AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 2001
REGISTRATION NO. 333-

SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WILSON GREATBATCH TECHNOLOGIES, INC.
 (Exact Name of Registrant as Specified in its Charter)

            DELAWARE                              3692                             16-1531026
(State or Other Jurisdiction of       (Primary Standard Industrial              (I.R.S. Employer
 Incorporation or Organization)       Classification Code Number)            Identification Number)	

10,000 WEHRLE DRIVE
CLARENCE, NEW YORK 14031
 (716) 759-6901
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
EDWARD F. VOBORIL
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
WILSON GREATBATCH TECHNOLOGIES, INC.
10,000 WEHRLE DRIVE
CLARENCE, NEW YORK 14031
 (716) 759-6901
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
COPIES TO:

  STEVEN D. RUBIN, ESQ.                             STEPHEN E. OLDER, ESQ.
WEIL, GOTSHAL & MANGES LLP                          EDWARD D. SOPHER, ESQ.
700 LOUISIANA, SUITE 1600                 AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
   HOUSTON, TEXAS 77002                               590 MADISON AVENUE
      (713) 546-5000                               NEW YORK, NEW YORK 10022
                                                        (212) 872-1000	

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. / /
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ________________
If delivery of this prospectus is expected to be made pursuant to Rule 434, check the following box. / /
CALCULATION OF REGISTRATION FEE

                                                                    PROPOSED MAXIMUM     PROPOSED MAXIMUM
           TITLE OF EACH CLASS OF                  AMOUNT TO         OFFERING PRICE          AGGREGATE            AMOUNT OF
        SECURITIES TO BE REGISTERED            BE REGISTERED (1)      PER SHARE (2)     OFFERING PRICE (2)    REGISTRATION FEE
Common Stock, par value $.001 per share.....   6,900,000 shares          $28.94            $199,686,000            $49,922	

(1) Includes 900,000 shares of common stock that the underwriters may purchase solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933 based upon the average of the high and low sale prices for the common stock included on the New York Stock Exchange on June 18, 2001.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

SUBJECT TO COMPLETION, DATED JUNE 20, 2001
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

6,000,000 Shares
[LOGO]
Wilson Greatbatch Technologies
Common Stock

We are selling 2,000,000 shares of our common stock and the selling stockholders are selling 4,000,000 shares of common stock.
Our common stock is listed on The New York Stock Exchange under the symbol "GB." The last reported sale price on June 18, 2001 was $28.82 per share.
The underwriters have an option to purchase a maximum of 900,000 additional shares from the selling stockholders to cover over-allotments of shares.
Investing in our common stock involves risk. See "Risk Factors" on page 8.

                                                  Underwriting          Proceeds to          Proceeds to
                               Price to           Discounts and      Wilson Greatbatch         Selling
                                Public             Commissions         Technologies         Stockholders
                          -------------------  -------------------  -------------------  -------------------
Per Share...............           $                    $                    $                    $
Total...................           $                    $                    $                    $	

Delivery of the shares, in book-entry form only, will be made on or about , 2001.
Neither the Securities and Exchange Commission nor any state securities commission has determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

    Credit Suisse First Boston                    Morgan Stanley Dean Witter

Banc of America Securities LLC                        U.S. Bancorp Piper Jaffray

                 The date of this prospectus is         , 2001.	

MEDICAL PRODUCTS
COMPONENTS FOR IMPLANTABLE DEVICES
[Photograph of Feedthrough]
FEEDTHROUGHS
HIGHLY DURABLE SEAL
MULTIFUNCTIONAL
[Photograph of Precision Components]
PRECISION COMPONENTS
HIGH LEVEL OF MANUFACTURING PRECISION
BROAD MANUFACTURING FLEXIBILITY
[Close-up Photograph of Electrode Tip]
ELECTRODE TIPS
PRECISION QUALITY COATED SURFACE
CUSTOMIZED OFFERING OF SURFACES AND TIPS

                                               [Diagram of ICD showing location
                                               of components]
[Photograph of a Capacitor]
CAPACITORS                                     IMPLANTABLE CARDIOVERTER
PROPRIETARY TECHNOLOGY                         DEFIBRILLATOR SHOWING COMPONENTS
ENABLES COMPONENT SIZE REDUCTION OF UP TO 50%  FROM WILSON GREATBATCH
ALLOWS A WIDE RANGE OF CUSTOM CONFIGURATIONS   TECHNOLOGIES, INC.	

[Photograph of four Implantable Power Sources] 
IMPLANTABLE POWER SOURCES
INDUSTRY STANDARD
PROPRIETARY TECHNOLOGIES
DECADES OF IMPLANT EXPERIENCE WITH SUPPORTIVE LIFE TEST DATA
COMMERCIAL PRODUCTS
HIGH PERFORMANCE, SAFE AND RELIABLE PRIMARY POWER SUPPLIES . . .
[Photograph of various power sources]
. . . SPECIFICALLY DESIGNED FOR THE MOST DEMANDING APPLICATIONS
[Photographs of a space shuttle, oceanographic exploration and a drilling rig]
[Logo]

TABLE OF CONTENTS

                                          PAGE
                                        --------
PROSPECTUS SUMMARY....................      1
RISK FACTORS..........................      8
FORWARD LOOKING STATEMENTS............     17
USE OF PROCEEDS.......................     18
COMMON STOCK PRICE RANGES AND
  DIVIDENDS...........................     18
CAPITALIZATION........................     19
SELECTED CONSOLIDATED FINANCIAL
  DATA................................     20
MANAGEMENT'S DISCUSSION AND ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.......................     22
BUSINESS..............................     35	

                                          PAGE
                                        --------

MANAGEMENT............................     48
RELATED PARTY TRANSACTIONS............     55
PRINCIPAL AND SELLING STOCKHOLDERS....     59
DESCRIPTION OF CAPITAL STOCK..........     63
SHARES ELIGIBLE FOR FUTURE SALE.......     66
UNDERWRITING..........................     67
NOTICE TO CANADIAN RESIDENTS..........     70
LEGAL MATTERS.........................     71
EXPERTS...............................     71
WHERE YOU CAN FIND MORE INFORMATION...     72
INDEX TO FINANCIAL STATEMENTS.........    F-1	

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT.
i

PROSPECTUS SUMMARY
YOU SHOULD READ THIS SUMMARY TOGETHER WITH THE MORE DETAILED INFORMATION REGARDING US AND THE COMMON STOCK BEING SOLD IN THIS OFFERING AND OUR HISTORICAL
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, THE INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION TO PURCHASE ADDITIONAL SHARES OF OUR COMMON
STOCK FROM THE SELLING STOCKHOLDERS AND ALL COMMON STOCK FIGURES REFLECT A ONE-FOR-THREE REVERSE STOCK SPLIT THAT OCCURRED IN MAY 2000 AND A THREE-FOR-FIVE REVERSE STOCK SPLIT THAT OCCURRED IN AUGUST 2000.
WILSON GREATBATCH TECHNOLOGIES, INC.
OUR BUSINESS
We are a leading developer and manufacturer of power sources, feedthroughs and wet tantalum capacitors used in implantable medical devices. We also develop and manufacture other components used in implantable medical devices. We believe that we are a preferred supplier of power sources and components because we offer technologically advanced, highly reliable and long lasting products for implantable medical devices. Through continuous technological innovation and improvements, we have enabled our customers to continually develop and introduce implantable medical devices that are progressively smaller, longer lasting, more efficient and more functional. Our customers include leading implantable medical device manufacturers such as Guidant, St. Jude Medical and Medtronic, the three largest manufacturers of pacemakers and implantable cardioverter defibrillators, or ICDs, based on revenues. We leverage our core competencies in technology and manufacturing to develop and produce power sources for commercial applications that demand high performance and reliability, including aerospace, oil and gas exploration and oceanographic equipment.
Our history, market leadership and reputation for quality and technological innovation in the implantable medical device industry began with Mr. Wilson Greatbatch, who patented the implantable pacemaker in 1962 and founded our company in 1970. We continue to develop pioneering technology used in implantable medical devices and other demanding commercial applications. As of June 1, 2001, we employed 182 scientists, engineers and technicians. To remain a leader in developing new technology, we also maintain close relationships with a number of research organizations, clinicians and other industry professionals. Since 1970, our company has received 348 patents worldwide, and as of June 1, 2001, we held 148 active patents.
We work closely with our customers to enable them to develop innovative medical devices that utilize our specially designed, proprietary power sources and components. We believe that our proprietary technology, close customer relationships, market leadership and dedication to quality provide us with significant competitive advantages and create a barrier to entry.
STRATEGY
Our objective is to enhance our position as a leading developer and manufacturer of power sources and other components for implantable medical devices. We intend to:
- expand our proprietary technology portfolio through continuous technological innovation and continue to focus our research, development and engineering efforts on pioneering power sources and advanced components for implantable medical devices;
- enhance our position as an integrated component supplier to the implantable medical device industry by broadening our product line to include a more comprehensive range of power sources and components;
1

- continue to collaborate with our customers to jointly develop new technologies that enable them to develop and market increasingly more effective and technologically innovative products; and
- enter into strategic alliances and make selective acquisitions that complement our core competencies in technology and manufacturing for both implantable medical devices and other demanding commercial applications.
IMPLANTABLE MEDICAL DEVICE INDUSTRY
An implantable medical device is an instrument that is surgically inserted into the body to provide diagnosis or therapy. The market for our implantable power sources and components benefits directly from the growth of the implantable medical device industry. The largest and fastest growing segment of the implantable medical device market is cardiac rhythm management, which includes devices such as pacemakers and ICDs. Pacemakers treat bradycardia, a condition that occurs when a patient has an abnormally slow heartbeat, by stimulating the heart with regular electrical pulses. ICDs treat tachycardia, a condition that occurs when a patient has a rapid and irregular heartbeat, by delivering concentrated and timed electrical energy to the heart to restore a normal heart rate.
The use of implantable medical devices has grown as advances in technology have enabled the treatment of a wider range of conditions. As the size of implantable medical devices has become smaller, implantation has become less invasive, making the use of these devices more attractive to patients and surgeons. Emerging applications, such as the treatment of congestive heart failure and atrial fibrillation, a condition associated with an unsynchronized motion of the atrium that produces an irregular heartbeat, increased ease of implantation and the general aging of the population are expected to drive the growth of the implantable medical device industry. Cardiovascular Device Update, a Biomedical Business International monthly publication that is independent of our company, estimates that revenues from pacemakers sold worldwide increased from $2.2 billion in 1995 to $3.0 billion in 2000, representing a compound annual growth rate of 6.4%. According to the publication, growth in the worldwide pacemaker market may begin to accelerate in the next few years as several new niche applications for pacemakers are beginning to emerge. Cardiovascular Device Update also estimates that revenues from ICDs sold worldwide increased from $625 million in 1995 to $1.75 billion in 2000, representing a compound annual growth rate of 22.8%. Cardiovascular Device Update believes the worldwide ICD market will grow at an average annual growth rate of 18-20% in the next three to five years. The faster growth predicted for the ICD market is based on continued penetration of existing clinical indications and anticipated expansion into new indications.
As a leading developer and manufacturer of power sources and other components for implantable medical devices, we believe that our company will continue to be well positioned to meet the requirements of manufacturers of these products.
2

PRODUCTS
We currently manufacture and market 23 models of pacemaker batteries and 19 models of ICD batteries as well as numerous other components for our customers in the implantable medical device industry. Our commercial power sources are used in aerospace, oil and gas exploration and oceanographic equipment. The following table provides information about our principal products:

PRODUCT                      DESCRIPTION                  USED IN                      PRINCIPAL PRODUCT ATTRIBUTES
-------                      -----------                  -------                      ----------------------------
MEDICAL:

  Implantable power sources  Batteries for implantable    Pacemakers, ICDs, left       High reliability and
                             medical devices              ventricular assistant        predictability
                                                          devices, neurostimulators,   Long service life
                                                          drug pumps and hearing       Customized configuration
                                                          assist devices               Light weight
                                                                                       Compact and less intrusive

  Capacitors                 Store energy generated by a  ICDs                         Stores more energy per unit
                             battery before delivery to                                volume (energy density) than
                             the heart                                                 other existing technologies
                                                                                       Customized configuration

  Medical components:

    Feedthroughs             Allow electrical signals to  Pacemakers, ICDs, left       Ceramic to metal seal is
                             be brought from inside an    ventricular assistant        substantially more durable
                             implantable medical device   devices, neurostimulators,   than traditional seals
                             to an electrode              drug pumps and hearing       Multifunctional
                                                          assist devices

    Electrodes               Deliver electric signal      Pacemakers and ICDs          High quality coated surface
                             from the feedthrough to a                                 Flexible in utilizing any
                             body part undergoing                                      combination of biocompatible
                             stimulation                                               coating surfaces
                                                                                       Customized offering of
                                                                                       surfaces and tips

    Precision components     Machined and molded parts    Pacemakers, ICDs and drug    High level of manufacturing
                             for implantable medical      pumps                        precision
                             devices                                                   Broad manufacturing
                                                                                       flexibility

COMMERCIAL:

  Commercial power sources   Batteries for demanding      Aerospace, oil and gas       Long-life dependability
                             commercial applications      exploration and              High energy density
                                                          oceanographic equipment	

OUR INITIAL PUBLIC OFFERING
In October 2000, we completed our initial public offering. We sold 5,750,000 shares of common stock at a price of $16.00 per share and received net proceeds of $84.0 million. All net proceeds were used to prepay a portion of our senior debt. Our common stock is listed on The New York Stock Exchange under the symbol "GB."
RECENT DEVELOPMENTS
SIERRA ACQUISITION
On June 18, 2001, we acquired the Sierra-KD Components Division, or Sierra, of Maxwell Technologies, Inc. Sierra, located in Carson City, Nevada, is a leading developer and manufacturer of electromagnetic interference filters and capacitors for implantable medical devices. Electromagnetic
3

interference, or EMI, is any undesirable emission or disturbance generated by products such as cell phones and two-way pagers. EMI may cause an undesirable response, malfunctioning or degradation in the performance of electronic equipment including medical devices.
We acquired Sierra for approximately $49.0 million in cash and certain assumed liabilities. During the fiscal year ended December 31, 2000 and three months ended March 31, 2001, Sierra generated revenues of approximately $13.7 million and approximately $5.3 million, respectively. The acquisition is expected to be neutral to slightly accretive to our 2001 earnings per share, inclusive of goodwill amortization, and accretive thereafter.
The addition of Sierra's patented EMI filtering products and technology broadens the product line we offer our customers and solidifies our position as a leading provider of enabling technologies to the manufacturers of implantable medical devices. Sierra holds several key patents relative to its differentiated EMI filtering technology.
Sierra is currently one of our component customers and we both share a similar medical device customer base. The vertical integration of Sierra represents an opportunity to increase our importance to these customers and positions us to participate in the growing demand for EMI protection on medical devices. The U.S. Food and Drug Administration, or FDA, is focusing on issues created by EMI. Currently, labels for new pacemakers and ICDs must disclose the level of EMI protection. We expect that over time the majority of implantable electronic medical devices will possess EMI protection.
Similar to us, Sierra has leveraged its technology and manufacturing expertise to provide high quality, precision components to provide components for commercial applications that demand high performance and reliability, including aerospace, oil and gas exploration and telecommunications equipment.
AMENDED CREDIT FACILITY
In conjunction with the acquisition of Sierra, we amended our existing $60.0 million credit facility with a consortium of banks by increasing the total size of the facility to $100.0 million. The amended facility consists of an $80.0 million term loan and a $20.0 million revolving line of credit. Both the term loan and the revolving line of credit have a term of five years, maturing in July 2006. We used proceeds from the amended facility to finance the acquisition of Sierra.
EARNINGS OUTLOOK
On June 19, 2001, we announced that we were raising our previous guidance on estimated revenues and earnings per share, or EPS, for the second quarter of fiscal year 2001. We announced that we estimate second quarter revenues will exceed $30 million and are comfortable with the high end of the current research analyst EPS expectations of $0.13. In addition, we announced that we remain comfortable with the current research analyst consensus estimates for the third and fourth quarters of fiscal year 2001.
4

THE OFFERING

Common stock offered by us.........................  2,000,000 shares

Common stock offered by the selling stockholders...  4,000,000 shares

Common stock to be outstanding after this
offering...........................................  20,712,967 shares	

Use of proceeds....................................  We plan to use the net proceeds from this
                                                     offering for general corporate purposes, which
                                                     may include the repayment of debt and future
                                                     acquisitions. We will not receive any proceeds
                                                     from the sale of common stock by the selling
                                                     stockholders.

NYSE symbol........................................  GB	

The outstanding share information is based on our shares outstanding as of June 1, 2001. This information excludes 632,583 shares of common stock issuable upon exercise of outstanding stock options at a weighted average exercise price of $10.22 per share and an aggregate of 1,036,496 shares of common stock that were available for future issuance under our stock option plans as of June 1, 2001.
Affiliates of Credit Suisse First Boston Corporation, one of the lead managing underwriters for this offering, are selling shares in this offering.

Our facilities are located in greater Buffalo, New York, Canton, Massachusetts and Columbia, Maryland. Our principal executive offices are located at 10,000 Wehrle Drive, Clarence, New York 14031. Our telephone number at that location is (716) 759-6901. Our Internet address is WWW.GREATBATCH.COM.
5

SUMMARY CONSOLIDATED FINANCIAL DATA
The following table provides summary consolidated financial data which has been derived from the historical financial information of our company and Sierra included elsewhere in this prospectus. You should read the summary consolidated financial data set forth below in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and with the consolidated financial statements and related notes of our company and Sierra appearing elsewhere in this prospectus.
The unaudited pro forma consolidated statement of operations data for the year ended December 29, 2000 and for the three months ended March 30, 2001 gives effect to the following events as if each had occurred on January 1, 2000:
- the acquisition of Sierra in June 2001;
- the amendment of our credit facility in June 2001; and
- the effect of our initial public offering and repayment of indebtedness in October 2000.
The unaudited pro forma as adjusted consolidated balance sheet data as of March 30, 2001 gives effect to the following events as if each had occurred on March 30, 2001:
- the acquisition of Sierra in June 2001;
- the amendment of our credit facility in June 2001; and
- the receipt and application as described under "Use of Proceeds" of the estimated net proceeds to us from this offering assuming a price of $28.82 per share, the last reported sale price on The New York Stock Exchange on June 18, 2001.
The unaudited pro forma consolidated statement of operations data and the pro forma as adjusted consolidated balance sheet data do not purport to represent what our results of operations actually would have been had these events occurred on the dates indicated, nor are they intended to project our results of operations for any future period or date.
6

                                                                                                                      PRO FORMA
                                                                                                                        THREE
                                                                                            THREE MONTHS ENDED (1)      MONTHS
                                               FISCAL YEAR (1)                PRO FORMA     ----------------------      ENDED
                                   ---------------------------------------   FISCAL YEAR    MARCH 31,    MARCH 30,    MARCH 30,
                                   1998 (2)        1999         2000 (3)         2000          2000        2001          2001
                                   ---------   ------------   ------------   ------------   ----------   ---------   ------------
                                                                             (UNAUDITED)         (UNAUDITED)         (UNAUDITED)
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Total revenues...................   $77,361      $79,235        $97,790        $108,381      $23,176      $29,571      $ 33,566
Cost of goods sold...............    36,454       41,057         55,446          62,935       12,936       15,560        18,213
                                    -------      -------        -------        --------      -------      -------      --------
Gross profit.....................    40,907       38,178         42,344          45,446       10,240       14,011        15,353
Selling, general and
  administrative.................    11,484        9,880         11,473          14,779        2,624        3,780         4,296
Research, development and
  engineering....................    12,190        9,339          9,941          10,191        2,520        3,188         3,327
Intangible amortization (4)......     5,197        6,510          6,530           8,594        1,627        1,639         2,155
                                    -------      -------        -------        --------      -------      -------      --------
                                     12,036       12,449         14,400          11,882        3,469        5,404         5,575
Interest expense.................    10,572       13,420         12,958           7,873        3,985          712         1,646
Other expense (income)...........       364        1,343           (189)           (189)          61           59            59
                                    -------      -------        -------        --------      -------      -------      --------
Income (loss) before income
  taxes..........................     1,100       (2,314)         1,631           4,198         (577)       4,633         3,870
Income tax expense (benefit).....       410         (605)           611           1,553         (184)       1,714         1,432
                                    -------      -------        -------        --------      -------      -------      --------
Income (loss) before loss on
  retirement of debt and
  cumulative effect of accounting
  change (5).....................       690       (1,709)         1,020        $  2,645         (393)       2,919      $  2,438
                                                                               ========                                ========
Extraordinary loss on retirement
  of debt (6)....................        --           --         (1,568)                          --       (2,994)
Cumulative effect of accounting
  change (7).....................        --         (563)            --                           --           --
                                    -------      -------        -------                      -------      -------
Net income (loss)................   $   690      $(2,272)       $  (548)                     $  (393)     $   (75)
                                    =======      =======        =======                      =======      =======

Basic earnings (loss) per share
  (8):
  Income (loss) from continuing
    operations...................   $  0.07      $ (0.14)       $  0.07        $   0.15      $ (0.03)     $  0.16      $   0.13
  Net income (loss)..............   $  0.07      $ (0.18)       $ (0.04)            N/A      $ (0.03)     $ (0.00)     $    N/A

Diluted earnings (loss) per share
  (8):
  Income (loss) from continuing
    operations...................   $  0.06      $ (0.14)       $  0.07        $   0.14      $ (0.03)     $  0.15      $   0.13
  Net income (loss)..............   $  0.06      $ (0.18)       $ (0.04)            N/A      $ (0.03)     $ (0.00)     $    N/A

Weighted average shares
  outstanding (8):
  Basic..........................    10,461       12,491         14,167          18,198       12,616       18,713        18,713
  Diluted........................    10,677       12,491         14,434          18,465       12,616       19,059        19,059	

                                                                       AT MARCH 30, 2001
                                                              ------------------------------------
                                                                                        PRO FORMA
                                                               ACTUAL     PRO FORMA    AS ADJUSTED
                                                              --------   -----------   -----------
                                                                         (UNAUDITED)   (UNAUDITED)
                                                                         (IN THOUSANDS)
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents...................................  $    253    $     48      $ 52,718
Total assets................................................   184,407     233,284       285,954
Long-term obligations.......................................    35,916      76,916        76,916
Total stockholders' equity..................................   135,770     135,770       188,440	

(1) Our fiscal year ends on the closest Friday to December 31. Accordingly, our fiscal year will periodically contain more or less than 365 days. For example, fiscal 1998 ended on January 1, 1999, fiscal 1999 ended on December 31, 1999 and fiscal 2000 ended on December 29, 2000. Our fiscal quarters are three-month periods that end on the Friday closest to the end of the applicable calendar quarter.
(2) In August 1998, we acquired the assets and liabilities of Hittman Materials and Medical Components, Inc., or Hittman. These figures include the results of operations of Hittman from August 8, 1998 to January 1, 1999.
(3) In August 2000, we acquired all of the capital stock of Battery Engineering, Inc., or BEI. These figures include the results of operations of BEI from August 4, 2000 to December 29, 2000.
(4) We have not included the potential impact of a proposed new accounting standard regarding the treatment of goodwill as this standard has not yet been issued.
(5) The pro forma net income for fiscal year 2000 does not include an expense, net of tax, of $5.5 million as a result of the early extinguishment of debt.
(6) Fiscal year 2000 and the three months ended March 30, 2001 include an extraordinary loss for the extinguishment of debt of $1.6 million and $3.0 million, respectively, as a result of our prepayment of a portion of our former credit facility and the repurchase of our senior subordinated notes.
(7) Fiscal year 1999 includes the cumulative effect of an accounting change as a result of adopting a new accounting rule for the treatment of start-up activities.
(8) We calculate basic earnings per share by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. We calculate diluted earnings (loss) per share by adjusting for common stock equivalents, which consist of stock options. During fiscal year 1999 and the three months ended March 31, 2000, there were options to purchase approximately 246,000 and 222,000 shares of common stock, respectively, that were not included in the computation of diluted earnings per share because to do so would be antidilutive for those periods. Diluted earnings per share for all other periods includes the potentially dilutive effect of stock options.

7

RISK FACTORS
BEFORE YOU INVEST IN OUR COMMON STOCK, YOU SHOULD UNDERSTAND THE HIGH DEGREE OF RISK INVOLVED. YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISKS AND OTHER INFORMATION IN THIS PROSPECTUS, INCLUDING OUR HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES, BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK. THE FOLLOWING RISKS AND UNCERTAINTIES ARE NOT THE ONLY ONES WE FACE. HOWEVER, THESE ARE THE RISKS OUR MANAGEMENT BELIEVES ARE MATERIAL. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS COULD BE ADVERSELY AFFECTED. AS A RESULT, THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE AND YOU COULD LOSE PART OR ALL OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS
WE DEPEND HEAVILY ON A LIMITED NUMBER OF CUSTOMERS, AND IF WE LOSE ANY OF
THEM, WE WOULD LOSE A SUBSTANTIAL PORTION OF OUR REVENUES.
A substantial portion of our business in 2000 was conducted with a limited number of customers, including Guidant, St. Jude Medical, Medtronic, Biotronik and Sulzer Intermedics, which was acquired by Guidant in 1999. In 2000, Guidant accounted for approximately 34% of our revenues and St. Jude Medical accounted for approximately 31% of our revenues. As a result, we depend heavily on revenues from Guidant and St. Jude Medical. Our supply agreements, particularly with our large customers, might not be renewed in the future after they expire, including our power source supply agreement with Guidant, which expires on December 31, 2001, and our supply agreement with St. Jude Medical, which expires on December 31, 2003. Our supply agreements with St. Jude Medical, Medtronic, Biotronik and Guidant do not require any minimum purchase levels. Sierra also depends on a limited number of customers. In 2000, Guidant accounted for approximately 39% of Sierra's total sales. Sierra has not entered into a supply agreement with Guidant. The loss of any large customer for any reason could harm the business, financial condition and results of operations of our company or Sierra.
IF WE DO NOT RESPOND TO CHANGES IN TECHNOLOGY, OUR PRODUCTS MAY BECOME OBSOLETE AND WE MAY EXPERIENCE REDUCED SALES AND A LOSS OF CUSTOMERS, WHICH WOULD NEGATIVELY AFFECT OUR REVENUES.
We sell our products to customers in several industries that are characterized by rapid technological changes, frequent new product introductions and evolving industry standards. For example, in 1998, an industry-wide design change in ICDs occurred, resulting in new ICDs using one battery instead of two. Primarily as a result of this design change, our implantable power source revenues decreased 19% in 1999 compared to 1998. Without the timely introduction of new products and enhancements, our products and services will likely become technologically obsolete over time and we may lose a number of our customers. In addition, other new products introduced by our customers may require fewer of our power sources or components. We dedicate a significant amount of resources to the development of our power sources and other products and technologies and we would be harmed if we did not meet customer requirements and expectations. Our inability, for technological or other reasons, to successfully develop and introduce new and innovative power sources and other products could cause our business to suffer. If this occurs, our revenues and operating results would suffer.
IF WE ARE UNABLE TO SUCCESSFULLY MARKET OUR CURRENT OR FUTURE PRODUCTS, OUR
BUSINESS WILL BE HARMED.
The market for our power sources, components and other products has been growing in recent years. If the market for our products does not grow as rapidly as forecasted by industry experts, our revenues could be less than expected. In addition, it is difficult to predict the rate at which the market for our products will grow or at which new and increased competition will result in market saturation. Slower growth in the pacemaker and ICD markets in particular would negatively impact our revenues. In addition, we face the risk that our products will lose widespread market acceptance. We cannot
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assure you that our customers will continue to utilize the products we offer or that a market will develop for our future products. We may at times determine that it is not technically or economically feasible for us to manufacture future products and we may not be successful in developing or marketing them. Additionally, new technologies that we develop may not be rapidly accepted because of industry-specific factors, including the need for regulatory clearance, entrenched patterns of clinical practice and uncertainty over third party reimbursement. If this occurs, our business will be harmed.
WE ARE SUBJECT TO PRICING PRESSURES FROM CUSTOMERS, WHICH COULD HARM OUR
OPERATING RESULTS.
We have made price concessions to some of our large customers in recent years and we expect customer pressure for pricing concessions will continue. Further, price concessions or reductions may cause our operating results to suffer. In addition, any delay or failure by a large customer to make payments due to us also could harm our operating results or financial condition.
WE RELY ON THIRD PARTY SUPPLIERS FOR RAW MATERIALS, KEY PRODUCTS AND SUBCOMPONENTS AND IF WE ARE UNABLE TO OBTAIN THESE MATERIALS, PRODUCTS AND SUBCOMPONENTS ON A TIMELY BASIS OR ON TERMS ACCEPTABLE TO US, OUR ABILITY TO MANUFACTURE PRODUCTS WILL SUFFER.
Our business depends on a continuous supply of raw materials. The principal raw materials used in our business include lithium, iodine, plastics, cases, lids, glass, screens, tantalum, platinum, ruthenium, gallium trichloride, tantalum pellets and vanadium pentoxide. Raw materials needed for our business are susceptible to fluctuations due to transportation, government regulations, price controls, economic climate or other unforeseen circumstances. In recent months, increasing global demand for some of the raw materials we need for our business, including platinum, gallium trichloride and tantalum, has caused the prices of these materials to increase significantly. In addition, there are a limited number of worldwide suppliers of the lithium needed to manufacture our products. We cannot assure you that we will be able to continue to procure raw materials critical to our business or to procure them at acceptable price levels.
We rely on third party manufacturers to supply many of our raw materials. For example, we rely on FMC to supply us with lithium for our power sources and HC Starck to supply us with tantalum powder and wire for capacitors. Manufacturing problems may occur with these and other outside sources, as a supplier may fail to develop and supply products and subcomponents to us on a timely basis, or may supply us with products and subcomponents that do not meet our quality, quantity and cost requirements. If any of these problems occur, we may be unable to obtain substitute sources of these products and subcomponents on a timely basis or on terms acceptable to us, which could harm our ability to manufacture our own products and components profitably or on time. In addition, to the extent the processes that our suppliers use to manufacture products and subcomponents are proprietary, we may be unable to obtain comparable subcomponents from alternative suppliers.
AMORTIZATION OF OUR INTANGIBLE ASSETS, WHICH REPRESENT A SIGNIFICANT PORTION OF OUR TOTAL ASSETS, WILL ADVERSELY IMPACT OUR NET INCOME AND WE MAY NEVER REALIZE THE FULL VALUE OF OUR INTANGIBLE ASSETS.
As of December 29, 2000, we had $104.4 million of net intangible assets, representing 57% of our total assets and 77% of our stockholders' equity. These intangible assets consist primarily of goodwill arising from our acquisition of Hittman and our trademarks and patented technology. We expect to incur amortization expenses relating to these intangible assets of $6.6 million in 2001 and if a proposed accounting standard does not take effect, $5.6 million in 2002. These expenses will reduce our future earnings or increase our future losses. We may not receive the recorded value for our intangible assets if we sell or liquidate our business or assets. The material concentration of intangible assets increases the risk of a large charge to earnings in the event that the recoverability of these intangible assets are impaired, and in the event of such a charge to earnings, the market price of our common stock could be adversely affected.
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QUALITY PROBLEMS WITH OUR POWER SOURCES AND OTHER PRODUCTS COULD HARM OUR REPUTATION FOR PRODUCING HIGH QUALITY PRODUCTS AND ERODE OUR COMPETITIVE ADVANTAGE.
Our power sources and other products are held to high quality standards. In the event that our power sources and other products fail to meet these standards, our reputation for producing high quality power sources and other products could be harmed, which would damage our competitive advantage.
OUR OPERATING RESULTS MAY FLUCTUATE, WHICH MAY MAKE IT DIFFICULT TO FORECAST
OUR FUTURE PERFORMANCE AND MAY RESULT IN VOLATILITY IN OUR STOCK PRICE.
Our operating results have fluctuated in the past and are likely to fluctuate significantly from quarter to quarter due to a variety of factors, including:
- the fixed nature of a substantial percentage of our costs, which results in our operations being particularly sensitive to fluctuations in revenue;
- changes in the relative portion of our revenue represented by our various products and customers, which could result in reductions in our profits if the relative portion of our revenue represented by lower margin products increases;
- timing of orders placed by our principal customers who account for a significant portion of our revenues; and
- increased costs of raw materials or supplies.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY
RIGHTS, OUR BUSINESS COULD BE ADVERSELY AFFECTED.
We rely on a combination of patents, licenses, trade secrets and know-how to establish and protect our proprietary rights to our technologies and products. As of June 1, 2001, we held 148 active patents. We cannot guarantee that the steps we have taken or will take to protect our proprietary rights will be adequate to deter misappropriation of our intellectual property. In addition to seeking formal patent protection whenever possible, we attempt to protect our proprietary rights and trade secrets by entering into confidentiality and non-compete agreements with employees, consultants and third parties with which we do business. However, these agreements can be breached and, if they are, there may not be an adequate remedy available to us and we may be unable to prevent the unauthorized disclosure or use of our technical knowledge, practices or procedures. If our trade secrets become known, we may lose our competitive advantages.
In addition, we may not be able to detect unauthorized use of our intellectual property and take appropriate steps to enforce our rights. If third parties infringe or misappropriate our patents or other proprietary rights, our business could be seriously harmed. We may be required to spend significant resources to monitor our intellectual property rights, we may not be able to detect infringement of these rights and we may lose our competitive advantages associated with our intellectual property rights before we do so. In addition, competitors may design around our technology or develop competing technologies that do not infringe on our proprietary rights.
WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY CLAIMS, WHICH COULD BE COSTLY AND TIME CONSUMING AND COULD DIVERT OUR MANAGEMENT AND KEY PERSONNEL FROM OUR BUSINESS OPERATIONS.
In producing our power sources and other components for implantable medical devices, third parties may claim that we are infringing their intellectual property rights and we may be found to have infringed those intellectual property rights. While we do not believe that any of our products infringe the intellectual property rights of third parties, we may be unaware of intellectual property rights of others that may be used in our technology and products. In addition, third parties may claim that our patents have been improperly granted and may seek to invalidate our existing or future patents.
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Although we do not believe that any of our active patents should be subject to invalidation, if any claim for invalidation prevailed, the result could be greatly expanded opportunities for third parties to manufacture and sell products which compete with our products. We also typically do not receive significant indemnification from parties which license technology to us against third party claims of intellectual property infringement. Any litigation or other challenges regarding our patents or other intellectual property could be costly and time consuming and could divert our management and key personnel from our business operations. The complexity of the technology involved in producing our power sources and other components for implantable medical devices, and the uncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement might also require us to enter into costly royalty or license agreements. However, we may not be able to obtain royalty or license agreements on terms acceptable to us, or at all. We also may be subject to significant damages or injunctions against development and sale of our products. Infringement claims, even if not substantiated, could result in significant legal and other costs and may be a distraction to management.
IF WE BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS, OUR EARNINGS AND FINANCIAL
CONDITION COULD SUFFER.
The manufacture and sale of our products expose us to potential product liability claims and product recalls, including those which may arise from misuse or malfunction of, or design flaws in, our products or use of our products with components or systems not manufactured or sold by us. Provisions contained in our agreements with key customers attempting to limit our damages, including provisions to limit damages to liability for gross negligence, may not be enforceable in all instances or may otherwise fail to protect us from liability for damages. Product liability claims or product recalls, regardless of their ultimate outcome, could require us to spend significant time and money in litigation or otherwise or require us to pay significant damages. The occurrence of product liability claims or product recalls could cause our earnings and financial condition to suffer.
We carry product liability insurance coverage which is limited in scope and amount. Our management believes that our insurance coverage is adequate given the risks we face. We cannot assure you that we will be able to maintain this insurance or to do so at reasonable cost and on reasonable terms. We also cannot assure you that this insurance will be adequate to protect us against a product liability claim that arises in the future.
WE ARE DEPENDENT UPON OUR SENIOR MANAGEMENT TEAM AND KEY PERSONNEL AND THE
LOSS OF ANY OF THEM COULD SIGNIFICANTLY HARM US.
Our future performance depends to a significant degree upon the continued contributions of our senior management team and key technical personnel. Our products are highly technical in nature. In general, only highly qualified and trained scientists have the necessary skills to develop our power sources and other products. The loss or unavailability to us of any member of our senior management team or a key technical employee could significantly harm us. We face intense competition for these professionals from our competitors, our customers and other companies operating in our industry. To the extent that the services of members of our senior management team and key technical personnel would be unavailable to us for any reason, we would be required to hire other personnel to manage and operate our company and to develop our products and technology. We cannot assure you that we would be able to locate or employ such qualified personnel on acceptable terms.
WE MAY NOT BE ABLE TO ATTRACT, TRAIN AND RETAIN A SUFFICIENT NUMBER OF
QUALIFIED PROFESSIONALS TO MAINTAIN AND GROW OUR BUSINESS.
Our success will depend in large part upon our ability to attract, train, retain and motivate highly-skilled employees and management. There is currently aggressive competition for employees who have experience in technology and engineering that is used in manufacturing and producing power sources and other components for implantable medical devices. We compete intensely with other companies to
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recruit and hire from this limited pool. The industries in which we compete for employees are characterized by high levels of employee attrition. Although we believe we offer competitive salaries and benefits, we may have to increase spending in order to retain personnel. In 1999, we temporarily reduced salaries company-wide by 10% and later restored salaries to their original levels. In connection with these salary reductions, we implemented various measures to retain our existing employees, including granting stock options to all of our salaried employees to compensate for the temporary 10% reduction in salaries. If a number of our employees resign from our company to join or form a competitor, the loss of these employees and any resulting loss of existing or potential clients to a competitor could harm our business, financial condition and results of operations. Any inability to attract, train, retain and motivate employees and management would cause our business, financial condition and results of operations to suffer.
WE MAY MAKE ACQUISITIONS THAT COULD SUBJECT US TO A NUMBER OF OPERATIONAL RISKS AND WE MAY NOT BE SUCCESSFUL IN INTEGRATING COMPANIES WE ACQUIRE INTO OUR EXISTING OPERATIONS.
We have made and in the future expect to make selective acquisitions that complement our core competencies in technology and manufacturing to enable us to manufacture and sell additional products to our existing customers and to expand our business into related markets. However, implementation of our acquisition strategy entails a number of risks, including:
- inaccurate assessments of undisclosed liabilities;
- diversion of our management's attention from our core businesses;
- potential loss of key employees or customers of the acquired businesses;
- difficulties in integrating the operations and products of an acquired business or in realizing projected efficiencies and cost savings; and
- increases in our indebtedness and a limitation in our ability to access additional capital when needed.
IF WE ARE NOT SUCCESSFUL IN MAKING ACQUISITIONS TO EXPAND AND DEVELOP OUR
BUSINESS, OUR FINANCIAL RESULTS MAY SUFFER.
A component of our strategy is to make selective acquisitions that complement our core competencies in technology and manufacturing to enable us to manufacture and sell additional products to our existing customers and to expand our business into related markets. For example, in August 1998 we acquired Hittman, a medical components manufacturer, in August 2000 we acquired BEI, a small specialty battery manufacturer, and in June 2001 we acquired Sierra, a leading developer and manufacturer of EMI filters and capacitors for implantable medical devices. Our continued growth will depend on our ability to identify and acquire companies that complement or enhance our business on acceptable terms. We may not be able to identify or complete future acquisitions. Some of the risks that we may encounter include expenses associated with, and difficulties in identifying, potential targets, the costs associated with incomplete acquisitions and higher prices for acquired companies because of competition for attractive acquisition targets. Our failure to acquire additional companies could cause our financial results to suffer.
WE MAY FACE COMPETITION FROM ONE OF OUR PRINCIPAL CUSTOMERS THAT COULD HARM OUR BUSINESS AND WE MAY BE UNABLE TO COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND ESTABLISHED COMPANIES WITH GREATER RESOURCES.
Competition in connection with the manufacturing of power sources for implantable medical devices may intensify in the future. One or more of our customers that manufactures implantable medical devices may undertake additional vertical integration initiatives and begin to manufacture some or all of their power source needs. Although Medtronic manufactures its own lithium batteries for its
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pacemakers and ICDs, to date, to our knowledge, Medtronic has not sold batteries to third parties. In 1999, Medtronic introduced a new ICD that reduced the number of batteries from two to one and caused us to lose some unit volume in 1999 and 2000. If Medtronic were to begin selling power sources for implantable medical devices to third parties, our revenues could be harmed. As the implantable medical device industry continues to consolidate, this risk will intensify. Many of our potential implantable power source and component competitors, which include some of our customers, have greater name recognition, longer operating histories, larger customer bases, longer customer relationships and greater financial, technical, personnel and marketing resources than our company.
The market for commercial power sources is competitive, fragmented and subject to rapid technological change. Many other commercial power source suppliers are larger and have greater financial, operational, personnel, sales, technical and marketing resources than our company. These and other companies may develop products that are superior to ours, which could cause our results of operations to suffer.
ACCIDENTS AT ONE OF OUR FACILITIES COULD DELAY PRODUCTION AND ADVERSELY
AFFECT OUR OPERATIONS.
Our business involves complex manufacturing processes and hazardous materials that can be dangerous to our employees. Although we employ safety procedures in the design and operation of our facilities and we have not experienced any serious accidents or deaths, there is a risk that an accident or death could occur in one of our facilities. Any accident, such as a chemical spill, could result in significant manufacturing delays or claims for damages resulting from injuries, which would harm our operations and financial condition. The potential liability resulting from any such accident or death, to the extent not covered by insurance, could cause our business to suffer. Any disruption of operations at any of our facilities could harm our business.
WE INTEND TO EXPAND INTO NEW MARKETS AND OUR PROPOSED EXPANSION PLANS MAY
NOT BE SUCCESSFUL.
We intend to expand into new markets through the development of new product applications based on our existing component technologies. These efforts have required, and will continue to require, us to make substantial investments, including significant research, development and engineering expenditures and capital expenditures for new, expanded or improved manufacturing facilities. We cannot assure you that we will be able to successfully manage expansion into new markets and products or that these efforts will not have an adverse impact on our business. Specific risks in connection with expanding into new markets include the inability to transfer our quality standards into new products, the failure of customers in new markets to accept our products and price competition.
OUR FAILURE TO OBTAIN LICENSES FROM THIRD PARTIES FOR NEW TECHNOLOGIES OR THE LOSS OF THESE LICENSES COULD IMPAIR OUR ABILITY TO DESIGN AND MANUFACTURE NEW PRODUCTS.
We occasionally license technologies from third parties rather than depending exclusively on our own proprietary technology and developments. For example, we license wet tantalum technology from the Evans Capacitor Company to produce our capacitors. Our ability to license new technologies from third parties is and will continue to be critical to our ability to offer new and improved products. We cannot assure you that we will be able to continue to identify new technologies developed by others and even if we are able to identify new technologies, we may not be able to negotiate licenses on favorable terms, or at all. Additionally, we could lose rights granted under licenses for reasons beyond our control. For example, the licensor could lose patent protection for a number of reasons, including invalidity of the licensed patent.
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RISKS RELATED TO OUR INDUSTRY
WE AND OUR CUSTOMERS ARE SUBJECT TO VARIOUS POLITICAL, ECONOMIC AND REGULATORY CHANGES IN THE HEALTHCARE INDUSTRY WHICH COULD FORCE US TO MAKE MODIFICATIONS TO HOW WE DEVELOP AND PRICE OUR PRODUCTS.
The healthcare industry is highly regulated and is influenced by changing political, economic and regulatory factors. Several of our product lines are subject to international, federal, state and local health and safety, packaging and product content regulations. In addition, implantable medical device products produced by our healthcare customers are subject to regulation by the FDA and similar international agencies. These regulations govern a wide variety of product activities from design and development to labeling, manufacturing, promotion, sales and distribution. Compliance with these regulations may be time consuming, burdensome and expensive and could negatively affect our customers' abilities to sell their products, which in turn would adversely affect our ability to sell our products. This may result in higher than anticipated costs or lower than anticipated revenues.
These regulations are also complex, change frequently and have tended to become more stringent over time. Federal and state legislatures have periodically considered programs to reform or amend the U.S. healthcare system at both the federal and state levels. In addition, these regulations may contain proposals to increase governmental involvement in healthcare, lower reimbursement rates or otherwise change the environment in which healthcare industry participants operate. We may be required to incur significant expenses to comply with these regulations or remedy past violations of these regulations. Any failure by our company to comply with applicable government regulations could also result in cessation of portions or all of our operations, impositions of fines and restrictions on our ability to carry on or expand our operations. In addition, because many of our products are sold into regulated industries, we must comply with additional regulations in marketing our products.
OUR BUSINESS IS SUBJECT TO ENVIRONMENTAL REGULATIONS THAT COULD BE COSTLY
FOR OUR COMPANY TO COMPLY WITH.
Federal, state and local regulations impose various environmental controls on the manufacturing, transportation, storage, use and disposal of power sources and components and hazardous chemicals and other materials used in and hazardous waste produced by the manufacturing of power sources and components. We cannot assure you that conditions relating to our historical operations which may require expenditures for clean-up will not arise in the future or that changes in environmental laws and regulations will not impose costly compliance requirements on us or otherwise subject us to future liabilities. We also cannot assure you that additional or modified regulations relating to the manufacture, transportation, storage, use and disposal of materials used to manufacture our power sources and components or restricting disposal of power sources will not be imposed. In addition, we cannot predict the effect that additional or modified regulations may have on us or our customers.
CONSOLIDATION IN THE HEALTHCARE INDUSTRY COULD HAVE AN ADVERSE EFFECT ON OUR
REVENUES AND RESULTS OF OPERATIONS.
Many healthcare industry companies are consolidating to create new companies with greater market power. As the healthcare industry consolidates, competition to provide products and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for our products. If we are forced to reduce our prices because of consolidation in the healthcare industry, our revenues would decrease and our results of operations would suffer.
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OUR BUSINESS IS INDIRECTLY SUBJECT TO HEALTHCARE INDUSTRY COST CONTAINMENT
MEASURES THAT COULD RESULT IN REDUCED SALES OF OUR PRODUCTS.
Our healthcare customers rely on third party payors, such as government programs and private health insurance plans, to reimburse some or all of the cost of the procedures in which our products are used. The continuing efforts of government, insurance companies and other payors of healthcare costs to contain or reduce those costs could lead to patients being unable to obtain approval for payment from these third party payors. If that occurred, sales of implantable medical devices may decline significantly, and our customers may reduce or eliminate purchases of our products. The cost containment measures that healthcare providers are instituting, both in the United States and internationally, could harm our ability to operate profitably.
OUR COMMERCIAL POWER SOURCE REVENUES ARE DEPENDENT ON CONDITIONS IN THE OIL
AND NATURAL GAS INDUSTRY, WHICH HISTORICALLY HAVE BEEN VOLATILE.
Sales of our commercial power sources depend to a great extent upon the condition of the oil and gas industry and, specifically, the exploration and production expenditures of oil and gas companies. In the past, oil and natural gas prices have been volatile and the oil and gas exploration and production industry has been cyclical, and it is likely that oil and natural gas prices will continue to fluctuate in the future. The current and anticipated prices of oil and natural gas influence the oil and gas exploration and production business and are affected by a variety of political and economic factors beyond our control, including worldwide demand for oil and natural gas, worldwide and domestic supplies of oil and natural gas, the ability of the Organization of Petroleum Exporting Countries, or OPEC, to set and maintain production levels and pricing, the level of production of non-OPEC countries, the price and availability of alternative fuels, political stability in oil producing regions and the policies of the various governments regarding exploration and development of their oil and natural gas reserves. An adverse change in the oil and gas exploration and production industry or a reduction in the exploration and production expenditures of oil and gas companies could cause our revenues from commercial power sources to suffer.
RISKS RELATED TO THIS OFFERING
THE POSSIBLE VOLATILITY OF OUR STOCK PRICE COULD ADVERSELY AFFECT OUR
STOCKHOLDERS.
Securities markets worldwide have recently experienced significant price and volume fluctuations and the market prices of the securities of technology companies have been especially volatile. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our common stock in spite of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors, and in response, the market price of our common stock could decrease significantly. Investors may be unable to resell their shares of our common stock at or above the offering price. In the past, companies that have experienced volatility in the market price of their stock have been the object of securities class action litigation. If we were to become the object of securities class action litigation, we may face substantial costs and our management's attention and resources may be diverted, which could harm our business.
DLJ MERCHANT BANKING PARTNERS II, L.P. AND SOME OF ITS AFFILIATES ARE PARTY TO STOCKHOLDERS AGREEMENTS WHICH ENABLE THEM TO EXERT SIGNIFICANT INFLUENCE OVER US AND THEY MAY HAVE INTERESTS THAT CONFLICT WITH THOSE OF OTHER STOCKHOLDERS, INCLUDING PURCHASERS IN THIS OFFERING.
DLJ Merchant Banking Partners II, L.P. and some of its affiliates, which we refer to collectively as DLJ Merchant Banking, have substantial control over our company and may have different interests than those of other holders of our common stock. Prior to this offering, DLJ Merchant Banking held 54.7% of our outstanding common stock and after this offering, these entities will beneficially own approximately 32.0%, or 28.1% if the underwriters exercise their over-allotment option in full, of our
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outstanding common stock. As a result of its stock ownership and related contractual rights, DLJ Merchant Banking has significant control over our business policies and affairs, including the power to:
- nominate all but one member of our Board of Directors and elect our directors; and
- appoint new management.
The parties to the stockholders agreements have agreed to vote in favor of DLJ Merchant Banking's director nominees. The directors elected by DLJ Merchant Banking have the ability to control decisions affecting the business and management of our company, including our capital structure. This includes the issuance of additional capital stock, the implementation of stock repurchase programs and the declaration of dividends.
The general partners of each of the entities comprising DLJ Merchant Banking are affiliates or employees of Credit Suisse First Boston Corporation, one of the managing underwriters of this offering.
FUTURE SALES OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR STOCK PRICE.
Sales of a substantial number of shares of common stock after this offering, or the perception that these sales could occur, could adversely affect the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Immediately after this offering, affiliates and holders of "restricted securities," as defined in Rule 144 under the Securities Act, will own 8,919,997 shares, representing approximately 43.1% of our outstanding shares of common stock, or if the underwriters exercise their over-allotment option in full, 8,019,997 shares, representing approximately 38.7%, of our outstanding shares of common stock. A decision by these persons to sell shares of common stock could adversely affect the trading price of our common stock. Our executive officers, directors, the selling stockholders and some of our existing stockholders and key employees have entered into the lock-up agreements described in "Underwriting."
WE HAVE VARIOUS MECHANISMS IN PLACE TO DISCOURAGE TAKEOVER ATTEMPTS, WHICH MAY REDUCE OR ELIMINATE YOUR ABILITY TO SELL YOUR SHARES FOR A PREMIUM IN A CHANGE OF CONTROL TRANSACTION.
Various provisions of our restated certificate of incorporation and bylaws and in Delaware corporate law may discourage, delay or prevent a change in control or takeover attempt of our company by a third party which is opposed to by our management and Board of Directors. Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and Board of Directors. These provisions include:
- authorizing the issuance of "blank check" preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares and thwart a takeover attempt;
- limiting who may call special meetings of our stockholders; and
- establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings.
ABSENCE OF DIVIDENDS COULD REDUCE OUR ATTRACTIVENESS TO INVESTORS.
Some investors favor companies that pay dividends, particularly in market downturns. We currently intend to retain any future earnings for funding growth and, therefore we do not currently anticipate paying cash dividends on our common stock in the foreseeable future. Because we may not pay dividends, your return on this investment likely depends on your ability to sell our stock for a profit.
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FORWARD LOOKING STATEMENTS
Some of the statements under "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and elsewhere in this prospectus constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. We have based these forward-looking statements on our current expectations, which are subject to known and unknown risks, uncertainties and assumptions. They include statements relating to:
- future revenues, expenses and profitability;
- the future development and expected growth of our business and the implantable medical device industry;
- our ability to successfully execute our business model and our business strategy;
- our ability to identify trends within the industries for implantable medical devices, medical components and commercial power sources and to offer products and services that meet the changing needs of those markets;
- projected capital expenditures; and
- trends in government regulation.
You can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those suggested by these forward-looking statements. In evaluating these statements, you should carefully consider the risks outlined under "Risk Factors." All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements and risk factors contained throughout this prospectus. We are under no duty to update any of the forward-looking statements after the date of this prospectus or to conform these statements to actual results.
In this prospectus, we rely on and refer to information and statistics regarding the implantable medical device industry. We obtained this information and statistics from third party sources. We believe that these sources are reliable, but we have not independently verified them.
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USE OF PROCEEDS
We will receive proceeds from this offering, assuming an offering price of $28.82 per share, the last reported sale price on The New York Stock Exchange on June 18, 2001, and after deducting underwriting discounts and commissions and estimated offering expenses of $5.0 million payable by us, of approximately $52.7 million.
We plan to use the net proceeds of this offering for general corporate purposes, which may include the repayment of debt and future acquisitions, although we currently have no commitments to acquire additional businesses.
We will not receive any proceeds from the sale of common stock by the selling stockholders.
COMMON STOCK PRICE RANGES AND DIVIDENDS
Our common stock began trading on The New York Stock Exchange on September 29, 2000 under the symbol "GB." The following table sets forth for the fiscal quarters indicated below the high and low closing prices per share for our common stock as reported on the NYSE Composite Tape.

