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AISIX SOLUTIONS INC — M&A Activity 2026
Jun 18, 2026
47495_rns_2026-06-18_f6220e57-a547-4fde-8ce3-7e2f94f1c854.pdf
M&A Activity
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AMALGAMATION AGREEMENT
THIS AGREEMENT is made effective as of June 11, 2026 (the “Effective Date”).
AMONG:
AISIX SOLUTIONS INC.
a corporation existing under the laws of British Columbia with offices at [Address redacted]
(“Aisix”)
AND:
RE: DRYING EQUIPMENT INC. (formerly LEMARG INC.)
a corporation existing under the laws of Canada with offices at of [Address redacted]
(“Lemarg”)
WHEREAS:
A. Aisix is a corporation existing under the laws of British Columbia and a reporting issuer in the Provinces of British Columbia and Alberta;
B. Lemarg is a corporation existing under the laws of the Canada Business Corporations Act;
C. Aisix wishes to acquire all of the issued and outstanding securities of Lemarg by way of a triangular amalgamation (the “Amalgamation”) pursuant to which: (i) Subco (as defined herein) will amalgamate with Lemarg under Section 181 of the Canada Business Corporations Act to form Amalco (as defined herein), (ii) the LM Shareholders (as defined herein) will receive common shares of the Resulting Issuer (as defined herein) in exchange for their LM Shares (as defined herein), and (iii) the Amalgamation will result in a “reverse take-over” of Aisix in accordance with the policies of the TSXV (as defined herein); and
D. In connection with the Amalgamation, Aisix will complete the Name Change (as defined herein) and Consolidation (as defined herein) and conduct the business of Lemarg as the resulting issuer (the “Resulting Issuer”), through Amalco all in the manner contemplated by and pursuant to the terms and conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do covenant and agree each with the other as follows:
1. Definitions and Schedules
1.1 Definitions: In this Agreement:
“1821 Debt Settlement” means the settlement of a principal amount of $451,000 plus accrued interest pursuant to a short-term loan issued to 1821 Capital Corp. on January 27, 2025, as amended, through the issuance of post-Consolidation Aisix Shares at a price of $0.27 per share;
“Agreement” means this amalgamation agreement and any Schedules attached hereto;
"Aisix" means Aisix Solutions Inc., as it currently exists, and for purposes of this Agreement includes Aisix as it will exist following the Name Change;
"Aisix Disclosure Documents" has the meaning assigned to that term in paragraph 8 of Schedule C;
"Aisix Financial Statements" has the meaning assigned to that term in paragraph 14 of Schedule C;
"Aisix Investigation" has the meaning assigned to that term in Section 4.2(a);
"Aisix Meeting" has the meaning assigned to that term in Section 2.1(a);
"Aisix Representatives" has the meaning assigned to that term in Section 4.2(a);
"Aisix Resignations and Releases" has the meaning assigned to that term in Section 3.2;
"Aisix Shareholders" means the registered holders of Aisix Shares and "Aisix Shareholder" means any one of them;
"Aisix Shares" means common shares in the capital of Aisix as they exist as of the date of this Agreement;
"Amalco" means the corporation resulting from the Amalgamation;
"Amalco Shares" means the common shares of Amalco;
"Amalgamating Companies" means Subco and Lemarg;
"Amalgamation" means the amalgamation of the Amalgamating Companies pursuant to Section 181 of the CBCA on the terms and conditions set forth in this Agreement;
"Applicable Laws" means all applicable rules, policies, notices, orders and legislation of any kind whatsoever of any governmental authority, regulatory body or stock exchange having jurisdiction over the transactions contemplated hereby;
"Articles of Amalgamation" means the articles of amalgamation, in a form to be agreed to between the Parties, acting reasonably, required to be filed with the Director pursuant to Section 185 of the CBCA in respect of the Amalgamation;
"Assets" means all properties, assets, privileges, rights, interests and claims, real and personal, tangible and intangible, of every type and description, which are owned or used by Lemarg in undertaking its Business, as a going concern, or to which Lemarg is entitled in connection with the Business;
"BCBCA" means the Business Corporations Act (British Columbia) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time;
"BC Registrar" means the Registrar of Companies for the Province of British Columbia duly appointed under the BCBCA;
"Books and Records" means all books, records, files, documents and other written Information relating to the Business or Lemarg or Aisix (as the case may be);
"Business" means Lemarg's business as it is currently being conducted by it;
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"Business Days" means any day, excluding Saturday or Sunday, on which banking institutions are open for business in Toronto, Ontario;
"CBCA" means the Canada Business Corporations Act;
"Certificate of Amalgamation" means the certificate issued by the Director pursuant to Section 185(4) of the CBCA to evidence the Amalgamation;
"Certificate of Name Change" means the certificate in respect of the Name Change issued by the BC Registrar;
"Closing" has the meaning assigned to that term in Section 9.1;
"Closing Date" has the meaning assigned to that term in Section 8.1;
"Communication" has the meaning assigned to that term in Section 13.8;
"Consolidation" means the consolidation of the Aisix Shares on a ten for one (10:1) basis;
"Director" means the Director appointed under Section 260 of the CBCA;
"Disclosure Document" means the disclosure document in the form prescribed by the Exchange to be filed by Aisix with the Exchange in relation to listing the Resulting Issuer Shares on the Exchange following closing of the Amalgamation;
"Dissenting Lemarg Shares" means the LM Shares held by Dissenting Shareholders;
"Dissent Rights" means, in respect of Lemarg, the right to dissent provided by Section 190(1) of the CBCA, in respect of the Amalgamation;
"Dissenting Shareholder" means a LM Shareholder who, in connection with the special resolution of the LM Shareholders approving the Amalgamation, has validly exercised the right to dissent pursuant to section 190 of the CBCA in strict compliance with the provisions thereof and thereby becomes entitled to receive the fair value of his, her or its LM Shares, and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights as permitted by section 190 of the CBCA, but only in respect of LM Shares in respect of which Dissent Rights are validly exercised by such holder;
"Amalgamation Effective Date" means the effective date of the Amalgamation as set out on the Certificate of Amalgamation issued to Amalco;
"Effective Time" means the time on the Effective Date that the Amalgamation becomes effective, which the Parties agree shall be 12:01 a.m. (Toronto time) on the Amalgamation Effective Date or such other time on the Amalgamation Effective Date as may be determined by the Parties and confirmed by them in writing;
"Encumbrances" means mortgages, charges, pledges, security interests, liens, encumbrances, actions, claims, pre-emption rights, liabilities, demands and equities of any nature, including without limitation, any liability for accrued but unpaid taxes;
"Escrow Agreement" has the meaning assigned to that term in Section 2.1(l);
"Escrow Policy" means National Policy 46-201, Escrow for Initial Public Offerings;
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"Exchange" or "TSXV" means the TSX Venture Exchange;
"Exchange Ratio" means 193,332.51 Resulting Issuer Shares for every one LM Share, based on each of Lemarg and Aisix having their respective issued and outstanding share capital as is reflected in Schedule "A" attached hereto and subject to adjustment if necessary to reflect any changes to Schedule "A" that occur prior to Closing;
"Government Authority" means any foreign, national, provincial, local or state government, any political subdivision or any governmental, judicial, public or statutory instrumentality, court, tribunal, agency (including those pertaining to health, safety or the environment), authority, body or entity, or other regulatory bureau, authority, body or entity having legal jurisdiction over the activity or Person in question and, for greater certainty, includes the Exchange and the applicable Securities Commissions;
"Gross Revenue" means the total aggregate amount earned in connection with the Business achieved within the twelve (12) months following Closing, calculated on an accrual basis, and including all amounts invoiced, booked, or otherwise recorded as receivable in accordance with Canadian generally accepted accounting principles, regardless of whether such amounts have been collected or received in cash during the Earnout Period. For greater certainty, Gross Revenue includes: (i) all fees, charges, and other consideration earned in respect of work performed or goods delivered during the Earnout Period, whether or not invoiced as of the end of such period; (ii) all amounts invoiced and outstanding as accounts receivable; and (iii) the fair market value of any non-monetary consideration received or receivable.
