a certificate
representing the Apollo Shares to which such holder is thereby entitled, be
delivered to such holder, without interest, the amount of the dividend or other
distribution with a record date after the Effective Time theretofore paid with
respect such Apollo Shares.

    

    Section
6.04     Withholding Rights

     

    Apollo and the Depositary shall be
entitled to deduct and withhold from all dividends or other distributions
otherwise payable to any Former Linear Shareholder such amounts as Apollo,
Apollo Subco or the Depositary is required or permitted to deduct and withhold
with respect to such payment under the Income Tax Act (Canada), the
United States Internal Revenue
Code of 1986, as amended, or any provision of any applicable federal,
provincial, state, local or foreign tax law, in each case, as amended. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes hereof as having been paid to the Former Linear Shareholder in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing
authority.

    
      
         

      

      
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    Section
6.05     Limitation and Proscription.

     

    To the extent that a Former Linear
Shareholder shall not have complied with the provisions of section 6.01 or
section 6.02 hereof on or before the date which is six years after the Effective
Date (the “final proscription date”), then the Apollo Shares which such Former
Linear Shareholder was entitled to receive shall be automatically cancelled
without any repayment of capital in respect thereof and the certificates
representing such Apollo Shares shall be delivered to Apollo by the Depositary
for cancellation and shall be cancelled by Apollo, and the interest of the
Former Linear Shareholder in such Apollo Shares shall be terminated as of such
final proscription date.

    

    ARTICLE
7

    AMENDMENTS

    

    Section
7.01     Amendments to Plan of Arrangement

     

    (a)       Apollo
and Linear reserve the right to amend, modify or supplement this Plan of
Arrangement at any time and from time to time, provided that each such
amendment, modification or supplement must be (i) set out in writing, (ii)
agreed to in writing by Apollo and Linear, (iii) filed with the Court and, if
made following the Linear Meeting, approved by the Court, and (iv) communicated
to Former Linear Shareholders if and as required by the Court.

    

    (b)       Any
amendment, modification or supplement to this Plan of Arrangement may be
proposed by Linear at any time prior to the Linear Meeting provided that Apollo
shall have consented thereto in writing, with or without any other prior notice
or communication, and, if so proposed and accepted by the persons voting at the
Linear Meeting (other than as may be required under the Interim Order), shall
become part of this Plan of Arrangement for all purposes.

    

    (c)       Any
amendment, modification or supplement to this Plan of Arrangement that is
approved by the Court following the Linear Meeting shall be effective only if
(i) it is consented to in writing by each of Apollo and Linear, and (ii) if
required by the Court, it is consented to by holders of the Linear Shares voting
in the manner directed by the Court.

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

    SCHEDULE
“B”

    LINEAR
COVERTIBLE SECURITIES

     

    
      
        
          	
                  Linear Convertible

                  Securities

                	 	
                  Number

                  Outstanding

                	 	
                  Expiry Date

                	 	
                  Exercise Price

                	 
	
                  Linear
      Warrants

                	 	 	2,322,728	 	
                  March
      19, 2011

                	 	$	1.50	 
	 
      	 	 	5,203,750	 	
                  November
      19, 2014

                	 	$	3.00	 
	 
      	 	 	651,286	 	
                  November
      19, 2011

                	 	$	2.15	 
	
                  Total

                	 	 	8,177,764	 	 
      	 	 	 	 
	 
      	 	 	 	 	 
      	 	 	 	 
	
