NSR Nomad Royalty Company Ltd

DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN

This prospectus covers 2,660,000 common shares, without par value (“Common Shares”) of Nomad Royalty Company Ltd. (the ”Company”, “Nomad”, “we” or “us”) that may be purchased under our dividend reinvestment plan (the “Plan”). The Plan provides holders of our Common Shares with a simple and convenient method of investing cash dividends declared on our Common Shares in additional Common Shares (less any applicable withholding tax).

Under the Plan, holders of our Common Shares resident in Canada, the United States, Bermuda or Cayman Islands may obtain additional Common Shares by automatically reinvesting all or any portion of the cash dividends paid on Common Shares held by the Plan without paying any brokerage commissions, administrative costs or other service charges.

The Common Shares acquired by Computershare Trust Company of Canada (“Computershare” or the “Plan Agent”) under the Plan will, at our sole election, either be Common Shares issued from the treasury by us (the “Treasury Purchase”) or be Common Shares acquired on the open market (the “Market Purchase”) through the facilities of the Toronto Stock Exchange (the “TSX”) and/or any other alternative Canadian market. The purchase price of Common Shares in a Treasury Purchase will be the weighted average trading price of the Common Shares on the TSX during the five trading days immediately preceding a dividend payment date, less a discount, if any, of up to 5% at our sole election (the “Average Market Price”). The purchase price of Common Shares in a Market Purchase will be the average price per Common Share paid by the Plan Agent for all the Common Shares so acquired, the Common Shares will be purchased within one business day at any point during the three business days following the dividend payment date. The dividends will be denominated in Canadian dollars.

We currently pay quarterly dividends on our Common Shares, which have historically been paid quarterly in respect of periods ended March 31, June 30, September 30 and December 31 on such dates as are determined by our board of directors. The rate at which we pay dividends takes into account all factors that our board of directors considers relevant from the perspective of the Company, including our available cash flow, financial condition and capital requirements. While we currently expect to pay dividends on a quarterly basis, any decision to declare dividends is at the discretion of our board of directors.

Our Common Shares are listed on both the TSX and the New York Stock Exchange (the ”NYSE”) under the symbol “NSR”.  Our Common Shares are also quoted for trading on the Frankfurt Stock Exchange (the “FSE”) under the symbol “IRL”. On November 8, 2021, being the last trading day prior to the date of this prospectus, the closing prices of our Common Shares on the TSX, the NYSE and the FSE were C$9.50, US$7.63 and €6.15, respectively.

We cannot estimate anticipated proceeds from the further sale of Common Shares under the Plan, which will depend on the market price of the Common Shares, the extent of shareholder participation in the Plan and other factors. We will not pay underwriting commissions in connection with the Plan, but will incur costs of approximately US$139,500 in connection with this offering.

The Plan was adopted on November 8, 2021.

Investing in our Common Shares involves risks. See “Risk Factors” and “Forward-Looking Statements” on page 3 of this prospectus for a discussion of certain factors relevant to an investment in our Common Shares.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is November 9, 2021.

THE DIVIDEND REINVESTMENT PLAN

The following summary of our Plan is intended as a general guide to the main features of the Plan and may omit information that is important to you. You should carefully read the entire text of the Plan in the registration statement of which this prospectus forms a part before you decide to participate in the Plan. Capitalized terms not defined in this section have the meanings given to them in the Plan.

WHAT IS THE PURPOSE OF THE PLAN?

The Plan allows eligible registered holders of our Common Shares to acquire additional Common Shares through reinvestment of cash dividends paid on their shareholdings. Dividends that Participants have elected to reinvest will be used to purchase Common Shares in the open market or by issuance from treasury (less a discount, if any, of up to 5%) as elected by the Company. The Company will provide advance notification to Participants if and when an election is made to change the method of purchasing Common Shares under the Plan.

We currently pay quarterly dividends on our Common Shares. The rate at which we pay dividends takes into account all factors that our board of directors considers relevant from the perspective of our Company, including our available cash flow, financial condition and capital requirements. While we currently expect to pay dividends on a quarterly basis, the decision to declare dividends is at the discretion of our board.

We have retained the Plan Agent, namely Computershare Trust Company of Canada, to act as agent for the participants in the Plan.

On November 8, 2021, our board of directors adopted a resolution authorizing the issuance of up to an additional 2,660,000 Common Shares pursuant to the Plan.

WHAT ARE THE MAIN ADVANTAGES OF ENROLLING IN THE PLAN?

Before deciding whether to participate in the Plan, you should consider the following advantages of the Plan, together with the other information about us and the Plan contained in this prospectus and incorporated by reference to other documents we have filed with or furnished to the SEC. The main advantages of enrolling in the Plan are as follows:

Shareholders considering participating in the Plan should carefully consider the matters noted under “Risk Factors” and “Forward-Looking Statements” prior to enrolling in the Plan.

WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?

The Plan is available to our shareholders who hold at least one whole Common Share and who reside in Canada, the United States, Bermuda or the Cayman Islands. Registered shareholders (which means shareholders who hold Common Shares in their own name) may enroll directly in the Plan. Beneficial shareholders (which means shareholders who hold their Common Shares through a financial advisor, broker, investment dealer, bank, financial institution or other nominee) may also be able to participate in the Plan through their nominees (such Plan participant being a “Beneficial Participant”) but should contact their financial advisor, broker, investment dealer, bank, financial institution or other nominee to determine the procedure for participation in the Plan. We cannot require or control an intermediary’s determination as to whether to participate in the Plan or any procedures adopted by any intermediary with respect to the Plan.

HOW DO I ENROLL IN THE PLAN IF MY COMMON SHARES ARE REGISTERED IN MY NAME?

If your Common Shares are registered in your name, you may participate in the Plan by choosing to reinvest the cash dividends, if any, less applicable Canadian withholding tax, paid on the Common Shares that you hold. See “What are my dividend reinvestment options?” below for details regarding the different elections you can make under the Plan. You can enroll online through the Plan Agent’s self-service web portal, Investor Centre, at www.investorcentre.com/Nomad or by completing a Reinvestment Enrollment—Participant Declaration Form and returning it to the Plan Agent within the applicable deadlines described below. To obtain an enrollment package, contact Computershare at 1-800-564-6253 if you are in the United States or Canada, at 1-514-982-7555 if you are outside of North America or access the Form online at www.investorcentre.com/Nomad. Additionally you may access an enrollment form at any time through the “Investors – Dividend” section of our website at www.nomadroyalty.com.

HOW DO I PARTICIPATE IN THE PLAN IF I AM A BENEFICIAL SHAREHOLDER?

If you are a beneficial owner whose Common Shares are held through a financial advisor, broker, investment dealer, bank, financial institution or other nominee and are therefore registered in a name other than your own, such as CDS Clearing and Depository Services Inc. (“CDS”), you may participate in the Plan by (i) having those Common Shares transferred into your name directly and then enrolling such Common Shares in the Plan as a registered holder or (ii) make appropriate arrangements with the financial advisor, broker, investment dealer, bank, financial institution or other nominee who holds your Common Shares to enroll in the Plan on your behalf. CDS as a participant will in turn enroll with the Plan Agent for the applicable dividend record date.

If you are a beneficial owner of Common Shares and wish to enroll in the Plan through a CDS participant in respect of your Common Shares registered through CDS, appropriate instructions must be received by CDS, as applicable, from the CDS participant no later than such deadline as may be established by CDS from time to time, in order for the instructions to take effect on the dividend payment date to which that dividend record date relates.

Instructions received by CDS after their internal deadline will not take effect until the next following dividend payment date. CDS participants holding Common Shares on behalf of beneficial owners of Common Shares registered through CDS must arrange for CDS to enroll such Common Shares in the Plan on behalf of such beneficial owners in respect of each dividend payment date.

If you are a beneficial owner of Common Shares, you should contact your financial advisor, broker, investment dealer, bank, financial institution or other nominee who holds your Common Shares to provide instructions regarding your participation in the Plan and to inquire about any applicable deadlines that the nominee may impose or be subject to and to confirm the fees, if any, the nominee may charge to enroll your Common Shares in the Plan on your behalf or whether the nominee’s policies might result in any costs otherwise becoming payable by you.

ONCE ENROLLED, HOW DO I REMAIN IN THE PLAN?

Once enrolled in the Plan, you will continue to be enrolled under the Plan until you terminate participation in the Plan or the Plan is terminated. Neither us nor Computershare will have any duty to inquire as to your residency, nor will we or the Plan Agent be required to know your residency status other than as you have notified us or the Plan Agent.

WHAT ARE MY DIVIDEND REINVESTMENT OPTIONS?

You will not be entitled to direct reinvestment of less than 100% of all cash dividends paid on your Common Shares that participate in the Plan, and you will continue to receive cash dividends, if and when declared, on any of your Common Shares that do not participate in the Plan. You may change your dividend reinvestment election by contacting Computershare. See “Who should I contact with questions about the Plan?” for contact details. In order for any changes in your dividend reinvestment election to take effect for the next dividend payment, if any, you must notify the Plan Agent in writing at least five business days before the record date for the next dividend.

WHEN WILL MY DIVIDEND REINVESTMENT BEGIN?

The reinvestment of any cash dividends will begin with the first cash dividend that we pay following your enrollment, but only if the Plan Agent receives a Reinvestment Enrollment—Participant Declaration Form at least five business days before the record date for that dividend. You can also enroll online through the Plan Agent’s self-service web portal, Investor Centre, at www.investorcentre.com/Nomad. If the Plan Agent receives your Reinvestment Enrollment—Participant Declaration Form, the reinvestment of any cash dividends paid on your Common Shares, or any changes thereto, will begin with the next dividend, if any, provided that you are still a shareholder on the record date for the next dividend.

