Board of Directors unanimously recommends that Kobex Shareholders
vote the WHITE form of proxy against,
and withhold their votes from, all of the Kingsway resolutions

VANCOUVER, Oct. 8, 2015 /CNW/ - Kobex Capital Corp. (TSX-V:KXM) (the "Company" or "Kobex") announced today that it has filed and is mailing a management information circular dated October 6, 2015 in connection with the special meeting of shareholders of the Company (the "Kobex Shareholders") scheduled to be held at noon (Toronto time) on Tuesday, November 17, 2015 (the "Special Meeting").

The Special Meeting was called as a result of the requisition received by the Company on September 17, 2015 from Kingsway Financial Services Inc. ("Kingsway") to consider the resolutions put forth by Kingsway providing, among other things, for the removal from office of all of the existing directors of the Company and their replacement by five (5) Kingsway nominees, or alternatively, the increase in the size of the board of directors of Kobex (the "Board") to nine (9) and the election of all five (5) of the Kingsway nominees.

The Board unanimously recommends that Kobex Shareholders reject changes to the current Board and vote the WHITE form of proxy against, and withhold their votes from, all of the Kingsway resolutions, as applicable. The reasons for this recommendation are set out in the management information circular.

The Board urges Kobex Shareholders to review in detail the Letter to Kobex Shareholders (reproduced below) and the Company's management information circular, which is being mailed to shareholders of record as of October 1, 2015. The management information circular has been filed on SEDAR and will be available under the Company's profile at www.sedar.com and on the Company's website at www.kobex-capital.com.

Kobex Shareholders are urged to vote ONLY the WHITE form of proxy or voting information form in favour of Kobex's current Board well in advance of the proxy cut-off at noon (Toronto Time) on Friday, November 13, 2015 pursuant to the instructions set out in the management information circular.

D.F. King is acting as Kobex's proxy solicitation agent in connection with the Special Meeting. Kobex Shareholders who have any questions, require information with regard to the Special Meeting or require any assistance in executing and submitting their WHITE form of proxy or voting instruction form can contact D.F. King at:

North American Toll Free Number: 1-800-301-3998
Outside North America, Banks, Brokers and Collect Calls: 1-201-806-7301
Email: inquiries@dfking.com
North American Toll Free Facsimile: 1-888-509-5907
Facsimile: 1-647-351-3176

The full text of the Letter to Kobex Shareholders is as follows:

My Dear Fellow Shareholders:

YOUR company is under assault!

Kingsway Financial Services Inc. ("Kingsway"), a holding company for businesses selling car insurance to risky drivers, which has spent its own way to financial distress, is seeking to replace the board of directors (the "Board") of Kobex Capital Corp. ("Kobex") and thereby gain control of your company and its cash assets.

A meeting of the shareholders of Kobex has been called for noon (Toronto time) on Tuesday, November 17, 2015 (the "Meeting") in response to the requisition of Kingsway (the "Requisition") to consider a hostile dissident proposal from Kingsway (the "Kingsway Proposal") to remove your current Board and replace them entirely with five of Kingsway's nominees (the "Kingsway Nominees"), or alternatively, to increase the Board's size to nine and elect each of the five Kingsway Nominees. Either way, Kingsway wants to take control over your company and your investment.

You have a very clear choice to make at the Meeting that will determine the value and security of your investment in Kobex.

You can choose to stay the course with your recently re‑elected and fully independent directors who have been working to create and enhance long‑term shareholder value for all Kobex shareholders

or

You can choose to believe the hollow and misleading promises of Kingsway, with its history of shareholder value destruction and related party transactions, and its conflicted non‑independent Kingsway Nominees who have no identified strategy for Kobex other than to spend your money to pay for Kingsway's unnecessary proxy contest and to buy‑back Kobex shares to increase Kingsway's proportionate interest.