                  Linear
      Options

                	 	 	705,000	 	
                  January
      9, 2013

                	 	$	3.00	 
	 
      	 	 	10,000	 	
                  February
      28, 2013

                	 	$	3.00	 
	 
      	 	 	50,000	 	
                  July
      20, 2013

                	 	$	3.00	 
	 
      	 	 	885,000	 	
                  February
      6, 2014

                	 	$	1.05	 
	 
      	 	 	25,000	 	
                  February
      19, 2014

                	 	$	1.05	 
	 
      	 	 	5,000	 	
                  March
      4, 2014

                	 	$	1.05	 
	 
      	 	 	405,000	 	
                  July
      29, 2014

                	 	$	1.37	 
	 
      	 	 	250,000	 	
                  August
      4, 2012

                	 	$	1.50	 
	 
      	 	 	75,000	 	
                  August
      24, 2014

                	 	$	2.18	 
	 
      	 	 	250,000	 	
                  August
      26, 2014

                	 	$	2.00	 
	 
      	 	 	30,000	 	
                  September
      9, 2014

                	 	$	2.10	 
	 
      	 	 	80,000	 	
                  October
      5, 2014

                	 	$	2.40	 
	
                  Total

                	 	 	2,770,000	 	 
      	 	 	 	 

        

      

    

    
      
         

      

      
        - 13
-Unassociated Document

    EXHIBIT 10.4

    

    Transition
Agreement

    

    This
Agreement establishes the understanding between Hancock Fabrics, Inc. (the
“Company” as herein defined) and Linda Gail Moore (the “Executive”) as of this
date, July 20, 2009, regarding the provisions of her Transition.

    

    
      	
              1.

            	
              The
      Transition Period shall run for 26 weeks beginning Monday, July 20, 2009
      and ending Friday, January 22,
2010.

            

    

    

    
      	
              2.

            	
              During
      the course of the Transition Period, the Executive will remain an employee
      of the Company unless termination occurs earlier by Resignation or
      Discharge for Cause as described herein.  As an employee, the
      Executive will retain the title held at the time of this Agreement until a
      successor is hired, and continue to be eligible for benefits and be bound
      by the policies, procedures and rules of conduct as other similarly
      situated employees except as otherwise stated in this
      Agreement.

            

    

    

    
      	
              3.

            	
              The
      Executive will make herself available to the Company to perform such
      services as may be required.  During the term of the Transition
      Period, the Executive will be provided suitable office facilities, but
      need not present herself at the offices of the Company nor at any other
      specified location, unless otherwise requested by the
      Company.  The Executive also agrees to provide to the Company,
      upon request, (i) information concerning her employment with the
      Company, and (ii) reasonable assistance relating to her previous
      employment with the Company, including but not limited to providing
      truthful testimony in any legal action pursued or defended by the Company
      in which she has information or
knowledge.

            

    

    

    
      	
              4.

            	
              Throughout
      the end of the Transition Period, the Executive shall be paid her salary
      that was in effect at the time of this Agreement, at regular payroll
      dates, unless Discharged for Cause as described herein. It is understood
      and agreed that the salary payments, regardless of duration, encompass (i)
      earned vacation, holidays, sick pay and any other form of paid time off,
      and (ii) any monetary bonus, incentive or award that the Executive had or
      would earn or be entitled to either prior to or during the Transition
      Period.

            

    

    

    
      	
              5.

            	
              Through
      the earlier of the termination of employment or the end of the Transition
      Period, the Executive and her eligible dependents shall be able to
      actively participate in the Medical, Flexible Spending Account, Dental,
      Life Insurance, Short Term Disability, Long Term Disability and Hancock
      Fabrics Retirement Savings (401(k)) Plan in accordance with the respective
      plan rules.

            

    

    

    
      	
              6.

            	
              During
      the Transition Period, the Executive will not be eligible for merit or
      other forms of increases in base salary.  The Executive shall
      not be a participant in the MOG Group Short or Long Term Incentive Plans
      for 2009 or 2010.  The provisions of the Change in Control
      Agreement dated January 1, 2009 shall not be in effect unless the terms of
      this Agreement are not honored by the successor owners following a Change
      in Control.

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	
              7.

            	
              In
      the event that the Executive begins other employment that is not
      restricted by this Agreement, prior to the end of the Transition Period,
      the Executive’s employment with the Company will terminate by
      Resignation.  However both the payments from the Company and the
      Executive’s obligations under this Agreement shall continue for the
      duration of the Transition Period.