"Information" means all agreements, data, knowledge, know-how, reports, surveys, analyses, technical, accounting and financial records, and other material information developed in and pertaining to the business and operations of a party, in whatever form and however communicated, developed, conceived, originated or obtained;
"ITA" means the Income Tax Act (Canada);
"Lemarg" means Re: Drying Equipment Inc. (formerly Lemarg Inc.), a corporation incorporated and existing in accordance with the Canada Business Corporations Act;
"LM Approvals" means all necessary approvals and consents required to be obtained by Lemarg in connection with the transactions contemplated by this Agreement;
"LM Financial Statements" means the audited financial statements of Lemarg for the years ended September 30, 2025 and 2024; and any unaudited financial statements for any subsequently completed interim quarterly period; all prepared in accordance with International Financial Reporting Standards;
"LM Investigation" has the meaning assigned to that term in Section 4.1(a);
"LM Representatives" has the meaning assigned to that term in Section 4.1(a);
"LM Securities" means collectively the LM Shares outstanding in the capital of Lemarg and any Subscription Receipts issued by Lemarg in the Transaction Financing, if applicable, or as held by each LM Securityholder, as applicable;
"LM Shareholders" means the holders of LM Shares, which may include the LM Shares issued pursuant to the Transaction Financing;
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"LM Shares" means the common voting shares in the capital of Lemarg as constituted on the date hereof;
"Material Adverse Change" or "Material Adverse Effect" means, with respect to a Person, any matter or action that has an effect or change that is, or would reasonably be expected to be, material and adverse to the business, results of operations, assets, capitalization, financial condition, rights, liabilities or prospects, contractual or otherwise, of such Person and its subsidiaries, if applicable, taken as a whole, other than any matter, action, effect or change relating to or resulting from:
(a) a matter that has been publicly disclosed prior to the date of this Agreement or otherwise disclosed in writing by a Party to the other Party prior to the date of this Agreement;
(b) any action or inaction taken by such Person to which the other Person had consented in writing;
(c) the announcement of the transactions contemplated by the Amalgamation or this Agreement;
(d) general economic, financial, currency exchange, securities, banking or commodity market conditions in the United States, Canada or worldwide; or
(e) this Agreement or the Amalgamation;
"Material Contracts" means contracts, agreements and other material documents of a Person of any kind whatsoever including, without limitation, lease agreements, license agreements, assignment agreements, operating agreements, joint venture agreements, acquisition and disposition agreements, employment agreements, shareholder or voting agreements, share purchase or sale agreements, bank and financial institution loans, promissory notes, debenture, general security, subordination and priority agreements that are material to such Person's business;
"Milestone Shares" means the additional Resulting Issuer Shares to be issued to the LM Shareholders in accordance with Section 2.7(a);
"Name Change" means the change of name of Aisix to such name as is acceptable to Lemarg and the Exchange;
"Performance Milestone" means at least $2,500,000 in Gross Revenue;
"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or association, or a governmental entity (or any department, agency, or political subdivision thereof);
"Personal Information Form" means a Form 2A – Personal Information Form to be completed by every individual who, if the securities of the application are accepted for listing on the Exchange, will at the time of listing be a Related Person (as such term is defined in the policies of the Exchange) of Aisix;
"Principal Shareholder" means Re: Brands Inc.;
"Regulatory Approvals" means all approvals, consents, waivers, permits, orders or exemptions from any Government Authority having jurisdiction or authority over any party hereto which are required to be obtained in order to list on the Exchange, including, without limitation, approval of the Exchange and the applicable Securities Commissions;
"Resulting Issuer" means Aisix following completion of the Name Change, Consolidation and Amalgamation as described in this Agreement;
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"Resulting Issuer Shares" means the common shares in the capital of the Aisix following the Name Change and the Consolidation;
"Securities Act" means the British Columbia Securities Act, R.S.B.C. 1996, c.418, as amended and the current rules and regulations thereunder, and the blanket rulings, orders and instruments issued by the British Columbia Securities Commission;
"Securities Commissions" means collectively the British Columbia Securities Commission and such other commissions as may hold jurisdiction over the transactions contemplated herein;
"Securities Laws" means the securities legislation having application, the regulations and rules thereunder and all administrative policy statements, instruments, blanket orders, notices, directions and rulings issued or adopted by the applicable securities regulatory authority, all as amended;
"Security" or "Securities" means any shares, ownership interests, stock options, stock option plans, employee share ownership plans, warrants, convertible notes or debentures, agreements, documents, instruments or other writings of any kind whatsoever which constitute a "security" as that term is defined in the Securities Act;
"Subco" means a wholly owned subsidiary of Aisix to be incorporated under the laws of the Canada Business Corporations Act for the sole purpose of effecting the Amalgamation;
"Sunset Date" means November 30, 2026, or such other date as the parties may mutually approve in writing;
"Tax" or "Taxes" means all taxes and other governmental charges of any kind whatsoever including without limitation, all federal, state, municipal or other governmental imposed income tax, capital tax, capital gains tax, transfer tax, value-added tax, sales tax, social services, health, payroll and employment taxes, duty, customs, or import duties and any penalty charges or interest in respect of the forgoing;
"Third Party" means any partnership, corporation, trust, unincorporated organization, union, government, governmental department or agency, individual or any heir, executor, administrator or other legal representative of an individual other than a party to this Agreement;
"Time of Closing" has the meaning assigned to that term in Section 8.1;
"Transaction Financing" mean the offer of sale by Aisix and/or Lemarg, as applicable, on a private placement basis, of subscription receipts (each, a "Subscription Receipt") for minimum gross proceeds of $1,500,000 and maximum gross proceeds of $2,000,000 at an offering price of minimum $0.027 per Subscription Receipt on a pre-Consolidation basis;
"Transfer Agent" means Aisix's register and transfer agent – TSX Trust Company; and
"United States" means the United States of America, its territories and possessions, any State of the United States and the District of Columbia.
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1.2 Schedules:
The following schedules are attached to and form part of this Agreement:
| Schedule | Title |
|---|---|
| A | Lemarg Authorized and Issued Securities |
| B | Representations and Warranties of Lemarg and the Principal Shareholder |
| C | Representations and Warranties of Aisix |
| D | Existing Aisix Consulting and Employment Agreements |
- The Amalgamation
2.1 Amalgamation Steps
The Parties agree that the Amalgamating Companies shall amalgamate under Section 181 of the CBCA effective as of the Effective Time and shall continue as one corporation on the terms and conditions set out in this Agreement. The Parties shall determine the Amalgamation Effective Date by mutual agreement, it being the intent of the Parties that the Amalgamation shall not occur unless, and the Articles of Amalgamation shall not be filed with the Director unless and until, the delivery and release of documents pursuant to Section 8 below shall have occurred (the "Closing").
Each of the Parties agrees to act in good faith and use all commercially reasonable efforts to take and do, or cause to be taken and done, all acts and other things necessary, proper or advisable to obtain all necessary approvals to complete the Amalgamation and the other transactions contemplated hereby in accordance with the terms and conditions hereof and applicable laws, and to cooperate with each other in connection therewith. Each Party hereby agrees that as soon as reasonably practicable after the date hereof or at such other time as is specifically indicated below, and subject to the terms and conditions of this Agreement, it shall take the following steps indicated for it:
(a) to the extent required by Applicable Laws, including Exchange policies, Aisix shall duly call and convene a meeting of the shareholders of Aisix (the "Aisix Meeting") at which the Aisix Shareholders will be asked to approve the Amalgamation described in this Agreement, the Consolidation, the Name Change and any other ancillary matters necessary to complete the Amalgamation and Aisix shall use all commercially reasonable efforts to obtain the approval of the Aisix Shareholders for the foregoing matters and any other ancillary matter required by the Exchange;
(b) Lemarg shall approve the Amalgamation and any other ancillary matters required by the Exchange by way of a written resolution of all of the LM Shareholders and Lemarg shall use all commercially reasonable efforts to obtain the approval of the LM Shareholders for the foregoing matters;
(c) Aisix shall use commercially reasonable efforts to complete the Transaction Financing;
(d) Aisix shall cause Subco to be incorporated as wholly-owned subsidiary of Aisix on terms acceptable to Lemarg;
(e) Following the receipt of shareholder approval at the Aisix Meeting and the completion of the Transaction Financing, and immediately prior to the filing of the
Articles of Amalgamation, Aisix shall effect the Consolidation, following which Aisix will have 18,575,085 Aisix Shares issued and outstanding, as well as the Aisix stock options and warrants as described in Schedule “A” attached hereto. No fractional post-Consolidation Aisix Shares will be delivered to any Aisix Shareholder otherwise entitled thereto and instead the number of post-Consolidation Aisix Shares to be issued to each former Aisix Shareholder will be rounded down to the nearest whole number;
(f) Lemarg and Subco shall amalgamate by way of statutory amalgamation under Section 181 of the CBCA on the terms and subject to the conditions contained in this Agreement and Aisix and Lemarg further agree that the Amalgamation Effective Date shall occur within ten (10) Business Days following the later of: (i) the receipt of shareholder approval by the Aisix Shareholders of the special business at the Aisix Meeting; (ii) the completion of the Transaction Financing; and (iii) the satisfaction of all conditions imposed by the Exchange or any other regulatory requirements;
(g) the Parties shall cause the Articles of Amalgamation to be filed to effect the Amalgamation, pursuant to which:
(i) the Amalgamating Companies will amalgamate under the provisions of the CBCA and continue as one amalgamated corporation, being Amalco and Amalco will be a wholly-owned subsidiary of Aisix;
(ii) all of the property and assets of each of the Amalgamating Companies will be the property and assets of Amalco and Amalco will be liable for all of the liabilities and obligations of each of the Amalgamating Companies;
(iii) the Articles of Amalgamation shall be deemed to be the articles of incorporation of Amalco and, the Certificate of Amalgamation shall be deemed to be the certificate of incorporation of Amalco;
(iv) Amalco shall be deemed to be the party plaintiff or the party defendant, as the case may be, in any civil action commenced by or against an Amalgamating Company before the Effective Time; and
(v) Amalco will be a direct wholly-owned subsidiary of the Resulting Issuer.
(h) subject to Section 2.5, LM Shares which are held by a Dissenting Shareholder shall not be converted as prescribed by Section 2.2(b). However, if a Dissenting Shareholder fails to perfect or effectively withdraw its claim under Section 190 of the CBCA or forfeits its right to make a claim under Section 190 of the CBCA or if its rights as a shareholder of Lemarg are otherwise reinstated, such Dissenting Shareholder’s LM Shares shall thereupon be deemed to have been converted as of the Amalgamation Effective Date as prescribed by Section 2.2(b);
(i) immediately following the filing of the Articles of Amalgamation to effect the Amalgamation, Aisix will: (i) reconstitute its board of directors to give effect to the director appointments in accordance with Section 3.1, and (ii) effect the Name Change;
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(k) as soon as practicable after the Amalgamation Effective Date, in accordance with normal commercial practice, Aisix shall issue or cause to be issued certificates, advices issued under a direct registration system or electronic positions within CDS representing the appropriate number of the Resulting Issuer Shares to the former LM Shareholders. No fractional Resulting Issuer Shares will be delivered to any LM Shareholder otherwise entitled thereto and instead the number of Resulting Issuer Shares to be issued to each former LM Shareholder will be rounded down to the nearest whole number;
(l) the Parties acknowledge that the Exchange will require some or all of the Resulting Issuer Shares issued pursuant to this Agreement to be held in escrow and Lemarg agrees to comply and use its reasonable efforts to cause its shareholders to comply with all such escrow requirements of the Exchange including the execution and delivery of the Exchange escrow agreement (the "Escrow Agreement") in the form as required by the Exchange; and
(m) the Parties shall take any other action and do anything, including the execution of any other agreements, documents or instruments, that are necessary or useful to give effect to the transactions contemplated by this Agreement.
2.2 Exchange of Securities Pursuant to Amalgamation
Pursuant to the Amalgamation, the issued and outstanding common shares in the capital of Subco ("Subco Shares") and LM Shares, and the outstanding rights to acquire such shares, immediately prior to the Effective Time shall, at the Effective Time, be exchanged or cancelled as follows:
(a) each LM Share held by a Dissenting Shareholder immediately prior to the Effective Time shall become an entitlement to be paid the fair value of such share;
(b) each LM Share (other than those held by Dissenting Shareholders) issued and outstanding immediately prior to the Effective Time shall be cancelled, and in consideration therefor the holder of such LM Shares shall receive such number of Resulting Issuer Shares for each LM Share held in accordance with the Exchange Ratio, issued by the Resulting Issuer free and clear of any and all encumbrances, liens, charges or demands of any kind and nature;
(c) as consideration for the issuance of the Resulting Issuer Shares to effect the Amalgamation, Amalco will issue to the Resulting Issuer one (1) fully paid Amalco Share for each Resulting Issuer Share so issued; and
(d) each Subco Share issued and outstanding immediately prior to the Effective Time shall be cancelled, and, in consideration therefor, Amalco shall issue one fully paid and non-assessable Amalco Share to the Resulting Issuer.
