AGREEMENT AND PLAN OF MERGER among JJR VI ACQUISITION CORP., ATLAS ACQUISITION CORP., KINGSWAY FINANCIAL SERVICES INC. and AMERICAN INSURANCE ACQUISITION INC. December 14, 2010

This Agreement and Plan of Merger is entered into on December 14, 2010 by and between JJR VI Acquisition Corp. (“JJR VI”), an Ontario corporation, Atlas Acquisition Corp. (“Subco”), a Delaware corporation, Kingsway Financial Services Inc. (“KFS”), an Ontario corporation, and American Insurance Acquisition Inc. (the “Company”), a Delaware corporation.

WHEREAS the respective Boards of Directors of JJR VI, Subco, KFS and the Company have determined that it is advisable and in the best interests of the respective corporations and their stockholders that Subco be merged with and into the Company in accordance with the General Corporation Law of the State of Delaware (the “DGCL”) and the terms of this Agreement such that the Company will be the surviving corporation and will become a subsidiary of JJR VI (the “Merger”);

AND WHEREAS from and after the Effective Time, the parties intend that the Resulting Issuer shall be treated as a “domestic corporation” for U.S. federal (and applicable state and local) income tax purposes under Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and any corresponding provisions of state and local tax law;

AND WHEREAS JJR VI, Subco, KFS and the Company desire to make certain representations, warranties, covenants, and agreements in connection with, and establish various conditions precedent to, the Merger.

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows:

“ACIC” means American Country Insurance Company, a corporation incorporated under the laws of the State of Illinois.

“Acquisition” means the merger of Subco with and into the Company and which acquisition shall constitute the Qualifying Transaction of JJR VI within the meaning of the CPC Policy.

“Act” means the Securities Act (Ontario), the regulations thereto and all Blanket Rulings, Policy Statements, Orders, Rules and Notices of the Ontario Securities Commission, which have the force of law.

“Adverse Development Agreement” has the meaning set forth in subsection 10.1(t) hereof.

“Affiliate” has the meaning specified in the OBCA.

“Agreement” means this Agreement and Plan of Merger and any instrument supplemental or ancillary hereto; and the expressions “Article”, “section”, and “subsection” followed by a number means and refers to the specified Article, section or subsection of this Agreement.

“Ancillary Agreements” means all agreements, certificates and other instruments delivered or given pursuant to this Agreement.

“ASI” means American Service Insurance Company, Inc., a corporation incorporated under the laws of Illinois.

“Assets” means the property and assets of the Company, ACIC and/or ASI as a going concern, of every kind and description and wheresoever situated.

“Atlas Information” has the meaning set forth in Section 4.16 hereof.

“August Meeting Matters” means the following items approved by the JJR VI Shareholders at a meeting held on August 20, 2010:

“Benefit Plans” means each pension, retirement, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, leave of absence, disability, salary continuation, legal benefits, unemployment benefits, vacation pay, holiday pay, employee loan, education assistance, incentive or bonus or similar plan, policy or arrangement maintained, sponsored or contributed to by the entity in question.

“Board of Directors” means the board of directors of the Company.

“Building Expense Subsidy Agreement” has the meaning set forth in subsection 10.1(s) hereof.

“Buildings” has the meaning set forth in Section 4.16 hereof.

“Business Day” means any day, other than a Saturday, Sunday or statutory holiday in the State of Delaware or the City of Toronto.

“Cayman Articles” means the memorandum and articles of association attached hereto as Schedule 8.6.

“Certificate of Merger” has the meaning set forth in subsection 2.1(c) hereof.

“Claims” has the meaning set forth in Section 13.1 hereof.

“Closing” means the completion of the transactions contemplated herein.

“Closing Date” means (i) December 31, 2010, however if all conditions set forth in Article 10 (other than those conditions that by their nature are to be satisfied or waived at Closing) have not been satisfied or waived by that date, then “Closing Date” means the first Business Day following the date upon which all such conditions are satisfied or waived, or (ii) such other Business Day as the Parties may agree in writing.

“Code” has the meaning specified in the recitals above.

“Company” means American Insurance Acquisition Inc., a Delaware corporation, which is wholly‑owned by KAI.

“Company Common Shares” means the shares of common stock in the capital of the Company.

“Company Information” has the meaning set forth in subsection 8.5(a) hereof.

“Company Officers” means Scott Wollney and Paul Romano.

“Company Preferred Shares” means the shares of preferred stock in the capital of the Company.

“Company’s Financial Statements” means the audited financial statements of ACIC and ASI as at, and for the fiscal years ended, December 31, 2007, 2008 and 2009 and the unaudited interim financial statements of ACIC and ASI as at, and for the period ended, September 30, 2010, copies of which are annexed hereto as Schedule 1.1(a).

“Company Shareholders” means the holders of the Company Common Shares.

“Company Shares” means Company Common Shares and Company Preferred Shares.

“Company Warrant” means a common share purchase warrant of the Company, expiring three years after the closing of the Acquisition, entitling the holder thereof to one Company Common Share upon exercise of such warrant and payment of the $2.00 exercise price, subject to the terms of the warrant certificate.

“Consolidation” means the consolidation of JJR VI Common Shares on the basis of one new JJR VI Common Share for each 10 outstanding JJR VI Common Shares outstanding prior thereto.

“Constituent Corporations” means Subco and the Company.

“Continuance” means the continuance of JJR VI from the OBCA to the Companies Law of the Cayman Islands.

“Corporate or Partnership Subsidiary” means (i) an entity treated as a corporation for U.S. federal income tax purposes in which a Person directly or indirectly holds equity interests equal to fifty percent (50%) or more of the voting power or value of such entity, or (ii) a partnership or disregarded entity for U.S. federal income tax purposes in which a Person directly or indirectly holds a ten percent (10%) or greater interest in the profits or capital of such entity.

“CPC Policy” means Policy 2.4 – Capital Pool Companies of the TSXV.

“December Meeting Matters” means the following items to be considered by JJR VI Shareholders at a meeting to be held on December 17, 2010:

“DGCL” has the meaning set forth in the first recital above.

“Disclosure Letter” means the letter dated the date hereof from the Company addressed to JJR VI and KFS setting out certain disclosures contemplated in this Agreement.

“Distributors” means those licensed agents who distribute policies of insurance on behalf of the Company, ACIC or ASI.

“Effective Time” means the time the Merger becomes effective as specified in the Certificate of Merger, which is anticipated to be 11:59 p.m. on the Closing Date or such other date and time as JJR VI and the Company may agree.

“Environment” includes the air, surface water, ground water, body of water, any land, soil or underground space even if submerged under water or covered by a structure, all living organisms and the interacting natural systems that include components of air, land, water, organic and inorganic matters and living organisms and the environment or natural environment as defined in any environmental law, and “Environmental” shall have a similarly extended meaning.

“Environmental Laws” means all applicable laws relating in whole or in part to the Environment including those relating to the storage, generation, use, handling, manufacture, processing, transportation, import, export, treatment, release or disposal of any Hazardous Substance and any laws relating to asbestos or asbestos containing materials in the Environment, in the workplace or in any building.

“Equity” means Equity Financial Trust Company.

“Escrow Agreement” means the subscription receipt escrow agreement between KAI and Equity dated November 1, 2010.

“Filing Statement” means the filing statement of JJR VI in the form prescribed by the TSXV, pertaining to the Qualifying Transaction and which shall be filed on SEDAR prior to the closing of the Acquisition.

“Final Date” means January 31, 2011.

“GAAP” means generally accepted accounting principles as in effect from time‑to‑time, consistently applied.

“Governmental Entity” means any government, parliament, legislature, regulatory authority, governmental department, agency, commission, board, tribunal, crown corporation, court or other law, rule or regulation‑making entity having jurisdiction or exercising executive, legislative, judicial, regulatory or administrative powers on behalf of any federation or nation, or any province, territory, state or other subdivision thereof or any municipality, district or other subdivision thereof, including, for greater certainty and without limitation, any securities authorities and stock exchanges.

“Hazardous Substance” means any pollutant, contaminant, waste, hazardous substance, hazardous material, toxic substance, dangerous substance or dangerous good as defined, judicially interpreted or identified in any Environmental Law.

“Indemnified Party” has the meaning set forth in subsection 13.8 hereof.

“Indemnified Person” has the meaning set forth in subsection 13.4(a) hereof.

“Indemnifying Party” has the meaning set forth in subsection 13.4(a) hereof.

“Intellectual Property” means all, domestic or foreign, trade or brand names, business names, business styles, trade marks, trade mark registrations and applications, service marks, service mark registrations and applications, distinguishing guises, copyrights, copyright registrations and applications, industrial design, patents, patent registrations and applications and other patent rights (including any patents issued on such applications or rights), internet domain names, internet websites, database rights, logos, Software, Software licenses, trade secrets, proprietary information and know‑how, equipment and parts lists and descriptions, instruction manuals, inventions, inventors’ notes, research data, unpatented blue prints, drawings and designs, formulae, processes, technology and other intellectual, industrial or proprietary rights, whether registered or not, anywhere in the world together with all rights under licences, registered user agreements, technology transfer agreements and other contracts or instruments relating to any of the foregoing.

“JJR Indemnified Parties” has the meaning set forth in Section 13.1 hereof.

“JJR VI” means JJR VI Acquisition Corp.

“JJR VI Assets” means the property and assets of JJR VI as a going concern, of every kind and description and wheresoever situated.

“JJR VI Common Shares” means common shares in the capital of JJR VI.

“JJR VI Information” has the meaning set forth in subsection 7.5(a) hereof.

“JJR VI Option” means an outstanding stock option of JJR VI.

