Section 85 Tax Act Election and Canada Revenue Agency Form T2057
A Peerless Energy Inc. (Peerless) class A shareholder who receives consideration that includes Petrobank Energy and Resources Ltd. (Petrobank) common shares (Petrobank Shares) and cash pursuant to the plan of arrangement (Arrangement) between Petrobank and Peerless may be entitled to make an income tax election under Section 85 of the Income Tax Act (Canada) (Tax Act) to defer all or a portion of the capital gain that would otherwise be realized.
The link below accesses Canada Revenue Agency Form T2057 which can be completed (in duplicate) by Peerless shareholders who wish to make this election and forwarded to Petrobank at the address noted below for signature and submission to the Canada Revenue Agency.
http://www.cra-arc.gc.ca/E/pbg/tf/t2057/t2057-05e.pdf
The T2057 form itself contains instructions with respect to its completion and additional information is provided by the Canada Revenue Agency in Information Circular IC76-19 and Interpretation Bulletins, IT-169, IT-291 and IT-378If.
To make this income tax election, Peerless class A shareholders must provide two signed copies of the necessary prescribed Canada Revenue Agency election forms to Petrobank within 90 days following the January 28, 2008 (the Effective Date), duly completed with the details of the number of Peerless class A shares transferred and the applicable agreed amounts for the purpose of such elections. Thereafter, subject to the election forms being correct and complete and complying with the provisions of the Tax Act (or any applicable provincial income tax law), the forms will be signed by Petrobank and forwarded by mail to the Canada Revenue Agency (or the applicable provincial taxing authority).
Petrobank will not be responsible for the proper completion of any election form and, except for Petrobanks obligation to forward by mail to the Canada Revenue Agency (or the applicable provincial taxing authority) the duly completed election forms which are received by either Petrobank or the Olympia Trust Company within 90 days the Effective Date, Petrobank will not be responsible for any taxes, interest, penalties or any other costs or damages resulting from the failure by a holder of Peerless class A shares to properly complete the election forms in the form and manner prescribed by the Tax Act (or any applicable provincial income tax law). In its sole discretion, Petrobank may choose to sign and forward by mail to the Canada Revenue Agency (or the applicable provincial taxing authority) an election form received more than 90 days following the Effective Date, but Petrobank will have no obligation to do so.
Peerless shareholders are advised to consult their own tax advisors to determine the particular tax consequences to them.
Petrobank Energy and Resources Ltd.