                                                                  HIGH               LOW
                                                             ---------------   ---------------
2000
Third Quarter (from September 29, 2000)....................  $         22.88   $         22.88
Fourth Quarter.............................................            29.88             21.75

2001
First Quarter..............................................  $         27.75   $         18.99
Second Quarter (through June 18, 2001).....................            32.50             17.46	

We do not intend to pay cash dividends in the foreseeable future. We currently intend to retain any earnings to further develop and grow our business and to reduce our indebtedness. We are a holding company and are dependent on distributions from our subsidiaries to meet our cash requirements. The terms of the amended credit agreement governing our credit facility limit the ability of our subsidiaries to make distributions to us and consequently limit our ability to pay dividends on our common stock.
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CAPITALIZATION
The following table sets forth our cash and capitalization as of March 30, 2001 on an actual basis, an unaudited pro forma basis and on an unaudited pro forma as adjusted basis. Our pro forma capitalization gives effect to our acquisition of Sierra and our amended credit facility. Our pro forma as adjusted capitalization gives effect to the pro forma capitalization and the sale by us of the 2,000,000 shares of our common stock offered by this prospectus at an assumed offering price of $28.82 per share, the last reported sale price on The New York Stock Exchange on June 18, 2001, and after deducting underwriting discounts and commissions and estimated offering expenses of $5.0 million payable by us as if this offering had occurred on March 30, 2001. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and accompanying notes included elsewhere in this prospectus.

                                                                 AS OF MARCH 30, 2001
                                                      ------------------------------------------
                                                                                      PRO FORMA
                                                       ACTUAL        PRO FORMA       AS ADJUSTED
                                                      --------      -----------      -----------
                                                                    (UNAUDITED)      (UNAUDITED)
                                                                    (IN THOUSANDS)
Cash and cash equivalents...........................  $    253        $     48         $ 52,718
                                                      ========        ========         ========
Debt:
  Credit facility (1):
    Term loan.......................................  $ 35,000        $ 80,000         $ 80,000
    Revolving line of credit........................       500           2,500            2,500
                                                      --------        --------         --------
      Total debt....................................    35,500          82,500           82,500
                                                      --------        --------         --------
Stockholders' equity:
  Preferred stock, $.001 par value, 100,000,000
    shares authorized and none outstanding..........        --              --               --
  Common stock, $.001 par value; 100,000,000 shares
    authorized; 18,974,028 shares issued and
    18,712,967 shares outstanding (actual);
    18,974,028 shares issued and 18,712,967 shares
    outstanding (pro forma); 20,974,028 shares
    issued and 20,712,967 shares outstanding (pro
    forma as adjusted)..............................        19              19               21
  Capital in excess of par value....................   157,537         157,537          210,205
  Retained deficit..................................   (17,607)        (17,607)         (17,607)
  Treasury stock, at cost (261,061 shares, actual,
    pro forma and pro forma as adjusted)............    (4,179)         (4,179)          (4,179)
                                                      --------        --------         --------
      Total stockholders' equity....................   135,770         135,770          188,440
                                                      --------        --------         --------
        Total capitalization........................  $171,270        $218,270         $270,940
                                                      ========        ========         ========	

(1) We amended our existing credit facility with a consortium of banks in June 2001. The amended facility consists of an $80.0 million term loan and a $20.0 million revolving line of credit. We used proceeds from the amended facility to finance our acquisition of Sierra.
19

SELECTED CONSOLIDATED FINANCIAL DATA
The following table provides selected financial data of our company for the periods indicated. You should read the selected consolidated financial data set forth below in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," and with our consolidated financial statements and related notes appearing elsewhere in this prospectus. The consolidated statement of operations data for the years ended January 1, 1999, December 31, 1999 and December 29, 2000 and the consolidated balance sheet data at December 31, 1999 and December 29, 2000 have been derived from our financial statements and related notes appearing elsewhere in this prospectus which have been audited by Deloitte & Touche LLP, independent auditors. The statement of operations data for the year ended December 31, 1996, the period from January 1, 1997 to July 10, 1997 and the period from July 11, 1997 to January 2, 1998 and the balance sheet data at December 31, 1996, January 2, 1998 and January 1, 1999 have been derived from our audited financial statements and related notes not included in this prospectus which have been audited by Deloitte & Touche LLP, independent auditors. The consolidated statement of operations data for the three months ended March 31, 2000 and March 30, 2001 and the consolidated balance sheet data at March 30, 2001 are unaudited but, in the opinion of management, include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation of our results for these interim periods. The results of operations for the three months ended March 30, 2001 are not necessarily indicative of results to be expected for the entire year or for any period.

                                         WILSON GREATBATCH                  WILSON GREATBATCH TECHNOLOGIES, INC.
                                             LTD. (1)             ---------------------------------------------------------
                                    ---------------------------
                                                    JANUARY 1,     JULY 11,                   YEAR ENDED (2)
                                     YEAR ENDED       1997 TO       1997 TO     -------------------------------------------
                                    DECEMBER 31,     JULY 10,     JANUARY 2,    JANUARY 1,    DECEMBER 31,    DECEMBER 29,
                                        1996           1997          1998        1999 (3)         1999          2000 (4)
                                    -------------   -----------   -----------   -----------   -------------   -------------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Total revenues....................     $51,390        $30,468       $ 27,193      $ 77,361      $ 79,235        $ 97,790
Cost of goods sold................      26,070         14,922         12,241        36,454        41,057          55,446
                                       -------        -------       --------      --------      --------        --------
Gross profit......................      25,320         15,546         14,952        40,907        38,178          42,344
Selling, general and
  administrative..................      10,356          6,729          5,412        11,484         9,880          11,473
Research, development and
  engineering.....................       7,951          4,400          4,619        12,190         9,339           9,941
Intangible amortization...........          --             --          1,810         5,197         6,510           6,530
Transaction related expenses......          --         11,097             --            --            --              --
Write-off of purchased in-process
  research, development and
  engineering.....................          --             --         23,779            --            --              --
                                       -------        -------       --------      --------      --------        --------
                                         7,013         (6,680)       (20,668)       12,036        12,449          14,400
Interest expense..................         388            252          4,128        10,572        13,420          12,958
Other expense (income)............        (124)          (117)            74           364         1,343            (189)
                                       -------        -------       --------      --------      --------        --------
Income (loss) before income
  taxes...........................       6,749         (6,815)       (24,870)        1,100        (2,314)          1,631
Income tax expense (benefit)
  (5).............................         157          1,053         (9,468)          410          (605)            611
                                       -------        -------       --------      --------      --------        --------
Income (loss) before loss on
  retirement of debt and
  cumulative effect of accounting
  change..........................       6,592         (7,868)       (15,402)          690        (1,709)          1,020
Extraordinary loss on retirement
  of debt (6).....................          --             --             --            --            --          (1,568)
Cumulative effect of accounting
  change (7)......................          --             --             --            --          (563)             --
                                       -------        -------       --------      --------      --------        --------
Net income (loss).................     $ 6,592        $(7,868)      $(15,402)     $    690      $ (2,272)       $   (548)
                                       =======        =======       ========      ========      ========        ========

Basic earnings (loss) per share
  (8)
  Income (loss) from continuing
    operations....................     $   732        $  (874)      $  (1.74)     $   0.07      $  (0.14)       $   0.07
  Net income (loss)...............     $   732        $  (874)      $  (1.74)     $   0.07      $  (0.18)       $  (0.04)
Diluted earnings (loss) per share
  (8)
  Income (loss) from continuing
    operations....................     $   732        $  (874)      $  (1.74)     $   0.06      $  (0.14)       $   0.07
  Net income (loss)...............     $   732        $  (874)      $  (1.74)     $   0.06      $  (0.18)       $  (0.04)
Weighted average shares
  outstanding (8):
  Basic...........................           9              9          8,855        10,461        12,491          14,167
  Diluted.........................           9              9          8,855        10,677        12,491          14,434

CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.........     $    54        $   N/A       $  2,319      $  4,140      $  3,863        $     16
Total assets......................      32,462            N/A        111,709       194,390       189,779         181,647
Long-term obligations.............       5,150            N/A         72,714       129,563       127,623          30,951
Total stockholders' equity........      16,914            N/A         28,239        45,595        46,407         135,834

                                    WILSON GREATBATCH TECHNOLOGIES, INC.
                                    -----------------------
                                         THREE MONTHS
                                           ENDED (2)
                                    -----------------------
                                    MARCH 31,    MARCH 30,
                                       2000         2001
                                    ----------   ----------
                                          (UNAUDITED)
                                     (IN THOUSANDS, EXCEPT
                                        PER SHARE DATA)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Total revenues....................   $ 23,176     $ 29,571
Cost of goods sold................     12,936       15,560
                                     --------     --------
Gross profit......................     10,240       14,011
Selling, general and
  administrative..................      2,624        3,780
Research, development and
  engineering.....................      2,520        3,188
Intangible amortization...........      1,627        1,639
Transaction related expenses......         --           --
Write-off of purchased in-process
  research, development and
  engineering.....................         --           --
                                     --------     --------
                                        3,469        5,404
Interest expense..................      3,985          712
Other expense (income)............         61           59
                                     --------     --------
Income (loss) before income
  taxes...........................       (577)       4,633
Income tax expense (benefit)
  (5).............................       (184)       1,714
                                     --------     --------
Income (loss) before loss on
  retirement of debt and
  cumulative effect of accounting
  change..........................       (393)       2,919
Extraordinary loss on retirement
  of debt (6).....................         --       (2,994)
Cumulative effect of accounting
  change (7)......................         --           --
                                     --------     --------
Net income (loss).................   $   (393)    $    (75)
                                     ========     ========
Basic earnings (loss) per share
  (8)
  Income (loss) from continuing
    operations....................   $  (0.03)    $   0.16
  Net income (loss)...............   $  (0.03)    $  (0.00)
Diluted earnings (loss) per share
  (8)
  Income (loss) from continuing
    operations....................   $  (0.03)    $   0.15
  Net income (loss)...............   $  (0.03)    $  (0.00)
Weighted average shares
  outstanding (8):
  Basic...........................     12,616       18,713
  Diluted.........................     12,616       19,059
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.........   $  2,474     $    253
Total assets......................    187,782      184,407
Long-term obligations.............    123,067       35,916
Total stockholders' equity........     45,980      135,770	

20

(1) The financial data for periods prior to July 11, 1997 relate to Wilson Greatbatch Ltd., our predecessor.
(2) Our fiscal year ends on the closest Friday to December 31. Accordingly, our fiscal year will periodically contain more or less than 365 days. For example, fiscal 1998 ended on January 1, 1999, fiscal 1999 ended on December 31, 1999 and fiscal 2000 ended on December 29, 2000. Our fiscal quarters are three-month periods that end on the Friday closest to the end of the applicable calendar quarter.
(3) In August 1998, we acquired the assets and liabilities of Hittman. These figures include the results of operations of Hittman from August 8, 1998 to January 1, 1999.
(4) In August 2000, we acquired all of the capital stock of BEI. These figures include the results of operations of BEI from August 4, 2000 to December 29, 2000.
(5) Wilson Greatbatch Ltd., our predecessor, incurred minimal state taxes as a former subchapter S corporation. The federal and state taxes for the period from January 1, 1997 to July 10, 1997 are directly attributable to our acquisition of our predecessor in July 1997.
(6) Fiscal year 2000 and the three months ended March 30, 2001 include an extraordinary loss for the extinguishment of debt of $1.6 million and $3.0 million, respectively, as a result of our prepayment of a portion of our former credit facility and the repurchase of our senior subordinated notes.
(7) Fiscal year 1999 includes the cumulative effect of an accounting change as a result of adopting a new accounting rule for the treatment of start-up activities.
(8) We calculate basic earnings per share by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. We calculate diluted earnings (loss) per share by adjusting for common stock equivalents, which consist of stock options. During the period from July 11, 1997 to January 2, 1998, the year ended December 31, 1999 and the three month period ended March 31, 2000, there were options to purchase approximately 0, 246,000 and 222,000 shares of common stock, respectively, that were not included in the computation of diluted earnings per share because to do so would be antidilutive for those periods. Diluted earnings per share for all other periods include the potentially dilutive effect of stock options.
21

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YOU SHOULD READ THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
OVERVIEW
We are a leading developer and manufacturer of power sources, feedthroughs and wet tantalum capacitors used in implantable medical devices. We also develop and manufacture other components used in implantable medical devices. We leverage our core competencies in technology and manufacturing to develop and produce power sources for commercial applications that demand high performance and reliability. These applications include aerospace, oil and gas exploration and oceanographic equipment.
In July 1997, DLJ Merchant Banking and members of our management formed our company to acquire Wilson Greatbatch Ltd. from relatives of its founder, Mr. Wilson Greatbatch, in a leveraged buyout transaction. In the leveraged buyout transaction, DLJ Merchant Banking and its affiliates initially acquired approximately 86% of our outstanding common stock. In connection with the leveraged buyout, we issued $25.0 million principal amount of 13% senior subordinated notes, entered into a $10.0 million revolving line of credit and incurred $50.0 million of senior Term A and Term B loans. Affiliates of DLJ Merchant Banking originally purchased $22.5 million of the principal amount of the notes and led a syndicate of financial institutions in extending us the line of credit and term loans. The leveraged buyout generated $82.9 million in intangible assets, of which approximately $6.1 million was allocated to goodwill. In connection with the leveraged buyout, we recorded a one time write-off of $23.8 million of purchased in-process research and development costs.
In August 1998, we acquired Hittman, a medical components manufacturer, for $71.8 million. At the time of the acquisition, we paid $69.0 million. A portion of the consideration was contingent upon Hittman achieving financial targets after the acquisition. Some of these targets were achieved in 1998 and we subsequently paid $2.8 million to the former owner of Hittman. In connection with our acquisition of Hittman, we borrowed an additional $60.0 million of Term A and Term B loans and increased our revolving line of credit up to a maximum of $20.0 million. We recorded the Hittman acquisition using the purchase method of accounting. The excess of the purchase price over the fair value of the net assets that we acquired was $67.7 million, of which $17.4 million was allocated to identifiable intangible assets and $50.3 million was allocated to goodwill. Sales by Hittman of $8.8 million are reflected in our 1998 results.
In August 2000, we acquired all of the capital stock of BEI, a small specialty battery manufacturer, from Hitachi-Maxell, Ltd. in exchange for 339,856 shares of our common stock and the assumption of approximately $2.7 million of indebtedness. The acquisition was accounted for as a purchase. The excess of the purchase price over the fair value of the net assets that we acquired was $0.8 million, all of which was allocated to goodwill. Sales by BEI of $4.0 million are reflected in our 2000 results.
In October 2000, we completed our initial public offering. We sold 5,750,000 shares of common stock at a price of $16.00 per share and received net proceeds of $84.0 million. All of the net proceeds were used to prepay a portion of our senior debt.
On January 12, 2001, we consummated a $60.0 million credit facility consisting of a $40.0 million term loan and a $20.0 million revolving line of credit. The proceeds from the $40.0 million term loan
22

were used to pay off the Term A facility, Term B facility and the senior subordinated notes that were outstanding as of December 29, 2000, plus accrued interest and a call premium. We amended the new credit facility, which has a term of five years, in June 2001 as described below. Interest is payable monthly on any outstanding prime rate loans and upon the contractual maturity for the London Interbank Offered Rate, or LIBOR, based loans. The interest rate charged is, at our option, based on either prime or LIBOR plus or minus an interest rate modifier. At current leverage levels, the applicable interest rates for both the term loan and the revolving line of credit are prime less 1.0% or LIBOR plus 1.25%, at our option.
In June 2001, we acquired Sierra, a leading developer and manufacturer of EMI filters and capacitors for implantable medical devices, for approximately $49.0 million in cash and certain assumed liabilities. The acquisition was accounted for as a purchase. The excess of the purchase price over the fair value of the net assets that we acquired will be allocated to identifiable intangible assets and to goodwill.
In conjunction with our acquisition of Sierra, we amended our existing $60.0 million credit facility with a consortium of banks by increasing the total size of the facility to $100.0 million. The amended facility consists of an $80.0 million term loan and a $20.0 million revolving line of credit. Both the term loan and the revolving line of credit have a term of five years, maturing in July 2006. We used proceeds from the amended facility to finance the acquisition of Sierra.
A brief description follows of the more significant projects which comprise the 1997 purchased in-process research and development costs. Each description addresses the status as of the acquisition date and the current status of each project.
CAPACITORS
The objective of this project was to develop new capacitor technology to facilitate a significant reduction in the size of ICDs by significantly improving the energy density.
Capacitor project expenditures, at the time of the leveraged buyout, totaled $2.6 million with additional expenditures of $2.0 million anticipated through completion of the project. We expected development efforts to be completed by mid-1998 and projected first year revenues of $1.4 million. We deemed the technical risks associated with this project to be moderate, as the technology was similar to our battery technology, and the commercialization risks we viewed as low, since we were working with the same customers as for our power source business.
Development efforts for the first generation capacitors continued through the third quarter of 1999. Revenues in 1999 were $2.3 million. Total development costs through the end of 1999 (including operating losses as this project transitioned to product line status) were $10.8 million. In addition, approximately $8.2 million in capital expenditures were incurred. The revisions of our original timeline and cost estimates resulted from the difficulty in manufacturing capacitors to customer specifications, which became more stringent than those originally envisioned.
NEXT GENERATION ICD
The objective of this project was to develop several proprietary process improvements to reduce the size of the ICD battery, while at the same time delivering more energy density than the products sold at the time.
At the time of the leveraged buyout, $0.1 million had been expended on this project with additional expenditures of $0.4 million anticipated through completion. We expected development efforts to be completed by the end of 1997. First year revenues of $6.4 million were projected to begin in 1998. We deemed the technical and commercialization risks to be low since the technology, end-user applications and customer base were familiar to us.
23

Development efforts were completed by December 1997 with a total cost of $0.5 million. First year revenues were $6.4 million.
GREATBATCH SCIENTIFIC
The objective of this project was to develop battery-powered surgical devices which were magnetic resonance imaging, or MRI, compatible, in order to develop a new product line, a new customer base and a new outlet for our already-existing batteries.
At the time of the leveraged buyout, we had expended $2.0 million on this project with additional expenditures of $1.7 million anticipated through completion. We expected to ship the first instruments in the third quarter of 1998. First year revenues of $4.6 million were projected to begin in 1998. We viewed the technical risk as moderate, as we had not produced a wide variety of surgical devices, and the commercialization risk as high. We intended to outsource much of the production and to initiate distribution to a completely new customer base.
In order to focus our efforts on integrating the Hittman acquisition and bringing our capacitor project into full production, we sold the Greatbatch Scientific operation to an unrelated medical device company in August 1998 in exchange for stock of the acquiror. Greatbatch Scientific had no further impact on our sales or operating costs after August 1998.
Sales from July 1997 through August 1998 were less than $0.1 million.
LITHIUM ION PRODUCTS
The objective of this project was to develop and manufacture rechargeable lithium ion batteries suitable for use in implantable medical devices.
At the time of the leveraged buyout, $0.5 million had been expended on this project, which was expected to be completed by the end of 1997. First year revenues of $0.9 million were projected to begin in 1998. We viewed the technical risk as moderate as we had not previously developed multi-use batteries. We viewed the commercialization risk as moderate because we would be targeting a new customer base.
We completed development efforts on the first generation of rechargeable lithium ion cell in the second quarter of 2000 and are now designing custom cells and packs for specific customer applications. Sales revenue has not yet begun. However, non-refundable engineering fees, which are recorded as an offset to development expenses, have approximated $2.6 million since the leveraged buyout. Development costs since the leveraged buyout have totaled $5.8 million. We have revised our original timelines and cost estimates due to delays in the development phase of this project. Some of the customers for this project are themselves development-stage enterprises.
FISCAL YEAR AND FISCAL QUARTERS
Our fiscal year ends on the closest Friday to December 31. Accordingly, our fiscal year will periodically contain more or less than 365 days. For example, fiscal 1998 ended on January 1, 1999, fiscal 1999 ended on December 31, 1999 and fiscal 2000 ended on December 29, 2000. Our fiscal quarters are three-month periods that end on the Friday closest to the end of the applicable calendar quarter.
REVENUE AND EXPENSE COMPONENTS
REVENUES
We derive revenues from the sale of medical and commercial products. Our medical revenues consist of sales of implantable power sources, capacitors and components. Our commercial revenues
24

consist of sales of commercial power sources. A substantial part of our business is conducted with a limited number of customers. Guidant accounted for approximately 34% of our revenues and St. Jude Medical accounted for approximately 31% of our revenues in 2000. We have entered into long-term supply agreements ranging from two to ten years with most of our large customers. Our supply agreements with St. Jude Medical, Medtronic, Biotronik and Guidant do not require that our customers maintain any minimum purchase levels.
Our implantable power source revenues are derived from sales of batteries for pacemakers, ICDs and other implantable medical devices. The majority of our implantable power source customers contract with us to develop custom batteries to fit their product specifications. We are the sole provider of these products to many of our customers. We also record royalties as implantable power source revenues for licenses we have granted to others for the manufacture of batteries using designs and processes patented by us. These revenues are recognized based on the reported number of units sold. Since January 2, 1998, royalties have accounted for approximately 2.7% to 3.3% of our aggregate annual revenues. Currently, Medtronic is our sole source of royalty fees. Although our license agreement with Medtronic has no termination date, the patents from which we receive royalty payments from Medtronic expired in all material respects in January 2001. Therefore, in the absence of new patents, we do not expect to receive any significant royalties to record as implantable power source revenues for production and sales.
Our capacitor revenues are derived from sales of our wet tantalum capacitors, which we developed for use in ICDs. In 1999 and 2000, we incurred start-up costs related to our capacitor operations of $5.7 million. We began selling our new wet tantalum capacitors commercially in the fourth quarter of 1999. We expect to enter into long term agreements of more than one year with our capacitor customers and add new customers in an effort to increase our capacitor revenues. Although there can be no assurance, we believe that our revenues in 2001 from capacitor sales will grow at a higher rate than sales of our other medical products and that our capacitor program will become profitable in 2001.
Our components revenues are derived from sales of feedthroughs, electrodes and other precision components principally used in pacemakers and ICDs. We also sell our components for use in other implantable medical devices, such as left ventricular assist devices, hearing assist devices, drug pumps, neurostimulators and other medical applications.
Our commercial power source revenues are primarily derived from sales of batteries for use in oil and gas exploration, including recovery equipment, pipeline inspection gauges, down-hole pressure measurement systems and seismic surveying equipment. We also supply batteries to NASA for its space shuttle program and other similarly-demanding commercial applications.
For each of our products, we recognize revenue when the products are shipped. We do not give warranties to our customers for our products and to date, returns have been immaterial. In addition to product and royalty revenues, we also receive cash flows from cost reimbursements for research, development and engineering conducted on behalf of some of our customers. We record these cost reimbursements as an offset to research, development and engineering costs. We recognize cost reimbursements upon achieving related milestones. The cost reimbursement charged to customers represents actual costs incurred by us in the design and testing of prototypes built to customer specifications. This cost reimbursement does not include a mark-up. Price concessions have not significantly affected revenues in the historical periods presented.
EXPENSES
Cost of goods sold includes materials, labor and other manufacturing costs associated with the products we sell. We have included start-up costs associated with the production of our capacitors in cost of goods sold. As a result, costs associated with capacitors prior to the fourth quarter of 1999,
25

when we began to commercially offer these products, were substantially in excess of revenue generated from capacitor sales.
Selling, general and administrative expenses include salaries, facility costs and patent-related expenses.
Research, development and engineering expenses include costs associated with the design, development, testing, deployment and enhancement of our products. We record cost reimbursements as an offset to research, development and engineering expenses.
Other expenses primarily include amortization of intangible assets and interest expense. Amortization of intangible assets is primarily related to the leveraged buyout and our acquisition of Hittman. Interest expense is primarily related to indebtedness we assumed in connection with these transactions.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage which the listed amounts bear to total revenues:

                                                                                                        FIRST THREE
                                                                     FISCAL YEAR                         MONTHS OF
                                                         ------------------------------------      ----------------------
                                                           1998          1999          2000          2000          2001
                                                         --------      --------      --------      --------      --------
Revenues:
  Implantable power sources........................        65.1%         51.1%         42.2%         45.4%         38.0%
  Capacitors.......................................         0.1           2.9          12.9          14.2          11.8
  Medical components...............................        18.1          33.4          30.6          30.4          26.6
                                                          -----         -----         -----         -----         -----
  Total medical revenues...........................        83.3          87.4          85.7          90.0          76.4
Commercial power sources...........................        16.7          12.6          14.3          10.0          23.6
                                                          -----         -----         -----         -----         -----
Total revenues.....................................       100.0%        100.0%        100.0%        100.0%        100.0%
                                                          =====         =====         =====         =====         =====
Income statement data as a percentage of revenues:
  Gross profit.....................................        52.9%         48.2%         43.3%         44.2%         47.4%
  Net income (loss)................................         0.9          (2.9)         (0.6)         (0.4)         (0.1)	

FIRST QUARTER OF 2001 COMPARED TO FIRST QUARTER OF 2000
REVENUES
Total revenues for the quarter ended March 30, 2001 were $29.6 million, a $6.4 million, or 28%, increase from $23.2 million for the first quarter of 2000. This increase was primarily due to the inclusion of revenues in the first quarter of 2001 of BEI, which we acquired in August 2000.
MEDICAL. Total medical revenues for the first quarter of 2001 were $22.6 million, a $1.7 million, or 8%, increase from $20.8 million for the first quarter of 2000. Implantable power source revenues for the quarter ended March 30, 2001 were $11.2 million, an increase of $0.7 million, or 7%, from $10.5 million for the quarter ended March 31, 2000. This increase was primarily due to our customers' increased current demand for ICD batteries versus the first quarter of 2000 and orders in anticipation of new product launches later this year. This increase was offset by a decline in sales of pacemaker batteries due to an unusually high order from one of our customers in the first quarter of 2000. Capacitor revenues for the quarter ended March 30, 2001 were $3.5 million, an increase of $0.2 million, or 6%, from $3.3 million for the first quarter of 2000. This increase was tempered by planned improvements in our capacitor technology in 2000, which reduced the number of capacitors per ICD to three from four in the first quarter of 2001. Sales of medical components were $7.9 million for the
26

quarter ended March 30, 2001, an increase of $0.8 million, or 12%, from $7.0 million in the first quarter of 2000. The increase was primarily due to our qualifying additional components for sale with existing and new customers.
COMMERCIAL. Commercial power sources revenues for the quarter ended March 30, 2001 were $7.0 million, an increase of $4.7 million, or 200%, from $2.3 million for the first quarter of 2000. The increase was primarily due to the inclusion of BEI sales in the first quarter of 2001, the continuing recovery in the oil and gas exploration business and certain price increases.
GROSS PROFIT
Gross profit for the quarter ended March 30, 2001 was $14.0 million, an increase of $3.8 million, or 37%, from $10.2 million for the first quarter of 2000. As a percentage of total revenues, gross profit for the first quarter of 2001 increased to 47% from 44% for the first quarter of 2000. The increase in gross profit as a percentage of sales was primarily due to a higher percentage of total revenues from products which have traditionally been more profitable, such as batteries for ICDs, and the presence of significant capacitor start-up costs during the first quarter of 2000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the quarter ended March 30, 2001 were $3.8 million, an increase of $1.2 million, or 44%, from $2.6 million for the first quarter of 2000. As a percentage of total revenues, selling, general and administrative expenses were 13% in the first quarter of 2001, as compared to 11% for the first quarter of 2000. The increase in selling, general and administrative expenses was primarily due to the inclusion of costs associated with BEI in 2001, the administrative costs associated with our status as a public company and training costs associated with a new quality initiative in the first quarter of 2001.
RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES
Research, development and engineering expenses for the quarter ended March 30, 2001 were $3.2 million, an increase of $0.7 million, or 27%, from $2.5 million in the first quarter of 2000. As a percentage of total revenues, research, development and engineering expenses were 11% for both the first quarter of 2001 and 2000. Payments received from customers for the development of proprietary battery models are recorded as an offset to research, development and engineering expenses.
OTHER EXPENSES
Intangible amortization was $1.6 million for both the first quarter of 2001 and 2000. Interest expense was $0.7 million for the quarter ended March 30, 2001, a decrease of $3.3 million, or 82%, from $4.0 million in the first quarter of 2000. The decrease was primarily attributable to the use of $84.0 million in net proceeds from our September 2000 initial public offering to pay down debt, lower interest rates generally in the first quarter of 2001 as compared to the first quarter of 2000 and a more favorable interest rate structure in our new credit agreement consummated in January 2001 than had been in our previous credit agreement.
PROVISION FOR INCOME TAXES
Our effective tax rate was 37% for the quarter ended March 30, 2001 and 32% for the quarter ended March 31, 2000. Our effective tax rate increased due to an increase in state taxes, a decrease in utilizable New York State tax credits and the acquisition of BEI, a Massachusetts taxpayer. Our effective tax rate of 37% differs from the federal statutory rate of 35% due to the effect of state taxes.
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INCOME (LOSS) BEFORE EXTRAORDINARY LOSS
Income from continuing operations was $2.9 million for the first quarter of 2001 compared to a loss of $0.4 million for the first quarter of 2000. The increase was due primarily to the increase in operating income in 2001 as compared to 2000. Diluted earnings per share from continuing operations for the first quarter of 2001 were $0.15 versus ($0.03) for the first quarter of 2000.
EXTRAORDINARY LOSS
In the quarter ended March 30, 2001, we had an extraordinary loss of $3.0 million, net of taxes, with no comparable amount for the first quarter of 2000. The loss was associated with the restructuring of our long-term debt and the related write-off of deferred financing fees and loan discounts associated with our long-term debt. Also included in the loss was the payment of $1.7 million, before taxes, as a call premium to the holders of our subordinated debt.
NET LOSS
Our net loss in the first quarter of 2001 narrowed to ($0.1) million from a net loss of ($0.4) million in the first quarter of 2000. The reduction in net loss was primarily due to an increase in operating income in 2001 relative to 2000, offset by the extraordinary loss of $3.0 million, net of taxes, in the first quarter of 2001. Diluted loss per share was ($0.00) in the first quarter of 2001 and ($0.03) in the first quarter of 2000.
FISCAL 2000 COMPARED TO FISCAL 1999
REVENUES
Total revenues for 2000 were $97.8 million, an $18.6 million, or 23%, increase from $79.2 million for 1999. The growth in revenues was primarily due to sales of our line of wet tantalum capacitors, which were launched commercially in the fourth quarter of 1999, and the inclusion of revenues from BEI since its acquisition in August 2000.
MEDICAL. Total medical revenues for 2000 were $83.8 million, a $14.6 million, or 21%, increase from $69.2 million for 1999. Implantable power source revenues for 2000 were $41.3 million, a $0.8 million, or 2%, increase from $40.5 million for 1999. This increase was primarily due to higher pacemaker battery sales as a result of an increase in pacemaker device sales by our customers, both foreign and domestic. This increase was partially offset due to an industry-wide design change in ICDs that resulted in ICDs using one battery instead of two. This conversion began in mid-1999 and was substantially complete by the third quarter of 2000. Capacitor revenues for 2000 were $12.6 million, a $10.3 million increase from $2.3 million for 1999. This increase was primarily due to initial commercial sales of our new wet tantalum capacitors beginning in the fourth quarter of 1999. Medical components revenues for 2000 were $29.9 million, a $3.5 million, or 13%, increase from $26.4 million for 1999. This increase was primarily due to the sale of a greater number of implantable medical devices by our customers, as well as our sales of a broader range of components in 2000 when compared with 1999.
COMMERCIAL. Commercial power sources revenues increased 40% to $14.0 million compared to $10.0 million for 1999. The higher revenues were primarily related to the inclusion of revenues from the BEI acquisition that was completed in August 2000.
GROSS PROFIT
Gross profit for 2000 was $42.3 million, a $4.2 million, or 11%, increase from $38.2 million for 1999. As a percentage of total revenues, gross profit for 2000 declined to 43.3% from 48.2% for 1999. This decrease was primarily due to a lower percentage of total revenues from established product lines such as implantable power sources, with no accompanying start-up costs, versus a higher percentage of
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total revenues from newer products, with accompanying high start-up costs, such as capacitors. In addition, sales of lower margin products, such as medical components and commercial power sources, have increased at a faster rate than have sales of historically higher margin implantable power sources.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for 2000 were $11.5 million, a $1.6 million, or 16%, increase from $9.9 million in 1999. The increase in selling, general and administrative expenses was primarily due to the inclusion of such expenses from BEI since its acquisition in August 2000, wage increases in 2000 as compared to wage decreases in 1999 and the accrual of incentive compensation in 2000 whereas there were no such accruals in 1999. As a percentage of total revenues, selling, general and administrative expenses were 11.8% and 12.5% in 2000 and 1999, respectively. The increase in total revenues mitigated the increase in selling, general and administrative expenses as a percentage of revenues.
RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES
We remain committed to investing in the development of new products and in enhancing the performance of our existing products. Research, development and engineering expenses for 2000 were $9.9 million, a $0.6 million, or 6%, increase from $9.3 million for 1999. Payments received from customers for the development of proprietary battery models are recorded as an offset to research, development and engineering expenses. Such payments totaled $3.2 million and $2.5 million in 2000 and 1999, respectively. As a percentage of total revenues, research, development and engineering expenses before such payments for 2000 declined to 13.4% from 15.0% for 1999. This decrease was primarily due to the rapid growth in capacitor sales and the growth in revenues of products that historically have not required significant research, development and engineering expenses, such as medical components and commercial power sources. Major areas of development are rechargeable lithium ion batteries and new battery systems for advanced ICD applications.
OTHER OPERATING EXPENSES
Intangible amortization was $6.5 million for 2000 and 1999. Interest expense for 2000 was $13.0 million, a decrease of $0.5 million, or 3%, from $13.4 million for 1999. This decrease was due to the use of net proceeds from our initial public offering to prepay $84.0 million of our senior debt. Miscellaneous income of $0.2 million in 2000 compares with miscellaneous expense of $1.3 million in 1999. In 2000, we sold interest rate cap agreements, which were no longer needed due to the prepayment of our senior debt, for a gain of $0.2 million. In 1999, we wrote down by $0.9 million the carrying value of our investment in an unaffiliated company.
PROVISION FOR INCOME TAXES
Our effective tax rate increased to 37% for 2000 from 26% for 1999. This increase was primarily due to the decrease in state tax credits available to us for 2000 as compared to 1999.
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS
Income from continuing operations was $1.0 million for 2000 compared to a loss of $1.7 million for 1999. The increase was due primarily to the increase in operating income in 2000 as compared to 1999. In addition, interest charges in 2000 were less than those for 1999, due to the prepayment of $84.0 million in senior debt from the proceeds of our initial public offering. Diluted earnings per share from continuing operations for 2000 were $0.07 versus ($0.14) for 1999.
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EXTRAORDINARY LOSS
In addition to the $84.0 million prepayment of our senior debt with the net proceeds of our initial public offering, we redeemed a portion of our subordinated debt. These two transactions resulted in an extraordinary charge, net of tax, of $1.6 million in 2000. The charge relates to the write-off of fees and other expenses incurred to establish the original debt financing.
NET LOSS
Our net loss for 2000 narrowed to ($0.5) million from a net loss of ($2.3) million in 1999. The reduction in net loss was primarily due to an increase in operating income and a reduction in interest expense. The net loss per share was ($0.04) for 2000, assuming dilution, and ($0.18) for 1999.
FISCAL 1999 COMPARED TO FISCAL 1998
REVENUES
Total revenues for 1999 were $79.2 million, a $1.9 million, or 2%, increase from $77.4 million for 1998.
MEDICAL. Total medical revenues for 1999 were $69.2 million, a $4.7 million, or 7%, increase from $64.5 million for 1998. Implantable power source revenues for 1999 were $40.5 million, a $9.9 million, or 20%, decrease from $50.3 million for 1998. This decrease was primarily due to a 1999 industry-wide design change in ICDs that reduced the number of batteries from two to one and the loss of market share by our ICD battery customers as a result of the introduction of a new ICD by Medtronic. Medtronic manufactured its own power sources for this ICD. This decrease was also due to a reduction in pacemaker battery demand resulting from Guidant's acquisition and subsequent closure of operations of Sulzer Intermedics, which previously purchased batteries from us. This decrease was partially offset by the successful launch of a new pacemaker by one of our customers and increased demand and orders from one of our customers that secured a government contract for pacemakers. Capacitor revenues for 1999 were $2.3 million, a $2.2 million increase from $0.1 million for 1998. This increase resulted primarily because we began selling our new wet tantalum capacitors commercially in the fourth quarter of 1999. Medical components revenues for 1999 were $26.4 million, a $12.4 million, or 89%, increase from $14.0 million for 1998. This increase was primarily due to the inclusion of a full year of operations from our Hittman acquisition and the sale of a greater number of implantable medical devices by our customers.
COMMERCIAL. Commercial power source revenues for 1999 were $10.0 million, a $2.9 million, or 22%, decrease from $12.9 million for 1998. This decrease was primarily due to continued weakness in the oil and gas industry.
GROSS PROFIT
Gross profit for 1999 was $38.2 million, a $2.7 million, or 7%, decrease from $40.9 million for 1998. As a percentage of revenues, gross profit for 1999 declined to 48% from 53% in 1998. The decrease in implantable power source gross profit amounted to 9% of revenue, while capacitor start-up costs totaled 6% of revenue.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for 1999 were $9.9 million, a $1.6 million, or 14%, decrease from $11.5 million for 1998. As a percentage of revenues, selling, general and administrative expenses for 1999 declined to 12% from 15% in 1998. These decreases were due to a temporary reduction in salaries, the deferral of annual merit increases, a reduction in incentive compensation, a general cutback in discretionary expenses and a reduction in the number of our employees.
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The temporary reduction in salaries was in effect from April 1999 through December 1999 and reduced selling, general and administrative expenses by $0.3 million in 1999. The reduction in incentive compensation, including both management bonuses and broad-based profit sharing, reduced expenses by $1.0 million compared to 1998. Discretionary expenses in 1999 were $0.3 million lower than in 1998. Three employees accounted for in selling, general and administrative expenses were terminated as part of the 1999 cost reductions, with total cost savings of less than $0.1 million, net of severance benefits.
RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES
Research, development and engineering expenses for 1999 were $9.3 million, a $2.9 million, or 23%, decrease from $12.2 million for 1998. As a percentage of total revenues, research, development and engineering expenses in 1999 declined to 12% from 16% in 1998. Beginning in 1999, as we anticipated achieving production volumes of our capacitors, we accounted for costs associated with our capacitor program as cost of goods sold, selling, general and administrative expenses and research, development and engineering expenses. In prior years, these costs were recognized only as research, development and engineering expenses. This had the effect of lowering research, development and engineering expenses in 1999 by $1.4 million as compared to 1998. In addition, in 1999, we had no research, development and engineering expenses for Greatbatch Scientific, one of our product lines, which we sold in 1998. The amount of the decrease in research, development and engineering expenses resulting from the sale of Greatbatch Scientific was $0.8 million. Greatbatch Scientific was a developer of battery-powered surgical tools that were magnetic resonance imaging, or MRI, compatible and incurred $0.8 million in research, development and engineering expenses in 1998.
Costs were also reduced in 1999 for the same programs as were discussed above under the caption "Selling, general and administrative expenses." The temporary reduction in salaries reduced costs in 1999 by $0.3 million. The reduction in incentive compensation reduced expenses by $0.6 million. Four employees accounted for in research, development and engineering expenses were terminated as part of the 1999 cost reductions, with total cost savings of $0.1 million, net of severance benefits. Non-refundable engineering fees, which serve to offset expenses, declined by $0.3 million in 1999 compared to 1998.
OTHER OPERATING EXPENSES
Intangible amortization expense for 1999 was $6.5 million, an increase of $1.3 million, or 25%, from $5.2 million in 1998. This increase was primarily due to incurring a full year of amortization of intangible assets associated with the Hittman acquisition in 1998. Interest expense was $13.4 million in 1999, an increase of $2.8 million, or 27%, from $10.6 million in 1998. This increase was due to the combination of a full year of interest expense in 1999 related to the 1998 acquisition of Hittman and higher interest rates in 1999 as compared to 1998. Other expense was $1.3 million in 1999, an increase of $0.9 million from $0.4 million in 1998. The increase resulted primarily from a write down of our investment in an unaffiliated company that we acquired in conjunction with our sale of Greatbatch Scientific.
PROVISION FOR INCOME TAXES
Our effective tax rate declined to 26% in 1999 from 37% in 1998. Our recapture of federal alternative minimum tax credits at a 20% tax rate resulted in a rate differential of 15% from the federal statutory rate. We also benefited from state tax credits.
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Loss from continuing operations was $1.7 million for 1999 compared to income of $0.7 million for 1998. The decrease was due primarily to an increase in cost of goods sold and higher other expenses in 1999 as compared to 1998. Diluted earnings per share from continuing operations for 1999 were ($0.14) versus $0.06 for 1998.
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NET INCOME (LOSS)
Net loss was ($2.3) million for 1999, a $3.0 million decrease from net income of $0.7 million for 1998. This decrease was primarily due to an increase in cost of goods sold and higher other expenses, as described above, as well as the nonrecurring cumulative effect of an accounting change which resulted in a charge of $0.6 million, net of taxes. The net loss per share was ($0.18) in 1999, compared with net income per share of $0.06 in 1998, both assuming dilution.
LIQUIDITY AND CAPITAL RESOURCES
We strengthened our financial position in 2000 through the successful completion of our initial public offering. All of the net proceeds from the initial public offering were used to pay down a portion of our senior debt. We used the proceeds from a private sale of our stock prior to consummation of the IPO to pay off the debt we assumed in conjunction with our purchase of BEI. We also redeemed $5.0 million of our 13% senior subordinated notes. As a consequence, our debt to equity ratio fell to 25% at December 29, 2000 as compared to 287% at December 31, 1999. We further enhanced our financial position in the first quarter of 2001 through the consummation of a new credit facility. The net proceeds from a new $40.0 million term loan were used to pay off all previously existing senior and subordinated debt.
LIQUIDITY
At March 30, 2001, we had $0.3 million of cash and cash equivalents. Cash provided by operating activities in the first quarter of 2001 was $2.5 million compared to $4.6 million in the first quarter of 2000. The decrease in cash provided by operating activities in the first quarter of 2001 as compared to that of 2000 was primarily due to increases in accounts receivable and inventories, necessitated by the first quarter 2001 sales level and anticipated customer demand. As of December 29, 2000, we had minimal cash and cash equivalents due to the prepayments of our debt. Cash provided by operating activities in 2000 was $18.2 million compared to $9.0 million and $9.1 million in 1999 and 1998, respectively. The increase in cash provided by operating activities in 2000 when compared to 1999 was primarily due to an increase in operating income, the receipt of refunds from state tax credits and previously-paid income taxes and a reduction in net operating assets. Cash provided by operating activities declined in 1999 as from 1998 levels primarily due to a net loss in 1999 compared to net income of $0.7 million in 1998, offset by higher non-cash charges in 1999.
Net cash used in investing activities was $2.5 million in the first quarter of 2001 and $2.2 million in the first quarter of 2000. Capital expenditures were $1.6 million and $1.9 million for the first quarters of 2001 and 2000, respectively. Cash used in investing activities was $3.4 million, $8.8 million and $83.4 million for 2000, 1999 and 1998, respectively. Capital expenditures were $4.5 million, $8.5 million and $6.2 million for 2000, 1999 and 1998, respectively. Our acquisition of Hittman significantly impacted cash used in investing activities in 1998.
Cash provided by financing activities was $0.2 million in the first quarter of 2001, compared with cash used in financing activities of $3.8 million in 2000. In January 2001, we used $40.0 million of proceeds from a new term loan and cash generated by operating activities to pay off the remaining $15.2 million of our senior debt, and the remaining $18.3 million of our 13% senior subordinated notes. We also prepaid $5.0 million of the new term loan by March 30, 2001. Cash used in financing activities in the first quarter of 2000 was primarily the result of debt repayments. Cash used in financing activities was $18.6 million and $0.4 million in 2000 and 1999, respectively, compared with cash provided by financing activities of $76.1 million in 1998. In 2000, we used the proceeds from our initial public offering and cash generated by operating activities to prepay or make regularly scheduled payments of $94.8 million on our senior debt, including our revolving line of credit. We redeemed $5.0 million of our 13% subordinated notes and purchased $2.0 million of our common stock, which we currently hold as treasury shares, from the holder of the redeemed notes. The stock was valued at the initial public offering price of $16.00 per share. In 2000, we also sold $3.0 million of our stock to the
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previous owner of BEI and used these proceeds to pay off the $2.7 million in debt we assumed in the BEI acquisition. Cash provided by financing activities in 1999 and 1998 was primarily the result of transactions related to our acquisition of Hittman and debt repayments.
We believe that cash generated from operations and proceeds from this offering will be sufficient to meet our working capital needs and planned capital expenditures for the near term. Capital expenditures for 2001 are expected to be approximately $8.2 million, of which approximately $2.9 million will be for capital supporting new product development. Should suitable investment opportunities arise during the second half of fiscal 2001, we believe that our earnings, cash flows and balance sheet will permit us to obtain additional debt or equity capital, if necessary. There can be no assurance, however, that additional financing will be available to us or, if available, that it can be obtained on a timely basis or on terms acceptable to us.
CAPITAL STRUCTURE
Our capital structure consists of interest-bearing debt and equity. Interest-bearing debt as a percentage of our total capitalization increased to 21% at March 30, 2001 compared to 20% at December 29, 2000. Our long-term debt at March 30, 2001 consisted of $35.0 million in a term note and $0.5 million in borrowings under our revolving line of credit. Interest-bearing debt as a percentage of our total capitalization decreased to 20% at December 29, 2000 compared to 74% at December 31, 1999, primarily due to the use of the net proceeds from our initial public offering to pay down a portion of our senior debt. Our long-term debt at December 29, 2000 consisted of subordinated notes and senior debt. Senior debt was comprised of Term A and Term B loans and a $20.0 million revolving line of credit.
In January 2001, we entered into a $60.0 million credit facility consisting of a $40.0 million term loan and a $20.0 million revolving line of credit. Both the term loan and the revolving line of credit have a term of five years and mature on January 1, 2006. The new credit agreement is secured by our accounts receivable and inventories and requires us to comply with various quarterly financial covenants related to EBITDA, as it is defined in the credit agreement, and ratios of leverage, interest and fixed charges as they relate to EBITDA. Both the term loan and revolving line of credit bear interest at a rate that varies with our level of leverage. At current leverage levels, the applicable interest rates for both the term loan and the revolving line of credit are prime less 1.0% or LIBOR plus 1.25%, at our option. At June 1, 2001, the weighted average interest rate for the term loan was 5.34% and there was nothing outstanding under the revolving line of credit.
We used the proceeds from the new term loan to pay off the remaining senior debt and the senior subordinated notes that were outstanding as of December 29, 2000, plus accrued interest and a call premium. At that date, there was $18.3 million principal amount outstanding under our 13% senior subordinated notes, $6.2 million outstanding under our Term A loan facility and $9.0 million outstanding under our Term B loan facility. There were no amounts outstanding under the revolving line of credit. At December 29, 2000, the weighted average interest rate for our Term A loans was 10.3% and the weighted average interest rate for our Term B loans was 10.5%. Associated with this debt prepayment was an extraordinary charge recorded in the first quarter of 2001 in the amount of $3.0 million, net of tax.
In June 2001, in conjunction with our acquisition of Sierra, we amended our existing $60.0 million credit facility with a consortium of banks by increasing the total size of the facility to $100.0 million. The amended facility consists of an $80.0 million term loan and a $20.0 million revolving line of credit. Both the term loan and the revolving line of credit have a term of five years, maturing in July 2006. We used the amended facility to finance the acquisition of Sierra. At current leverage levels, the applicable interest rates for both the term loan and the revolving line of credit are prime, or LIBOR plus 2.125%, at our option.
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INFLATION
We do not believe that inflation has had a significant effect on our operations to date.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Under the amended credit facility, both the term loan and any borrowings under the line of credit bear interest at fluctuating market rates. An analysis of the impact on our interest rate sensitive financial instruments of a hypothetical 10% change in short-term interest rates shows an impact on expected 2001 earnings of approximately $0.5 million of higher or lower earnings, depending on whether short-term rates rise or fall by 10%. The discussion and the estimated amounts referred to above include forward-looking statements of market risk which involve certain assumptions as to market interest rates. Actual future market conditions may differ materially from such assumptions. Accordingly, the forward-looking statements should not be considered projections of future events by our company.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, or SFAS, No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. In June 2000, the FASB issued SFAS No. 138, which amends certain provisions of SFAS No. 133 to clarify four areas causing difficulties in implementation. The amendment included expanding the normal purchase and sale exemption for supply contracts, permitting the offsetting of certain intercompany foreign currency derivatives and thus reducing the number of third party derivatives, permitting hedge accounting for foreign-currency denominated assets and liabilities and redefining interest rate risk to reduce sources of ineffectiveness. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. Under SFAS No. 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. We adopted SFAS No. 133 effective December 30, 2000, which was the first day of fiscal 2001. We do not expect the adoption of SFAS No. 133 to have a significant impact on our consolidated financial position, results of operations or cash flows.
PROPOSED ACCOUNTING STANDARD
In February 2001, the FASB released a revised exposure draft for a proposed SFAS, "Business Combinations and Intangible Assets--Accounting for Goodwill." The proposed standards would, among other things:
- prohibit the use of the pooling-of-interests method of accounting for business combinations;
- require that goodwill not be amortized in any circumstance; and
- require that goodwill be tested for impairment annually or when events or circumstances occur between annual tests indicating that goodwill of a reporting unit might be impaired.
The FASB plans to simultaneously issue two Statements on business combinations and goodwill and intangible assets. One of those Statements will incorporate its decisions related to accounting and reporting for a business combination (the Statement on business combinations). The other Statement will incorporate its decisions on the accounting for goodwill and other purchased intangible assets subsequent to an acquisition (the Statement on goodwill and intangible assets). The FASB expects to vote on both Statements in late June 2001 and issue the Statements in the second half of July 2001. The proposed standards would take full effect in fiscal 2002. The provisions of any final standards could differ from those reflected in the exposure draft. As a result, the actual application of any final standard could result in different effects than those described above. We have not tested goodwill for impairment under the proposed standards.
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BUSINESS
OVERVIEW
We are a leading developer and manufacturer of power sources, feedthroughs and wet tantalum capacitors used in implantable medical devices. We also develop and manufacture other components used in implantable medical devices, and we believe that we are a preferred supplier of power sources and components. We offer technologically advanced, highly reliable and long lasting products for implantable medical devices and enable our customers to introduce implantable medical devices that are progressively smaller, longer lasting, more efficient and more functional. We leverage our core competencies in technology and manufacturing to develop and produce power sources for commercial applications that demand high performance and reliability, including aerospace, oil and gas exploration and oceanographic equipment. Our customers utilize our specially designed proprietary power sources and components in their products. We believe that our proprietary technology, close customer relationships, market leadership and dedication to quality provide us with significant competitive advantages over our competitors and create a barrier to entry for potential market entrants.
Mr. Wilson Greatbatch patented the implantable pacemaker in 1962. In 1970, Mr. Greatbatch founded Wilson Greatbatch Ltd., our predecessor. In July 1997, DLJ Merchant Banking led a leveraged buyout of Wilson Greatbatch Ltd. Our company was incorporated in connection with the 1997 leveraged buyout to acquire Wilson Greatbatch Ltd., which is now our wholly-owned subsidiary. We acquired Hittman Materials and Medical Components, Inc., now Greatbatch-Hittman, Inc., in August 1998 to expand and complement our product lines. Hittman, a medical components manufacturer, produces feedthroughs and electrode components for implantable medical devices. Feedthroughs are among the most critical components used in implantable medical devices and both feedthroughs and electrodes are key component technologies.
IMPLANTABLE MEDICAL DEVICE INDUSTRY
OVERVIEW
The following table sets forth the main categories of battery-powered implantable medical devices and the principal illness or symptom treated by each device:

