Private Placement Investor Presentation

October
2010
1
FORWARD LOOKING INFORMATION

Statements in this presentation, including the information set forth as to the future financial or operating performance of American Country
Insurance Company and/or American Service Insurance Company (collectively, “Atlas”), that are not current or historical factual statements
may constitute “forward looking” information within the meaning of securities laws. Such forward looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Atlas, or industry results,
to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
When used in this presentation, such statements may include, among other terms, such words as “may”, “will”, “expect”, “believe”, “plan”,
“anticipate”, “intend”, “estimate” and other similar terminology. These statements reflect current expectations, estimates and projections
regarding future events and operating performance and speak only as to the date of this presentation. Readers should not place undue
importance on forward looking statements and should not rely upon this information as of any other date. These forward looking statements
involve a number of risks and uncertainties. Some of the factors facing Atlas that could cause actual results to differ materially from those
expressed in or underlying such forward looking statements include: (i) market fluctuations, changes in interest rates or the need to generate
liquidity; (ii) access to capital; (iii) recognition of future tax benefits on realized and unrealized investment losses; (iv) managing expansion
effectively; (v) conditions affecting the industries in which we operate; (vi) competition from industry participants; (vii) attracting and retaining
independent agents and brokers; (viii) comprehensive industry regulation; (ix) our holding company structure; (x) our ratings with A.M. Best;
(xi) new claim and coverage issues; (xii) claims payments and related expenses; (xiii) reinsurance arrangements; (xiv) credit risk; (xv) our
ability to retain key personnel; (xvi) our ability to replace or remove management or Directors; (xvii) future sales of common shares; (xviii)
public company challenges; and (xix) failure to effectively execute our business plan. The foregoing list of factors is not exhaustive. See also
“Risk Factors” in Appendix B of this presentation. Many of these issues can affect Atlas’ actual results and could cause the actual results to
differ materially from those expressed or implied in any forward looking statements made by, or on behalf of, Atlas. Readers are cautioned
that forward looking statements are not guarantees of future performance, and should not place undue reliance on them. In formulating the
forward looking statements contained in this presentation, it has been assumed that business and economic conditions affecting Atlas will
continue substantially in the ordinary course. These assumptions, although considered reasonable at the time of preparation, may prove to
be incorrect.

2
Discussion Agenda

1. Introduction to Atlas
2. Opportunity Overview
3. U.S. Commercial Auto Industry Overview
4. Financials
5. Offering Summary

Appendices:
A. Important Notice & Disclaimer
B. Risk Factors
C. Rights of Action

3
Offering Summary

Subscription receipts ultimately exchange into common shares of Atlas

Offering Financial Holdings, Inc. upon closing of the Qualifying Transaction

Offering Size Approximately US$35 - US$40 million

Offering Valuation Approximately 0.65x - 0.7x Book Value

Over-Allotment Option Up to 15%

To fund the purchase of a majority stake in the holding company (American

Use of Proceeds Insurance Acquisition, Inc.), which owns American Country Insurance
Company and American Service Insurance Company
Kingsway has executed an LOI with JJR VI Acquisition Corp, a Canadian
CPC sponsored by JJR Capital, which would acquire American Insurance
Acquisition, Inc. by issuing shares to current shareholders and subscription
Qualifying Transaction receipt holders. If the Qualifying Transaction is not successfully completed
by it’s planned close date, the proceeds from the sale of the subscription
receipts will be returned to investors with interest.
The distribution of the securities of Atlas contemplated in this presentation in the provinces of Canada will be made on a private placement basis and is therefore
exempt from the requirement that Atlas prepare and file a prospectus with the relevant Canadian securities regulatory authorities. Accordingly, any resale of the
securities must be made: (a) through an appropriately registered dealer or pursuant to an exemption from the dealer registration requirements of applicable provincial
securities laws; and (b) in accordance with, or pursuant to an exemption from, the prospectus requirements of applicable provincial securities laws. These resale
restrictions may in some circumstances apply to resales made outside of Canada. Purchasers are advised to seek legal advice prior to any resale of the securities.
Purchasers are advised that Atlas currently does not intend to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the
resale of the securities to the public in any province or territory of Canada in connection with the contemplated offering. This presentation does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities of Atlas in the United States. The Atlas securities contemplated hereby have not been and will not be
registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S.
persons (as such term is defined in Regulation S under the U.S. Securities Act) unless those securities are registered under the U.S. Securities Act and applicable state
securities laws or an exemption therefrom is available. 4
Experienced Executive Management Team

SCOTT D. WOLLNEY
Currently, President & CEO of Kingsway America

President & Chief
Executive Officer
Former President and CEO of Lincoln General Insurance Company (Apr. 08 to Apr. 09)

Co-Founder & former President of Avalon Risk Management, Inc (Jan. 98 to Apr. 08)

BA from University of Illinois at Champaign and MBA from Kellogg School of Management

PAUL A. ROMANO
Currently, VP and Treasurer of Kingsway America

Chief Financial
Officer
Former VP, Data Integrity at Lincoln General Insurance Company (Sept. 08 to Apr. 09)

Former CFO of American Country Insurance Company (Oct. 01 to Sept. 08)

BSc from University of Illinois at Chicago and MBA from Kellogg School of Management

JOSEPH R. SHUGRUE
Currently, VP, Claims of Kingsway America

Vice President, Claims

Former VP, Claims of American Service Insurance Company (Mar. 04 to Jul. 09)

Former Account Executive at Marsh Inc. (Dec. 02 to Mar. 04)

BA from University of Illinois at Champaign

5
Brief History and Company Snapshot

WHO WE ARE:

Provider of specialty commercial insurance products to owner-operators and small fleets

Active in 12 states and licensed in 47 states in the United States

In 2010, we expect to write approximately US$45M of premium with approximately US$72M GAAP book value
— This capital base will allow for significant growth without the need for incremental capital

Capital adequacy ratio suggests A.M. Best(1) rating upgrade from current level

WHY THIS OPPORTUNITY IS AVAILABLE:

In 2009, Kingsway Financial Services (“KFS” or the “Parent”) launched an aggressive enterprise wide strategic
review process following financial difficulties
— As a result, strong operations such as Atlas, Zephyr (Hawaii personal lines), Jevco (Canadian personal /
commercial lines), and Mendota (U.S. personal lines) have been sold or are in process of being sold to raise cash
and de-lever KFS’s balance sheet

Circumstances relating to current parent prevented the companies from pursuing new and renewal business

(1) A.M Best is an internationally recognized provider of credit ratings to the insurance industry. 6
The Transaction Forming Atlas

YESTERDAY TOMORROW

Issues at affiliated companies overshadow individual company
Clear of KFS issues

performance

Improved A.M. Best rating

A.M. Best ratings reduced

Attractive growth prospects

De-emphasized within group

Clear strategic focus on commercial lines

Unclear message regarding future

Kingsway Financial Atlas Financial Holdings, Inc.(1)

Services Inc. (Cayman Islands Holding Company)

Kingsway American Insurance

Kingsway America
Reinsurance Acquisition, Inc.
Inc.
Corporation (Delaware Holding Company)

American Country American Service

Northeast U.S. American American
Mendota Universal Insurance Company Insurance Company
JBA Alliance Security Country Service
Insurance Casualty (Illinois Domiciled (Illinois Domiciled
Associates Insurance Insurance Insurance Insurance
Company Company Insurance Company) Insurance Company)
Agency LLC Company Company Company

Mendakota
Insurance
Company

(1) Renamed from JJR VI Acquisition Corporation. 7

Investment Highlights

Niche commercial insurance business in the U.S. poised for growth

— Initially through recapture of business written in past three years
— Existing license, operating and claims infrastructure which is currently under-utilized

Enhanced, proprietary technology and deep data repository provides significant underwriting advantages