WHAT YOU NEED TO KNOW ABOUT KINGSWAY

• Since Kingsway came under the effective control of Joseph Stilwell in 2009, Kingsway has lost a staggering US$287,478,000 (annual periods ending Dec. 31, 2010 — Dec. 31, 2014).
• Kingsway's shares have lost ~77% of their value since Stilwell achieved board representation.
• From 2009 to 2014, Kingsway's book value deteriorated from US$348,073,000 (Dec 31, 2009) to US$41,866,000 (Dec 31, 2014) — that's US$306,207,000 in shareholder equity or 88% of the company GONE!
• During this time, the President and CEO of Kingsway appointed by Stilwell, Larry Swets, has earned over US$5,300,000 in direct compensation.
• In its public disclosures, Kingsway has stated that it owed approximately US$22,700,000 in deferred interest payments prior to March 4, 2016 and that it at the time it did "....not have the cash resources necessary to satisfy completely the deferred interest payment obligations."
• In its public disclosures, Kingsway has stated that it has been subject to intense review and supervision by insurance regulators which have also requested additional capital contributions from Kingsway to its insurance subsidiaries.
  

On all metrics the Kingsway management team has not delivered and appears desperate for cash. Kobex Shareholders should not trust these people, their non‑independent nominees or their motives. Your investment depends on it!

A MIDNIGHT RAID

The Board believes that this proxy contest is simply a cash grab aimed at promoting Kingsway's self‑interested agenda at the expense of all other Kobex shareholders. A mere eight days after Kingsway publicly announced the increase in its stake in Kobex from 3.62% to 13.07%, it launched the Requisition and proxy contest without any attempt at approaching the Board or management of Kobex or engaging in any discussions, either formally or informally. This is a complete departure from Kingsway's own public statement made on September 9, 2015 that it expected to seek to engage with management and/or the Board in dialogue and actions related to maximizing shareholder value and exploring strategic alternatives. Now they claim an intention to pursue an agenda for the benefit of all shareholders. We don't believe them and neither should you.

Don't be fooled by their "concerned shareholder" charade. They think their very recently acquired stake entitles them to complete control over your company. Kingsway is only interested in getting its hands on Kobex and your cash. As recently as in its 2014 10‑K report filed with the U.S. Securities and Exchange Commission, Kingsway stated that it did not have the cash resources necessary to satisfy its interest payment obligations. Following the delivery of the Requisition, Kingsway has been engaged in a creeping acquisition of Kobex shares. If Kingsway wants to control your cash, they should make a proper take‑over bid to all Kobex shareholders at an appropriate premium price.

Your Board unanimously recommends that you submit the enclosed WHITE form of proxy to send a message, loud and clear, that you are against the Kingsway Proposal and that you reject Kingsway's proposed changes to the Board.

WHO IS KINGSWAY?

The Board, in the exercise of its fiduciary duties, has carried out an investigation of Kingsway based upon publicly available information which is ongoing, and as a result of which it has determined the following. Kingsway is a holding company for car insurance businesses. In 2009, it came under the effective control of funds managed by Joseph Stilwell. When the Stilwell group arrived, the Kingsway share price was $27.20 and it had a market capitalization of $374,465,990. Today, and notwithstanding a four‑for‑one share consolidation the Kingsway share price is $6.15 and its market capitalization is $133,344,614. In between these times, Kingsway and its management have been unable to turn around its performance. Kingsway management and its board have squandered approximately US$320 million in the past five years. Kingsway has approximately US$22.7 million in imminent interest payments coming due. In light of its losses incurred in recent years, by their own admission, Kingsway and its regulated insurance subsidiaries have become subject to intense review and supervision by insurance regulators.

In addition, Kingsway and its management have engaged in a number of related party and other inappropriate transactions against the interests of Kingsway shareholders. As an example, Kingsway tried to dispose of the shares of a troubled subsidiary to 20 charities without disclosing to them the nature of the toxic "gift" which almost immediately resulted in Kingsway being sued by the Commonwealth of Pennsylvania Insurance Department. As another example, the President and CEO of Kingsway sold an insurance company to Kingsway for in excess of US$2,000,000, which company was subsequently judged to be worthless. That same CEO currently enjoys the benefit of the grant by Kingsway of restricted shares which in 10 years will result in his ownership of 10% of Kingsway. And finally, as recently as March of 2015, Joseph Stilwell was sanctioned by an order of the U.S. Securities and Exchange Commission for inappropriate management of his investment funds. His funds are also being sued by the former chairman of Kingsway who Mr. Stilwell himself had appointed. Details of the foregoing as well as additional cautionary information regarding Kingsway are provided under the heading "Reasons for Rejecting Kingsway Resolutions".

Are these the people you want to control your investment?

