Crosswinds Holdings Inc.
TSX : CWI

December 31, 2014 11:50 ET

Crosswinds Holdings Inc. Announces Internalization of Management and Provides Corporate Updates

TORONTO, ONTARIO--(Marketwired - Dec. 31, 2014) -

Summary

Crosswinds Holdings Inc. ("Crosswinds" or the "Company") (formerly C.A. Bancorp Inc.) (TSX:CWI) today announced that effective January 1, 2015:

  • the Company's management agreement with CDJ Global Catalyst LLC is terminated; and
  • J. Roy Pottle is appointed Chairman of the Company.

The Company's previously announced joint venture to form Monarch National Insurance Company is now expected to close in the first quarter of 2015.

The Company also announced that it has formed a Delaware wholly-owned subsidiary named Crosswinds AUM LLC ("Crosswinds AUM"). Crosswinds AUM will, among other things, perform the asset management functions for Monarch.

Internalization of Management

Crosswinds has reached an agreement to internalize its management functions (the "Internalization") currently provided by CDJ Global Catalyst LLC ("CDJ") through the termination of its management agreement with CDJ effective January 1, 2015. No additional compensation or termination fee will be paid to CDJ in connection with the Internalization. CDJ will receive its management fees for the period up to and including December 31, 2014. Effective January 1, 2015, Colin King, principal of CDJ and Chief Executive Officer of the Company will be employed and paid directly by the Company along with the Company's other executive officers.

The Internalization is a "related party transaction" for purposes of Multilateral Instrument 61-101, however, because the fair market value of the subject matter and consideration of the Internalization is less than 25% of the market capitalization of the Company, the Internalization is exempt from the valuation and minority approval requirements of the Instrument.

The Company will be filing a material change report in respect of the Internalization less than 21 days before the effective date of the Internalization on the basis that this shorter period is reasonable in the circumstances as the Company disclosed the potential proposed Internalization in its third quarter results publicly disseminated on November 14, 2014.

The Company made the decision to Internalize together with CDJ to simplify the Company's operating and corporate structure and to better align management's interests with those of the Company's shareholders through the direct employment of these individuals. The Internalization is not expected to result in any change in operating costs to the Company.

A copy of the full text of the Management Agreement is available under Crosswinds' profile on SEDAR at www.sedar.com.

Appointment of New Chairman of the BoardUpdate on Insurance Joint Venture

The Company is pleased to announce the appointment of J. Roy Pottle to Chairman of the Board of Directors of Crosswinds, replacing Robert Wolf effective January 1, 2015. Mr. Wolf will continue to serve as a Director on the Board and will continue to provide leadership to the Company. Mr. Pottle has been a director of the Company since March 2013. On July 21, 2014, the Company announced an agreement to form a new Florida-based property and casualty insurance carrier named Monarch National Insurance Company ("Monarch") and the execution of a subscription agreement for its interest in Monarch which was expected to close on or before December 31, 2014. The Company's subscription in Monarch is now expected to close in the first quarter of 2015 subject to the receipt of regulatory approval and the satisfaction of other closing conditions.

Formation of Operating Subsidiary

The Company also announced that it has formed a wholly-owned subsidiary Crosswinds AUM LLC in Delaware ("Crosswinds AUM"). Crosswinds AUM will, among other things, perform the asset management functions for Monarch. The Company is in the process of registering Crosswinds AUM as an investment advisor with the United States Securities and Exchange Commission. Crosswinds AUM will also employ the management of Crosswinds following the Internalization.

Crosswinds Holdings Inc.

Crosswinds is a publicly traded private equity firm with a focus on the insurance industry. The Company is focused on investments, either directly or through entities to be managed by it, in the insurance sector.

Caution Regarding Forward-Looking Information

This release includes certain forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue" or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These forward-looking statements are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. Reference should be made to the risk factors in the Company's 2013 Annual Information Form, in the Management's Discussion and Analysis for the three months ended September 30, 2014 and in our other filings with Canadian securities regulators. Additional important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, interest rates, tax related matters, loss of personnel, reliance on key personnel, ability of the Company to generate positive future returns for investors, ability of the Company to execute its strategies from time to time; the receipt of any regulatory approvals or consents required from time to time.

365 Bay St., Suite 800
Toronto, Ontario M5H 2V1
Telephone: 1-800-439-5136

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