2.3 Fractional Securities
No fractional Resulting Issuer Shares will be issued pursuant to the Amalgamation. Following the Effective Time, if the aggregate number of Resulting Issuer Shares to which a former holder of LM Shares would otherwise be entitled to receive pursuant to Section 2.2(b) hereof is not a whole number, then the number of Resulting Issuer Shares to be issued to such former holder shall be rounded down to the nearest whole number and no compensation shall be payable in lieu thereof,
provided that each Lemarg Shareholder (other than Dissenting Shareholders) shall receive at least one Resulting Issuer Share.
2.4 Stated Capital Additions
Upon the Amalgamation and the issuance of shares contemplated by Section 2 hereof there shall be added to the stated capital account maintained by the Resulting Issuer for the Resulting Issuer Shares, in respect of the Resulting Issuer Shares issued to the former holders of LM Shares in accordance with Section 2.2(b) hereof, an amount equal to the “paid-up capital” (as defined in the Tax Act) of the LM Shares (other than LM Shares held by Dissenting Shareholders) outstanding immediately prior to the Effective Time.
2.5 Dissenting Lemarg Shareholders
LM Shareholders will be entitled to exercise Dissent Rights with respect to their LM Shares in connection with the Amalgamation pursuant to and in the manner set forth in the CBCA. Lemarg shall give Aisix notice of any written notice of a dissent, withdrawal of such notice, and any other instruments served pursuant to such Dissent Rights and received by Lemarg, and shall provide Aisix with copies of such notices and written objections. LM Shares which are held by a Dissenting Shareholder shall not be exchanged for Resulting Issuer Shares pursuant to the Amalgamation. However, if a Dissenting Shareholder fails to perfect or effectively withdraw their claim under the CBCA, or forfeits their right to make a claim under the CBCA, or if such Dissenting Shareholder’s rights as a LM Shareholder are otherwise reinstated, such LM Shareholder’s LM Shares shall thereupon be deemed to have been exchanged for Resulting Issuer Shares as of the Effective Time as prescribed herein.
2.6 Resulting Issuer Shares and Procedures
(a) At the Effective Time, the registrar and transfer agent of the Resulting Issuer shall forward or cause to be forwarded by first class mail (postage prepaid) to the former LM Shareholders, at the address specified in the central securities register maintained by Lemarg, advices issued under a direct registration system or share certificates issued by such transfer agent evidencing the number of Resulting Issuer Shares issued to such LM Shareholder pursuant to the Amalgamation, and all share certificates representing LM Shares outstanding immediately prior to the Effective Time shall represent only the right of the registered holder thereof to receive Resulting Issuer Shares in accordance with this Agreement.
(b) The share certificates representing the Amalco Shares issued to the Resulting Issuer in connection with the Amalgamation will be kept in the minute books of Amalco.
(c) Aisix, as the registered holder of the Subco Shares, shall be deemed to be the registered holder of the Amalco Shares to which it is entitled hereunder and Aisix shall be entitled to receive a share certificate representing the number of Amalco Shares to which it is entitled hereunder. Until delivery of such certificate, the share certificate or certificates representing the Subco Shares held by Aisix will be evidence of Aisix’s right to be registered as a shareholder of Amalco. Share certificates evidencing Subco Shares shall cease to represent any claim upon or interest in Subco other than the right of the registered holder to receive the number Amalco Shares to which it is entitled pursuant to the terms hereof and the Amalgamation.
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2.7 Aisix to Issue Milestone Shares
(a) If within 12 months after the Closing, Lemarg achieves the Performance Milestone Aisix will issue to the LM Shareholders an additional 8,529,376 Resulting Issuer Shares (the “Milestone Shares”) as fully paid and non-assessable Aisix Shares. In the event Lemarg does not achieve the Performance Milestone, Aisix will issue such number of Milestone Shares that is equivalent to the following: (Amount of Performance Milestone achieved / Performance Milestone) x Milestone Shares. By way of example, if the satisfied Performance Milestone is $1,250,000 then the amount of Milestone Shares shall be equal to ($1,250,000 / $2,500,000) x 8,529,376 = 4,264,688.
(b) Promptly following the expiry of twelve (12) months from the Closing (the “Earnout Period”), Lemarg shall prepare or cause to be prepared and deliver to the then independent directors of Aisix who are not also officers of Aisix and were not LM Nominee Directors or their successors (as such term is used in Section 3.1 of this Agreement) (the “Aisix Earnout Committee”) a statement (the “Earnout Statement”) setting forth, in reasonable detail, (i) the Gross Revenue for the Earnout Period. In the event the Performance Milestone is achieved prior to the Earnout Period Lemarg will prepare the Earnout Statement as soon as reasonably practicable and deliver the same to the Aisix Earnout Committee.
(c) In the event that the Aisix Earnout Committee disputes the calculation of the Milestone Shares set forth in the Earnout Statement, within fifteen (15) days following delivery by Lemarg of such Earnout Statement (an “Earnout Dispute Notice Deadline”), the Aisix Earnout Committee shall notify Lemarg in writing by delivery of a notice (an “Earnout Dispute Notice”), which Earnout Dispute Notice shall set forth in reasonable detail the nature of any and all items in dispute and the proposed correct amount of such item in dispute. Any such dispute shall be resolved under the expert determination procedures set forth in Section 2.7(g) of this Agreement. Any item or amount on an Earnout Statement to which no dispute is raised in the Earnout Dispute Notice will be final, conclusive and binding on the parties hereto.
(d) During the period commencing on the date of the delivery of an Earnout Statement and ending on (i) if the Aisix Earnout Committee timely delivers an Earnout Dispute Notice, the date of the resolution of such dispute in writing, or (ii) if the Aisix Earnout Committee does not timely deliver the Earnout Dispute Notice, the Earnout Dispute Notice Deadline, Lemarg shall make available (subject to customary confidentiality agreements and the delivery of non-reliance letters, if applicable) to the Aisix Earnout Committee relevant books and records of Lemarg and the Business, and will reasonably cooperate with the Aisix Earnout Committee as may be reasonably required for the purposes of the Aisix Earnout Committee’s review right and dispute process contemplated in this Section.
(e) Promptly following the date an Earnout Statement becomes final in accordance with this Section 2.7, and in no event more than ten (10) Business Days thereafter, Aisix shall issue, or cause to be issued, the Milestone Shares in accordance with the instructions of Lemarg.
(f) For the avoidance of doubt, the Milestone Shares will be earned at such time the Performance Milestone is achieved, regardless of whether such time occurs earlier than the expiry of the Earnout Period or not.
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(g) If Lemarg and the Aisix Earnout Committee are unable to agree on the determination or calculation of Gross Revenue under this Agreement (each, a “Disputed Metric”), either party may, upon written notice to the other party, request that such Disputed Metric be determined by an independent expert (the “Expert”). The Expert shall be a qualified professional with relevant expertise in the applicable field, mutually agreed upon by the parties in writing within fifteen (15) days of the delivery of such written notice. If the parties fail to agree on the appointment of an Expert within such period, either party may request that the Expert be appointed by the Canadian Institute of Chartered Business Valuators (or its successor organization). The Expert shall act as an expert and not as an arbitrator. Each party shall provide the Expert with all relevant information, records, and documentation reasonably requested within ten (10) Business Days of the Expert's request. The Expert shall render a written determination of the Disputed Metric within thirty (30) days of receiving all necessary information, unless otherwise agreed by the parties in writing. The Expert’s determination shall be final and binding on the parties, absent manifest error. The costs and fees of the Expert shall be borne equally by the parties, unless the Expert determines that one party’s position was unreasonable, in which case the Expert may allocate such costs and fees accordingly. All proceedings and determinations conducted pursuant to this provision shall be kept strictly confidential in accordance with the confidentiality obligations set out in this Agreement.
2.8 Initial Amalco Corporate Matters
At the Effective Time, and thereafter subject to such changes as may be properly effected under the CBCA and the Articles of Amalgamation, as the case may be:
(a) Name. The name of Amalco shall be “Lemarg Holdings Inc.”, or such other name as Aisix and Lemarg shall agree.
(b) Registered Office. Until changed in accordance with the CBCA, the registered office of Amalco shall be the registered office of Lemarg.
(c) Directors. Until changed in accordance with the CBCA, the board of directors of Amalco shall consist of a minimum of one and a maximum of ten directors.
(d) First Director. The number of directors of Amalco shall initially be set at one. The following person shall be the first director of Amalco and shall hold office from the Amalgamation Effective Date until the first annual meeting of the shareholders of Amalco, or until his successor is duly elected or appointed:
| Name | Address | Resident Canadian |
|---|---|---|
| Ruslan Elensky | [Address redacted] | Yes |
(e) Business and Powers. There shall be no restrictions on the business that Amalco may carry on, or on the powers that Amalco may exercise, subject to the provisions of the CBCA.
(f) Authorized Capital. The authorized capital of Amalco shall consist of an unlimited number of common shares (being the Amalco Shares). The Amalco Shares shall have the rights, privileges, restrictions and conditions set out in the Articles of Amalgamation.
(g) Restricted Transfer of Shares. If Amalco: (a) is not a reporting issuer or investment fund within the meaning of applicable securities legislation; and (b) has not distributed to the public (excluding accredited investors within the meaning of applicable securities legislation) any of its securities, then no Amalco Shares shall be transferred by the Resulting Issuer without either: (i) the previous consent of the board of directors expressed by a resolution passed by the board of directors or by an instrument or instruments in writing signed by a majority of the directors; or (ii) the previous consent of the holders of at least 51% of the shares of that class for the time being outstanding expressed by a resolution passed by the shareholders or by an instrument or instruments in writing signed by such shareholders.