ARE THERE LIMITATIONS ON PARTICIPATION IN THE PLAN?

You may not transfer the right to participate in the Plan.

Subject to applicable law and regulatory policy, we reserve the right to terminate a participant’s participation at any time if there is less than one Common Share recorded in the Participant’s account or the Participant cannot be contacted at the addresses given by the Participant.

We may deny the right to participate in the Plan to any shareholder if we have reasons to believe that such shareholder has been engaging in market activities, or has been artificially accumulating securities of Nomad, for the purpose of taking undue advantage of the Plan to the detriment of Nomad.

We reserve the right to deny participation in the Plan, and to not accept enrollment from, any person or agent of such person who appears to be, or who we have reason to believe is, subject to the laws of any jurisdiction that does not permit participation in the Plan in the manner sought by or on behalf of such person. Shareholders should be aware that certain intermediaries may not allow participation in the Plan and we are not responsible for monitoring or advising which intermediaries allow participation.

WHEN DOES COMPUTERSHARE REINVEST DIVIDENDS AND PURCHASE COMMON SHARES?

The reinvestment of dividends to purchase Common Shares will occur within one business day at any point during the three business days following the dividend payment date.

HOW DOES THE PLAN AGENT PURCHASE THE COMMON SHARES?

On each of our dividend payment dates, the cash dividends payable on your participating Common Shares are paid by us to the Plan Agent. At our sole election, the Plan Agent shall use those funds (less any withholdings under applicable tax laws) to (i) purchase newly issued Common Shares from us in Treasury Purchases; (ii) purchase Common Shares in Market Purchases. Such determination by us, and the determination of any Applicable Discount in the case of a Treasury Purchase, will be provided to the Plan Agent by written notice.

Your account will then be credited with the number of Common Shares, including fractions computed to six decimal places, equal to (i) the total amount of cash dividends to be reinvested on your behalf, less any applicable withholding tax, divided by (ii) the price per Common Share calculated pursuant to the method described below under “At what price will Common Shares be purchased under the Plan?”

The total amount to be reinvested in Common Shares on your behalf will depend on the amount of the cash dividend, if any, paid on the number of Common Shares you hold and have designated for reinvestment under the Plan.

Dividends to be reinvested in Common Shares pursuant to the Plan will be denominated in Canadian dollars for all participants in the Plan.

AT WHAT PRICE WILL COMMON SHARES BE PURCHASED UNDER THE PLAN?

Neither Nomad nor the Plan Agent will exercise any direct or indirect control over the price paid for Common Shares purchased under the Plan.

The purchase price of the Common Shares acquired under the Plan on each dividend payment date will depend on whether the Plan Agent purchases such shares by way of a Treasury Purchase or a Market Purchase. The purchase price allocation for each Common Share acquired by the Plan Agent under the Plan will be:

Nomad will announce by way of press release and in dividend announcements whether purchases of Common Shares under the Plan will be made by way of a Treasury Purchase or a Market Purchase and any Applicable Discount for Treasury Purchases in connection with the reinvestment of dividends.

The dividends, the Average Market Price and average price in the event of a Market Purchase will be denominated in Canadian dollars.

WHAT ARE THE FEES ASSOCIATED WITH PARTICIPATION IN THE PLAN?

Participants in the Plan will not be charged any brokerage commissions, administrative costs or other service charges in connection with the purchase of Common Shares under the Plan, and we will pay all costs of administering the Plan.

Participants will be responsible for all applicable brokerage commissions and transfer taxes, if any, incurred in connection with the sale of Common Shares in the Plan by the Plan Agent on behalf of any participant.

If you are a beneficial owner of Common Shares, you should contact your financial advisor, broker, investment dealer, bank, financial institution or other nominee who holds your Common Shares to confirm the fees, if any, the nominee may charge to enroll or sell your Common Shares in the Plan on your behalf or whether the nominee’s policies might result in any costs otherwise becoming payable by you.

WHAT HAPPENS IF I OWN FRACTIONAL COMMON SHARES UNDER THE PLAN?

The Plan Agent will credit your account with fractions of Common Shares, computed to six decimal places, and with dividends in respect of such fractional shares to allow full investment of eligible funds.

WHO IS THE PLAN ADMINISTRATOR?

Computershare, as agent for Plan participants, will administer the Plan. Its responsibilities include:

Common Shares purchased under the Plan will be registered in the name of each participant and will be held by Computershare in the accounts of participants. We will pay certain administrative fees and expenses of Computershare as may, from time to time, be agreed upon by Computershare and us.