NON‑INDEPENDENT NOMINEES WITHOUT KOBEX'S BEST INTERESTS IN MIND

Kingsway claims that its Kingsway Nominees are independent. We know otherwise. Of the five nominees, four are directly associated with Kingsway. These four nominees are either members of the board of Kingsway, members of the boards of affiliates of Kingsway or service providers to Kingsway or its affiliates who have been or may currently be beholden to Kingsway for their work and compensation. Even before they have been elected, the Kingsway Nominees have already expressly determined that they will follow Kingsway's so‑called "plan". Their relationships and apparent bias in favour of Kingsway should be of significant concern to all other Kobex shareholders. If elected, whose interests do you think they will serve — yours or Kingsway's?

THE WAY FORWARD

Do not be fooled. Kingsway's campaign is not about corporate governance or about strategic vision. If Kingsway really cared about the reduction of expenses, it would never have launched an expensive proxy contest which virtually guarantees the unnecessary expenditure of your cash. Kingsway has disclosed no specific plans other than arranging to have Kobex pay for its expenses related to this proxy contest and to have Kobex commence a share buyback program to use your cash to effectively increase its proportionate interest in Kobex. This at the very same time that Kingsway has contrarily delivered a letter proposing to finance Kobex in another endeavor to increase Kingsway's interest. We are, and you should be, very suspicious that this very lack of an announced plan on Kingsway's part demonstrates its designs on utilizing Kobex's cash for its own purposes and to help alleviate its own serious problems. Supporting Kingsway risks putting the fate and future of Kobex in the hands of individuals with questionable motives. It also risks disruption of your current Board's progress in the reduction of expenses, the marshalling and conservation of Kobex's cash reserves and the consideration of appropriate transactions to unlock value for all Kobex shareholders. In the midst of the current challenging global economic situation and depressed commodity price environment, with the attractive opportunities that this implies, Kobex's cash reserves represent a precious asset that cannot be replicated and should not be squandered.

THE BOARD'S RECOMMENDATION

As you prepare to cast your vote, the Board asks you to consider the very real concerns regarding Kingsway and the Kingsway Nominees identified in this letter and further described in the accompanying management information circular including, among others, Kingsway's and its management's past history and performance as well as the non‑independence of, and irreconcilable conflicts of interest facing, the Kingsway Nominees should they be elected to your Board. I would ask you to read the circular carefully as it provides compelling and essential information regarding the challenge facing your company today.

Do not turn Kobex over to Kingsway and its handpicked Kingsway nominees. We urge you to stop Kingsway in its hostile and self‑serving attempt to take control of Kobex and your assets and investment.

The Board unanimously recommends that you vote the WHITE form of proxy AGAINST and WITHHOLD your votes from the Kingsway resolutions, as applicable.

Regardless of the number of shares you own, you should take immediate action and cast your vote today by completing and returning only the WHITE form of proxy.

If you have any questions or need assistance in casting your vote or completing the WHITE form of proxy, please call D.F. King & Co., Inc. at toll‑free 1‑800‑301‑3998 and they will be happy to help. Additionally, for up to date information and ease of voting we strongly encourage shareholders to please continue to visit www.kobex‑capital.com.

Regards,
Paul van Eeden
Chairman

Forward-Looking Statements

Certain statements contained in this news release may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The use of any of the words "anticipate", "continue", "expect", "may", "will", "would", "project", "should", "believe", "plan" and "intends" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements may relate to Kobex's management's expectations, estimates and analysis with respect to: its business strategy; the composition of its board of directors; and the feasibility, value and impact of Kingsway's proposals and strategies for Kobex and the Board's belief that these proposals and strategies are not in the best interests of Kobex or its shareholders, and will destroy shareholder value.

Forward-looking statements are based on certain factors and assumptions regarding, among other things, market acceptance of Kobex's corporate strategy and corporate endeavours and the success of Kobex's announced corporate strategy and future transactions. There can be no assurance that these assumptions will prove to be correct. Readers are cautioned that forward-looking statements included in this news release are not guarantees of future performance, and are also cautioned not to place undue reliance on forward-looking statements which involve known and unknown material risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any anticipated results, performance or achievements expressed or implied in such forward-looking statements. These statements speak only as of the date of this news release. Kobex undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law.

All of the forward-looking statements made in this news release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Kobex.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Kobex Capital Corp.