Medchem (P.R.), Inc. - Page 14




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          manufacturing of Avitene at the end of the processing agreement’s           
          original 3-year term.                                                       
               In February 1988, Jonathan Donaldson traveled to Humacao and           
          interviewed Mr. Perez for a position with MedChem P.R.5  At the             
          time, Mr. Perez was involved in and familiar with all aspects of            
          the Avitene manufacturing process; he was a longtime Alcon P.R.             
          employee with various supervisory responsibilities as to                    
          Avitene’s manufacturing.  Shortly thereafter, while in Woburn,              
          Mr. Donaldson decided to hire Mr. Perez and communicated that               
          decision to Mr. Perez in Puerto Rico.  Mr. Perez accepted Mr.               
          Donaldson’s offer and worked for MedChem P.R. until June 30,                
          1990, reporting directly to Bernard Sullivan or to Mr. Sullivan’s           
          superior, Mr. Donaldson.  Mr. Perez worked from May 1988 through            
          June 30, 1990, primarily out of a one-room office (the only                 
          office) that MedChem P.R. maintained in Humacao during that                 
          period.  The office was equipped with three desks, a computer, a            
          facsimile machine, a photocopier, and file cabinets.  The office            
          contained product specifications, standard operating procedures,            
          invoices, and copies of some of the financial statements and                
          records which would be needed in the event of an audit.                     
               MedChem P.R. paid Mr. Perez an annual salary, plus benefits,           
          to manage and coordinate its efforts in Puerto Rico as to the               

               5 This was one of the infrequent occasions on which Mr.                
          Donaldson or any of either petitioner’s other officers or                   
          directors traveled to Puerto Rico on Avitene business.                      





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