News Column

Till Capital Announces Signing of Letter of Intent with Omega Insurance Holdings, Inc.

July 28, 2014

HAMILTON, Bermuda--(BUSINESS WIRE)-- Till Capital Ltd. (TSX.V: TIL) (the “Company” or “Till), a Bermuda domiciled reinsurance provider announces that it has entered into a letter of intent with Omega Insurance Holdings, Inc. (“Omega”), a Toronto, Canada based insurance provider, and its shareholders, pursuant to which the Company proposes to acquire all of the issued and outstanding shares of Omega (the “Proposed Transaction”). The letter of intent with Omega includes the subsidiary companies Omega General Insurance Company and Focus Group, Inc.

“We are enthusiastic about this accretive transaction which adds the portfolio of Omega’s existing policies and management expertise. The transaction provides us with enhanced capacity to support our future reinsurance operations while continuing to provide outsourced services for foreign insurance carriers in Canada,” said William M. Sheriff, Till Capital Chairman and CEO. “I look forward to working with Phil Cook who will lead the expansion of Till’s insurance activities. His decades of experience along with his established staff will be valuable additions to our team.”

Phil Cook, Chief Executive Officer of Omega added, "We look forward to working with Till Capital as we enter the next phase of Omega's development. Till's international footprint, along with a proven track record of successful investment strategies, will enable our combined organizations to achieve our corporate objectives while continuing to serve the needs of our policyholders and other stakeholders."

Omega Insurance Holdings, Inc.

With over $40 million in assets and operating since 2004, Omega’s mission is to offer secure, innovative and customized solutions for Insurers/Reinsurers exiting the market and organizations with unique insurance needs in a cost effective manner by a team of dedicated professionals. Omega is 77% owned by Integrated Partners Limited Partnership One, a division of Integrated Asset Management Corp. of Toronto.

Omega’s expertise in both the Canadian run-off phase and the Canadian start-up phase for a foreign insurance company gives Omega a strategic advantage in its two main target markets:

1. To provide those insurers wishing to access the Canadian market an ability to do so in the most efficient manner, through fronting arrangements and other creative solutions;

2. To provide those insurers wishing to exit Canada through a dedicated company deep in experience in handling “run-off” business an ability to facilitate such an exit, so that their financial, legal, and moral obligations are met on a continuing basis, while being able to repatriate their surplus capital in a more timely fashion.

Philip H. Cook, M.B.A., F.C.I.P. - Chief Executive Officer

Serving as Omega’s Chief Executive Officer since 2004, Mr. Phil Cook entered the Insurance Industry in 1962 and has worked in a variety of capacities with companies in England, Canada and the United States. From a background in Claims and Claims Management he moved to Administration, Operation and General Management. Before establishing Focus Group Inc. in 1986, he was the Chief Executive Officer for a major Insurer. His qualifications and his extensive practical experience make him uniquely qualified to consult, advise and handle any aspect of Insurance Management. His specialties include: claims management, strategic planning, risk management, feasibility studies, seminars, internal operations, IBNR calculations, audits and all areas of general management. He is presently Chief Agent for 4 Insurers/Reinsurers operating in the Canadian marketplace.

Matthew P. Cook, C.A., B.B.A. - Chief Financial Officer

Serving as Omega’s Chief Financial officer since 2004, Mr. Matthew Cook entered the insurance industry in 2004, after working at a number of companies in various industries. His Chartered Accountant designation and background has provided him with extensive experience in financial reporting, auditing, tax, financial systems, IT systems, and general management.

Transaction Details

The letter of intent contemplates that the Company will pay an aggregate purchase price of 1.2 times book value, or approximately $15,400,000 as of March 31, 2014, plus an amount not to exceed $3,000,000 for any transactions in process at closing, in exchange for all of the issued and outstanding shares of Omega.

The aggregate purchase price will be payable as follows: (i) at the closing of the Proposed Transaction (and 90 days from the date of completion of any qualifying transactions in progress at closing), Till will pay to the Omega shareholders 95% of the purchase price in cash and (ii) 12 months after the closing of the Proposed Transaction, Till will pay to the Omega shareholders 5% of the purchase price in cash. The payment at 12 months following closing of the Proposed Transaction is subject to reduction in the event losses incurred on the policies purchased from Omega are greater than 10% above the actual loss reserves pursuant to the financial statements prepared as of the most recent quarter end prior to the closing date. Insiders of Omega will be permitted to receive shares of Till in lieu of the 95% cash payment. In the event the insiders elect to receive shares of Till, the value per share will be the VWAP for the 5-day period ending on the day immediately prior to the closing date of the Proposed Transaction less the maximum discount allowed by the TSX Venture Exchange, but in no event will the value be less than $9.50 per share. The 5% cash payment due 12 months from closing will in all cases be paid in cash.

Should the Proposed Transaction be completed, Omega will become a wholly-owned subsidiary of the Company. It is expected that Mr. Phil Cook will continue to hold the position of Chief Executive Officer of Omega and Mr. Matthew Cook will continue to hold the position of Chief Financial Officer of Omega upon closing of the Proposed Transaction.

Pursuant to the letter of intent, the shareholders of Omega have agreed to negotiate and deal exclusively with the Company until the earlier of August 19, 2014 or the date of termination of the letter of intent, provided that Omega may pay in the alternative a break-up fee of CAD$500,000 to the Company.

The parties are currently negotiating definitive terms and documents for the Proposed Transaction, which documents will contain customary representations, warranties, covenants, indemnities and other ancillary agreements to the extent appropriate for transactions of the type of the Proposed Transaction.

As of the date hereof, there is no assurance that the Company will consummate the Proposed Transaction. Completion of the Proposed Transaction is subject to a number of conditions, including the negotiation and settlement of definitive terms for the Proposed Transaction and the entering into of a definitive share purchase agreement among the parties, completion of due diligence, approval of Canada’s Office of the Superintendent of Financial Institutions, receipt of respective board approvals, receipt of approval of the TSX Venture Exchange, and receipt of certain other customary consents.

Till Capital Ltd.

Till Capital is a unique Bermuda-domiciled company engaged in the reinsurance business supported by a hybrid investment strategy. This non-traditional approach creates a company with diversified investments including royalties and physical gold, well-positioned for future growth through access to and strategic deployment of capital. Our goal: to maximize opportunity; mitigate risk; and invest in assets and opportunities with significant upside potential.

For additional information:

Till Capital Ltd.

William M. Sheriff

Chairman and Chief Executive Officer

(208) 635 5415

info@tillcap.com

www.tillcap.com

Cautionary Note

The Till shares are restricted voting shares, whereby no single shareholder of Till is able to exercise voting rights for more than 9.9% of the voting rights of the total issued and outstanding Till shares (the "9.9% Restriction”). However, if any one shareholder of Till beneficially owns, or exercises control or direction over, more than 50% of the issued and outstanding Till shares, the 9.9% Restriction will cease to apply to the Till shares.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities of Till or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. Trading in the securities of Till should be considered speculative.

Neither the TSX Venture Exchange nor its Regulatory Service Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statement Regarding Forward Looking Information

Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “except”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “will”, “could” and other similar words, or statements that certain events or conditions “may” occur. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, Till assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change.




Till Capital Ltd.

William M. Sheriff, 208-635-5415

Chairman and Chief Executive Officer

info@tillcap.com

www.tillcap.com

Source: Till Capital Ltd.


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