All whole and fractional Common Shares purchased under the Plan will be registered in the name of the Plan Agent or its nominee and the appropriate number of whole and fractional Common Shares will be credited to the account of registered shareholders or, in the case of beneficial owners of Common Shares, in the name of CDS, who will credit their nominees, as applicable.

WHAT KIND OF REPORTS WILL I RECEIVE AS A PLAN PARTICIPANT?

An individual account is maintained by the Plan Agent for each participant’s holdings under the Plan. An account statement is mailed to each participant quarterly (or at such other frequency determined by Nomad). These statements are a record of a participant’s investment activity under the Plan and should be retained for income tax purposes. Participants will also receive annual income tax slips.

If you are not a registered shareholder and participate in the Plan through arrangements made for you by your financial advisor, broker, investment dealer, bank, financial institution or other nominee, you may or may not be provided with reports with respect to your participation in the Plan. You should contact your nominee regarding obtaining information on your account with the Plan.

HOW DO I SELL COMMON SHARES THAT I PURCHASED THROUGH THE PLAN?

You may request the sale of any number of whole Common Shares of your shares held in the Plan without terminating your participation in the Plan by duly completing the selling instructions located on the reverse of the periodic statement of account you received as a registered holder of Common Shares or by notifying the Plan Agent in writing. Any written notice provided to the Plan Agent must be signed by you as a registered shareholder or by your agent. Alternatively you may withdraw from the Plan by submitting the request online through the Plan Agent’s web portal, www.investorcentre.com/Nomad, or as otherwise identified from time to time by the Plan Agent. Upon receipt of such a request, the Plan Agent will as soon as practicable arrange for the sale of such Common Shares through a registered broker-dealer selected by the Plan Agent from time to time. The selling participant will be charged brokerage commissions and transfer taxes, if any, which will be deducted from the cash proceeds of the sale to be paid to the selling participant. Commissions charged on such sales will be charged at the customary rates charged from time to time by the registered broker-dealer. Common Shares that are sold may be commingled with Common Shares of other participants to be sold on the open market and the sale price of such shares will be the average sale price of all Common Shares commingled and sold on the same day. The Plan Agent can only sell Common Shares acquired under the Plan.

You may not pledge, hypothecate, assign or otherwise dispose of or transfer of any Common Shares held in the Plan. If you wish to pledge, hypothecate, assign, dispose of or otherwise transfer of all or any portion of your Common Shares in the Plan, you must first withdraw such Common Shares from the Plan.

Whole Common Shares may be withdrawn from your account under the Plan by sending a request to the Plan Agent in a form acceptable to it, by referencing the instructions on the reverse of the periodic statement of account you received as a registered holder of Common Shares or by notifying the Plan Agent. Any written notice provided to the Plan Agent must be signed by you as a registered shareholder or by your agent. Alternatively you may withdraw from the Plan by submitting the request online through the Plan Agent’s web portal, www.investorcentre.com/Nomad, or as otherwise identified from time to time by the Plan Agent. Fractions of Common Shares may not be withdrawn.

If you sell or withdraw less than all of your Common Shares in the Plan, dividends paid on your remaining Common Shares in the Plan will continue to be reinvested in Common Shares under the Plan.

If you are not a registered shareholder and participate in the Plan through arrangements made for you by your financial advisor, broker, investment dealer, bank, financial institution or other nominee, you should contact your nominee regarding the procedures for withdrawing or selling Common Shares in the Plan.

HOW DO I TERMINATE MY PARTICIPATION IN THE PLAN?

Your participation in the Plan may be terminated at any time by sending a request to the Plan Agent in a form acceptable to it by referencing the instructions on the reverse of the periodic statement of account you received as a registered holder of Common Shares or by notifying the Plan Agent. Any written notice provided to Computershare must be signed by you as a registered shareholder or by your agent. Alternatively you may terminate your participation in the Plan by submitting the request online through Computershare’s web portal, www.investorcentre.com/Nomad, or as otherwise identified from time to time. If you are not a registered shareholder and participate in the Plan through arrangements made for you by your financial advisor, broker, investment dealer, bank, financial institution or other nominee, you may terminate your participation in the Plan by giving notice to your nominee through which your Common Shares are held, subject to such nominee’s compliance with the requirements of the Plan.

A request for termination that is received by the Plan Agent will become effective as soon as practicable. On closing a participant’s account under the Plan (and after any funds paid by Nomad to the Plan Agent have been re-invested into additional Common Shares where such termination becomes effective between a dividend record date and a dividend payment date), a direct registration system advice, certificate or other evidence of such whole Common Shares and a cheque for payment for any fraction of a Common Share held in the account will be issued and sent to the participant based on the prevailing market price at the time of sale.

