Medchem (P.R.), Inc. - Page 12




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          and to supervise each of these functions.  Alcon P.R. was solely            
          responsible for resolving any problem that arose during the                 
          period from the time that it received the corium up until the               
          time that the finished Avitene was delivered to a carrier for               
          delivery to MedChem U.S.A. (manufacturing process).                         
               Alcon P.R. generally manufactured Avitene in accordance with           
          a two-phase process and kept its inventory of finished Avitene in           
          its warehouse attached to its manufacturing facility.  Avitene’s            
          two-phase manufacturing process was as follows:                             
                                       Phase I                                        
                    (1) Frozen corium and component materials were                    
               ordered from the warehouse attached to the Avitene                     
               manufacturing facility and transferred to a preparation                
               room in the facility, where the corium was thawed and                  
               machine washed.                                                        
                    (2) The corium was machine cut into approximately                 
               4 square inch pieces, manually inspected for                           
               imperfections, and machine cut into smaller pieces of                  
               approximately one square inch in size.                                 
                    (3) The smaller pieces were acidified, washed with                
               alcohol, and tested against product specifications.                    
                    (4) The resulting product was refrigerated while                  
               the initial steps were repeated for a second lot of                    
               corium; the two lots were mixed together and dried in a                
               rotary dryer.                                                          
                    (5) The dried corium was machine milled into a                    
               loose, powdery, fibrous substance known as bulk flour.                 
               The bulk flour was placed in quarantined cages awaiting                
               further processing into its final form as either                       
               finished flour or nonwoven web.                                        









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