DEVICE                                                    PRINCIPAL ILLNESS OR SYMPTOM
------                                                    ----------------------------
Pacemakers..............................................  Abnormally slow heartbeat
Implantable Cardiac Defibrillators (ICDs)...............  Rapid and irregular
                                                          heartbeat
Left ventricular assist devices.........................  Heart failure
Hearing assist devices..................................  Hearing loss
Neurostimulators........................................  Tremors or chronic pain
Drug pumps..............................................  Diabetes or chronic pain	

The implantable medical device industry is expected to grow primarily as a result of:
- advances in medical technology that will allow physicians to use implantable medical devices as a substitute for, or in conjunction with, prescription drugs, to treat a wider range of heart diseases, such as atrial fibrillation and congestive heart failure;
- increased use of recently developed implantable medical devices, including left ventricular assist devices, hearing assist devices, neurostimulators and drug pumps;
- expansion of indications, or uses, for implantable medical devices;
- the aging population, which is expected to require an increasing number of pacemakers, ICDs and other implantable medical devices;
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- a combination of smaller, lighter, more efficient and more functional devices and longer-lasting power sources which will be easier for physicians to implant and will be less intrusive to recipients; and
- increased market penetration beyond the United States and other developed countries.
Cardiovascular Device Update has predicted that ICD revenues will grow faster than pacemaker revenues in the next three to five years. The faster growth predicted for the ICD market is based on continued penetration of existing clinical indications and anticipated expansion into new indications.
MARKET OPPORTUNITY
The market for our power sources and components benefits directly from the growth of the implantable medical device industry. Manufacturers are dependent on advances in power sources and component technology to make their devices smaller, longer lasting, more efficient and more functional. In addition, manufacturers of implantable medical devices must be approved by the FDA, and have significant exposure to product liability claims and damages. To minimize risk and facilitate the FDA approval process, which can be lengthy, manufacturers of implantable medical devices generally require the highest quality, most reliable power sources and components available from proven suppliers. As a result, manufacturers generally enter into long-term contracts with their suppliers and often collaborate with them on power source and component development. We believe that our proprietary technology, close customer relationships, market leadership and dedication to quality provide us with significant competitive advantages over our competitors and create a barrier to entry for potential market entrants.
STRATEGY
Our objective is to enhance our position as a leading developer and manufacturer of power sources and other components for implantable medical devices. We intend to:
- EXPAND OUR PROPRIETARY TECHNOLOGY PORTFOLIO THROUGH CONTINUOUS TECHNOLOGICAL INNOVATION AND CONTINUE TO FOCUS OUR RESEARCH, DEVELOPMENT AND ENGINEERING EFFORTS ON PIONEERING POWER SOURCES AND ADVANCED COMPONENTS FOR IMPLANTABLE MEDICAL DEVICES. We commit substantial resources to research, development and engineering and believe that this commitment has enabled us to be at the forefront of the new technologies that are expected to drive the growth of the implantable medical device market in the foreseeable future. In 1999, we introduced a line of capacitors utilizing proprietary wet tantalum technology. Our innovative use of this technology enables us to produce capacitors that are significantly smaller than those currently used and offer improved electrical performance. We believe that our focus on technology has led to strong relationships with our customers and provides us significant advantages in maintaining our continued leadership within our markets.
- ENHANCE OUR POSITION AS AN INTEGRATED COMPONENT SUPPLIER TO THE IMPLANTABLE MEDICAL DEVICE INDUSTRY BY BROADENING OUR PRODUCT LINE TO INCLUDE A MORE COMPREHENSIVE RANGE OF POWER SOURCES AND COMPONENTS. We believe that there is a significant opportunity to provide our customers with substantially all of the key components for their products, other than microelectronics. Our position as a leading manufacturer of implantable medical device components allows us to provide a broader range of product components than any of our competitors. As a result of our 1998 acquisition of Hittman and the internal expansion of our components business, we are able to provide a major implantable medical device manufacturer with most of the components used in its pacemakers. Our acquisition of Sierra in June 2001 added EMI filters and capacitors to our product line, further enhancing our position as a provider of enabling technologies to manufacturers of implantable medical devices. We intend to continue to expand our product
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line. We believe that our customers value the benefits of a stable, reliable, quality-driven supplier which is able to provide a broad range of components to meet their product requirements.
- CONTINUE TO COLLABORATE WITH OUR CUSTOMERS TO JOINTLY DEVELOP NEW TECHNOLOGIES THAT ENABLE THEM TO DEVELOP AND MARKET INCREASINGLY MORE EFFECTIVE AND TECHNOLOGICALLY INNOVATIVE PRODUCTS. Our close relationships with our customers give us significant advantages in anticipating and meeting their requirements and needs. We intend to continue to work closely with our customers to develop innovative medical devices that utilize our specially designed, proprietary power sources and components. We are currently collaborating with two leading manufacturers of ICDs to incorporate customized configurations of our new capacitors into their most advanced product programs. We believe that by integrating our development efforts with those of our customers, we can continue to create innovative and technologically superior products and strengthen our position as a single source supplier.
- ENTER INTO STRATEGIC ALLIANCES AND MAKE SELECTIVE ACQUISITIONS THAT COMPLEMENT OUR CORE COMPETENCIES IN TECHNOLOGY AND MANUFACTURING FOR BOTH IMPLANTABLE MEDICAL DEVICES AND OTHER DEMANDING COMMERCIAL APPLICATIONS. We regularly review strategic opportunities to acquire or license technologies. Through our 1998 acquisition of Hittman, we added two key component technologies, feedthroughs and electrodes, to our product offerings. In June 2001, we added EMI filters and capacitors to our product line by acquiring Sierra. We are currently working with strategic partners to develop rechargeable battery systems and technology for automatic external defibrillators. We believe that strategic alliances and selective acquisitions will enable us to accelerate the development of new technologies and grow our leading market share position.
PRODUCTS
We design and manufacture a variety of power sources, capacitors and components, such as feedthroughs, electrodes and precision components for implantable medical devices. Our technology is also used in a number of demanding commercial applications, including aerospace, oil and gas exploration and oceanographic equipment. The table set forth on page 3 of this prospectus provides more detailed information about our principal products.
IMPLANTABLE POWER SOURCES
The power sources that we produce are batteries. A battery is an electrochemical device that stores energy and releases it in the form of electricity. To generate an electrical current, electrons are first released from one part of the battery, called the anode or negative electrode. This flow of electrons, known as a current, travels to a load or device outside the battery. After powering the device, the electron flow reenters another part of the battery, called the cathode or positive electrode. As electrons flow from the anode to the device being powered by the battery, ions released from the anode cross through an electrolyte, which consists of one or more chemical compounds that facilitate the flow of ions to the cathode. The ions react with the cathode in order to complete the circuit. Separators are typically used inside the battery as electrical insulators to divide the anode and the cathode to prevent mechanical contact between them, which would result in the rapid depletion of the battery cell.
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The following diagram illustrates the battery process described in the paragraph above:
[BATTERY PROCESS DIAGRAM]
From the late 1950s to the early 1970s, implantable medical devices, such as pacemakers, were powered by zinc/mercuric oxide batteries. These batteries typically lasted two to three years, often failed without warning, were large and bulky and generated hydrogen gas, making it impossible to seal the battery. In the early 1970s, we introduced lithium/iodine batteries as power sources for pacemakers. Lithium batteries manufactured by us and manufactured by others under license from us are now a principal power source for pacemakers. Pacemaker batteries utilizing our technology last approximately six years and provide high reliability and predictability. In the mid 1980s, we introduced lithium/silver vanadium batteries for powering ICDs. These batteries provide the higher power levels required by an ICD with a high degree of reliability and at least a five year battery life. Our lithium/silver vanadium oxide batteries have become a principal power source of ICDs.
In 1996, we introduced a lighter weight titanium-encased lithium/carbon monofluoride battery as the next generation pacemaker battery. These batteries offer improved pacemaker performance in several areas, including:
- pacemaker weight reduction of up to 25%;
- improved electrical performance, which is more suitable for use with the latest pacemaker microelectronics; and
- 10-15% longer battery life than comparable products.
In 1996, we introduced a new process for cathode manufacturing that enabled the production of significantly thinner cathodes than previously possible. As a result of this new cathode manufacturing process and other design improvements, our newest generation of ICD batteries is the thinnest commercially available and is up to 50% thinner than many existing models. Over the past few years, the decrease in battery size has contributed significantly to decreases in the size of ICDs, making these devices easier to implant.
CAPACITORS
Capacitors, which are used in ICDs, perform the critical function of storing electrical pulses before delivery to the heart. An ICD typically has two capacitors. Historically, ICDs utilized aluminum-based
38

capacitors. In the fourth quarter of 1999, we introduced wet tantalum hybrid capacitors commercially for use in ICDs, which provide a number of advantages over aluminum-based capacitors. Our wet tantalum hybrid capacitors, which combine liquid electrolytes and ruthenium oxide cathode material with a tantalum anode component, provide a unique combination of high voltage and high energy storage capacity. This combination enables energy density not achievable with competing technologies. Our capacitors can be manufactured in many sizes and shapes to meet the specific needs of our customers.
To produce our capacitors, we have licensed wet tantalum technology from the Evans Capacitor Company. We are the exclusive licensee for implantable medical applications of this technology. We have also developed our own portfolio of patents and patent applications covering improvements that we have made to Evans' capacitor technology. We believe that we are the only supplier of wet tantalum capacitors for the implantable medical device industry. In 1997, we entered into an agreement with a major ICD manufacturer to use our capacitor technology in their next generation of ICDs which was launched in the first quarter of 2000.
MEDICAL COMPONENTS
We manufacture feedthroughs, electrodes and other precision components that are utilized in implantable medical devices. Feedthroughs and electrodes are critical components of these devices that deliver electrical energy to the heart.
FEEDTHROUGHS. Feedthroughs are components that transmit electrical signals from inside an implantable medical device to the electrodes that transmit the signals to the body. Feedthroughs consist of an outer metallic structure called a flange, an electrical insulator made of ceramic or glass material, and wire connectors called poles that carry electrical signals from within the device. Our feedthroughs use a ceramic to metal seal that is substantially more durable than a traditional glass to metal seal. We also manufacture a feedthrough that includes a filtering capacitor that can filter out electromagnetic interference, such as signals from other implantable medical devices or cellular phones.
We design and manufacture 35 types of feedthroughs. Each of our feedthroughs is designed specifically for a particular customer device. We are often the sole source of feedthroughs for our customers. In 2000, approximately 95% of our feedthroughs were used in pacemakers and ICDs, with the balance used primarily in left ventricular assist devices, hearing assist devices, drug pumps and neurostimulators. We are currently working with a number of medical device manufacturers to develop hermetic feedthroughs for the next generation of implantable medical devices and applications, including neurostimulators, middle ear devices and muscle stimulation devices.
ELECTRODES. Electrodes are components used in pacemakers and ICDs that deliver the electrical signal from the feedthrough to the heart to restore its normal rhythm. By coating the electrode with chemical compounds, we can enhance its electrical properties and therefore better deliver energy to the heart. Some electrode tips are designed to contain medication, such as steroids, to prevent scarring of the heart tissue following electrode implantation.
We design and manufacture a variety of coated electrodes, some of which have tips that can contain medication. We believe that our experience with physical deposition processes, such as sputtering and powder metallurgic techniques, has enabled us to produce high quality coated surfaces utilizing almost any combination of biocompatible coating surfaces.
PRECISION COMPONENTS. We design and manufacture miniature precision components and subassemblies primarily for pacemaker and ICD manufacturers. Our precision components are machined or molded to adhere to tolerances up to one ten-thousandth of an inch. To manufacture precision components, we typically use various alloys of stainless steel, platinum, titanium, aluminum and brass, as well as plastics and composites. We also are the exclusive supplier of a critical drug pump
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subassembly for a manufacturer of implantable drug pumps. Although our primary focus is to develop and manufacture precision components for implantable medical devices, we also serve the general medical equipment market and the aerospace industry.
COMMERCIAL POWER SOURCES
We have developed specialized power source technologies that are functional in high temperatures or under high shock and vibration. The majority of the commercial power sources that we sell are used in oil and gas exploration, including recovery equipment, pipeline inspection gauges, down-hole pressure measurement systems and seismic surveying equipment. We also supply power sources to NASA for its space shuttle program. In addition, our commercial power sources have been used for emergency position locating beacons and locator transmitters, classified governmental uses, electronic circuit breakers for industrial applications, weather balloon instrumentation, electricity transmission cable lighting detectors, wear monitors for train cables and scientific equipment used in Antarctica.
PRODUCT LINES UNDER DEVELOPMENT
RECHARGEABLE LITHIUM ION BATTERIES. We are currently developing a line of rechargeable lithium ion batteries that is expected to broaden and complement our current lines of lithium batteries. A number of new medical devices require rechargeable batteries, including:
- LEFT VENTRICULAR ASSIST DEVICES that are being developed to treat heart failure use external and internal batteries as power sources, both of which must be rechargeable. We are developing lithium ion rechargeable technology to produce lighter batteries with increased power and longer life.
- IMPLANTABLE HEARING ASSIST DEVICES that are used to treat patients who cannot use conventional hearing aids. These batteries are compact and are capable of providing low levels of current with infrequent recharging.
- NEUROSTIMULATORS AND DRUG PUMPS that are used for indications such as tremors, diabetes and chronic pain. Since these devices are sometimes implanted in young patients, the use of our rechargeable battery technology with extended device life should reduce the number of replacement implants needed throughout the life of the patient.
IMPLANTABLE PUMP TECHNOLOGY. We have developed proprietary technology that has applications in implantable devices that are designed to deliver small quantities of drugs or other fluids to a patient. Several of our technologies are critical to these devices, including the power source, the feedthroughs and the pumping mechanism that moves the fluid. Currently, one of our customers has regulatory approval in Europe for a device that utilizes our implantable pump technology and has recently filed with the FDA for regulatory approval in the United States.
RESEARCH, DEVELOPMENT AND ENGINEERING
Our position as a leading developer and manufacturer of power sources for implantable medical devices is largely the result of our long history of technological innovation. We invest substantial resources in research, development and engineering. Our scientists, engineers and technicians focus on improving existing products, expanding the use of our products and developing new products. In addition to our internal technology and product development efforts, we maintain close relationships with leading research organizations, including Alfred University, Clarkson University, the Jet Propulsion Laboratory, the applied physics department of Johns Hopkins University, NASA, Sandia-National Laboratories, the State University of New York at Buffalo and Villanova University. These relationships include funding research efforts, licensing researchers' technology and assisting in building prototypes.
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Our research, development and engineering team is responsible for a number of pioneering developments in the implantable medical device industry including:

    DATE                        COMMERCIAL INTRODUCTION                       INDUSTRY IMPACT
    ----                        -----------------------                       ---------------
1972                    First lithium anode battery               Industry standard for pacemakers

1974                    First ceramic-to-metal seal for           Industry standard for hermetic sealing
                        implantable devices                       of devices

1980                    First oxyhalide/interhalogen batteries    Enabled commercial batteries to perform
                                                                  at lower temperatures with very high
                                                                  energy density

1981                    First implantable pump capable of         Enabled implantable drug delivery system
                        passing bubbles

1987                    First implantable lithium/silver          Enabled commercial viability for ICDs
                        vanadium oxide battery

1996                    First titanium-encased lithium/carbon     Enabled weight reduction and improved
                        monofluoride pacemaker batteries          electrical performance for advanced
                                                                  microelectronics

1999                    First wet tantalum capacitors             Enabled smaller sizes of ICDs and
                                                                  increased design flexibility	

PATENTS AND PROPRIETARY TECHNOLOGY
We rely on a combination of patents, licenses, trade secrets and know-how to establish and protect our proprietary rights to our technologies and products. To date, we have been granted 166 U.S. patents and 182 foreign patents. We also have 155 U.S. and 184 foreign pending patent applications at various stages of approval. During the past three years, we have received 49 new U.S. patents, of which 23 were received in 2000. Corresponding foreign patents have been issued or are expected to be issued in the near future. Often, a single product is protected by several patents covering various aspects of the design. We believe this provides broad protection of the concepts employed. The following table provides a breakdown of our patents as of June 1, 2001 by product type:

                                                      NUMBER OF        NUMBER OF
PRODUCT                                            PATENTS GRANTED   ACTIVE PATENTS
-------                                            ---------------   --------------
Batteries -- Pacemakers..........................        181               19
Batteries -- ICDs................................         90               78
Capacitors.......................................          7                7
Feedthroughs.....................................          2                2
Pumps............................................          9                9
Batteries -- Commercial..........................         22               13
Batteries -- Rechargeable........................          8                8
Batteries -- Lithium/carbon monofluoride.........          5                5
Other products...................................         24                7
                                                         ---              ---
Total............................................        348              148
                                                         ===              ===	

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The following table sets forth the expiration dates of our material patents as of June 1, 2001:

DESCRIPTION OF PATENT                                           EXPIRATION DATE
---------------------                                           ---------------
Defibrillator cell design...................................      May 2006
Defibrillator cell design...................................      May 2006
Serpentine electrode design for prismatic cell..............      May 2011
Butterfly electrode assembly................................   September 2011
Butterfly electrode assembly................................   September 2011
Multiplate electrode design connected by bridge.............   September 2011
Insulating upper bag for increased cell reliability.........      May 2012
Halogenated polymer fiber separator for electrochemical
  cell......................................................    October 2013
Sheet cathode...............................................    November 2013
Sheet cathode...............................................    November 2013
High shock and vibration resistant cell design..............    February 2015
Aqueous blended electrode material..........................     March 2015
Carbonate electrolyte additives for defibrillator cells.....     March 2015
Separator insert for oxyhalide cell.........................    February 2016
Dual connection tab current collector for carbon
  monofluoride cells........................................      July 2016
Hermetic seal using a single close ball.....................    October 2016
Improved electrolyte/cathode ratio for carbon monofluoride
  cells.....................................................    November 2016
Ultrasonically coated substrate for use in a capacitor and
  method of manufacture.....................................      May 2017
Hermetically sealed wet tantalum capacitor..................      May 2017
Separator for use in carbon monofluoride cells..............      June 2017
Electrode edge design for increased energy density for
  carbon monofluoride cells.................................     August 2017
Insulating upper bag for increased cell reliability.........     April 2018	

In addition, we are also a party to several license agreements with third parties pursuant to which we have obtained, on varying terms, the exclusive or non-exclusive rights to patents held by third parties. We have also granted rights in our own patents to others under license agreements. We used three material patents that expired in January 2001 in connection with our production of pacemaker batteries. The primary impact on our business as a result of the expiration of these patents is the termination of the related royalties paid by Medtronic. Otherwise, we expect the impact of the expiration of these patents on our product line to be immaterial.
We license the basic capacitor technology used in our defibrillator capacitors from Evans Capacitor Company. The license extends throughout the lives of the related patents, which expire in 2010, 2013 and 2014. The license can be cancelled if we default under the license agreement and fail to cure the default. A cancellation of the license would seriously impair our ability to produce our entire line of capacitors. We license the anode technology we use in our rechargeable lithium ion batteries from AT&T. The license extends throughout the lives of the related patents, one of which expired in 2000 and one of which will expire in 2002. The license can be cancelled if we default under the license agreement and fail to cure the default. A cancellation of the license may impair our ability to produce our entire line of rechargeable lithium ion batteries. We do not expect the expiration of the license, as a result of the expiration of the patents underlying it, to have a material effect on any of our product lines.
It is our policy to require our executive and technical employees, consultants and other parties to execute confidentiality agreements. These agreements prohibit disclosure of confidential information to third parties except in specified circumstances. In the case of employees and consultants, the
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agreements generally provide that all confidential information relating to our business is the exclusive property of our company.
MANUFACTURING AND QUALITY CONTROL
Our principal manufacturing facilities are in Clarence, New York, Cheektowaga, New York, Canton, Massachusetts and Columbia, Maryland. Our three New York manufacturing facilities produce implantable power sources, capacitors, commercial power sources and components. Our Canton, Massachusetts facility produces commercial power sources. Our Columbia, Maryland facility produces feedthroughs, electrodes and other components. We test our implantable power sources at our Wheatfield, New York facility.
In 1999 and 2000, we modernized our facilities and a number of our manufacturing lines, processes and equipment. These manufacturing improvements have enabled us to increase the quality and service life of our power sources and other components and increase our manufacturing capacity. Key resources that allow us to manufacture subassemblies include a full model shop, a precious metals machining area, injection molding equipment and a Class 10,000 clean room.
We primarily manufacture small lot sizes, as most customer orders range from a few hundred to thousands of units. As a result, our ability to remain flexible is an important factor in maintaining high levels of productivity. Each of our production teams receives assistance from a manufacturing support team, which typically consists of representatives from our quality control, engineering, manufacturing, materials and procurement departments.
Our quality system is based upon an ISO documentation system and is driven by a master validation plan that requires rigorous testing and validation of all new processes or process changes that directly impact our products. Our New York facilities are ISO-9001 certified, which requires compliance with regulations regarding quality systems of product design, supplier control, manufacturing processes and management review. This certification can only be achieved after completion of an audit conducted by an independent authority. Our New York facilities are audited by the British Standards Institute and are also certified by the British Standards Institute to the more rigorous EN-46001 standard that is usually reserved for manufacturers of medical devices. Our Columbia, Maryland facility is ISO-9002 certified and is audited by TUV Rheinland of North America, an independent auditing firm that specializes in evaluating ISO quality standards. Our Canton, Massachusetts facility is ISO-9001 and ISO-14001 certified and is audited by NSAI (National Standards Authority of Ireland), which operates under the National Standards Authority of Ireland Act 1996 on behalf of the Minister of Enterprise, Trade and Employment. To maintain certification, all facilities must be reexamined every six months by their respective certifying bodies.
SALES AND MARKETING
We utilize a combination of direct and indirect sales methods, depending on the particular product. In 2000, approximately 70% of our products were sold in the United States.
We market and sell our implantable power sources and capacitors directly to manufacturers of implantable medical devices. The majority of our implantable power source customers contract with us to develop custom batteries or capacitors to fit their specific product specifications. As a result, we have established close working relationships between our internal program managers and our customers. We market our power source products and technologies at industry meetings and trade shows, including CardioStim and North American Society of Pacing and Electrophysiology, or NASPE.
We sell feedthroughs, electrodes and other precision components directly to manufacturers. Internal sales managers support all activity, and involve engineers and materials professionals in the sales process to address customer requests appropriately. As in the implantable power source and
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capacitor sales process, we have established relationships directly with leading manufacturers of implantable medical devices. We market our precision components, feedthroughs and electrodes by participating in the annual Medical Design and Manufacturing trade show and by producing printed and electronic marketing materials for distribution to prospective customers.
We sell our commercial power sources either directly to the end user, directly to manufacturers that incorporate our products into other devices for resale, or to distributors who sell our products to manufacturers and end users. Our sales managers are trained to assist our customers in selecting appropriate battery chemistries and configurations. We market our commercial power sources at various technical trade meetings, including the annual Petroleum Offshore Technology Conference and Offshore Europe. We also place print advertisements in relevant trade publications.
Firm backlog orders at December 29, 2000 and December 31, 1999 were $29.7 million and $16.2 million, respectively. Most of these orders were expected to be shipped within one year. The $13.5 million increase was primarily due to backlog from our new line of wet tantalum capacitors and from BEI, which we acquired in August 2000.
CUSTOMERS
Our products are designed to provide reliable, long lasting solutions that meet the evolving requirements and needs of our customers and the end users of their products. Our medical products customers include leading implantable medical device manufacturers such as Guidant, St. Jude Medical and Medtronic. In 2000, Guidant accounted for approximately 34% of our revenues and St. Jude Medical accounted for approximately 31% of our revenues. Our commercial products customers are primarily companies involved in the aerospace, oil and gas exploration and oceanographic industries.
In February 1999, we entered into a power source supply agreement with Guidant. Pursuant to the agreement, Guidant purchases power sources from us for use in its implantable medical devices. Guidant also separately purchases components from us for use in its implantable medical devices. Our power source supply agreement with Guidant expires on December 31, 2001 and can be renewed for additional one year periods upon mutual agreement.
In April 1997, we entered into a supply agreement with St. Jude Medical. In accordance with this agreement, we are the primary supplier of many components used in their pacemakers and ICDs, except for microprocessors and capacitors. We will also be the exclusive supplier of batteries to St. Jude Medical. This agreement was renegotiated in July 2000 and expires on December 31, 2003, with the ability of St. Jude to extend the agreement for two one-year extensions.
In March 1976, we entered into a technology transfer agreement and license agreement with Medtronic. Our license agreement provides Medtronic with the nonexclusive right to use our proprietary technology to manufacture its own batteries. The license agreement allows Medtronic to manufacture lithium/iodine or lithium/halide batteries, but does not permit Medtronic to manufacture batteries using our new titanium lithium/carbon monofluoride technology. In accordance with the license agreement, Medtronic pays us a royalty for each battery produced by it for use in each medical device that it sells. At the time we entered into the license agreement with Medtronic, there were a number of competing battery technologies. Our management believed that licensing our proprietary technology to Medtronic, which was the industry leader at that time, would help make our technology the industry standard. Our license agreement does not terminate so long as Medtronic uses any of our patented technology. However, in the absence of new patents, we do not expect to receive significant royalties from Medtronic for production and sales after January 2001.
In July 1991, we entered into a defibrillator battery supply agreement with Medtronic. In accordance with the agreement, we provide Medtronic with lithium/silver vanadium oxide batteries for their ICDs. Our supply agreement with Medtronic expires on July 31, 2001.
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SUPPLIERS AND RAW MATERIALS
Lithium, iodine and metal cases are the most significant raw materials that we use to manufacture our batteries. In the past, we have not experienced any significant interruptions or delays in obtaining raw materials. We seek to minimize inventory levels, which provides us with a reduced risk of obsolescence. Minimizing our inventory levels also enables us to stock materials based on firm order requirements, rather than forecasts and anticipated sales. However, we maintain minimum safety stock levels of critical raw materials. We seek to improve our supply purchase pricing by using bulk purchases, precious metal pool buys and blanket orders and by entering into long-term contracts. Annual minimum purchase levels under these contracts have historically been well below our expected annual usage, and therefore present little risk of liability.
We have long standing relationships with most of our significant suppliers and have conducted business with them for an average of 13 years. Our supply agreements typically have three year terms. Our significant suppliers of raw materials and components accounted for approximately 31% of our purchases in 2000. We believe that there are alternative suppliers or substitute products available for each of the materials we purchase, at competitive prices. Our material supply agreements may be terminated prior to their scheduled expiration dates if there is a material breach by us that remains uncured.
COMPETITION
We currently supply implantable power sources, capacitors, feedthroughs, electrodes and precision components to the implantable medical device market. Our existing or potential competitors include:
- leading implantable medical device manufacturers, such as Guidant, St. Jude Medical and Medtronic, which have vertically integrated operations or may become vertically integrated in the future; and
- smaller companies that concentrate on niche markets.
Medtronic produces power sources for use in implantable medical devices that it manufactures. However, to our knowledge Medtronic does not sell power sources to third parties. Our company and Medtronic are the two major manufacturers of power sources for implantable medical devices. We also compete in the intensely competitive commercial power source market. Our principal competitors in this market are Eagle-Picher Industries and ECO-Tracer. While we believe that the industry perceives our products to be of the highest quality, there are suppliers whose products are perceived to be of comparable quality. Moreover, the commercial power source market is subject to volatility in oil and gas exploration activity. When oil and gas exploration activity has slowed, a number of our competitors have historically reduced battery prices to maintain or gain market share. Quality and technology are the principal bases upon which we compete in both the implantable medical devices market and the commercial power sources market.
GOVERNMENT REGULATION
Except as described below, our business is not subject to direct governmental regulation other than the laws and regulations generally applicable to businesses in the jurisdictions in which we operate, including those federal, state and local environmental laws and regulations governing the emission, discharge, use, storage and disposal of hazardous materials and the remediation of contamination associated with the release of these materials at our facilities and at off-site disposal locations. Our research, development and engineering activities involve the controlled use of, and our products contain, small amounts of hazardous materials. Liabilities associated with hazardous material releases arise principally under the Comprehensive Environmental Response, Compensation and Liability Act and analogous state laws which impose strict, joint and several liability on owners and operators of
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contaminated facilities and parties that arrange for the off-site disposal of hazardous materials. We are not aware of any material noncompliance with the environmental laws currently applicable to our business and we are not subject to any material claim for liability with respect to contamination at any company facility or any off-site location. We cannot assure you, however, that we will not be subject to such environmental liabilities in the future as a result of historic or current operations.
As a component manufacturer, our products are not subject to FDA pre-market approval. However, the FDA and related state and foreign governmental agencies regulate many of our customers' products as medical devices. In many cases, the FDA must approve those products prior to commercialization. In addition, because some of the products produced by our engineered components division may be considered finished medical devices, some of the operations within that division are subject to FDA inspection and must comply with current good manufacturing practices (CGMP) requirements.
RECRUITING AND TRAINING
We dedicate significant resources to our recruiting efforts. Our internal recruiting efforts primarily focus on supplying quality personnel to our business. We also seek to meet our hiring needs through outside sources. We believe that a strong human resources and recruiting effort is necessary to expand our current employee base and maintain our high employee retention rates. We have established a number of programs that are designed to challenge and motivate our employees and we encourage our employees to be proactive in contributing ideas and regularly survey them to collect feedback on ways that our business and operations can be improved.
We provide an intensive training program to our new employees which is designed to educate them on safety, quality, our business strategy and the methodologies and technical competencies that are required for our business and our corporate culture. Our safety training programs focus on such areas as basic industrial safety practices and emergency response procedures to deal with fires or chemical spills. All of our employees are required to participate in a specialized training program that is designed to provide an understanding of our quality objectives. We also have formal, mandatory training for all of our employees in their core competencies on an annual basis. We offer our employees a tuition reimbursement program and encourage them to continue their education at local colleges. Many of our professionals attend seminars on topics that are related to our corporate objectives and strategies. We believe that comprehensive training is necessary to ensure that our employees work in a uniform and consistent manner and that best practices are effectively utilized.
EMPLOYEES
As of June 1, 2001, we had 898 employees, including 182 research, development and engineering personnel, 535 manufacturing personnel and 181 support personnel. We also employ a number of temporary employees to assist us with various projects and service functions. Our employees are not represented by any union and, except for certain executive officers of our company and our subsidiaries, are retained on an at-will basis. We believe that we have a good relationship with our employees.
PROPERTIES
Our executive offices are located in Clarence, New York. The building that houses our executive offices also contains warehouse operations, a variety of support services and capacity for light manufacturing or laboratory space.
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The following table sets forth information, as of June 1, 2001, about all of our principal manufacturing or testing facilities:

LOCATION                             SQ. FT.       OWN/LEASE                   USE
--------                             --------      ---------                   ---
Clarence, NY(1)....................   70,453         Own       Battery manufacturing, development
Clarence, NY(2)....................   20,800         Own       Machining and assembly of components
Clarence, NY(2)....................   18,550        Lease      Machining and assembly of components
Clarence, NY.......................   45,305        Lease      Offices and warehouse
Wheatfield, NY.....................    2,600        Lease      Battery testing
Cheektowaga, NY....................   23,812        Lease      Capacitor manufacturing
Canton, MA(1)......................   32,000         Own       Battery manufacturing, development
Columbia, MD.......................   30,000        Lease      Feedthroughs, electrodes and
                                                               components manufacturing	

(1) Commercial power sources revenues are generated from these facilities.
(2) We own and rent space in part of the same facility.
We believe these facilities are adequate for our current and foreseeable purposes and that additional space will be available when needed.
LEGAL PROCEEDINGS
We are involved in various lawsuits and claims incidental to our business. In the opinion of our management, the ultimate liabilities, if any, resulting from these lawsuits and claims will not materially affect our financial position or results of operations.
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MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
Our directors, executive officers and certain key employees, and their respective ages and positions as of June 1, 2001, are as follows:

NAME                            AGE                              POSITION
----                          --------                           --------
Edward F. Voboril...........     58      President, Chief Executive Officer and Chairman of the
                                         Board
Larry T. DeAngelo...........     54      Senior Vice President, Administration and Secretary
Curtis F. Holmes, Ph.D......     58      Group Vice President, Components and President,
                                         Greatbatch-Hittman, Inc.
Arthur J. Lalonde...........     46      Senior Vice President, Finance
Richard W. Mott.............     42      Executive Vice President and Chief Operating Officer
Susan M. Bratton............     44      Vice President, Corporate Quality
Ernest J. Norman............     55      Director, Investor Relations and Corporate
                                         Communications and Assistant Secretary
Robert C. Rusin.............     42      General Manager, Implantable Power Sources Division
Peter E. Samek..............     48      Vice President, Corporate Development
Esther S. Takeuchi, Ph.D....     47      Vice President, Research and Development
Steven J. Ebel..............     43      General Manager, Electrochem Division
Ricky S. Kline..............     46      General Manager, Implantable Capacitor Division
Robert E. Rich, Jr..........     60      Director
Douglas E. Rogers...........     46      Director
Bill R. Sanford.............     57      Director
Henry Wendt.................     67      Director
David M. Wittels............     36      Director	