Where the Plan Agent has received written notice of the death of a participant, with written instructions from a person acting in a representative or fiduciary capacity and satisfactory evidence of their proof of appointment and authority to act, the participant’s participation in the Plan will automatically terminate. In such circumstances (and after any funds paid by Nomad to the Plan Agent have been re-invested into additional Common Shares where such termination becomes effective between a dividend record date and a dividend payment date), a direct registration system advice, certificate or other evidence of the Common Shares will be issued in the name of the deceased participant or in the name of the estate of the deceased participant and sent to the representative of the deceased participant along with a cheque for payment for any fraction of a Common Share held in deceased participant’s account based on the prevailing market price at the time of sale.

WILL I RECEIVE SHARE CERTIFICATES FOR PLAN COMMON SHARES?

Direct registration system advice, certificate or other evidence of such Common Shares are not issued to participants for Common Shares while held under the Plan.

WILL I BE ABLE TO VOTE PLAN COMMON SHARES?

Common Shares held for a participant’s account under the Plan will be voted in accordance with the instructions of the participant given on a form to be furnished to the participant by the Plan Agent. Common Shares enrolled in the Plan for which instructions are not received will not be voted. Common Shares under the Plan held by the Plan Agent representing fractional interests in Common Shares will not be voted.

Participants that are non-registered shareholders wishing to vote Common Shares held for their benefit under the Plan should consult their intermediary to determine the procedures for voting such Common Shares.

WHAT HAPPENS IF THERE IS A RIGHTS OFFERING?

If we issue rights to our holders of Common Shares to subscribe for additional Common Shares or other securities, then rights certificates in respect of whole rights will be issued by us to each participant (as well as intermediaries holding Common Shares on behalf of non-registered shareholders) in respect of the Common Shares held for the participant under the Plan on the record date for the rights issue. No rights will be issued on a fraction of a Common Share held in the account of a participant.

WHAT HAPPENS IF THERE IS A STOCK SPLIT OR STOCK DIVIDEND?

If Shares are distributed pursuant to a stock split or stock dividend on our Common Shares, such Common Shares received by Computershare for participants under the Plan will be retained by the Plan Agent and credited proportionately to the respective accounts of participants (as well as intermediaries holding Common Shares on behalf of non-registered shareholders).

WHAT LIABILITY DO NOMAD AND THE PLAN AGENT HAVE UNDER THE PLAN?

None of Nomad, the Plan Agent or any director, officer or employee thereof shall be liable for any act, or for any omission to act, in connection with the operation of the Plan including, without limitation, any claims of liability:

Participants should recognize that neither Nomad nor the Plan Agent can assure a profit or protect them against a loss on the Common Shares held from time to time for the participants under the Plan.

Notwithstanding any other provision of the Plan, shareholders may not enroll, terminate or change the number of shares enrolled in the Plan at any time when they have knowledge of an undisclosed material fact or material change with respect to Nomad or when they are prohibited from doing so under Nomad’s disclosure and/or trading policies.

MAY THE PLAN BE AMENDED, SUSPENDED OR TERMINATED?

Nomad reserves the right to amend, suspend or terminate the Plan at any time, but such actions shall have no retroactive effect that would prejudice the then-existing interests of the participants. All amendments to the Plan must be pre-cleared by applicable securities regulators and stock exchanges (including the TSX, NYSE and, to the extent applicable, any other stock exchange on which the Common Shares may from time to time be listed and posted for trading) to the extent required by law or stock exchange rules. Affected participants (as well as intermediaries holding Common Shares on behalf of non-registered shareholders) will be notified of any amendment to or suspension or termination of the Plan by written notice or announcement by news release or posting to our website and/or the Plan Agent.

In the event of suspension of the Plan, no dividend reinvestment will be made under the Plan from and including the effective date of such suspension. Any cash dividend received on or after the effective date of suspension will be sent to the participants (as well as intermediaries holding Common Shares on behalf of Beneficial Participants) in cash.

In the event of termination of the Plan, Computershare will promptly send to each participant a direct registration system advice, certificate or other evidence of the whole Common Shares held for such participant under the Plan and a cash payment for any fractional interest in a Common Share in the Plan.

HOW WILL NOTICES TO PARTICIPANTS IN THE PLAN BE ADDRESSED?

Notices to a participant shall be mailed to the most recent address of the participant on the records of Nomad maintained by the Plan Agent.

WHO SHOULD I CONTACT WITH QUESTIONS ABOUT THE PLAN?

All questions regarding the Plan as well as all notices, requests, elections or instructions under the Plan required or permitted to be given to the Plan Agent should be in writing and signed and may be directed:

WHO INTERPRETS THE PLAN?

Nomad reserves the right to regulate and interpret the Plan as it deems necessary or desirable to ensure its efficient and equitable operations in the best interests of Nomad. Any issues of interpretation arising in connection with the Plan or its application shall be conclusively determined by Nomad.

WHAT ARE THE GOVERNING LAWS OF THE PLAN?

The Plan shall be governed and construed in accordance with the laws in force of the province of Québec and the federal laws of Canada applicable therein.

