Mr. Richard Patricio reports

TERRENO RESOURCES CORP. AND CROWN LIFE CANADA LTD. ENTER INTO ARRANGEMENT AGREEMENT

Terreno Resources Corp. and Crown Life Canada Ltd. have entered into an arrangement agreement dated June 18, 2015. 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).

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;
• 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 one-for-4.8 basis, which will result in there being approximately 1,663,454 postconsolidation common shares of Terreno issued and outstanding. Additionally, Crown Life is also required to complete a consolidation of the Crown Life common shares on an approximate one-for-five basis, which will result in there being approximately 44,546,276 postconsolidation common shares of Crown Life 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 takeover of Terreno, with each Crown Life shareholder receiving one 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, postconsolidation basis, Terreno will have approximately:

• 46,209,730 issued and outstanding Terreno shares, of which approximately 3.6 per cent will be held by former Terreno shareholders and approximately 96.4 per cent will be held by former Crown Life shareholders;
• 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 Aug. 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.

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. to act as agent in connection with a best-efforts private placement of a minimum of 9,210,526 subscription receipts of Crown Life at price of 38 cents per subscription receipt for minimum gross proceeds of approximately $3.5-million and up to 13,157,894 subscription receipts for maximum gross proceeds of $5-million, 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 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. 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 comprise one Crown Life share and one Crown Life share purchase warrant, entitling the holder to acquire one additional Crown Life share at an exercise price of 55 cents 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 per cent of the total gross proceeds and broker warrants exercisable for units equal to 7.5 per cent 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 38 cents 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.

Crown Life is a Canadian private Ontario company with its head office in Mississauga, Ont., 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.

We seek Safe Harbor.