            

    

    

    
      	
              8.

            	
              If,
      prior to the end of the Transition Period, the Executive is Discharged for
      Cause, no further payments will be paid by the Company to the Executive,
      however the Executive’s obligations under this Agreement shall
      continue.

            

    

     

    For
purposes of this Agreement, “Cause” shall mean any of the
following:

    
      	
               
      

            	
              ·

            	
              Theft,
      dishonesty, willful misconduct, breach of fiduciary duty, falsification of
      employment or Company records.

            

    

    
      	
               
      

            	
              ·

            	
              Willful
      violation of any rule, law or regulation (excluding traffic citations and
      similar offenses), or commission of an act involving moral
      turpitude.

            

    

    
      	
               
      

            	
              ·

            	
              Intentional
      failure to perform regular or assigned
duties.

            

    

    
      	
               
      

            	
              ·

            	
              Intentional
      disclosure of Company’s confidential or proprietary
      information.

            

    

    
      	
               
      

            	
              ·

            	
              Breach
      of the Company’s Insider Trading
Policy.

            

    

    
      	
               
      

            	
              ·

            	
              Any
      material breach of the Company’s Code of Business Conduct and
      Ethics.

            

    

    
      	
               
      

            	
              ·

            	
              Material
      violation of the obligations under this
  Agreement.

            

    

    

    
      	
              9.

            	
              By
      signing this Transition Agreement, the Executive agrees to release and
      forever discharge Hancock Fabrics, Inc. and its parent corporations,
      subsidiaries and affiliates, and their shareholders, officers, employees,
      agents, representatives, independent contractors, successors, assigns and
      benefit plans (the “Company”) from any and all claims, actions,
      liabilities and suits, whether known or unknown, whether existing now or
      arising, accruing, or maturing later, arising out of anything that has
      occurred up through the date this Transition Agreement is signed, or end
      of the Transition Period, whichever is later, including but not limited to
      any claims that arise from the Executive’s employment with the Company,
      but excluding any claim for vested benefits from a retirement plan in
      which she was a participant.

            

    

    

    
      	
              10.

            	
              Without
      limiting the generality of the foregoing, the Executive agrees that, by
      signing this Transition Agreement, she is releasing and waiving any and
      all claims that she ever had or may have as of the date this Transition
      Agreement is signed or the end of the Transition Period, whichever is
      later, for age discrimination under the Age Discrimination in Employment
      Act, 29 U.S.C. Sec.Sec. 621, et seq.  The
      Executive is advised to consult with an attorney before signing this
      Transition Agreement; that the consideration the Executive receives in
      exchange for signing this Transition Agreement is in addition to amounts
      to which the Executive was already entitled; and that the Executive may,
      before signing this Transition Agreement, consider this Transition
      Agreement for a period of 21 calendar days.  After such
      21-day period, the offer contained in this letter is
      withdrawn.  By signing this Agreement, the Executive indicates
      that she has used as much of the 21 calendar day period as needed or
      desired.  The Executive may revoke this Transition Agreement
      within 7 calendar days from the date of the signing of this Transition
      Agreement.  This Transition Agreement is not effective until 7
      calendar days following its
signing.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
 

    
      	
              11.

            	
              The
      Executive acknowledges that information, observations and data obtained by
      her while employed by the Company (“Confidential Information”) are the
      property of the Company.  By signing this Transition Agreement,
      the Executive agrees not to disclose to any unauthorized person, or use
      for her own purpose, any Confidential Information without the prior
      written consent of the Company, unless and to the extent that the
      aforementioned matters become generally known to and available for use by
      the public other than as a result of the Executive’s acts or
      omissions.

            

    

    

    
      	
              12.