(h) By-Laws. Upon the Articles of Amalgamation becoming effective, the by-laws of Amalco shall be those of Lemarg, until repealed, amended, altered or added to in accordance with the CBCA. A copy of such by-laws may be examined at the registered office of Amalco.
(i) Fiscal Year. The fiscal year end of Amalco shall be September 30th of each calendar year.
3. Director and Officer Appointments
3.1 On Closing, the directors and officers of the Resulting Issuer shall consist of the following persons, and Aisix shall take all necessary steps to obtain resignations of existing directors and officers in order for these appointments to be effective on Closing:
| Ruslan Elensky | Director and Chairman, Chief Executive Officer |
|---|---|
| Veronique Laberge | Chief Financial Officer |
| Genadi Saltikov | LM Nominee Director |
| Riccardo Forno | LM Nominee Director |
| Edward Olson | Aisix Director |
| Gioachino Roberti | Aisix Director |
3.2 On Closing, Aisix shall deliver: (i) resignations and mutual releases of each of Gioachino Roberti (as Chief Executive Officer of Aisix), Charles Jenkins (as Chief Financial Officer of Aisix) and Mihalis Belantis (as Chairman of the board of directors of Aisix) (the "Aisix Resignations and Releases") with effect from Closing; such resignations to include waivers and releases in favour of Lemarg in respect of any liabilities of Aisix to them.
3.3 Aisix and Lemarg, on behalf of the Resulting Issuer, must make an offer of employment or of engagement as a consultant by the Resulting Issuer, as applicable, to each of the employees and consultants of Aisix listed in Schedule D no later than the date being 14 days prior to Closing which must: (a) be conditional on Closing; (b) be effective from the Effective Time; (c) be on terms and conditions that are at least substantially similar to, and considered on an overall basis, no more or less favourable than, the terms and conditions of the applicable employee or consultant at Closing; and (d) in the case of an employee, recognize such employee's prior service with Aisix and that such employee's continuity of employment will not be broken by the Closing. For greater certainty and the avoidance of doubt, in lieu of a new offer of employment pursuant to this Section 3.3, the Resulting Issuer and any employee listed in Schedule D may
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agree to continue the employment of such employee following Closing under the existing employment agreement for such employee at the time of Closing.
4. Covenants, Agreements and Acknowledgements
4.1 Aisix covenants and agrees with Lemarg that from and including the Effective Date through to and including the Closing Date it shall:
(a) permit Lemarg, through its directors, officers, employees and authorized agents and representatives (collectively the “LM Representatives”) at Lemarg’s own cost, full access during normal business hours to all Information pertaining to Aisix including, without limitation, all of the assets, material contracts and minute books of Aisix, and any Information relating to Aisix’s directors or officers, so as to permit Lemarg to make such investigation (the “LM Investigation”) of Aisix as Lemarg deems necessary;
(b) use its reasonable commercial efforts to complete the Aisix Investigation (as such term is defined in Section 4.2(a)) within 15 Business Days of the date that the Aisix Representatives (as such term is defined in Section 4.2(a)) receive all required due diligence materials in order to complete the Aisix Investigation;
(c) with the cooperation of Lemarg and the Principal Shareholder, use commercially reasonable efforts to prepare the Disclosure Document or any other disclosure document required by the Exchange and all other related materials, and obtain Exchange approval to listing the Resulting Issuer Shares, the Milestone Shares and any Aisix Shares issuable to investors in the Transaction Financing on the Exchange, as soon as reasonably possible;
(d) other than: (i) the Aisix Shares to be issued hereunder (including the Aisix Shares to be issued pursuant to the 1821 Debt Settlement), (ii) any Aisix Shares issued in connection with the exercise or conversion of any outstanding securities of Aisix exercisable or convertible into Aisix Shares in accordance with their terms, and (iii) any Subscription Receipts of Aisix issued in the Transaction Financing, not permit the issuance from treasury of any Aisix Shares or securities convertible or exercisable for Aisix Shares;
(e) do all such acts and things necessary to ensure that all of the representations and warranties of Aisix remain true and correct and not do any such act or thing that would render any representation or warranty of Aisix untrue or incorrect;
(f) not solicit or negotiate with any other Person in respect of any offer to buy, or offer to agree to sell, or sell or otherwise transfer or issue, any of its assets or unissued shares in its capital or any interest therein and shall not merge or enter into a business combination with or solicit or negotiate any offer to merge or enter into a business combination with or into any corporation or entity other than Lemarg;
(g) execute all undertakings and comply with all requirements of the applicable Securities Laws, the Exchange, the Securities Commissions and any other Persons or governmental or regulatory authorities, which may be necessary or reasonable to list the Resulting Issuer Shares, the Milestone Shares and any Aisix Shares issuable to investors in the Transaction Financing and the 1821 Debt Settlement on the Exchange;
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(h) execute and do all such further deeds, acts, things and assurances as may be reasonably required to complete the transactions contemplated herein;
(i) not incur or commit to incur any debt other than in the ordinary course of business, except with the prior consent of Lemarg (which consent shall not be unreasonably withheld or delayed);
(j) not make any expenditures outside of the ordinary course of business, other than as contemplated herein;
(k) not declare or pay any dividends or distribute any of its properties or assets to shareholders;
(l) not enter into or amend or terminate any Material Contracts out of the ordinary course of business, other than in connection with this Agreement;
(m) other than with respect to the Name Change and Consolidation, not alter or amend its articles or constating documents, except as agreed with Lemarg;
(n) not redeem, purchase or offer to purchase any of its common shares or other securities;
(o) not sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any of its Assets; and
(p) not acquire, directly or indirectly, any assets, including but not limited to securities of other companies, other than as contemplated herein.
4.2 Lemarg covenants and agrees with Aisix that from and including the Effective Date through to and including the Closing Date it shall:
(a) permit Aisix, and its authorized agents and representatives (collectively “Aisix Representatives”), at Aisix’s own cost, full access during normal business hours to all Information pertaining to Lemarg, including, without limitation, all of the Assets, material contracts and minute books of Lemarg and any Information relating to Lemarg, and its directors, officers and the LM Shareholders, so as to permit Aisix’s Representatives to make such investigation of the financial condition, business, properties, title, assets and affairs of Lemarg and the title of the LM Shares (the “Aisix Investigation”) as Aisix deems necessary;
(b) use its reasonable commercial efforts to complete the LM Investigation within 30 days of the date that the LM Representatives receive all required due diligence materials in order to complete the LM Investigation;
(c) use its reasonable commercial efforts to provide to Aisix, at the request of Aisix as soon as available, all such further Information, documents, instruments and materials and do all such acts and things as may be required by Aisix to prepare the Disclosure Document and obtain Exchange approval for listing, including, but not limited to, providing to Aisix:
(i) LM Financial Statements in a form acceptable to the Exchange;
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(ii) a business plan outlining the business, industry, market, personnel and budgets for Lemarg looking forward 24 months if requested by the Exchange;
(iii) a valuation of the Assets or Business of Lemarg in a form acceptable to the Exchange, if such valuation is requested by the Exchange or it is mutually determined by Lemarg and Aisix that it would be beneficial to provide such valuation to the Exchange; and
(iv) a fully completed and properly executed Personal Information Form for each director and senior officer of Aisix subsequent to Closing or any Person who will hold more than 10% of the Aisix Shares on Closing;
(d) do all such acts and things necessary to ensure that all of the representations and warranties of Lemarg remains true and correct and not do any such act or thing that would render any representation or warranty of Lemarg untrue or incorrect except as contemplated by this Agreement;
(e) preserve and protect the Assets;
(f) not solicit or negotiate with any other Person in respect of any participation interest or agreement in relation to the Assets, offer to buy, or offer to agree to sell, or sell any Assets or the Business of Lemarg or any interest therein or issue any shares in the capital of Lemarg or other securities; and shall not merge or enter into a business combination with or solicit or negotiate any offer to merge or enter into a business combination with or into any corporation or entity other than Aisix;
(g) use its reasonable commercial efforts to obtain all LM Approvals, any consents and waivers and give all notices which are required prior to Closing;
(h) execute all undertakings and comply with all requirements of the applicable securities laws, the Exchange, the Securities Commissions and any other Persons or governmental or regulatory authorities, which may be necessary or reasonable to obtain the necessary LM Approvals and Regulatory Approvals to the transactions contemplated hereby;
(i) execute and do all such further deeds, acts, things and assurances as may be reasonably required to complete the transactions contemplated herein;
(j) not incur or commit to incur any additional debt out of the ordinary course of business, except with the prior consent of Aisix (which consent shall not be unreasonably withheld or delayed);
(k) not make any material expenditures out of the ordinary course of business, other than as contemplated herein or as disclosed to Aisix;
(l) not declare or pay any dividends or distribute any of its properties or Assets to its shareholders;
(m) except as disclosed to Aisix, not enter into any Material Contracts out of the ordinary course of business and shall not enter into or amend or terminate any Material Contracts in relation to the Assets;
(n) not alter or amend its articles or constating documents;
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(o) except as disclosed to Aisix, not sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any of the Assets; and
(p) except as disclosed to Aisix, not acquire, directly or indirectly, any assets out of the ordinary course of business, including but not limited to securities of other companies, other than as contemplated herein.
Conditions Precedent
5.1 The respective obligations of the parties hereto to complete the transactions contemplated by this Agreement will be subject to the satisfaction of the following conditions, any of which may be waived by the parties not required to perform the condition in whole or in part without prejudice to such parties' right to rely on any other of them:
(a) The approval of the terms of the Transaction Financing by both Parties and the closing of the Transaction Financing by Aisix;
(b) approval of the Amalgamation and ancillary matters thereto, including without limitation the Name Change and Consolidation, by the Exchange;
(c) approval of the Name Change, Consolidation and Amalgamation by the Aisix Shareholders, to the extent required by Applicable Laws;
(d) this Agreement shall not have been terminated pursuant to Article 10;
(e) all Regulatory Approvals and corporate approvals shall have been obtained;
(f) each Party shall not have entered into any transaction or contract which would have a material effect on the financial and operational condition, or the assets of each Party, excluding those transactions or contracts undertaken in the ordinary course of business, without first discussing and obtaining the approval of the other Parties;
(g) the requisite approval of the shareholders of Aisix and Lemarg, as applicable, of the Amalgamation shall have been obtained;
(h) the requisite approval of the shareholders of Aisix of the Consolidation, Name Change and director appointments shall have been obtained;
(i) the Transaction Financing shall have been completed for minimum gross proceeds of $1.5 million; and
(j) there will not be in force any order or decree restraining or enjoining the consummation of the transactions contemplated by this Agreement, including, without limitation, the Amalgamation; and all consents, orders and approvals required or necessary or desirable for the completion of the transactions provided for in this Agreement will have been obtained or received, all on terms satisfactory to each of the parties hereto, acting reasonably.
