Bausch & Lomb Incorporated and Consolidated Subsidiaries - Page 8

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          employ its own sales force.  In order to improve customer service           
          and reduce the lead time on product orders, the director of the             
          representative office in Hong Kong suggested to the Ophthalmic              
          Division of B&L Inc.11 in Rochester that B&L operate a warehouse            
          to maintain an inventory in Hong Kong.  It was the understanding            
          of B&L that any office that maintained inventory in Hong Kong had           
          to be incorporated in Hong Kong.                                            
               The Ophthalmic Division of B&L Inc. decided to incorporate             
          B&L Hong Kong in 1972 for the primary purposes of distributing              
          sunglasses and other B&L products in Hong Kong and related                  
          markets in Southeast Asia and improving customer service and                
          expanding B&L's business in Southeast Asia.  In connection with             
          the decision to establish distribution operations in Hong Kong,             
          B&L considered Hong Kong's labor costs, its political stability,            
          its historic role as a trading center, any logistical difficulty            
          of managing the Asian distribution function from Rochester, and             
          the inadequacy of its marketing and sales in Southeast Asia, in             
          particular in Hong Kong, because of its reliance on independent             
          distributors.                                                               
               From 1972 through 1981, B&L Hong Kong functioned, inter                
          alia, as a marketing, sales, warehousing, and distribution                  
          facility that purchased sunglasses, contact lenses, contact lens            


          11  The Ophthalmic Division was one of two main divisions of B&L            
          Inc. at the time the decision to incorporate B&L Hong Kong was              
          made.                                                                       




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