EDWARD F. VOBORIL has served as President and Chief Executive Officer of our company and our predecessor since December 1990. Mr. Voboril became Chairman of our Board of Directors in July 1997. Mr. Voboril's career spans over 25 years in the medical device industry. Prior to joining our predecessor in 1990, Mr. Voboril was Vice President and General Manager of the Biomedical Division of PPG Industries. He was previously Vice President and General Manager of the Medical Electronics Division of Honeywell, which was acquired by PPG in 1986. Mr. Voboril currently serves on the board of directors of Analogic Corporation, an electronics company. Mr. Voboril served as President of the Health Care Industries Association of Western New York from July 1995 to July 1998 and currently serves as a member of the board of directors of Adva Med.
LARRY T. DEANGELO has served as our Senior Vice President, Administration since December 2000 and as Secretary since July 1997. Mr. DeAngelo also served as Vice President, Administration of our company and our predecessor from November 1991 to December 2000. Prior to joining our predecessor, Mr. DeAngelo was the Director of International Human Resources of Rockwell International Corporation. Mr. DeAngelo is currently a member of the Payment and Health Care Delivery Committee of Adva Med and chairman of the operating board for the Buffalo Hearing and Speech Center.
CURTIS F. HOLMES, PH.D. has served as our Group Vice President, Components since May 2001 and as President of our subsidiary, Greatbatch-Hittman, Inc., since January 2000. Dr. Holmes served as Senior Vice President and Chief Operating Officer of Greatbatch-Hittman, Inc. from July 1999 to December 1999 and as our Senior Vice President from January 1999 to July 1999. From November 1980 to January 1999, Dr. Holmes served as our Vice President, Technology.
ARTHUR J. LALONDE has served as our Senior Vice President, Finance since December 2000. Mr. Lalonde previously served as Vice President, Finance and Treasurer since July 1997. Mr. Lalonde
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served as the Controller of our predecessor from August 1988 to July 1997. Mr. Lalonde is a Certified Public Accountant and a member of the New York State Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Mr. Lalonde is also a member of the Investments Committee of HealthNow NY, Inc., the local Blue Cross/Blue Shield affiliate.
RICHARD W. MOTT has served as our Executive Vice President and Chief Operating Officer since December 2000. From August 1998 to December 2000, Mr. Mott served as our Group Vice President. Mr. Mott served as our Vice President, Batteries from July 1997 to August 1998 and previously served as the Vice President, Batteries of our predecessor from September 1993 to December 1996 and from November 1997 to July 1997. Mr. Mott also served as Vice President and General Manager of Greatbatch Scientific from December 1996 to August 1998. Mr. Mott serves as a director of The Health Industries Association of Western New York and as a member of the Investment Committee of the Alfred University Board of Trustees.
SUSAN M. BRATTON has served as our Vice President, Corporate Quality since March 2001. Ms. Bratton served as the General Manager, Electrochem from July 1998 to March 2001 and previously served as the Director of Procurement for our company and our predecessor from June 1991 to July 1998. Ms. Bratton has held various positions with us since 1976.
ERNEST J. NORMAN has served as our Director, Investor Relations and Corporate Communications and Assistant Secretary since August 2000. Prior to joining our company, Mr. Norman was a member of the law firm of Watson, Bennett, Colligan, Johnson & Schechter, L.L.P. from December 1998 to August 2000. He previously served as General Counsel and Corporate Secretary of Trico Products Corporation and as Vice President, General Counsel and Assistant Corporate Secretary at Goldome Bank. Mr. Norman is currently a member of the Public Affairs Coordinating Council of Adva Med. Mr. Norman is licensed to practice law in the State of New York and the District of Columbia.
ROBERT C. RUSIN has served as our General Manager, Implantable Power Sources Division since May 2001. Mr Rusin served as the General Manager, Engineered Components Division from December 2000 to May 2001 and previously served as Vice President, Corporate Quality from July 1999 to November 2000. From August 1998 to July 1999, Mr. Rusin served as President and Chief Operating Officer of BioVector, Inc. From January 1997 to August 1998, Mr. Rusin served as Director, Sales and Distribution, of Greatbatch Scientific and previously served as Director, Greatbatch Surgical Products for our predecessor from January 1995 to January 1997.
PETER E. SAMEK has served as our Vice President, Corporate Development since January 2001. Prior to joining our company, Mr. Samek served from November 1998 to August 2000 as Director of Corporate Business Development of the Eastman Kodak Corporation and from October 1993 to November 1998 as Managing Director, Equity Investments of Manning & Napier Advisors, Inc. of Rochester, New York.
ESTHER S. TAKEUCHI, PH.D. has served as our Vice President, Research and Development since May 1999. Dr. Takeuchi served as our Director of Electrochemical Research from July 1997 to May 1999 and previously served as Director of Electrochemical Research of our predecessor from August 1991 to July 1997. The Electrochemical Society Inc. conferred the Battery Division Technology Award upon Dr. Takeuchi in 1995 and in 1998, the Western New York
Section of the American Chemical Society presented Dr. Takeuchi with the 68th Jacob F. Schoellkopf Medal. Dr. Takeuchi was elected a Fellow of the American Institute for Medical and Biological Engineering in 1999.
STEVEN J. EBEL has served as our General Manager, Electrochem Division since May 2001 and served as the General Manager, Implantable Power Source Division from July 1998 to May 2001. From September 1996 to July 1998, Mr. Ebel served as our General Manager, Electrochem Battery Division and from August 1994 to September 1996, he was our Director of Program Management and Product Development. Mr. Ebel has held various positions with our company since 1983.
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RICKY S. KLINE has served as our General Manager, Capacitor Division since December 2000. He served as our Director of Capacitor Operations from February 2000 through November 2000. Mr. Kline served as General Manager of our Engineered Components Division from April 1999 to February 2000. He has held various Director positions for our company from 1989 to 1999.
ROBERT E. RICH, JR. has served as a director since July 1997. Mr. Rich has served as President of Rich Products Corporation, a frozen foods manufacturer, since 1978. Mr. Rich is Chairman of the board of directors of the Grocery Manufacturers of America, Inc.
DOUGLAS E. ROGERS has served as a director since July 1997. Since January 1997, Mr. Rogers has served as Managing Director of Global Health Care Partners, a unit of DLJ Merchant Banking specializing in private equity investment in health care businesses worldwide. Mr. Rogers previously served as head of U.S. Investment Banking at Baring Brothers and as a Senior Vice President at Lehman Brothers. Mr. Rogers serves on the board of directors of Charles River Laboratories Corp. and Computerized Medical Systems, Inc.
BILL R. SANFORD has served as a director since November 2000. Mr. Sanford is the founder, and since August 2000 has been the Chairman, of Symark LLC, a technology commercialization and business development company. From April 1987 to August 2000, Mr. Sanford was Chairman of the Board, President and Chief Executive Officer of STERIS Corporation, a provider of infection and contamination prevention and reduction systems to the healthcare, scientific and other markets. Mr. Sanford serves on the board of KeyCorp N.A. Mr. Sanford is also Chairman of NorTech, the Northeast Ohio Regional Technology Coalition, Vice Chairman of the Edison Biotechnology Center and a Fellow of the American Institute for Medical and Biological Engineering.
HENRY WENDT has served as a director since July 1997. From January 1997 until January 2001, Mr. Wendt has served as Chairman of Global Health Care Partners, a unit of DLJ Merchant Banking specializing in private equity investment in healthcare businesses worldwide. Mr. Wendt retired as Chairman of SmithKline Beecham p.l.c. in 1994 after completing a career of nearly 40 years in the pharmaceutical, healthcare products and services industries. Mr. Wendt is Chairman of the Board of Computerized Medical Systems, Inc., and serves on the board of directors of Charles River Laboratories Corp., The Egypt Investment Company and West Marine, Inc., and also is a Trustee of the Trilateral Commission and Trustee Emeritus of the American Enterprise Institute.
DAVID M. WITTELS has served as a director since July 1997. Mr. Wittels has been a Managing Director of DLJ Merchant Banking, Inc. since January 2001. For the past five years, Mr. Wittels has held various positions with DLJ Merchant Banking, Inc. He serves on the boards of AKI Holding Corp., AKI Inc., Mueller Holdings (N.A.), Inc., Advanstar, Inc., Advanstar Communications, Inc., Ziff Davis Holdings Inc. and Ziff Davis Media Inc.
In accordance with the stockholders agreements described below, all of the parties to the stockholders agreements have agreed to cause our Chief Executive Officer, presently Mr. Voboril, to be a member of our Board of Directors. DLJ Merchant Banking nominated Messrs. Rich, Rogers, Wendt and Wittels to be directors.
BOARD OF DIRECTORS
Our directors are elected annually to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified. Our Board of Directors elects our executive officers annually to serve until the next annual meeting of the Board of Directors, or until their successors are duly elected and qualified, or until their earlier death, resignation, disqualification or removal from office.
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BOARD COMMITTEES
Our Board of Directors has established a Compensation Committee, which consists of Messrs. Wendt and Wittels. The Compensation Committee makes recommendations to the Board of Directors with respect to our general and specific compensation policies and administers our 1997 and 1998 stock option plans.
The Board of Directors has established an Audit Committee, which consists of Messrs. Sanford and Rich. The Board of Directors intends to name one additional independent director to the Audit Committee during 2001, as required by the rules of the New York Stock Exchange. The Audit Committee reviews and reports to the Board of Directors on the scope and results of audits by our independent auditors and recommends a firm of certified independent public accountants to serve as our independent auditors, subject to nomination by the Board of Directors and approval by the stockholders. The Audit Committee also discusses with the independent auditors the matters required to be discussed by auditing standards and reviews the independence of the auditors. Membership on the Audit Committee is restricted to directors who are independent of management and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment as a committee member.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Throughout 2000, Messrs. Wendt and Wittels served on our Compensation Committee. Also, prior to our initial public offering, Lawrence A. Maciariello, a former director, and Mr. Voboril served on our Compensation Committee. Mr. Voboril served as our President, Chief Executive Officer and Chairman of the Board during 2000. In November 1997, we issued a loan to Mr. Voboril in the amount of $570,000, in connection with his purchase of shares of our common stock, which was repaid in full at the time of our initial public offering. Mr. Wittels is a Managing Director of DLJ Merchant Banking, Inc. and from June 1997 to July 1997, prior to our acquisition of Wilson Greatbatch Ltd., he served as our President.
COMPENSATION OF DIRECTORS
Since the completion of our initial public offering, we have paid directors who are not full-time employees of our company, DLJ Merchant Banking or any of their affiliates compensation which consists of a $10,000 annual retainer and a $1,000 per meeting fee for attendance at meetings of our Board of Directors or any committee of which the director is a member. Directors entitled to receive the $10,000 annual retainer have an option to receive some or all of that amount in shares of our common stock, instead of cash, at the closing price per share on the last trading day of the calendar year for which the retainer is payable. Directors are required to hold any shares received pursuant to such an election for at least six months after they receive them. In addition, all directors are reimbursed for travel expenses and other out-of-pocket costs incurred in connection with their attendance at meetings.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation for the years ended December 29, 2000 and December 31, 1999 earned by our President, Chief Executive Officer and Chairman, and our four other most highly compensated executive officers as of December 29, 2000. In this prospectus, we refer to these individuals as our named executive officers.
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SUMMARY COMPENSATION TABLE

                                                      ANNUAL COMPENSATION                        LONG TERM COMPENSATION
                                           -----------------------------------------   ------------------------------------------
                                                                                         AWARDS      PAYOUTS
                                                                                       ----------   ----------
                                                                         OTHER         SECURITIES
                                                                         ANNUAL        UNDERLYING      LTIP         ALL OTHER
NAME AND PRINCIPAL POSITION       YEAR      SALARY     BONUS        COMPENSATION(3)     OPTIONS     PAYOUTS(4)   COMPENSATION(5)
---------------------------     --------   --------   --------      ----------------   ----------   ----------   ----------------
Edward F. Voboril.............    2000     $315,000   $105,000(1)       $33,582          21,040      $     --        $ 20,625
President, Chief Executive        1999      271,500    253,078(2)            --          40,940            --          23,297
Officer and Chairman

Larry T. DeAngelo.............    2000      150,335     30,600(1)            --           5,580        78,816          10,830
Senior Vice President,            1999      128,571     36,924(2)            --           6,487       179,410          18,435
Administration and Secretary

Curtis F. Holmes, Ph.D........    2000      184,401     45,700(1)         4,041           7,880        80,738         164,868
President, Greatbatch-Hittman,    1999      147,166     38,373(2)        37,967           8,935       184,050         185,655
Inc.

Richard W. Mott...............    2000      161,308     41,000(1)         8,885           7,880        85,864          10,465
Executive Vice President and      1999      138,332     39,740(2)            --           8,855       179,410          18,652
Chief Operating Officer

Esther S. Takeuchi, Ph.D......    2000      118,377     25,000(1)            --           1,380            --           7,959
Vice President, Research and      1999      105,580     14,500(2)            --           4,307            --          17,203
Development	

(1) Represents amounts accrued in fiscal 2000 which were paid in fiscal 2001.
(2) Represents payments we made in fiscal 1999 for bonuses earned in prior years.
(3) Includes $33,582 of tuition expenses for Mr. Voboril in 2000, $4,041 of tuition expenses for Dr. Holmes in 2000 and reimbursement of $31,397 of relocation expenses for Dr. Holmes in 1999. In addition, $8,885 was paid to Mr. Mott for unused vacation time. No other annual compensation is reported for the named executive officers because perquisites and personal benefits otherwise did not exceed the lesser of $50,000 and 10% of the total annual salary and bonus reported for these named executive officers.
(4) Represents payments we made in fiscal 1999 and fiscal year 2000 pursuant to our long term compensation plan, which was terminated in 1997. The final payment under the plan was paid in 2001.
(5) Represents payments in fiscal 2000 of term life insurance premiums of $8,167 for Mr. Voboril and $1,134 for Mr. DeAngelo; our matching contributions to the 401(k) plan of $3,360 for Mr. Voboril, $2,744 for Mr. DeAngelo, $3,360 for Dr. Holmes, $2,923 for Mr. Mott and $2,267 for Dr. Takeuchi; our contributions under the ESOP plan of $8,000 for Mr. Voboril, $6,429 for Mr. DeAngelo, $7,358 for Dr. Holmes; $6,917 for Mr. Mott and $5,279 for Dr. Takeuchi, which contributions represent 533, 429, 491, 461 and 352 shares of our common stock, respectively; cash profit sharing distributions of $1,098 for Mr. Voboril, $523 for Mr. DeAngelo, $649 for Dr. Holmes, $625 for Mr. Mott and $413 for Dr. Takeuchi; and a payout of $153,501 to Dr. Holmes made in fiscal 2000 in respect of stock appreciation rights granted in prior years.
STOCK OPTION GRANTS
The following table sets forth the stock options we granted during the fiscal year ended December 29, 2000 to each of the named executive officers, including the potential realizable value over the ten-year term of the options, based on assumed rates of stock appreciation of 5% and 10%, compounded annually. These assumed rates of appreciation are mandated by the rules of the Securities and Exchange Commission and do not represent our estimate of future stock price performance. Actual gains, if any, on stock option exercises will be dependent on the future performance of our common stock.
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OPTION GRANTS IN LAST FISCAL YEAR

                                                   INDIVIDUAL GRANTS                        POTENTIAL REALIZABLE
                              -----------------------------------------------------------     VALUE AT ASSUMED
                                                PERCENTAGE                                  RATES OF STOCK PRICE
                                 NUMBER OF       OF TOTAL                                     APPRECIATION FOR
                                SECURITIES        OPTIONS     EXERCISE                          OPTIONS TERM
                                UNDERLYING      GRANTED IN      PRICE                       ---------------------
NAME                          OPTIONS GRANTED   FISCAL 2000   ($/SHARE)   EXPIRATION DATE      5%          10%
----                          ---------------   -----------   ---------   ---------------   ---------   ---------
Edward F. Voboril...........      21,040           25.2%       $15.00     January 1, 2010   $514,079    $818,585
Larry T. DeAngelo...........       5,580            6.7         15.00     January 1, 2010    136,338     217,096
Curtis F. Holmes, Ph.D......       7,880            9.4         15.00     January 1, 2010    192,535     306,580
Richard W. Mott.............       7,880            9.4         15.00     January 1, 2010    192,535     306,580
Esther S. Takeuchi, Ph.D....       1,380            1.7         15.00     January 1, 2010     33,718      53,690	

FISCAL YEAR END OPTION VALUES
The table below provides information about the number and value of options held by the named executive officers at December 29, 2000. The values of in-the-money options have been calculated on the basis of a valuation of $28.25 per share, the closing price per share of our common stock on December 29, 2000, less the applicable exercise price.
YEAR END OPTION VALUES

                                                   NUMBER OF SECURITIES
                                                  UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                                        OPTIONS AT              IN-THE-MONEY OPTIONS AT
                                                     DECEMBER 29, 2000             DECEMBER 29, 2000
                                                ---------------------------   ---------------------------
                                                EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
                                                -----------   -------------   -----------   -------------
Edward F. Voboril.............................     66,541         85,539      $1,306,539     $1,637,321
Larry T. DeAngelo.............................     24,846         28,281         519,963        600,762
Curtis F. Holmes, Ph.D........................     26,623         30,993         552,626        647,976
Richard W. Mott...............................     27,863         31,612         569,057        656,192
Esther S. Takeuchi, Ph.D......................      8,137          8,150         173,486        148,316	

EMPLOYMENT AGREEMENT
On July 9, 1997, we entered into an employment agreement with Mr. Voboril, our President, Chief Executive Officer and Chairman. The agreement currently expires on June 30, 2001 and automatically extends for additional one year periods until we or Mr. Voboril gives notice to terminate not less than 12 months prior to the proposed termination date. We currently pay Mr. Voboril $340,000 per year and our Compensation Committee, along with our Board of Directors, has the right to increase Mr. Voboril's salary. Under the agreement, Mr. Voboril is entitled to a bonus equal to 75% of his current base salary if our company achieves financial targets set by our Board of Directors and reflected in our annual budget.
If we terminate Mr. Voboril's employment without cause or if Mr. Voboril terminates his employment for good reason, we have agreed to pay to Mr. Voboril the greater of $285,000 or his current annual base salary and a bonus for the year of termination equal to a percentage of his base salary. If we terminate his employment without cause within six months before, or twelve months after, a change in control of our company, we will pay Mr. Voboril an amount equal to his current annual salary and a bonus equal to 75% of his current base salary and all performance stock options held by Mr. Voboril will automatically vest and he will have the right to exercise all unexercised options.
If we terminate Mr. Voboril's employment for cause or if Mr. Voboril terminates his employment without good reason, we will pay him his accrued base salary and other compensation that has accrued as of the termination date. However, we will not pay Mr. Voboril an annual bonus if we terminate his
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employment with cause, and any stock options granted to Mr. Voboril that have not vested will be forfeited and canceled. If we terminate Mr. Voboril for cause, we may, at our election, purchase all of his shares and vested stock options at the lesser of the shares' cost or fair market value.
So long as Mr. Voboril is not terminated without cause, he has agreed not to compete, directly or indirectly, against us during his employment and for two years after his employment ends. In addition, Mr. Voboril has agreed not to solicit any of our employees for two years after his employment ends.
We have not entered into employment agreements with our other named executive officers.
STOCK PLANS
We have two stock option plans that provide for the issuance of nonqualified and incentive stock options to our key employees and key employees of our subsidiaries. The terms of our 1997 stock option plan and 1998 stock option plan are substantially the same and both plans are administered by our Compensation Committee. Our 1997 stock option plan authorizes the issuance of options to acquire up to 480,000 shares of our common stock and our 1998 stock option plan authorizes the issuance of options to acquire up to 1,220,000 shares of our common stock. Options granted under our 1997 and 1998 stock option plans generally vest over a three to five year period and the vesting period can be accelerated depending upon the achievement by our company of performance standards, including earnings targets. Options expire 10 years from the date of the grant, except that incentive stock options granted to key employees expire five years from the date of grant. Options are granted with exercise prices equal to the fair market value of our common stock on the date of the grant. Options generally are non-transferable, other than by will or the laws of descent and distribution and are exercisable only by the grantee while the grantee is alive. Both of our stock option plans contain a change in control provision. If a change in control of our company occurs, at the discretion of our Compensation Committee, each option granted under our stock option plans may be terminated. If this occurs, we are to pay each optionholder an amount equal to the difference between the fair market value of each share and the exercise price per share. This amount would be payable upon the closing of a transaction that results in a change in control.
As of June 1, 2001, 632,583 shares of our common stock were issuable upon exercise of outstanding stock options, subject in some cases to vesting conditions, and 1,036,496 options were available for future grants under our 1997 and 1998 stock option plans. The weighted average remaining contractual life of granted options is seven years. The average weighted exercise price per share of the options outstanding as of June 1, 2001 was $10.22.
INCENTIVE COMPENSATION PLANS
We sponsor various incentive compensation programs, which provide for the payment of cash to key employees based upon achievement of specific earnings goals before incentive compensation expense.
EMPLOYEE STOCK OWNERSHIP PLAN
We sponsor an employee stock ownership plan, or ESOP, and related trust as a long-term benefit for substantially all of our employees. There are two components to contributions under the ESOP. The first component is a defined contribution pension plan whose annual contribution equals 5% of each employee's compensation. Contributions to the ESOP are in the form of our common stock. The second component is a discretionary profit sharing contribution determined by the Board of Directors. This profit sharing contribution is also contributed to the ESOP in the form of shares of our common stock. The ESOP is subject to contribution limitations and vesting requirements.
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RELATED PARTY TRANSACTIONS
We describe below some of the transactions we have entered into with parties that are related to our company. We believe that each of the transactions described below was on terms no less favorable to us than we could have obtained from unrelated parties.
SALES OF COMMON STOCK TO MANAGEMENT
In August 1998, we sold 2,849,384 shares of our common stock to DLJ Merchant Banking for an aggregate purchase price of $14,246,919. At that time we also sold the following number of shares of common stock for the following purchase price to some of our current and former executive officers:

                                                 NUMBER OF SHARES   PURCHASE PRICE
                                                 ----------------   --------------
Edward F. Voboril..............................       60,822           $304,110
Tim H. Belstadt................................       20,000             99,999
Larry T. DeAngelo..............................       27,316            136,381
Curtis F. Holmes, Ph.D.........................       28,597            142,986
Arthur J. Lalonde..............................       20,299            101,493
Richard W. Mott................................        6,000             30,000
Susan M. Bratton...............................       16,000             80,001
                                                     -------           --------
    Total......................................      179,034           $894,970	

In September 1999, we sold 50,000 shares of our common stock for an aggregate purchase price of $750,000 to Fred Hittman, who at that time was serving as President of Greatbatch-Hittman, Inc.
REGISTRATION AND ANTI-DILUTION AGREEMENT
We entered into a registration and anti-dilution agreement with DLJ Investment Partners, L.P., DLJ Investment Funding, Inc., DLJ First ESC L.L.C. and Donaldson, Lufkin & Jenrette Securities Corporation, all of which are entities affiliated with DLJ Merchant Banking, and The Northwestern Mutual Life Insurance Company in July 1997. The agreement provides for adjustments to the number of shares held by the purchasers to prevent dilution from issuance of shares for less than fair market price. If we propose to register any common stock under the Securities Act, either for our own account or for the account of other securityholders, the purchasing parties are entitled to include their shares in the registration. In addition, parties holding more than 25% of the securities entitled to registration may require us to prepare and file a registration statement under the Securities Act at any time after our initial public offering, which was completed in October 2000. We are not obligated to effect more than two of these demand registrations. The managing underwriter of the offering has the right to limit the number of shares in any registration relating to the agreement if the underwriter believes that the success of the offering would be materially and adversely affected because of its size or kind. In the event of a demand registration request, if more than half of the securities entitled to registration are excluded by the managing underwriter, the holders of the registration rights are to be given an additional demand registration.
AMENDED AND RESTATED CREDIT AGREEMENT
We entered into a credit agreement with a syndicate of financial institutions led by DLJ Capital Funding, Inc. on July 10, 1997. DLJ Capital Funding, Inc. is an affiliate of DLJ Merchant Banking and Credit Suisse First Boston Corporation. The parties to the credit agreement amended and restated it on August 7, 1998 to provide for up to a secured credit facility including term loans and a revolving credit facility up to a maximum of $130.0 million. In connection with the credit agreement, we paid the
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following amounts to affiliates of DLJ Merchant Banking in the periods indicated for interest and various fees, including commitment, waiver and amendment and debt financing fees:

YEAR                                                   INTEREST PAID   FEES PAID
----                                                   -------------   ----------
1998.................................................     $52,246      $1,709,189
1999.................................................          --              --
2000.................................................          --              --	

In October 2000, we used the net proceeds of our initial public offering to prepay $34.4 million of our Term A loans and $49.6 million of our Term B loans. As of January 12, 2001, we entered into a $60.0 million credit facility which consists of a $40.0 million term loan and a $20.0 million revolving line of credit. We used the proceeds from the $40.0 million term loan to pay off the Term A facility, Term B facility and the senior subordinated notes that were outstanding as of December 29, 2000, plus accrued interest and a call premium. The new credit facility has a term of five years and matures on January 1, 2006. Interest is payable monthly on any outstanding prime rate loans and upon the contractual maturity for LIBOR-based loans. The interest rate charged is, at our option, based on either the prime rate or LIBOR plus or minus an interest rate modifier. The applicable interest rates for both the term loan and the revolving line of credit are currently prime less 1.0% or LIBOR plus 1.25%, at our option.
STOCKHOLDERS AGREEMENTS
In July 1997, we entered into three separate stockholders agreements with DLJ Merchant Banking and other parties, including members of our management who participated in the leveraged buyout and are stockholders of our company. The terms of the three stockholders agreements are substantially the same. In the agreements, the parties agreed to elect the Board of Directors, transfer securities governed by the agreements and conduct and participate in registrations of securities governed by the agreements according to the terms of the agreements. The stockholders agreements prohibit most transfers of securities governed by the agreements unless the proposed transferor offers to include in the proposed transfer the other parties' pro rata share of securities subject to the agreement, or the transfer is made in connection with a party's exercise of its right of participation in such a transfer or DLJ Merchant Banking's exercise of its right of forced sale under the agreements. Most transfer restrictions under the stockholders agreements terminated upon the consummation of our initial public offering in October 2000, or, in the case of the management stockholders agreement, will terminate one year after that date. The stockholders agreements will survive the closing of this offering. The agreements provide that the parties to the agreements and our company will take all action required to cause the Board of Directors to consist of seven directors, one of whom shall be the Chief Executive Officer. So long as they collectively beneficially own at least 3% of the fully-diluted shares of our common stock, members of the Greatbatch family, who are the former controlling stockholders of our company, have the right to nominate one director to the Board of Directors. DLJ Merchant Banking has the right to nominate all other members of the Board of Directors. The parties to the stockholders agreements have agreed to vote in favor of nominees selected by DLJ Merchant Banking and, if applicable, the Greatbatch family nominee. The members of the Board of Directors elected pursuant to the agreements include Mr. Voboril, our President and Chief Executive Officer, and Messrs. Rich, Rogers, Wendt and Wittels, each of whom was nominated by DLJ Merchant Banking.
All the stockholders party to the stockholders agreements agree to vote their shares in elections of directors in accordance with the terms of the stockholders agreements. Therefore, each party may be deemed to share beneficial ownership of all shares subject to each stockholders agreement to which it is a party. Entities affiliated with DLJ Merchant Banking II, L.P. are party to all three stockholders agreements and consequently may be deemed to beneficially own the aggregate of all 12,329,608 shares subject to the three agreements. This number includes all of the 10,228,206 shares of common stock
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held directly by the entities affiliated with DLJ Merchant Banking II, L.P. Members of our management are party to two of the three agreements, the stockholders agreement dated as of July 16, 1997 and the management stockholders agreement dated as of July 10, 1997, and consequently may be deemed to beneficially own the aggregate of all 11,844,522 shares subject to those two agreements, in addition to the shares held by them directly.
In August 1999, we entered into a stockholders agreement, which is described below, with Fred Hittman and DLJ Merchant Banking. Under the agreement, a DLJ Merchant Banking entity has the power to direct the voting, in some respects, of all of Mr. Hittman's 50,533 shares of common stock. Therefore, DLJ Merchant Banking may be deemed to share beneficial ownership of those shares. In August 2000, in connection with our acquisition of BEI, we entered into a stockholders agreement with Hitachi-Maxell, Inc. and DLJ Merchant Banking. Under the agreement, a DLJ Merchant Banking entity has the power to direct the voting, in some respects, of all of Hitachi-Maxell, Inc.'s 539,856 shares of common stock. Therefore, DLJ Merchant Banking may be deemed to share beneficial ownership of those shares, some of which are being sold in this offering.
Holders of an aggregate of 12,919,997 shares of our common stock are party to the five stockholders agreements. After this offering, holders of an aggregate of 8,919,997 shares of our common stock will be party to these stockholders agreements. Subject to pro rata and underwriter exceptions, if we propose to file a registration statement relating to an offering of any of its equity securities, the parties to the stockholders agreements have the right to have their shares of common stock registered and sold as part of the offering.
DLJ FINANCIAL ADVISORY AGREEMENT AND OTHER FEES
On July 10, 1997, we appointed Donaldson, Lufkin & Jenrette Securities Corporation, or DLJ, to act as our exclusive financial advisor with respect to reviewing and analyzing financial alternatives for our company. Under the agreement, DLJ's successor, Credit Suisse First Boston Corporation, or CSFB, assists us from time to time in analyzing our operations and historical performance as well as our future prospects, with a view to meeting our long term strategic objectives. The agreement expires in August 2005. In accordance with this agreement, we pay CSFB $100,000 annually and as further compensation, CSFB has the right to act as our exclusive financial advisor and sole managing underwriter for any underwritten public offering of our stock and other financial transactions consummated by our company during the engagement period. CSFB is an affiliate of DLJ Merchant Banking and is the book-running manager for this offering.
DLJ, whose corporate parent was recently acquired by Credit Suisse Group, of which CSFB is an indirect subsidiary, was a joint book-running manager in our initial public offering and received fees of approximately $2.0 million, and DLJDIRECT Inc., an affiliate of DLJ and CSFB (now known as CSFBDIRECT Inc.), was an underwriter and received fees of approximately $0.1 million. We also paid a premium of approximately $1.7 million to DLJ Investment Partners and other investors for prepayment of our 13% senior subordinated notes. CFSB is acting as a managing underwriter in this offering and will receive the fees and expense reimbursement described under "Underwriting" for its services.
HITTMAN AGREEMENTS
In August 1998, we purchased all of the outstanding capital stock of Hittman from Fred Hittman, the sole shareholder, for $71.8 million. Fred Hittman subsequently served as the President of our subsidiary Greatbatch-Hittman, Inc. until his retirement on December 31, 1999. We paid $69.0 million of the purchase price at the time of the acquisition and an additional $2.8 million after Hittman achieved financial targets in 1998. We paid DLJ a fee of approximately $2.8 million for acting as our financial advisor in connection with the acquisition, for its underwriting fee and for a bond consent fee.
We lease our Columbia, Maryland facility from Mr. Hittman under an agreement that expires in 2006. In accordance with the agreement, we made payments to Mr. Hittman of $83,655 for the period
57

from August 8, 1998 to the end of fiscal 1998, $210,600 in 1999 and $210,600 in 2000. The annual rental payment under the lease is $210,600 until 2003, at which time it increases annually until the termination of the lease. The average annual rental payment throughout the term of the lease is $219,600. In addition, we have an option to purchase the leased property for the agreed fair market value at the time when the lease expires.
In August 1999, we entered into a stockholders agreement with Fred Hittman, then President of Greatbatch-Hittman, Inc., and DLJ Merchant Banking. In the agreement, we and Fred Hittman agreed to elect our Board of Directors and conduct and participate in registrations of securities governed by the agreements according to the terms of the agreement. Most transfer restrictions under the stockholders agreement terminated upon the consummation of our initial public offering. The stockholders agreement will survive the closing of this offering. The stockholders agreement provides that Fred Hittman will take all action within his power required to cause our Board of Directors to include all of the directors designated by DLJ Partners II or its successor in interest. Therefore, because an entity affiliated with DLJ Merchant Banking II, L.P. has the power to direct the voting of Mr. Hittman's shares in this respect, the entities affiliated with DLJ Merchant Banking II, L.P. may be deemed to share beneficial ownership of all of Mr. Hittman's 50,533 shares that are subject to the stockholders agreement. However, because Mr. Hittman does not have the power to direct the voting of shares owned by the entities affiliated with DLJ Merchant Banking II, L.P. under the terms of the stockholders agreement, Mr. Hittman does not share voting power with respect to those shares and consequently is not deemed to beneficially own any of such shares as a result of the stockholders agreement. Mr. Hittman is a selling stockholder in this offering.
GREATBATCH LEASE AGREEMENT
We lease approximately 18,550 square feet at one of our Clarence, New York facilities from Warren Greatbatch, as trustee under an irrevocable trust agreement for the benefit of Ericka D. Chadbourne, who is the niece of Lawrence
A. Maciariello, a former director. Warren D. Greatbatch is the brother-in-law of Mr. Maciariello. In accordance with the lease agreement, which will expire on March 31, 2018, we made payments to the trust of $86,400 per year in each of fiscal 1998, 1999 and 2000. This lease provides that the rental rate is to be adjusted in 2003, 2008 and 2013 to reflect the fair market rental value at that time. Ericka D. Chadbourne, Warren D. Greatbatch and Lawrence A. Maciariello are selling stockholders in this offering.
58

PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information regarding beneficial ownership of our common stock as of June 1, 2001, and as adjusted to reflect the sale of shares of our common stock offered by us and the selling stockholders in this offering, by:
- each person or group of affiliated persons that we know beneficially owns more than 5% of our outstanding shares of common stock;
- each of our directors and named executive officers;
- all of our directors and executive officers as a group; and
- each selling stockholder.
We determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission, which generally require inclusion of shares over which a person has voting or investment power. Shares of common stock issuable pursuant to options held by a person that are currently exercisable or exercisable within 60 days of June 1, 2001 are considered outstanding for that person, but not when computing the percentage ownership of each other person.

                                                   NUMBER OF
                                                    SHARES
                                                 BENEFICIALLY                         NUMBER OF             NUMBER OF SHARES
                                                     OWNED                              SHARES                BENEFICIALLY
                                                    BEFORE                              BEING                 OWNED AFTER
NAME OF BENEFICIAL OWNER                           OFFERING                            OFFERED                  OFFERING
------------------------             -------------------------------------   ----------------------------   ----------------
DLJ Merchant Banking Related
  Entities (1)
  DLJ Merchant Banking Partners II,
    L.P............................                              5,810,983                      2,039,611      3,771,372
  DLJ Merchant Banking Partners II-
    A, L.P.........................                                231,420                         81,227        150,193
  DLJ Offshore Partners II, C.V....                                285,753                        100,297        185,456
  DLJ Diversified Partners, L.P....                                339,736                        119,244        220,492
  DLJ Diversified Partners-A,
    L.P............................                                126,166                         44,283         81,883
  DLJ Millennium Partners, L.P.....                                 93,957                         32,978         60,979
  DLJ Millennium Partners-A,
    L.P............................                                 18,325                          6,432         11,893
  DLJMB Funding II, Inc............                              1,031,710                        362,122        669,588
  DLJ Investment Partners, L.P.....                                350,550                        123,040        227,510
  DLJ Investment Funding, Inc......                                 49,953                         17,533         32,420
  UK Investment Plan 1997
    Partners.......................                                153,747                         53,964         99,783
  DLJ EAB Partners, L.P............                                 26,090                          9,157         16,933
  DLJ First ESC, L.P...............                              1,709,816                        600,132      1,109,684
    Subtotal (1)(2)................                             10,228,206                      3,590,020      6,638,184
  John Hancock Financial
    Services, Inc. (3).............                                951,510                             --        951,510
    John Hancock Place
    P. O. Box 111
    Boston, Massachusetts 02117
  Edward F. Voboril (4)(5).........                                254,772                             --        254,772
  Larry T. DeAngelo (4)(6).........                                109,339                             --        109,339
  Curtis F. Holmes, Ph.D. (4)(7)...                                115,078                             --        115,078
  Richard W. Mott (4)(8)...........                                 90,318                             --         90,318
  Robert E. Rich, Jr. (4)(9).......                                 20,075                             --         20,075
  Esther S. Takeuchi, Ph.D.
    (4)(10)........................                                 10,136                             --         10,136
  Douglas E. Rogers (11)...........                                     --                             --
  Bill R. Sanford..................                                 30,000                             --         30,000

                                             PERCENTAGE OF
                                              COMMON STOCK
                                              OUTSTANDING
                                     ------------------------------
                                        BEFORE              AFTER
NAME OF BENEFICIAL OWNER               OFFERING            OFFERING
------------------------             -------------         --------
DLJ Merchant Banking Related
  Entities (1)
  DLJ Merchant Banking Partners II,
    L.P............................          31.1%           18.2%
  DLJ Merchant Banking Partners II-
    A, L.P.........................           1.2               *
  DLJ Offshore Partners II, C.V....           1.5               *
  DLJ Diversified Partners, L.P....           1.8             1.1
  DLJ Diversified Partners-A,
    L.P............................             *               *
  DLJ Millennium Partners, L.P.....             *               *
  DLJ Millennium Partners-A,
    L.P............................             *               *
  DLJMB Funding II, Inc............           5.5             3.2
  DLJ Investment Partners, L.P.....           1.9             1.1
  DLJ Investment Funding, Inc......             *               *
  UK Investment Plan 1997
    Partners.......................             *               *
  DLJ EAB Partners, L.P............             *               *
  DLJ First ESC, L.P...............           9.1             5.4
    Subtotal (1)(2)................          54.7            32.0
  John Hancock Financial
    Services, Inc. (3).............           5.1             4.6
    John Hancock Place
    P. O. Box 111
    Boston, Massachusetts 02117
  Edward F. Voboril (4)(5).........           1.4             1.2
  Larry T. DeAngelo (4)(6).........             *               *
  Curtis F. Holmes, Ph.D. (4)(7)...             *               *
  Richard W. Mott (4)(8)...........             *               *
  Robert E. Rich, Jr. (4)(9).......             *               *
  Esther S. Takeuchi, Ph.D.
    (4)(10)........................             *               *
  Douglas E. Rogers (11)...........             *               *
  Bill R. Sanford..................             *               *	

59

                                                   NUMBER OF
                                                    SHARES
                                                 BENEFICIALLY                         NUMBER OF             NUMBER OF SHARES
                                                     OWNED                              SHARES                BENEFICIALLY
                                                    BEFORE                              BEING                 OWNED AFTER
NAME OF BENEFICIAL OWNER                           OFFERING                            OFFERED                  OFFERING
------------------------             -------------------------------------   ----------------------------   ----------------
  Henry Wendt (11).................                                     --                             --             --
  David M. Wittels (11)............                                     --                             --             --
  All directors and executive
    officers as a group (14
    persons)
(2)(4)(5)(6)(7)(8)(9)(10)(11)(12)..                                771,034                             --        771,034
  Evelyn Belstadt (13).............                                  3,999                          1,404          2,595
  Jack Belstadt....................                                  4,239                          1,488          2,751
  Karianne Belstadt (13)...........                                  3,999                          1,404          2,595
  Ricky Belstadt...................                                  3,999                          1,404          2,595
  Tim H. Belstadt (13).............                                 45,513                         15,975         29,538
  Jack Belstadt Family Trust.......                                 36,000                         12,636         23,364
  Ricky Belstadt Family Trust......                                 25,999                          9,125         16,874
  Tim Belstadt Family Trust........                                 67,999                         23,867         44,132
  Ashton B. Carter.................                                  1,700                            597          1,103
  Ericka D. Chadbourne.............                                 29,233                         10,261         18,972
  John M. Deutch...................                                  3,099                          1,088          2,011
  East Hill Foundation.............                                 99,999                         35,099         64,900
  Joseph C. Falcone................                                  9,999                            877          9,122
  John T. Fordyce..................                                    200                             70            130
  Christine A. Frysz...............                                  2,791                            980          1,811
  Greatbatch 1998 Trust for
    Children (Jenny Dulian)........                                 63,999                         22,463         41,536
  Greatbatch 1998 Trust for
    Children (Kenneth Dulian)......                                 63,999                         22,463         41,536
  Ami A. Greatbatch................                                 81,550                         28,623         52,927
  The John Greatbatch Trust........                                 19,999                          7,020         12,979
  Kenneth A. and Sharon H.
    Greatbatch.....................                                 75,886                          9,086         66,800
  Michele A. Greatbatch............                                 55,887                          4,904         50,983
  Warren D. Greatbatch.............                                261,551                         91,802        169,749
  Robert W. Hammell................                                  3,859                          1,354          2,505
  Hitachi Maxell, Ltd..............                                539,856                         70,199        469,657
  Fred Hittman (14)................                                 50,533                         17,737         32,796
  Paul G. Kaminski.................                                  3,099                          1,088          2,011
  James E. Maciariello.............                                  1,999                            702          1,297
  Lawrence A. and Anne K.
    Maciariello (15)...............                                 55,887                         11,758         44,129
  Lawrence A. Maciariello, Jr. and
    Darla G. Maciariello...........                                  1,999                            702          1,297
  Rachel Lee Maciariello...........                                  1,999                            702          1,297
  Lois H. Mott.....................                                  1,999                            123          1,876
  Robert T. Mott...................                                  6,000                            351          5,649
  William J. Perry.................                                  3,099                            351          2,748
  Michele R. Schmidt...............                                    288                            101            187
  John P. White....................                                  3,099                          1,088          2,011
  Irving B. Yoskowitz..............                                  3,099                          1,088          2,011

                                             PERCENTAGE OF
                                              COMMON STOCK
                                              OUTSTANDING
                                     ------------------------------
                                        BEFORE              AFTER
NAME OF BENEFICIAL OWNER               OFFERING            OFFERING
------------------------             -------------         --------
  Henry Wendt (11).................             *               *
  David M. Wittels (11)............             *               *
  All directors and executive
    officers as a group (14
    persons)
(2)(4)(5)(6)(7)(8)(9)(10)(11)(12)..           4.1             3.7
  Evelyn Belstadt (13).............             *               *
  Jack Belstadt....................             *               *
  Karianne Belstadt (13)...........             *               *
  Ricky Belstadt...................             *               *
  Tim H. Belstadt (13).............             *               *
  Jack Belstadt Family Trust.......             *               *
  Ricky Belstadt Family Trust......             *               *
  Tim Belstadt Family Trust........             *               *
  Ashton B. Carter.................             *               *
  Ericka D. Chadbourne.............             *               *
  John M. Deutch...................             *               *
  East Hill Foundation.............             *               *
  Joseph C. Falcone................             *               *
  John T. Fordyce..................             *               *
  Christine A. Frysz...............             *               *
  Greatbatch 1998 Trust for
    Children (Jenny Dulian)........             *               *
  Greatbatch 1998 Trust for
    Children (Kenneth Dulian)......             *               *
  Ami A. Greatbatch................             *               *
  The John Greatbatch Trust........             *               *
  Kenneth A. and Sharon H.
    Greatbatch.....................             *               *
  Michele A. Greatbatch............             *               *
  Warren D. Greatbatch.............           1.4               *
  Robert W. Hammell................             *               *
  Hitachi Maxell, Ltd..............           2.9             2.3
  Fred Hittman (14)................             *               *
  Paul G. Kaminski.................             *               *
  James E. Maciariello.............             *               *
  Lawrence A. and Anne K.
    Maciariello (15)...............             *               *
  Lawrence A. Maciariello, Jr. and
    Darla G. Maciariello...........             *               *
  Rachel Lee Maciariello...........             *               *
  Lois H. Mott.....................             *               *
  Robert T. Mott...................             *               *
  William J. Perry.................             *               *
  Michele R. Schmidt...............             *               *
  John P. White....................             *               *
  Irving B. Yoskowitz..............             *               *	

* Less than 1%
(1) Consists of shares held directly by DLJ Merchant Banking Partners II, L.P. and the related investors named below. The number of shares and percentages set forth opposite each entity under this heading and the
60

subtotal of those numbers and percentages reflect record ownership and not beneficial ownership. The following related investors have been aggregated for beneficial ownership purposes: DLJ Merchant Banking Partners II, L.P.; DLJ Merchant Banking Partners II-A, L.P.; DLJ Offshore Partners II, C.V.; DLJ Diversified Partners, L.P.; DLJ Diversified Partners-A, L.P.; DLJ Millennium Partners, L.P.; DLJ Millennium Partners-A, L.P.; DLJMB Funding II, Inc.; DLJ Investment Partners, L.P.; DLJ Investment Funding, Inc.; UK Investment Plan 1997 Partners; DLJ EAB Partners, L.P.; and DLJ First ESC, L.P. The address for each of the entities related to DLJ Merchant Banking Partners is 277 Park Avenue, New York, New York 10172. Credit Suisse First Boston, a Swiss bank, filed a Schedule 13G dated February 14, 2001 reporting ownership of a majority of the voting stock of Credit Suisse First Boston, Inc., which in turn owns all of the voting stock of Credit Suisse First Boston (USA), Inc. (formerly Donaldson Lufkin & Jenrette, Inc.), or CSFB-USA. DLJ Merchant Banking Partners II, L.P. and the related entities named above are direct and indirect subsidiaries of CSFB-USA and merchant banking funds advised by subsidiaries of CSFB-USA.
(2) Voting power with respect to shares covered by stockholders agreements entered into in July 1997, August 1999 and August 2000 is shared with the other parties to the stockholders agreements. Therefore, the various entities affiliated with CSFB-USA and Messrs. Rogers, Wendt and Wittels each may be deemed to beneficially own all of the 12,920,565 shares of common stock with respect to which voting power is shared pursuant to the stockholders agreements. Such 12,920,565 shares consist of the 12,330,176 shares that are subject to the three stockholders agreements entered into in July 1997, including the 10,228,206 shares held directly by the entities affiliated with CSFB-USA and the shares held directly by Messrs. Voboril, DeAngelo, Holmes, Mott and Rich and Dr. Takeuchi; the 50,533 shares held directly by Fred Hittman that are subject to the stockholders agreement entered into in August 1999; and the 539,856 shares held directly by Hitachi-Maxell, Ltd. that are subject to the stockholders agreement entered into in August 2000. In addition, the other parties to the stockholders agreement dated as of July 16, 1997, who, under the agreement, share voting power with respect to the shares owned by the entities affiliated with CSFB-USA, may be deemed to beneficially own the 10,228,206 shares of common stock held by the entities affiliated with CSFB-USA, which is equivalent to 54.7% of the common stock outstanding before this offering and 32.0% of the common stock outstanding after this offering. Those other parties, each of whom disclaims beneficial ownership of such shares held by the entities affiliated with CSFB-USA, include the following persons: Tim H. Belstadt, Susan M. Bratton, Larry T. DeAngelo, Curtis F. Holmes, Arthur J. Lalonde, Richard W. Mott, Edward F. Voboril, Jack A. Belstadt, Richard J. Boos, William H. Bruns, Curtis A. Cashmore, William D.K. Clark, Steven J. Ebel, Douglas P. Eberhard, Gayle E. Fairchild, Stuart S. Ferguson, John T. Fordyce, Frank J. Forkl, Jr., Dominick J. Frustaci, Christine A. Frysz, Richard M. Garlapow, Robert W. Hammell, Robert C. Jackson, Ricky S. Kline, Randolph A. Leising, Bruce E. Meyer, Charles L. Mozeko, Barry C. Muffoletto, Michael R. Nowaczyk, William M. Paulot, Joseph M. Probst, Michael F. Pyszczek, Janice E. Remigio, Robert C. Rusin, Gary J. Sfeir, Robert W. Siegler, Joseph E. Spaulding, Esther S. Takeuchi, Mark Visbisky, Gary R. Whitcher and Robert C. Weigand. The various entities affiliated with CSFB-USA disclaim beneficial ownership of the shares held by these individuals.
(3) John Hancock Financial Services, Inc., John Hancock Life Insurance Company, John Hancock Subsidiaries, Inc., The Berkeley Financial Group, Inc. and John Hancock Advisors, Inc. filed a Schedule 13G dated February 12, 2001. In this Schedule 13G, John Hancock Financial Services, Inc. reported that it is the ultimate parent company of John Hancock Advisors, Inc., which has direct beneficial ownership of the reported shares.
(4) Voting power with respect to the shares covered by stockholders agreements entered into in July 1997 is shared with the other parties to the stockholders agreements. Therefore, Messrs. Voboril, DeAngelo, Holmes, Mott and Rich and Dr. Takeuchi each may be deemed to beneficially own all of the 11,844,522 shares of common stock with respect to which voting power is shared pursuant to the stockholders agreements. Messrs. Voboril, DeAngelo, Holmes, Mott and Rich and Dr. Takeuchi disclaim beneficial ownership of such shares, other than the 254,772 shares, 109,339 shares, 115,078 shares, 90,318 shares, 20,075 shares and 10,136 shares held directly by Messrs. Voboril, DeAngelo, Holmes, Mott and Rich and Dr. Takeuchi, respectively.
(5) Includes 42,000 shares of common stock held by Mr. Voboril's spouse as a trustee of a trust for the benefit of Mr. Voboril's family members and 66,541 shares Mr. Voboril has the right to acquire pursuant to options exercisable within 60 days after June 1, 2001. Including such shares, Mr. Voboril directly holds 254,772 shares
61

of common stock, which is equivalent to 1.4% of the common stock outstanding before this offering and 1.2% of the common stock outstanding after this offering.
(6) Includes 24,846 shares Mr. DeAngelo has the right to acquire pursuant to options exercisable within 60 days after June 1, 2001. Including such shares, Mr. DeAngelo directly holds 109,339 shares of common stock, which is equivalent to less than 1% of the common stock outstanding before and after this offering.
(7) Includes 13,334 shares of common stock held by Dr. Holmes's spouse as the trustee of a trust for the benefit of Dr. Holmes's family members and 26,623 shares Dr. Holmes has the right to acquire pursuant to options exercisable within 60 days after June 1, 2001. Including such shares, Dr. Holmes directly holds 115,078 shares of common stock, which is equivalent to less than 1% of the common stock outstanding before and after this offering.
(8) Includes 866 shares held by Mr. Mott as trustee of the Sarah E. Mott Trust, 866 shares held by Mr. Mott as trustee of the Lindsay Mott Trust, 866 shares held by Mr. Mott as trustee of the Rachel Mott Trust and 27,863 shares Mr. Mott has the right to acquire pursuant to options exercisable within 60 days after June 1, 2001. Including such shares, Mr. Mott directly holds 90,318 shares of common stock, which is equivalent to less than 1% of the common stock outstanding before and after this offering.
(9) Mr. Rich directly holds 20,075 shares of common stock, which is equivalent to less than 1% of the common stock outstanding before and after this offering.
(10) Includes 8,137 shares Dr. Takeuchi has the right to acquire pursuant to options exercisable within 60 days after June 1, 2001. Including such shares, Dr. Takeuchi directly holds 10,136 shares of common stock, which is equivalent to less than 1% of the common stock outstanding before and after this offering.
(11) Consists of shares held by entities affiliated with CSFB-USA, all of which are funds managed by DLJ Merchant Banking. Messrs. Rogers, Wendt and Wittels are officers of DLJ Merchant Banking. Shares shown for Messrs. Rogers, Wendt and Wittels exclude shares shown as held by entities affiliated with CSFB-USA, as to which they disclaim beneficial ownership.
(12) All directors and executive officers as a group may be deemed to beneficially own an aggregate of 10,999,249 shares of common stock before this offering, which is equivalent to 58.8% of the common stock outstanding before this offering and may be deemed to beneficially own an aggregate of 7,409,225 shares of common stock after this offering, which is equivalent to 35.8% of the common stock outstanding after this offering.
(13) Evelyn Belstadt is the spouse and Karianne Belstadt is the daughter of Tim H. Belstadt, who served as a Vice President of our company until December 31, 1998.
(14) Mr. Hittman served as the President of Greatbatch-Hittman, Inc. until December 31, 1999.
(15) Mr. Maciariello served as a member of our Board of Directors until May 18, 2000.
62