Strong brands and deep distribution relationships

— Significant growth can be achieved simply by showing agents that Atlas is committed to commercial auto
insurance and free of holding company distractions

Substantial initial investment leverage enhances return on equity in early years

Entrepreneurial, committed and experienced management team with aligned interests

— Management will be buying equity at the same terms as investors

Attractive transaction pricing provides conservative starting point for investment

— Discount to GAAP book value
— Seller financing
— Substantial upside with limited downside exposure

8
The Company: What We Do

A specialty property & casualty insurance company with a niche market orientation and focus on
the “light” commercial automobile sector
— Focused on taxis, non-emergency para-transit, limo / livery and business auto
WHAT WE DO
— Owner-operated and small (1-10 vehicle) operations
— Homogeneity of vehicle types across segments: “light” vehicle weight, cars, vans, pick-up
trucks, etc.
— Growth will be exclusively in historically profitable business classes

Niche underwriting
CORE
Unique claims handling attributes
COMPETENCIES
Business specific service needs

Strong risk management support

DIRECT PREMIUM WRITTEN BY CLASS ACTIVE AND LICENSED STATES (1)

2009 2012

Active

Admitted Basis Only

Admitted and Surplus Basis

(1) Atlas is also licensed in Alaska and Hawaii. Not Licensed 9

The Atlas Growth Story

The Atlas Growth Story

Re-energize Distribution PROJECTED PREMIUM WRITTEN
(US Dollars in millions)
Agency force produced more than
$140.0
US$100 million of premium for
Atlas prior to KFS de-emphasis of $120.0
commercial auto lines.
$100.0
Recapturing this business
supports above average growth
$80.0
without compromising Conservative
underwriting profit. $60.0 Base
Accelerated
Pricing Cycle “Hardens” $40.0

After several years of a soft $20.0

market, pricing should start to
improve in the next year or two $0.0
providing for more premium with 2010E 2011E 2012E
the same exposure. EXPLANATION OF SCENARIOS

Geographic Expansion Conservative Base Accelerated

Scenario Scenario Scenario
Currently writing in 12 of 47 states
Insurance market conditions Rate Hardening in '12 Rate Hardening in '11 Rate Hardening in '11
where we are licensed.
Expansion to follow pricing Atlas A.M. Best rating B 2 yrs for B+ 1 yr for A-
improvement. Time to return to '08 volume 5 years 3 years 2 years
Improvement in loss ratio 2% over 3 years 2.9% over 3 years 5.4% over 3 years
Bolt-on Acquisitions Improvement in underwriting expense ratio .5% over 3 years .9% over 3 years .9% over 3 years
Opportunistic addition of strategic Rate of investment return 3.2% - 4.0% 3.7% - 4.3% 3.8% - 5.5%
books of business, taking Acquisitions None None $25M of Premium
advantage of competitive Active States 12 14 20
weakness. 10
Competitive Advantages: Driving Profitable Growth

American Country Insurance Company is one of the oldest taxi insurers in the U.S.
Brand Recognition

American Services Insurance Company is well known in our target markets

Experienced underwriters each with more than 15 years of experience who are committed to the
commercial auto insurance market and are able to identify more profitable risks than competitors
Underwriting
Large universe of data from a much larger book of business enables accurate pricing in target markets and
Expertise ease of entry into new markets

Deep understanding of complex business processes and local protocols with extensive knowledge of
municipalities, state and federal requirements

Creation of a predictive underwriting model enhances risk selection and underwriting results

Customized, user-friendly web-enabled Point-of-Sale system adds value through reducing the need for
Use of Technology
agents to contact the Company and increased throughput

Designed to support our specialized products

Knowledgeable group of adjusters including local facilities in key markets (Chicago and New York) and a
large network of independent adjusters in smaller markets
Efficient Claims
Process oriented around customer priorities with a focus on returning vehicles back into service quickly
Handling
In-depth understanding of equipment in specialized industries

Existing infrastructure and longstanding relationships allows for increased control over loss adjustment
costs and fraud avoidance

Strong Distribution
Distribution channel cultivated over many years with longstanding relationships in key niche markets
Relationships
Strong brand recognition in target markets

Initial Operating
Low initial operating leverage implies a substantial A.M. Best rating increase and may allow for more
Leverage growth in premium written
11
Distribution: How We Sell It

LONGSTANDING RELATIONSHIPS WITH “CORNERSTONE” AGENTS AND SIGNIFICANT

OPPORTUNITY TO EXPAND DISTRIBUTION NETWORK

Current network includes more than 800 individual agents with average annual premium of
approximately US$50,000 per agency
— In 2009, the largest agency wrote US$2.5 million of premium and no agency accounted
for more than 6% of premium written
Exclusively Retail
Diversified distribution network with 1 – 5 strategic “cornerstone” partners in each state
Agents producing in excess of US$50,000 of premium annually
— Our goal is to be one of the top three companies that they place premium with

Overall distribution network supported efficiently through Point-of-Sale technology

Significant opportunity to expand network in many active states

Extensive research was performed in 2009 yielding key value drivers for agents which Atlas’
business model is built around
— Underwriting expertise
Extensive Research — Commitment to niche business
Performed to — Ease of doing business
Determine Agent
— User friendly technology
Priorities

Strong brand recognition and longstanding relationships with “cornerstone” agents
— Commercial auto expertise is well known to distribution network
— Improved technology and commitment to specialty commercial markets will leverage brand
12
Technology: Predictive Model and Point-of-Sale System

ATLAS HAS DEVELOPED A PREDICTIVE UNDERWRITING MODEL TO ENHANCE RISK SELECTION

AND INCREASE UNDERWRITING PERFORMANCE

Developed over approximately 18 months costing Kingsway America, Inc. US$500,000

Preliminary version retro-tested against historical data for Truck class indicated loss ratio
Predictive Model improvement of 14%

The predictive model is planned for full deployment in 2011

Designed to work in conjunction with traditional rate filings

Point-of-Sale
Underwriting interface is web-based, easy for underwriters to use and data feeds directly into
System Point-of-Sale system

Seamless deployment into market

13
Commercial Auto Insurance Market Is Large

At US$24.6 billion, the commercial auto industry represented approximately 5.2% of total P&C direct premium
written in 2009
— Atlas needs only a 0.1% market share to get to US$250 million of premium

Top-line growth for the sector has been challenging since 2006, the first year direct premium written declined, as
commercial auto pricing has been soft

HISTORICAL COMMERCIAL AUTO DIRECT PREMIUMS WRITTEN

(US Dollars in billions)

$35.0
$30.6 $30.6 $30.5
$29.7 $29.2
$30.0 $27.7
$26.8
$24.0 $24.6
$25.0
$21.1
$19.6
$20.0

$15.0

$10.0

$5.0

$0.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Highline Data. 14

Industry Underwriting Performance Has Been Good

Historically, the underwriting performance for the commercial auto industry has been more favorable during
hard markets compared to the total P&C industry
— During the hard market of 2002-2005, the commercial auto business loss ratio outperformed the total P&C
industry by an average of 8.0% per year with an average loss ratio of 68.0% while the total P&C industry
averaged 76.0%

HISTORICAL COMMERCIAL AUTO LOSS RATIO PERFORMANCE

100.0%
86.2% 87.0% 87.2%

80.0% 75.8%
68.0% 66.1% 66.0%
65.1% 63.3% 64.9% 63.8%

60.0%

40.0%

20.0%

0.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Highline Data. 15

Industry Loss Trends

Combined ACIC/ASI Experience

Frequency Accident Year
Customer Group 2007 2008 2009
Airport Bus 56.4% 45.2% 30.7%
Business Auto 12.5% 12.4% 12.3%
Limo 27.4% 26.0% 23.9%
Paratransit 28.2% 26.5% 21.3%
Taxi 79.7% 59.1% 54.8%
Claim Feature / Car Year

