Shares for Shares or Cash

Overview

BCE will acquire GLENTEL under a CBCA Plan of Arrangement for cash or shares, at the GLENTEL shareholder's option, but with the overall consideration fixed at $295.4 million cash and BCE shares equal to 0.4974 of a BCE common share multiplied by 50% of the outstanding GLENTEL common shares. Both a s. 85.1 rollover (for those receiving only shares) and a s. 85 rollover (for those receiving a mixture) is available.

GLENTEL

A provider of wireless communication services listed on the TSX. Thomas Skidmore (the CEO) and A Allan Skidmore (Vice Chairman) hold 21.2% and 15.6% of the common shares.

BCE

Canada's largest communications company listed on the TSX and NYSE.

Plan of Arrangement

1. Each outstanding option will be deemed to have been vested, with those with a lower exercise price than the "Cash Consideration" described below cash surrendered, and the others cancelled.
2. Each common share of GLENTEL (other than those held by dissenting shareholders) will be transferred to BCE in consideration for the "Cash Consideration" (of $26.50 per share) or the "Share Consideration" (of 0.4974 of a BCE common share) at the shareholder's option subject to pro-ration based on the aggregate Cash Consideration and Share Consideration being fixed as described above - and with those not electing deemed to have elected the less popular option.
3. Dissenting shareholders will be deemed to have transferred their GLENTEL shares to BCE.

Canadian tax consequences

A holder who receives only BCE common shares (other than cash in lieu of a fractional share) may defer gain under s. 85.1(1). A holder (including a non-resident holder) who receives both cash and BCE shares will be provided with a signed election form under s. 85(1) (or under s. 85(2) in the case of a partnership), provided the necessary information is provided to BCE within 90 days of the effective date of the Plan of Arrangement. In addition to posting a "Tax Instruction Letter" on its website, BCE will provide the letter to a duly requesting shareholder by email.

U.S. tax consequences

"BCE and GLENTEL do not plan to structure the Arrangement with the intended goal of satisfying [the] requirements" for "tax-free status" and "intend to take the position that the Arrangement is a taxable transaction."

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.

Cash purchase

Proposed Quebec plan of arrangement under which holders of shares of TSX-listed 20-20 (valued at $75 million), other than Mignault Holding Inc. ("Mignault"), would receive $4 per share in cash (for an estimated 28% premium). Vector Capital Corporation is a private equity firm.

Provision for break fee of $3 million on specified 20-20 termination. Vector is to pay $4.5 million to 20-20 if there is a specified financing failure.

Rollover transaction

Mignault would sell approximately 80% of its 22.16% interest in 20-20 (held either directly or through Qualifying Holdco's as described below) to Vector for $4 per share in cash, and receive an equity interest of up to 9.9% in the wholly-owning grandparent of Vector ("Vector Parent") for the remaining 20% interest. This transaction is intended to occur on a rollover (s. 85(1) or 85.1) basis. Vector Parent then rolls the shares so acquired by it on a share-for-share rollover basis to its immediate subsidiary (Vector Holdco) which, in turn, transfers such shares on a share-for-share rollover basis to Vector.

Safe-income planning

Resident shareholders of 20-20 are permitted to transfer their shares to a Newco (a "Qualifying Holdco") in advance of the plan of arrangement, pay a safe income dividend out of their Qualifying Holdco and then sell their shares of Qualifying Holdco to Vector for the equivalent of $4 per 20-20 share held by their Qualifying Holdco. Permitted safe income dividends include "an increase in stated capital, a stock dividend, a cash dividend financed with a daylight loan or a dividend paid through the issuance of a promissory note with a determined principal amount and any such promissory note issued in relation to the payment of any such dividend will no longer be outstanding as of the Effective Time" (p. 28).

Options

. Holders of 20-20 employee incentive options and deferred share units are deemed to be vested at the effective time of the plan of arrangement as the first step in the plan of arrangement, and then are immediately cashed out for their in-the-money value as the second step.

Canadian income taxation

There is Canadian income disclosure only respecting the sale of 20-20 shares for cash (a taxable transaction to residents, and with the 20-20 shares potentially not being taxable Canadian property to non-residents).