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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;5. Impairment of Goodwill and Other Intangibles&lt;/b&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;The Company tests goodwill and other intangible assets for impairment on an annual basis during its
   third fiscal quarter, or more often if events or circumstances indicate there may be impairment.
   The assessment during the third quarter of 2010 and 2009 indicated that there was no impairment
   with respect to goodwill or other recorded intangible assets.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;During the second quarter of fiscal 2009, as a result of the decline in our market capitalization
   related to the overall macro-economic climate and its resulting unfavorable impact on hospital
   capital spending and our operating results, the Company determined it was required to perform an
   interim impairment test with respect to goodwill and certain other intangibles outside of its
   normal third fiscal quarter test period.
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;The impairment test initially performed in the second quarter of fiscal 2009 resulted in an
   impairment of goodwill and other intangibles in each of the Company&amp;#8217;s three reportable segments in
   the following amounts: North America Acute Care $292.0&amp;#160;million, North America Post-Acute Care $62.0
   million and International and Surgical $116.0&amp;#160;million, which represented a full impairment of
   goodwill in the applicable North America Acute Care and International and Surgical reporting units.
   During the third quarter of fiscal 2009, the Company refined its impairment assessment and
   recorded an additional charge of $3.8&amp;#160;million related to North America Post-Acute Care segment.
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