Distributions/Acquisition of Common Shares Pursuant to the Plan

Subject to the “passive foreign investment company” (“PFIC”) discussion below, in the case of a Treasury Purchase, a U.S. Participant will be treated as receiving a distribution for U.S. federal income tax purposes in an amount equal to the fair market value on the applicable dividend payment date of the Common Shares purchased with reinvested dividends plus the amount of any Canadian withholding tax withheld therefrom. The fair market value of the Common Shares purchased from us on the applicable dividend payment date may be higher or lower than the price used to determine the number of Common Shares purchased pursuant to the Plan. In the case of a Market Purchase, a U.S. Participant will be treated as receiving a distribution for U.S. federal income tax purposes in an amount equal to the sum of (i) the cash dividend paid by us (without reduction for any Canadian tax withheld from such dividend) and (ii) any brokerage commissions, fees, transaction costs or other related charges paid by us that are allocable to the Plan Agent’s purchase of Common Shares on behalf of such U.S. Participant. The amount of any such distribution to a U.S. Participant (reduced by any Canadian tax withheld from such distribution, accounted for as cash) will be such U.S. Participant’s tax basis in the Common Shares purchased. A U.S. Participant’s holding period for these Common Shares will begin on the day following the date of purchase.

Any distribution to a U.S. Participant described in the preceding paragraph will be subject to U.S. federal income tax in the same manner as cash distributions described below. See “Purchase, Ownership and Disposition of Common Shares -- Cash Distributions.”

If U.S. backup withholding tax applies to any dividends paid that are to be reinvested in Common Shares, the number of Common Shares credited to your account will be reduced as a result of such backup withholding tax. See “Tax Considerations Relating to Purchase, Ownership and Disposition of Common Shares—Backup Withholding Tax and Information Reporting.”

Purchase, Ownership and Disposition of Common Shares

Cash Distributions

Subject to the application of the PFIC rules discussed below, a U.S. Participant that receives a cash distribution with respect to a Common Share generally will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian tax withheld from such distribution) to the extent of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes). To the extent the amount of such distribution exceeds such current and accumulated earnings and profits, it will be treated first as a non-taxable return of capital to the extent of such U.S. Participant’s tax basis in such Common Share and, thereafter, will be treated as gain from the sale or exchange of such Common Share. The Company does not currently expect to calculate its earnings and profits under United States federal income tax principles and cannot provide U.S. Participants with such information. Therefore, U.S. Participants should expect the entire amount received pursuant to the Plan to be treated as a dividend if such amount is treated as a distribution as described above

Distributions on Common Shares that are treated as dividends generally will constitute income from sources outside the United States and generally will be categorized for U.S. foreign tax credit purposes as “passive category income” or, in the case of some U.S. Participants, as “general category income.” A U.S. Participant may be eligible to elect to claim a U.S. foreign tax credit against its U.S. federal income tax liability, subject to applicable limitations and holding period requirements, for Canadian tax withheld, if any, from distributions received in respect of the Common Shares. A U.S. Participant that does not elect to claim a U.S. foreign tax credit generally may instead claim a deduction for Canadian tax withheld, but only for a taxable year in which the U.S. Participant elects to do so with respect to all foreign income taxes paid or accrued in such taxable year. Special rules apply in determining the amount allowable to be claimed as a foreign tax credit with respect to excess distributions received by a U.S. Participant from a PFIC. The rules relating to U.S. foreign tax credits are very complex, and each U.S. Participant is urged to consult its own tax advisor regarding the application of such rules.

If, as expected, Common Shares are readily tradable on an established U.S. securities market within the meaning of the Code or (if Common Shares are not so tradable) if the Company is eligible for benefits under the U.S. Treaty, and if certain holding period and other requirements (including but not limited to a requirement that the Company is not a PFIC in the year of the dividend or the preceding year) are met, dividends received by a non-corporate U.S. Participant generally will be “qualified dividend income” to such U.S. Participant. Qualified dividend income received by a non-corporate U.S. Participant (including an individual) from the Company generally will be subject to U.S. federal income tax at preferential rates (currently 20% plus the 3.8% unearned income Medicare contribution tax, if applicable to the U.S. Participant) if certain conditions are met. U.S. Participants should consult with their own tax advisors regarding the availability of lower rates on qualified dividend income.

In the case of a U.S. Participant that is a U.S. corporation, distributions from the Company generally are not eligible for the dividends received deduction.

The amount of any cash distribution paid in Canadian dollars with respect to Common Shares will be equal to the U.S. dollar value of the Canadian dollars on the date of distribution regardless of whether the payment is in fact converted into U.S. dollars at that time. Gain or loss, if any, realized on the sale or disposition of Canadian dollars will generally be U.S. source ordinary income or loss. A U.S. Holder that does not participate in the Plan, and that continues to receive cash dividends, will be treated as receiving a distribution equal to the sum of (i) the amount of cash received, and (ii) the U.S. dollar amount of any Canadian taxes withheld with respect to the distribution.