“JJR VI’s Financial Statements” means the audited financial statements of JJR VI for the period from December 21, 2009 to December 31, 2009, annexed hereto as Schedule 1.1(b).

“JJR VI Shareholders” means the holders of JJR VI Common Shares.

“KAI” means Kingsway America Inc., a Delaware corporation and a wholly‑owned subsidiary of KFS.

“KAI Notes” means the promissory notes dated November 1, 2010, of the Company evidencing debt to KAI in the aggregate amount of $7,967,005.

“KFS” means Kingsway Financial Services Inc., a corporation incorporated under the laws of Ontario.

“KFS Assigning Agreements” means the agreements listed in Section 10.1(p) of the Disclosure Letter.

“KFS Officers” means Larry Swets, Daniel Brazier, and Bill Hickey.

“KFS Surviving Agreements” means the agreements listed in Section 10.1(n) of the Disclosure Letter.

“KFS Termination” has the meaning set forth in Section 12.1 hereof.

“KFS Terminating Agreements” means the agreements listed in Section 10.1(o) of the Disclosure Letter.

“KFS Transferred Intellectual Property” means the intellectual property listed in Section 10.1(q) of the Disclosure Letter.

“Letter of Intent” means the letter agreement between JJR VI and KFS dated May 26, 2010, as amended on July 29, 2010, as of August 31, 2010, as of September 5, 2010, as of September 10, 2010, as of September 17, 2010, as of September 24, 2010, as of October 1, 2010, as of October 8, 2010, as of October 22, 2010 and as of November 5, 2010.

“Licences” has the meaning set forth in Section 4.20 hereof.

“Lien” means any mortgage, encumbrance, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), charge, title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition, which, in substance, secures payment, or performance of an obligation or restricts transfer.

“Material Adverse Effect” means, with respect to any Person, an event, matter or circumstance, the effect of which is materially adverse to the business, operations or condition (financial or otherwise) of the Person, other than any effect resulting from (i) changes in general economic conditions affecting the Person and the industry in which the Person operates, (ii) changes in applicable laws, (iii) changes in GAAP, or (iv) this Agreement, or the Ancillary Agreements, or the completion of the transactions contemplated in this Agreement and the Ancillary Agreements.

“Merger” means the merger of Subco with and into the Company pursuant to the provisions of the DGCL in the manner contemplated in and pursuant to the terms and conditions of this Agreement.

“NAIC” means National Association of Insurance Commissioners.

“Name Change” means a change of the name of JJR VI from “JJR VI Acquisition Corp.” to “Atlas Financial Holdings, Inc.” or such other name as is agreed to by the Company and JJR VI.

“Non‑Assignable Contract” means any of the KFS Assigning Agreements or Shared Agreements:

“OBCA” means the Business Corporations Act (Ontario).

“Offer” has the meaning set forth in Section 12.1 hereof

“Party” means a party to this Agreement and “Parties” means all parties to this Agreement.

“Permitted Activities” has the meaning set forth in Section 7.3 hereof.

“Permitted Party” has the meaning set forth in Section 7.3 hereof.

“Person” includes an individual, corporation, partnership, joint venture, trust, unincorporated organization, the Crown or any agency or instrumentality thereof or any other juridical entity.

“Private Placement” means the private placement of 3,983,502 Subscription Receipts undertaken by the Company on November 1, 2010 for gross proceeds of $7,967,005.

“Real Property” has the meaning set forth in Section 4.16 hereof.

“Registration Rights Agreement” has the meaning set forth in subsection 10.2(h) hereof.

“Required Consents and Approvals” means:

“Resulting Issuer” means JJR VI upon the completion of the Merger.

“Resulting Issuer Option” means a stock option of the Resulting Issuer.

“Resulting Issuer Ordinary Shares” means the ordinary voting shares in the share capital of the Resulting Issuer.

“Resulting Issuer Preferred Shares” means the preferred shares in the share capital of the Resulting Issuer.

“Resulting Issuer Restricted Voting Shares” means the restricted voting shares in the share capital of the Resulting Issuer.

“Resulting Issuer Warrant” means a common share purchase warrant of the Resulting Issuer, expiring three years after the closing of the Acquisition, entitling the holder thereof to one Resulting Issuer Ordinary Share upon exercise of such warrant and payment of the $2.00 exercise price, subject to the terms of the warrant certificate.

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

“Share Amendment” means the amendment to the proposed articles of association of JJR VI to provide for Resulting Issuer Preferred Shares and Resulting Issuer Restricted Voting Shares to be considered by the shareholders at a meeting of JJR VI Shareholders to be held on December 17, 2010.

“Shared Agreement” means each agreement listed on Section 10.1(p) of the Disclosure Letter pursuant to which KFS or an Affiliate and one of the Company, ACIC or ASI is a party and whereby such parties share the rights, interests, benefits and liabilities thereunder in accordance with the terms of each such contract.

“Software” means all computer programs in source, object and executable code form used (including all modules, routines and sub‑routines), data, databases, and all source and other preparatory materials relating to them (including user requirements), functional specifications, and programming specifications, ideas, principles, programming languages, algorithms, flow charts, logic, logic diagrams, orthographic representations, file structures, coding sheets, coding (including any relevant manuals or other documentation), computer‑generated works together with all translations, adaptations, modifications, derivations, combination and derivative works (other than so‑called shrink‑wrap software and similar computer software commonly used in business).

“Solicitation Activities” has the meaning set forth in Section 7.3 hereof.

“Statutory Statements” means the financial statements required to be filed by ACIC and ASI with the Department of Insurance in the State of Illinois for the fiscal years ended December 31, 2009, 2008 and 2007 and for the nine‑month period ended September 30, 2010.

“Stock Option Plan” means the stock option plan to be adopted by the Resulting Issuer upon completion of the Acquisition, substantially in the form approved by the JJR VI Shareholders at the meeting held on December 17, 2010.

“Subco” means Atlas Acquisition Corp., a direct, wholly‑owned subsidiary of JJR VI incorporated under the DGCL on December 6, 2010 for the sole purpose of effecting the Merger in connection with the Acquisition.

“Subco Shares” means all of the outstanding common shares in the capital of Subco.

“Subordinated Surplus Debentures” means collectively, the U.S. $8,800,000 principal amount subordinated surplus debenture issued by ASI in favour of KAI dated September 30, 2009 with a maturity date of September 30, 2039, the U.S. $4,700,000 principal amount subordinated surplus debenture issued by ACIC in favour of KAI dated September 30, 2009 with a maturity date of September 30, 2039 and the U.S. $950,000 principal amount subordinated surplus debenture issued by Southern United Fire Insurance Company in favour of KAI dated September 18, 2009 with a maturity date of September 30, 2039.

“Subscription Receipt” means a subscription receipt issued by the Company under the Private Placement at a purchase price of $2.00 per receipt, each exchangeable into one Company Common Share and one Company Warrant immediately prior to the Merger.

“Subscription Receipt Agreement” means the subscription receipt agreement between the Company, KAI and Equity dated November 1, 2010 regarding the Subscription Receipts.

“SUGAT” means Southern United General Agency of Texas, Inc.

“Surviving Corporation” has the meaning set forth in subsection 2.1(a) hereof.

“Target” has the meaning set forth in Section 12.1 hereof.

“Target Alternative Transaction” has the meaning set forth in Section 12.1 hereof.

“Target Alternative Transaction Agreement” has the meaning set forth in Section 12.1 hereof.

“Tax Benefit” has the meaning set forth in subsection 13.5(c) hereof.

“Tax Proceeding” has the meaning set forth in subsection 13.4(b) hereof.

“Third Party Claim” has the meaning set forth in Section 13.4(a) hereof.

“Transferred Employees” means the employees listed in Section 4.41 of the Disclosure Letter.

“Transition Services Agreement” means the transition services agreement to be entered into at Closing between KFS and the Company in substantially the form attached hereto as Schedule 10.1(l).

“TSXV” means the TSX Venture Exchange.

“UCC Lease Agreement” has the meaning set forth in subsection 10.1(j) hereof.

2.2    Public Announcement.

Immediately after the execution of this Agreement, JJR VI shall issue a public announcement, announcing the entering into of this Agreement, which announcement shall address all matters required by TSXV policies and shall be in form and substance acceptable to each of them, acting in a commercially reasonable manner. Subject to applicable law, no Party shall issue any news release or public statements with respect to this Agreement or the Merger without giving notice of such announcement or statement to all of the other Parties, consulting the other Parties with respect to its form and content, and obtaining the consent of the other Parties, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, the disclosing party shall have the right to make the announcement or statement without the consent of the other Parties if the disclosing party has been advised by its legal counsel that the information must be disclosed under applicable law or that changes to the proposed disclosure suggested by any other Party would make the disclosure misleading or otherwise not responsive to applicable law. As used in this Section 2.2, a public announcement or statement includes a filing with a Governmental Entity.

2.3    Merger Events.

Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time:

2.4    Convertible Securities.

Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time:

2.5    Certificates.

At the Effective Time:

2.6    Merged Corporation.

Unless otherwise determined in accordance with applicable law by the Surviving Corporation or its shareholders, the following provisions will apply:

As of the Effective Time, the initial officers of the Surviving Corporation and their titles shall be as follows:

2.7    Fractional Shares.

No fractional Resulting Issuer Ordinary Shares, Resulting Issuer Restricted Voting Shares and Resulting Issuer Preferred Shares will be issued or delivered pursuant to the Acquisition, rather each holder of a Company Share entitled to a fractional share shall be paid the fair value therefor in cash.