Combined ACIC/ASI Experience

Severity Accident Year
Customer Group 2007 2008 2009
Airport Bus 1,036 2,970 799
Business Auto 1,646 2,171 2,305
Limo 3,680 3,775 2,209
Paratransit 5,251 3,909 2,183
Taxi 2,047 2,063 1,441
US$ per Claim Feature

Declines in frequency and severity

Factors include
— Economy
— Reduced fatalities
— Improved safety

16
Atlas Loss Ratio

LOSS & ALLOCATED LOSS ADJUSTMENT EXPENSE RATIO

ACIC/ASI Combined
Accident Premium Ultimate
Year Earned (,000) Loss & ALAE
2001 60,788 61%
2002 66,225 62%
2003 71,652 52%
Hard
2004 80,504 51% Market
2005 82,695 51%
2006 81,336 52%
2007 88,607 62%
Soft
2008 95,337 65% Market
2009 81,460 63%
2010 (YTD 6/30) 19,797 63%
10 Yr 728,402 58%
Note: Unallocated Loss Adjustment Expense (ULAE) currently runs
9% and will improve by 2% points with return to scale

17
Premium Rates Are Improving

Commercial auto rates are improving moderately as CIAB survey respondents are beginning to see some increases
in rates and smaller declines.

COMMERCIAL AUTO INSURANCE RATE CHANGES Atlas is securing

5% - 6% yr/yr
rate increases in
Q3 2010
Percentage of Survey Respondents

Late 2005 to 2008

The early part of the last decade showed The trend is improving in the
showed material rate
more significant rate increase last several quarters
decrease

Source: The Council of Insurance Agents and Brokers (“CIAB”). 18

Financial Highlights (GAAP)
2009 2010 2011 2012
YTD June Q3 Q4
Actual Pro Forma Pro Forma Pro forma Projected Projected Projected
Income Statement Items:

Premium Written $106.2 $106.2 $27.2 $10.2 $15.7 $65.8 $99.8

Net Premiums Earned 76.2 112.5 31.8 10.2 14.3 49.7 79.5
Investment income 3.9 5.6 3.3 2.3 1.0 5.2 5.0
Other Income 1.3 2.1 1.5 (0.3) 0.1 - -
Total Revenue 81.4 120.2 36.6 12.2 15.4 54.9 84.5
Loss & LAE 64.9 81.6 24.9 7.7 10.8 35.2 55.2
Commission and Taxes 12.2 22.7 6.7 2.3 2.7 8.5 13.6
Underwriting Expenses 22.6 14.2 4.7 1.9 * 1.4 5.7 6.1
Transition Expense - - - 0.4 0.4 - -
- - - - - - -
Total Expenses 99.7 118.5 36.3 12.3 15.3 49.4 74.9
Income Before Taxes (18.3) 1.7 0.3 (0.1) 0.1 5.5 9.6
Income taxes (6.2) 0.6 0.1 (0.0) 0.0 0.9 2.2
Net Income (Loss) After Taxes ($12.1) $1.1 $0.2 ($0.1) $0.1 $4.7 $7.4

Loss & LAE Ratio 85.2% 72.5% 78.2% 75.5% 75.5% 70.8% 69.4%
Loss & LAE Ratio "Go-Forward" lines N/A N/A 72.2% 72.2% 72.2% 70.8% 69.4%
Loss & LAE Ratio "Discountinued" lines N/A N/A 81.7% 81.7% 78.7% N/A N/A
Acquisition Cost Ratio 16.0% 20.2% 21.1% 22.5% 18.9% 17.1% 17.1%
Underwriting Expense Ratio 28.0% 10.8% 10.1% 21.5% 9.1% 11.5% 7.7%
Transition Expense Ratio 0.0% 0.0% 0.0% 3.9% 2.8% 0.0% 0.0%

Selected Balance Sheet Items:

Cash & Invested Assets $221.6 $221.6 $196.4 $192.0 $182.9 $190.9 $211.2
Loss & LAE Reserves 169.5 169.5 156.4 140.8 138.7 136.6 139.8
Unearned Premium 34.3 34.3 27.1 24.9 21.0 34.2 50.2
Shareholder's Equity (GAAP) 72.8 72.2 76.9 84.3

(1) Includes NOL carry-forward in 2011E and 2012E.

Note: Pro forma adjustments include the elimination of non-recurring litigation, management fee to parent, affiliated reinsurance impacts including prior year loss experience,
one-time costs associated with transformation initiatives, corporate restructuring costs, replacement IT costs previously part of the management fee to parent, elimination of
losses from equity positions, and an increase in investment income from higher invested assets resulting from the elimination of the affiliated reinsurance agreements.
19
Conservative Investment Portfolio With Good Leverage

Atlas’ high quality investment portfolio consists of 38% corporate bonds and 28% government bonds
— In addition, roughly 70% of the portfolio consists of securities rated AAA or AA by Standard & Poor’s

6/30/2010 INVESTMENT PORTFOLIO BY TYPE 6/30/2010 INVESTMENT PORTFOLIO BY RATING(1)

Total Cash & Invested Assets US$193.3M

= = 5x Investment Leverage
Total Initial Common Equity (2) US$38.4M

(1) Based on Standard & Poor’s ratings

(2) Common equity plus existing JJR Public Company valuation, as illustrated on page 21 20
Pro Forma Post-Transaction Ownership

Atlas Financial Holdings, Inc.

Pro Forma Post Transaction Ownership
(US Dollars in millions)

Atlas Equity Post Transaction Common Stock Ownership

GAAP Tangible Book Value (pre close) $ 72.0 %
Seller Preferred Financing (non-voting preferred shares)
(1)
18.0 New Investors and Kingsway(2) 91.9%
(3)
Common Equity Management 2.7%
GAAP Book Value net of Seller Preferred Financing 54.0 JJR 5.4%
Transaction Multiple to Book Value 0.65 Total 100.0%
Pre-Money Valuation 35.1

JJR PubCo
Valuation 2.0

(1) 25 year non-voting preferred shares from Atlas with a 4.5% rate of interest payable in cash or 25 year non-voting preferred shares
from Atlas with a 4.5% rate of interest payable in cash in-kind, at the option of Atlas, convertible at a price equal to a 33% premium to
the initial issuance price of Atlas common shares (non-callable for five years).
(2) In support of completing the transaction, Kingsway is prepared to own up to 80% of Atlas common shares. Any holdings by
Kingsway in excess of 30% of the outstanding shares will be deposited into a voting trust to be voted proportionately with and in the
manner of the votes cast by holders of common shares of Atlas other than Kingsway.
(3) Initial ownership represents minimum investment by management at same terms as other investors.

Note: An option pool equal to 5% of outstanding shares will be created to be granted to officers and directors upon closing of the
transaction. Such grant will vest rateably over four years.
21
Investment Highlights

Niche commercial insurance business in the U.S. poised for growth

— Segment is outperforming U.S. P&C overall by 10% on combined ratio
— At 2012 scale, Atlas will have less than 5% market share in target markets

Enhanced, proprietary technology and deep data repository provides significant underwriting advantages
— Operationally efficient POS technology creating value for distribution partners
— Market leading predictive model to provide underwriting profit incremental to base case

Strong brands and deep distribution relationships

— Recapturing lost business will result in substantial growth at historically profitable loss ratios

Substantial initial investment leverage enhances return on equity

— Provides higher than average RAROC during initial re-building years

Entrepreneurial management team with aligned interests

— Management will be buying equity at the same terms as investors
— Committed team with experience running larger businesses

Attractive transaction pricing provides conservative starting point for investment

— Limited downside
— Substantial upside
22
Appendix A: Important Notice & Disclaimer

This Private Placement Investor Presentation constitutes an offering of these securities only in those jurisdictions
and to those persons where and to whom they may be lawfully offered for sale, and only by persons permitted to sell
these securities. This Private Placement Investor Presentation is not, and under no circumstances is to be
construed as, an advertisement or a public offering of these securities in Canada. No securities commission or
similar authority in Canada has reviewed or in any way passed upon this document or the merits of these securities,
and any representation to the contrary is an offence.