Withdrawal, Termination and Sale or Other Disposition of Common Shares

U.S. Participants generally will recognize a taxable gain or loss when they sell or exchange Common Shares, including when U.S. Participants instruct the Plan Agent to sell shares credited to them under the Plan, and when they receive cash payments for fractional shares credited to their accounts upon withdrawal from or termination of the Plan or otherwise. The amount of any such gain or loss will be equal to the difference between the amount a participant receives for his or her Common Shares or fraction thereof and the U.S. Participant’s adjusted tax basis in these Common Shares or fraction thereof. Subject to the PFIC discussion below, such gain or loss generally will be a capital gain or loss and will be a long-term capital gain or loss if the holding period for such Common Shares exceeds one year. Except as provided below with respect to PFIC shares, long-term capital gain of a non-corporate U.S. holder is generally subject to tax at a lower maximum tax rate (currently 20%). The deductibility of capital losses is subject to limitations. A U.S. Participant’s gain or loss on Common Shares generally will be treated as being from sources within the United States for foreign tax credit limitation purposes. U.S. Participants that are individuals, estates or trusts and whose income exceeds certain thresholds will also be subject to a 3.8% Medicare tax on capital gains from the sale or other taxable disposition of the Common Shares.

A U.S. Participant will not realize any taxable income upon withdrawal from or termination of the Plan for the whole Common Shares credited to the U.S. Participant’s brokerage account.

Passive Foreign Investment Company Status

Special, generally unfavorable, U.S. federal income tax rules apply to U.S. Holders owning stock of a “passive foreign investment company” or “PFIC” within the meaning of Section 1297 of the Code. A foreign corporation will be considered a PFIC for any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable “look through” rules, either (1) 75 percent or more of its gross income is “passive” income (the “income test”) or (2) 50 percent or more of the average value of its assets is attributable to assets that produce passive income or are held for the production of passive income (the “asset test”). For this purpose, “passive income” generally includes, among other things, interest, dividends, rents, royalties, certain gains from the sale of stock and securities and certain gains from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all of a non-U.S. corporation’s commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in the ordinary course of a trade or business. For purposes of determining whether a foreign corporation will be considered a PFIC, such foreign corporation will be treated as holding its proportionate share of the assets and receiving directly its proportionate share of the income of any other corporation in which it owns, directly or indirectly, more than 25 percent (by value) of the other corporation’s stock. The determination of PFIC status for any particular year is based on the types of income the Company earns and the types and value of the Company’s assets from time to time, all of which are subject to change, as well as, in part, the application of complex U.S. federal income tax rules, which are subject to differing interpretations. Additionally, the U.S. Treasury Department has not issued specific guidance on how the income and assets of a non-U.S. corporation such as the Company will be treated under the PFIC rules. Based on the Company’s current and anticipated business activities and financial expectations, it may be a PFIC for its current tax year and the foreseeable future, and may have been a PFIC for prior taxable years. If the Company is classified as a PFIC in any year during which a U.S. Holder holds Common Shares, the Company generally will continue to be treated as a PFIC as to such U.S. Holder in all succeeding years that such U.S. Holder continues to hold such Common Shares, regardless of whether the Company continues to meet the income or asset test discussed above.

If the Company is classified as a PFIC for any taxable year during which a U.S. Holder holds Common Shares, such U.S. Holder would generally be subject to increased tax liability (including an interest charge) upon the receipt of certain “excess distributions” and upon the sale or other disposition of Common Shares. An excess distribution is the portion of any distributions to a U.S. Holder with respect to Common Shares during a single taxable year that exceeds 125% of the average annual distributions received by such U.S. Holder with respect to Common Shares during the three preceding taxable years or, if shorter, during such U.S. Holder’s holding period for such Common Shares. In addition, a U.S. Holder of PFIC Common Shares is generally required to allocate any excess distribution, or gain from the sale or other disposition of the Common Shares, ratably over the holding period for Common Shares. The excess distribution or gain from the sale or other disposition of the Common Shares generally would be taxed as ordinary income, at the highest applicable rate in effect for each taxable year of the holding period and, in addition, the tax on amounts allocated to prior taxable years would be subject to an interest charge at the rate applicable to underpayments of tax with respect to such prior years.