JJR VI hereby represents and warrants to the Company and KFS as follows and acknowledges that the Company and KFS are relying on such representations and warranties in connection with the transactions contemplated hereby:

3.1    Incorporation, Organization and Authority of JJR VI and Subco.

JJR VI is a corporation duly incorporated, organized and validly subsisting and in good standing under the laws of the Province of Ontario, and has all the requisite corporate capacity and authority to enter into this Agreement and to perform its obligations hereunder and to carry on its business and to own, lease and operate JJR VI Assets. Subco is the only subsidiary of JJR VI. Subco is a corporation duly incorporated, organized and validly subsisting and in good standing under the laws of the State of Delaware, and has all the requisite corporate capacity and authority to enter into this Agreement and to perform its obligations hereunder.

3.2    Necessary Proceedings.

All necessary and/or required corporate measures, proceedings and actions of the directors and shareholders of JJR VI and Subco have been taken to authorize and enable each of JJR VI and Subco to enter into and deliver this Agreement and to perform its obligations hereunder, other than the approval of the Company Shareholders for the December Meeting Matters.

3.3    Valid and Binding Obligation.

This Agreement has been duly executed and delivered by each of JJR VI and Subco and constitutes a legal, valid and binding obligation of each of JJR VI and Subco enforceable against each of them in accordance with its terms subject only to:

3.4    Share Capital.

The authorized capital of JJR VI consists of an unlimited number of JJR VI Common Shares of which 10,700,000 have been duly and validly issued and are outstanding as fully paid and non‑assessable shares as of the date hereof. The authorized capital of Subco consists of 3,000 common shares of par value U.S.$0.0001 of which 100 common shares have been duly and validly issued and are outstanding as fully paid and non‑assessable shares as of the date hereof. Except as contemplated by this Agreement, there is no other agreement, obligation (contractual or otherwise), right or option existing or pending pursuant to which JJR VI or Subco is or might be required to issue any shares or other securities of its capital other than the 856,000 options granted to insiders of JJR VI, the 214,000 options to be granted to a director of JJR VI prior to Closing and the 250,000 options granted to the agent of JJR VI in JJR VI’s initial public offering with each such option exercisable for one (1) JJR VI Common Share on a pre‑Consolidation basis. No holder of outstanding securities of JJR VI or Subco is entitled to any pre‑emptive or similar rights to acquire or subscribe for any securities of JJR VI or Subco, as applicable. At Closing, subject to receipt of all necessary approvals, the authorized capital of JJR VI will consist of 800,000,000 Resulting Issuer Ordinary Shares, 200,000,000 Restricted Voting Shares and 200,000,000 Preferred Shares, of which 4,553,502 Resulting Issuer Ordinary Shares, 13,804,061 Resulting Issuer Restricted Voting Shares (registered in the name of KAI) and 18,000,000 Resulting Issuer Preferred Shares (registered in the name of KAI) will be issued and outstanding as validly issued, fully paid and non‑assessable.

3.5    Title to JJR VI Assets.

JJR VI has good and marketable title to JJR VI Assets free and clear of any actual, pending or, to the knowledge or belief of JJR VI, threatened claims or Liens whatsoever, including without limitation any action, proceeding or investigation affecting title to JJR VI Assets, at law or in equity, before any court, administrative agency or other tribunal or any governmental authority, to all of JJR VI Assets and to any properties.

3.6    Reporting Issuer.

JJR VI is a reporting issuer under the Act, the Securities Act (Alberta) and the Securities Act (British Columbia) and JJR VI’s name does not appear on a list of defaulting reporting issuers maintained by the securities commissions of Alberta and Ontario. JJR VI is in compliance and up to date with all filings under applicable corporate and securities rules and regulations.

3.7    Cease Trading.

No order ceasing or suspending trading in securities of JJR VI or prohibiting the sale of securities by JJR VI or JJR VI Shareholders is currently in effect and no proceedings for this purpose have been instituted, are pending, or, to its knowledge, contemplated or threatened other than the trading halt imposed by the TSXV on May 27, 2010 in connection with the announcement of the Qualifying Transaction.

3.8    Financial Statements.

JJR VI’s Financial Statements have been prepared in accordance with Canadian GAAP and present fairly JJR VI Assets and liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of JJR VI as of the date thereof.

3.9    Business of JJR VI.

JJR VI has conducted its activities in material compliance with the CPC Policy and has not carried on any business activity which is not in compliance with the CPC Policy.

3.10    Liabilities of JJR VI.

There are no known liabilities or indebtedness (whether accrued, absolute, contingent or otherwise) of JJR VI or Subco of any kind whatsoever, and, to the best of the knowledge of JJR VI, there is no reasonable basis for assertion against JJR VI or Subco of any liabilities or indebtedness of any kind, other than:

3.11    Guarantees.

Neither JJR VI nor Subco are a party to, or bound by, any agreement of guarantee, indemnification, assumption or endorsement or any like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other Person.

3.12    Absence of Other Agreements.

Other than as set out in Schedule 3.12, JJR VI is not a party to any material contract nor is it bound by any outstanding contract or commitment which requires prior approval in connection with the Acquisition. All the material contracts, agreements, commitments, indentures and other instruments to which JJR VI is a party are in good standing and in full force and effect without amendment thereto, JJR VI is entitled to all benefits thereunder and, to the best of the knowledge of JJR VI, the other parties to such contracts, agreements, commitments, indentures and other instruments are not in default or breach of any of their obligations thereunder.

3.13    Public Disclosure.

JJR VI has made all material filings required to be made by it under applicable securities laws and stock exchange rules. None of the materials filed by, or on behalf of, JJR VI with the applicable securities regulators and the TSXV contain a misrepresentation (as defined in the Act) or omit to state a material fact as at the date of such filing, which has not been corrected. JJR VI has not filed any confidential material change reports. No adverse material information (as that terms is defined under TSXV policies) exists in relation to JJR VI which has not been publicly disclosed.

3.14    No Breach Caused by this Agreement.

Neither the execution nor delivery of this Agreement nor the fulfillment or compliance with any of the terms and conditions hereof will conflict with, or result in, nor will they with the giving of notice or the lapse of time or both result in, a breach of the terms, conditions or provisions of, or constitute a default under, the articles and by‑laws or Certificate of Incorporation or By‑Laws, of JJR VI or Subco or any indenture, mortgage, lease, agreement or instrument to which JJR VI or Subco is subject to, or will require any consent or other action by any administrative or governmental body, other than the Required Consents and Approvals. Each of JJR VI and Subco have complied with all licenses, franchises, leases, permits, approvals, agreements and applicable law to which it is a party or by which it is bound, the breach of which would adversely affect the Acquisition or the operations or condition, financial or otherwise, of JJR VI.

3.15    Litigation.

There are no claims, demands, disputes, actions, suits, proceedings or investigations pending or, to the knowledge of JJR VI, threatened against or directly or indirectly affecting JJR VI or Subco (including without limitation, restraining or preventing JJR VI from issuing Resulting Issuer Ordinary Shares, Resulting Issuer Restricted Voting Shares and Resulting Issuer Preferred Shares pursuant to the Merger), at law or in equity or before or by any federal, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign, nor is JJR VI or Subco subject to any presently effective adverse order, writ, injunction or decree of any such body.

3.16    No Brokers.

Neither JJR VI nor Subco has entered into any agreement which would entitle any Person to any valid claim against JJR VI, Subco, KFS or the Company for a broker’s commission, finder’s fee or any like payment in respect of the Merger or any other matters contemplated by this Agreement.

3.17    Approvals.

No approval of, or registration, declaration or filing by JJR VI or Subco with, any federal, provincial or local court, authority or administrative agency or Governmental Entity is necessary to authorize the execution and delivery of this Agreement, or any and all of the documents and instruments to be delivered under this Agreement, by JJR VI or Subco or the consummation by JJR VI or Subco of the transactions contemplated herein, other than those approvals set out in paragraphs (b) to (f) of the definition of Required Consents and Approvals.

3.18    Compliance with Laws.

Neither JJR VI nor Subco is in violation of any federal, provincial, municipal or other law, regulation or order of any government or governmental or regulatory authority, domestic or foreign which has had or would reasonably be expected to have a Material Adverse Effect on JJR VI or Subco.

3.19    Shareholders’ Agreements, etc.

Other than any escrow agreements required by the TSXV, there are no shareholders’ agreements, pooling agreements, voting trusts or other similar agreements with respect to the ownership or voting of any JJR VI Common Shares.

3.20    No Bankruptcy.

No proceedings have been taken, are pending or authorized by JJR VI or Subco or, to the knowledge of JJR VI, by any other person in respect of the bankruptcy, insolvency, liquidation or winding up of JJR VI or Subco.

3.21    Business Activities.

Upon the Merger, none of JJR VI, Subco or any other Corporate or Partnership Subsidiary of JJR VI or Subco will have any business activities in the Cayman Islands.

The Company represents and warrants to JJR VI as follows and acknowledges that JJR VI is relying on such representations and warranties in connection with the transactions contemplated hereby:

4.1    Incorporation, Organization and Authority of the Company.

The Company is a corporation duly incorporated, organized and validly subsisting and in good standing under the DGCL, and has all the requisite corporate capacity and authority to enter into this Agreement and to perform its obligations hereunder and to carry on its business and to own, lease and operate the Assets.

4.2    Ownership of Subsidiaries.

The only subsidiaries of the Company are ACIC, ASI and SUGAT. The Company owns all of the issued and outstanding securities of ACIC and ASI and ASI owns all of the issued and outstanding securities of SUGAT. Each of ACIC, ASI and SUGAT has been duly incorporated and organized, and is validly existing as a corporation in good standing, under the laws of its jurisdiction of incorporation. Each of ACIC, ASI and SUGAT is duly qualified to carry on its business, and is in good standing, in each jurisdiction in which the character of its properties, owned or leased, or the nature of its activities makes such qualification necessary, except where the failure to be so qualified does not constitute or would not reasonably be expected to have a Material Adverse Effect on any of the Company, ACIC or ASI. All of the outstanding capital stock of ACIC, ASI and SUGAT is held by the Company or ASI, as applicable, free and clear of any Lien or any other limitation or restriction (including any restriction on the right to vote or transfer the same).