23
Appendix B: Risk Factors

Certain material risks and uncertainties currently known regarding our business operations are included in this section. If any of the following risks, or other risks and
uncertainties that we have not yet identified or that we currently consider not to be material, actually occur, our business, prospects, financial condition, results of
operations and cash flows could be materially and adversely affected.
Market fluctuations, changes in interest rates or a need to generate liquidity can have significant and negative effects on our investment portfolio.

Our results of operations depend in part on the performance of our invested assets. As of March 31, 2010, 93.5% of our investment portfolio was invested in fixed
maturities, and 6.5% was invested in cash and cash equivalents. As of March 31, 2010, approximately 48.0% of our fixed maturity portfolio was invested in U.S.
Government and government agency fixed income securities and all of the fixed maturities were invested in fixed maturities rated “investment grade” (credit rating of
AAA to BBB-) by Standard & Poor’s Corporation.

Investment returns are an important part of our overall profitability. We cannot predict which industry sectors in which we maintain investments may suffer losses as a
result of potential declines in commercial and economic activity, or how any such decline might impact the ability of companies within the affected industry sectors to pay
interest or principal on their securities and we cannot predict how or to what extent the value of any underlying collateral might be affected. Accordingly, adverse
fluctuations in the fixed income or equity markets could adversely impact our profitability, financial condition or cash flows.

Markets in the United States and around the world have been experiencing volatility since mid-2007.

Initiatives taken by the U.S. and foreign governments have helped to stabilize the financial markets and restore liquidity to the banking system and credit markets.
However, the financial system has not completely stabilized and market volatility could continue in the future if there is a prolonged recession or a worsening in key
economic indicators. If market conditions deteriorate, our investment portfolio could be adversely impacted.

Historically, we have not had the need to sell our investments to generate liquidity. If we were forced to sell portfolio securities that have unrealized losses for liquidity
purposes rather than holding them to maturity or recovery, we would recognize investment losses on those securities when that determination was made.
We may not have access to capital in the future due to an economic downturn.

We may need new or additional financing in the future to conduct our operations, expand our business or refinance existing indebtedness. Any sustained weakness in
the general economic conditions and/or financial markets in Canada, the United States or globally could adversely affect our ability to raise capital on favorable terms or
at all. From time to time we may rely on access to financial markets as a source of liquidity for operations, acquisitions and general corporate purposes.
Our ability to recognize future tax benefits on realized and unrealized investment losses is limited.

At December 31, 2009, we had gross deferred tax assets of US$1.6 million related to investment securities. Future realization of the remaining deferred tax asset, as
well as the ability to record tax benefits on future realized and unrealized capital losses, will depend on management’s assessment of available tax planning strategies
such as realizing any appreciation in certain investment assets. If management believes realization of a deferred tax asset is not likely, an additional valuation allowance
would be established by increasing income tax expense, or in the case of additional future unrealized losses, reducing accumulated other comprehensive income.

24
Appendix B: Risk Factors

If we expand our operations too rapidly and do not manage that expansion effectively, our financial performance and stock price could be adversely
affected.

We intend to grow by expanding geographically and capturing more market share from our insurance distribution network. Continued growth could impose significant
demands on our management, including the need to identify, recruit, maintain and integrate additional employees. In addition, our systems, procedures and internal
controls may not be adequate to support our operations as they expand and the A.M. Best ratings at our subsidiaries could be adversely impacted.

In addition to these organic growth strategies, we expect to regularly explore opportunities to acquire other companies or selected books of business. Upon the
announcement of an acquisition, our stock price may fall depending on the size of the acquisition, the purchase price and the potential dilution to existing shareholders. It
is also possible that an acquisition could dilute earnings per share.

If we grow through acquisitions, we could have difficulty in integrating an acquired company, which may cause us not to realize expected revenue increases, cost
savings, increases in geographic or product presence, and other projected benefits from the acquisition. The integration could result in the loss of key employees,
disruption of our business or the business of the acquired company, or otherwise harm our ability to retain customers and employees or achieve the anticipated benefits
of the acquisition. Time and resources spent on integration may also impair our ability to grow our existing businesses. Also, the negative effect of any financial
commitments required by regulatory authorities or rating agencies in acquisitions or business combinations may be greater than expected.

Any failure by us to manage our growth effectively could have a material adverse effect on our business, financial condition or results of operations.
We will derive the majority of premiums from a few geographic areas, which may cause our business to be affected by catastrophic losses or business
conditions in these areas.

Some jurisdictions including Illinois, Indiana, Michigan, Minnesota, New York and Ohio generate a significant percentage of total premiums. Results of operations may,
therefore, be adversely affected by any catastrophic losses in these areas. Catastrophic losses can be caused by a wide variety of events, including earthquakes,
hurricanes, tropical storms, tornadoes, wind, ice storms, hail, fires, terrorism, riots and explosions, and their incidence and severity are inherently unpredictable.
Catastrophic losses are characterized by low frequency but high severity due to aggregation of losses, and could result in adverse effects on its results of operations or
financial condition. Results of operations may also be adversely affected by general economic conditions, competition, regulatory actions or other business conditions
that affect losses or business conditions in the specific areas in which we do most of its business.
Because we are a commercial automobile insurer, conditions in that industry could adversely affect our business.

All of our gross premiums written are generated from commercial automobile insurance policies. Adverse developments in the market for commercial automobile
insurance, including those which could result from potential declines in commercial and economic activity, could cause our results of operations to suffer. The
commercial automobile insurance industry is cyclical. Historically, the industry has been characterized by periods of price competition and excess capacity followed by
periods of high premium rates and shortages of underwriting capacity. These fluctuations in the business cycle have and could continue to negatively impact our
revenues.

Additionally, our results may be affected by risks that impact the commercial automobile industry related to severe weather conditions, such as rainstorms, snowstorms,
hail and ice storms, floods, hurricanes, tornadoes, earthquakes and tsunamis, as well as explosions, terrorist attacks and riots. Our commercial automobile insurance
business also may be affected by cost trends that negatively impact profitability, such as a continuing economic downturn, inflation in vehicle repair costs, vehicle
replacement parts costs, used vehicle prices, fuel costs and medical care costs. Increased costs related to the handling and litigation of claims may also negatively
impact our profitability.

25
Appendix B: Risk Factors

We face competition from companies with greater financial resources, broader product lines, higher ratings and stronger financial performance than us,
which may impair our ability to retain existing customers, attract new customers and maintain our profitability and financial strength.

The commercial automobile insurance business is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. Many of our
competitors are substantially larger and may enjoy better name recognition, substantially greater financial resources, higher ratings by rating agencies, broader and
more diversified product lines and more widespread agency relationships than we do. We compete with large national underwriters and smaller niche insurance
companies. In particular, in the specialty insurance market we compete against, among others, American Transit Insurance Company (New York only), Canal Insurance
Company, CNA, Carolina Casualty Insurance Company, Empire Fire & Marine Insurance Company (subsidiary of Zurich Financial Services Ltd.), Gateway Insurance
Company, Global Liberty Insurance Company of New York, Grenada, Hereford Holding Company, Inc., Hartford Financial Services Group, Lancer Financial Group,
MAPFRE, Maya Assurance Company, Mercury General Corporation, National Indemnity Company (subsidiary of Berkshire Hathaway, Inc.), National Interstate
Corporation, Northland Insurance Company (subsidiary of Travelers Companies, Inc.), Safeco Corporation (subsidiary of Liberty Mutual), Scottsdale Insurance Company
(National Casualty Company) and ULLICO, Inc. Our underwriting profits could be adversely impacted if new entrants or existing competitors try to compete with our
products, services and programs or offer similar or better products at or below our prices.
If we are not able to attract and retain independent agents and brokers, our revenues could be negatively affected.

