## 5. Investments (continued): 

Year ended December 31, 2011 

amount equal to the Preferred Distribution for the prior fiscal year multiplied by the percentage increase or decrease in Killick’s Gross Revenue for the previous fiscal year, subject to a maximum increase or decrease of 4%. Distributions on the Killick Units are receivable monthly. 

Killick has the option at any time after July 6, 2014 to repurchase all (but not less than all) of the Killick Units at a pre-negotiated premium to the original purchase price. 

(f) Investment in Quetico, LLC (“Quetico”): 

The Corporation, through its wholly-owned subsidiary Alaris USA Inc., holds 1,250 Class B units (“Quetico Units”) in Quetico, LLC, an American corporation. The units were acquired on November 22, 2011 for an aggregate acquisition cost of $27.36 million (Canadian funds). 

Pursuant to the Quetico LLC agreement (the "Quetico LLC Agreement") dated November 22, 2011, the Quetico Units entitle the Corporation to receive an annual preferred distribution (the “Preferred Distribution") in priority to distributions on Quetico’s other units in an amount equal to the Preferred Distribution for the prior fiscal year multiplied by the percentage increase or decrease in Quetico’s Gross Revenue for the previous fiscal year, subject to a maximum increase of 10% and a maximum decrease of 20%. Distributions on the Quetico Units are receivable monthly and are denominated in US dollars. 

Quetico has the option at any time after November 22, 2014 to repurchase all (but not less than all) of the Quetico Units at a pre-negotiated premium to the original purchase price. 

## II – Intangible Assets 

(a) Investment in End of the Roll Carpet and Vinyl (“End of the Roll”): 

On May 1, 2005, the Corporation purchased certain intellectual property (the "ER IP") from End of the Roll for an aggregate purchase price of $7.2 million pursuant to an acquisition agreement (the "ER Acquisition Agreement") dated May 1, 2005 (the "End of the Roll Investment"). The ER IP includes End of the Roll's trademarks, trade names, website, and proprietary system for operating franchises. The ER IP was subsequently licensed to End of the Roll for a term (the "Term") of 80 years pursuant to a license agreement (the "ER License Agreement") dated May 1, 2005 in consideration of an annual royalty (the "Royalty"). The Royalty for the first 12-month period from May 1, 2005 to April 30, 2006 was $1.2 million (the "Initial Royalty"). The Royalty for each subsequent 12-month period during the Term is calculated by increasing or decreasing the Royalty for End of the Roll's fiscal year just ended by the percentage change in Same Store Sales (as defined in the ER License Agreement), being generally the total sales of all franchisee retail stores that have been open for at least two years, over the fiscal year immediately preceding the fiscal year just ended. Royalty payments are receivable monthly. 

End of the Roll has the option at any time after May 1, 2010 to repurchase the ER IP (and terminate the Royalty) at a pre-negotiated premium to the original purchase price. 