If any of the above conditions shall not have been complied with or waived by the Parties on or before the Sunset Date or, if earlier, the date required for the performance thereof, then a Party
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may terminate this Agreement in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by the Party terminating the Agreement. In the event that the failure to satisfy any one or more of the above conditions precedent results from a material default by a Party of its obligations under this Agreement and if such condition(s) precedent would have been satisfied but for such default, such defaulting Party shall not rely on such failure (to satisfy one or more of the above conditions) as a basis for its own non-compliance with its obligations under this Agreement.
5.2 Aisix's obligations under this Agreement including, without limitation, its obligation to close the transactions contemplated under this Agreement, are subject to the fulfillment, to its satisfaction, of the following conditions that:
(a) on or before the Time of Closing, Aisix will have been permitted to complete the Aisix Investigation to its reasonable satisfaction;
(b) there will have been no Material Adverse Change in the Business, affairs, financial condition or operations of Lemarg;
(c) Lemarg will have completed or complied with the matters outlined in Section 4.2;
(d) the Board of Directors of Lemarg will have approved the transfer of the LM Shares to Aisix, or otherwise complied with all applicable laws for transfer of such shares;
(e) there shall be no dilutive securities of Lemarg outstanding, except those contemplated herein or issued in connection with the transactions contemplated herein;
(f) Lemarg shall have no Encumbrances on its Assets, and not have incurred any other liabilities out of the ordinary course of business;
(g) all covenants, agreements and obligations hereunder on the part of Lemarg and the LM Shareholders to be performed or complied with at or prior to the Closing contained herein will have been performed and complied with in all material respects;
(h) on Closing, Lemarg and the LM Shareholders will have delivered to Aisix the documents required to be delivered by them pursuant to Section 8.2; and
(i) Lemarg shall have completed and delivered the LM Financial Statements.
The conditions precedent set forth above are for the exclusive benefit of Aisix and may be waived by it in whole or in part on or before the Time of Closing.
5.3 Lemarg's obligations under this Agreement including, without limitation, its obligations to close the transactions contemplated under this Agreement, are subject to the fulfillment, to their satisfaction, of the following conditions:
(a) on or before the Time of Closing, Lemarg will have been permitted to complete LM Investigation to its reasonable satisfaction;
(b) there will have been no Material Adverse Change in the Business, affairs, financial condition or operations of Aisix;
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(c) the board of directors of Aisix will have approved the transactions contemplated herein, including, without limitation, the Milestone Shares and any Aisix Shares issuable to investors in the Transaction Financing;
(d) on or before the Time of Closing, Aisix will have obtained the approval of the Aisix Shareholders to the Amalgamation in accordance with Exchange policies;
(e) the Certificate of Name Change shall have been issued by the BC Registrar giving effect to the Name Change and the Consolidation shall have been effected;
(f) Aisix will have completed or complied with the matters outlined in Section 4.1;
(g) on Closing the board of Aisix shall have been reconstituted in the manner set forth in Section 3.1;
(h) Aisix will not have incurred any liabilities other than those reasonably incurred in connection with the transactions contemplated in this Agreement and will have spent its cash on hand at the date of this Agreement exclusively in the ordinary course of business and for the purpose of completing the Amalgamation and any other transaction contemplated hereby;
(i) the representations and warranties of Aisix contained in Schedule C will be true and correct in all material respects at and as of the Closing;
(j) all covenants, agreements and obligations hereunder on the part of Aisix to be performed or complied with at or prior to the Closing contained herein will have been performed and complied with in all material respects;
(k) on Closing, Aisix will have delivered to Lemarg the documents required to be delivered by them pursuant to Section 8.3;
(l) at any time prior to and including the Time of Closing, there will not have been any Material Adverse Change in the business or affairs of Aisix;
(m) there shall be no shares or securities or warrants of Aisix issued and outstanding as of the Time of Closing, except those referred to herein, which for greater certainty shall include only 2,500,000 options outstanding (on a pre-Consolidation basis) issued to [Names redacted];
(n) there shall be no outstanding amounts payable by Aisix to a related party of Aisix (which includes any officer or director of Aisix or any Person that is controlled or directed by a related party) (an “Aisix Related Party”) pursuant to any loan provided by an Aisix Related Party to Aisix, including, for greater certainty and the avoidance of doubt, pursuant to the loan agreement dated January 24, 2025, as amended, between Aisix and 1821 Capital Corp., a Person of which Mihalis Belantis is the principal;
(o) Aisix shall have appointed the signatories agreed with Lemarg to the bank accounts of Aisix with the signing powers agreed between the parties or provide appropriate forms to amend the mandates given by Aisix to its bankers;
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(p) Aisix shall provide, or cause its legal counsel to provide, to Lemarg the legal opinion described in Section 8.3(h), if applicable;
(q) Aisix shall have at least $100,000 of working capital, calculated as the difference between: (A) Aisix’s cash on hand plus GST receivables, less (B) current payables up to the day prior to the Closing Date;
(r) the 1821 Debt Settlement shall have been completed;
(s) the management cease trade order dated May 1, 2026 issued by the British Columbia Securities Commission shall have been revoked;
(t) options to purchase 7,600,000 Aisix Shares shall have expired in accordance with their terms or have been cancelled by the respective holders of such options; and
(u) Aisix Solutions GmbH (formerly Minerva Intelligence GmbH) shall have been dissolved and have no surviving obligations or liabilities and Lemarg shall have received a full indemnity and release in this regard from a senior officer of Aisix (the “German Subsidiary Release”), and for greater certainty and the avoidance of doubt, such German Subsidiary Release shall not be binding on, or enforceable against, Charles Jenkins in his capacity as an officer or director of Aisix Solutions GmbH.
The conditions precedent set forth above are for the exclusive benefit of Lemarg, and may be waived by Lemarg in whole or in part on or before the Time of Closing.
6. Lemarg and Principal Shareholder’s Representations and Warranties
6.1 In order to induce Aisix to enter into this Agreement and complete its obligations hereunder, Lemarg (and the Principal Shareholder) make the representations and warranties set forth in Schedule B.
6.2 The representations and warranties of Lemarg and the Principal Shareholder contained in Schedule B are true and correct as of the Effective Date and shall be true and correct in all material respects at the Time of Closing as though they were made at that time.
7. Aisix Representations and Warranties
7.1 In order to induce Lemarg and the LM Shareholders to enter into this Agreement and complete their respective obligations hereunder, Aisix makes the representations and warranties to Lemarg contained in Schedule C.
7.2 The representations and warranties of Aisix contained in Schedule C are true and correct as of the Effective Date and shall be true and correct in all material respects at the Time of Closing as though they were made at that time.
8. Closing
8.1 The completion of the transactions contemplated under this Agreement shall be closed (the “Closing”) at the offices of the solicitors for Aisix, at 10:00am Vancouver Time (the “Time of Closing”), on the date which is the fifth business day following the satisfaction or waiver of all conditions precedent as set out in Section 5, or such other time or day as the parties may agree
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upon (the "Closing Date"). In the event that the transactions contemplated under this Agreement have not closed on or before the Sunset Date, either Aisix or Lemarg may terminate this Agreement by notice in writing to the other parties to this Agreement and this Agreement shall then be of no further force and effect.
8.2 At a time selected by the Parties prior to the Closing Date (the "Pre-Closing Date"), Lemarg shall deliver to Aisix the following Closing documents:
(a) certified true copies of any corporate authorizations which are necessary in order to authorize and approve this Agreement, Lemarg's execution and delivery hereof and all of the transactions of Lemarg contemplated hereunder, which authorization shall include specific reference to the approval of the Amalgamation as contemplated by this Agreement;
(b) a copy of all of the LM Share certificates, duly marked as cancelled; and a new share certificate representing all of the issued and outstanding LM Shares issued to and in the name of Aisix;
(c) the minute books and records of Lemarg duly brought up to date;
(d) the Escrow Agreement, duly executed by those LM Shareholders receiving Resulting Issuer Shares on Closing who are required by the Exchange to execute and deliver the Escrow Agreement; and
(e) all such other closing documents as Lemarg and Aisix may mutually agree upon prior to the Time of Closing.
8.3 On the Pre-Closing Date, Aisix shall deliver to Lemarg the following:
(a) certified true copies of the corporate authorizations of Aisix which are necessary in order to authorize and approve this Agreement, Aisix's execution and delivery hereof and all of the transactions of Aisix contemplated hereunder, which authorizations shall include specific reference to the approval of:
(i) this Agreement and the authorization of Aisix's entry hereinto;
(ii) the Transaction Financing;
(iii) the issuance of the Resulting Issuer Shares, the Milestone Shares and any Aisix Shares issuable to investors in the Transaction Financing on the Exchange to the LM Shareholders pursuant to the terms of this Agreement; and
(iv) receipt of and acceptance of the Aisix Resignations and Releases and the appointment of Lemarg nominees for directors and officers;
(b) certificates representing Resulting Issuer Shares issued on Closing registered in the names of or as directed by Lemarg;
(c) certificates representing Aisix Shares issued on Closing registered in the names of the investors in the Transaction Financing;
(d) the conditional approval of the Amalgamation, 1821 Debt Settlement and listing of the Aisix Shares to be issued to the LM Shareholders from the Exchange;
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(e) evidence that the matters outlined in Section 4.1 have been completed;
(f) evidence that any financing statements registered under the Personal Property Security Act have been discharged, including without limitation the financing statement registered in the name of 1821 Capital Corp.;
(g) the Aisix Resignations and Releases duly executed;
(h) evidence that Aisix has appointed the signatories agreed with Lemarg to the bank accounts of Aisix with the signing powers agreed between the parties, or the appropriate forms to amend the mandates given by Aisix to its bankers;
(i) if requested by Lemarg, a legal opinion from counsel to Aisix with respect to the applicable Canadian Securities Laws exemptions relied on in respect of the Resulting Issuer Shares, the Milestone Shares and the Aisix Shares issued to the investors in connection with the Transaction Financing;
(j) the German Subsidiary Release; and
(k) all such other closing documents as Lemarg and Aisix may mutually agree upon prior to the Time of Closing.