We compete with other insurance carriers to attract and retain business from independent agents and brokers. Some of our competitors offer a larger variety of products,
lower prices for insurance coverage or higher commissions than we offer. Our top ten independent agents/brokers accounted for an aggregate of 28% of our gross
premium written during the year ended December 31, 2009. If we are unable to attract and retain independent agents/brokers to sell our products, our ability to compete
and attract new customers and our revenues would suffer.

Independent agents generally have the ability to bind insurance policies, actions over which we have a limited ability to exercise preventative control. In the event that
an independent agent exceeds its authority by binding us on a risk that does not comply with our underwriting guidelines, we may be at risk for that policy until a
cancellation is effected. Any improper use of such authority may result in losses that could have a material adverse effect on our business, results of operations and
financial condition.

26
Appendix B: Risk Factors

We are subject to comprehensive regulation and our ability to earn profits may be restricted by these regulations.

We are subject to comprehensive regulation by government agencies in the states and foreign jurisdictions where our insurance company subsidiaries are domiciled,
and, to a lesser degree, where these subsidiaries issue policies and handle claims. Failure by one of our insurance company subsidiaries to meet regulatory
requirements could subject us to regulatory action. The regulations and associated examinations may have the effect of limiting our liquidity and may adversely affect
results of operations.

In addition, state insurance department examiners perform periodic financial, market conduct and other examinations of insurance companies. Compliance with
applicable laws and regulations is time consuming and personnel-intensive. The last market conduct examination performed by the Illinois Department of Insurance with
respect to American Services Insurance Company and American Country Insurance Company were in 2001 and 2003, respectively. No open issues remain relative to
these market conduct examinations. There is a normal course financial examination from the Illinois Department of Insurance currently underway for the period ending
December 31, 2009. At this time, no report has been issued in connection with these financial examinations. We may be subject to future market conduct examinations
of our claims and underwriting practices. There are no pending market conduct examinations currently underway.

Any adverse findings by other insurance departments could result in significant fines and penalties, negatively affecting our profitability.

In addition, insurance-related laws and regulations may become more restrictive in the future. New or more restrictive regulation, including changes in current tax or
other regulatory interpretations affecting the alternative risk transfer insurance model, could make it more expensive for us to conduct our business, restrict the premiums
we are able to charge or otherwise change the way we do business. In addition, the economic and financial market turmoil may result in some type of federal oversight
of the insurance industry. For a further discussion of the regulatory framework in which we operate, see the subsection of “Business” entitled “Regulation.”
As a holding company, we are dependent on the results of operations of our insurance company subsidiaries to meet our obligations and pay future
dividends.

We are a holding company and a legal entity separate and distinct from our insurance company subsidiaries. As a holding company without significant operations of our
own, one of our sources of funds are dividends and other distributions from our insurance company subsidiaries. As discussed under the subsection of “Business”
entitled “Regulation,” statutory and regulatory restrictions limit the aggregate amount of dividends or other distributions that our insurance subsidiaries may declare or
pay within any twelve-month period without advance regulatory approval and require insurance companies to maintain specified levels of statutory capital and surplus.
Insurance regulators have broad powers to prevent reduction of statutory capital and surplus to inadequate levels and could refuse to permit the payment of dividends
calculated under any applicable formula. As a result, we may not be able to receive dividends from our insurance subsidiaries at times and in amounts necessary to
meet our operating needs, to pay dividends to our shareholders or to pay corporate expenses.

27
Appendix B: Risk Factors

We are currently rated “B-” by A.M. Best. A decline in our rating could adversely affect our position in the insurance market, make it more difficult to market
our insurance products and cause our premiums and earnings to decrease.

Financial ratings are an important factor influencing the competitive position of insurance companies.

A.M. Best ratings, which are commonly used in the insurance industry, currently range from “A++” (Superior) to “F” (In Liquidation), with a total of 16 separate ratings
categories. A.M. Best currently assigns us a financial strength rating of “B-”. The objective of A.M. Best’s rating system is to provide potential policyholders and other
interested parties an opinion of an insurer’s financial strength and ability to meet ongoing obligations, including paying claims. This rating reflects A.M. Best’s analysis of
our balance sheet, financial position, capitalization and management. It is not an evaluation of an investment in our common shares, nor is it directed to investors in our
common shares and is not a recommendation to buy, sell or hold our common shares. This rating is subject to periodic review and may be revised downward, upward or
revoked at the sole discretion of A.M. Best.

Establishing a higher A.M. Best rating is a key part of our strategy for growth and increased profitability. It is possible that due to unforeseen events that our A.M. Best
rating will not be increased.

If our rating is reduced by A.M. Best, we believe that our competitive position in the insurance industry could suffer and it could be more difficult for us to market our
insurance products. A downgrade could result in a significant reduction in the number of insurance contracts we write and in a substantial loss of business to other
competitors with higher ratings, causing premiums and earnings to decrease.
New claim and coverage issues are continually emerging in the insurance industry and these new issues could negatively impact our revenues, our
business operations or our reputation.

As insurance industry practices and regulatory, judicial and industry conditions change, unexpected and unintended issues related to pricing, claims, coverage and
business practices may emerge. Plaintiffs often target property and casualty insurers in purported class action litigation relating to claims handling and insurance sales
practices. The resolution and implications of new underwriting, claims and coverage issues could have a negative effect on our insurance business by extending
coverage beyond our underwriting intent, increasing the size of claims or otherwise requiring us to change our business practices. The effects of unforeseen emerging
claim and coverage issues could negatively impact our revenues, results of operations and our reputation.

We may be subject to governmental or administrative investigations and proceedings in the context of our highly regulated sectors of activity. we cannot predict the
outcome of these investigations, proceedings and reviews, and cannot assure you that such investigations, proceedings or reviews or related litigation or changes in
operating policies and practices would not materially adversely affect our results of operations and financial condition. In addition, if we were to experience difficulties
with our relationship with a regulatory body in a given jurisdiction, it could have a material adverse effect on our ability to do business in that jurisdiction.

28
Appendix B: Risk Factors

If our claims payments and related expenses exceed our reserves, our financial condition and results of operations could be adversely affected.

Our success depends upon our ability to accurately assess and price the risks covered by the insurance policies that we write. We establish reserves to cover our
estimated liability for the payment of all losses and LAE incurred with respect to premiums earned on the insurance policies that we write.

Reserves do not represent an exact calculation of liability. Rather, reserves are estimates of our expectations regarding the ultimate cost of resolution and administration
of claims under the insurance policies that we write. These estimates are based upon actuarial and statistical projections, assessments of currently available data,
historical claims information, as well as estimates and assumptions regarding future trends in claims severity and frequency, judicial theories of liability and other factors.
We continually refine our reserve estimates in an ongoing process as experience develops and claims are reported and settled. In each of the past five years, annual
reserves were certified by an accredited actuarial firm, Towers Watson & Company (fka Towers, Perrin, Forster & Crosby, Inc.).

Establishing an appropriate level of reserves is an inherently uncertain process. The following factors may have a substantial impact on our future actual losses and LAE
experience:

Unfavorable development in any of these factors could cause our level of reserves to be inadequate.

To the extent that actual losses and LAE exceed expectations and the reserves reflected on our financial statements, we will be required to immediately reflect those
changes by increasing reserves. When we increase reserves, the pre-tax income for the period in which we do so will decrease by a corresponding amount. In addition
to having a negative effect on pre-tax income, increasing or “strengthening” reserves cause a reduction in our insurance companies’ surplus and could cause a
downgrading of the rating of our insurance company subsidiaries. Such a downgrade could, in turn, adversely affect our ability to sell insurance policies.
We may not be successful in reducing our risk and increasing our underwriting capacity through reinsurance arrangements, which could adversely affect
our business, financial condition and results of operations.

