Medchem (P.R.), Inc. - Page 56




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                                     APPENDIX A                                       
          Pre-Sec. 936(a)(2)(B) Test Period (1987 to Aug. 31, 1989)                   
          Dec. 18, 1987       Petitioners buy the Avitene business from               
                              Alcon P.R., and Alcon P.R. agrees to (and               
                              ultimately does) manufacture Avitene for                
                              MedChem P.R. for the 3-year period ended Dec.           
                              31, 1990.                                               
          Feb. 29, 1988       MedChem P.R. hires Mr. Perez and establishes            
                              a one-room office in Humacao.                           
          June 21, 1989       MedChem P.R. purchases land for the                     
                              construction of an Avitene manufacturing                
                              facility in Puerto Rico.                                

          Sec. 936(a)(2)(B) Test Period (Sept. 1, 1989, to Aug. 31, 1992)             
          Feb. 2, 1990        District Court issues preliminary injunction            
                              as to MedChem U.S.A.’s manufacture and sale             
                              of Amvisc.  MedChem P.R. writes off                     
                              capitalized expenses relating to its proposed           
                              facility in Puerto Rico.  Unipro notified to            
                              stop work on that facility.                             
          Feb. 28, 1990      MedChem U.S.A. initiates plans to locate an              
                              Avitene manufacturing facility into its idled           
                              Amvisc facility in Woburn during the fall of            
                              1990.                                                   
          June 30, 1990       Petitioners move their bulk flour                       
                              manufacturing equipment from Humacao to                 
                              Woburn.  Mr. Perez terminated, Humacao office           
                              closed, and records shipped to Woburn.  Kelly           
                              hires Mr. Castro to replace Mr. Perez as                
                              Avitene planner/buyer.                                  
          July 1, 1990        MedChem U.S.A. personnel in Woburn write all            
                              MedChem P.R. checks and mail those checks to            
                              the payees.  MedChem U.S.A.’s personnel in              
                              Woburn approve and pay from MedChem P.R. bank           
                              account all invoices delivered to MedChem               
                              P.R.                                                    








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