4.3    Necessary Proceedings.

All necessary and/or required corporate measures, proceedings and actions of the directors and shareholders of the Company have been taken to authorize and enable the Company to enter into and deliver this Agreement and to perform its obligations hereunder.

4.4    Valid and Binding Obligation.

The execution and delivery of this Agreement by the Company and the consummation by it of the transactions under this Agreement have been duly authorized by the Board of Directors of the Company and its shareholders as applicable, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms subject only to:

4.5    Share Capital.

The authorized capital of the Company consists of 34,000,000 Company Common Shares and 39,000,000 Company Preferred Shares, of which 13,804,960 Company Common Shares and 18,000,000 Preferred Shares are duly and validly issued and outstanding as fully paid and non‑assessable and issued in compliance with all applicable laws. Other than the Company Common Shares and Company Warrants to be issued pursuant to the Subscription Receipts under the Private Placement and the Company Common Shares to be issued upon the conversion of the Company Preferred Shares, there is no other agreement, obligation, right or option, (contractual or otherwise), existing or pending pursuant to which the Company, ACIC or ASI is or might be required to issue, repurchase, redeem or otherwise acquire any further shares or other securities of its capital.

4.6    Cease Trading.

No order ceasing or suspending trading in securities of the Company, ACIC or ASI or prohibiting the sale of securities by the Company or the Company Shareholders is currently in effect and to the knowledge of the Company no proceedings for this purpose have been instituted, are pending, contemplated or threatened.

4.7    Title to Assets.

Each of the Company, ACIC and ASI has good and marketable title to its Assets free and clear of any actual, pending or, to the knowledge of the Company, threatened claims or Liens, whatsoever, including without limitation any action, proceeding or investigation affecting title to the Assets, at law or in equity, before any court, administrative agency or other tribunal or any governmental authority, to any of the Assets and to any properties, save and except in any case which would not reasonably be expected to have a Material Adverse Effect on any of the Company, ACIC or ASI. None of the Company, ACIC nor ASI has granted or entered into any agreement, option, understanding or commitment or any encumbrance of or disposal of the Assets or an interest therein or any right or privilege capable of becoming any such agreement or option with respect to the Assets and will not do so prior to the Effective Time.

4.8    Licences.

Except as set out in Section 4.8 of the Disclosure Letter:

4.9    Policy Liabilities and Reserves.

The actuarial and related liabilities of each of the Company, ACIC and ASI and the changes thereto shown in the Company’s Financial Statements have been valued by Towers Watson, the independent actuary of each of ACIC and ASI, as applicable, and are in accordance with all applicable regulatory requirements and, to the knowledge of the Company, accepted actuarial practice in the United States of America. To the knowledge of the Company, the amount of policy liabilities of each of ACIC and ASI makes appropriate provision for all policyholder obligations and the Company’s Financial Statements fairly present the results of each of ACIC’s and ASI’s appointed actuary’s valuation. All provisions relative to any policy issued or assumed by any of ACIC and ASI and in force have been taken into account by the appointed actuary of such company in determining the actuarial liabilities of such company. Each of ACIC and ASI has made full disclosure to its appointed actuary of all relevant information required for the preparation of the valuation of the actuarial and related liabilities of such company. There have been no changes in actuarial assumptions or methods since December 31, 2009 and no circumstances have arisen which are materially and adversely inconsistent with such actuarial assumptions and methods and changes. No Governmental Entity having jurisdiction over any the Company, ACIC or ASI is disputing the methods employed by it in establishing and valuing current policy liabilities nor is any such Governmental Entity requesting or requiring that capital, in addition to the current amount thereof, should be invested in one of the Company, ACIC and ASI or that one of the Company, ACIC and ASI increase its risk based capital. The risk based capital of each of ACIC and ASI was prepared in accordance with applicable standards and all related mechanical calculations were accurately performed. All material information and data relating to the determination of policy liabilities of each of ACIC and ASI has been provided to JJR VI.

4.10    Statutory Statements.

The Company has made the Statutory Statements available to JJR VI. The Statutory Statements fairly present, in all material respects, the statutory financial condition and statutory results of operations for each of ACIC and ASI for the period therein specified and were prepared in conformity with statutory accounting principles prescribed or permitted by any Governmental Entity having jurisdiction over ACIC or ASI applied on a consistent basis during the periods presented, except as expressly set forth within the subject Statutory Statements. Notwithstanding the foregoing, any implied or actual representation or warranty made by the Company with respect to the net deferred tax asset of ACIC and ASI as shown in the Statutory Statements is qualified as being made to the knowledge of the Company.

4.11    Investments.

4.12    Distributor Loans.

Section 4.12 of the Disclosure Letter sets forth a complete and accurate list of: (a) all loans and commitments to make loans made to Distributors by any of the Company, ACIC and ASI, including a description of outstanding principal and interest and material terms, including any overdue amounts and maturity date; and (b) all other outstanding financing agreements and arrangements between each of the Company, ACIC and ASI and all Distributors. Such loans comply with the requirements of all applicable laws relating thereto and all such loans are evidenced by appropriate written agreements and are valid and genuine and enforceable in accordance with their terms.

4.13    Regulatory Matters.

4.14    Reinsurance.

4.15    Distributors.

4.16    Real Property.

All real property owned by the Company, ACIC or ASI (the “Real Property”) is set out in Section 4.16 of the Disclosure Letter, including the legal description thereof and the name of the registered and beneficial owner thereof. The Company, ACIC or ASI has good and marketable title to the identified Real Property free and clear of all title defects and Liens. The Company has such rights of entry and exit to and from the Real Property as are reasonably necessary to carry on its business substantially in the manner in which it is currently carried on. None of the Company, ACIC or ASI has entered into any agreement to sell, transfer, encumber, or otherwise dispose of or impair its right, title and interest in and to the Real Property. There are no work orders outstanding against the Real Property and none of the Company, ACIC or ASI has received any deficiency notices, requests or written advice of any breach of any applicable law in respect of the foregoing which could, if not corrected, become a work order or could require performance of work or expenditure of money to correct. The Real Property is zoned to permit its current uses and the buildings on such property (the “Buildings”) comply in all material respects with the by‑laws and building codes of each municipality in which they are situate. No part of the Real Property is subject to any building or use restriction that would restrict or prevent the use and operation of the Real Property for its current uses. The Buildings, including the roofs and structural elements thereof, the mechanical, electrical, security, heating, cooling, sewer, drainage, septic and plumbing systems, and all equipment necessary for the operation thereof, are in good working condition and in good repair and maintenance. There are no matters affecting the right, title and interest of the Company in and to the Real Property which, in the aggregate, would adversely affect the ability to carry on its business upon the Real Property substantially in the manner in which such operations are currently carried on.

4.17    Environmental Matters.

To the knowledge of the Company, all operations of the Company, ACIC and ASI are now and always have been in compliance with all applicable Environmental Laws. To the knowledge of the Company, none of the Company, ACIC, ASI or their businesses or the Assets are the subject of any order or request issued, filed or imposed pursuant to any Environmental Law including any order or request requiring any remediation or clean‑up of any Hazardous Substance or requiring that any release, disposal or other activity be reduced, modified or eliminated, nor to the knowledge of the Company has any investigation, evaluation or other proceeding been commenced to determine whether any such order or request is necessary, other than any order or request which would not reasonably be expected to have a Material Adverse Effect on the Company, ACIC or ASI. To the knowledge of the Company, there are no Hazardous Substances on, at or under the Real Property.

4.18    Financial Statements.

The Company’s Financial Statements have been prepared in accordance with U.S. GAAP and present fairly the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of ACIC and ASI, respectively, as of the respective dates thereof and the consolidated sales, income and results of operations of ACIC and ASI, respectively for the respective financial periods covered thereby. Notwithstanding the foregoing, any implied or actual representation or warranty made by the Company with respect to the net deferred tax asset of ACIC and ASI set out in the Company’s Financial Statements is qualified as being made to the knowledge of the Company.

4.19    Material Change.

There has been no material change in the capital, business, Assets, liabilities, obligations, condition (financial or otherwise), results of operations, financial position, capital or long‑term debt, affairs or prospects of the Company, ACIC or ASI since the date of the Company’s Financial Statements.

4.20    Business of the Companies.

Each of the Company, ACIC and ASI has conducted and is conducting its respective businesses in compliance with all applicable laws, rules and regulations of each jurisdiction in which their respective businesses are carried on in all material respects and each hold the necessary licenses, permits, approvals, consents, certificates, registrations and authorizations, whether governmental, regulatory or otherwise (collectively, the “Licences”), to enable their respective businesses to be carried on as now conducted and their property and assets to be owned, leased and operated, and the same are validly existing and in good standing and none of such Licenses contains any burdensome term, provision, condition, sanction or limitation, save and except in any case which would not have a materially adverse effect on the operation of their respective business. Each of ACIC and ASI is currently in compliance with minimum capital requirements under the NAIC risk‑based capital calculation. The risk‑based capital of ACIC is approximately 344.6% and of ASI is approximately 655.9%. To the knowledge of the Company, no investigation, review, disciplinary action or sanction by any Governmental Entity with respect to the Company, ACIC or ASI is pending or threatened, nor, to the knowledge of the Company, has any Governmental Entity indicated an intention to conduct the same.

4.21    Rating.

The current claims‑paying A.M. Best rating of each of ACIC and ASI is “B‑, Under Review Developing” and the Company is not aware of any reason why there may be a downgrade in the rating of either company prior to or after the Effective Time.