In order to reduce our underwriting risk and increase our underwriting capacity, we transfer portions of our insurance risk to other insurers through reinsurance contracts.

The availability, cost and structure of reinsurance protection are subject to prevailing market conditions that are outside of our control and which may affect our level of
business and profitability. We continually assess and continue to increase our participation in the risk retention for certain products in part because we believe the
current price increases in the reinsurance market are excessive for the reinsurance exposure assumed. In order for these contracts to qualify for reinsurance accounting
and to provide the additional underwriting capacity that we desire, the reinsurer generally must assume significant risk and have a reasonable possibility of a significant
loss. Our reinsurance facilities are generally subject to annual renewal. We may be unable to maintain our current reinsurance facilities or obtain other reinsurance
facilities in adequate amounts and at favorable rates. If we are unable to renew our expiring facilities or obtain new reinsurance facilities, either our net exposure to risk
would increase or, if we are unwilling to bear an increase in net risk exposures, we would have to reduce the amount of risk we underwrite which could adversely impact
our results of operations.

29
Appendix B: Risk Factors

We are subject to credit risk with respect to the obligations of our reinsurers and certain of our insureds. The inability of our risk sharing partners to meet
their obligations could adversely affect our profitability.

Although the reinsurer is liable to us to the extent of risk ceded by us, we remain ultimately liable to the policyholder on all risks, even those reinsured. As a result, ceded
reinsurance arrangements do not limit our ultimate obligations to policyholders to pay claims. We are subject to credit risks with respect to the financial strength of our
reinsurers. We are also subject to the risk that our reinsurers may dispute their obligations to pay our claims. As a result, we may not recover sufficient amounts for
claims that we submit to our reinsurers in a timely manner, if at all. As of December 31, 2009, we had a total of US$5.0 million of unsecured reinsurance recoverables. In
addition, our reinsurance agreements are subject to specified limits and we would not have reinsurance coverage to the extent that we exceed those limits.

With respect to our insurance programs, we are subject to credit risk with respect to the payment of claims and on the portion of risk exposure either ceded to the
captives or retained by our clients. The credit worthiness of prospective risk sharing partners is a factor we consider when entering into or renewing these alternative risk
transfer programs. We typically collateralize balances due through funds withheld, letters of credit or trust agreements. To date, we have not, in the aggregate,
experienced material difficulties in collecting balances from our risk sharing partners. No assurance can be given, however, regarding the future ability of these entities to
meet their obligations. The inability of our risk sharing partners to meet their obligations could adversely affect our profitability.
Our inability to retain our senior executives and other key personnel could adversely affect our business.

Our success depends, in part, upon the ability of our executive management and other key personnel to implement our business strategy and on our ability to attract and
retain qualified employees. Employment contracts will be executed with executive management prior to the close of the proposed transaction.

In addition, we must forecast volume and other factors in changing business environments with reasonable accuracy and adjust our hiring and employment levels
accordingly. Our failure to recognize the need for such adjustments, or our failure or inability to react appropriately on a timely basis, could lead either to over-staffing
(which would adversely affect our cost structure) or under-staffing (impairing our ability to service our current product lines and new lines of business). In either event,
our financial results and customer relationships could be adversely affected.

30
Appendix B: Risk Factors

Provisions in our organizational documents, corporate laws and the insurance laws of Illinois could impede an attempt to replace or remove our
management or Directors or prevent or delay a merger or sale, which could diminish the value of our common shares.

Our Amended and Restated Articles of Incorporation and Code of Regulations, the corporate laws and the insurance laws of various states contain, or are anticipated to
contain, provisions that could impede an attempt to replace or remove our management or Directors or prevent the sale of our Company that shareholders might
consider to be in their best interests. These provisions may include, among others:
— a classified Board of Directors consisting of no less than five, and no more than seven Directors divided into two classes;
— the inability of our shareholders to remove a Director from the Board without “cause;”
— requiring a vote of holders of 50% of the common shares to call a special meeting of the shareholders;
— requiring a two-thirds vote to amend the shareholder protection provisions of our Code of Regulations and to amend the Articles of Incorporation;
— requiring the affirmative vote of a majority of the voting power of our shares represented at a special meeting of shareholders;
— excluding the voting power of interested shares to approve a “control share acquisition”; and prohibiting a merger, consolidation, combination or majority share
acquisition between us and an interested shareholder or an affiliate of an interested shareholder for a period of three years from the date on which the shareholder
first became an interested shareholder, unless previously approved by our Board.

These provisions may prevent shareholders from receiving the benefit of any premium over the market price of our common shares offered by a bidder in a potential
takeover. In addition, the existence of these provisions may adversely affect the prevailing market price of our common shares if they are viewed as discouraging
takeover attempts.

The insurance laws of most states require prior notice or regulatory approval of changes in control of an insurance company or its holding company. The insurance laws
of the State of Illinois, where our U.S. insurance companies are domiciled, provide that no corporation or other person may acquire control of a domestic insurance or
reinsurance company unless it has given notice to such insurance or reinsurance company and obtained prior written approval of the relevant insurance regulatory
authorities. Any purchaser of 10% or more of our aggregate outstanding voting power could become subject to these regulations and could be required to file notices
and reports with the applicable regulatory authorities prior to such acquisition. In addition, the existence of these provisions may adversely affect the prevailing market
price of our common shares if they are viewed as discouraging takeover attempts. For further discussion of insurance laws, see the subsection of “Business” entitled
“Regulation.”
Future sales of our common shares may affect the trading price of our common shares.

We cannot predict what effect, if any, future sales of our common shares or the availability of common shares for future sale will have on the trading price of our common
shares. Sales of substantial amounts of our common shares in the public market by our shareholders, or the possibility or perception that such sales could occur, could
adversely affect prevailing market prices for our common shares. If such sales reduce the market price of our common shares, our ability to raise additional capital in the
equity markets may be adversely affected.

31
Appendix B: Risk Factors

We face ongoing challenges as a result of being a public company and our financial results could be adversely affected.

As a public company, we incur significant legal, accounting and other expenses that result from corporate governance requirements, including rules implemented by the
Ontario Securities Commission, the TSX, Office of the Superintendant of Financial Regulation (“OSFI”) and the Financial Industry Regulatory Authority. We expect these
rules and regulations to increase our legal and finance compliance costs and to make some activities more time-consuming and costly. We continue to evaluate and
monitor developments with respect to compliance with public company requirements and we cannot predict or estimate the amount or timing of additional costs we may
incur.

We have committed, and will continue to expend, a significant amount of resources to monitor and address any internal control issues, which may occur in our business.
Any failure to do so could adversely impact our operating results.
We are subject to comprehensive regulation, and our ability to earn profits may be restricted by these regulations.

We are subject to comprehensive regulation by government agencies in the states and foreign jurisdictions where our insurance company subsidiaries are domiciled
(Illinois) and, to a lesser degree, where these subsidiaries issue policies and handle claims. Failure by one of our insurance company subsidiaries to meet regulatory
requirements could subject us to regulatory action. The regulations and associated examinations may have the effect of limiting our liquidity and may adversely affect
results of operations. We must comply with statutes and regulations relating to, among other things:
— statutory capital and surplus and reserve requirements;
— standards of solvency that must be met and maintained;
— payment of dividends;
— changes of control of insurance companies;
— transactions between an insurance company and any of its affiliates;
— licensing of insurers and their agents;
— types of insurance that may be written;
— market conduct, including underwriting and claims practices;
— provisions for unearned premiums, losses and other obligations;
— ability to enter and exit certain insurance markets;
— nature of and limitations on investments, premium rates, or restrictions on the size of risks that may be insured under a single policy;
We do not have a significant presence in the market. You may have difficulty selling your common shares because of the limited trading volume for such
shares.

