Terreno Resources Corp.
TSX VENTURE : TNO

Terreno Resources Corp.
Crown Life Canada Ltd.

June 18, 2015 15:15 ET

Terreno Resources Corp. and Crown Life Canada Ltd. Enter Into Arrangement Agreement

TORONTO, ONTARIO--(Marketwired - June 18, 2015) - Terreno Resources Corp. (TSX VENTURE:TNO) ("Terreno") and Crown Life Canada Ltd. ("Crown Life") are pleased to announce that they have entered into an arrangement agreement dated June 18, 2015 (the "Arrangement Agreement"). Pursuant to the Arrangement Agreement, Terreno will acquire all of the outstanding common shares of Crown Life in exchange for common shares in the capital of Terreno by way of a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement").

Upon completion of the Arrangement:

  • Crown Life will become a wholly-owned subsidiary of Terreno and the current Crown Life shareholders will become shareholders of Terreno;
  • Crown Life's existing senior management team, including Lorraine Fusco (President and Chief Executive Officer), Walter Fusco (Executive Vice-President) and David Berman (Chief Financial Officer), will continue the Crown Life business as Terreno's senior management team; and
  • the Terreno board of directors will be reconstituted to include representatives from the existing Crown Life board of directors.

Arrangement Overview

Pursuant to the terms of the Arrangement Agreement, immediately prior to the Arrangement, Terreno is required to complete a consolidation of the Terreno common shares on an approximate 4.8 for 1 basis (the "Terreno Consolidation"), which will result in there being approximately 1,663,454 post-Terreno Consolidation common shares of Terreno (the "Terreno Shares") issued and outstanding. Additionally, Crown Life is also required to complete a consolidation of the Crown Life common shares on an approximate 5 for 1 basis (the "Crown Life Consolidation"), which will result in there being approximately 44,546,276 post-Crown Life Consolidation common shares of Crown Life (the "Crown Life Shares") issued and outstanding.

The Arrangement will be effected by way of a statutory plan of arrangement pursuant to the Business Corporations Act (Ontario). Pursuant to the Arrangement Agreement and upon completion of the Terreno Consolidation and the Crown Life Consolidation, Crown Life will complete a reverse take-over of Terreno with each Crown Life shareholder receiving one (1) Terreno Share for each Crown Life Share held immediately prior to the completion of the Arrangement.

Upon completion of the Arrangement and without giving effect to the financing to be conducted by Crown Life in connection therewith, on a pro forma, post-consolidation basis, Terreno will have approximately:

  • 46,209,730 issued and outstanding Terreno Shares, of which approximately 3.6% will be held by former Terreno shareholders and approximately 96.4% will be held by former Crown Life shareholders; and
  • outstanding stock options and warrants and other equity compensation arrangements to issue up to an additional 426,208 Terreno Shares.

The Arrangement has been unanimously approved by the boards of directors of both Terreno and Crown Life. Completion of the Arrangement is expected to occur prior to August 31, 2015 and is conditional upon, among other things, receipt of all required court, stock exchange and shareholder approvals. For additional information please see the Arrangement Agreement which has been filed on under Terreno's profile on SEDAR at www.sedar.com.

Shareholder Meetings

Terreno will be calling an annual and special meeting of its shareholders to seek approval of, among other things, a change of business upon completion of the Arrangement, the Terreno Consolidation and the issuance of Terreno Shares to former Crown Life shareholders pursuant to the Arrangement. Additionally, Crown Life will be calling a special meeting of its shareholders to seek approval of the Crown Life Consolidation and the Arrangement. Details regarding the meetings of the shareholders of Terreno and Crown Life, respectively, will be provided in a joint management information circular of Terreno and Crown Life that will be mailed to shareholders.

Crown Life Financing

Crown Life has retained Jacob Securities Inc. (the "Agent") to act as agent in connection with a best efforts private placement of a minimum of 9,210,526 subscription receipts of Crown Life (the "Subscription Receipts") at price of $0.38 per Subscription Receipt for minimum gross proceeds of approximately $3,500,000 and up to 13,157,894 Subscription Receipts for maximum gross proceeds of $5,000,000 (the "Offering"), or such greater number of Subscription Receipts as Crown Life, Terreno and the Agent may determine. The gross proceeds of the Offering less the reasonable expenses of the Agent (the "Escrowed Proceeds") will be held in escrow on behalf of the subscribers by an escrow agent and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments).