4.22    Liabilities.

There are no liabilities (whether accrued, absolute, contingent or otherwise) whether due or to become due of the Company, ACIC or ASI of any kind whatsoever, and, to the best of the knowledge of the Company, there is no reasonable basis for assertion against the Company, ACIC or ASI of any liabilities of any kind, other than:

4.23    Related Party Transactions.

Except as expressly contemplated by this Agreement, there are no related party transactions or off‑balance sheet structures or transactions with respect to any of the Company, ACIC or ASI and there will be no such structures or transactions in place immediately before or immediately after the Effective Time.

4.24    Indebtedness.

Except for the KAI Notes and the Subordinated Surplus Debentures or as disclosed in the Company’s Financial Statements, none of the Company, ACIC or ASI has any bonds, debentures, mortgages, promissory notes or other indebtedness maturing more than one (1) year after the date of their original creation or issuance, and none of the Company, ACIC or ASI is under any obligation to create or issue any bonds, debentures, mortgages, promissory notes or other indebtedness maturing more than one (1) year after the date of their original creation or issuance.

4.25    Guarantees.

None of the Company, ACIC or ASI is a party to, or bound by, any agreement of guarantee, indemnification, assumption or endorsement or any like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other Person.

4.26    Tax Matters.

Except as disclosed in Section 4.26 of the Disclosure Letter, to the knowledge of the Company, none of the Company, ACIC or ASI is in arrears or in default in respect of the filing of any required material federal, state or municipal tax or other tax return; and (i) all material taxes, filing fees and other assessments due and payable prior to the Closing from the Company, ACIC and ASI shall have been paid prior to the Closing, (ii) no claim for additional taxes, filing fees or other amounts and assessments due and payable or collectible from the Company, ACIC and ASI has been made or threatened which has not been collected, (iii) to the best of the knowledge of the Company, no such return contains any misstatement or conceals any statement that should have been included therein, and (iv) there are no audits or reviews pending or threatened of the tax returns of the Company, ACIC and ASI (whether federal, state, local or foreign). Each of the Company, ACIC and ASI have withheld from each payment made to any of its employees the amount of all taxes (including but not limited to income tax) and other deductions required to be withheld therefrom and will have paid or will pay such amounts to the proper tax or other receiving authority within the time required under applicable legislation.

4.27    Absence of Other Agreements.

Other than as disclosed to JJR VI in writing, none of the Company, ACIC and ASI:

4.28    Good Standing of Agreements.

None of the Company, ACIC or ASI is in default or breach of any of its obligations under any one or more contracts, agreements (written or oral), commitments, indentures or other instruments to which it is a party or by which it is bound save and except in any case for any default or breach which would not reasonably be expected to have a Material Adverse Effect on any the Company, ACIC or ASI, as applicable, and there exists no state of facts which, to the best of the knowledge of the Company, after notice or lapse of time or both, would constitute such a default or breach. All such contracts, agreements, commitments, indentures and other instruments have been duly authorized, executed and delivered and are now in good standing and in full force and effect without amendment thereto, the Company, ACIC and ASI, as applicable, are entitled to all benefits thereunder and, to the best of the knowledge of the Company, the other parties to such contracts, agreements, commitments, indentures and other instruments are not in default or breach of any of their obligations thereunder save and except in any case which would not reasonably be expected to have a Material Adverse Effect on any of the Company, ACIC or ASI, as applicable.

4.29    Corporate Records.

The corporate records and minute books of each of the Company, ACIC and ASI, respectively contain in all material respects complete and accurate minutes of all meetings of the directors and shareholders of the applicable company held since their respective incorporation, and signed copies of all resolutions and by‑laws duly passed or confirmed by their respective directors or shareholders other than at a meeting, all such meetings having been duly called and held. The share certificate books, register of security holders, register of transfers and register of directors and any similar corporate records of each of the Company, ACIC and ASI are complete and accurate in all material respects.

4.30    No Breach.

None of the acquisition by the Company of the securities of ACIC and ASI, the issuance of the KAI Notes and the completion of the Private Placement of Subscription Receipts conflicted with or resulted in, nor did they or will they with the giving of notice or the lapse of time or both, result in a breach of the terms, conditions or provisions of, or constitute a default under, the articles and by‑laws or other constating documents of any of the Company, ACIC or ASI, or any indenture, mortgage, lease, agreement, Licence, permit or instrument to which any of the Company, ACIC or ASI is subject to, or any applicable law or required or will require any consent or other action by any administrative or governmental body, save and except in any case for any breach which did not have a Material Adverse Effect or would not reasonably be expected to have a Material Adverse Effect on any of the Company, ACIC or ASI, respectively. Neither the execution nor delivery of this Agreement, nor the fulfillment or compliance with any of the terms and conditions hereof, will conflict with, or result in, nor will they with the giving of notice or the lapse of time or both, result in a breach of the terms, conditions or provisions of, or constitute a default under, the articles and by‑laws or other constating documents of any of the Company, ACIC or ASI, or any indenture, mortgage, lease, agreement, licence, permit or instrument to which the Company, ACIC or ASI are subject to, or any applicable law or will require any consent or other action by any administrative or governmental body, save and except in any case for any breach which would not reasonably be expected to have a Material Adverse Effect on any the Company, ACIC or ASI, respectively. Each of the Company, ACIC and ASI has materially complied with all licenses, franchises, leases, permits, approvals and agreements to which it is a party or by which it is bound, the breach of which would adversely affect its operations or condition, financial or otherwise.

4.31    Severance and Employment Agreements.

Except as otherwise disclosed in Section 4.31 of the Disclosure Letter, none of the Company, ACIC or ASI is a party to any agreement or understanding (written or oral, by contract or at common law) providing for severance, termination or change of control payments (including at or after the Effective Time) to, or any employment agreement or understanding (written or oral, by contract or at common law) with any current or former officer, director or employee where the obligation of any one of them thereunder could exceed three months salary of such person.

4.32    Benefit Plans.

4.33    Labour Matters.

4.34    Intellectual Property.

4.35    Privacy.

The Company, ACIC and ASI have conducted their businesses in material compliance with all applicable privacy laws, and have not received written notice of any request, complaint, investigation, inquiry or claim relating to their handling of personal information.

4.36    Litigation.

There are no claims, demands, disputes, actions, suits, proceedings or investigations pending or, to the knowledge of the Company, threatened against or directly or indirectly affecting any of the Company, ACIC or ASI or their properties or assets, at law or in equity, or before or by any federal, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign, nor are the Company, ACIC or ASI subject to any presently effective adverse order, writ, injunction or decree of any such body which would reasonably be expected to have a Material Adverse Effect on any of the Company, ACIC or ASI or prevent or materially delay the Merger.

4.37    No Brokers.

None of the Company, ACIC or ASI has entered into any agreement which would entitle any Person to any valid claim against JJR VI or the Company, ACIC or ASI for a broker’s commission, finder’s fee or any like payment in respect of the sale by their holders of the Company Common Shares and Company Preferred Shares held by them to JJR VI or any other matters contemplated by this Agreement.

4.38    Dividends.

Since September 30, 2010, none of the Company, ACIC nor ASI has, directly or indirectly, declared or paid any dividend or declared or made any other distribution on any of its shares or securities or, directly or indirectly, redeemed, purchased or otherwise acquired any of its shares or securities or agreed to do any of the foregoing.

4.39    Approvals.

No approval of, registration, declaration or filing with any federal, provincial or local court, authority or administrative agency is necessary to authorize the execution and delivery of this Agreement, or any and all of the documents and instruments to be delivered under this Agreement or the consummation of the transactions contemplated herein other than the Required Consents and Approvals and the filing of Certificate of Merger to effect the Merger.

4.40    Compliance with Laws.

None of the Company, ACIC or ASI is in violation of any federal, state, municipal or other law, regulation or order of any government or governmental or regulatory authority, domestic or foreign, save and except in any case which would not have a Material Adverse Effect on the Company, ACIC or ASI, respectively.

4.41    Assets and Employees.

The Assets of the Company, ACIC and ASI are all of the assets currently used in connection with the business of such entities. The Transferred Employees are all of the employees that currently manage and are involved in the day to day operation of the business of ACIC and ASI. An offer of employment has been made by ACIC or ASI, as applicable, to each Transferred Employee and was accepted by each Transferred Employee such that each Transferred Employee will become an employee of ACIC or ASI effective on the Closing

4.42    Shareholders’ Agreements, etc.

To the best of the knowledge of the Company, there are no shareholders’ agreements, pooling agreements, voting trusts or other similar agreements with respect to the ownership or voting of any of the shares of the Company, ACIC or ASI.

4.43    No Bankruptcy.

No proceedings have been taken, are pending or authorized by the Company, ACIC or ASI or, to the knowledge of the Company, by any other person in respect of the bankruptcy, insolvency, liquidation or winding up of the Company, ACIC or ASI.

4.44    Business Activities.

None of the Company, ACIC, ASI, SUGAT or any other Corporate or Partnership Subsidiary of the Company, ACIC, ASI or SUGAT has any business activities in the Cayman Islands.