As a new public company whose common shares will begin trading on the TSX, there may be less coverage by security analysts, the trading price may be lower, and it
may be more difficult for our shareholders to dispose of their common shares due to the lower trading volume in our common shares. Our lack of a significant presence
in the market could serve to limit the distribution of news and limit investor interest in our common shares. In addition, the Company does not manage analysts’ or
investors’ earnings expectations. One or more of these factors could result in price volatility and serve to depress the liquidity and market prices of our common shares.32
Appendix B: Risk Factors

The insurance and related businesses in which we operate may be subject to periodic negative publicity which may negatively impact our financial results.

The products and services of our operating subsidiaries are ultimately distributed to individual and business consumers. From time to time, consumer advocacy groups
or the media may focus attention on insurance products and services, thereby subjecting the industry to periodic negative publicity. We also may be negatively impacted
if participants in one or more of our markets engage in practices resulting in increased public attention to our businesses.

Negative publicity may also result in increased regulation and legislative scrutiny of practices in our industry as well as increased litigation. These factors may further
increase our costs of doing business and adversely affect our profitability by impeding our ability to market our products and services, requiring us to change our
products or services or by increasing the regulatory burdens under which we operate.

33
Appendix C: Rights of Action

Securities legislation in certain Canadian provinces and territories provide purchasers of securities with rights of rescission or damages, or both, where an offering
memorandum or any amendment thereto contains a misrepresentation (as such term is defined in the applicable legislation). The following is a summary of such
statutory rights of rescission or damages only. The summary is subject to the express provisions of the applicable legislation and the rules and regulations there under,
and reference is made thereto for the complete text of such provisions. Investors should refer to the provisions of the applicable securities legislation for the
particulars of these rights and/or consult with a legal advisor.

The rights discussed below are in addition to and without derogation from any other right or remedy which purchasers may have at law and are intended to correspond
to the provisions of the relevant securities legislation and are subject to the defences contained therein.
Ontario Investors

The Securities Act (Ontario) provides an Ontario purchaser with a statutory right of action for damages or rescission against the issuer and selling security holder where
an offering memorandum contains a misrepresentation. A purchaser who purchases a security offered by the offering memorandum during the period of distribution is
deemed to have relied on such misrepresentation if it was a misrepresentation at the time of purchase.

The rights above are subject to a number of limitations and defences, including:
— No person is liable in an action for damages or rescission, if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation;
— In an action for damages, the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the
security as a result of the misrepresentation relied on; and
— In no case shall the amount recoverable under these rights of action exceed the price at which the securities were offered.

The rights above do not apply to a Canadian financial institution, an authorized foreign bank named in Schedule III of the Bank Act (Canada), the Business
Development Bank of Canada, or a subsidiary of the foregoing if the person owns all of the voting securities of the subsidiary, except the voting securities required by
law to be owned by directors of the subsidiary.

No action shall be commenced to enforce any of the foregoing rights unless such right is exercised within: (a) in the case of an action for rescission, 180 days from the
date of the transaction that gave rise to the cause of action, or (b) in the case of an action for damages, the earlier of (i) 180 days after the plaintiff first had knowledge of
the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause of action.
Alberta Investors

Securities legislation in Alberta provides that every purchaser of securities pursuant to an offering memorandum shall have, in addition to any other rights they may
have at law, a right of action for damages or rescission, or both, against: the issuer or selling security holder on whose behalf the distribution is made, as well as right of
action for damages against every director of the issuer, if the offering memorandum or any amendment thereto contains a misrepresentation. However, such rights must
be exercised within prescribed time limits.

The Securities Act (Alberta) provides that no action may be commenced to enforce such right of action unless the right is exercised: (a) in the case of an action for
rescission, 180 days from the day of the transaction that gave rise to the cause of action; or (b) in the case of any action, other than an action for rescission, the earlier
of: (i) 180 days from the day that the purchaser first had knowledge of the facts giving rise to the cause of action; or (ii) three years from the day of the transaction that
gave rise to the cause of action.

34
Appendix C: Rights of Action

Saskatchewan Investors

Securities legislation in Saskatchewan provides that where an offering memorandum or any amendment thereof is sent or delivered to a Saskatchewan purchaser and
such document contains a misrepresentation, a purchaser who purchases a security offered by the offering memorandum or any amendment thereof is deemed to have
relied upon that misrepresentation, if it was a misrepresentation at the time of purchase, and has a right of action for rescission against the issuer or a selling security
holder on whose behalf the distribution was made or has a right of action for damages against: (a) the issuer or a selling security holder on whose behalf the distribution
is made; (b) every promoter and director of the issuer or the selling security holder at the time the offering memorandum or any amendment thereof was sent or
delivered; (c) every person or company whose consent has been filed respecting the offering, but only with respect to reports, opinions or statements that have been
made by them; (d) every person or company that, in addition to those mentioned in (a) to (c) above, signed the offering memorandum or the amendment to thereof; and
(e) every person who or company that sells securities on behalf of the issuer or selling security holder under the offering memorandum or amendment thereof.

Subject to the provisions of The Securities Act, 1988 (Saskatchewan), no action shall be commenced to enforce any of the foregoing rights more than: (a) in the case of
an action for rescission, 180 days from the date of the transaction that gave rise to the cause of action, or (b) in the case of an action for damages, the earlier of (i) one
year after the plaintiff first had knowledge of the facts giving rise to the cause of action, or (ii) six years after the date of the transaction that gave rise to the cause of
action.
Manitoba Investors

If the purchaser is resident in Manitoba and if the offering memorandum contains a misrepresentation, each purchaser in Manitoba to whom the offering memorandum
has been sent or delivered and who purchases the securities, will be deemed to have relied upon such misrepresentation if it was a misrepresentation at the time of
purchase, and the purchaser has a right of action for damages against the issuer, and, subject to certain additional defences, against the directors of the issuer (who
were directors at the date of the offering memorandum) and any person or company who signed the offering memorandum, but may elect instead to exercise a right of
rescission against the issuer, in which case the purchaser will have no right of action for damages against the issuer or the directors of the issuer (who were directors at
the date of the offering memorandum) or any other person or company who signed the offering memorandum, provided that, among other limitations:
— in an action for rescission or damages, no person or company will be liable if it proves that the purchaser purchased the securities with knowledge of the
misrepresentation;
— in an action for damages, the issuer will not be held liable for all or any portion of the damages that it proves do not represent the depreciation in value of the
securities as a result of the misrepresentation relied upon; and
— in no case will the amount recoverable under the right of action described above exceed the price at which the securities were offered.

35
Appendix C: Rights of Action

Manitoba Investors (continued)

In addition, no person or company other than the issuer is liable if the person or company proves that:
— the offering memorandum was sent or delivered to the purchaser without the person's or company's knowledge or consent and that, on becoming aware of its
delivery, the person or company gave reasonable general notice that it was delivered without the person's or company's knowledge or consent;
— after delivery of the offering memorandum and before the purchase of the securities by the purchaser, on becoming aware of any misrepresentation in the offering
memorandum, the person or company withdrew the person's or company's consent to the offering memorandum and gave reasonable general notice of the
withdrawal and the reason for it; or
— with respect to any part of the offering memorandum purporting to be made on the authority of an expert, or to be a copy of, or an extract from, a report, an opinion
or a statement of an expert, the person or company had no reasonable grounds to believe and did not believe that: (i) there had been a misrepresentation; or (ii) the
relevant part of the offering memorandum (A) did not fairly represent the report, opinion or statement of the expert, or (B) was not a fair copy of, or an extract from,
the report, opinion or statement of the expert.