The Escrowed Proceeds and all accrued interest, less the Agent's fee and any unpaid expenses of the Agent, will be released to Crown Life upon receipt by the escrow agent of a notice from Crown Life and the Agent indicating the satisfaction of the escrow release conditions agreed to among Crown Life, Terreno and the Agent at which time each Subscription Receipt will automatically convert, without any further action on the part of the holder, into one unit of Crown Life (a "Crown Life Unit"). In the event the escrow release conditions are not satisfied on or before the escrow release deadline determined by Crown Life and the Agent, the Subscription Receipts will be cancelled and all proceeds from the sale of the Subscription Receipts will be returned to the subscribers.

Each Crown Life Unit will be comprised of one Crown Life Share and one Crown Life Share purchase warrant (each, a "Crown Life Warrant") entitling the holder to acquire one additional Crown Life Share at an exercise price of $0.55 for a period of two-years from the closing date of the Offering, subject to certain acceleration provisions.

Pursuant to the terms of the Arrangement Agreement, upon completion of the Arrangement, the subscribers for Crown Life Units will receive one Terreno Share for each Crown Life Share and one Terreno Share purchase warrant having terms identical to the Crown Life Warrants for each Crown Life Warrant.

The net proceeds of the Offering will are expected to be used by the resulting issuer for the acquisition of additional life settlement portfolios, working capital and general corporate purposes and expenses.

In connection with the Offering, the Agent will be entitled to a cash commission equal to 7.5% of the aggregate gross proceeds, and broker warrants exercisable for Units equal to 7.5% of the number of Subscription Receipts issued. Each broker warrant shall, subject to completion of the Arrangement, entitle the holder thereof to acquire, at any time for a period of two-years from the closing date, one Unit at a price of $0.38 per Unit. Pursuant to the Arrangement, each broker warrant issued pursuant to the Offering will be exchanged for one broker warrant of Terreno.

Additional Information Regarding the Arrangement

As additional information regarding the Arrangement becomes available, Terreno will issue subsequent press releases including additional information regarding the proposed Arrangement.

About Crown Life Canada Ltd.

Crown Life is a Canadian private Ontario company with its head office in Mississauga, Ontario and is in the business of purchasing and holding senior life settlements until maturity. Crown Life acquires life insurance policies at a discount to face value from persons who no longer need or want their life insurance policy. Crown Life is focused solely on the U.S. senior life settlement market and has a portfolio of approximately $110 million in face value of life insurance policies.

About Terreno Resources Corp.

Terreno was previously focused on international mineral exploration, but has ceased its exploration activities. Terreno's current business is to identify and evaluate businesses and assets with a view to acquiring a new operating business.

Cautionary Note Regarding Forward-looking Statements

This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.

In particular, this news release contains forward-looking statements relating to, among other things, the completion of the Arrangement, the completion of the Offering, the ability of the Terreno and Crown Life to complete the pre-closing obligations set out in the Arrangement Agreement and the proposed board of directors and executive officers of the resulting issuer. Management of the Terreno believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Terreno, including information obtained from third party industry analysts and other third party sources.

Forward-looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of Terreno and Crown Life, that may cause the actual results, level of activity, performance or achievements of Terreno and Crown Life to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business, economic, competitive, political and social uncertainties; negotiation uncertainties and other risks of the insurance industry. Although Terreno and Crown Life have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Terreno and Crown Life's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, neither Terreno nor Crown Life assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

Completion of the Arrangement is subject to a number of conditions, including TSX Venture Exchange acceptance. Additionally, the Arrangement cannot close until the required shareholder approval is obtained. There can be no assurance that the Arrangement will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the joint management information circular of Terreno and Crown Life to be prepared in connection with the transaction, any information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of Terreno should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the Arrangement and has neither approved nor disapproved the contents of this press release.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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