Dispositions A disposition, or a deemed disposition, of a Common Share by a R esident Holder generally will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the Common Share, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of the Common Share to the R esident Holder. F or this purpose, the adjusted cost base to a R esident Holder of a Common Share at any particular time will be determined by averaging the cost of that Common Share with the adjusted cost base of all Common Shares held as capital property at that time by the R esident Holder. Generally, one-half of any capital gain realized by a R esident Holder in a taxation year must be included in computing the R esident Holder’s income for such year (a ‘‘taxable capital gain’’) and one-half of any capital loss realized by a R esident Holder in a taxation year (an ‘‘allowable capital loss’’) must be deducted from the R esident Holder’s taxable capital gains realized in that year in accordance with the rules in the T ax A ct. Any unused allowable capital losses may be applied to reduce net taxable capital gains realized in the three preceding taxation years or any subsequent taxation year, subject to the provisions of the T ax A ct in that regard. The amount of any capital loss realized on the disposition or deemed disposition of Common Shares by a R esident Holder that is a corporation may be reduced by the amount of dividends previously received or deemed to have been received by it on such shares or shares substituted for such shares to the extent and in the circumstances described in the T ax A ct. Analogous rules may apply where a R esident Holder that is a corporation is a member of a partnership or a beneficiary of a trust that owns Common Shares or that is itself a member of a partnership or a beneficiary of a trust that owns such shares. A R esident Holder that is throughout the relevant taxation year a ‘‘Canadian-controlled private corporation’’ (as defined in the T ax A ct) may be liable to pay an additional refundable tax of 6 2 ? 3 % on its ‘‘aggregate investment income’’ for the year (which is defined in the T ax A ct to include an amount in respect of taxable capital gains but not dividends or deemed dividends deductible in computing taxable income). This refundable tax generally will be refunded to a R esident Holder that is a corporation at the rate of $1 for every $3 of taxable dividends paid while it is a private corporation. Capital gains realized by a R esident Holder that is an individual (other than certain trusts) may be subject to alternative minimum tax in respect of realized capital gains. Eligibility for Investment The Common Shares would, if issued on the date hereof and listed on the TSX, be qualified investments on the date hereof under the T ax A ct and regulations thereunder for trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered education savings plans and registered disability savings plans. T axation of Non-R esident Holders Dividends Dividends paid or credited or deemed to be paid or credited to a Non-R esident Holder by Orbit Garant are subject to Canadian withholding tax at the rate of 25% unless reduced by the terms of an applicable tax treaty. Under the Canada-United States Income T ax Convention (1980) (the ‘‘T reaty’’), the rate of withholding tax on dividends paid or credited to a Non-R esident Holder who is resident in the U.S. for purposes of the T reaty (a ‘‘U.S. Holder’’) is generally limited to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Holder that is a corporation beneficially owning at least 10% of Orbit Garant’s voting shares). On September 21, 2007, the Minister of Finance (Canada) and the United States Secretary of the T reasury signed the fifth protocol to the T reaty (the ‘‘P rotocol’’) which includes amendments to many of the provisions of the T reaty, including significant amendments to the limitation on benefits provision. The P rotocol was ratified by the Canadian government on December 14, 2007 and will enter into force once it is ratified by the United States and the two countries have formally notified each other that their procedures are complete and will have effect in respect of withholding taxes, after the first day of the second month that begins after the date on which the 69