DESCRIPTION OF CAPITAL STOCK
Immediately following the consummation of this offering, the authorized capital stock of our company will consist of 100,000,000 shares of common stock, par value $.001 per share, and 100,000,000 shares of preferred stock, par value $.001 per share, the rights and preferences of which may be established from time to time by our Board of Directors. As of June 1, 2001, there were 18,712,967 shares of common stock outstanding that were held of record by approximately 117 registered stockholders. Upon completion of this offering, there will be 20,712,967 outstanding shares of common stock, no outstanding shares of preferred stock and options to purchase 632,583 shares of common stock.
The following discussion summarizes the material provisions of our capital stock and the anti-takeover provisions that are contained in our certificate of incorporation and bylaws. This summary is qualified by our restated certificate of incorporation and bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part.
Our restated certificate of incorporation and bylaws contain provisions, such as the authorization of "blank check" preferred stock, limiting who may call special meetings of our stockholders and advance notice procedures that are required for stockholders to nominate candidates for election to our Board of Directors or propose matters to be acted upon at stockholder meetings, which are intended to enhance the likelihood of continuity and stability in the composition of our Board of Directors. "Blank check" preferred stock could be issued by our Board of Directors, without the delay that would be required to obtain stockholder approval, to increase the number of outstanding shares and thwart a takeover attempt. Limitations on who may call special meetings of our stockholders make it difficult for minority stockholders to call special meetings in which a new Board of Directors could be elected, among other things. Advance notice requirements for nominations of candidates for election to our Board of Directors or to propose matters to be acted upon by stockholders at stockholder meetings make it more difficult for stockholders to nominate new directors or submit stockholder proposals to be acted upon at stockholder meetings. These provisions may have the effect of delaying, deferring or preventing a future takeover or change in control of our company, unless such takeover or change in control is approved by our Board of Directors.
COMMON STOCK
Holders of our common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Because holders of common stock do not have cumulative voting rights, the holders of a majority of the shares of common stock can elect all of the members of our Board of Directors. Subject to preferences of any preferred stock that may be issued in the future, the holders of common stock are entitled to receive dividends as may be declared by our Board of Directors. The common stock is entitled to receive pro rata all of the assets of our company available for distribution to our stockholders. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable.
Our common stock is listed on The New York Stock Exchange under the symbol "GB."
PREFERRED STOCK
Our Board of Directors will be authorized, without further action by our stockholders, to issue shares of preferred stock in one or more series. The Board will have discretion to determine the rights, preferences, privileges and limitations of each series, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences. Satisfaction of any dividend preference of outstanding shares of preferred stock would reduce the amount of funds available for the payment of dividends on shares of common stock. In some circumstances, the issuance of shares of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the
63

assumption of control by a holder of a large block of our securities or the removal of incumbent management. We have no current intention to issue any shares of preferred stock.
OPTIONS
As of June 1, 2001, options to purchase a total of 632,583 shares of our common stock were outstanding, and options to acquire up to 1,036,496 shares of common stock may be available for future issuance under our existing stock option plans. The average weighted exercise price per share of the options outstanding as of June 1, 2001 was $10.22.
REGISTRATION RIGHTS
After this offering, the holders of 8,919,997 shares of our common stock will be entitled to registration rights. If we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders exercising registration rights, these holders are entitled to notice of registration and are entitled to include shares of common stock, subject to pro rata and underwriting exceptions. Additionally, some of our stockholders have demand registration rights pursuant to which they may require us on up to two occasions, to file a registration statement under the Securities Act at our expense. The registration rights are subject to the right of the underwriters of an offering to limit the number of shares included in the registration and our right not to effect a required registration within 180 days following an offering of our securities pursuant to a registration statement in connection with an underwritten public offering, including this offering. If more than half of the securities entitled to demand registration are excluded by the underwriters, the holders of demand registration rights are to be given an additional demand registration right. These registration rights are also subject to our right not to effect a requested registration, for no more than one 120-day period during any calendar year, if our Board of Directors determines in good faith to delay the filing to allow our company to include financial statements in the registration statement or if our Board of Directors reasonably determines that effectiveness of the registration statement or an offering would materially adversely affect a pending or proposed acquisition, merger or other significant corporate transaction.
LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS
Our restated certificate of incorporation limits the liability of directors to the fullest extent permitted by Delaware law. The effect of these provisions is to eliminate the rights of our company and our stockholders, through stockholders' derivative suits on behalf of our company, to recover monetary damages against a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However, our directors will be personally liable to us and our stockholders for monetary damages if they acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper benefit from their actions as directors. In addition, our restated certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. We have entered indemnification agreements with our current directors and executive officers. We also maintain directors and officers insurance.
DELAWARE ANTI-TAKEOVER LAW
We are subject to Section 203 of the Delaware General Corporation law which regulates corporate acquisitions. This law provides that specified persons who, together with affiliates and associates, own, or within three years did own, 15% or more of the outstanding voting stock of a corporation may not engage in business combinations with the corporation for a period of three years after the date on which the person became an interested stockholder. The law does not include interested stockholders prior to the time our common stock became listed on The New York Stock Exchange. The law defines the term "business combination" to include mergers, asset sales and other transactions in which the
64

interested stockholder receives or could receive a financial benefit on other than a pro rata basis with other stockholders. This provision has an anti-takeover effect with respect to transactions not approved in advance by our Board of Directors, including discouraging takeover attempts that might result in a premium over the market price for the shares of our common stock. With approval of our stockholders, we could amend our certificate of incorporation in the future to avoid the restrictions imposed by this anti-takeover law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is Mellon Investor Services, L.L.C.
65

SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have 20,712,967 outstanding shares of common stock and outstanding options to purchase 632,583 shares of our common stock, assuming no exercise of the underwriters' over-allotment option and no additional option grants or exercises after June 1, 2001. We expect that the 6,000,000 shares to be sold in this offering, plus any shares sold upon exercise of the underwriters' over-allotment option, together with the 5,750,000 shares we issued in our initial public offering, will be freely tradable without restriction under the Securities Act, unless purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act. The remaining 8,919,997 shares outstanding and 632,583 shares subject to outstanding options are "restricted securities" within the meaning of Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if the sale is registered or if it qualifies for an exemption from registration, such as under Rule 144 or Rule 144(k) promulgated under the Securities Act, which are summarized below.
LOCK-UP AGREEMENTS
Our executive officers, directors, the selling stockholders and some of our existing stockholders and key employees have entered into the lock-up agreements described in "Underwriting."
RULE 144
In general, under Rule 144 as currently in effect, a person who has beneficially owned restricted securities for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:
- 1% of the number of shares of common stock then outstanding, which will equal approximately 207,130 shares immediately after this offering; and
- the average weekly trading volume of our common stock on The New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales under Rule 144 are also subject to requirements with respect to manner of sale, notice and the availability of current public information about us.
RULE 144(K)
Under Rule 144(k), a person who is not deemed to have been our affiliate at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, may sell these shares without complying with the manner of sale, public information, volume limitation or notice requirements of Rule 144.
REGISTRATION RIGHTS
After this offering, the holders of approximately 8,919,997 shares of common stock will be entitled to rights with respect to registration of these shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares, except for shares purchased by affiliates of our company, becoming freely tradable without restriction under the Securities Act immediately on the effective date of this offering.
STOCK OPTIONS
We have filed a registration statement under the Securities Act covering all shares of common stock subject to outstanding stock options and common stock issuable under our stock option plans. Shares of common stock registered under any registration statement will, subject to Rule 144 volume limitations applicable to affiliates and the lock-up agreements described in "Underwriting," be available for sale in the open market.
66

UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement dated , 2001, we and the selling stockholders have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and U.S. Bancorp Piper Jaffray Inc. are acting as representatives, the following respective numbers of shares of common stock:

                                                              NUMBER OF
UNDERWRITER                                                     SHARES
-----------                                                   ----------
Credit Suisse First Boston Corporation......................
Morgan Stanley & Co. Incorporated...........................
Banc of America Securities LLC..............................
U.S. Bancorp Piper Jaffray Inc..............................
                                                              ----------
    Total...................................................
                                                              ==========	

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.
The selling stockholders have granted to the underwriters a 30-day option to purchase on a pro rata basis up to an aggregate of 900,000 additional outstanding shares from the selling stockholders at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to broker/dealers.
The following table summarizes the compensation and estimated expenses we and the selling stockholders will pay:

                                                     PER SHARE                           TOTAL
                                          -------------------------------   -------------------------------
                                             WITHOUT            WITH           WITHOUT            WITH
                                          OVER-ALLOTMENT   OVER-ALLOTMENT   OVER-ALLOTMENT   OVER-ALLOTMENT
                                          --------------   --------------   --------------   --------------
Underwriting Discounts and Commissions
  payable by us.........................      $                $                $                $
Expenses payable by us..................      $                $                $                $
Underwriting Discounts and Commissions
  payable by the selling stockholders...      $                $                $                $
Expenses payable by the selling
  stockholders..........................      $   --           $   --           $   --           $   --	

Credit Suisse First Boston Corporation, one of the underwriters, may be deemed to be our affiliate. The offering, therefore, is being conducted in accordance with the applicable provisions of Rule 2720 of the National Association of Securities Dealers, Inc.'s Conduct Rules.
We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to
67

make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston Corporation for a period of 90 days after the date of this prospectus, except issuances pursuant to the exercise of employee stock options outstanding on the date hereof or pursuant to our dividend reinvestment plan.
Our officers and directors, the selling stockholders and some of our existing stockholders and key employees have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston Corporation for a period of 90 days after the date of this prospectus.
We and the selling stockholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
Our common stock is listed on The New York Stock Exchange under the symbol "GB."
DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMB Funding II, Inc., DLJ Investment Partners, L.P., DLJ Investment Funding, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P. and DLJ First ESC, L.P., each of which is an affiliate of Credit Suisse First Boston Corporation, are stockholders of our company.
In addition, DLJ Merchant Banking Partners II, L.P. and its affiliates have the right to nominate a majority of the members of our Board of Directors. DLJ Capital Funding, Inc. acted as syndication agent and was a lender under our former bank credit facility. Prior to this offering, Credit Suisse First Boston Corporation and its affiliates owned an aggregate of approximately 54.7% of the issued and outstanding shares of our common stock.
In connection with the offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934.
- Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by either exercising their over-allotment option and/or purchasing shares in the open market.
- Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at
68

which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option--a naked short position--the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
- Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The New York Stock Exchange or otherwise and, if commenced, may be discontinued at any time.
A prospectus in electronic format will be made available on the web sites maintained by one or more of the underwriters participating in this offering. The representatives may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters that will make Internet distributions on the same basis as other allocations. Credit Suisse First Boston Corporation may effect an online distribution through its affiliate, CSFBDIRECT Inc., an online broker dealer, as a selling group member.
69

NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling stockholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.
REPRESENTATIONS OF PURCHASERS
By purchasing common stock in Canada and accepting a purchase confirmation, a purchaser is representing to us, the selling stockholders and the dealer from whom the purchase confirmation is received that:
- the purchaser is entitled under applicable provincial securities laws to purchase the common stock without the benefit of a prospectus qualified under those securities laws,
- where required by law, the purchaser is purchasing as principal and not as agent, and
- the purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario purchasers will not receive the contractual right of action prescribed by Ontario securities law. As a result, Ontario purchasers must rely on other remedies that may be available, including common law rights of action for damages or rescission or rights of action under the civil liability provisions of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named herein and the selling stockholders may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon the issuer or such persons. All or a substantial portion of the assets of the issuer and such persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the issuer or such persons in Canada or to enforce a judgment obtained in Canadian courts against such issuer or persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of common stock to whom the SECURITIES ACT (British Columbia) applies is advised that the purchaser is required to file with the British Columbia Securities Commission a report within 10 days of the sale of any common stock acquired by the purchaser in this offering. The report must be in the form attached to British Columbia Securities Commission Blanket Order BOR #95/17, a copy of which may be obtained from us. Only one report must be filed for common stock acquired on the same date and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and
70

about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered by this prospectus will be passed on for us by Weil, Gotshal & Manges LLP, Houston, Texas. Certain legal matters relating to the common stock offered by this prospectus will be passed on for the underwriters by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York.
EXPERTS
The consolidated balance sheets of Wilson Greatbatch Technologies, Inc. and subsidiary as of December 31, 1999 and December 29, 2000 and the consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 29, 2000 included in this prospectus and the related financial statement schedule included elsewhere in the registration statement of which this prospectus is a part have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein and elsewhere in this prospectus (which report expresses an unqualified opinion and includes an explanatory paragraph referring to a change in method of accounting for costs of start-up activities), and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the financial statements of Sierra-KD Components Division at December 31, 2000 and for the year then ended, as set forth in their report. We have included these financial statements in this prospectus and elsewhere in this registration statement in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.
71

WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act relating to the common stock being sold in this offering. This prospectus constitutes a part of that registration statement. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement because some parts have been omitted in accordance with the rules and regulations of the Commission. For further information about us and the common stock being sold in this offering, you should refer to the registration statement and the exhibits and schedules filed as a part of the registration statement. Statements contained in this prospectus regarding the contents of any agreement, contract or other document referred to are not necessarily complete. Reference is made in each instance to the copy of the contract or document filed as an exhibit to the registration statement. Each statement is qualified by reference to the exhibit. The registration statement, including related exhibits and schedules, may be inspected without charge at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained after payment of fees prescribed by the Commission from:
- the Commission's Public Reference Room at the Commission's principal office, 450 Fifth Street, N.W., Washington, D.C. 20549; or
- the Commission's regional offices in: New York, located at 7 World Trade Center, Suite 1300, New York, New York 10048; or Chicago, located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You may obtain information regarding the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the Commission. The address of the web site is WWW.SEC.GOV.
We furnish holders of our common stock with annual reports containing audited financial statements certified by an independent public accounting firm and quarterly reports containing unaudited condensed financial information for the first three quarters of each fiscal year. We also furnish other reports as we may determine or as may be required by law.
72

INDEX TO FINANCIAL STATEMENTS

PRO FORMA FINANCIAL STATEMENTS:

Unaudited Pro Forma As Adjusted Consolidated Financial
  Information...............................................   F-2

Unaudited Pro Forma As Adjusted Consolidated Balance Sheet
  as of March 30, 2001......................................   F-3

Unaudited Pro Forma As Adjusted Consolidated Statement of
  Operations for the year ended December 29, 2000...........   F-4

Unaudited Pro Forma As Adjusted Consolidated Statement of
  Operations for the three months ended March 30, 2001......   F-5

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY:

Independent Auditors' Report................................   F-6

Consolidated Balance Sheets as of December 31, 1999 and
  December 29, 2000.........................................   F-7

Consolidated Statements of Operations for the years ended
  January 1, 1999, December 31, 1999 and December 29,
  2000......................................................   F-8

Consolidated Statements of Stockholders' Equity for the
  years ended January 1, 1999, December 31, 1999 and
  December 29, 2000.........................................   F-9

Consolidated Statements of Cash Flows for the years ended
  January 1, 1999, December 31, 1999 and December 29,
  2000......................................................  F-10

Notes to Consolidated Financial Statements for the years
  ended January 1, 1999, December 31, 1999 and December 29,
  2000......................................................  F-11

SIERRA-KD COMPONENTS DIVISION:

Report of Ernst & Young LLP, Independent Auditors...........  F-28

Balance Sheets as of December 31, 2000 (Audited) and
  March 31, 2001 (Unaudited)................................  F-29

Statements of Operations for the year ended December 31,
  2000 (Audited) and three months ended March 31, 2000 and
  2001 (Unaudited)..........................................  F-30

Statements of Division Equity for the year ended
  December 31, 2000 (Audited) and the three months ended
  March 31, 2001 (Unaudited)................................  F-31

Statements of Cash Flows for the year ended December 31,
  2000 (Audited) and three months ended March 31, 2000 and
  2001 (Unaudited)..........................................  F-32

Notes to Financial Statements...............................  F-33	

F-1

UNAUDITED PRO FORMA AS ADJUSTED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma as adjusted consolidated financial information has been derived from the historical financial information of Wilson Greatbatch Technologies, Inc. (WGT) and the Sierra-KD Components Division (Sierra) included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations data for the year ended December 29, 2000 and for the three months ended March 30, 2001 gives effect to the following events as if each had occurred on January 1, 2000:
- the acquisition of Sierra in June 2001;
- the amendment of our credit agreement in June 2001; and
- the effect of our initial public offering and repayment of indebtedness in October 2000.
The unaudited pro forma as adjusted consolidated balance sheet data as of March 30, 2001 gives effect to the following events as if each had occurred on March 30, 2001:
- the acquisition of Sierra in June 2001;
- the amendment of our credit agreement in June 2001; and
- the receipt and application as described under "Use of Proceeds" of the estimated net proceeds to us from this offering assuming a price of $28.82 per share, the last reported sale price on the New York Stock Exchange on June 18, 2001.
The unaudited pro forma as adjusted consolidated financial information does not purport to represent what WGT's results of operations actually would have been had these events occurred on the dates indicated, nor are they intended to project WGT's results of operations for any future period or date. The unaudited pro forma as adjusted consolidated financial information should be read in conjunction with the historical consolidated financial statements appearing elsewhere in this prospectus.
F-2

UNAUDITED PRO FORMA AS ADJUSTED CONSOLIDATED BALANCE SHEET
AS OF MARCH 30, 2001
 (IN THOUSANDS)

                                              HISTORICAL
                                     -----------------------------
                                           WILSON
                                         GREATBATCH                   PRO FORMA                  OFFERING      PRO FORMA
                                     TECHNOLOGIES, INC.    SIERRA    ADJUSTMENTS   PRO FORMA    ADJUSTMENTS   AS ADJUSTED
                                     ------------------   --------   -----------   ----------   -----------   -----------
CURRENT ASSETS:
  Cash and cash equivalents........       $    253        $   448      $  (653)(1)  $     48      $52,670(3)   $ 52,718
  Accounts receivable, net.........         15,377          3,498       (4,816)(1)    14,059           --        14,059
  Inventories......................         15,948          4,771           --        20,719           --        20,719
  Prepaid expenses and other
    assets.........................            930             54           --           984           --           984
  Refundable income taxes..........            279             --           --           279           --           279
  Deferred tax asset...............          1,863             --           --         1,863           --         1,863
                                          --------        -------      -------      --------      -------      --------
  Total current assets.............         34,650          8,771       (5,469)       37,952       52,670        90,622
PROPERTY, PLANT AND EQUIPMENT,
  NET..............................         36,640          2,834           --        39,474           --        39,474
INTANGIBLE ASSETS, NET.............        102,347             --       42,676 (1)(2)   145,023        --       145,023
DEFERRED TAX ASSET.................          8,800             --           --         8,800           --         8,800
OTHER ASSETS.......................          1,970             65           --         2,035           --         2,035
                                          --------        -------      -------      --------      -------      --------
TOTAL ASSETS.......................       $184,407        $11,670      $37,207      $233,284      $52,670      $285,954
                                          ========        =======      =======      ========      =======      ========

CURRENT LIABILITIES:
  Accounts payable.................       $  3,277        $ 2,661      $(1,318)     $  4,620      $    --      $  4,620
  Accrued liabilities..............          9,429            534           --         9,963           --         9,963
  Due to affiliates................             --          2,095       (2,095)(1)        --           --            --
  Current maturities of long-term
    obligations....................             15             --        6,000 (2)     6,015           --         6,015
                                          --------        -------      -------      --------      -------      --------
  Total current liabilities........         12,721          5,290        2,587        20,598           --        20,598
LONG-TERM OBLIGATIONS..............         35,916             --       41,000 (2)    76,916           --        76,916
                                          --------        -------      -------      --------      -------      --------
  Total liabilities................         48,637          5,290       43,587        97,514           --        97,514
                                          --------        -------      -------      --------      -------      --------

STOCKHOLDERS' EQUITY:
  Common stock.....................             19             --           --            19            2 (3)        21
  Division equity..................             --          6,380       (6,380)(1)        --           --            --
  Capital in excess of par value...        157,537             --           --       157,537       52,668 (3)   210,205
  Retained deficit.................        (17,607)            --           --       (17,607)          --       (17,607)
                                          --------        -------      -------      --------      -------      --------
  Subtotal.........................        139,949          6,380       (6,380)      139,949       52,670       192,619
  Less treasury stock, at cost.....         (4,179)            --           --        (4,179)          --        (4,179)
                                          --------        -------      -------      --------      -------      --------
  Total stockholders' equity.......        135,770          6,380       (6,380)      135,770       52,670       188,440
                                          --------        -------      -------      --------      -------      --------
TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY...........................       $184,407        $11,670      $37,207      $233,284      $52,670      $285,954
                                          ========        =======      =======      ========      =======      ========	

(1) To record the purchase of substantially all of the assets of Sierra for $49.0 million in cash, less liabilities assumed. The transaction excluded cash, accounts receivable and intercompany accounts. We have also eliminated intercompany accounts receivable and accounts payable in the amount of $1,318,000. The excess of the purchase price over the fair value of the net assets that we acquired will be allocated to identifiable intangible assets and to goodwill. Such amounts are based on preliminary asset allocations and are subject to final allocation adjustments.
(2) To record borrowings of $47.0 million under WGT's amended credit facility for the purchase of Sierra and a loan origination fee to an unrelated party of $1.4 million incurred related to the borrowings of $47.0 million.
(3) To record assumed proceeds from the sale of 2,000,000 shares of WGT common stock less estimated underwriting fees and offering expenses of $5.0 million. The assumption of offering proceeds is permitted as we expect to have a firm commitment from our underwriters upon execution of the underwriting agreement.
F-3

UNAUDITED PRO FORMA AS ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 29, 2000
 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                  HISTORICAL
                                         -----------------------------
                                               WILSON                      SIERRA          IPO
                                             GREATBATCH                   PRO FORMA     PRO FORMA
                                         TECHNOLOGIES, INC.    SIERRA    ADJUSTMENTS   ADJUSTMENTS   PRO FORMA
                                         ------------------   --------   -----------   -----------   ----------
REVENUES...............................        $97,790        $13,691      $(3,100)(1)   $    --      $108,381
COST OF GOODS SOLD.....................         55,446         10,589       (3,100)(1)        --        62,935
                                               -------        -------      -------       -------      --------
GROSS PROFIT...........................         42,344          3,102           --            --        45,446
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES.............................         11,473          3,306           --            --        14,779
RESEARCH, DEVELOPMENT AND ENGINEERING
  COSTS, NET...........................          9,941            250           --            --        10,191
INTANGIBLE AMORTIZATION................          6,530             --        2,064 (2)        --         8,594
                                               -------        -------      -------       -------      --------
                                                14,400           (454)      (2,064)           --        11,882
INTEREST EXPENSE.......................         12,958             21        3,783 (3)    (8,889)(5)     7,873
OTHER (INCOME) EXPENSE.................           (189)            --           --            --          (189)
                                               -------        -------      -------       -------      --------
INCOME (LOSS) BEFORE INCOME TAXES AND
  EXTRAORDINARY LOSS...................          1,631           (475)      (5,847)        8,889         4,198
INCOME TAX EXPENSE (BENEFIT) (4).......            611           (166)      (2,163)        3,271         1,553
                                               -------        -------      -------       -------      --------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS
  (CONTINUING OPERATIONS)..............        $ 1,020        $  (309)     $(3,684)      $ 5,618      $  2,645
                                               =======        =======      =======       =======      ========

BASIC EARNINGS PER SHARE
  Income from continuing operations....        $  0.07                                                $   0.15

DILUTED EARNINGS PER SHARE
  Income from continuing operations....        $  0.07                                                $   0.14

WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic................................         14,167                                                  18,198
  Diluted..............................         14,434                                                  18,465	

(1) To eliminate intercompany sales.
(2) To record the amortization of intangible assets and goodwill acquired as a result of the purchase price allocation of Sierra. For pro forma purposes, identifiable intangible assets and goodwill are amortized over 20 years. Such amounts are based on preliminary asset allocations and are subject to final allocation adjustments. We have not included the potential impact of the new accounting standard regarding the treatment of goodwill as this standard has not yet been issued.
(3) To record interest expense at an effective interest rate of 8.5% for amounts borrowed under the amended credit facility used to finance the Sierra acquisition.
(4) Reflects an income tax (benefit) expense at expected effective rates.
(5) Adjusts interest expense to reflect what would have been expensed if the initial public offering that was completed on October 4, 2000 had occurred on January 1, 2000. This would result in interest on debt of approximately $3.7 million at an effective rate of approximately 8.5% rather than that which was historically recorded.
F-4

UNAUDITED PRO FORMA AS ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 30, 2001
 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                   HISTORICAL
                                          -----------------------------
                                                WILSON                      SIERRA          IPO
                                              GREATBATCH                   PRO FORMA     PRO FORMA
                                          TECHNOLOGIES, INC.    SIERRA    ADJUSTMENTS   ADJUSTMENTS   PRO FORMA
                                          ------------------   --------   -----------   -----------   ----------
REVENUES................................        $29,571        $ 5,295      $(1,300)(1)    $ --        $33,566
COST OF GOODS SOLD......................         15,560          3,953       (1,300)(1)      --         18,213
                                                -------        -------      -------        ----        -------
GROSS PROFIT............................         14,011          1,342           --          --         15,353
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES..............................          3,780            516           --          --          4,296
RESEARCH, DEVELOPMENT AND ENGINEERING
  COSTS, NET............................          3,188            139           --          --          3,327
INTANGIBLE AMORTIZATION.................          1,639             --          516 (2)      --          2,155
                                                -------        -------      -------        ----        -------
                                                  5,404            687         (516)         --          5,575
INTEREST EXPENSE........................            712             (1)         846 (3)      89 (5)      1,646
OTHER (INCOME) EXPENSE..................             59             --           --          --             59
                                                -------        -------      -------        ----        -------
INCOME (LOSS) BEFORE INCOME TAXES AND
  EXTRAORDINARY LOSS....................          4,633            688       (1,362)        (89)         3,870
INCOME TAX EXPENSE (BENEFIT)............          1,714            241         (504)(4)     (19)(4)      1,432
                                                -------        -------      -------        ----        -------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS
  (CONTINUING OPERATIONS)...............        $ 2,919        $   447      $  (858)       $(70)       $ 2,438
                                                =======        =======      =======        ====        =======
BASIC EARNINGS PER SHARE
  Income from continuing operations.....        $  0.16                                                $  0.13
DILUTED EARNINGS PER SHARE
  Income from continuing operations.....        $  0.15                                                $  0.13
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic.................................         18,713                                                 18,713
  Diluted...............................         19,059                                                 19,059	

(1) To eliminate intercompany sales.
(2) To record the amortization of intangible assets acquired as a result of the purchase price allocation of Sierra. For pro forma purposes, identifiable intangible assets and goodwill are amortized over 20 years. Such amounts are based on preliminary asset allocations and are subject to final allocation adjustments. We have not included the potential impact of the new accounting standard regarding the treatment of goodwill as this standard has not yet been issued.
(3) To record interest expense at an effective interest rate of 8.5% for amounts borrowed under the amended credit facility used to finance the Sierra acquisition.
(4) Reflects an income tax (benefit) expense at expected effective rates.
(5) Adjusts interest expense to reflect what would have been expensed if the initial public offering that was completed on October 4, 2000 had occurred on January 1, 2000. This would result in interest on debt of approximately $0.5 million at an effective rate of approximately 8.5% rather than that which was historically recorded.
F-5

INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Wilson Greatbatch Technologies, Inc.
Clarence, New York
We have audited the accompanying consolidated balance sheets of Wilson Greatbatch Technologies, Inc. and subsidiary (the "Company") as of December 31, 1999 and December 29, 2000, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 29, 2000. Our audits also included the financial statement schedule listed in the Index at Item 16(B). These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Wilson Greatbatch Technologies, Inc. and subsidiary as of December 31, 1999 and December 29, 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 29, 2000, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, in 1999, the Company changed its method of accounting for costs of start-up activities.
DELOITTE & TOUCHE LLP
Buffalo, New York
January 24, 2001
F-6

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
 (DOLLARS IN THOUSANDS)

                                                           DECEMBER 31,   DECEMBER 29,    MARCH 30,
                                                               1999           2000          2001
                                                           ------------   ------------   -----------
                                                                                         (UNAUDITED)
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents..............................    $  3,863       $     16       $    253
  Accounts receivable, net of allowance for doubtful
    accounts of $219, $319 and $364 as of December 31,
    1999, December 29, 2000 and March 30, 2001,
    respectively.........................................      11,016         12,977         15,377
  Inventories............................................      13,583         13,643         15,948
  Prepaid expenses and other assets......................         868            819            930
  Refundable income taxes................................       2,520            623            279
  Deferred tax asset.....................................       1,520          1,863          1,863
                                                             --------       --------       --------
    Total current assets.................................      33,370         29,941         34,650
PROPERTY, PLANT AND EQUIPMENT, NET.......................      33,557         36,625         36,640
INTANGIBLE ASSETS, NET...................................     112,902        104,395        102,347
DEFERRED TAX ASSET.......................................       7,828          8,800          8,800
OTHER ASSETS.............................................       2,122          1,886          1,970
                                                             --------       --------       --------
TOTAL ASSETS.............................................    $189,779       $181,647       $184,407
                                                             ========       ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable.......................................    $  2,385       $  2,365       $  3,277
  Accrued liabilities....................................       7,139          9,480          9,429
  Current maturities of long-term obligations............       6,225          3,017             15
                                                             --------       --------       --------
    Total current liabilities............................      15,749         14,862         12,721
LONG-TERM OBLIGATIONS....................................     126,988         30,951         35,916
DEFERRED COMPENSATION....................................         635             --             --
                                                             --------       --------       --------
    Total liabilities....................................     143,372         45,813         48,637

COMMITMENTS AND CONTINGENCIES (NOTE 13)

STOCKHOLDERS' EQUITY:
  Common stock...........................................          12             19             19
  Subscribed common stock................................       1,684             --             --
  Capital in excess of par value.........................      63,488        157,526        157,537
  Retained deficit.......................................     (16,984)       (17,532)       (17,607)
                                                             --------       --------       --------
    Subtotal.............................................      48,200        140,013        139,949
  Less treasury stock, at cost...........................        (109)        (4,179)        (4,179)
  Less subscribed common stock receivable................      (1,684)            --             --
                                                             --------       --------       --------
    Total stockholders' equity...........................      46,407        135,834        135,770
                                                             --------       --------       --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...............    $189,779       $181,647       $184,407
                                                             ========       ========       ========	

See notes to consolidated financial statements.
F-7

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                        YEARS ENDED                     THREE MONTHS ENDED
                                          ----------------------------------------   -------------------------
                                          JANUARY 1,   DECEMBER 31,   DECEMBER 29,    MARCH 31,     MARCH 30,
                                             1999          1999           2000          2000          2001
                                          ----------   ------------   ------------   -----------   -----------
                                                                                     (UNAUDITED)   (UNAUDITED)
REVENUES................................   $77,361       $79,235        $97,790        $23,176       $29,571
COST OF GOODS SOLD......................    36,454        41,057         55,446         12,936        15,560
                                           -------       -------        -------        -------       -------
GROSS PROFIT............................    40,907        38,178         42,344         10,240        14,011
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES..............................    11,484         9,880         11,473          2,624         3,780
RESEARCH, DEVELOPMENT AND ENGINEERING
  COSTS, NET............................    12,190         9,339          9,941          2,520         3,188
INTANGIBLE AMORTIZATION.................     5,197         6,510          6,530          1,627         1,639
                                           -------       -------        -------        -------       -------
                                            12,036        12,449         14,400          3,469         5,404
INTEREST EXPENSE........................    10,572        13,420         12,958          3,985           712
OTHER EXPENSE (INCOME)..................       364         1,343           (189)            61            59
                                           -------       -------        -------        -------       -------
INCOME (LOSS) BEFORE INCOME TAXES,
  EXTRAORDINARY LOSS AND CUMULATIVE
  EFFECT OF ACCOUNTING CHANGE...........     1,100        (2,314)         1,631           (577)        4,633
INCOME TAX EXPENSE (BENEFIT)............       410          (605)           611           (184)        1,714
                                           -------       -------        -------        -------       -------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS
  AND CUMULATIVE EFFECT OF ACCOUNTING
  CHANGE................................       690        (1,709)         1,020           (393)        2,919
EXTRAORDINARY LOSS ON RETIREMENT OF
  DEBT, NET OF TAX......................        --            --         (1,568)            --        (2,994)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE,
  NET OF TAX............................        --          (563)            --             --            --
                                           -------       -------        -------        -------       -------
NET INCOME (LOSS).......................   $   690       $(2,272)       $  (548)       $  (393)      $   (75)
                                           =======       =======        =======        =======       =======
BASIC EARNINGS (LOSS) PER SHARE
  Income (loss) from continuing
    operations..........................   $  0.07       $ (0.14)       $  0.07        $ (0.03)      $  0.16
  Extraordinary loss on retirement of
    debt................................        --            --          (0.11)         (0.00)        (0.16)
  Cumulative effect of accounting
    change..............................        --         (0.04)            --             --            --
                                           -------       -------        -------        -------       -------
  Net income (loss).....................   $  0.07       $ (0.18)       $ (0.04)       $ (0.03)      $ (0.00)
                                           =======       =======        =======        =======       =======
DILUTED EARNINGS (LOSS) PER SHARE
  Income (loss) from continuing
    operations..........................   $  0.06       $ (0.14)       $  0.07        $ (0.03)      $  0.15
  Extraordinary loss on retirement of
    debt................................        --            --          (0.11)         (0.00)        (0.15)
  Cumulative effect of accounting
    change..............................        --         (0.04)            --             --            --
                                           -------       -------        -------        -------       -------
  Net income (loss).....................   $  0.06       $ (0.18)       $ (0.04)       $ (0.03)      $ (0.00)
                                           =======       =======        =======        =======       =======
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic.................................    10,461        12,491         14,167         12,616        18,713
  Diluted...............................    10,677        12,491         14,434         12,616        19,059	

See notes to consolidated financial statements.
F-8

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 (DOLLARS IN THOUSANDS EXCEPT SHARES)

                                                               SUBSCRIBED         CAPITAL
                                       COMMON STOCK           COMMON STOCK       IN EXCESS   RETAINED      TREASURY STOCK
                                   ---------------------   -------------------    OF PAR     EARNINGS    -------------------
                                     SHARES      AMOUNT     SHARES     AMOUNT      VALUE     (DEFICIT)    SHARES     AMOUNT
                                   ----------   --------   --------   --------   ---------   ---------   --------   --------
BALANCE, JANUARY 2, 1998.........   8,728,262     $ 9       336,800    $1,684    $ 43,632    $(15,402)        --     $   --
  Shares issued in connection
    with the financing of
    Greatbatch-Hittman...........   3,300,000       3            --        --      16,497          --         --         --
  Shares contributed to Employee
    Stock Ownership Plan.........      25,231      --            --        --         126          --         --         --
  Exercise of stock options......       7,960      --            --        --          40          --         --         --
  Net income.....................          --      --            --        --          --         690         --         --
                                   ----------     ---      --------    ------    --------    --------    -------     ------
BALANCE, JANUARY 1, 1999.........  12,061,453      12       336,800     1,684      60,295     (14,712)        --         --
  Common stock issued............      66,537      --            --        --         998          --         --         --
  Common stock acquired for
    treasury.....................          --      --            --        --          --          --      7,285        109
  Shares contributed to Employee
    Stock Ownership Plan.........     139,470      --            --        --       2,092          --         --         --
  Exercise of stock options......      20,668      --            --        --         103          --         --         --
  Net loss.......................          --      --            --        --          --      (2,272)        --         --
                                   ----------     ---      --------    ------    --------    --------    -------     ------
BALANCE, DECEMBER 31, 1999.......  12,288,128      12       336,800     1,684      63,488     (16,984)     7,285        109
  Common stock issued............   5,950,000       6            --        --      86,401          --         --         --
  Common stock acquired for
    treasury.....................          --      --            --        --          --          --    265,746      4,250
  Shares contributed to Employee
    Stock Ownership Plan.........      57,038      --            --        --         856          --    (11,970)      (180)
  Shares issued to acquire
    Battery Engineering, Inc.....     339,856       1            --        --       5,097          --         --         --
  Purchase and cancel fractional
    shares.......................         (70)     --            --        --          (1)         --         --         --
  Settlement of common stock
    subscriptions................     336,800      --      (336,800)   (1,684)      1,684          --         --         --
  Exercise of stock options......          47      --            --        --           1          --         --         --
  Net loss.......................          --      --            --        --          --        (548)        --         --
                                   ----------     ---      --------    ------    --------    --------    -------     ------
BALANCE, DECEMBER 29, 2000.......  18,971,799     $19            --    $   --    $157,526    $(17,532)   261,061     $4,179
                                   ==========     ===      ========    ======    ========    ========    =======     ======

                                   SUBSCRIBED
                                     COMMON
                                     STOCK
                                   RECEIVABLE
                                   ----------
BALANCE, JANUARY 2, 1998.........    $1,684
  Shares issued in connection
    with the financing of
    Greatbatch-Hittman...........        --
  Shares contributed to Employee
    Stock Ownership Plan.........        --
  Exercise of stock options......        --
  Net income.....................        --
                                     ------
BALANCE, JANUARY 1, 1999.........     1,684
  Common stock issued............        --
  Common stock acquired for
    treasury.....................        --
  Shares contributed to Employee
    Stock Ownership Plan.........        --
  Exercise of stock options......        --
  Net loss.......................        --
                                     ------
BALANCE, DECEMBER 31, 1999.......     1,684
  Common stock issued............        --
  Common stock acquired for
    treasury.....................        --
  Shares contributed to Employee
    Stock Ownership Plan.........        --
  Shares issued to acquire
    Battery Engineering, Inc.....        --
  Purchase and cancel fractional
    shares.......................        --
  Settlement of common stock
    subscriptions................    (1,684)
  Exercise of stock options......        --
  Net loss.......................        --
                                     ------
BALANCE, DECEMBER 29, 2000.......    $   --
                                     ======	

See notes to consolidated financial statements.
F-9

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (DOLLARS IN THOUSANDS)

                                                                   YEARS ENDED                     THREE MONTHS ENDED
                                                     ----------------------------------------   -------------------------
                                                     JANUARY 1,   DECEMBER 31,   DECEMBER 29,    MARCH 31,     MARCH 30,
                                                        1999          1999           2000          2000          2001
                                                     ----------   ------------   ------------   -----------   -----------
                                                                                                (UNAUDITED)   (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)..................................   $    690      $(2,272)       $   (548)      $  (393)     $    (75)
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities, net of
  acquisitions:
  Depreciation and amortization....................      9,190       11,363          12,102         3,115         3,222
  Extraordinary loss on retirement of debt.........         --           --           2,407            --         3,019
  Amortization of deferred financing costs.........        699          972             907           232            30
  Deferred income taxes............................       (907)       1,309            (369)           --            --
  Loss on disposal of assets.......................        194          146              68            --            26
  Valuation loss on investment held at cost........         --          859              --            --            --
  Cumulative effect of accounting change...........         --          939              --            --            --
  Reserve for disposal of property.................        300           --              --            --            --
Changes in operating assets and liabilities:
  Accounts receivable..............................     (4,223)         947          (1,018)          556        (2,400)
  Inventories......................................       (629)        (292)            914        (1,134)       (2,305)
  Prepaid expenses and other assets................        (57)        (663)          2,144          (454)         (220)
  Accounts payable.................................       (103)         251            (128)          253           912
  Accrued liabilities..............................      4,809       (2,741)          1,536         2,336           248
  Income taxes.....................................       (910)      (1,826)            145           120            29
                                                      --------      -------        --------       -------      --------
    Net cash provided by operating activities......      9,053        8,992          18,160         4,631         2,486
                                                      --------      -------        --------       -------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property, plant and equipment.....     (6,207)      (8,452)         (4,528)       (1,918)       (1,552)
  Proceeds from sale of property, plant and
    equipment......................................         80            5               4            --            --
  Increase in intangible assets....................     (1,741)        (570)           (417)         (267)         (940)
  (Increase) decrease in other long term assets....     (2,569)         170              --            --            --
  Cash provided in acquisition of subsidiary.......         --           --           1,583            --            --
  Acquisition of subsidiary, net of cash
    acquired.......................................    (72,938)          --              --            --            --
                                                      --------      -------        --------       -------      --------
    Net cash used in investing activities..........    (83,375)      (8,847)         (3,358)       (2,185)       (2,492)
                                                      --------      -------        --------       -------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings (repayments) under line of credit,
    net............................................       (700)       4,300          (4,300)       (2,150)          500
  Proceeds from long-term debt.....................     61,853           --              --            --        40,000
  Scheduled payments of long-term debt.............       (775)          --          (4,456)       (1,650)           (3)
  Prepayments of long-term debt....................       (775)      (2,950)        (93,735)           --       (40,265)
  Acquisition earnout payment......................         --       (2,764)             --            --            --
  Purchase of treasury stock.......................         --         (109)         (2,565)          (35)           --
  Expenses related to initial public offering......         --           --          (2,153)           --            --
  Issuance of common stock.........................     16,540        1,101          88,560            --            11
                                                      --------      -------        --------       -------      --------
    Net cash provided by (used in) financing
      activities...................................     76,143         (422)        (18,649)       (3,835)          243
                                                      --------      -------        --------       -------      --------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS.................................      1,821         (277)         (3,847)       (1,389)          237
CASH AND CASH EQUIVALENTS, BEGINNING
  OF YEAR..........................................      2,319        4,140           3,863         3,863            16
                                                      --------      -------        --------       -------      --------
CASH AND CASH EQUIVALENTS, END OF YEAR.............   $  4,140      $ 3,863        $     16       $ 2,474      $    253
                                                      ========      =======        ========       =======      ========	