            	
              The
      Executive acknowledges that all inventions, innovations, improvements,
      developments, methods, designs, analyses, drawings, reports and all
      similar or related information (whether patentable or not) which relate to
      the Company’s actual or anticipated business, research and development or
      existing or future products or services and which are conceived, developed
      or made by the Executive while employed by the Company (“Work Products”)
      belong to the Company.  The Executive shall promptly disclose
      such Work Products to the Company and perform all actions reasonably
      requested by the Company (whether during or after employment) to establish
      and confirm such ownership.

            

    

    

    
      	
              13.

            	
              Notwithstanding
      the obligations set forth in the above two paragraphs, after termination
      of employment with the Company, the Executive is free to use Residuals of
      the Company’s Confidential Information and Work Products for any purpose
      subject only to the obligations with respect to disclosure set forth
      herein and any copyrights of patents of the Company.  The term
      “Residuals” means information in non-tangible form that may be retained in
      the Executive’s unaided memory derived from the Company’s Confidential
      Information and Work Product to which the Executive had access during her
      employment with the Company.  The Executive may not retain or
      use the documents and any other tangible materials containing the
      Company’s Confidential Information or Work Product after the termination
      of employment with the Company.

            

    

    

    
      	
              14.

            	
              The
      Executive agrees that for the duration of the Transition Period, she will
      not directly or indirectly own any interest in, manage, control,
      participate in, work for, consult with or render any services for any
      Material Competitor of the Company.  “Material Competitor” is
      defined as a retailer of both fabrics and home décor items on a national
      or multi-state scale.  Examples of such competitors include, but
      are not limited to Jo-Ann Stores, Hobby Lobby and
      Michaels.  Nothing in this paragraph shall prohibit the
      Executive from being a passive owner of not more than 2% of the
      outstanding stock of any class of a corporation which is publicly traded
      so long as there is no active participation in the business of such
      corporation.  The Company reserves the right to enforce this
      provision in any state in which it is
  enforceable.

            

    

    

    
      	
              15.

            	
              The
      Executive agrees that for the duration of the Transition Period, she will
      not directly or indirectly through another entity 1) induce or attempt to
      induce any employee of the Company to leave the employ of the Company or
      in any way interfere with the relationship between the Company and any
      employee thereof, 2) hire any person who was an employee of the Company at
      any time of his/her employment history, or 3) induce or attempt to induce
      any customer, supplier, licensee, licenser, franchisee or other business
      relation of the Company to cease doing business with the Company or in any
      way interfere with the relationship between such supplier, licensee,
      licenser, franchisee or other business relation and the Company
      (including, without limitation, making negative statements or
      communications about the Company).

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              16.

            	
              To
      the extent that the Executive has a grant(s) of restricted stock under the
      Hancock Fabrics, Inc. Stock Incentive Plan, in which some or all of the
      shares are not vested as of the date of this Agreement, the Company will
      pay the Executive the cash equivalent of the fair market value of her
      unvested, outstanding, restricted stock grants that would have vested as
      of the end of the Transition Period.  The Company will pay this
      amount in a single lump-sum
payment.

            

    

    

    
      	
              17.

            	
              This
      Transition Agreement contains the entire understanding between the
      Executive and the Company concerning the Executive’s employment during the
      Transition Period and termination of employment and may only be amended by
      a written instrument signed by both
parties.

            

    

    

    For the
Company:

     

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                /s/ Jane Aggers

                              	 	
                                July 20, 2009

                              	 
	
                                Jane
      Aggers, President & CEO

                              	 	
                                Date

                              	 
	 
      	 	 
      	 
	 
      	 	 
      	 
	
                                For
      the Executive:

                              	 	 
      	 
	 
      	 	 
      	 
	 
      	 	 
      	 
	
                                /s/ Linda G. Moore

                              	 	
                                July 22, 2009

                              	 
	
                                Linda
      Gail Moore, SVP Merchandising

                              	 	
                                Date

                              	 

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        4

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