KFS hereby represents and warrants to JJR VI as follows and acknowledges that JJR VI is relying on such representations and warranties in connection with the transactions contemplated hereby:

5.1    Valid and Binding Obligation.

This Agreement has been duly executed and delivered by KFS and constitutes a legal, valid and binding obligation of KFS, enforceable against it in accordance with its terms subject only to:

5.2    No Breach.

The sale by KAI to the Company of the securities of ACIC and ASI did not conflict with or result in, nor did it or will it with the giving of notice or the lapse of time or both, result in a breach of the terms, conditions or provisions of, or constitute a default under, the articles and by‑laws or other constating documents of KFS or any Affiliate or any indenture, mortgage, lease, agreement, Licence, permit or instrument to which KFS or an Affiliate is subject to, save and except in any case for any breach which did not have a Material Adverse Effect or would not reasonably be expected to have a Material Adverse Effect on KFS or an Affiliate, respectively, or any applicable law or required or will require any consent or other action by any administrative or governmental body. Neither the execution nor delivery of this Agreement nor the fulfillment or compliance with any of the terms and conditions hereof will conflict with, or result in, nor will they with the giving of notice or the lapse of time or both, result in, a breach of the terms, conditions or provisions of, or constitute a default under, any indenture, mortgage, lease, agreement or instrument to which KFS, KAI or an Affiliate thereof is subject to, or will require any consent or other action by any administrative or governmental body. KFS and KAI have materially complied with all licenses, franchises, leases, permits, approvals and agreements to which each is a party or by which each is bound, the breach of which would adversely affect the completion of the Merger.

5.3    Litigation.

There are no claims, demands, disputes, actions, suits, proceedings or investigations pending or, to the knowledge of KFS, threatened against or directly or indirectly affecting KFS, KAI or an Affiliate, at law or in equity or before or by any federal, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign, nor is KFS, KAI or an Affiliate subject to any presently effective adverse order, writ, injunction or decree of any such body, which would reasonably be expected to prevent or have an adverse impact on the consummation by KFS, KAI or the Company of the transactions contemplated herein.

5.4    No Brokers Fees.

None of KFS, KAI or an Affiliate thereof has entered into any agreement which would entitle any Person to any valid claim against JJR VI or the Company for a broker’s commission, finder’s fee or any like payment in respect of the Merger or any other matters contemplated by this Agreement.

5.5    Stock and Options.

KAI holds of record and owns beneficially 13,804,001 Company Common Shares and 18,000,000 Company Preferred Shares, being all of the issued and outstanding Company Common Shares and Company Preferred Shares on the date hereof, which Company Common Shares and Company Preferred Shares are free and clear of any Liens, restrictions on transfer, taxes, security interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. None of KFS or any Affiliate thereof owns any other securities of the Company. KAI is not a party to any option, warrant, purchase right, or other contract or commitment that could require KAI to sell, transfer, or otherwise dispose of any securities of the Company (other than this Agreement). KAI is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock of the Company.

6.1    Survival of Representations and Warranties.

The representations and warranties made by the Parties and contained in this Agreement, or contained in any Ancillary Agreement, shall survive the Closing as follows:

after which period, if no claim has, prior to the expiry of such period, been specifically made in writing under this Agreement against a party with respect to any breach of any representation or warranty made by such party, such party will have no further liability with respect to such representation or warranty; provided that, if the matter involves intentional misrepresentation or fraud, there shall be no time limit and a claim may be brought at any time.

6.2    Survival of Covenants.

All covenants and agreements of the Parties set forth in this Agreement to be performed after the Closing Date shall survive the Closing.

Each of the Company and KFS hereby covenants and agrees with JJR VI as follows until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms:

7.1    Investigations and Availability of Records.

JJR VI and/or its directors, officers, auditors, counsel and other authorized representatives shall be permitted to make such commercially reasonable investigations of the properties, Assets and business of the Company, ACIC and ASI and of their financial and legal condition as JJR VI reasonably deems necessary or desirable. If reasonably requested, the Company shall provide copies of the corporate records, including minute books, share ledgers and the records maintained in connection with the business of the Company, ACIC and ASI. Such investigations will not, however, affect or mitigate in any way the representations and warranties contained in this Agreement, which representations and warranties shall continue in full force and effect for the benefit of JJR VI in accordance with the terms hereof.

7.2    Necessary Consents.

Each of the Company and KFS shall use its commercially reasonable efforts to obtain from the directors and shareholders of the Company, ACIC and ASI, as applicable, and all Governmental Entities governing such entities such approvals or consents as are required to complete the transactions contemplated herein.

7.3    Non‑Solicitation.

Other than in connection with Permitted Activities (as that term is defined below), the Company and KFS shall not, directly or indirectly, solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non‑public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction, or propose any activities or solicitations, in opposition to or in competition with the Merger, and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid”, exempt or otherwise, within the meaning of the Act, for securities or assets of the Company, ACIC and/or ASI, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Merger, including, without limitation, allowing access to any third party (other than the representatives of the Company and KFS) to conduct due diligence, nor to permit any of its officers or directors to authorize such access, except as required by statutory obligations. The foregoing prohibited activities are referred to herein as “Solicitation Activities”. In the event KFS, the Company or any of their affiliates, including any of their officers or directors, receives any form of offer or inquiry in respect of the foregoing or any Permitted Activities, KFS shall forthwith (in any event within one business day following receipt) notify JJR VI of such offer or inquiry and provide JJR VI with such details as it may request. “Permitted Activities” means any Solicitation Activities with Berkshire Hathaway Inc., Bayside Capital or American European Insurance Group, Inc. or any of their respective affiliates or associates (each a “Permitted Party”).

7.4    Ordinary Course Business.

The Company shall, and shall ensure that each of its subsidiaries, maintains its corporate status and operates its business in a prudent and business‑like manner in the ordinary course and in a manner consistent with past practice and none of the Company or any of its subsidiaries shall:

7.5    Confidentiality.

7.6    Status and Filings.

The Company will, and KFS will cause the Company to, maintain its corporate status and comply with applicable laws (including applicable securities and corporate laws) including any applicable filing requirements required in connection with the Merger and the Meeting Matters.

7.7    Material Change.

Each of the Company and KFS agree to provide prompt and full disclosure to JJR VI of any material information, change or event in the business, operations, financial condition or other affairs of the Company, ACIC or ASI prior to Closing or any event, condition or circumstance that might be reasonably expected to cause any representation or warranty contained in this Agreement or an Ancillary Agreement to be untrue or inaccurate at the Effective Time in any material respect.

7.8    All Other Action.

Each of the Company and KFS shall take all such actions as are within its power to control, and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to satisfy each of the conditions precedent to be satisfied by it, ACIC or ASI as soon as practicable and in any event before the Effective Date, 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 that are commercially reasonable to permit the completion of the Acquisition pursuant to the Merger in accordance with the terms and conditions of this Agreement, and applicable law.

7.9    Inversion.

The parties intend that the Resulting Issuer shall be treated as a domestic corporation for U.S. federal (and applicable state and local) income tax purposes under Section 7874 of the Code and none of the Company, ACIC, ASI or SUGAT or any of their subsidiaries will take any position on any U.S. federal, state, local or other income or franchise tax return, or take any other reporting position, that is inconsistent with such treatment unless otherwise required by a final U.S. federal court decision, a closing agreement with The Internal Revenue Service or by applicable U.S. federal, state or local income or franchise tax law. In furtherance of the foregoing, prior to Closing, KFS shall cause the Company, ACIC, ASI, SUGAT and any other Corporate or Partnership Subsidiary of the Company, ACIC, ASI or SUGAT not to conduct any business activities in the Cayman Islands.

JJR VI hereby covenants and agrees with the Company and KFS as follows until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms:

8.1    Investigations and Availability of Records.

The Company, KFS and/or their directors, officers, auditors, counsel and other authorized representatives, as applicable, shall be permitted to make such commercially reasonable investigations of the property, assets and business of JJR VI and of its financial and legal condition as the Company and KFS reasonably deem necessary or desirable. If reasonably requested, JJR VI shall provide copies of JJR VI’s corporate records, including its minute books, share ledgers and the records maintained in connection with the business of JJR VI. Such investigations will not, however, affect or mitigate in any way the representations and warranties contained in this Agreement, which representations and warranties shall continue in full force and effect for the benefit of the Company and KFS.

8.2    Necessary Consents.

JJR VI shall use its commercially reasonable efforts to obtain from JJR VI’s directors, shareholders, the TSXV and all Governmental Entities governing it and Subco such approvals or consents as are required to complete the transactions contemplated herein.

8.3    Non‑Solicitation.

JJR VI shall not, directly or indirectly, solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non‑public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Merger, and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid”, exempt or otherwise, within the meaning of the Act, for securities of JJR VI, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Merger, including, without limitation, allowing access to any third party (other than its representatives) to conduct due diligence, nor to permit any of its officers or directors to do so, except as required by statutory obligations In the event JJR VI or any of its affiliates, including any of their officers or directors, receives any form of offer or inquiry in respect of any of the foregoing, JJR VI shall forthwith (in any event within one business day following receipt) notify KFS of such offer or inquiry and provide KFS with such details as it may request.

8.4    Ordinary Course of Business.

JJR VI shall maintain its corporate status and operate its business in a prudent and business‑like manner in the ordinary course and in a manner consistent with past practice and shall not:

8.5    Confidentiality.

8.6    JJR VI Meeting Matters.

On or prior to the Effective Time and subject to all necessary regulatory and corporate approvals, JJR VI shall use its commercially reasonable efforts to do the following: (a) file articles of amendment to effect the Consolidation; (b) convene and hold a meeting to approve the December Meeting Matters; and (c) file an application for approval of the continuance to the Cayman Islands with the Ministry of Finance (Ontario) and The Cayman Islands Registrar of Companies including the Cayman Articles.

8.7    Material Change.

JJR VI agrees to provide prompt and full disclosure to the Company and KFS of any material information, change or event in the business, operations, financial condition or other affairs of JJR VI prior to Closing or any event, condition or circumstance that might be reasonably expected to cause any representation or warranty of it contained in this Agreement or an Ancillary Agreement to be untrue or inaccurate at the Effective Time.