See notes to consolidated financial statements.
F-10

WILSON GREATBATCH TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JANUARY 1, 1999, DECEMBER 31, 1999 AND DECEMBER 29, 2000
1. DESCRIPTION OF BUSINESS
THE ENTITY--The consolidated financial statements include the accounts of Wilson Greatbatch Technologies, Inc., a holding company, and its wholly-owned subsidiary Wilson Greatbatch Ltd. (collectively, the "Company"). The Company is comprised of its operating companies, Wilson Greatbatch Ltd. and its wholly-owned subsidiaries, Greatbatch-Hittman, Inc. ("Hittman") and Battery Engineering, Inc. ("BEI"). All significant intercompany balances and transactions have been eliminated.
NATURE OF OPERATIONS--The Company operates in two reportable segments-medical and commercial power sources. The medical segment designs and manufactures power sources, capacitors and components used in implantable medical devices. The commercial power sources segment designs and manufactures non-medical power sources for use in aerospace, oil and gas exploration and oceanographic equipment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING CHANGE--In 1999, the Company adopted Statement of Position 98-5, "Reporting the Costs of Start-Up Activities." This statement required that start-up costs, including organization costs, capitalized by the Company prior to January 2, 1999, be written off and any future start-up costs be expensed as incurred. The total amount of deferred start-up costs reported as a cumulative effect of change in accounting principle was $939,000, net of tax benefits of $376,000.
CASH AND CASH EQUIVALENTS--Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities of three months or less.
INVENTORIES--Inventories include raw materials, work-in-process and finished goods and are stated at the lower of cost (as determined by the first-in, first-out method) or market.
PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment is carried at cost. Depreciation is computed primarily by the straight-line method over the estimated useful lives of the assets, which are as follows: buildings and building improvements 7-40 years; machinery and equipment 3-10 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less.
The cost of repairs and maintenance is charged to expense as incurred. Renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is recorded in income or expense. The Company continually reviews plant and equipment to determine that the carrying values have not been impaired.
INTANGIBLE ASSETS--Intangible assets include goodwill and other identifiable intangible assets, which were derived in connection with the Company's acquisition of the Predecessor (Wilson Greatbatch Ltd.) in 1997, Hittman and BEI. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill is being amortized on a straight-line basis over 15 to 40 years. Other identifiable intangible assets are being amortized on a straight-line basis over their estimated useful lives as follows: trademark and names, 40 years; patented technology, 12 years; assembled workforce, 10-12 years; and other intangibles, 3-10 years. Deferred financing costs are amortized using the effective yield method over the life of the underlying debt. The Company continually reviews these intangible assets for potential impairment by assessing significant decreases in the market value, a significant change in the extent or manner in which an asset is used or a significant adverse change in the business climate. The Company measures expected future cash flows and
F-11

compares them to the carrying amount of the asset to determine whether any impairment loss is to be recognized.
FAIR VALUE OF FINANCIAL INSTRUMENTS--The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Unless otherwise disclosed, the fair value of cash and cash equivalents approximates their recorded values due to the nature of the instruments. The floating rate debt carrying value approximates the fair value based on the floating interest rate resetting on a regular basis. The fixed rate long-term debt carrying value approximates fair value.
The fair value of the interest rate cap agreements are estimated by obtaining quotes from brokers and represents the cash requirement if the existing contract has been settled at year end. The notional amount, fair value and carrying amount of the Company's interest rate cap agreements were approximately $54.1 million and $79.1 million; $196,000 and $515,300; and $254,500 and $229,100, as of January 1, 1999 and December 31, 1999, respectively. In the fourth quarter of 2000, the Company terminated two of its three interest rate cap agreements. As a result, a gain was recorded and included in ordinary income for the year ended December 29, 2000. The other interest rate cap agreement expired in December 2000 resulting in no gain or loss. At December 29, 2000, the Company was not party to any interest rate cap agreements.
CONCENTRATION OF CREDIT RISK--Financial instruments which potentially subject the Company to concentration of credit risk consist principally of trade receivables. A significant portion of the Company's sales are to customers in the medical industry, and, as such, the Company is directly affected by the condition of that industry. However, the credit risk associated with trade receivables is minimal due to the Company's stable customer base and ongoing control procedures, which monitor the creditworthiness of customers.
DERIVATIVE FINANCIAL INSTRUMENTS--The Company has only limited involvement with derivative financial instruments and does not enter into financial instruments for trading purposes. Interest rate cap agreements have been used to reduce the potential impact of increases in interest rates on floating-rate long-term debt. Premiums paid for purchased interest rate cap agreements are amortized over the terms of the caps and recognized as interest expense. Unamortized premiums are included in other assets in the consolidated balance sheets. Amounts receivable under interest rate cap agreements are accrued as a reduction of interest expense. At December 29, 2000, the interest rate cap agreements to which the Company had been a party had either expired or been sold.
STOCK OPTION PLAN--The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards ("SFAS") No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION. As permitted in that Standard, the Company has chosen to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related interpretations. Prior to its Initial Public Offering in September 2000, there was no readily available market for the Company's stock. In the absence of a "regular, active public market," the fair market value of the common stock had been determined by the Board of Directors, via independent valuations.
INCOME TAXES--The Company provides for income taxes using the liability method whereby deferred tax liabilities and assets are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using the anticipated tax rate when taxes are expected to be paid or reversed.
REVENUE RECOGNITION--Revenues are recognized when the products are shipped to customers.
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS--Research, development and engineering costs are expensed as incurred. The Company recognizes cost reimbursements from customers for whom the Company designs products upon achieving milestones related to designing batteries and capacitors for
F-12

their products. The cost reimbursements charged to customers represent actual costs incurred by the Company in the design and testing of prototypes built to customer specifications. This cost reimbursement includes no mark-up and is recorded as an offset to research, development and engineering costs.
Net research, development and engineering costs for 1998, 1999 and 2000 are as follows (dollars in thousands):

                                                     1998       1999       2000
                                                   --------   --------   --------
Research, development and engineering costs......  $15,580    $11,885    $13,101
Less cost reimbursements.........................   (3,390)    (2,546)    (3,160)
                                                   -------    -------    -------
Research, development and engineering costs,
  net............................................  $12,190    $ 9,339    $ 9,941
                                                   =======    =======    =======	

EARNINGS (LOSS) PER SHARE--Basic earnings per share is calculated by dividing net income (loss) by the average number of shares outstanding during the period. Diluted earnings per share is calculated by adjusting for common stock equivalents, which consist of stock options. There were approximately 0.2 million stock options that were not included in the computation of diluted earnings per share for 1999 because to do so would have been antidilutive. Diluted earnings per share for 1998 and 2000 include the potentially dilutive effect of stock options. All shares held in the Employee Stock Ownership Plan
("ESOP") are considered outstanding for both basic and diluted earnings (loss)
per share calculations.
COMPREHENSIVE INCOME--Comprehensive income includes all changes in stockholders' equity during a period except those resulting from investments by owners and distribution to owners. For all periods presented, the Company's only component of comprehensive income is its net income (loss) for those periods.
USE OF ESTIMATES--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS--SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, is effective for all fiscal years beginning after June 15, 2000. SFAS 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Under SFAS 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. The Company will adopt SFAS 133 effective December 30, 2000 (first quarter of 2001). Management does not expect the adoption of SFAS 133 to have a significant impact on the consolidated financial position, results of operations, or cash flows of the Company.
FINANCIAL STATEMENT YEAR END--The Company's year end is the closest Friday to December 31. Fiscal 1998, 1999 and 2000 included 52 weeks.
F-13

SUPPLEMENTAL CASH FLOW INFORMATION:

                                                      1998       1999       2000
                                                    --------   --------   --------
                                                            (IN THOUSANDS)
Cash paid during the year for:
  Interest........................................   $9,150    $13,790    $12,883
  Income taxes....................................    1,482        186        122

Noncash investing and financing activities:
  Common stock issued for acquisition.............   $   --    $    --    $ 5,098
  Common stock contributed to ESOP................      126      2,092      1,036
  Settlement of subscribed common stock
    receivable....................................       --         --      1,684	

RECLASSIFICATIONS--Certain reclassifications were made to the prior years' financial statements to conform with the current year presentation. None of the reclassifications affected net (loss) income or stockholders' equity.
3. ACQUISITIONS
On August 4, 2000, Wilson Greatbatch Ltd. acquired all of the capital stock of BEI, a small specialty battery manufacturer, in exchange for 339,856 shares ($5,098,000) of Company common stock and the assumption of approximately $2.7 million of indebtedness.
The acquisition was recorded under the purchase method of accounting and accordingly, the results of the operations of BEI have been included in the consolidated financial statements from the date of acquisition. The purchase price has been allocated to assets acquired and liabilities assumed based on the fair value at the date of acquisition. Liabilities assumed in this acquisition were $3,946,000. The excess of the acquisition cost over fair value of the net assets acquired was approximately $0.8 million which was allocated to goodwill.
On August 7, 1998, Wilson Greatbatch Ltd. acquired all of the issued and outstanding shares of Hittman for a total purchase price of $71.8 million. Of the total purchase price, $69.0 million was paid in cash at the date of acquisition. The remaining purchase price was contingent upon Hittman achieving certain financial targets in 1998 and 1999. Approximately $2.8 million of the contingent consideration was incurred in 1998, paid in 1999, and allocated to the purchase price. There is no additional contingent consideration to be incurred.
The acquisition was recorded under the purchase method of accounting and accordingly, the results of the operations of Hittman have been included in the consolidated financial statements from the date of acquisition. The purchase price has been allocated to assets acquired and liabilities assumed based on the fair value at the date of acquisition. Liabilities assumed in this acquisition were $1,034,000. The excess of the purchase price over fair value of the net assets acquired was approximately $67.7 million, of which $17.4 million was allocated to identifiable intangible assets and $50.3 million was allocated to goodwill.
F-14

4. INVENTORIES
Inventories consisted of the following (dollars in thousands):

                                           DECEMBER 31,   DECEMBER 29,    MARCH 30,
                                               1999           2000          2001
                                           ------------   ------------   -----------
                                                                         (UNAUDITED)
Raw material.............................     $ 7,099        $ 7,302       $ 7,947
Work-in-process..........................       5,089          4,941         5,951
Finished goods...........................       1,395          1,400         2,050
                                              -------        -------       -------

Total....................................     $13,583        $13,643       $15,948
                                              =======        =======       =======	

5. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consisted of the following (dollars in thousands):

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Land and land improvements..........................     $ 2,227       $  3,316
Buildings and building improvements.................       5,226          6,799
Leasehold improvements..............................       2,243          2,837
Machinery and equipment.............................      26,153         32,610
Furniture and fixtures..............................       1,628          1,742
Computers and information technology................       2,259          2,569
Other...............................................       2,863            678
                                                         -------       --------
                                                          42,599         50,551
Less accumulated depreciation.......................      (9,042)       (13,926)
                                                         -------       --------

Total...............................................     $33,557       $ 36,625
                                                         =======       ========	

Depreciation expense for 1998, 1999 and 2000 was approximately $3,532,000, $4,240,000 and $4,943,000, respectively.
F-15

6. INTANGIBLE ASSETS, NET
Intangible assets consisted of the following (dollars in thousands):

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Goodwill, net of accumulated amortization of $2,229
  and $3,803........................................    $ 53,944       $ 54,948
Trademark and names, net of accumulated amortization
  of $1,685 and $2,426..............................      27,975         27,234
Patented technology, net of accumulated amortization
  of $2,824 and $3,952..............................      10,606          9,478
License agreement, net of accumulated amortization
  of $2,579 and $3,459..............................       3,611            988
Assembled workforce, net of accumulated amortization
  of $1,468 and $2,103..............................       5,912          5,277
Noncompete/employment agreement, net of accumulated
  amortization of $1,400 and $2,333.................       4,200          3,267
Unpatented proprietary technology, net of
  accumulated amortization of $976 and $1,611.......       2,224          1,589
Patent licenses, net of accumulated amortization of
  $312 and $313.....................................         295            367
Deferred financing costs, net of accumulated
  amortization of $1,746 and $4,405.................       3,906          1,247
Interest rate cap agreements........................         229             --
                                                        --------       --------

Total...............................................    $112,902       $104,395
                                                        ========       ========	

During 2000, a review of underlying data by management resulted in a reclassification of cost and accumulated amortization from license agreement to goodwill. This reclassification did not impact amortization expense for any years presented.
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following (dollars in thousands):

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Salaries and benefits...............................     $3,832         $4,901
Profit sharing......................................      1,105          2,456
Interest............................................        931            163
Other...............................................      1,271          1,960
                                                         ------         ------

Total...............................................     $7,139         $9,480
                                                         ======         ======	

F-16

8. LONG-TERM OBLIGATIONS
Long-term obligations consisted of the following (dollars in thousands):

                                                           DECEMBER 31,   DECEMBER 29,    MARCH 30,
                                                               1999           2000          2001
                                                           ------------   ------------   -----------
                                                                                         (UNAUDITED)
Long-term Debt:
  New $40.0 million term loan............................    $     --        $    --       $35,000
  New $20.0 million revolving line of credit.............          --             --           500
  Term A Facility, $50.0 million. This credit facility
    was refinanced in its entirety on January 12, 2001.
    See below............................................      46,250          6,247            --
  Term B Facility, $60.0 million. This credit facility
    was refinanced in its entirety on January 12, 2001.
    See below............................................      59,250          9,018            --
  Revolving Credit Facility, up to $20.0 million. This
    credit facility was refinanced in its entirety on
    January 12, 2001. See below..........................       4,300             --            --
  Senior Subordinated Notes, principal amount of Notes of
    $25.0 million. These notes were refinanced in their
    entirety on January 12, 2001. See below..............      22,602         18,337            --
                                                             --------        -------       -------
    Total long-term debt.................................     132,402         33,602        35,500
  Other long-term obligations............................         811            366           431
                                                             --------        -------       -------
    Total long-term obligations..........................     133,213         33,968        35,931
  Less current maturities of long-term obligations.......      (6,225)        (3,017)          (15)
                                                             --------        -------       -------
  Long-term obligations..................................    $126,988        $30,951       $35,916
                                                             ========        =======       =======	

In July 1997, the Company entered into a Credit Agreement with various financial institutions providing a maximum of $60.0 million in senior, first-secured financing. In August 1998, this agreement was amended and restated to facilitate the Hittman acquisition, and the maximum senior, first secured financing was increased to $130.0 million (the "Agreement"). The Agreement provided for two term facilities ("Term A Facility" and "Term B Facility") and a revolving credit facility ("Revolving Facility"). No gain or loss was recorded as a result of the amended and restated Agreement.
Also, in July 1997, the Company issued $25.0 million, 13% Senior Subordinated Notes (the "Senior Subordinated Notes") to various affiliates of the former Donaldson, Lufkin & Jenrette ("DLJ") and third parties and received $25.0 million related to the issuance. At maturity, July 1, 2007, the entire principal amount of the Senior Subordinated Notes, $25.0 million, will be payable to the holders of the Senior Subordinated Notes. At the date of inception, the Company recorded $21,811,688 as its obligation due to lenders and $3,188,312 for shares issued to the lenders. The difference between the face amount of the Senior Subordinated Notes and the recorded book value is amortized under the effective yield method and will be charged to interest expense over the term of the Senior Subordinated Notes. The effect of this transaction resulted in an effective interest rate of 14.3% in 1998, 1999 and 2000. Payments are subordinated to amounts due under the Agreement. In connection with the issuance of the Senior Subordinated Notes, the Company issued 637,663 shares to the holders of the Senior Subordinated Notes.
The Revolving Facility included the availability to the Company of up to $20.0 million in the form of either revolving loans, swing-line loans, or letters of credit. The swing-line loans and letters of credit were not to exceed $2.0 million and $5.0 million, respectively. The Revolving Facility was due September 30, 2004. There was no balance outstanding at December 29, 2000.
F-17

In October 2000, using the net proceeds from its Initial Public Offering, the Company prepaid $34.4 million of its Term A Facility and $49.6 million of its Term B Facility. Also in October 2000, the Company repurchased $5.0 million of its Senior Subordinated Notes and purchased for its Treasury 127,532 shares of common stock from the noteholder. As a result of the prepayment and repurchase transactions, an extraordinary loss for the extinguishment of debt was recorded in the fourth quarter of 2000 in the amount of $1.6 million, net of tax.
Subsequent to December 29, 2000, the Company consummated a new $60.0 million credit facility ("New Credit Facility") which was effective January 12, 2001. The New Credit Facility consists of a $40.0 million Term Loan and a $20.0 million revolving line of credit. The proceeds from the $40.0 million Term Loan were used to pay off the Term A Facility, Term B Facility and the Senior Subordinated Notes that were outstanding as of December 29, 2000, plus accrued interest and a call premium. The New Credit Facility has a term of five years and matures on January 1, 2006. Interest is payable monthly on any outstanding prime rate loans and upon the contractual maturity for LIBOR-based loans. The interest rate charged is, at the Company's option, based on either prime or LIBOR plus or minus an interest rate modifier ("Applicable Margin"). At current leverage levels, the applicable interest rates for both the Term Loan and the revolving line of credit are prime less 1.0% or LIBOR plus 1.25%, at the Company's option.
As a result of the payoff of debt in 2001, there will be an extraordinary loss for the extinguishment of debt recorded in the first quarter of 2001 in the amount of $3.0 million, net of tax.
The following maturity schedule is based on the New Credit Facility (dollars in thousands):

2001........................................................  $  3,000
2002........................................................     5,500
2003........................................................     7,500
2004........................................................     9,500
2005........................................................    11,500
Thereafter..................................................     3,000
                                                              --------
Total.......................................................  $ 40,000
                                                              ========	

9. INCENTIVE COMPENSATION AND EMPLOYEE BENEFIT PLANS
INCENTIVE COMPENSATION PLANS--The Company sponsors various incentive compensation programs, which provide for the payment of cash to key employees based upon achievement of specific earnings goals before incentive compensation expense.
EMPLOYEE STOCK OWNERSHIP PLAN--The Company sponsors a non-leveraged Employee Stock Ownership Plan ("ESOP") and related trust as a long-term benefit for substantially all of its employees as defined in the plan documents. Under the ESOP, there are two components to ESOP contributions. The first component is a defined contribution pension plan whose annual contribution equals five percent of each employee's compensation. Contributions to the ESOP are in the form of Company stock. The second component is a discretionary profit sharing contribution as determined by the Board of Directors. This profit sharing contribution is to be contributed to the ESOP in the form of Company stock. The ESOP is subject to contribution limitations and vesting requirements as defined in the plan.
Compensation cost under the two components of the ESOP recognized by the Company was approximately $2.1 million in 1998, $1.1 million in 1999 and $1.9 million in 2000. As of December 29, 2000, the Company had contributed 237,211 shares under the ESOP and 67,040 committed-to-be released shares under the ESOP, which equals the number of shares to settle the liability based on the closing market price of the shares at December 29, 2000.
F-18

SAVINGS PLAN--The Company sponsors a defined contribution 401(k) plan, which covers substantially all of its employees. The plan provides for the deferral of employee compensation under Section 401(k) and a Company match. Net pension costs related to this defined contribution pension plan were approximately $477,500, $429,000 and $468,000 in 1998, 1999 and 2000, respectively.
Total costs to the Company for all of the above plans were approximately $4,118,000, $1,946,000 and $3,367,000 in 1998, 1999 and 2000, respectively.
10. STOCK OPTION PLANS
The Company has two stock option plans which provide for the issuance of nonqualified and incentive stock options to employees of the Company. The Company's 1997 Stock Option Plan ("1997 Plan") authorizes the issuance of options to purchase up to 480,000 shares of common stock of the Company. The stock options generally vest over a five-year period and may vary depending upon the achievement of earnings targets. The stock options expire 10 years from the date of the grant. Stock options are granted at exercise prices equal to the fair market value of the Company's common stock at the date of the grant.
The Company's 1998 Stock Option Plan ("1998 Plan") authorizes the issuance of nonqualified and incentive stock options to purchase up to 1,220,000 shares of common stock of the Company, subject to the terms of the plan. The stock options vest over a three-to-five-year period and may vary depending upon the achievement of earnings targets. The stock options expire 10 years from the date of the grant. Stock options are granted at exercise prices equal to the fair value of the Company's common stock at the date of the grant.
As of December 29, 2000, options for 1,080,642 shares were available for future grants under the two plans. The weighted average remaining contractual life is seven years.
The fair value of stock options granted subsequent to the Company's Initial Public Offering on September 29, 2000 was the closing stock price on the date of grant. The Compensation Committee of the Board of Directors had determined the fair value of the stock options granted prior to September 29, 2000. In the absence of a "regular, active public market," and based in part on independent valuations of the Company's stock as of December 31, 1998 and 1999 and consideration of comparable companies, the fair value of the common stock underlying stock options granted in 1998 was estimated to be $5.00 per share. The fair value of the common stock underlying stock options granted in 1999 was estimated to be $15.00 per share.
F-19

A summary of the transactions under the 1997 Plan and 1998 Plan for 1998, 1999 and 2000 follows:

                                                                      WEIGHTED
                                                         OPTION       AVERAGE
                                                        ACTIVITY   EXERCISE PRICE
                                                        --------   --------------
Balance at January 2, 1998............................  423,600        $ 5.00
  Options granted.....................................   57,307          5.00
  Options exercised...................................   (7,960)         5.00
  Options forfeited...................................  (17,040)         5.00
                                                        -------

Balance at January 1, 1999............................  455,907        $ 5.00
  Options granted.....................................  138,457         15.00
  Options exercised...................................  (20,668)         5.00
  Options forfeited...................................  (63,439)         5.75
                                                        -------

Balance at December 31, 1999..........................  510,257        $ 7.60
  Options granted.....................................   83,472         15.49
  Options exercised...................................      (47)        15.00
  Options forfeited...................................   (2,997)        15.00
                                                        -------

Balance at December 29, 2000..........................  590,685        $ 8.70
                                                        -------

Options exercisable at:
  January 1, 1999.....................................  137,412        $ 5.00
  December 31, 1999...................................  133,325          7.05
  December 29, 2000...................................  245,759          7.66	

Of the options outstanding as of December 29, 2000, 376,466 options were at an exercise price of $5.00, 211,048 options were at a range of exercise prices of $15.00 to $16.00, and 3,171 options were at an exercise price of $26.00. The exercise prices of outstanding options approximated their weighted average exercise prices.
No compensation cost has been recognized in the financial statements because the option exercise price was equal to the estimated fair market value of the underlying stock on the date of grant. The weighted average grant date fair value of options granted was $1.31 in 1998, $5.45 for 1999 and $9.06 for 2000.
The Company has determined the pro forma information as if the Company had accounted for stock options granted under the fair value method of SFAS 123. The binomial option pricing model was used with the following weighted average assumptions: risk-free interest rates of 4.37%, 6.55% and 6.37% in 1998, 1999 and 2000, respectively; no dividend yield; expected common stock market price volatility factor of effectively zero in 1998 and 1999 and 48% in 2000; and a weighted average expected life of the options of seven years. As prescribed by SFAS 123, pro forma net income (loss), basic and diluted earnings (loss) per share would have been $600,000, $0.06, $0.06; $(2,975,000), $(0.24), $(0.24); and $(1,365,000), $(0.10), $(0.10) for 1998, 1999 and 2000, respectively. These pro forma calculations assume the common stock is freely tradable for all years presented and, as such, the impact is not necessarily indicative of the effects on reported net income of future years.
F-20

11. INCOME TAXES
The components of income tax expense (benefit) attributable to continuing operations for 1998, 1999 and 2000, consisted of the following (dollars in thousands):

                                                           1998       1999       2000
                                                         --------   --------   --------
Federal:
  Current..............................................    $580      $ (702)     $ --
  Deferred.............................................    (129)        685       411
                                                           ----      ------      ----
                                                            451         (17)      411
                                                           ----      ------      ----

State:
  Current..............................................     142      (1,588)       41
  Deferred.............................................    (183)      1,000       159
                                                           ----      ------      ----
                                                            (41)       (588)      200
                                                           ----      ------      ----
  Income tax expense (benefit).........................    $410      $ (605)     $611
                                                           ====      ======      ====	

The net deferred tax asset includes the following (dollars in thousands):

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Deferred tax asset -- current.......................     $1,520         $ 1,863
Deferred tax asset -- non current...................      7,828           8,800
                                                         ------         -------
Net deferred tax asset..............................     $9,348         $10,663
                                                         ======         =======	

The tax effect of major temporary differences that give rise to the Company's net deferred tax asset are as follows (dollars in thousands):

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Amortization of intangible assets...................     $7,249         $ 6,714
Allowance for obsolete inventory and Uniform
  Capitalization....................................        687             683
Accrued liabilities and deferred compensation.......        751           1,335
Depreciation........................................     (1,507)         (2,115)
Restructuring reserves..............................        153             113
Tax credits.........................................        559           1,287
Net operating loss carryforwards....................      1,430           2,646
Other...............................................         26              --
                                                         ------         -------
Net deferred tax asset..............................     $9,348         $10,663
                                                         ======         =======	

In assessing the reliability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the Initial Public Offering and simultaneous reduction of indebtedness and interest expense, as well as projections for future taxable income over the years in which the deferred assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences at December 29, 2000. Accordingly, no valuation allowance has been recorded.
F-21

The net deferred tax asset of $7,249,000 at December 31, 1999 and $6,714,000 at December 29, 2000 ascribed to the amortization of intangible assets is primarily attributable to the 1997 expensing of purchased in-process research, development and engineering costs.
The provision for income taxes differs in each of the years from the federal statutory rate due to the following:

                                                             1998           1999           2000
                                                           --------       --------       --------
Statutory rate......................................          35%            35%            35%
State taxes.........................................          15            (30)            (2)
Federal and state tax credits.......................         (14)            20             --
Other...............................................           1              1              4
                                                             ---            ---            ---
Effective tax rate..................................          37%            26%            37%
                                                             ===            ===            ===	

12. CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares of common stock, $.001 par value per share. There are no preferred shares outstanding. Under the terms of the New Credit Facility, the Company may pay dividends in an amount up to 50% of net income. Holders of common stock have one vote per share.
On September 29, 2000, the Company conducted its Initial Public Offering. Together with the underwriters' over-allotment, the Company issued 5,750,000 shares in October 2000 and realized proceeds of approximately $84.0 million, net of issuance costs.
Subscribed common stock receivable consisted of promissory notes, bearing interest at 6.4% (the "Applicable Federal Rate" at the time the notes were issued) extended by the Company to management stockholders to facilitate the purchase of 336,800 shares of common stock. In connection with the Initial Public Offering, the management stockholders tendered to the Company the requisite number of shares of common stock at $16.00 per share to satisfy, in full, the outstanding promissory notes.
13. COMMITMENTS AND CONTINGENCIES
The Company is a party to various legal actions arising in the normal course of business. The Company does not believe that any such pending activities should have a material adverse effect on its results of operations or financial position.
The Company is a party to various license agreements through 2003 to manufacture and sell components for use in medical implants and various commercial applications.
OPERATING LEASES--The Company is a party to various operating lease agreements for office and manufacturing space. The Company incurred operating lease expense of $621,000, $807,000 and $834,000 for 1998, 1999 and 2000, respectively. Included in this amount is $83,655, $211,000 and $211,000 paid in 1998, 1999 and 2000, respectively to a related party under a non-cancelable operating lease which expires in 2006.
If all lease extension options are exercised as expected by Company management, minimum future annual operating lease payments over the next five years for the Company are $789,000 in 2001; $790,000 in 2002; $568,000 in 2003; $501,000 in 2004; and $517,000 in 2005.
F-22

14. BUSINESS SEGMENT INFORMATION
The Company operates its business in two reportable segments: medical and commercial power sources. The medical segment designs and manufactures power sources, capacitors and components used in implantable medical devices, which are instruments that are surgically inserted into the body to provide diagnosis or therapy. The commercial power sources segment designs and manufactures non-medical power sources for use in aerospace, oil and gas exploration and oceanographic equipment.
The Company's medical segment includes three product lines that have been aggregated because they share similar economic characteristics and similarities in the areas of products, production processes, types of customers, methods of distribution and regulatory environment. The three product lines are implantable power sources, capacitors and medical components.
The reportable segments are separately managed, and their performance is evaluated based on income from operations. Management defines segment income from operations as gross profit less costs and expenses attributable to segment specific selling, general and administrative and research, development and engineering. Non-segment specific selling, general and administrative expenses, research, development and engineering expenses, interest expense, intangible amortization and non-recurring items are not allocated to reportable segments. Certain items of income previously classified as unallocated were assigned to reportable segments in 2000. Segment income from operations in 1998 and 1999 has been restated to conform to this revised allocation. Revenues from transactions between the two segments are not significant. The accounting policies of the segments are the same as those described in Note 2.
F-23

An analysis and reconciliation of the Company's business segment information to the respective information in the consolidated financial statements is as follows (dollars in thousands):

                                                                                 THREE         THREE
                                                                                MONTHS        MONTHS
                                                                                 ENDED         ENDED
                                                                               MARCH 31,     MARCH 30,
                                               1998       1999       2000        2000          2001
                                             --------   --------   --------   -----------   -----------
                                                                              (UNAUDITED)   (UNAUDITED)
Revenues:
  Medical..................................  $64,449    $69,224    $83,789      $20,846       $22,582
  Commercial power sources.................   12,912     10,011     14,001        2,330         6,989
                                             -------    -------    -------      -------       -------
  Total revenues...........................  $77,361    $79,235    $97,790      $23,176       $29,571
                                             =======    =======    =======      =======       =======

Segment income from operations:
  Medical..................................  $28,937    $29,006    $30,005      $ 7,499       $ 8,415
  Commercial power sources.................    4,303      2,711      3,494          604         2,578
                                             -------    -------    -------      -------       -------
  Total segment income from operations.....   33,240     31,717     33,499        8,103        10,993
  Unallocated..............................  (32,140)   (34,031)   (31,868)      (8,680)       (6,360)
                                             -------    -------    -------      -------       -------

  Income (loss) before income taxes and
    extraordinary loss.....................  $ 1,100    $(2,314)   $ 1,631      $  (577)      $ 4,633
                                             =======    =======    =======      =======       =======

Depreciation and amortization:
  Medical..................................  $ 2,585    $ 3,699    $ 4,826
  Commercial power sources.................      290        301        377
                                             -------    -------    -------
  Total depreciation included in segment
    income from operations.................    2,875      4,000      5,203
  Unallocated depreciation and
    amortization...........................    6,315      7,363      6,899
                                             -------    -------    -------
  Total depreciation and amortization......  $ 9,190    $11,363    $12,102
                                             =======    =======    =======

Expenditures for tangible long-lived
  assets, excluding acquisitions:
  Medical..................................  $ 2,129    $ 6,700    $ 4,061
  Commercial power sources.................      136         72         82
                                             -------    -------    -------
  Total reportable segments................    2,265      6,772      4,143
  Unallocated long-lived tangible assets...    3,942      1,680        385
                                             -------    -------    -------
  Total expenditures.......................  $ 6,207    $ 8,452    $ 4,528
                                             =======    =======    =======	

                                                              DECEMBER 31,   DECEMBER 29,
                                                                  1999           2000
                                                              ------------   ------------
Identifiable assets, net
  Medical...................................................    $ 42,236       $ 44,320
  Commercial power sources..................................       5,068          9,673
                                                                --------       --------
  Total reportable segments.................................      47,304         53,993
  Unallocated assets........................................     142,475        127,654
                                                                --------       --------
  Total assets..............................................    $189,779       $181,647
                                                                ========       ========	

F-24

Net revenues by geographic area are presented by attributing revenues from external customers based on where the products are sold. All dollars are in thousands.

                                                     1998       1999       2000
                                                   --------   --------   --------
Revenues by geographic area:
  United States..................................  $60,917    $58,644    $68,179
  Foreign countries..............................   16,444     20,591     29,611
                                                   -------    -------    -------
  Consolidated revenues..........................  $77,361    $79,235    $97,790
                                                   =======    =======    =======	

                                                      DECEMBER 31,   DECEMBER 29,
                                                          1999           2000
                                                      ------------   ------------
Long-lived assets:
  United States.....................................    $156,409       $151,706
  Foreign countries.................................          --             --
                                                        --------       --------
  Consolidated long-lived assets....................    $156,409       $151,706
                                                        ========       ========	

Two customers accounted for approximately 36%, 64% and 65% of sales for 1998, 1999 and 2000, respectively. Two customers accounted for approximately 62% and 52% of the outstanding accounts receivable as of December 31, 1999 and December 29, 2000, respectively.
15. INVESTMENT
In August 1998, the Company sold the assets of a product line, Greatbatch-Scientific, to a third party in exchange for shares of stock of the third party. Greatbatch-Scientific sales were not significant to the consolidated financial statements. As a result of this transaction, the Company recorded the shares of stock acquired as an investment carried at cost, which approximated $2.4 million. Cost of the assets sold approximated fair value and accordingly, no gain or loss was recorded in the accompanying consolidated financial statements as of the date of sale. The investment is included in other assets on the consolidated balance sheet. The cost method is used to account for the Company's investment because the Company does not have the ability to exercise significant influence over the investee's operating and financial policies. Management intends for this investment to be long-term. During 1999, an $859,000 impairment of this investment was recorded. The write-down of the investment represented an other than temporary decline and was based upon the Company's monitoring of this investment and other publicly available information. As of December 29, 2000, the Company has concluded that no change in the carrying value of this investment is warranted.
16. RESTRUCTURING
In October 1998, management of the Company initiated a plan to restructure Engineered Components ("EC"), a product line of the Company's medical segment. EC ceased the production of non-medical products to concentrate on its core customer base. The restructuring is not expected to
F-25

significantly impact future operations. A total of $825,000 in restructuring costs was charged to operations in fiscal 1998. Such restructuring costs included the following (dollars in thousands):

Asset Impairment Charges:
  Estimated unsaleable inventory............................  $350
  Losses from the planned disposal of equipment.............   300
                                                              ----
                                                              $650
                                                              ====

Other Restructuring Costs:
  Losses on equipment leases................................  $100
  Severance pay and benefits to employees...................    75
                                                              ----
                                                              $175
                                                              ====	

Approximately $49,000 for terminated EC employees and $5,000 for lease exit costs were paid in 1998. The future cash liability at January 1, 1999 approximated $26,000 for terminated EC employees and $95,000 for lease exit costs. Approximately $121,000, including all severance and benefits, was paid in cash, in 1999. In addition, approximately $80,000 of inventory was disposed of. The remaining assets are anticipated to be disposed of during the first half of 2001.
17. RELATED PARTY TRANSACTIONS
The Company had amounts due from related parties of $1,684,000 at December 31, 1999. Amounts due from related parties were composed of notes receivable from executive officers and key employees in connection with their purchase in 1997 of shares of the Company's common stock. In connection with the Initial Public Offering, the management stockholders tendered to the Company the requisite number of shares of common stock at $16.00 per share to satisfy, in full, the outstanding promissory notes. (See Note 12).
The Company may from time to time enter into other investment banking relationships with DLJ or one of its affiliates pursuant to which DLJ or its affiliates will receive customary fees and will be entitled to reimbursement of reasonable disbursements and out-of-pocket expenses incurred in connection therewith. The Company expects that any such arrangement will include provisions for the indemnification of DLJ against liability, including liabilities under the federal securities laws.
DLJ received approximately $2.8 million related to its capacity as a financial advisor to the Company in connection with the Hittman acquisition, for a syndication fee and a bond consent fee.
The Company is a party to an operating lease to a related party under a non-cancelable operating lease which expires in 2006 (see Note 13). The Company believes the rental amount to be reflective of arms-length, market-based rates for similar structures.
F-26

18. QUARTERLY SALES AND EARNINGS DATA--UNAUDITED

                                              FIRST         SECOND        THIRD         FOURTH
                                             QUARTER       QUARTER       QUARTER       QUARTER
                                             --------      --------      --------      --------
                                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)
1999

Revenues...................................  $20,496       $17,822       $19,621       $21,296
Gross profit...............................   10,472         8,461         9,759         9,486
Loss before cumulative effect of accounting
  change...................................      (47)         (867)          (52)         (743)
Net (loss) income..........................     (610)(a)      (867)          (52)         (743)
Loss per share before cumulative effect of
  accounting change -- basic...............       --         (0.07)           --         (0.06)
Loss per share before cumulative effect of
  accounting change -- diluted.............       --         (0.07)           --         (0.06)
Earnings (loss) per share -- basic (b).....    (0.05)        (0.07)           --         (0.06)
Earnings (loss) per share -- diluted (b)...    (0.05)        (0.07)           --         (0.06)

2000

Revenues...................................  $23,176       $23,408       $23,256       $27,950
Gross profit...............................   10,240         9,959         9,726        12,419
(Loss) income before extraordinary loss....     (393)         (383)         (860)        2,656
Net (loss) income..........................     (393)         (383)         (860)        1,088(c)
Earnings (loss) per share before
  extraordinary loss- basic................    (0.03)        (0.03)        (0.07)         0.14
Earnings (loss) per share before
  extraordinary loss -- diluted............    (0.03)        (0.03)        (0.07)         0.14
Earnings (loss) per share -- basic (b).....    (0.03)        (0.03)        (0.07)         0.06
Earnings (loss) per share -- diluted (b)...    (0.03)        (0.03)        (0.07)         0.06	

(a) Amount includes the cumulative effect of an accounting change of $563,000, net of tax.
(b) Per share data has been restated for all periods to reflect a one-for-three reverse stock split effective May 18, 2000 and a three-for-five reverse stock split effective August 15, 2000.
(c) Amount includes an extraordinary loss for the extinguishment of debt in the amount of $1,568,000, net of tax.
19. SUBSEQUENT EVENTS AFTER ISSUANCE (UNAUDITED)
On June 18, 2001, the Company completed the acquisition of substantially all of the assets of Sierra, a developer and manufacturer of electromagnetic interference filters and capacitors for implantable medical devices for $49.0 million in cash and certain assumed liabilities. The acquisition will be accounted for as a purchase. In conjunction with the acquisition of Sierra, the Company amended its existing $60.0 million credit facility with a consortium of banks by increasing the total size of the facility to $100.0 million. The amended facility consists of an $80.0 million term loan and a $20.0 million revolving line of credit. Both the term loan and the revolving line of credit have a term of five years, maturing in July 2006.
F-27

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Sierra--KD Components Division
We have audited the accompanying balance sheet of Sierra--KD Components Division (a division of Maxwell Technologies, Inc.) as of December 31, 2000, and the related statements of operations, division equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sierra--KD Components Division (a division of Maxwell Technologies, Inc.) at December 31, 2000, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

                                          /S/ ERNST & YOUNG LLP

San Diego, California
May 25, 2001	

F-28

SIERRA--KD COMPONENTS DIVISION
BALANCE SHEETS

                                                              DECEMBER 31,    MARCH 31,
                                                                  2000          2001
                                                              ------------   -----------
                                                                             (UNAUDITED)
ASSETS
Current assets:
  Cash......................................................   $   78,077    $   448,121
  Accounts receivable, net of allowance for doubtful
    accounts of $113,511 and $124,516, respectively.........    2,439,800      3,498,332
  Inventories, net..........................................    4,349,189      4,770,706
  Other current assets......................................       70,828         54,001
                                                               ----------    -----------
Total current assets........................................    6,937,894      8,771,160

Property and equipment, net.................................    2,841,540      2,833,754
Other assets................................................       67,030         65,446
                                                               ----------    -----------
Total assets................................................   $9,846,464    $11,670,360
                                                               ==========    ===========

LIABILITIES AND DIVISION EQUITY
Current liabilities:
  Accounts payable..........................................   $2,543,996    $ 2,661,374
  Accrued expenses and compensation.........................      477,186        533,557
  Due to affiliates.........................................      892,226      2,095,174
                                                               ----------    -----------
Total current liabilities...................................    3,913,408      5,290,105

Division equity:
  Net contribution from Maxwell.............................    2,059,000      2,059,000
  Accumulated division income...............................    3,874,056      4,321,255
                                                               ----------    -----------
Total division equity.......................................    5,933,056      6,380,255
                                                               ----------    -----------
Total liabilities and division equity.......................   $9,846,464    $11,670,360
                                                               ==========    ===========	

SEE ACCOMPANYING NOTES.
F-29

SIERRA--KD COMPONENTS DIVISION
STATEMENTS OF OPERATIONS

                                                                           THREE MONTHS ENDED
                                                           YEAR ENDED           MARCH 31,
                                                          DECEMBER 31,   -----------------------
                                                              2000          2000         2001
                                                          ------------   ----------   ----------
                                                                               (UNAUDITED)
Net sales...............................................  $13,690,893    $3,407,959   $5,294,896
Cost of sales...........................................   10,589,042     2,502,154    3,952,818
                                                          -----------    ----------   ----------
Gross profit............................................    3,101,851       905,805    1,342,078

Operating expenses:
  Sales and marketing...................................    1,163,680       307,522      258,882
  General and administrative............................    2,142,850       550,640      257,626
  Research and development..............................      249,590        54,481      138,873
                                                          -----------    ----------   ----------
                                                            3,556,120       912,643      655,381
                                                          -----------    ----------   ----------
Income (loss) from operations...........................     (454,269)       (6,838)     686,697
Interest expense and other, net.........................      (21,205)       (6,540)       1,502
                                                          -----------    ----------   ----------
Income (loss) before income taxes.......................     (475,474)      (13,378)     688,199
Income tax provision (benefit)..........................     (166,000)       (4,682)     241,000
                                                          -----------    ----------   ----------
Net income (loss).......................................  $  (309,474)   $   (8,696)  $  447,199
                                                          ===========    ==========   ==========	

SEE ACCOMPANYING NOTES.
F-30

SIERRA--KD COMPONENTS DIVISION
STATEMENT OF DIVISION EQUITY
YEAR ENDED DECEMBER 31, 2000 AND THE THREE
MONTHS ENDED MARCH 31, 2001 (UNAUDITED)

                                                                  NET
                                                              CONTRIBUTION   ACCUMULATED
                                                                  FROM        DIVISION
                                                                MAXWELL        INCOME
                                                              ------------   -----------
Balance at January 1, 2000..................................   $       --    $4,183,530
  Conversion of intercompany payable to equity..............    2,059,000            --
  Net and comprehensive loss................................           --      (309,474)
                                                               ----------    ----------
Balance at December 31, 2000................................    2,059,000     3,874,056
  Net and comprehensive income (unaudited)..................           --       447,199
                                                               ----------    ----------
Balance at March 31, 2001 (unaudited).......................   $2,059,000    $4,321,255
                                                               ==========    ==========	

SEE ACCOMPANYING NOTES.
F-31

SIERRA--KD COMPONENTS DIVISION
STATEMENTS OF CASH FLOWS

                                                                            THREE MONTHS ENDED
                                                            YEAR ENDED           MARCH 31,
                                                           DECEMBER 31,   -----------------------
                                                               2000         2000         2001
                                                           ------------   ---------   -----------
                                                                                (UNAUDITED)
OPERATING ACTIVITIES
Net income (loss)........................................  $  (309,474)   $  (8,696)  $   447,199
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operations:
  Depreciation and amortization..........................      471,307      115,576       133,861
  Changes in operating assets and liabilities:
    Accounts receivable..................................     (983,646)    (354,734)   (1,058,533)
    Inventories..........................................   (1,369,311)     303,751      (421,519)
    Other current assets.................................       28,748      (16,623)       16,827
    Accounts payable.....................................    1,852,261     (307,738)      117,378
    Accrued expenses and compensation....................      (22,301)     452,161       112,591
                                                           -----------    ---------   -----------
Net cash provided by (used in) operating activities......     (332,416)     183,697      (652,196)

INVESTING ACTIVITIES
Other assets.............................................      198,938        3,511         1,584
Purchases of property and equipment......................     (772,491)    (173,697)     (126,073)
                                                           -----------    ---------   -----------
Net cash used in investing activities....................     (573,553)    (170,186)     (124,489)

FINANCING ACTIVITIES
Payments on short-term debt..............................     (160,761)      (3,541)           --
Net advances from (payments to) affiliates...............      531,794     (372,798)      740,239
                                                           -----------    ---------   -----------
Net cash provided by (used in) financing activities......      371,033     (376,339)      740,239
                                                           -----------    ---------   -----------

Net decrease in cash.....................................     (534,936)    (362,828)      (36,446)
Cash at beginning of period..............................      613,013      613,013       484,567
                                                           -----------    ---------   -----------
Cash at end of period....................................  $    78,077    $ 250,185   $   448,121
                                                           ===========    =========   ===========
SUPPLEMENTAL CASH FLOW ACTIVITIES:
Interest paid............................................  $    22,598    $   5,275   $        --
                                                           ===========    =========   ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
  FINANCING:
Conversion of intercompany payable to equity.............  $ 2,059,000    $      --   $        --
                                                           ===========    =========   ===========	

SEE ACCOMPANYING NOTES.
F-32

SIERRA--KD COMPONENTS DIVISION
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 2001 AND FOR THE THREE 
MONTHS ENDED MARCH 31, 2000 AND 2001 IS UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Sierra--KD Components Division (the "Company") manufactures, designs and sells ceramic filter capacitors, integrates such filters with wire feedthroughs and designs, manufactures and markets ceramic capacitors for military, aerospace and commercial applications. The Company is a division of Maxwell Technologies, Inc. ("Maxwell").
The divisional statement of operations for the year ended December 31, 2000 includes all revenue and expenses directly attributable to the Company, including a corporate allocation for payroll and benefit administration and information technology services provided to the Company. All of the allocations reflected in the 2000 financial statements are based on assumptions that management believes are reasonable under the circumstances. However, these allocations and estimates are not necessarily indicative of the costs that would have resulted if the Company had been operated on a stand-alone basis.
INTERIM FINANCIAL INFORMATION
The financial information at March 31, 2001 and for the three months ended March 31, 2000 and 2001 is unaudited but, in the opinion of management, has been prepared on the same basis as the annual financial statements and includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position at such date and the operating results and cash flow for such periods. Results for the three months ended March 31, 2001 are not necessarily indicative of the results to be expected for any subsequent period.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the related assets, generally three to five years. Building and building improvements are stated at cost and amortized using the straight-line method over the estimated useful lives of the assets generally seven to twenty-seven years.
REVENUE RECOGNITION
The Company derives its revenue from the sale of manufactured products. Such revenue is typically recognized upon shipment of the products.
IMPAIRMENT OF LONG-LIVED ASSETS
Financial Accounting Standards ("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS, requires the Company to review the carrying amount of long-lived assets, including goodwill, to determine whether any indicators of impairment are present. Should an impairment exist, the
F-33

SIERRA--KD COMPONENTS DIVISION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2001 AND FOR THE THREE 
MONTHS ENDED MARCH 31, 2000 AND 2001 IS UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) impairment loss would be measured based on the excess of the carrying value of the asset over the asset's fair value or discounted estimates of future cash flows. The Company has not identified any such impairment losses for the year ended December 31, 2000.
INCOME TAXES
Through March 31, 2001, the Company was not a separate taxable entity for federal, state, or local income tax purposes, and its operations were included in the tax returns of Maxwell. The Company has recognized income taxes under the liability method. Deferred income taxes are recognized for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.
COMPREHENSIVE LOSS
The Company has adopted SFAS No. 130, REPORTING COMPREHENSIVE INCOME, which establishes standards for reporting comprehensive income (loss) and its components in the financial statements. To date, the Company's comprehensive income (loss) has equaled its net income (loss).
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Accordingly, actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments, including cash and accounts receivable approximate fair value because of their short maturities.
NEW ACCOUNTING PRONOUNCEMENTS
In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS. SAB No. 101 provides guidance in applying generally accepted accounting principles to revenue recognition in financial statements. SAB No. 101 was implemented in the fourth quarter of 2000. The adoption of SAB No. 101 has had no impact on the Company's financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, which the Company adopted on January 1, 2001. SFAS No. 133 sets forth a comprehensive and consistent standard for the recognition of derivatives and hedging activities. SFAS No. 133 did not have an impact on the Company's results of operations or
F-34

SIERRA--KD COMPONENTS DIVISION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2001 AND FOR THE THREE 
MONTHS ENDED MARCH 31, 2000 AND 2001 IS UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) financial condition when adopted as the Company currently holds no derivative financial instruments and does not engage in hedging activities.
2. INVENTORIES
Inventories consist of the following:

                                                      DECEMBER 31,    MARCH 31,
                                                          2000          2001
                                                      ------------   -----------
                                                                     (UNAUDITED)
Raw materials.......................................   $1,171,206    $1,711,372
Work-in-process.....................................    2,258,950     1,742,206
Finished goods......................................    1,172,246     1,585,342
                                                       ----------    ----------
                                                        4,602,402     5,038,920
Less reserve for obsolescence.......................     (253,213)     (268,214)
                                                       ----------    ----------
                                                       $4,349,189    $4,770,706
                                                       ==========    ==========	

3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:

                                                      DECEMBER 31,    MARCH 31,
                                                          2000          2001
                                                      ------------   -----------
                                                                     (UNAUDITED)
Manufacturing equipment.............................   $3,670,627    $3,709,463
Land and buildings..................................    1,702,690     1,702,690
Computer equipment..................................      427,229       435,527
Furniture and fixtures..............................      315,505       315,505
Construction-in-progress............................      120,859       199,798
                                                       ----------    ----------
                                                        6,236,910     6,362,983
Less accumulated depreciation.......................   (3,395,370)   (3,529,229)
                                                       ----------    ----------
                                                       $2,841,540    $2,833,754
                                                       ==========    ==========	

Depreciation expense was $465,346, $113,743 and $133,861 for the year ended December 31, 2000 and three months ended March 31, 2000 and 2001, respectively.
4. SIGNIFICANT CUSTOMERS
The Company had one customer that accounted for approximately 39% of total sales during fiscal 2000. Accounts receivable from this customer totaled $463,110 at December 31, 2000. No other customer had sales in excess of 10% of total sales.
F-35

SIERRA--KD COMPONENTS DIVISION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2001 AND FOR THE THREE 
MONTHS ENDED MARCH 31, 2000 AND 2001 IS UNAUDITED)
5. INCOME TAXES
The net loss incurred for the year ended December 31, 2000 is attributable to the operations of the Company as a division of Maxwell and were included in the income tax returns filed by Maxwell.
Deferred income taxes are recognized for differences between the financial statements and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The provision (benefit) for income taxes shown in the accompanying statement of operations for the year ended December 31, 2000 consist of the following:

Current:
Federal and state...........................................  $(534,000)

Deferred:
  Federal and state.........................................    368,000
                                                              ---------
Total.......................................................  $(166,000)
                                                              =========	

The effective rate of the fiscal 2000 income tax benefit approximates the federal tax rate of 35%.
Significant components of the Company's deferred tax assets and liabilities as of December 31, 2000 are as follows:

Deferred tax assets:
  Reserves..................................................  $155,000
  Accrued vacation and other................................    83,000
                                                              --------
Total deferred tax assets...................................   238,000

Deferred tax liabilities:
  Depreciation..............................................  (102,000)
                                                              --------
Net deferred tax assets.....................................  $136,000
                                                              ========	

The net deferred assets are included in the balance sheet under the caption due to affiliates. The provision/benefit for income taxes during the interim periods is based on the estimated effective tax rates for the year.
6. RELATED PARTY TRANSACTIONS
FUNDING
The Company's net cash requirements are funded by Maxwell through cash advances, which are not subject to formal financing arrangements and do not bear interest. Net financing provided by Maxwell to the Company in 2000 was approximately $532,000. Amounts due to Maxwell from these
F-36

SIERRA--KD COMPONENTS DIVISION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 2001 AND FOR THE THREE 
MONTHS ENDED MARCH 31, 2000 AND 2001 IS UNAUDITED)
6. RELATED PARTY TRANSACTIONS (CONTINUED) advances are included in the balance sheet under the caption due to affiliates. Included within the due to affiliates caption are amounts charged by Maxwell for corporate services. Approximately $2.1 million of amounts due to Maxwell were converted to equity of the Company during fiscal 2000.
CORPORATE SERVICES
In accordance with the SAB No. 55, corporate expense allocations have been reflected in these financial statements. These include payroll and benefits administration and information technology services. Allocations and charges were based on either a direct cost pass-through for incremental corporate administration, finance and management costs or a percentage allocation of costs for other services provided based on factors such as headcount and relative expenditure levels. Such allocations and charges totaled approximately $158,702, $43,227 and $18,910 for the year ended December 31, 2000 and for the three months ended March 31, 2000 and 2001, respectively. Management believes that the basis used for allocating corporate services is reasonable. However, the terms of these transactions may differ from those that would have resulted form transactions among unrelated parties.
7. SUBSEQUENT EVENT (UNAUDITED)
On June 18, 2001, Maxwell consummated an agreement with Wilson Greatbatch Technologies, Inc. ("WGT") to sell the business and certain assets of Sierra-KD Components Division for $49.0 million less liabilities assumed by WGT.
F-37

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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale of common stock being registered. All amounts are estimates except the SEC registration fee and the NASD filing fees.

