Bellatrix/Angle

Overview

All the shares of TSX-listed Angle are to be acquired under an Alberta plan of arrangement by Bellatrix (a TSX-listed ABCA corporation, also listed on the NYSE MKT) in consideration for 30.2M Bellatrix shares and $69.7M cash. Angle shareholders are given a choice of $3.85 per share cash (the "Cash Consideration"), or 0.4734 of a Bellatrix share (the "Share Consideration") per Angle share, subject to the overall cash/share proportion being fixed at 22% (cash) and 78% (shares). Bellatrix, Angle and a wholly-owned Angle subsidiary ("ARI") will then amalgamate. Following the Arrangement, former Angle shareholders will hold 18% of the common shares of Amalco. If Angle debentureholders vote to participate, their debentures (with principal of $1,000 aggregating to $60M) will be acquired by Bellatrix under the Plan of Arrangment for cash at a 4% premium.

U.S. Securities law

The Bellatrix shares will be issued in reliance on the s. 3(a)(10) exemption.

Plan of Arrangement

1. Angle Energy Partnership (an Alberta general partnership between Angle and ARI) will be dissolved so that Angle and ARI receive an undivided interest in each partnership property and they assume its liabilities on a pro rata basis.
2. Angle shares and debentures of dissenters will be transferred to Bellatrix, with an entitlement to be paid their fair value.
3. Each outstanding Angle share will be transferred to Bellatrix for the Cash Consideration or Share Consideration, subject to pro-ration based on the aggregate Cash Consideration being fixed at $69.7M and provided that where an Angle. shareholder, who has received both Share Consideration and Cash Consideration, makes a valid s. 85(1) or (2) election, it "shall be deemed to have transferred all of such holder's Angle Shares to Bellatrix as a single transaction for consideration consisting of the combination of Bellatrix Shares and cash received under this Plan."
4. Provided that a debentureholder affirmative vote has been received and dissent rights have not been exercised in respect of more than 5% of the principal, each outstanding Angle debenture will be transferred to Bellatrix for cash of $1040 plus all accrued but unpaid interest.
5. The stated capital of the shares of Angle and of ARI will be reduced to $1.
6. Bellatrix, Angle and ARI will be amalgamated, with the Angle and ARI shares being cancelled and with the articles, stated capital and name of Amalco the same as Bellatrix.

Debentures

If the Angle debentureholders do not approve the Arrangement by a 66 2/3% vote, the Arrangement will still proceed. However: Bellatrix will be required to offer to purchase the debentures at 100% of their principal amount plus accrued but unpaid interest; and upon completion of the Arrangement, the holders will be entitled to receive on conversion: (i) as to 78% of the Angle shares that otherwise would be received on conversion, 0.4734 of a Bellatrix share for each such Angle share; and (ii) as to 22% of the Angle shares that otherwise would have been received on conversion, $3.85 in cash for each such Angle share.

Canadian tax consequences

Capital gains treatment. In the absence of an s. 85 election, the exchange will occur on a non-rollover basis except (under s. 85.1) where only Share Consideration is received. Capital gains/loss treatment will apply to dissenters except re interest. Non-residents who do not hold their shares as taxable Canadian property will not be subject to tax on disposing of their shares.

Election forms

Pre-signed s. 85(1) or (2) election forms will be available on the Bellatrix website within 60 days of the Effective Date of the plan of arrangement. Bellatrix will not be responsible for completing these forms. Any applicable provincial election forms must be provided to Bellatrix within 90 days of the Effective Date and will be signed and returned by it within 30 days.