MEDASONICS ACQUISITION

On October 18, 2000, we acquired MedaSonics, Inc., including its line of handheld and compact Doppler ultrasound systems used in obstetrics and gynecology as well as in cardiology and other medical specialties.

  We paid cash of $500,000 and 162,290 shares of our common stock, having a market value of $5.6 million at the closing. A maximum of 28,469 additional shares will be paid at a later date.

  The acquisition has been accounted for as a purchase. The excess of the purchase price over the fair value of the net assets acquired (goodwill) has been recorded at $5.4 million and is being amortized over 20 years.

LEISEGANG ACQUISITION

On January 31, 2000, we acquired a group of women’s health-care products (the “Leisegang Business”) from NetOptix Corporation for approximately $10 million in cash at closing, plus in May 2000, an additional $250,000. Before the acqui-sition, the Leisegang Business had annual revenue of more than $11 million from operations in the U.S., Germany and Canada.

  The Leisegang Business consists of diagnostic and surgical instruments including colposcopes, instruments to perform loop electrosurgical excision procedures, hand-held gynecological instruments, disposable specula and cryosurgical systems. Many of these products are disposable, including the Sani-Spec line of plastic specula, its largest product group.

  The acquisition has been accounted for as a purchase. Goodwill has been recorded at $5.4 million and is being amortized over 20 years.

BEI ACQUISITION

On December 8, 1999, we acquired a group of women’s healthcare products from BEI Medical Systems Company, Inc., including uterine manipulators and other products for the gynecological surgery market, for approximately $10.3 million in cash. Most of these products are disposable. Physicians use them in both their offices and in hospitals. The acquisition has been accounted for as a purchase.

  Goodwill has been recorded at $8.4 million and is being amortized over 20 years.

INVESTMENT IN LITMUS

In February 1998, we purchased, for approximately $10 million cash, a 10% equity position in Litmus Concepts Inc. and received an exclusive license to distribute Litmus’ FemExam TestCard System of diagnostic tests in the women’s professional healthcare market in North America. Of the $10 million purchase price, we allocated $5 million to the equity investment and $5 million to the exclusive license. We are accounting for our investment in Litmus on the cost basis and amortizing the license over 17 years. We agreed to annual minimum purchases, which end when we have purchased 10 million units of the products or on the sixth anniversary of the agreement, whichever occurs first. If we do not meet the required minimum purchases, Litmus’ only remedy is to cancel the exclusivity of the license.

ASPECT ACQUISITION

In December 1997, we acquired Aspect Vision Care Ltd. (“Aspect”), a privately held manufacturer of high quality contact lenses sold primarily in the United Kingdom and other European countries. Aspect is an English company with the pound sterling as its functional currency. We have included Aspect in CVI’s results from the date of its acquisition.

  We paid approximately $51 million at closing ($21.6 million in cash, 38,000 shares of Cooper’s common stock with a value of $1.5 million and $28 million in 8% five-year notes to the selling shareholders), and based on Aspect’s performance over the last three years, we will pay an additional £13.5 million (approximately $20.5 million) as follows: $17.2 million is payable in two payments – one on December 11, 2000 and the other on June 11, 2001 and is included in current accrued liabilities. The balance of $3.3 million is payable on December 11, 2001 and is included in other long-term liabilities. The cash paid at closing was partially financed under our $50 million line of credit (see “Midland Bank” Note 6). The acquisition has been accounted for as a purchase. Based on an independent valuation report, Goodwill has been recorded at $57.9 million ($44.9 million at closing, including about $7.5 million for the minimum earn-out, and an additional $13 million accrued in October 2000 in anticipation of payment of the aforementioned amounts). The entire amount of goodwill will be amortized on the 40th anniversary of the acquisition. Other intangibles of $3.5 million are being amortized over periods of from 10 to 30 years.

  Following the acquisition, some of the selling shareholders became employees of Cooper. As of October 31, 2000 and 1999, approximately $41.2 million and $23.4 million, respectively, of the five-year notes and the additional payments owed by Cooper in connection with the acquisition are payable to these employees or members of their immediate family. None of these employees are officers of Cooper. For the years ended October 31, 2000, 1999 and 1998, our consolidated income statement included $1.8 million, $1.9 million and $2 million of interest expense and $2.3 million, $2.4 million and $2.3 million of royalty expense paid or payable to these individuals.

  In connection with the Aspect acquisition, Cooper agreed to make quarterly royalty payments of from 5% to 7 1/2% on sales of certain Aspect-manufactured products, with a minimum royalty for five years of £1 million a year. The balance of royalties payable under the agreement was $481,000 and $586,000 at October 31, 2000 and 1999, respectively, and is included in other accrued liabilities in the accompanying consolidated balance sheet.