If the Company is classified as a PFIC, certain elections may be available to mitigate such consequences. If the Common Shares are regularly traded on a registered national securities exchange or certain other exchanges or markets, then such Common Shares will constitute “marketable stock” for purposes of the PFIC rules. The Company expects that the Common Shares will constitute “marketable stock” for purposes of the PFIC rules. U.S. Holders that make a “mark-to-market election” with respect to marketable stock would not be subject to the foregoing PFIC rules. Instead, after making the mark-to-market election, a U.S. Holder generally would include as ordinary income, each year during which the election is in effect and during which the Company is a PFIC, the excess, if any, of the fair market value of Common Shares at the end of the taxable year over the U.S. Holder’s adjusted tax basis in such Common Shares. Annual mark-to-market ordinary income is not eligible for the preferential qualified dividend or long-term capital gains tax rates. A U.S. Holder with a mark-to-market election in effect also would be allowed to take an ordinary loss in respect of the excess, if any, of its adjusted tax basis in Common Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income that was previously included as a result of the mark-to-market election). A U.S. Holder’s tax basis in Common Shares would be adjusted to reflect any income or loss amounts resulting from a mark-to-market election. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the Common Shares ceased to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders are urged to consult their own tax advisor regarding the availability of the mark-to-market election, and whether the election would be advisable in their particular circumstances.

If the Company is classified as a PFIC for any tax year in which a U.S. Holder held Common Shares, and such U.S. Holder had made a timely and effective election to treat the Company as a “qualified electing fund” (a “QEF Election”) for the first tax year of such U.S. Holder’s holding period in which the Company is classified as a PFIC, then such U.S. Holder generally would not be subject to the PFIC rules described in the preceding paragraphs. Instead, such U.S. Holder would be subject to U.S. federal income tax on such holder’s pro rata share of (a) the net capital gain of the Company, which would be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which would be taxed as ordinary income to such U.S. Holder. A QEF Election, once made, would be effective with respect to such U.S. Holder’s Common Shares for all subsequent tax years in which the Company were treated as a PFIC, unless the QEF Election is invalidated or terminated or the IRS consents to revocation of the QEF Election. The QEF election will not be available, however, if the Company does not provide the information necessary to make such an election. The Company does not currently expect to provide the information necessary to make a QEF election, and thus, even if the Company is a PFIC, the QEF election may not be available with respect to Common Shares.

As discussed above in “Distributions/Acquisition of Common Shares Pursuant to the Plan,” notwithstanding any election made with respect to the Common Shares, if the Company is a PFIC in either the taxable year of the distribution or the preceding taxable year, dividends received with respect to Common Shares will not constitute qualified dividend income eligible for reduced rates of taxation.

In any year in which the Company is classified as a PFIC, a U.S. Holder generally will be required to file an annual report with the IRS containing certain information regarding such holder’s interest in the Company (generally on IRS Form 8621). A failure to satisfy such reporting requirement could result in the extension of the statute of limitations with respect to federal income tax returns filed by such U.S. Holder. The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foregoing reporting requirements, the advisability of making a QEF Election or Mark-to-Market Election, and any other tax consequences under the PFIC rules of acquiring, owning and disposing of Common Shares.

Foreign Currency Gains

If taxable dividends with respect to Common Shares are treated as paid in Canadian dollars, such dividends will be included in the gross income of a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of actual or constructive receipt of the dividend, regardless of whether the Canadian dollars are converted into U.S. dollars at that time. If a U.S. Holder receives Canadian dollars upon the sale, exchange or other taxable disposition of Common Shares, the amount realized by such U.S. Holder will generally be based on the U.S. dollar value of the Canadian dollars received on the settlement date of the disposition. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the Canadian dollars equal to their U.S. dollar value on the date of receipt. Any U.S. Holder that receives payment in Canadian dollars and engages in a subsequent conversion or other disposition of the Canadian dollars may have a foreign currency exchange gain or loss that will be treated as ordinary income or loss, and such gain or loss generally will be U.S. source gain or loss for foreign tax credit purposes.

U.S. Information Reporting and Backup Withholding

Under some circumstances, a U.S. Holder may be subject to U.S. information reporting and backup withholding tax on distributions paid on Common Shares or from the disposition of Common Shares. Information reporting and backup withholding will not apply, however, to a U.S. Holder that is a corporation or is otherwise exempt from information reporting and backup withholding and, when required, demonstrates this fact. Backup withholding also will not apply to a U.S. Holder that furnishes a correct taxpayer identification number, certifies on an IRS Form W-9 or successor form, under penalty of perjury, that it is not subject to backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. A U.S. Holder that fails to provide the correct taxpayer identification number on IRS Form W-9 or any successor form may be subject to penalties imposed by the IRS. Backup withholding, currently at a 24% rate, is not an additional tax, and any amount withheld under these rules will be allowed as a refund or credit against a U.S. Holder’s U.S. federal income tax liability if the required information is timely furnished to the IRS.

Certain U.S. Holders who are individuals and who hold certain specified foreign assets in excess of $50,000 may be required to report information relating to Common Shares, subject to certain exceptions (including an exception for Common Shares held in accounts maintained by certain financial institutions). U.S. holders are urged to consult their tax advisors regarding their reporting requirements.