8.4 The items tabled at Closing pursuant to Sections 8.2 and 8.3 shall be held in escrow until all of such items have been tabled and Aisix and Lemarg have acknowledged that they are satisfied therewith, whereupon one or more share certificates registered in the name of Aisix or its designated nominees representing all of the outstanding LM Shares shall be delivered by Lemarg to Aisix, and such escrow shall be terminated and the Closing shall have occurred. If such escrow is not released on or before 5:00 p.m. on the Sunset Date and Aisix and Lemarg do not agree to an extension of the escrow, the Closing shall not occur, and the balance of the documents tabled by each party shall be returned to such party.
- Non-Solicitation
None of the Parties shall solicit any offers to purchase its shares or assets and neither of Aisix nor Lemarg will initiate or encourage any discussions or negotiations with any third party with respect to such a transaction or amalgamation, merger, take-over, plan of arrangement or similar transaction during the period commencing on the date hereof and ending on the termination of this Agreement (excluding, for greater certainty, any solicitations by Aisix of offers to purchase Subscription Receipts under the Transaction Financing). The Parties shall immediately cease and cause to be terminated any existing discussions or negotiations with any third party related to any of the foregoing. In the event any of the Parties is approached in respect of any such transaction, it shall immediately notify the other.
- Termination
10.1 This Agreement may be terminated by the mutual agreement of the parties hereto. Unless otherwise agreed in writing by the parties hereto, this Agreement shall terminate without further notice or agreement in the event that:
(a) any condition precedent set out in Section 5 is not satisfied, released or waived on or before the Closing or such earlier date indicated therein;
(b) by either Lemarg or the Aisix, by written notice to the other, if the Closing has not occurred on or before the Sunset Date, or such later date as may be approved in writing by Lemarg and Aisix, provided that the right to terminate pursuant to this Section shall not be available to any party whose failure to fulfil any obligation under this Agreement has been the primary cause of, or has resulted in, the failure of the Closing to occur on or before the Sunset Date; or
(c) Lemarg shall have the right to terminate this Agreement, in its sole and absolute discretion, by delivering written notice of termination to Aisix at any time prior to the expiration of the Due Diligence Period (as defined below) if Lemarg determines, in good faith, that the results of its due diligence investigation are unsatisfactory to Lemarg (a “Due Diligence Termination”). The “Due Diligence Period” shall mean the period commencing on the date of this Agreement and expiring at 5:00 p.m. (Toronto time) on the date that is fifteen (15) Business Days after the date on which Aisix provides written notice that the data room is fully populated (the “Due Diligence Expiry Date”), unless extended by mutual written agreement of the parties. If Lemarg does not deliver a written notice of Due Diligence Termination to Aisix prior to the expiration of the Due Diligence Period, Lemarg shall be deemed to have waived its right to terminate this Agreement pursuant to this Section, and the parties shall proceed to Closing in accordance with the terms and conditions of this Agreement.
In the event of the termination of this Agreement as provided in this Section, this Agreement shall forthwith have no further force or effect and there shall be no obligation on the part of Aisix or Lemarg hereunder except as set forth in Section 10.2 hereof and this Section 10.1, which provisions shall survive the termination of this Agreement. Nothing herein shall relieve any Party from liability for any breach of this Agreement.
10.2 The Parties hereto shall be responsible for the payment of their own professional fees (including but not limited to legal and accounting fees) and other expenses incurred by them in connection with this Agreement whether or not the Amalgamation is completed.
- Indemnification.
11.1 Each party (each, an “Indemnifying Party”) shall indemnify, defend, and hold harmless the other party and its respective directors, officers, employees, agents, successors, and permitted assigns (each, an “Indemnified Party”) from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable legal fees) (collectively, “Losses”) arising out of or relating to: (a) any breach of any representation, warranty, covenant, or obligation made by the Indemnifying Party under this Agreement; or (b) the gross negligence or wilful misconduct of the Indemnifying Party or its representatives in connection with the transactions contemplated by this Agreement. Notwithstanding the foregoing, no party shall be liable to the other party for any indirect, consequential, special, or punitive damages, even if advised of the possibility of such damages, except to the extent such damages are awarded to a third party in connection with a third-party claim. An Indemnified Party seeking indemnification under this provision shall: (i) provide the Indemnifying Party with prompt written notice of the relevant claim; (ii) grant the Indemnifying Party reasonable control over the defence and settlement of such claim, provided that no settlement that imposes any obligation or liability on the Indemnified Party shall be made without the prior written consent of the Indemnified Party, not to be unreasonably withheld or delayed; and (iii) provide reasonable cooperation to the Indemnifying Party in connection with the defence of such claim, at the Indemnifying Party's cost and expense.
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12. Dissenting Shareholders
12.1 On the earlier of the Amalgamation Effective Date, the making of an agreement between a Dissenting Shareholder and Lemarg for the purchase of their Dissenting Lemarg Shares or the pronouncement of a court order pursuant to Section 190 of the CBCA, a Dissenting Shareholder shall cease to have any rights as a LM Shareholder other than the right to be paid the fair value of its Dissenting Lemarg Shares in the amount agreed to or as ordered by the court, as the case may be. Notwithstanding anything in this Agreement to the contrary, Dissenting Lemarg Shares which are held by a Dissenting Shareholder shall not be exchanged for Resulting Issuer Shares on the Amalgamation Effective Date as provided in Section 2.2(b) hereof. However, in the event that a Dissenting Shareholder fails to perfect or effectively withdraws the Dissenting Shareholder's claim under Section 190 of the CBCA or otherwise forfeits the Dissenting Shareholder's right to make a claim under Section 190 of the CBCA, the Dissenting Shareholder's Dissenting Lemarg Shares shall thereupon be deemed to have been exchanged as of the Amalgamation Effective Date for Resulting Issuer Shares on the basis set forth in Section 2.2(b) hereof.
13. General
13.1 Neither Aisix nor Lemarg will make any press release, public announcement or public statement about the transactions contemplated herein which has not been previously approved by the others, except that Aisix may make a press release or filing with a regulatory authority if counsel for Aisix advises that such press release or filing is necessary under applicable securities laws or the rules and policies of the Exchange, provided that Aisix will provide Lemarg with the opportunity to review and provide comments prior to dissemination.
13.2 Each party to this Agreement will be responsible for all of his, her or its own expenses and costs in respect of the transactions contemplated hereunder including, without limitation, expenses and costs incurred for professional advice such as legal, accounting, tax, financial and business advice, among others, finder's fees and any personal or corporate sales taxes, income taxes and capital gains.
13.3 Time and each of the terms and conditions of this Agreement shall be of the essence of this Agreement; and any waiver by the parties of this subsection or any failure by them to exercise any of their rights under this Agreement shall be limited to the particular instance and shall not extend to any other instance or matter in this Agreement or otherwise affect any of their rights or remedies under this Agreement.
13.4 The Schedules to this Agreement and the recitals to this Agreement constitute a part of this Agreement. The headings in this Agreement are for reference only and do not constitute terms of the Agreement. Whenever the singular or masculine is used in this Agreement the same shall be deemed to include the plural or the feminine or the body corporate or vice versa as the context may require.
13.5 This Agreement constitutes the entire Agreement between the parties hereto in respect of the matters referred to herein and there are no representations, warranties, covenants or agreements, expressed or implied, collateral hereto other than as expressly set forth or referred to herein.
13.6 The parties hereto shall execute and deliver all such further documents and instruments and do all such acts and things as any party may, either before or after the Closing, reasonably require of the other in order that the full intent and meaning of this Agreement is carried out. The provisions
contained in this Agreement which, by their terms, require performance by a party to this Agreement subsequent to the Closing, shall survive the Closing of this Agreement.
13.7 No alteration, amendment, modification or interpretation of this Agreement or any provision of this Agreement shall be valid and binding upon the parties hereto unless such alteration, amendment, modification or interpretation is in written form executed by all of the parties to this Agreement.
13.8 Any payment, notice, request, demand, election and other communication of any kind whatsoever (a “Communication”) to be given under this Agreement shall be in writing and shall be delivered by hand or e-mail to the parties at their following respective addresses:
(a) To Lemarg or the LM Shareholders:
[Address redacted]
Attention: Ruslan Elensky, CEO
Email: [Email address redacted]
With a copy to (which shall not constitute notice):
Irwin Lowy LLP
[Address redacted]
Attention: Riccardo Forno
Email: [Email address redacted]
(b) To Aisix:
[Address redacted]
Attention: Mihalis Belantis, Chairman
Email: [Email address redacted]
With a copy to:
MLT Aikins LLP
[Address redacted]
Attention: Mahdi Shams
Email: [Email address redacted]
or to such other addresses as may be given in writing by the parties hereto in the manner provided for in this subsection, and the party sending such notice should request acknowledgment of delivery and the party receiving such notice should provide such acknowledgment. Notwithstanding whether or not a request for acknowledgment has been made or replied to, whether or not delivery has occurred will be a question of fact. If a party can prove that delivery was made as provided for above, then it will constitute delivery for the purposes of this Agreement whether or not the receiving party acknowledged receipt. Each of the LM Shareholders hereby appoints Lemarg as its nominee for the purpose of receiving a Communication from Aisix pursuant to this Agreement.
13.9 This Agreement may not be assigned by any party hereto without the prior written consent of all of the parties hereto.
13.10 This Agreement shall be subject to, governed by, and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, and the
- 25 -
parties hereby agree to attorn to the non-exclusive jurisdiction of the Courts of British Columbia and not to commence any form of proceedings in any other forum.
13.11 The phrase “to the knowledge of” when used to modify or describe the state of knowledge of factual or legal matters relating to a party, whether or not used with any other limiting or expansive language, shall be construed in all cases to mean “to the knowledge of the party after diligent enquiry”.
13.12 The word “including”, when following any general statement or terms, is not to be construed as limiting the general statement or term to the specific items or matters set forth or to similar items or matters, but rather as permitting the general statement or term to refer to all other items or matters that could reasonably fall within its broadest possible scope.
13.13 All references to currency are deemed to mean Canadian dollars.
13.14 A reference to a statute includes all regulations made thereunder, all amendments to the statute or regulation in force from time to time, and every statute or regulation that supplements or supersedes such statute or regulation.
