## Foreign Account Tax Compliance Provisions 

FATCA imposes a reporting and 30% withholding tax regime with respect to (a) certain U.S. source income (including interest, dividends, royalties, and other passive income) and gross proceeds from the sale or other disposition of property that can produce U.S. source interest or dividends and (b) certain non-U.S. source payments paid to non-compliant foreign (i.e., non-U.S.) “financial institutions” (or FFIs). For purposes of the FATCA rules, Alaris will likely be treated as an FFI, and therefore intends to comply with FATCA. 

In early 2014, Canada and the United States entered into an intergovernmental agreement (the “IGA”) to facilitate compliance with FATCA by Canadian financial institutions. Under the IGA, Alaris (and its subsidiaries) will generally be required to (i) register with the U.S. Internal Revenue Service (the "IRS") and acquire an identifying number, (ii) perform specified diligence to determine whether they have any “U.S. reportable accounts” and (iii) report information to the Canadian Revenue Agency (“CRA”) about their US “account holders”, which could include certain of Alaris’ shareholders. The CRA will provide information about U.S. reportable accounts to the IRS in a manner consistent with the protections provided in the Canada-U.S. tax treaty. 

Equity and debt interests that are regularly traded on an established securities market are not treated as “financial accounts” under the IGA. If the Common Shares are regularly traded on an established securities market, Alaris will not be required to provide information to the CRA about U.S. holders of Common Shares. The Common Shares are regularly traded on an established securities market and as such, Alaris does not expect to be required to report information about such US holders of its Common Shares to the CRA. However, should the Common Shares no longer be considered to be regularly traded on an established securities market, Alaris’ reporting obligations under FATCA may change. 

This description is based on guidance issued by the IRS and the Treasury Department, including recently issued final regulations, IRS notices and intergovernmental agreements. Future guidance, including explanations of and rulings interpreting current authorities, may affect the application of FATCA to Alaris in a manner that is unfavourable to Alaris and holders of Common Shares. 

## Passive Foreign Investment Company (“PFIC”) Status for U.S. Shareholders 

Generally, unfavourable rules apply to U.S. shareholders who own and dispose of shares of a PFIC for any year during which the U.S. shareholder holds such shares (regardless of whether the company continues to be a PFIC), including, without limitation, increased tax liabilities under U.S. tax laws and regulations and additional reporting requirements. Specifically, if a non-U.S. entity is classified as a PFIC, any gain on disposition of shares of a PFIC and any "excess distribution" received by a U.S. holder would be: (i) deemed to have been earned rateably over the period such holder owns such shares: (ii) taxed at ordinary income tax rates; and (3) subject to an interest charge for the deemed deferral in payment of the tax. 

A non-U.S. entity will be a PFIC for any taxable year in which either (1) at least 75% of its gross income is passive income or (2) at least 50% of the value (determined on the basis of a quarterly average) of its assets is attributable to assets that produce or are held for the production of passive income. 

Based upon the value of our assets and the scope of our current and projected operations and financial expectations, we believe that we were not a PFIC during our prior tax years and we expect that we will not become a PFIC during our current tax year ending December 31, 2014 or for the foreseeable future. However, the tests for determining the PFIC classification are fundamentally fact specific in nature, based on income and assets, which cannot be determined until the close of the taxation year in question and are determined annually. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. Consequently, there can be no assurance that we have never been and will not become a PFIC for any tax year during which U.S. shareholders hold Common Shares. 

If Alaris does become a PFIC, it does not intend to make available to U.S. shareholders the financial information necessary to make a “qualified electing fund” election. However, provided the Common Shares continue to be regularly traded on an established securities market, if Alaris becomes a PFIC, U.S. shareholders will be able to make “mark-to-market” elections with respect to their Common Shares. 

Alaris urges U.S. investors to consult their own tax advisors regarding the possible application of the PFIC rules 