8.8    All Other Action.

JJR VI shall take all such actions as are within its power to control, and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to satisfy each of the conditions precedent to be satisfied by it as soon as practical and in any event before the Effective Time, and use commercially reasonable efforts 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 to permit the completion of the Acquisition pursuant to the Merger in accordance with the terms and conditions of this Agreement, and applicable law.

8.9    Inversion.

The parties intend that the Resulting Issuer shall be treated as a domestic corporation for U.S. federal (and applicable state and local) income tax purposes under Section 7874 of the Code and none of JJR, Subco or any of their Corporate or Partnership Subsidiaries will take any position on any U.S. federal, state, local or other income or franchise tax return, or take any other reporting position that is inconsistent with such treatment unless otherwise required by a final U.S. federal court decision, a closing agreement with the Internal Revenue Service or by applicable U.S. federal, state or local income or franchise tax law.

8.10    Business Activities.

None of JJR VI, Subco or any other Corporate or Partnership Subsidiary of JJR VI or Subco will conduct any business activities in the Cayman Islands.

KFS hereby covenants and agrees with JJR VI as follows until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms:

9.1    Principal Shareholder Support.

KFS shall cause KAI to vote all of the Company Common Shares and Company Preferred Shares in favour of the Merger and the transactions contemplated thereby or any matter that could reasonably be expected to facilitate it. KFS will use, and shall cause KAI to use, all reasonable efforts to co‑operate with JJR VI and the Company in respect of the Merger and facilitate, assist with, encourage and provide any information reasonably requested by such persons in order to carry out the transactions contemplated herein and shall not, or permit KAI to, take any steps in contravention thereof.

9.2    Escrow.

KFS shall cause KAI to enter into an escrow agreement with JJR VI at Closing as required by the TSXV in respect of the Resulting Issuer Ordinary Shares, Resulting Issuer Restricted Voting Shares and/or Resulting Issuer Preferred Shares that KAI will hold after the Closing and shall use its reasonable efforts to cause its Affiliates or associates to enter into any other escrow agreement, if required by the TSXV.

9.3    All Other Action.

KFS shall take all such actions as are within its power to control, and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to satisfy each of the conditions precedent to be satisfied by it or the Company as soon as practical and in any event before the Effective Time, and use commercially reasonable efforts 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 to permit the completion of the Acquisition pursuant to the Merger in accordance with the terms and conditions of this Agreement, and applicable law.

9.4    Subscription Receipt Escrow Agreement.

KFS shall cause KAI to issue the Release Certificate (as that term is defined in the Escrow Agreement) upon the satisfaction of all the conditions precedent set forth in Section 10.2. Neither the Company nor KAI shall agree to any amendments to the Escrow Agreement or Subscription Receipt Agreement without the prior written consent of JJR VI.

9.5    Affiliate Investment.

KFS shall cause the investment in KFS Capital LLC held by ASI to be transferred to an Affiliate of KFS for a cash amount equal to its carrying value immediately prior to Closing.

10.1    Conditions for the Benefit of JJR VI.

The transactions contemplated herein are subject to the following conditions to be fulfilled or performed on or prior to the Effective Time, which conditions are for the exclusive benefit of JJR VI and may be waived, in whole or in part, by JJR VI in its sole discretion:

10.2    Conditions for the Benefit of the Company and KFS.

The transactions contemplated herein are subject to the following conditions to be fulfilled or performed on or prior to the Effective Time, which conditions are for the exclusive benefit of the Company and KFS and may be waived, in whole or in part, by the Company and KFS in their sole discretion:

11.1    Time of Closing.

The Closing of the transactions contemplated herein shall be completed at the offices of Fasken Martineau DuMoulin LLP, 333 Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario on the Closing Date, or at such other time and/or place as may be mutually agreed upon by the Parties hereto.

11.2    KFS and Company Closing Documents.

On the day of Closing, KFS and the Company shall deliver to JJR VI the following documents:

11.3    JJR VI’s Closing Documents.

On the day of Closing, JJR VI shall deliver to the Company the following documents:

12.1    Target Alternative Transaction.

In the event that KFS or an affiliate of KFS (including KAI, the Company, ACIC or ASI) receives a bona fide offer, whether written or oral, (an “Offer”) from a third party to acquire assets or shares of the Company, ACIC or ASI (collectively, the “Target”), directly or indirectly, including in the event of a financing of Target, or to enter into an arrangement or agreement which would materially interfere with the Merger which KFS, Target or an affiliate of KFS or Target wishes to pursue at the instruction of its board of directors or a committee thereof, including without in any way limiting the generality of the foregoing, any such arrangement or agreement resulting from an unsolicited offer or proposal from a third party (a “Target Alternative Transaction”), then KFS shall provide forthwith a copy of the Offer to JJR VI or if made orally, a written summary of the Offer (and in any event within one business day following receipt thereof) and KFS may terminate this Agreement upon written notice to the Company and JJR VI. Upon termination of this Agreement by KFS by written notice to JJR VI (the “KFS Termination”) or upon KFS, Target or an affiliate of either entering into an agreement, including a letter of intent (the “Target Alternative Transaction Agreement”), directly or indirectly, at any time following the date of this Agreement and prior to January 31, 2011, with respect to the Target Alternative Transaction, KFS shall forthwith provide JJR VI with a copy of the Target Alternative Transaction Agreement.

12.2    Termination.

In addition to the rights of termination in Section 12.1, this Agreement also may be terminated at any time prior to the Effective Time:

12.3    Reimbursement of Expenses.

KFS shall, within ten (10) Business Days following the earlier of (a) a KFS Termination or (b) the entering into of the Target Alternative Transaction Agreement, make a cash payment to JJR VI in the amount of $500,000, which payment shall constitute full and final compensation and remedy to JJR VI for any breach or the non‑performance of this Agreement and any and all fees and expenses associated therewith. The Parties agree that the payment represents a genuine pre‑estimate of damages with respect to the termination of this Agreement and is not a penalty. Each Party irrevocably waives any right that it may have to raise as a defence that any liquidated damages are excessive or punitive.

12.4    Effect of Termination.

In the event of termination of this Agreement, this Agreement shall immediately become void and there shall be no liability or obligation on the part of any Party, or their respective officers, directors, shareholders or Affiliates to perform its obligations hereunder; provided that (a) no such termination shall relieve any Party from liability or limit or affect any right or cause of action for any breach of this Agreement including from any inaccuracy in the representations and warranties and any non‑performance of the covenants; (b) KFS shall make the cash payment required by Section 12.3, if applicable; and (c) the provisions of Sections 7.5, 8.5, 12.1, 12.3 and Section 15.6 of this Agreement shall remain in full force and effect and survive any termination of this Agreement.

13.1    Indemnities by the Company.

KFS shall fully indemnify, defend and hold harmless JJR VI and its subsidiaries, officers, directors and shareholders (collectively, the “JJR Indemnified Parties”) from and against any claim, demand, action, cause of action, damage, loss, cost, liability or expense (including judicial or administrative actions, suits or proceedings, and including interest, penalties, professional fees and disbursements) (collectively, “Claims”) arising out of any misrepresentation or breach of any warranty or covenant by KFS or the Company under this Agreement or any Ancillary Agreement, including, for greater certainty, any Claims resulting from KFS’ entering into this Agreement and the consummation of the transactions contemplated hereby or the disposition by KFS of its interest in ACIC and ASI to the Company including any Claim arising from a class action, oppression or other suit brought by one or more shareholders of KFS. In each case, such indemnity shall include, without limitation, reasonable legal fees and expenses in connection with any action or proceeding against the JJR Indemnified Parties in any third party action or proceeding for which indemnification by KFS is required. For greater certainty and for the purposes of avoiding duplication, adverse development pursuant to the Adverse Development Agreement shall not constitute a Claim and shall be dealt with pursuant to the Adverse Development Agreement.

13.2    Indemnities by JJR VI.

JJR VI shall fully indemnify, defend and hold harmless each of KFS and its subsidiaries and their respective subsidiaries, officers, directors and shareholders (collectively, the “KFS Indemnified Parties”), as the case may be, from and against any Claims arising out of any misrepresentation or breach of any warranty or breach of any covenant by JJR VI under this Agreement or any Ancillary Agreement, including, for greater certainty, any Claim resulting from JJR VI entering into this Agreement and the consummation of the transactions contemplated hereby. In each case, such indemnity shall include, without limitation, reasonable legal fees and expenses in connection with any action or proceeding against the KFS Indemnified Parties in any third party action or proceeding for which indemnification by JJR VI is required.

13.3    Agency for Representatives.

Each Party agrees that it accepts each indemnity in favour of any of its Indemnified Parties as agent and trustee of each. Each Party agrees that a Party may enforce an indemnity in favour of any of that Party’s Indemnified Parties on their behalf.

13.4    Indemnification Procedure: Third Party Claims.

13.5    Duty to Mitigate and Subrogation.

13.6    Limitations on Liability.

Notwithstanding the foregoing provisions of this Article 13:

13.7    Direct Claims.

A Claim for indemnification for any matter not involving a Third Party Claim must be asserted by notice (setting out in reasonable detail the factual basis for the Claim and the amount of potential damages arising therefrom) to the Party from whom indemnification is sought within the periods specified in Article 6 of this Agreement and will be subject, at all times, to the provisions of Sections 13.5, 13.6 and 13.9.

13.8    General Limitations.

JJR VI and KFS shall have no liability to a KFS Indemnified Party or JJR Indemnified Party (each an “Indemnified Party”), as applicable hereunder:

13.9    Indemnification Sole Remedy.

Subject to Article 12, and except in respect of Section 14.1, Section 14.2, Section 14.4 and Section 14.6 for a claim for specific performance or injunctive relief, and as otherwise expressly provided in this Agreement or in any Ancillary Agreement, the indemnifications provided for in this Article 13 constitute the sole remedy available to the KFS, the Company and JJR VI from and after the Closing Date with respect to any and all breaches or failures of representations, warranties, covenants, conditions, agreements or obligations contained in this Agreement and the Ancillary Agreements. In furtherance of the foregoing, each of the Parties hereby waives, from and after the Closing, to the fullest extent permitted under applicable law, any and all other rights, claims and causes of action it may have against the other Parties relating to the subject matter of this Agreement.