13.15 Words importing the masculine gender include the feminine or neuter; words in the singular include the plural; a word importing a corporate entity includes an individual; and vice versa.
13.16 This Agreement may be signed by fax and in counterpart, and each copy so signed shall be deemed to be an original, and all such counterparts together shall constitute one and the same instrument.
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IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective Date first above written.
| AISIX SOLUTIONS INC. | RE: DRYING EQUIPMENT INC. |
|---|---|
| Per: “Gioachino Roberti” | |
| Name: Gioachino Roberti | |
| Title: Chief Executive Officer | Per: “Ruslan Elensky” |
| Authorized Signatory |
RE: BRANDS INC.
Per:
Per: “Ruslan Elensky”
Authorized Signatory
- 27 -
SCHEDULE A
Lemarg Authorized Share Capital and Issued Securities
| Security | Total Number Issued |
|---|---|
| LM Shares | 100 |
| Other Convertible Securities | Nil |
Aisix Authorized Share Capital and Issued Securities
| Security | Total Number Issued |
|---|---|
| Aisix Shares | 185,750,858 |
| Aisix Options | 10,100,000¹ |
| Aisix Warrants | 38,251,192 |
| Other Convertible Securities | Nil |
Resulting Issuer Capitalization²
| Security | Total Number Issued |
|---|---|
| Resulting Issuer Shares held by Aisix Shareholders | 18,575,085 |
| Resulting Issuer held by former Lemarg Shareholders | 19,333,251 |
| TOTAL UNDILUTED | 37,908,336 |
| Milestone Shares issuable to LM Shareholders on achievement of the Performance Milestone | Up to 8,529,376 |
| Resulting Issuer Shares issued in connection with the 1821 Debt Settlement³ | 1,670,370 |
| TOTAL UNDILUTED WITH PERFORMANCE MILESTONE EARNED IN FULL | 48,108,082 |
¹ Parties acknowledge and agree that immediately prior to Closing there shall be a maximum of 2,500,000 options issued and outstanding in favour of [Names redacted] on a pre-Consolidation basis.
² Parties agree that the Resulting Issuer Capitalization table with respect to the Resulting Issuer Shares issuable pursuant to the Transaction Financing and 1821 Debt Settlement is representative only and may be subject to change prior to Closing subject to and in accordance with the terms of the Agreement.
³ Assuming conversion of principal amount of loan of $451,000 at $0.27 Transaction Financing price.
A-1
| Security | Total Number Issued |
|---|---|
| Resulting Issuer Shares issued pursuant to the Transaction Financing (assuming maximum financing of $2,000,000 at $0.27 post-Consolidation) | 7,407,407 |
| TOTAL UNDILUTED WITH FINANCING | 55,515,489 |
| Options | 250,000 |
| Warrants | 3,825,119 |
| TOTAL FULLY DILUTED: | 59,590,608 |
A-2
B-1
SCHEDULE B
Representations and Warranties of Lemarg and the Principal Shareholder
Each of Lemarg and the Principal Shareholder jointly and severally represent, warrant and agree as of the date hereof and at the Time of Closing that:
- Lemarg is duly incorporated, validly existing and in good standing under the laws of Canada, and has all necessary corporate power to own its Assets and to conduct its Business as such Business is now being conducted;
- Lemarg has the power, authority and capacity to enter into this Agreement and to carry out its terms;
- to the extent required, Lemarg is qualified to conduct business in each jurisdiction as necessary to perform its obligations under each of the Material Contracts, as applicable;
- Lemarg does not own or control directly or indirectly, any interest in any corporation, association, partnership, joint venture or other business entity;
- the execution and delivery of this Agreement and all other related agreements or documents, and the completion of the transactions contemplated hereby, will by the Time of Closing have been duly and validly authorized by all necessary corporate acts on the part of it, and this Agreement constitutes a legal, valid and binding obligation of it;
- the authorized share capital of Lemarg is, and will be at the Time of Closing as described in Schedule A, all of which LM Shares will be at the time of Closing validly issued, fully paid and non-assessable and are registered to and beneficially owned by the LM Shareholders and in amounts described in Schedule A, and will be, as at the Time of Closing, free and clear of all Encumbrances of any kind whatsoever;
- the rights, privileges, restrictions and conditions attached to the LM Shares are as set out in Lemarg’s constating documents and under applicable corporate legislation;
- there are and will be at the Time of Closing no outstanding share purchase warrants, options or other rights or other arrangements to acquire shares in the capital of Lemarg or under which Lemarg is bound or obligated to issue additional shares in its capital; and the LM Shareholders and the LM Shares are not subject to the terms of any shareholder or voting trust agreement;
- Lemarg has not entered into any agreement, option, understanding or commitment or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment with any Third Party, for the acquisition of any portion of the Assets or Business of Lemarg which has not been terminated prior to the date thereof;
- the Assets, including all assets necessary to conduct the Business, are owned and at the Time of Closing will be owned by Lemarg free and clear of all Encumbrances whatsoever and Lemarg and the Principal Shareholders are not aware of any adverse claim or claims which may affect its ownership of the Assets;
- neither the execution and delivery of this Agreement, nor the completion of the transactions contemplated hereby will conflict with or result in any breach of any of the terms and provisions
of, or constitute a default under, the constating documents, director or shareholder minutes of Lemarg, or any agreement or instrument or statute or laws to which Lemarg is a party or by which the Assets of Lemarg are bound or any order, decree, statute, regulation, covenant or restriction applicable to Lemarg;
-
to the knowledge of Lemarg and the Principal Shareholder, there are no actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of Lemarg) pending or threatened by or against Lemarg or affecting its Business or Assets, at law or in equity, or before or by any federal, provincial, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign; and Lemarg and the Principal Shareholders are not aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success;
-
to the knowledge of Lemarg and the Principal Shareholder, none of Lemarg, an Asset or any part of the Business is in any respect infringing the right of any Person under or in respect of any patent, design, trademark, trade name, copyright or other industrial or intellectual property, and no Person has alleged to Lemarg or the Principal Shareholder a violation by Lemarg of such a right;
-
Other than management and certain consulting contracts as disclosed to Aisix, Lemarg has no contract, commitment or arrangement, whether written, oral or implied with any Person whatsoever relating to employment which contains any specific agreement as to notice of termination or severance pay in lieu thereof or which cannot be terminated without cause upon giving reasonable notice as may be implied by law without the payment of, or any liability in respect of, any bonus, damages, share of profits or penalty, and there are no policies or practices of Lemarg which confer benefits on the employees of Lemarg or result in obligations of Lemarg with respect to its employees;
-
Lemarg has no pension, stock option or stock purchase plan or a profit sharing, incentive or bonus plan or other deferred compensation plan, or an employee group insurance plan, hospitalization plan, disability plan or other employee benefit plan, program, policy or practice, formal or informal with respect to any of its employees, other than as required under applicable legislation and other similar health plans established pursuant to statute, and Lemarg has no unfunded or unpaid liability in respect of such plan;
-
there are no employees of Lemarg that Lemarg considers it has the right to terminate for cause; and no employee has made any claim or has any basis for any action or proceeding against Lemarg arising out of any statute, ordinance or regulation relating to discrimination in employment or employment practices, harassment, occupational health and safety standards or workers' compensation;
-
to the knowledge of Lemarg, no employee or consultant has made or has any basis for making any claim (whether under law, any employment or consulting agreement or otherwise) on account of or for: (a) overtime pay, other than overtime for the current payroll period; (b) wages or salary for any period other than the current payroll period; (c) any bonus, raise or other compensation or remuneration; (d) other time off, sick time or pay in lieu; or (e) any violation of any statute, ordinance, or regulation relating to minimum wages or the maximum hours of work;
-
all Material Contracts of Lemarg and all amendments and extensions thereof have been made available to Aisix, with the exception of such contracts Aisix has agreed do not need to be made available to Aisix. Lemarg is not in default or breach of its obligations under its Material Contracts and to the knowledge of Lemarg and the Principal Shareholder, there exists no state of
B-2
facts which, after notice or lapse of time or both, would constitute such a default or breach, and all such contracts are now in good standing and in full force and effect without amendment thereto and Lemarg is entitled to all benefits thereunder. Further, there are no outstanding material disputes under any such contracts, and, except for the LM Approvals, no consents, releases, waivers or approvals are necessary under such contracts with regard to the transactions described in this Agreement;
-
Lemarg has maintained proper and consistent Books and Records of its activities, and such Books and Records are up to date, have been provided to Aisix for review, and there has been no material change in any practice or policy insofar as such change might affect the valuation of assets or the recording of expenditures or receipts relating to Lemarg, its Business and Assets;
-
all material data and Information relating to the Business and Assets has been summarized or otherwise disclosed to Aisix;
-
the Books and Records of Lemarg disclose all material financial transactions of Lemarg since its inception, and such transactions have been fairly and accurately recorded;
-
except as disclosed in LM Financial Statements or as described herein:
(a) Lemarg is not indebted to the LM Shareholders or any one of them, whether by way of shareholder loan, unpaid, accrued or deferred compensation or otherwise;
(b) none of the LM Shareholders or any other officer, director or employee of Lemarg is indebted or under obligation to Lemarg on any account whatsoever; and
(c) Lemarg has not guaranteed or agreed to guarantee any debt, liability or other obligation of any kind whatsoever of any Person, firm or corporation of any kind whatsoever;
- except as disclosed in this Agreement Lemarg has not:
(a) declared, made or committed itself to make any payment of any dividends or any other distribution in respect of its shares or subdivided, consolidated or reclassified, or redeemed, purchased or otherwise acquired or agreed to acquire any of its shares;
(b) issued or sold any shares in its capital or any warrants, bonds, debentures or its other corporate securities or issued, granted or delivered any right, option or other commitment for the issuance of any such securities;
(c) mortgaged, pledged, subjected to lien, granted a security interest in or otherwise encumbered any of its Assets, whether tangible or intangible;
(d) made any gift of money or of any of its Assets to any Person;
(e) made any licence, sale, assignment, transfer, or disposition of its Assets; or
(f) authorized, agreed or otherwise become committed to do any of the foregoing;
-
Lemarg has filed with appropriate taxation authorities, all returns, reports and declarations which are required to be filed by it prior to the Closing and has paid all Taxes which have become due prior to the Closing and no taxing authority is asserting or has, to the knowledge of Lemarg and the Principal Shareholder threatened to assert, or has any basis for asserting against Lemarg any claim for additional Taxes or interest thereon or penalty;
-
Lemarg has no indebtedness, liabilities or obligations, secured or unsecured (whether accrued, absolute, contingent, undisclosed or otherwise), except for those described in the LM Financial
B-3
Statements, those incurred in the ordinary course of business and those incurred in connection with the transactions contemplated by this Agreement;
-
Lemarg is conducting and has since incorporation conducted its Business in compliance with all Applicable Laws of each jurisdiction in which it carries on business;
-
Except as provided in this Agreement, Lemarg has not incurred any liability for brokers’ or finder’s fees of any kind whatsoever with respect to this Agreement or any transaction contemplated under this Agreement;
-
the corporate records of Lemarg are or will be on Closing complete and accurate in all material respects;
-
the Information supplied by Lemarg for inclusion in the Disclosure Document or other Exchange prescribed forms shall not, on the date each document is filed and at the Closing Time, contain any statement which, at such time and in light of the circumstances under which it was made, is false or misleading with respect to any material fact, or omits to state any material fact necessary in order to make the statements made therein not false or misleading, and if at any time prior to the Closing Time any event relating to Lemarg or its directors or officers should be discovered by Lemarg or the Principal Shareholder which should be set forth in a supplement to the disclosure documents, Lemarg and the Principal Shareholder shall promptly inform Aisix thereof in writing;
-
except as disclosed in this Agreement, none of the above persons has any Information or knowledge of any fact relating to the Business, the Assets or any indebtedness of Lemarg or the transactions contemplated hereby which might reasonably be expected to have a Material Adverse Effect on any of the Assets or the organization, operations, affairs, business, properties, prospects or financial condition or position of Lemarg; and
-
the facts which are the subject of the representations and warranties of Lemarg and the Principal Shareholder contained in this Agreement comprise all material facts known to Lemarg and the Principal Shareholder which are material and relevant to their obligations hereunder or which might prevent any of them from meeting their obligations under this Agreement.