SEC registration fee........................................  $   49,922
NASD filing fee.............................................      20,469
New York Stock Exchange listing fee.........................      29,500
Printing and engraving......................................     500,000
Legal fees and expenses.....................................     600,000
Accounting fees and expenses................................     400,000
Transfer agent fees.........................................       1,000
Miscellaneous expenses......................................     199,109
                                                              ----------
    Total...................................................  $1,800,000
                                                              ==========	

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, or the DGCL, provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
Our restated certificate of incorporation provides that indemnification shall be to the fullest extent permitted by the DGCL for all current or former directors or officers of our company.
As permitted by the DGCL, the certificate of incorporation provides that directors of our company shall have no personal liability to our company or our stockholders for monetary damages for breach of
II-1

fiduciary duty as a director, except (1) for any breach of the director's duty of loyalty to our company or our stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law,
(3) under Section 174 of the DGCL or (4) for any transaction from which a director derived an improper personal benefit.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
We have not sold any securities within the past three years which were not registered under the Securities Act, except as set forth below.
In March 1998, we issued 25,231 shares of our common stock, for an aggregate purchase price of $126,153, to the Trustees of the Wilson Greatbatch Ltd. Equity Plus Plan Stock Bonus Plan as a bonus to the plan members. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rue 701 under the Securities Act.
In April 1998, we issued 120 shares of our common stock, for an aggregate purchase price of $600, to John T. Fordyce upon his exercise of a stock option. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In July 1998, we issued 1,920 shares of our common stock, for an aggregate purchase price of $9,600, to Stuart Scott Ferguson upon his exercise of a stock option. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In August 1998, we issued 480 shares of our common stock, for an aggregate purchase price of $2,400, upon the exercise of stock options. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act. We issued 240 shares to Jack Belstadt and 240 shares to Charles Mozeko.
In August 1998, we issued 3,231,014 shares of our common stock for an aggregate purchase price of $16,619,616. We issued 2,849,384 shares to DLJ Merchant Banking and its affiliates. We issued 100,000 shares to East Hill Foundation and 201,630 shares to members of our management and other key personnel who participated in the leveraged buyout and their affiliates. We issued 80,000 shares to former shareholders of Wilson Greatbatch Ltd. who participated in the leveraged buyout and their affiliates. The securities were issued in a private placement in reliance on Section 4(2) of the Securities Act.
In August 1998, we issued 2,080 shares of our common stock, for an aggregate purchase price of $10,400, upon the exercise of stock options. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act. We issued 240 shares to Robert W. Siegler, 240 shares to Richard M. Garlapow and 1,600 shares to Gary Sfeir.
In August 1998, we issued 68,985 shares of our common stock, for an aggregate purchase price of $344,925, to The Northwestern Mutual Life Insurance Company. The securities were issued in a private placement in reliance on
Section 4(2) of the Securities Act.
In November 1998, we issued 3,360 shares of our common stock, for an aggregate purchase price of $16,800, to Robert C. Rusin upon his exercise of stock options. The securities were issued in a transaction exempt from
Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In March 1999, we issued 10,761 shares of our common stock, for an aggregate purchase price of $53,805, upon the exercise of stock options. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act. We issued 1,448 shares to Gary Whitcher and 9,313 shares to Tim H. Belstadt.
In April 1999, we issued 4,363 shares of our common stock, for an aggregate purchase price of $21,816, upon the exercise of stock options. The securities were issued in a transaction exempt from
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Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act. We issued 251 shares to Gayle Fairchild, 251 shares to William Bruns and 3,861 shares to Robert W. Hammell.
In May 1999, we issued 3,356 shares of our common stock, for an aggregate purchase price of $16,782, to Robert C. Jackson upon the exercise of stock options. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In August 1999, we issued 139,471 shares of our common stock, for an aggregate purchase price of $2,092,050, to the Trustees of the Wilson Greatbatch Ltd. Equity Plus Plan Stock Bonus Plan for our annual retirement plan contribution. The securities were issued in a transaction exempt from Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In September 1999, we issued 50,000 shares of our common stock, for an aggregate purchase price of $750,000, to Fred Hittman. The securities were issued in a private placement in reliance on Section 4(2) of the Securities Act.
In September 1999, we issued 2,188 shares of our common stock, for an aggregate purchase price of $32,823, to Christine A. Frysz upon her exercise of stock options. The securities were issued in a transaction exempt from
Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
In December 1999, we issued 16,537 shares of our common stock, for an aggregate purchase price of $293,679, to members of our management and other key personnel who had terminated their employment. The securities were issued in a private placement in reliance on Section 4(2) of the Securities Act.
In August 2000, we issued 339,856 shares of our common stock to Hitachi-Maxell, Ltd. in exchange for all of the capital stock of Battery Engineering, Inc. The securities were issued in reliance on Section 4(2) of the Securities Act.
In August 2000, we issued 200,000 shares of our common stock, for an aggregate purchase price of $3,000,006, to Hitachi-Maxell, Ltd. The securities were issued in a private placement in reliance on Section 4(2) of the Securities Act.
In August 2000, we issued 57,037 shares of our common stock, for an aggregate purchase price of $855,560, to the Trustees of the Wilson Greatbatch Ltd. Equity Plus Plan Money Purchase Plan for our annual retirement plan contribution. The securities were issued in a transaction exempt from
Section 5 of the Securities Act pursuant to Rule 701 under the Securities Act.
No underwriters were involved in connection with any transaction set forth above. As noted above, the issuances of the securities described above were deemed to be exempt from registration pursuant to Section 4(2) of the Securities Act and Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering. In all of these transactions, the recipients of securities represented their intention to acquire the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof and appropriate legends were affixed to the securities issued.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS

       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
        1.1*            Form of Underwriting Agreement

        3.1             Amended and Restated Certificate of Incorporation
                        (incorporated by reference to Exhibit 3.1 to our
                        registration statement on Form S-1 (File No. 333-37554))

        3.2             Amended and Restated Bylaws (incorporated by reference to
                        Exhibit 3.2 to our registration statement on Form S-1 (File
                        No. 333-37554))

        5.1**           Opinion of Weil, Gotshal & Manges LLP

       10.1             1997 Stock Option Plan (including form of "standard" option
                        agreement and form of "special" option agreement)
                        (incorporated by reference to Exhibit 10.1 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.2             1998 Stock Option Plan (including form of "standard" option
                        agreement, form of "special" option agreement and form of
                        "non-standard" option agreement) (incorporated by reference
                        to Exhibit 10.2 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.3             Wilson Greatbatch Ltd. Equity Plus Plan Money Purchase Plan
                        (incorporated by reference to Exhibit 10.3 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.4             Wilson Greatbatch Ltd. Equity Plus Plan Stock Bonus Plan
                        (incorporated by reference to Exhibit 10.4 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.5             Employment Agreement, dated as of July 9, 1997, between
                        Wilson Greatbatch Ltd. and Edward F. Voboril (incorporated
                        by reference to Exhibit 10.5 to our registration statement
                        on Form S-1 (File No. 333-37554))

       10.6             Registration and Anti-Dilution Agreement, dated as of July
                        10, 1997, among Wilson Greatbatch Technologies, Inc., DLJ
                        Investment Partners, L.P., DLJ Investment Funding, Inc., DLJ
                        First ESC L.L.C., The Northwestern Mutual Life Insurance
                        Company and Donaldson, Lufkin & Jenrette Securities
                        Corporation (incorporated by reference to Exhibit 10.7 to
                        our registration statement on Form S-1 (File No. 333-37554))

       10.7             Stockholders Agreement, dated as of July 16, 1997, among
                        Wilson Greatbatch Technologies, Inc., DLJ Merchant Banking
                        Partners II, L.P., DLJMB Funding II, Inc., DLJ Merchant
                        Banking Partners II-A, L.P., DLJ Diversified Partners, L.P.,
                        DLJ Diversified Partners-A, L.P., DLJ Millennium Partners,
                        L.P., DLJ First ESC L.L.C., DLJ Offshore Partners II, C.V.,
                        DLJ EAB Partners, L.P., U.K. Investment Plan 1997 Partners,
                        and the other holders of common stock of Wilson Greatbatch
                        Technologies Inc. party thereto (incorporated by reference
                        to Exhibit 10.12 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.8             Amendment No. 1 to Stockholders Agreement, dated as of
                        October 31, 1997, among Wilson Greatbatch Technologies,
                        Inc., DLJ Merchant Banking Partners II, L.P., DLJMB Funding
                        II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.L.C.,
                        DLJ Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, and the other holders of
                        common stock of Wilson Greatbatch Technologies, Inc. party
                        thereto (incorporated by reference to Exhibit 10.13 to our
                        registration statement on Form S-1 (File No. 333-37554))	

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       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
       10.9             Management Stockholders Agreement, dated as of July 10,
                        1997, among Wilson Greatbatch Technologies, Inc., DLJ
                        Merchant Banking Partners II, L.P., DLJMB Funding II, Inc.,
                        DLJ Merchant Banking Partners II-A, L.P., DLJ Diversified
                        Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ
                        Millennium Partners, L.P., DLJ First ESC L.L.C., DLJ
                        Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, and the other holders of
                        common stock of Wilson Greatbatch Technologies, Inc. party
                        thereto (incorporated by reference to Exhibit 10.14 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.10            Subordinated Note Holders Stockholders Agreement, dated as
                        of July 10, 1997, among Wilson Greatbatch Technologies,
                        Inc., DLJ Merchant Banking Partners II, L.P., DLJMB Funding
                        II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.L.C.,
                        DLJ Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, DLJ Investment Partners,
                        L.P., DLJ Investment Funding, Inc., The Northwestern Mutual
                        Life Insurance Company and Donaldson, Lufkin & Jenrette
                        Securities Corporation (incorporated by reference to Exhibit
                        10.15 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.11+           Supply Agreement (SVO Batteries), dated as of July 31, 1991,
                        between Wilson Greatbatch Ltd. and Medtronic Inc.
                        (incorporated by reference to Exhibit 10.16 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.12+           Amendment No. 1 to the Supply Agreement (SVO Batteries),
                        dated as of June 3, 1996, between Wilson Greatbatch Ltd. and
                        Medtronic Inc. (incorporated by reference to Exhibit 10.17
                        to our registration statement on Form S-1 (File No.
                        333-37554))

       10.13+           Amendment No. 2 to the Supply Agreement (SVO Batteries),
                        dated as of March 24, 1997, between Wilson Greatbatch Ltd.
                        And Medtronic Inc. (incorporated by reference to Exhibit
                        10.18 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.14+           Amendment No. 3 to the Supply Agreement (SVO Batteries),
                        dated as of July 22, 1999, between Wilson Greatbatch Ltd.
                        and Medtronic Inc. (incorporated by reference to Exhibit
                        10.19 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.15+           Supply Agreement, dated as of February 1, 1999, among Wilson
                        Greatbatch Ltd. and Guidant/CRM (incorporated by reference
                        to Exhibit 10.20 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.16+           Agreement, dated as of April 16, 1997, between Wilson
                        Greatbatch Ltd. and Pacesetter, Inc., a St. Jude Medical
                        Company (incorporated by reference to Exhibit 10.21 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.17+           License Agreement, dated August 8, 1996, between Wilson
                        Greatbatch Ltd. and Evans Capacitor Company (incorporated by
                        reference to Exhibit 10.22 to our registration statement on
                        Form S-1 (File No. 333-37554))

       10.18+           Supplier Partnering Agreement, dated as of June 1, 2000,
                        between Wilson Greatbatch Ltd. and Pacesetter, Inc., a St.
                        Jude Medical Company (incorporated by reference to Exhibit
                        10.23 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.19            License Agreement, dated March 16, 1976, between Wilson
                        Greatbatch Ltd. and Medtronic Inc. (incorporated by
                        reference to Exhibit 10.24 to our registration statement on
                        Form S-1 (File No. 333-37554))

       10.20            Amendment No. 1 to License Agreement, dated July 20, 1976,
                        between Wilson Greatbatch Ltd. and Medtronic Inc.
                        (incorporated by reference to Exhibit 10.25 to our
                        registration statement on Form S-1 (File No. 333-37554))	

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       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
       10.21            Stockholders Agreement, dated as of August 23, 1999, among
                        Wilson Greatbatch Technologies, Inc., DLJ Merchant Banking
                        Partners II, L.P., DLJMB Funding II, Inc., DLJ Merchant
                        Banking Partners II-A, L.P., DLJ Diversified Partners, L.P.,
                        DLJ Diversified Partners-A, L.P., DLJ Millennium Partners,
                        L.P., DLJ First ESC L.P., DLJ Offshore Partners II, C.V.,
                        DLJ EAB Partners, L.P., UK Investment Plan 1997 Partners and
                        Fred Hittman (incorporated by reference to Exhibit 10.26 to
                        our registration statement on Form S-1 (File No. 333-37554))

       10.22            Stock Purchase Agreement, dated as of July 31, 2000, among
                        Wilson Greatbatch Technologies, Inc., Battery Engineering,
                        Inc. and Hitachi-Maxell, Ltd. (incorporated by reference to
                        Exhibit 10.31 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.23            Stockholders Agreement, dated as of August 7, 2000, among
                        Wilson Greatbatch Technologies, Inc., Hitachi-Maxell, Ltd.,
                        DLJ Merchant Banking Partners II, L.P., DLJMB Funding II,
                        Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.P., DLJ
                        Offshore Partners II, C.V., DLJ EAB Partners, L.P. and UK
                        Investment Plan 1997 Partners (incorporated by reference to
                        Exhibit 10.32 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.24            Subscription Agreement, dated as of August 7, 2000, between
                        Wilson Greatbatch Technologies, Inc. and Hitachi-Maxell,
                        Ltd. (incorporated by reference to Exhibit 10.33 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.25            Non-Compete Agreement, dated as of August 7, 2000, between
                        Wilson Greatbatch Technologies, Inc. and Hitachi-Maxell,
                        Ltd. (incorporated by reference to Exhibit 10.34 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.26**          Amended and Restated Credit Agreement, dated as of June 15,
                        2001, among Wilson Greatbatch Ltd., the lenders party
                        thereto and Manufacturers and Traders Trust Company, as
                        Administrative Agent

       10.27            Asset Purchase Agreement, dated as of June 18, 2001, among
                        Wilson Greatbatch Technologies, Inc., GB Acquisition
                        Co., Inc., Maxwell Technologies, Inc. and Maxwell Electronic
                        Components Group, Inc. (incorporated by reference to
                        Exhibit 10.1 to our current report on Form 8-K filed
                        June 19, 2001)

       21.1**           List of Subsidiaries

       23.1**           Consent of Deloitte & Touche LLP

       23.2**           Consent of Ernst & Young LLP, Independent Auditors

       23.3**           Consent of Weil, Gotshal & Manges LLP (included in Exhibit
                        5.1)

       24.1**           Power of Attorney (included on signature page)	

* To be filed by amendment.
** Filed herewith.
+ Portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.
(B) FINANCIAL STATEMENT SCHEDULES

        PAGE
       NUMBER           DESCRIPTION
---------------------   -----------
         S-1            Schedule II -- Valuation and Qualifying Accounts	

All other schedules are omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or the notes thereto.
II-6

ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(b) To provide to the underwriter(s) at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter(s) to permit prompt delivery to each purchaser.
(c) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
(d) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Clarence, New York, on June 20, 2001.

WILSON GREATBATCH TECHNOLOGIES, INC.

By:  /s/ EDWARD F. VOBORIL
     -----------------------------------------
     Edward F. Voboril
     President, Chief Executive Officer and
     Chairman of the Board	

POWER OF ATTORNEY
The undersigned directors and officers of Wilson Greatbatch Technologies, Inc. ("WGT") do hereby constitute and appoint Edward F. Voboril, Larry T. DeAngelo and Arthur J. Lalonde, and each of them, with full power of substitution, our true and lawful attorneys-in-fact and agents to do any and all acts and things in our name and behalf in our capacities as directors and officers, and to execute any and all instruments for us and in our names in the capacities indicated below which such person may deem necessary or advisable to enable WGT to comply with the Securities Act of 1933, as amended (the "Act") and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this registration statement, including specifically, but not limited to, power and authority to sign for us, or any of us, in the capacities indicated below and any and all amendments (including pre-effective and post-effective amendments or any other registration statement filed pursuant to the provision of Rule 462(b) under the Act) hereto; and we do hereby ratify and confirm all that such person or persons shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

                NAME                                        TITLE                       DATE
                ----                                        -----                       ----
        /s/ EDWARD F. VOBORIL              President, Chief Executive Officer and
------------------------------------         Chairman of the Board (principal       June 20, 2001
          Edward F. Voboril                  executive officer)

        /s/ ARTHUR J. LALONDE              Senior Vice President, Finance
------------------------------------         (principal financial and accounting    June 20, 2001
          Arthur J. Lalonde                  officer)

       /s/ ROBERT E. RICH, JR.
------------------------------------       Director                                 June 20, 2001
         Robert E. Rich, Jr.

------------------------------------       Director                                 June 20, 2001
          Douglas E. Rogers

         /s/ BILL R. SANFORD
------------------------------------       Director                                 June 20, 2001
           Bill R. Sanford	

II-8

                NAME                                        TITLE                       DATE
                ----                                        -----                       ----
           /s/ HENRY WENDT
------------------------------------       Director                                 June 20, 2001
             Henry Wendt

        /s/ DAVID M. WITTELS
------------------------------------       Director                                 June 20, 2001
          David M. Wittels	

II-9

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
 (DOLLARS IN THOUSANDS)

                                                                COL. C
                                                               ADDITIONS
                                                        -----------------------
                                             COL. B                   CHARGED
                                           BALANCE AT    CHARGED      TO OTHER       COL. D         COL. E
COL. A                                     BEGINNING     TO COSTS    ACCOUNTS--   DEDUCTIONS--    BALANCE AT
DESCRIPTION                                OF PERIOD    & EXPENSES    DESCRIBE    DESCRIBE(1)    END OF PERIOD
-----------                                ----------   ----------   ----------   ------------   -------------
FISCAL YEAR 1998
  Allowance for doubtful accounts........    $  123       $  111       $   --       $   (37)         $  197
  Valuation allowances for inventory.....       349        1,024        223(2)         (222)          1,374
FISCAL YEAR 1999
  Allowance for doubtful accounts........       197          179           --          (157)            219
  Valuation allowances for inventory.....     1,374        1,689           --        (2,119)            944
FISCAL YEAR 2000
  Allowance for doubtful accounts........       219          106           --            (6)            319
  Valuation allowances for inventory.....       944        1,810           --        (1,333)          1,421	

(1) Accounts written off, net of collections on accounts receivable previously written off.
(2) Business acquisition during 1998.
S-1

INDEX TO EXHIBITS

       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
        1.1*            Form of Underwriting Agreement

        3.1             Amended and Restated Certificate of Incorporation
                        (incorporated by reference to Exhibit 3.1 to our
                        registration statement on Form S-1 (File No. 333-37554))

        3.2             Amended and Restated Bylaws (incorporated by reference to
                        Exhibit 3.2 to our registration statement on Form S-1 (File
                        No. 333-37554))

        5.1**           Opinion of Weil, Gotshal & Manges LLP

       10.1             1997 Stock Option Plan (including form of "standard" option
                        agreement and form of "special" option agreement)
                        (incorporated by reference to Exhibit 10.1 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.2             1998 Stock Option Plan (including form of "standard" option
                        agreement, form of "special" option agreement and form of
                        "non-standard" option agreement) (incorporated by reference
                        to Exhibit 10.2 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.3             Wilson Greatbatch Ltd. Equity Plus Plan Money Purchase Plan
                        (incorporated by reference to Exhibit 10.3 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.4             Wilson Greatbatch Ltd. Equity Plus Plan Stock Bonus Plan
                        (incorporated by reference to Exhibit 10.4 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.5             Employment Agreement, dated as of July 9, 1997, between
                        Wilson Greatbatch Ltd. and Edward F. Voboril (incorporated
                        by reference to Exhibit 10.5 to our registration statement
                        on Form S-1 (File No. 333-37554))

       10.6             Registration and Anti-Dilution Agreement, dated as of July
                        10, 1997, among Wilson Greatbatch Technologies, Inc., DLJ
                        Investment Partners, L.P., DLJ Investment Funding, Inc., DLJ
                        First ESC L.L.C., The Northwestern Mutual Life Insurance
                        Company and Donaldson, Lufkin & Jenrette Securities
                        Corporation (incorporated by reference to Exhibit 10.7 to
                        our registration statement on Form S-1 (File No. 333-37554))

       10.7             Stockholders Agreement, dated as of July 16, 1997, among
                        Wilson Greatbatch Technologies, Inc., DLJ Merchant Banking
                        Partners II, L.P., DLJMB Funding II, Inc., DLJ Merchant
                        Banking Partners II-A, L.P., DLJ Diversified Partners, L.P.,
                        DLJ Diversified Partners-A, L.P., DLJ Millennium Partners,
                        L.P., DLJ First ESC L.L.C., DLJ Offshore Partners II, C.V.,
                        DLJ EAB Partners, L.P., U.K. Investment Plan 1997 Partners,
                        and the other holders of common stock of Wilson Greatbatch
                        Technologies Inc. party thereto (incorporated by reference
                        to Exhibit 10.12 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.8             Amendment No. 1 to Stockholders Agreement, dated as of
                        October 31, 1997, among Wilson Greatbatch Technologies,
                        Inc., DLJ Merchant Banking Partners II, L.P., DLJMB Funding
                        II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.L.C.,
                        DLJ Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, and the other holders of
                        common stock of Wilson Greatbatch Technologies, Inc. party
                        thereto (incorporated by reference to Exhibit 10.13 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.9             Management Stockholders Agreement, dated as of July 10,
                        1997, among Wilson Greatbatch Technologies, Inc., DLJ
                        Merchant Banking Partners II, L.P., DLJMB Funding II, Inc.,
                        DLJ Merchant Banking Partners II-A, L.P., DLJ Diversified
                        Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ
                        Millennium Partners, L.P., DLJ First ESC L.L.C., DLJ
                        Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, and the other holders of
                        common stock of Wilson Greatbatch Technologies, Inc. party
                        thereto (incorporated by reference to Exhibit 10.14 to our
                        registration statement on Form S-1 (File No. 333-37554))	

       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
       10.10            Subordinated Note Holders Stockholders Agreement, dated as
                        of July 10, 1997, among Wilson Greatbatch Technologies,
                        Inc., DLJ Merchant Banking Partners II, L.P., DLJMB Funding
                        II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.L.C.,
                        DLJ Offshore Partners II, C.V., DLJ EAB Partners, L.P., U.K.
                        Investment Plan 1997 Partners, DLJ Investment Partners,
                        L.P., DLJ Investment Funding, Inc., The Northwestern Mutual
                        Life Insurance Company and Donaldson, Lufkin & Jenrette
                        Securities Corporation (incorporated by reference to Exhibit
                        10.15 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.11+           Supply Agreement (SVO Batteries), dated as of July 31, 1991,
                        between Wilson Greatbatch Ltd. and Medtronic Inc.
                        (incorporated by reference to Exhibit 10.16 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.12+           Amendment No. 1 to the Supply Agreement (SVO Batteries),
                        dated as of June 3, 1996, between Wilson Greatbatch Ltd. and
                        Medtronic Inc. (incorporated by reference to Exhibit 10.17
                        to our registration statement on Form S-1 (File No.
                        333-37554))

       10.13+           Amendment No. 2 to the Supply Agreement (SVO Batteries),
                        dated as of March 24, 1997, between Wilson Greatbatch Ltd.
                        And Medtronic Inc. (incorporated by reference to Exhibit
                        10.18 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.14+           Amendment No. 3 to the Supply Agreement (SVO Batteries),
                        dated as of July 22, 1999, between Wilson Greatbatch Ltd.
                        and Medtronic Inc. (incorporated by reference to Exhibit
                        10.19 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.15+           Supply Agreement, dated as of February 1, 1999, among Wilson
                        Greatbatch Ltd. and Guidant/CRM (incorporated by reference
                        to Exhibit 10.20 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.16+           Agreement, dated as of April 16, 1997, between Wilson
                        Greatbatch Ltd. and Pacesetter, Inc., a St. Jude Medical
                        Company (incorporated by reference to Exhibit 10.21 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.17+           License Agreement, dated August 8, 1996, between Wilson
                        Greatbatch Ltd. and Evans Capacitor Company (incorporated by
                        reference to Exhibit 10.22 to our registration statement on
                        Form S-1 (File No. 333-37554))

       10.18+           Supplier Partnering Agreement, dated as of June 1, 2000,
                        between Wilson Greatbatch Ltd. and Pacesetter, Inc., a St.
                        Jude Medical Company (incorporated by reference to Exhibit
                        10.23 to our registration statement on Form S-1 (File No.
                        333-37554))

       10.19            License Agreement, dated March 16, 1976, between Wilson
                        Greatbatch Ltd. and Medtronic Inc. (incorporated by
                        reference to Exhibit 10.24 to our registration statement on
                        Form S-1 (File No. 333-37554))

       10.20            Amendment No. 1 to License Agreement, dated July 20, 1976,
                        between Wilson Greatbatch Ltd. and Medtronic Inc.
                        (incorporated by reference to Exhibit 10.25 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.21            Stockholders Agreement, dated as of August 23, 1999, among
                        Wilson Greatbatch Technologies, Inc., DLJ Merchant Banking
                        Partners II, L.P., DLJMB Funding II, Inc., DLJ Merchant
                        Banking Partners II-A, L.P., DLJ Diversified Partners, L.P.,
                        DLJ Diversified Partners-A, L.P., DLJ Millennium Partners,
                        L.P., DLJ First ESC L.P., DLJ Offshore Partners II, C.V.,
                        DLJ EAB Partners, L.P., UK Investment Plan 1997 Partners and
                        Fred Hittman (incorporated by reference to Exhibit 10.26 to
                        our registration statement on Form S-1 (File No. 333-37554))

       10.22            Stock Purchase Agreement, dated as of July 31, 2000, among
                        Wilson Greatbatch Technologies, Inc., Battery Engineering,
                        Inc. and Hitachi-Maxell, Ltd. (incorporated by reference to
                        Exhibit 10.31 to our registration statement on Form S-1
                        (File No. 333-37554))	

       EXHIBIT
       NUMBER           DESCRIPTION
---------------------   -----------
       10.23            Stockholders Agreement, dated as of August 7, 2000, among
                        Wilson Greatbatch Technologies, Inc., Hitachi-Maxell, Ltd.,
                        DLJ Merchant Banking Partners II, L.P., DLJMB Funding II,
                        Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ
                        Diversified Partners, L.P., DLJ Diversified Partners-A,
                        L.P., DLJ Millennium Partners, L.P., DLJ First ESC L.P., DLJ
                        Offshore Partners II, C.V., DLJ EAB Partners, L.P. and UK
                        Investment Plan 1997 Partners (incorporated by reference to
                        Exhibit 10.32 to our registration statement on Form S-1
                        (File No. 333-37554))

       10.24            Subscription Agreement, dated as of August 7, 2000, between
                        Wilson Greatbatch Technologies, Inc. and Hitachi-Maxell,
                        Ltd. (incorporated by reference to Exhibit 10.33 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.25            Non-Compete Agreement, dated as of August 7, 2000, between
                        Wilson Greatbatch Technologies, Inc. and Hitachi-Maxell,
                        Ltd. (incorporated by reference to Exhibit 10.34 to our
                        registration statement on Form S-1 (File No. 333-37554))

       10.26**          Amended and Restated Credit Agreement, dated as of June 15,
                        2001, among Wilson Greatbatch Ltd., the lenders party
                        thereto and Manufacturers and Traders Trust Company, as
                        Administrative Agent

       10.27            Asset Purchase Agreement, dated as of June 18, 2001, among
                        Wilson Greatbatch Technologies, Inc., GB Acquisition
                        Co., Inc., Maxwell Technologies, Inc. and Maxwell Electronic
                        Components Group, Inc. (incorporated by reference to
                        Exhibit 10.1 to our current report on Form 8-K filed
                        June 19, 2001)

       21.1**           List of Subsidiaries

       23.1**           Consent of Deloitte & Touche LLP

       23.2**           Consent of Ernst & Young LLP, Independent Auditors

       23.3**           Consent of Weil, Gotshal & Manges LLP (included in Exhibit
                        5.1)

       24.1**           Power of Attorney (included on signature page)	

* To be filed by amendment.
** Filed herewith.
+ Portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment.

EXHIBIT 5.1
June 19, 2001
Wilson Greatbatch Technologies, Inc.
10,000 Wehrle Drive
Clarence, New York 14031
Ladies and Gentlemen:
We have acted as counsel to Wilson Greatbatch Technologies, Inc., a Delaware corporation (the "Company"), in connection with the preparation and filing by the Company of a Registration Statement on Form S-1 (the "Registration Statement") under the Securities Act of 1933, as amended, relating to the proposed offering of up to 6,900,000 shares (the "Shares") (including up to 900,000 shares which may be sold by the selling stockholders named therein pursuant to an over-allotment option) of the Company's common stock, par value $.001 per share, 2,000,000 of which Shares are being sold by the Company (the "Primary Shares") and up to 4,900,000 of which Shares are being sold by the selling stockholders named therein (the "Secondary Shares"). The Shares will be issued and sold pursuant to an Underwriting Agreement (the "Underwriting Agreement") to be entered into among Credit Suisse First Boston Corporation, Banc of America Securities LLC, Morgan Stanley Dean Witter Incorporated, U.S. Bancorp Piper Jaffray, the Company and the selling stockholders named therein. Capitalized terms defined in the Underwriting Agreement and used (but not otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the form of the Underwriting Agreement to be filed as an exhibit to the Registration Statement, the form of resolutions (the "Resolutions") proposed to be adopted by the pricing committee (the "Pricing Committee") of the Board of Directors of the Company authorizing the issuance and sale of the Primary Shares pursuant to the Underwriting Agreement and such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to these opinions that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company. We have also assumed for purposes hereof that
(i) the Underwriting Agreement will be executed and delivered in substantially the form thereof to be filed as an exhibit to the Registration Statement and
(ii) the Pricing Committee will adopt the Resolutions authorizing the issuance and sale of the Shares pursuant to the Underwriting Agreement in substantially the form reviewed by us.
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware.
2. The Primary Shares, when issued and sold in the manner described in the Registration Statement and in accordance with (i) the Resolutions as adopted by the Pricing Committee and (ii) the terms of the Underwriting Agreement, will be duly authorized, validly issued, fully paid and non-assessable.

Wilson Greatbatch Technologies, Inc.
June 19, 2001
Page 2
3. The Secondary Shares have been duly authorized, validly issued and are fully paid and non-assessable.
We hereby consent to the use of this letter as an exhibit to the Registration Statement and to any and all references to our firm in the Prospectus which is a part of the Registration Statement.
Very truly yours,

/S/ WEIL, GOTSHAL & MANGES LLP	

Exhibit 10.26
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
JUNE 15, 2001
by and among
WILSON GREATBATCH LTD.,
the LENDERS Party Hereto
and
MANUFACTURERS AND TRADERS TRUST COMPANY
as Administrative Agent
$100,000,000

                                TABLE OF CONTENTS

ARTICLE I   DEFINITIONS                                                                                          1
------------------------------------------------------------------------------------------------------------------
1.01     DEFINED TERMS.                                                                                          1
1.02     TERMS GENERALLY.                                                                                       17
1.03     ACCOUNTING TERMS; GAAP.                                                                                17

ARTICLE II  THE CREDIT FACILITIES                                                                               19
------------------------------------------------------------------------------------------------------------------
2.01     TERM LOAN FACILITIES.                                                                                  19
2.02     REVOLVING CREDIT FACILITIES.                                                                           20
2.03     REQUESTS FOR CREDIT LINE LOANS.                                                                        21
2.04     REQUESTS FOR SWINGLINE LOANS.                                                                          22
2.05     LETTERS OF CREDIT.                                                                                     24
2.06     FUNDING OF BORROWINGS.                                                                                 28
2.07     INTEREST ELECTIONS.                                                                                    29
2.08     TERMINATION AND REDUCTION OF THE COMMITMENTS.                                                          30
2.09     REPAYMENT AND PREPAYMENT OF LOANS; EVIDENCE OF DEBT.                                                   31
2.10     FEES.                                                                                                  34
2.11     INTEREST.                                                                                              36
2.12     ALTERNATE RATE OF INTEREST.                                                                            36
2.13     INCREASED COSTS.                                                                                       37
2.14     BREAK FUNDING PAYMENTS.                                                                                38
2.15     TAXES.                                                                                                 38
2.16     PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.                                           39
2.17     MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.                                                        41

ARTICLE III REPRESENTATIONS AND WARRANTIES                                                                      42
------------------------------------------------------------------------------------------------------------------
3.01     ORGANIZATION; POWERS.                                                                                  42
3.02     AUTHORIZATION; ENFORCEABILITY.                                                                         42
3.03     GOVERNMENTAL APPROVALS; NO CONFLICTS.                                                                  42
3.04     FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.                                                       43
3.05     PROPERTIES.                                                                                            43
3.06     LITIGATION AND ENVIRONMENTAL MATTERS.                                                                  43
3.07     COMPLIANCE WITH LAWS AND AGREEMENTS.                                                                   44
3.08     INVESTMENT AND HOLDING COMPANY STATUS.                                                                 44
3.09     TAXES.                                                                                                 44
3.10     ERISA.                                                                                                 44
3.11     DISCLOSURE.                                                                                            44
3.12     USE OF CREDIT.                                                                                         45

ARTICLE IV  CONDITIONS                                                                                          45
------------------------------------------------------------------------------------------------------------------
4.01     EFFECTIVE DATE.                                                                                        45
4.02     EACH CREDIT EVENT.                                                                                     47

ARTICLE V   AFFIRMATIVE COVENANTS                                                                               48
------------------------------------------------------------------------------------------------------------------
5.01     FINANCIAL STATEMENTS AND OTHER INFORMATION.                                                            48
5.02     NOTICES OF MATERIAL EVENTS.                                                                            49
5.03     EXISTENCE: CONDUCT OF BUSINESS.                                                                        50	

5.04     FUTURE SUBSIDIARIES; SUBSIDIARY GUARANTORS.                                                            50
5.05     FUTURE PARENT ENTITIES; PARENT GUARANTORS.                                                             50
5.06     PAYMENT OF OBLIGATIONS.                                                                                50
5.07     MAINTENANCE OF PROPERTIES; INSURANCE.                                                                  50
5.08     BOOKS AND RECORDS; INSPECTION RIGHTS.                                                                  51
5.09     COMPLIANCE WITH LAWS.                                                                                  51
5.10     USE OF PROCEEDS.                                                                                       51

ARTICLE VI  NEGATIVE COVENANTS                                                                                  51
------------------------------------------------------------------------------------------------------------------
6.01     INDEBTEDNESS.                                                                                          51
6.02     LIENS.                                                                                                 54
6.03     FUNDAMENTAL CHANGES.                                                                                   54
6.04     LINES OF BUSINESS.                                                                                     56
6.05     RESTRICTIVE AGREEMENTS.                                                                                56
6.06     INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS; HEDGING AGREEMENTS.                         57
6.07     RESTRICTED PAYMENTS.                                                                                   57
6.08     TRANSACTIONS WITH AFFILIATES.                                                                          58
6.09     SALE AND LEASE-BACK TRANSACTIONS.                                                                      58
6.10     CERTAIN FINANCIAL COVENANTS.                                                                           58

ARTICLE VII EVENTS OF DEFAULT                                                                                   59
------------------------------------------------------------------------------------------------------------------

ARTICLE VIII THE ADMINISTRATIVE AGENT                                                                           61
------------------------------------------------------------------------------------------------------------------

ARTICLE IX  MISCELLANEOUS                                                                                       63
------------------------------------------------------------------------------------------------------------------
9.01     NOTICES.                                                                                               63
9.02     WAIVERS; AMENDMENTS.                                                                                   65
9.03     EXPENSES; INDEMNITY; DAMAGE WAIVER.                                                                    66
9.04     SUCCESSORS AND ASSIGNS.                                                                                68
9.05     SURVIVAL.                                                                                              70
9.06     COUNTERPARTS; INTEGRATION; EFFECTIVENESS.                                                              71
9.07     SEVERABILITY.                                                                                          71
9.08     RIGHT OF SETOFF.                                                                                       71
9.09     GOVERNING LAW; JURISDICTION: ETC.                                                                      71
9.10     WAIVER OF JURY TRIAL.                                                                                  72
9.11     HEADINGS.                                                                                              72
9.12     TREATMENT OF CERTAIN INFORMATION: CONFIDENTIALITY.                                                     72

SCHEDULE I - Commitments
SCHEDULE II - Existing Indebtedness, Liens and Investments
SCHEDULE III - Litigation
SCHEDULE IV - Environmental Matters
SCHEDULE V - Existing Letters of Credit

EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Opinion of Counsel to the Borrower
EXHIBIT C - Form of Term Note

                                                                              ii	

EXHIBIT D - Form of Revolving Credit Note EXHIBIT E - Form of Revolving Credit Borrowing Request EXHIBIT F1 - Form of Interest Election Request for Term Loan Borrowing EXHIBIT F2 - Form of Interest Election Request for Revolving Credit Borrowing EXHIBIT G - Form of Borrower Compliance Certificate
iii

AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 15, 2001, by and among WILSON GREATBATCH LTD., a New York corporation, the LENDERS party hereto, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as Administrative Agent.
Pursuant to a Credit Agreement dated as of January 12, 2001 (the "ORIGINAL CREDIT AGREEMENT") the Lenders (as hereinafter defined) extended credit to the Borrowers (as hereinafter defined) in an aggregate principle or face amount not exceeding Sixty Million Dollars ($60,000,000) at any one time outstanding (the "ORIGINAL CREDIT FACILITIES").
The Borrower has requested that the Lenders extend and replace the Original Credit Facilities and increase the amount of the Original Credit Facilities by extending credit to it in an aggregate principal or face amount not exceeding One Hundred Million Dollars ($100,000,000), make available Swingline Loans (as hereinafter defined), and make such other changes to the Original Credit Facilities as further described herein. The Lenders are prepared to extend such additional credit, and make such further changes to the Original Credit Facilities, upon the terms and conditions hereof, and, accordingly, the Original Credit Agreement shall be amended and restated in its entirety to read as follows:
ARTICLE I DEFINITIONS
1.01 DEFINED TERMS. As used in this Agreement, the following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, indicates that such Loan, or the Loans constituting such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Base Rate.
"ADJUSTED LIBOR" means, with respect to any ALR Loan for the related Interest Period, the rate PER ANNUM that is equal to the sum of (a) the Applicable Margin, PLUS (b) the rate PER ANNUM obtained by multiplying (i) the LIBOR, by (ii) the Eurocurrency Reserve Rate, all as conclusively determined by the Administrative Agent, such sum to be rounded up, if necessary, to the nearest whole multiple of one hundredth (1/100th) of one percent (1%).
"ADJUSTED BASE RATE" means, for any day, a rate PER ANNUM equal to the greater of (a) the sum of the Prime Rate in effect on such day PLUS the Applicable Margin in effect for such day, and (b) the sum of the Federal Funds Effective Rate in effect on such day, PLUS one-half of one percent (0.500%), PLUS the Applicable Margin in effect for such day.
"ADMINISTRATIVE AGENT" means M&T, in its capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE AGENT'S ACCOUNT" means an account designated by the Administrative Agent in a notice to the Borrower and the Lenders.

"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
"ALR", when used in reference to any Loan or Borrowing, indicates that such Loan, or the Loans constituting such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBOR.
"APPLICABLE MARGIN" means, for any day, (a) with respect to any ABR Loan the applicable rate PER ANNUM set forth below under the caption "ABR Spread",
(b) with respect to any ALR Loan, the applicable rate PER ANNUM set forth below under the caption "LIBOR Spread", or (c) with respect to the revolving credit fees payable hereunder, the applicable rate PER ANNUM set forth below under the caption "Revolving Credit Fee Rate", respectively, based upon the Leverage Ratio as at the end of the most recent fiscal quarter; PROVIDED, HOWEVER, that during the period commencing on the Effective Date and ending on December 28, 2001, the Applicable Margin shall be the applicable rate PER ANNUM set forth below in Category 2; and PROVIDED, FURTHER, that, notwithstanding the foregoing, during the period commencing on the Effective Date and ending on December 28, 2001, if the Leverage Ratio equals or exceeds 2.500 to 1, the Applicable Margin shall be the applicable rate PER ANNUM set forth below in Category 1, which Category 1 shall remain effective until the earlier of (i) the date on which the Applicable Margin is less than 2.500 to 1, and (ii) December 28, 2001; PROVIDED, FURTHER, during the period commencing on and including December 29, 2001, and at all times thereafter, the Applicable Margin shall be the applicable rate PER ANNUM set forth below opposite the Leverage Ratio as at the end of the most recent fiscal quarter.