No action shall be commenced to enforce these rights more than: (a) in the case of an action for rescission, 180 days after the date of the transaction that gave rise to
the cause of action; or (b) in the case of any action, other than an action for rescission, the earlier of: (i) 180 days after the date on which the purchaser first had
knowledge of the facts giving rise to the cause of action; or (ii) two years after the date of the transaction that gave rise to the cause of action.
Nova Scotia Investors

Where an offering memorandum or any amendment thereto or any advertising or sales literature (as defined in the Securities Act (Nova Scotia)) contains a
misrepresentation, a purchaser to whom the offering memorandum has been delivered and who purchases a security referred to therein shall be deemed to have relied
upon such misrepresentation if it was a misrepresentation at the time of purchase and the purchaser has a right of action for damages against the seller but may elect to
exercise a right of rescission against the seller, in which case he shall have no right of action for damages against the seller, provided that:
— in an action for rescission or damages, the defendant will not be liable if it proves that the purchaser purchased the security with knowledge of the
misrepresentation;
— in an action for damages, the defendant is not liable for all or any portion of the damages that it proves do not represent the depreciation in value of the security as a
result of the misrepresentation relied upon;
— in no case shall the amount recoverable under the right of action described herein exceed the price at which the security was offered.

In addition, no person or company other than the issuer is liable if the person or company proves that:
— the offering memorandum or the amendment to the offering memorandum was sent or delivered to the purchaser without the person's or company's knowledge or
consent and that, on becoming aware of its delivery, the person or company gave reasonable general notice that it was delivered without the person's or company's
knowledge or consent;

36
Appendix C: Rights of Action

Nova Scotia Investors (continued)

— after delivery of the offering memorandum or the amendment to the offering memorandum and before the purchase of the securities by the purchaser, on becoming
aware of any misrepresentation in the offering memorandum, or amendment to the offering memorandum, the person or company withdrew the person's or
company's consent to the offering memorandum, or amendment to the offering memorandum, and gave reasonable general notice of the withdrawal and the reason
for it; or
— with respect to any part of the offering memorandum or amendment to the offering memorandum purporting: (i) to be made on the authority of an expert; or (ii) to be
a copy of, or an extract from, a report, an opinion or a statement of an expert, the person or company had no reasonable grounds to believe and did not believe that,
there had been a misrepresentation; or the relevant part of the offering memorandum or amendment to the offering memorandum (A) did not fairly represent the
report, opinion or statement of the expert, or (B) was not a fair copy of, or an extract from, the report, opinion or statement of the expert.

Furthermore no person or company other than the issuer is liable with respect to any part of the offering memorandum or amendment to the offering memorandum not
purporting (a) to be made on the authority of an expert, or (b) to be a copy of, or an extract from, a report, opinion or statement of an expert, unless the person or
company, (c) failed to conduct a reasonable investigation to provide reasonable grounds for a belief that there had been no misrepresentation, or (d) believed that there
had been a misrepresentation.

Pursuant to section 146 of the Securities Act (Nova Scotia), no action shall be commenced to enforce the right of action conferred by section 138 thereof unless an
action is commenced to enforce that right not later than 120 days after the date on which payment was made for the security or after the date on which the initial
payment for the security was made where payments subsequent to the initial payment are made pursuant to a contractual commitment assumed prior to, or
concurrently with, the initial payment.
New Brunswick Investors

Pursuant to section 150 of the Securities Act (New Brunswick), if an offering memorandum, together with any amendment thereto or any information relating to this
offering, or any advertising or sales literature delivered to a New Brunswick purchaser in connection with a distribution of securities, contains a misrepresentation and it
was a misrepresentation at the time of purchase, the purchaser will be deemed to have relied upon the misrepresentation and will, as provided below, have a right of
action against the issuer and a selling security holder on whose behalf the distribution is made, every director of the issuer and person who signed the offering
memorandum, for damages, or for rescission, in which case, if the purchaser elects to exercise the right of rescission, the purchaser will have no right of action for
damages, provided that among other limitations:
— no person is liable in an action for damages or rescission, if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation;
— in an action for damages, the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the
security as a result of the misrepresentation relied on;

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Appendix C: Rights of Action

New Brunswick Investors (continued)

— the issuer shall not be liable where it is not receiving any proceeds from the distribution of the securities being distributed and the misrepresentation was not based
on information provided by the issuer unless the misrepresentation (i) was based on information that was previously publicly disclosed by the issuer, (ii) was a
misrepresentation at the time of its previous public disclosure, and (iii) was not subsequently publicly corrected or superseded by the issuer before the completion of
the distribution of the securities being distributed; and
— in no case shall the amount recoverable under these rights of action exceed the price at which the securities were offered.

No action shall be commenced to enforce such right of action described above unless the right is exercised: (a) in the case of an action for rescission, 180 days from
the day of the transaction that gave rise to the cause of action; or (b) in the case of any action for damages, the earlier of: (i) one year from the day that the purchaser
first had knowledge of the facts giving rise to the cause of action; or (ii) six years from the day of the transaction that gave rise to the cause of action. Notwithstanding
the foregoing, no action shall be commenced to enforce such right of action more than 120 days after the date on which payment was made for the securities.
Prince Edward Island Investors

Pursuant to section 112(1) of the Securities Act (Prince Edward Island), if an offering memorandum contains a misrepresentation, a purchaser who purchases a security
offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied on the misrepresentation, a right of action for
damages against: the issuer, the selling security holder on whose behalf the distribution is made, every director of the issuer at the date of the offering memorandum,
and every person who signed the offering memorandum, or against the issuer or the selling security holder on whose behalf the distribution is made if the purchaser
elects to exercise a right of action for rescission, in which case the purchaser shall have no right of action for damages.

No person is liable if that person proves that the purchaser purchased the securities with knowledge of the misrepresentation. In addition, a person, other than the
issuer and selling security holder, is not liable under if that person proves that:
— The offering memorandum was sent to the purchaser without the person's knowledge or consent and that, on becoming aware of its being sent, the person had
promptly given reasonable notice to the issuer that it had been sent without the knowledge and consent of the person;
— the person, on becoming aware of the misrepresentation in the offering memorandum, had withdrawn the person's consent to the offering memorandum and had
given reasonable notice to the issuer of the withdrawal and the reason for it; or
— with respect to any part of the offering memorandum purporting to be made on the authority of an expert or purporting to be a copy of, or an extract from, a report,
statement or opinion of an expert, the person had no reasonable grounds to believe and did not believe that (i) there had been a misrepresentation, or (ii) the
relevant part of the offering memorandum (1) did not fairly represent the report, statement or opinion of the expert, or (2) was not a fair copy of, or an extract from,
the report, statement or opinion of the expert.

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Appendix C: Rights of Action

Prince Edward Island Investors (continued)

In an action for damages, the defendant is not liable for any damages that the defendant proves do not represent the depreciation in value of the security resulting from
the misrepresentation.

An issuer, and every director of the issuer at the date of the offering memorandum who is not a selling security holder, is not liable if the issuer does not receive any
proceeds from the distribution of the securities and the misrepresentation was not based on information provided by the issuer, unless the misrepresentation: (a) was
based on information previously publicly disclosed by the issuer; (b) was a misrepresentation at the time of its previous public disclosure; and (c) was not subsequently
publicly corrected or superseded by the issuer before completion of the distribution of the securities being distributed.

No action may be commenced to enforce a right more than: (a) in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the
cause of action; or (b) in the case of any action other than an action for rescission, (i) 180 days after the plaintiff first had knowledge of the facts giving rise to the cause
of action, or (ii) three years after the date of the transaction giving rise to the cause of action, whichever period expires first.
British Columbia, Quebec, Newfoundland and Labrador, the Northwest Territories, Nunavut and the Yukon Territory Investors

Purchasers of securities pursuant to this Private Placement Investor Presentation who are resident in British Columbia, Quebec, Newfoundland and Labrador, the
Northwest Territories, Nunavut or the Yukon Territory, shall be granted a contractual right of action for damages or rescission if this Private Placement Investor
Presentation, together with any amendments to it, contains a misrepresentation. The contractual right of action shall be granted on the same terms and conditions as
the statutory rights of action for purchasers of securities who are resident in Ontario as described above.

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