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## 12. COMMITMENTS AND CONTINGENCIES: 

In 2009, the Corporation signed a seven-year lease at a new location that commenced December 1, 2009, ending November 30, 2016. The Corporation’s annual commitment under this lease is as follows: 

<img src='content_image/193347.jpg'>

In early January 2014, the Corporation received a proposal letter (the “Proposal Letter”) wherein the Canada Revenue Agency (the “CRA”) states that it intends to reassess Alaris and deny the deduction of certain non-capital losses claimed by Alaris for the taxation year ended July 14, 2009. The Corporation then received a notice of reassessment (the “Notice of Reassessment”) from the CRA in February 2014. 

Alaris anticipates that legal proceedings through the CRA and tax courts would take considerable time to resolve. The Corporation firmly believes it will be successful in defending its position and therefore, any deposits paid to the CRA would be refunded, plus interest. No provisions have been made for these amounts. 

## 13. SUBSEQUENT EVENTS: 

Subsequent to December 31, 2013, the Corporation contributed $6 million to Labstat for 600,000 additional Labstat Units. Distributions on those units will be on similar terms as those set out in note 5 with a fixed distribution of $435,000 (7.25%) in the first twelve months along with a variable portion that will depend on the performance of the business up to a maximum of $857,143. 