B-4
SCHEDULE C
Representations and Warranties of Aisix
Aisix represents and warrants to Lemarg and the LM Shareholders, and agrees as of the date hereof and at the Time of Closing that:
-
Aisix is a corporation duly incorporated, validly existing and in good standing under the laws of the Province of British Columbia, and has the power, authority and capacity to enter into this Agreement and to carry out its terms and has all necessary corporate power to own its assets and to conduct its business as such business is now being conducted;
-
Aisix does not own or control directly or indirectly, any interest in any other corporation, association, partnership, joint venture or other business entity;
-
Aisix is a “reporting issuer” in each of the provinces of British Columbia and Alberta; and is not in default of its continuous disclosure obligations with the securities regulators of those provinces, except in respect of the management cease trade order dated May 1, 2026 issued by the British Columbia Securities Commission, a copy of which has been made available to Lemarg;
-
the execution and delivery of this Agreement and all other related agreements or documents, and the completion of the transactions contemplated hereby, will by the Time of Closing have been duly and validly authorized by all necessary corporate acts on the part of Aisix, and this Agreement constitutes a legal, valid and binding obligation of Aisix;
-
the authorized share capital of Aisix consists of an unlimited number of common shares without par value, and at the Time of Closing (unless Lemarg otherwise agrees), the issued share capital will not exceed the number of Aisix Shares contemplated herein, all of which shares will be validly issued, fully paid, and non-assessable;
-
the rights, restrictions and conditions attached to the Aisix Shares are as set out in Aisix’s constating documents and under applicable corporate legislation;
-
except as set out in this Agreement, there are and will be at the Time of Closing no outstanding share purchase warrants, options or other rights or other arrangements under which Aisix is bound or obligated to issue additional shares in its capital, and, to Aisix’s knowledge, none of the outstanding Aisix Shares are subject to the terms of any shareholder or voting trust agreement;
-
all disclosure documents of Aisix filed under applicable Securities Laws, including but not limited to, financial statements, prospectuses, offering memorandums, information circulars, material change reports and shareholder communications (the “Aisix Disclosure Documents”) contain no untrue statement of a material fact as at the date thereof nor do they omit to state a material fact which, at the date thereof, was required to have been stated or was necessary to prevent a statement that was made from being false or misleading in the circumstances in which it was made;
-
neither the execution and delivery of this Agreement, nor the completion of the transactions contemplated hereby will conflict with or result in any breach of any of the terms and provisions of, or constitute a default under, the constating documents, director or shareholder minutes of Aisix, or any agreement or instrument or statute or law to which Aisix is a party or by which any
C-1
assets of Aisix are bound, or any order, decree, statute, regulation, covenant or restriction applicable to Aisix;
-
all of the assets and material transactions of Aisix have been properly recorded or filed in or with the Books and Records of Aisix;
-
to the knowledge of Aisix, there are no actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of Aisix) pending or threatened by or against Aisix or affecting Aisix’s assets at law or in equity, before or by any federal, provincial, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign, and Aisix is not aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success;
-
a true and complete copy of all Material Contracts of Aisix and all amendments and extensions thereof has been made available to Lemarg. Aisix is not in default or breach of its obligations under any Material Contracts to which it is a party and to the knowledge of Aisix, there exists no state of facts which, after notice or lapse of time or both, would constitute such a default or breach, and all such Material Contracts are now in good standing and in full force and effect without amendment thereto and Aisix is entitled to all benefits thereunder. Further, there are no outstanding material disputes under any such contracts and, except for the Regulatory Approvals, no consents, releases, waivers or approvals are necessary under such contracts with regard to the transactions described in this Agreement;
-
Aisix has filed with appropriate taxation authorities, federal, state, provincial and local, all returns, reports and declarations which are required to be filed by it and has paid all Taxes which have become due and no taxing authority is asserting or has, to the knowledge of Aisix threatened to assert, or has any basis for asserting against Aisix any claim for additional Taxes or interest thereon or penalty;
-
the financial statements of Aisix forming part of the Aisix Disclosure Documents (the “Aisix Financial Statements”), as provided to Lemarg, are true and correct in every material respect and present fairly and accurately the financial position and results of the operations of Aisix for the periods then ended, and have been prepared in accordance with International Financial Reporting Standards applied on a consistent basis;
-
the Books and Records of Aisix disclose all material financial transactions of Aisix since inception and such transactions have been fairly and accurately recorded;
-
there are no material liabilities of Aisix, whether direct, indirect, absolute, contingent or otherwise, which are not disclosed or reflected in the Aisix Financial Statements except those incurred in the ordinary course of business of Aisix, which have been disclosed to Lemarg;
-
there has not been any Material Adverse Change of any kind whatsoever to the financial position or condition of Aisix or any damage, loss or other change of any kind whatsoever in circumstances materially affecting the business, assets of Aisix or the right or capacity of Aisix to carry on its business other than as disclosed in the Aisix Financial Statements and the Aisix Disclosure Documents;
-
to its knowledge, Aisix is not in material breach of any law, ordinance, statute, regulation, by-law, order or decree of any kind whatsoever;
-
Aisix is conducting and has since incorporation conducted its business in compliance with all Applicable Laws of each jurisdiction in which it carries on business;
C-2
-
except as disclosed in this Agreement, Aisix has not incurred any liability for broker’s or finder’s fees of any kind whatsoever with respect to this Agreement or any transaction contemplated under this Agreement;
-
Aisix has maintained proper and consistent Books and Records of its activities, and such Books and Records are up to date, have been provided to Lemarg for review, and there has been no material change in any practice or policy insofar as such change might affect the valuation of assets or the recording of expenditures or receipts relating to Aisix and its business and assets;
-
except as disclosed in the Aisix Financial Statements:
(a) Aisix is not indebted to the Aisix Shareholders or any one of them, whether by way of shareholder loan, unpaid, accrued or deferred compensation or otherwise;
(b) none of the Aisix Shareholders or any other officer, director or employee of Aisix is indebted or under obligation to Aisix on any account whatsoever; and
(c) Aisix has not guaranteed or agreed to guarantee any debt, liability or other obligation of any kind whatsoever of any Person, firm or corporation of any kind whatsoever;
- except as disclosed in this Agreement, since the date of the most recent Aisix Financial Statements, Aisix has not:
(a) declared, made or committed itself to make any payment of any dividends or any other distribution in respect of its shares;
(b) issued or sold any bonds, debentures or other debt instruments;
(c) mortgaged, pledged, subjected to lien, granted a security interest in or otherwise encumbered any of its assets, whether tangible or intangible;
(d) made any gift of money or of any of its assets to any Person;
(e) made any licence, sale, assignment, transfer, or disposition of its assets; or
(f) authorized, agreed or otherwise become committed to do any of the foregoing;
-
Aisix has no indebtedness, liabilities or obligations, secured or unsecured (whether accrued, absolute, contingent or otherwise), except for those described in the Aisix Financial Statements, those incurred in the ordinary course of business (which have been disclosed to Lemarg) and those incurred in connection with the transactions contemplated by this Agreement;
-
the corporate records of Aisix are or will be on Closing complete and accurate in all material respects;
-
except as disclosed in this Agreement, Aisix has no Information or knowledge of any fact relating to its assets or any indebtedness of Aisix or the transactions contemplated hereby which might reasonably be expected to have a Material Adverse Effect on any of the assets or the organization, operations, affairs, prospects or financial condition or position of Aisix;
-
the facts which are the subject of the representations and warranties of Aisix contained in this Agreement comprise all material facts known to Aisix which are material and relevant to its obligations hereunder or which might prevent it from meeting its obligations under this Agreement; and
-
on Closing, the Resulting Issuer Shares, the Aisix Shares issued to the investors pursuant to the Transaction Financing and, when issued, the Milestone Shares:
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(a) will be issued to the respective recipients as fully paid and non-assessable shares of Aisix;
(b) will be duly registered in the names of the recipients in the books and registers of Aisix; and
(c) will be duly listed and posted for trading on the Exchange, subject only to any Exchange escrow requirements.
C-4
D-1
SCHEDULE D
Existing Aisix Consulting and Employment Agreements
| Employee or Consultant | Agreement |
|---|---|
| [Names redacted] | [Type of agreement redacted] |