14.1    Non‑Solicitation.

14.2    Assurances.

KFS:

Accordingly, in the event of a breach or threatened breach by KFS or any of its Affiliates of Section 14.1, in addition to any remedy provided for at law or in equity, JJR VI and its Affiliates shall be entitled to seek equitable relief, including an interim injunction, interlocutory injunction and permanent injunction or specific performance or both.

14.3    Tax Losses.

The Parties agree that (i) to the extent that the unified loss rules of Internal Revenue Service Regulations Section 1.1502‑36 apply to the Merger, and (ii) the application of such rules would result in the Company, ACIC and ASI, upon their exit from the KAI consolidated federal income tax return, receiving in the aggregate net operating loss carry forwards of less than US$38,975,400, then KFS agrees to cause KAI to work with the Company to make such elections (to the extent allowable by law) that would result in the Company, ACIC and ASI receiving net operating loss carry forwards of at least US$38,975,400 in the aggregate. Notwithstanding the preceding sentence, KAI shall not be obligated to transfer net operating loss carry forwards in the first sentence of this Section 14.3 in excess of the amount of net operating loss carry forwards allocable to the Company, ACIC and ASI that existed immediately prior to the Merger. The Parties further agree that KAI shall be allowed (to the extent allowable by law) to make the elections necessary to retain for the benefit of KAI and its Affiliates those net operating loss carry forwards attributable to the Company, ACIC and ASI that are not otherwise allocated to the Company, ACIC and ASI in the first sentence of this Section 14.3. The Parties agree to co‑operate on a best efforts basis and to make such filings and elections as are required or necessary to give effect to this Section 14.3. In the event that the election set forth in the first sentence of this Section 14.3 will be detrimental to KAI and its Affiliates, KFS agrees to work in good faith with the Company to modify such election. The Parties acknowledge that the stock of KFS is widely held and that there has been a significant amount of trading activity in the stock of KFS over the last twelve to eighteen months. The Parties acknowledge that it is possible that this trading activity may have caused a limitation on the amount of the tax losses that would have otherwise been available to the Company, ASI, ACIC, SUGAT and/or Southern United Fire Insurance Company.

14.4    Voting.

Whenever the capital of the Resulting Issuer is divided into different classes and the holders of the Resulting Issuer Preferred Shares or Resulting Issuer Restricted Voting Shares have a right to consent to a matter separately as a Class other than pursuant to Article 14 of the Cayman Articles, KFS shall cause the holder of the Resulting Issuer Preferred Shares and the holder of the Resulting Issuer Restricted Voting Shares (provided the holder is KFS or an Affiliate of KFS) to vote their shares in accordance with the votes of the Resulting Issuer Ordinary Shares on the matter. In such event, KFS shall not or shall not permit the holder of the Resulting Issuer Preferred Shares or Resulting Issuer Restricted Voting Shares to exercise its dissent rights in respect of any such matter. Notwithstanding the foregoing, if the matter is one which would affect the particular Class in a manner that is different from the Resulting Issuer Ordinary Shares, and the difference is adverse to the holders of such Class, the holders of such Class shall not be obligated to vote their shares in accordance with the votes of the Resulting Issuer Ordinary Shares on the matter.

14.5    Non‑Assignable Contracts and Shared Contracts.

14.6    Confidentiality.

From and after the Effective Time, KFS shall, and shall cause its Affiliates to, not use or disclose to any person (other than to its directors, officers and advisors who have a need to know in connection with the Acquisition and who have agreed to maintain such information in the strictest confidence), directly or indirectly all information, trade secrets or financial or business documents regarding the Company, ACIC or ASI or their businesses or Assets (collectively the “Atlas Information”) except as permitted in this section. KFS acknowledges that the Atlas Information is vital, sensitive, confidential and proprietary to, the business carried on by the Company, ACIC and ASI and the use by, or unauthorized disclosure of the Atlas Information by KFS or its Affiliates would be materially prejudicial and detrimental to the interests of the Company, ACIC and ASI. The non‑disclosure obligations in this Section shall not restrict disclosure of Atlas Information where:

14.7    Conduct of Business on the Closing Date.

The Parties agree that the Company, ACIC and ASI shall not transact any business on the Closing Date other than those activities that would be conducted in the ordinary course.

15.1    Counterparts.

This Agreement may be executed in several counterparts (by original or facsimile signature), each of which when so executed shall be deemed to be an original and each of such counterparts, if executed by each of the Parties, shall constitute a valid and enforceable agreement among the Parties.

15.2    Severability.

In the event that any provision or part of this Agreement is determined by any court or other judicial or administrative body to be illegal, null, void, invalid or unenforceable, that provision shall be severed to the extent that it is so declared and the other provisions of this Agreement shall continue in full force and effect.

15.3    Applicable Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the conflict of law principles therein. Each party irrevocably and unconditionally attorns to the exclusive jurisdiction of the courts of the Province of Ontario.

15.4    Successors and Assigns.

This Agreement shall accrue to the benefit of and be binding upon each of the Parties hereto and their respective successors and assigns, provided that this Agreement shall not be assigned by any one of the Parties without the prior written consent of the other Parties.

15.5    Interpretation.

Schedule 1.1(a)    -    Company Financial Statements

Schedule 1.1(b)    -    JJR VI Financial Statements

Schedule 2.1(c)    -    Certificate of Merger

Schedule 3.12        -    Absence of Other Agreements

Schedule 8.6        -    Cayman Articles

Schedule 10.1(j)    -    UCC Lease Agreement

Schedule 10.1(l)    -    Transition Services Agreement

Schedule 10.1(s)    -    Building Expense Subsidy Agreement

Schedule 10.1(t)    -    Adverse Development Agreement

15.6    Expenses.

Notwithstanding any other provision herein, each of the Parties hereto shall be responsible for their own costs and charges incurred with respect to the transactions contemplated herein including, without limitation, all costs and charges incurred prior to the date of this Agreement and all legal and accounting fees and disbursements relating to preparing this Agreement and all Ancillary Agreements or otherwise relating to the transactions contemplated herein. For the purposes of clarity, the Company shall be responsible for all listing fees in connection with any securities issued pursuant to the Acquisition.

15.7    Further Assurances.

Each of the Parties hereto will from time‑to‑time at all times hereafter at another Party’s request and without further consideration, do such acts and execute and deliver such other instruments of transfer, conveyance and assignment and take such further action as the other may reasonably require to give effect to any matter provided for herein.

15.8    Entire Agreement.

This Agreement and the schedules referred to herein constitute the entire agreement among the Parties hereto and supersede all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof, including the Letter of Intent. None of the Parties hereto shall be bound or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings not specifically set forth in this Agreement or in the schedules, documents and instruments to be delivered at Closing pursuant to this Agreement. The Parties hereto further acknowledge and agree that, in entering into this Agreement and in delivering the schedules, documents and instruments to be delivered at Closing, they have not in any way relied, and will not in any way rely, upon any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings, express or implied, not specifically set forth in this Agreement or in such schedules, documents or instruments.

15.9    Notices.

Any notice required or permitted to be given hereunder shall be in writing and shall be effectively given if (i) delivered personally, (ii) sent prepaid courier service or mail, or (iii) sent prepaid by facsimile or other similar means of electronic communication addressed as follows:

in the case of notice to JJR VI or Subco:

with copies to:

in the case of notice to KFS:

with copies to:

in the case of notice to the Company:

with copies to:

Any notice, designation, communication, request, demand or other document given or sent or delivered as aforesaid shall:

15.10    Waiver.

Any Party hereto which is entitled to the benefits of this Agreement may, and has the right to, waive any term or condition hereof at any time on or prior to the Closing Date, provided however that such waiver shall be evidenced by written instrument duly executed on behalf of such Party.

15.11    Amendments.

No modification or amendment to this Agreement may be made unless agreed to by the Parties hereto in writing.

15.12    Remedies Cumulative.

Except as provided herein, the rights and remedies of the Parties under this Agreement are cumulative and in addition to and not in substitution for any rights or remedies provided by law. Any single or partial exercise by any Party hereto of any right or remedy for default or breach of any term, covenant or condition of this Agreement does not waive, alter, affect or prejudice any other right or remedy to which such Party may be lawfully entitled for the same default or breach.

15.13    Currency.

Unless otherwise indicated, all dollar amounts referred to in this Agreement are in the lawful money of Canada.

15.14    Number and Gender.

In this Agreement, unless there is something in the subject matter or context inconsistent therewith:

15.15    Knowledge.

Where any matter is stated to be “to the knowledge” or “to the best of the knowledge” of the Company or words to like effect in this Agreement, such shall mean the actual knowledge of the Company Officers after due inquiry, including due inquiry of officers of the subsidiaries of the Company.

Where any matter is stated to be “to the knowledge” or “to the best of the knowledge” of KFS or words to like effect in this Agreement, such shall mean the actual knowledge of the KFS Officers after due inquiry, including due inquiry of officers of the subsidiaries of KFS.

Where any matter is stated to be “to the knowledge” or “to the best of the knowledge” of JJR VI or words to like effect in this Agreement, such shall mean the actual knowledge of Jordan Kupinsky after due inquiry.

15.16    Time of Essence.

Time shall be of the essence hereof.

IN WITNESS WHEREOF this Agreement has been executed by the Parties hereto as of the date first above written.