-------------------------------------------------------------------------------------------------------------------------
                LEVERAGE RATIO (= "X")                                   ABR SPREAD        LIBOR SPREAD      REVOLVING
                                                                                                           CREDIT FEE RATE
-------------------------------------------------------------------------------------------------------------------------
   CATEGORY 1: X greater than and equal to 2.500 : 1                        0.250           2.500              0.500
-------------------------------------------------------------------------------------------------------------------------
   CATEGORY 2:  2.000 : 1 less than and equal to X less than 2.500: 1       0.000             2.125            0.375
-------------------------------------------------------------------------------------------------------------------------
   CATEGORY 3:  1.500 : 1 less than and equal to X less than 2.000 : 1     -0.250             1.750            0.250
-------------------------------------------------------------------------------------------------------------------------
   CATEGORY 4:  1.000 : 1 less than and equal to X less than 1.500 : 1     -0.500             1.500            0.125
-------------------------------------------------------------------------------------------------------------------------
   CATEGORY 5:  X less than 1.000 : 1                                      -0.750             1.250            0.125
-------------------------------------------------------------------------------------------------------------------------	

For purposes of the foregoing, each change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective as to any Loans then outstanding or thereafter made during the period commencing on and including the date three (3) Business Days after delivery to the Administrative Agent of the Consolidated financial statements pursuant to Section 5.01(a) or 5.01(b), as applicable, indicating such change and ending on the date immediately preceding the
2

effective date of the next such change; PROVIDED that the Applicable Margin shall be deemed to be in Category 1: (i) at any time that an Event of Default has occurred and is continuing; and (ii) if the Borrower fails to deliver the Consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or 5.01(b), during the period commencing on the expiration date of the time for delivery thereof and ending on the date three (3) Business Days after such Consolidated financial statements are delivered.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment as set forth opposite such Lender's name on SCHEDULE I or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. If the Commitments have terminated or expired, each Lender's Applicable Percentage shall be determined based upon the Commitments most recently in effect, after giving effect to any assignments of any Commitments by or among the Lenders.
"ASSET PURCHASE AGREEMENT" shall have the meaning ascribed to such term in
Section 4.01(k).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of EXHIBIT A or any other form approved by the Administrative Agent.
"AVAILABILITY PERIOD" means, with respect to the Revolving Credit Commitments, the period from and including the Effective Date to but excluding the earlier of the Revolving Credit Commitment Termination Date and the date of termination of the Revolving Credit Commitments.
"BOARD" means the Board of Governors of the Federal Reserve System of the United States of America.
"BORROWER" means Wilson Greatbatch Ltd., a New York corporation.
"BORROWER PLEDGE AGREEMENT" shall have the meaning ascribed to such term in Section 4.01(h), as such agreement may be modified, amended or supplemented from time to time.
"BORROWING" means (a) all ABR Loans made, converted or continued on the same date, or (b) all ALR Loans (or portions thereof) that have the same Interest Period.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing of Revolving Credit Loans in accordance with Section 2.03 or 2.04, as applicable.
"BUSINESS DAY" means any day (a) that is not a Saturday, Sunday or other day on which commercial banks in Buffalo, New York are authorized or required by law to remain closed, and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a continuation or conversion of or into, or the Interest Period for, an ALR Borrowing, or to a notice by the Borrower with respect to any such Borrowing, payment, prepayment, continuation,
3

conversion, or Interest Period, a day that is also a day on which dealings in deposits for United States Dollars are carried out in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
"CASH INTEREST EXPENSE" of any Person means, for any period, the sum (without duplication and in accordance with GAAP) of the following: (a) all interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period), PLUS (b) the net amount payable (or MINUS the net amount receivable) under interest rate Hedging Agreements during such period (whether or not actually paid or received during such period), MINUS (c) the sum of (i) interest income during such period, PLUS
(ii) all amounts attributable to non-cash items of interest expense, all as determined in accordance with GAAP.
"CHANGE IN CONTROL" means any time at which (a) Wilson Greatbatch Technologies, Inc. shall cease to beneficially own in the aggregate one hundred percent (100%) of the total combined voting power of all classes of voting stock of Wilson Greatbatch Intermediate Holdings, Inc., free and clear of all Liens (including, without limitation, pursuant to any voting trust or other agreement to which such shareholder becomes a party or bound by, that in any way limits the right or ability of such shareholder to exercise one hundred percent (100%) of such total combined voting powers); or (b) Wilson Greatbatch Intermediate Holdings, Inc. shall cease to beneficially own in the aggregate one hundred percent (100%) of the total combined voting power of all classes of voting stock of the Borrower, free and clear of all Liens (including, without limitation, pursuant to any voting trust or other agreement to which such shareholder becomes a party or bound by, that in any way limits the right or ability of such shareholder to exercise one hundred percent (100%) of such total combined voting powers).
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement, or (c) compliance by any Lender or the Issuing Lender (or, for purposes of Section 2.13(b), by any lending office of such Lender or by such Lender's or the Issuing Lender's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COLLATERAL AGENCY AGREEMENT" shall have the meaning ascribed to such term in Section 6.01(a)(iv), as such agreement may be modified, amended or supplemented from time to time.
"COMMITMENT" means, with respect to a Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Commitment
4

and Term Loan Commitment hereunder. The initial amount of each Lender's Commitment is set forth on SCHEDULE I, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The "COMMITMENTS" shall mean the aggregate amounts of all Lenders' commitments to make Loans and to acquire participations in Letters of Credit hereunder; the initial amount of the Commitments is One Hundred Million Dollars ($100,000,000).
"COMPLIANCE CERTIFICATE" means a certificate of a Financial Officer as described in Section 5.01(c).
"CONSOLIDATED", "CONSOLIDATING" or "CONSOLIDATED BASIS" means, except as otherwise specifically provided for in this Agreement, the consolidation of the accounts of the Borrower and the Guarantors in accordance with GAAP, including principles of consolidation.
"CONSOLIDATED EBITDA" means, for any period, the sum of the following on a Consolidated basis: (a) Net Income for such period, PLUS (b) without duplication and to the extent deducted in computing such Net Income for such period, the sum of (i) Consolidated Cash Interest Expense, PLUS (ii) income tax expense, PLUS
(iii) depreciation and amortization expense, PLUS (iv) amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), PLUS (v) amortization of intangibles (including, but not limited to, goodwill) and organization costs, PLUS (vi) any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in such Net Income for such period, losses on sales of assets outside of the ordinary course of business), PLUS (vii) any other non-cash charges, and MINUS (c) to the extent included in computing such Net Income for such period, the sum of (i) any extraordinary, unusual or nonrecurring income or gains (including, whether or not otherwise includable as a separate item in such Net Income for such period, gains on the sales of assets outside of the ordinary course of business) , PLUS (ii) any other non-cash income. Solely in connection with the determination of Consolidated EBITDA for any period ending on March 30, 2001, the premium ("premium") payable to the holders of Borrower's 13% Senior Subordinated Notes due 2007 in the original principal amount of Twenty Five Million Dollars ($25,000,000) in connection with the repayment of such notes prior to their stated maturity shall be added back to Net Income pursuant to clause (b) of this definition; provided, in no event shall the aggregate amount of the premium to be added back to Net Income in determining Consolidated EBITDA pursuant to this sentence exceed an amount equal to One Million Seven Hundred Thirty Four Thousand Dollars ($1,734,000).
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of the following on a Consolidated basis: (a) capital expenditures, PLUS (b) Cash Interest Expense, PLUS (c) all regularly scheduled repayments of principal of Indebtedness (including principal repayments of the Term Loan and principal repayments of any Capital Lease Obligations), MINUS, (d) for such period, the sum of (i) the cost of financing any capital expenditures described in clause
(a) of this definition, PLUS (ii) interest income during such period.
"CONSOLIDATED FUNDED DEBT" means, at any time, the sum of the following
(without duplication and in accordance with GAAP) on a Consolidated basis: (a)
all interest-bearing Indebtedness; PLUS (b) Capital Lease Obligations; PLUS (c) synthetic lease obligations.
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"CONTROL" and "CONTROLLING" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "CONTROLLED" has the correlative meaning to such terms.
"CREDIT EXPOSURE" means, with respect to a Lender, at any time, the sum of
(a) such Lender's Revolving Credit Exposure at such time, PLUS (b) the outstanding principal amount of such Lender's Term Loan at such time.
"CREDIT LINE LOAN" and "CREDIT LINE LOANS" means, individually and collectively, each Loan made by the Lenders under the Revolving Credit Facility as requested by the Borrower pursuant to Section 2.03.
"DEFAULT" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings disclosed in SCHEDULE III and the environmental matters disclosed in SCHEDULE IV.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
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"ERISA EVENT" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan,
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in ARTICLE VII.
"EUROCURRENCY RESERVE RATE" means, for any Interest Period, a fraction (expressed as a decimal) the numerator of which is the number one (1) and the denominator of which is the number one (1) MINUS the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages established by the Board (including any marginal, special, emergency or supplemental reserves) expressed as a decimal to which the Administrative Agent is subject for "Eurocurrency Liabilities" (as that term is used in Regulation D of the Board). ALR Loans shall be deemed to constitute "Eurocurrency Liabilities" and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Eurocurrency Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage for "Eurocurrency Liabilities".
"EXCESS CASH FLOW" means, for any period, on a Consolidated basis, the excess of: (i) Consolidated EBITDA during such period OVER (ii) the sum of (a) the amount any voluntary prepayments of the Loans made pursuant to the provisions of Sections 2.09(b)(i) or 2.09(b)(iii), as applicable, (b) the amount of any cash used in connection with a transaction permitted pursuant to the provisions of Section 6.03(c)(iii), (c) interest paid, (d) taxes paid, (e) distributions, (f) dividends, (g) scheduled debt repayments or mandatory prepayments of the Term Loans made pursuant to the provisions of Section 2.09(b)(ii)[B], (h) funded capital expenditures, (i) Capital Lease Obligations, and (j) increases, if any, in working capital.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.17(b)), any withholding tax that is imposed on amounts
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payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement or is attributable to such Foreign Lender's failure or inability (other than as a result of a Change in Law) to deliver documentation prescribed by applicable law that permits payments made to such Foreign Lender to be made without holding taxes, except to the extent that such Foreign Lender's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.15(a).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average (rounded upwards, if necessary, to the next one hundredth (1/100th) of one percent (1%)) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next one hundredth (1/100th) of one percent (1%)) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, treasurer or vice president-finance of the Borrower.
"FIXED CHARGES COVERAGE RATIO" means the ratio of Consolidated EBITDA to Consolidated Fixed Charges as at the end of each fiscal quarter and measured for the four (4) consecutive fiscal quarters ending on the last day of such fiscal quarter; PROVIDED, (i) the items contained in clauses (a) and (d) of the definition of Consolidated Fixed Charges as at the end of any fiscal quarter shall be measured for the four (4) consecutive fiscal quarters ending on the last day of such fiscal quarter, and (ii) the items contained in clauses (b) and
(c) of the definition of Consolidated Fixed Charges (collectively, the "DEBT FIXED CHARGES") (A) as at the end of the second (2nd) fiscal quarter ending in 2001 shall equal the product of two (2) multiplied by the debt fixed charges as measured for the two (2) consecutive fiscal quarters ending on the last day of such fiscal quarter, and (B) as at the end of the third (3rd) fiscal quarter ending in 2001 shall equal the product of one and one-third (1.33) multiplied by the debt fixed charges as measured for the three (3) consecutive fiscal quarters ending on the last day of such fiscal quarter. The determination of the Fixed Charges Coverage Ratio shall be based upon the Consolidated financial statements delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.
"FOREIGN LENDER" means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

      "GAAP" means generally accepted accounting principles in the United States
of America.

      "GBAC" means GB Acquisition Co., Inc., a Delaware corporation and indirect	

wholly-owned Subsidiary of the Borrower.
"GOVERNMENTAL AUTHORITY" means the government of the United States of America, or of any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; PROVIDED that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
"GUARANTOR" and "GUARANTORS" means, individually and collectively, each Parent Guarantor and each Subsidiary Guarantor.
"GUARANTY AGREEMENT" and "GUARANTY AGREEMENTS", individually and collectively, shall have the meaning ascribed to such terms in Section 4.01(f), as any such agreement may be modified, amended or supplemented from time to time.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyl's, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.
"Hittman Pledge Agreement" shall have the meaning ascribed to such term in
Section 4.01(i), as such agreement may be modified, amended or supplemented from time to time.
"HOLDINGS" means WGL Intermediate Holdings, Inc., a Delaware corporation and the owner of all of the issued and outstanding capital stock of the Borrower.
"INDEBTEDNESS" of any Person means, without duplication (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such
9

Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTELLECTUAL PROPERTY SECURITY AGREEMENTS" shall have the meaning ascribed to such term in Section 4.01(g), as the same may be modified, amended or supplemented from time to time.
"INTEREST COVERAGE RATIO" means the ratio of Consolidated EBITDA to Consolidated Cash Interest Expense as at the end of each fiscal quarter and measured for the four (4) consecutive fiscal quarters ending on the last day of such fiscal quarter; PROVIDED, Consolidated Cash Interest Expense (a) as at the end of the second (2nd) fiscal quarter ending in 2001 shall equal the product of two (2) multiplied by the Consolidated Cash Interest Expense as measured for the two (2) consecutive fiscal quarters ending on the last day of such fiscal quarter, and (b) as at the end of the third (3rd) fiscal quarter ending in 2001 shall equal the product of one and one-third (1.33) multiplied by the Consolidated Cash Interest Expense as measured for the three (3) consecutive fiscal quarters ending on the last day of such fiscal quarter. The determination of the Interest Coverage Ratio shall be based upon the Consolidated financial statements delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert a Borrowing to, or continue a Borrowing as an ABR Borrowing or ALR Borrowing in accordance with Section 2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the first day of each calendar month, and (b) with respect to any ALR Loan, the next Business Day immediately following the last day of each Interest Period therefor.
"INTEREST PERIOD" means, (a) for any ALR Loan or ALR Borrowing, the period commencing on the date of such Loan, or with respect to such Borrowing, the date specified in the applicable Interest Election Request as the commencement date of the Interest Period for such Borrowing, and ending on the numerically corresponding day in the calendar month that is one (1), two (2), three (3) or six (6) months thereafter, or (b) with respect to any portion of any ALR Loan or Borrowing that is scheduled to be repaid on the Maturity Date or the Commitment Termination Date, a period of less than one (1) month's duration commencing on the date of such Loan, or with respect to such Borrowing, the date specified in the applicable Interest Election Request as the commencement date of the Interest Period for such Borrowing, and ending on the Maturity Date or Commitment Termination Date, as applicable; PROVIDED that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the
10

next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, and (ii) any Interest Period (other than an Interest Period pertaining to an ALR Borrowing that ends on the Maturity Date or Commitment Termination Date, as applicable, that is permitted to be of less than one (1) month's duration as provided in this definition) that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Revolving Credit Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan as an ALR Loan, and the date of a Borrowing comprising a Revolving Credit Loan, multiple Revolving Credit Loans, or any portion of a Revolving Credit Loan or Revolving Credit Loans, that has or have, respectively, been converted or continued shall be the effective date of the most recent conversion or continuation of such Loan, Loans or portion thereof. The date of the Term Loans shall be the date on which such Loans are made.
"ISSUING LENDER" means M&T, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(j).
"LC DISBURSEMENT" means a payment made by the Issuing Lender pursuant to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn amounts of all outstanding Letters of Credit at such time, PLUS (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
"LENDERS" means the Persons listed on SCHEDULE I and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.
"LETTER OF CREDIT" means any standby letter of credit issued pursuant to this Agreement.
"LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit, or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.
"LEVERAGE RATIO" means the ratio of (a) Consolidated Funded Debt, MINUS cash, MINUS cash equivalent investments, as at the end of each fiscal quarter, to (b) Consolidated EBITDA as at the end of each fiscal quarter, and measured for the four (4) consecutive fiscal quarters ending on the last day of such fiscal quarter. The determination of the Leverage Ratio shall be based upon the Consolidated financial statements delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.
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"LIBOR" means for any Interest Period, the PER ANNUM rate, as determined by the Administrative Agent from any broker, quoting service or commonly available source utilized by the Administrative Agent, at which United States Dollar deposits in immediately available funds are offered to leading banks in the London interbank deposit market at 11:00 a.m. Greenwich Mean Time (or as soon thereafter as practicable) on the Quotation Date for delivery on the first day of such Interest Period and for a period equal to such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset, and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the Letter of Credit Documents, the Guaranty Agreements, the Security Agreements, the Borrower Pledge Agreement, the Intellectual Property Security Agreements, the Reaffirmation Agreement and all other agreements, documents, certificates and instruments executed and delivered by the Borrower, any Subsidiary Guarantor, Technologies, Holdings, and any other Person pursuant to the terms hereof to the Administrative Agent and/or the Lenders in connection with the Transactions, as each of such Loan Documents may be modified, amended or supplemented from time to time.
"LOANS" means the Revolving Credit Loans and/or the Term Loans made by the Lenders to the Borrower pursuant to this Agreement.
"LOCAL TIME" means the local time in Buffalo, New York.
"M&T" means Manufacturers and Traders Trust Company.
"MARGIN STOCK" means "margin stock" within the meaning of Regulations T, U and X of the Board.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under this Agreement or any of the other Loan Documents, or (c) the ability of the Lenders to enforce or assert any right or interest granted to the Lenders under this Agreement or any of the other Loan Documents.
"MATURITY DATE" means, with respect to the Term Loans and the Term Note, July 1, 2006.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NET INCOME" of any Person, means, with respect to any period, all amounts which, in conformity with GAAP, would be included under net income on an income statement of such Person for such period.
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"NOTE" and "NOTES" means, individually and collectively, the Revolving Credit Note and the Term Note.
"OTHER TAXES" means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.
"PARENT GUARANTOR" and "PARENT GUARANTORS" means, individually and collectively, Technologies, Holdings and each Person in relation to which the Borrower or any Subsidiary of the Borrower becomes a Subsidiary and that has executed and delivered to the Administrative Agent a Guaranty Agreement as provided in Section 4.01 or Section 5.05.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
"PERMITTED INVESTMENTS" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within two hundred seventy
(270) days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's Ratings Services or Moody's Investors Services, Inc; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than Two Hundred Fifty Million Dollars ($250,000,000); and (d) fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) of this definition and entered into with a financial institution satisfying the criteria described in clause (c) of this definition.
"PERSON" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced from time to time by M&T as its prime rate in effect at its principal office in Buffalo, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
"QUALIFYING ACQUISITION" shall have the meaning ascribed to such term in Section2.09(b)(ii)[B].
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"QUALIFYING SALE" shall have the meaning ascribed such term in Section 2.09(b)(ii)[B].
"QUALIFYING SALE PROCEEDS" shall have the meaning ascribed to such term in Section2.09(b)(ii)[B].
"QUARTERLY DATES" means the last Business Day of March, June, September and December in each year, the first of which shall be the first such day after the date hereof.
"QUOTATION DATE" means, for any Interest Period, the date that is two (2) Business Days prior to the first day of such Interest Period.
"REAFFIRMATION AGREEMENT" has the meaning set forth in Section 4.01(e).
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Credit Exposures and unused Revolving Credit Commitments representing greater than fifty one percent (51%) of the sum of the total Credit Exposures and unused Revolving Credit Commitments at such time.
"RESTRICTED PAYMENT" for any Person means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of such Person, or (b) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of such Person or any option, warrant or other right to acquire any such shares of capital stock of such Person, or (c) any dividend, distribution or other payment by such Person or any Subsidiary of such Person to any shareholder of such Person or such Subsidiary (other than such Person), or to any Affiliate of such Person, any of its Subsidiaries, or to such shareholder, whether in cash, securities or other property.
"REVOLVING CREDIT COMMITMENT" means, with respect to a Lender, the commitment of such Lender to make Revolving Credit Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder and its Applicable Percentage of the unused principal amount of the Revolving Credit Note, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving Credit Commitment is set forth on SCHEDULE I, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The "REVOLVING CREDIT COMMITMENTS" shall mean the aggregate amounts of all Lenders' commitments to make Revolving Credit Loans and to acquire participations in Letters of Credit hereunder; the initial amount of the Revolving Credit Commitments is Twenty Million Dollars ($20,000,000).
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"REVOLVING CREDIT COMMITMENT TERMINATION DATE" means, with respect to the Revolving Credit Loans, Revolving Credit Note and the Letters of Credit, July 1, 2006.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Credit Loans and its LC Exposure at such time.
"REVOLVING CREDIT FACILITY" means the credit extended to the Borrower as described in Section 2.02.
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS" means, individually and collectively, each Credit Line Loan and each Swingline Loan made by the Lenders pursuant to Section 2.02.
"REVOLVING CREDIT NOTE" means the Note executed and delivered by the Borrower to the Administrative Agent pursuant to Section 2.02 and in the form of EXHIBIT E hereto, and all substitutions and replacements thereof.
"SECURITY AGREEMENT" shall have the meaning ascribed to such term in
Section 4.01(g), as any such agreement may be modified, amended or supplemented from time to time.
"SENIOR EXECUTIVE OFFICER" with respect to any Person, means the Chief Executive Officer, President or Executive Vice President of such Person.
"SIERRA ACQUISITION" shall have the meaning ascribed to such term in
Section 4.01(k).
"SUBORDINATED INDEBTEDNESS" means, with respect to the Borrower and its Subsidiaries, all unsecured Indebtedness that is subordinated in right of payment to the payment of the Loans and is otherwise junior to the rights of the Lenders with respect to the Loans in all respects.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" and "SUBSIDIARY GUARANTORS" means, individually and collectively, each Subsidiary of the Borrower or of any Subsidiary of the Borrower that has executed and delivered to the Administrative Agent the Loan Documents as provided in Section 4.01 or Section 5.04, and for the purposes hereof shall specifically include GBAC.
15

"SWINGLINE LENDER" means M&T, in its capacity as the issuer of Swingline Loans hereunder, and its successors in such capacity as provided in Section 2.04(g).
"SWINGLINE LOAN" and "SWINGLINE LOANS" means, individually and collectively, each Loan made by the Swingline Lender and the other Lenders under the Revolving Credit Facility pursuant to Section 2.04.
"TECHNOLOGIES" means Wilson Greatbatch Technologies, Inc., a Delaware corporation and the owner of all of the issued and outstanding capital stock of Holdings.
"TAXES" means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
"TERM LOAN" and "TERM LOANS" means, individually and collectively, each Term Loan made by a Lender pursuant to Section 2.01.
"TERM LOAN COMMITMENT" means, with respect to a Lender, the commitment of such Lender to make a Term Loan hereunder on the Effective Date, expressed as an amount representing the maximum aggregate amount of such Lender's Applicable Percentage of the Term Note as such commitment may be reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The amount of each Lender's Term Loan Commitment is set forth on SCHEDULE I, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The "TERM LOAN COMMITMENTS" shall mean the aggregate amounts of all Lenders' commitments to make Term Loans hereunder on the Effective Date; the aggregate amount of the Term Loan Commitments is Eighty Million Dollars ($80,000,000).
"TERM LOAN FACILITY" means the credit extended to the Borrower as described in Section 2.01.
"TERM NOTE" means the Note executed and delivered by the Borrower to the Administrative Agent pursuant to Section 2.01 and in the form of EXHIBIT D hereto, and all substitutions and replacements thereof.
"TRANSACTIONS" means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
"TYPE", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans constituting such Borrowing, is determined by reference to the Adjusted LIBOR or the Adjusted Base Rate, and, accordingly, whether such Loan or Borrowing is an ALR Loan or Borrowing or ABR Loan or Borrowing, respectively.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
16

1.02 TERMS GENERALLY. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof' and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

1.03        ACCOUNTING TERMS; GAAP.

            (a) GAAP: CHANGES IN ACCOUNTING TERMS TREATMENT. Except as otherwise
      expressly provided herein, all terms of an accounting or financial nature
      shall be construed in accordance with GAAP, as in effect from time to
      time; PROVIDED that, if the Borrower notifies the Administrative Agent
      that the Borrower requests an amendment to any provision hereof to
      eliminate the effect of any change occurring after the date hereof in GAAP
      or in the application thereof on the operation of such provision (or if
      the Administrative Agent notifies the Borrower that the Required Lenders
      request an amendment to any provision hereof for such purpose), regardless
      of whether any such notice is given before or after such change in GAAP or
      in the application thereof, then such provision shall be interpreted on
      the basis of GAAP as in effect and applied immediately before such change
      shall have become effective until such notice shall have been withdrawn or
      such provision amended in accordance herewith.

            (b) CHANGES IN FISCAL PERIODS. To enable the ready and consistent
      determination of compliance with the covenants set forth in Section
      ARTICLE VI, the Borrower will not change the last day of its fiscal year
      from the Friday nearest to December 31 of each year (whether or not such
      last day occurs in the same calendar year or the next following calendar
      year), or the last days of the first three fiscal quarters in each of
      their fiscal years from the Friday closest to March 31, June 30 or
      September 30 of each year, respectively. By way of illustration of the
      foregoing, fiscal year 2001 will end on December 28, 2001.

            (c) PRO FORMA TREATMENT OF ACQUISITIONS. For the purposes of
      computing Consolidated EBITDA, Consolidated Fixed Charges, Cash Interest
      Expense, Consolidated Funded Debt, the Fixed Charges Coverage Ratio, the
      Interest Coverage Ratio and the Leverage Ratio (and any financial
      calculations required to be made or included within such amounts or
      ratios) as of the end of any measurement period, in the event any Person
      (an "ACQUIRED PERSON") is acquired by the Borrower or any of its
      Subsidiaries after the beginning of and prior to the end of such
      measurement period, all components of such amounts or ratios (other than
      capital expenditures as determined in accordance with GAAP) shall be
      computed on a PRO FORMA basis as if such	

17

acquisition has occurred on the first day of such measurement period, and shall, without duplication, and to the extent applicable:
(i) include, for purposes of calculating Consolidated EBITDA, the actual items of income and expense of the acquired Person as measured for the four (4) consecutive fiscal quarters of such acquired Person ending on the date of its acquisition by the Borrower or such Subsidiary;
(ii) include, for purposes of calculating Consolidated Fixed Charges, the actual items of fixed charges of the acquired Person as measured for the four (4) consecutive fiscal quarters of such acquired Person ending on the date of its acquisition by the Borrower or such Subsidiary;
(iii) include, for purposes of determining Cash Interest Expense, the actual items of cash interest expense of the acquired Person as measured for the four (4) consecutive fiscal quarters of such acquired Person ending on the date of its acquisition by the Borrower or such Subsidiary;
(iv) include, for the purposes of determining Consolidated Funded Debt, the actual amount of all interest-bearing Indebtedness, Capital Lease Obligations and synthetic lease obligations of the acquired entity as at the date of its acquisition by the Borrower or such Subsidiary;
(v) exclude any Indebtedness of the acquired Person that has been retired or discharged on or prior to the date the Borrower or such Subsidiary acquired such acquired Person (the "ACQUISITION DATE");
(vi) calculate interest payable during such measurement period with respect to any Indebtedness of such acquired Person at a rate of interest equal to the actual weighted average interest rate in effect for the Loans hereunder on the date of such acquisition; and
(vii) include all cost savings to be realized by the Borrower or such Subsidiary in connection with such acquisition during the twelve (12) month period ending on the first (1st) anniversary of the acquisition date, as determined in good faith by the Borrower or such Subsidiary and set forth in the relevant Compliance Certificate delivered by the Financial Officer of the Borrower for such measurement period (collectively, the "PROJECTED COST SAVINGS"); PROVIDED, HOWEVER, in computing each such amount or ratio (A) no cost savings which would accrue or occur after the first (1st) year anniversary of the acquisition date shall be considered, and (B) the actual cost savings realized by the Borrower or such Subsidiary (if any) during each measurement period commencing after the end of the measurement period containing the acquisition date, rather than the projected cost savings expected to be realized during such measurement period, shall (to the extent applicable) be used in computing each such amount or ratio as of the end of such measurement period.
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                        ARTICLE II THE CREDIT FACILITIES

2.01        TERM LOAN FACILITIES.

            (a) TERM LOAN COMMITMENTS. Subject to the terms and conditions set
      forth herein, each Lender severally agrees to lend to the Borrower on the
      Effective Date an amount equal to such Lender's Term Loan Commitment set
      forth opposite such Lender's name on SCHEDULE I or in the Assignment and
      Acceptance pursuant to which such Lender shall have assumed its
      Commitment, as applicable.

            (b) OBLIGATIONS OF LENDERS FOR TERM LOANS. Each Term Loan shall be
      made on the Effective Date by the Lenders ratably in accordance with their
      respective Applicable Percentages of the Term Loan Commitments. The
      failure of any Lender to make any Term Loan required to be made by it
      shall not relieve any other Lender of its obligations hereunder; PROVIDED
      that the Term Loan Commitments of the Lenders are several and no Lender
      shall be responsible for any other Lender's failure to make its Term Loan
      as required hereunder. The Term Loans shall be repaid and shall bear
      interest as described herein and as described in the Term Note.

            (c) TYPE OF BORROWING. Each Borrowing of the Term Loans shall be
      constituted entirely of ABR Loans or of ALR Loans as the Borrower may
      request in accordance herewith. Subject to the provisions of Section 2.12,
      the Borrower may elect to change the Type of any Borrowing of the Term
      Loans after the Effective Date in accordance with the provisions of
      Section 2.07

            (d) TERM NOTE. The Term Loans, and the Borrower's obligation to
      repay the Term Loans and interest thereon, shall be evidenced by the Term
      Note executed and delivered to the Administrative Agent on the Effective
      Date, and shall be in the form of EXHIBIT D hereto. Interest on the
      outstanding and unpaid principal amount of the Term Loans will be payable
      from the date of the Term Loans as hereinafter provided. The principal
      amounts of the Term Loans shall be repaid in nineteen (19) consecutive
      quarterly installments on the first day of each calendar quarter
      commencing October 1, 2001 with subsequent installments being due on the
      first day of each calendar quarter thereafter, and in one final
      installment due and payable on the Maturity Date in the amount necessary
      to repay in full the unpaid principal amount of the Term Note. The amount
      of each quarterly installment repayment of principal of the Term Loans
      (before giving effect to any prepayments of principal of the Term Loans	

pursuant to Section 2.09(b)) shall be as follows:

----------------------------------------------------------------------------------------------------------
    PAYMENT         2001            2002            2003            2004          2005            2006
     DATE
----------------------------------------------------------------------------------------------------------
   JANUARY 1         N/A          $3,000,000      $3,500,000      $4,000,000    $4,500,000      $5,000,000
----------------------------------------------------------------------------------------------------------

    APRIL 1          N/A          $3,000,000      $3,500,000      $4,000,000    $4,500,000      $5,000,000
----------------------------------------------------------------------------------------------------------

    JULY 1           N/A          $3,000,000      $3,500,000      $4,000,000    $4,500,000      $5,000,000
----------------------------------------------------------------------------------------------------------
   OCTOBER 1      $3,000,000      $3,500,000      $4,000,000      $4,500,000    $5,000,000         N/A
----------------------------------------------------------------------------------------------------------	

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PROVIDED, the final principal repayment installment must be in an amount necessary to repay the outstanding and unpaid principal amount of the Term Note in full on the Maturity Date (whether greater or less than the amount of the applicable scheduled payment).

            (e) RECORDS OF THE ADMINISTRATIVE AGENT. The Administrative Agent
      shall set forth on a schedule attached to and made a part of the Term Note
      or on any separate similar schedule or on any continuation of any such
      schedule (including, but not limited to, any similar schedule maintained
      in computerized records) annotations evidencing (i) the date and principal
      amount of each Term Loan, (ii) the aggregate of all principal amounts of
      all Term Loans, (iii) the amounts of any repayments of principal of the
      Term Loans, (iv) the outstanding principal amount of the Term Note, (v)
      the applicable Interest Period for the Term Loans to the extent that the
      Borrower has elected to convert or continue the Term Loans as ALR Loans,
      (vi) the Applicable Margin and resulting interest rate for the Term Loans,
      (vii) the aggregate amounts of all payments under or repayments of
      principal of the Term Note, and (viii) and such other information relating
      to the Term Note, the Term Loans, principal amounts thereof, interest paid
      or payable thereon, or otherwise as the Administrative Agent shall deem
      appropriate in the Administrative Agent's sole discretion. Each such
      annotation shall, in the absence of manifest error, be conclusive and
      binding upon the Borrower. No failure of the Administrative Agent to make
      and no error by the Administrative Agent in making any annotation on such
      attached schedule or any such similar schedule shall affect the
      obligations of the Borrower to repay the principal amount of each Term
      Loan and the outstanding principal amount of the Term Note, the obligation
      of the Borrower to pay interest on the outstanding principal amount of
      each Term Loan and on the outstanding principal amount of the Term Note,
      or any other obligation of the Borrower to the Administrative Agent or any
      Lender pursuant to this Agreement.

2.02        REVOLVING CREDIT FACILITIES.

            (a) REVOLVING CREDIT COMMITMENTS. Each Lender severally agrees to
      make Revolving Credit Loans to the Borrower from time to time during the
      Availability Period in an aggregate principal amount that will not result
      in (i) such Lender's Revolving Credit Exposure exceeding such Lender's
      Revolving Credit Commitment, or (ii) the total Revolving Credit Exposures
      exceeding the total Revolving Credit Commitments. Each Lender's Revolving
      Credit Commitment is set forth opposite such Lender's name on SCHEDULE I
      or in the Assignment and Acceptance pursuant to which such Lender shall
      have assumed its Commitment, as applicable. Within the foregoing limits
      and subject to the terms and conditions set forth herein, the Borrower may
      borrow, prepay and reborrow Revolving Credit Loans.

            (b) OBLIGATIONS OF LENDERS FOR REVOLVING CREDIT LOANS. Each
      Revolving Credit Loan shall be made on the date of such Borrowing by the
      Lenders ratably in accordance with their respective Applicable
      Percentages. The failure of any Lender to make any Revolving Credit Loan
      required to be made by it shall not relieve any other Lender of its
      obligations hereunder; PROVIDED that the Revolving Credit Commitments of
      the Lenders are several and no Lender shall be responsible for any other
      Lender's failure to make Revolving Credit Loans as required hereunder.	

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            (c) TYPE OF REVOLVING CREDIT LOANS. Each Borrowing of Revolving
      Credit Loans shall be constituted entirely of ABR Loans or of ALR Loans as
      the Borrower may request in accordance herewith. Subject to the provisions
      of Section 2.12, the Borrower may elect to change the Type of any
      Borrowing of Revolving Credit Loans after the Effective Date in accordance
      with the provisions of Section 2.07.

            (d) REVOLVING CREDIT NOTE. The Revolving Credit Loans, and the
      Borrower's obligation to repay the Revolving Credit Loans and interest
      thereon, shall be evidenced by the Revolving Credit Note executed and
      delivered to the Administrative Agent on the Effective Date, and shall be
      in the form of EXHIBIT E hereto. Interest on the outstanding and unpaid
      principal amount of the Revolving Credit Note will be payable from the
      date of the Revolving Credit Note as hereinafter provided, and the entire
      unpaid principal amount of the Revolving Credit Note shall be repaid on
      the Revolving Credit Commitment Termination Date.

            (e) RECORDS OF THE ADMINISTRATIVE AGENT. The Administrative Agent
      shall set forth on a schedule attached to and made a part of the Revolving
      Credit Note or on any separate similar schedule or on any continuation of
      any such schedule (including, but not limited to, any similar schedule
      maintained in computerized records) annotations evidencing (i) the date
      and principal amount of each Revolving Credit Loan, (ii) the aggregate of
      all principal amounts of all Revolving Credit Loans, (iii) the amounts of
      any repayments of principal of the Revolving Credit Loans, (iv) the
      outstanding principal amount of the Revolving Credit Note, (v) the
      applicable Interest Period for each Borrowing that is an ALR Borrowing
      (vi) the Applicable Margin and resulting interest rate for each Borrowing
      of Revolving Credit Loans, (vii) the aggregate amounts of all payments
      under or repayments of principal of the Revolving Credit Note, and (viii)
      and such other information relating to the Revolving Credit Note, the
      Revolving Credit Loans, principal amounts thereof, interest paid or
      payable thereon, or otherwise as the Administrative Agent shall deem
      appropriate in the Administrative Agent's sole discretion. Each such
      annotation shall, in the absence of manifest error, be conclusive and
      binding upon the Borrower. No failure of the Administrative Agent to make
      and no error by the Administrative Agent in making any annotation on such
      attached schedule or any such similar schedule shall affect the
      obligations of the Borrower to repay the principal amount of each
      Revolving Credit Loan and the outstanding principal amount of the
      Revolving Credit Note, the obligation of the Borrower to pay interest on
      the outstanding principal amount of each Revolving Credit Loan and on the
      outstanding principal amount of the Revolving Credit Note, or any other
      obligation of the Borrower to the Administrative Agent or any Lender
      pursuant to this Agreement.

2.03        REQUESTS FOR CREDIT LINE LOANS.

            (a) NOTICE BY THE BORROWER. To request a Revolving Credit Borrowing,
      the Borrower shall notify the Administrative Agent of such request by
      telephone (i) in the case of an ALR Borrowing, not later than 11:00 a.m.,
      Local Time, three (3) Business Days before the date of the proposed
      Borrowing, or (ii) in the case of an ABR Borrowing (including an ABR
      Borrowing to finance the reimbursement of an LC Disbursement as
      contemplated by Section 2.05(f)), not later than 11:00 a.m., Local Time,
      on the date of the proposed Borrowing. Each such telephonic Borrowing
      Request shall be irrevocable and shall be confirmed promptly by hand
      delivery or telecopy to the Administrative Agent of a written Borrowing
      Request in the	

21

      form of EXHIBIT E hereto and signed by the Borrower on or prior to the
      date of such Borrowing as required pursuant to the foregoing.

            (b) CONTENT OF BORROWING REQUESTS. Each telephonic and written
      Borrowing Request shall specify the following information in compliance
      with Section 2.02:

                  (i) the aggregate amount of the requested Borrowing;

                  (ii) the date of such Borrowing, which shall be a Business
            Day;

                  (iii) whether such Borrowing is to be an ABR Borrowing or an
            ALR Borrowing; and

                  (iv) in the case of an ALR Borrowing, the Interest Period
            therefor, which shall be a period contemplated by the definition of
            the term "Interest Period" and permitted under Section 2.07(g).

            (c) MINIMUM AMOUNTS OF CREDIT LINE LOAN BORROWINGS. Each ALR
      Borrowing under the Revolving Credit Facility shall be in an aggregate
      amount equal to Five Hundred Thousand Dollars ($500,000) or a larger
      multiple of Two Hundred Fifty Thousand Dollars ($250,000). Each ABR
      Borrowing under the Revolving Credit Facility shall be in an aggregate
      amount equal to Five Hundred Thousand Dollars ($500,000) or a larger
      multiple of Two Hundred Fifty Thousand Dollars ($250,000); PROVIDED that
      an ABR Borrowing under the Revolving Credit Facility may be in an
      aggregate amount that is equal to the entire unused balance of the total
      Revolving Credit Commitments or that is required to finance the
      reimbursement of an LC Disbursement as contemplated by Section 2.05(f).

            (d) NOTICE BY THE ADMINISTRATIVE AGENT TO THE LENDERS. Promptly
      following receipt of a Borrowing Request in accordance with this Section,
      the Administrative Agent shall advise each Lender of the details thereof
      and of the amount of such Lender's Revolving Credit Loan to be made as
      part of the requested Borrowing.

            (e) FAILURE TO ELECT. If the Borrower fails to elect the Type of a
      requested Revolving Credit Borrowing, then the requested Borrowing shall
      be an ABR Borrowing. If no Interest Period is specified with respect to
      any requested ALR Revolving Credit Borrowing, the requested Borrowing
      shall be made instead as an ABR Borrowing.

2.04        REQUESTS FOR SWINGLINE LOANS.

            (a) NOTICE BY THE BORROWER. Notwithstanding the provisions of
      Section 2.03, above, the Borrower may from time to time request the
      Swingline Lender to consider making a Swingline Loan to the Borrower. In
      order to request a Swingline Loan the Borrower shall notify the
      Administrative Agent of such request by telephone not later than 3:00
      p.m., Local Time, on the date of the proposed Borrowing. Each such
      telephonic Borrowing Request shall be irrevocable and shall be confirmed
      promptly by hand delivery or telecopy to the Administrative Agent and	

Swingline Lender of a written Borrowing Request in the form of EXHIBIT E hereto and signed by the Borrower on the date of such Borrowing. Each telephonic and written Borrowing Request shall specify the following information in compliance with
22

Section2.03: (i) the principal amount of such Swingline Loan, and (ii) the aggregate amount of Swingline Loans outstanding, both before and after giving effect to such Swingline Loan, and (iii) the date of such Swingline Loan, which shall be a Business Day.
(b) DETERMINATION BY SWINGLINE LENDER. Any decision to make a Swingline Loan to the Borrower shall be in the sole and absolute discretion of the Swingline Lender, and the Swingline Lender shall review each request for a Swingline Loan on a case-by-case basis. The Swingline Lender shall not make a Swingline Loan if it has actual notice, or has received notice from the Administrative Agent, any lender or the Borrower, that an Event of Default has occurred and is continuing. Other than instances in which the Swingline Lender has actual notice, or has received notice from the Administrative Agent, any Lender or the Borrower, that an Event of Default has occurred and is continuing, in the event the Swingline Lender does not approve Borrower's request for a Swingline Loan, the Borrowing Request delivered to the Administrative Agent and Swingline Lender requesting a Swingline Loan shall be treated as a Borrowing Request for an ABR Loan pursuant to the provisions of Section 2.03, above, and such requested Loan's borrowing date shall be deemed to be the earliest date for borrowing an ABR Credit Line Loan following delivery of such Borrowing Request to the Administrative Agent pursuant to such Section. This Agreement does not constitute a commitment, and the Swingline Lender shall not have any obligation, to make any Swingline Loan.
(c) LIMITATIONS ON AMOUNTS. Each Swingline Loan shall be in an amount of not less than Fifty Thousand Dollars ($50,000) and, if in an amount greater than Fifty Thousand Dollars ($50,000), shall be in whole multiples of Ten Thousand Dollars ($10,000). No Swingline Loan shall (i) individually be in an amount greater than Five Hundred Thousand Dollars ($500,000), or (ii) either individually or when aggregated with all other Swingline Loans, exceed the lesser of (A) the amount of the Swingline Lender's Revolving Credit Commitment, and (B) Two Million Five Hundred Thousand Dollars ($2,500,000).
(d) NOTIFICATION BY SWINGLINE LENDER. If, after receiving a Borrowing Request with respect to a Swingline Loan, and upon the Borrower's fulfillment of all applicable conditions set forth herein, the Swingline Lender elects to make a Swingline Loan available to the Borrower, the Swingline Lender shall (i) notify the Borrower by 4:00 p.m., Local Time, on the date of receipt of such Borrowing Request , (ii) pay or deliver all funds so requested by the Borrower in the Borrowing Request by the end of business on such date, and (iii) promptly notify the Administrative Agent of such Swingline Loan.
(e) NOTIFICATION BY ADMINISTRATIVE AGENT. After receiving notice of a Swingline Loan from the Swingline Lender, the Administrative Agent shall promptly notify each Bank by telephone of such Swingline Loan and of such Lender's Applicable Percentage of the principal amount of such Swingline Loan. Each Lender (other than the Swingline Lender) shall, before 11:00
a.m. (Eastern Standard Time or Eastern Daylight Savings Time, as the case may be) on the Business Day immediately following the date of a Swingline Loan, deposit with the Administrative Agent the amount of such Lender's Applicable Percentage of the principal amount of such Swingline Loan in immediately available funds. After receipt by the Administrative Agent of such funds, the Administrative Agent shall pay or deliver all funds so received to the order of the Swingline Lender to the account designated by the Swingline Lender for the receipt of such funds, and each amount paid by a Lender to the Administrative Agent for the account of the Swingline Lender shall constitute such Lender 's Revolving Credit
23

Commitment with respect to such Swingline Loan for purposes of this Agreement and the Revolving Credit Note.
(f) DISCONTINUANCE OF SWINGLINE LOANS. Upon one (1) Business Day's written notice to the Administrative Agent and the other Lenders, any Lender (including the Swingline Lender) may elect to discontinue to honor any Borrowing Request with respect to its Applicable Percentage of a Swingline Loan delivered to the Swingline Lender and the Administrative Agent after such notice. In such event, the Administrative Agent and other Banks shall elect to either (i) terminate the availability of Swingline Loans to the Borrower after the date of such notice, or (ii) negotiate with the Borrower an alternate method of making Swingline Loans (or an equivalent form of credit) available to the Borrower upon terms and conditions satisfactory to the Lenders.
(g) REPLACEMENT OF THE SWINGLINE LENDER. The Swingline Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall promptly notify the Lenders of any such replacement of the Swingline Lender. From and after the effective date of any such replacement, (i) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans to be issued thereafter, and (ii) references herein to the term " Swingline Lender" shall be deemed to refer to such successor or to any previous Swingline

      Lender, or to such successor and all previous Swingline Lenders, as the
      context shall require. After the replacement of an Swingline Lender
      hereunder, the replaced Swingline Lender shall cease to be a party hereto
      and shall not have any right, duty or obligation hereunder to issue
      additional Swingline Loans.

2.05        LETTERS OF CREDIT.

            (a) GENERAL. Subject to the terms and conditions set forth herein,
      in addition to the Revolving Credit Loans provided for in Section 2.02,
      the Borrower may request the Issuing Lender to issue, at any time and from
      time to time during the Availability Period, Letters of Credit for its own
      account in such form as is acceptable to the Issuing Lender in its
      reasonable determination. Letters of Credit issued hereunder shall
      constitute utilization of the Revolving Credit Commitments.

            (b) NOTICE OF ISSUANCE; AMENDMENT; RENEWAL OR EXTENSION. To request
      the issuance of a Letter of Credit (or the amendment, renewal or extension
      of an outstanding Letter of Credit), the Borrower shall hand deliver or
      telecopy (or transmit by electronic communication, if arrangements for
      doing so have been approved by the Issuing Lender) to the Issuing Lender
      and the Administrative Agent (reasonably in advance of the requested date
      of issuance, amendment, renewal or extension) a notice requesting the
      issuance of a Letter of Credit, or identifying the Letter of Credit to be
      amended, renewed or extended, and specifying the date of issuance,
      amendment, renewal or extension (which shall be a Business Day), the date
      on which such Letter of Credit is to expire (in compliance with paragraph
      (d) of this Section), the amount of such Letter of Credit, the name and
      address of the beneficiary thereof and such other information as shall be
      necessary to prepare, amend, renew or extend such Letter of Credit. The
      Borrower also shall submit a letter of credit application on the Issuing
      Lender's standard form in connection with any request for a Letter of
      Credit. In the event of any inconsistency between the terms and	

24

conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
(c) LIMITATIONS ON AMOUNTS. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing Lender (determined for these purposes without giving effect to the participations therein of the Lenders pursuant to paragraph (e) of this Section) shall not exceed Ten Million Dollars ($10,000,000), and (ii) the total Revolving Credit Exposures shall not exceed the total Revolving Credit Commitments.
(d) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date which is twelve
(12) months after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, twelve (12) months after the then current expiration date of such Letter of Credit, so long as such renewal or extension occurs within one (1) month of such then-current expiration date), and (ii) the date that is five (5) Business Days prior to the Revolving Credit Commitment Termination Date.
(e) PARTICIPATIONS. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) by the Issuing Lender, and without any further action on the part of the Issuing Lender or the Lenders, the Issuing Lender hereby grants to each Lender, and each Lender hereby acquires from the Issuing Lender, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for account of the Issuing Lender, such Lender's Applicable Percentage of each LC Disbursement made by the Issuing Lender promptly upon the request of the Issuing Lender at any time from the time of such LC Disbursement until such LC Disbursement is reimbursed by the Borrower or at any time after any reimbursement payment is required to be refunded to the Borrower for any reason. Such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Lender the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to the next following paragraph, the Administrative Agent shall distribute such payment to the Issuing Lender or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Lender for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.
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(f) REIMBURSEMENT. If the Issuing Lender shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse the Issuing Lender in respect of such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Local Time, on (i) the Business Day that the Borrower receives notice of such LC Disbursement, if such notice is received prior to 10:00 a.m., Local Time, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time, PROVIDED that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage thereof.
(g) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, and (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower's obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by the Issuing Lender or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Lender; PROVIDED that the foregoing shall not be construed to excuse the Issuing Lender from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Lender's gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit;
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(ii) the Issuing Lender shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit; and
(iii) this sentence shall establish the standard of care to be exercised by the Issuing Lender when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law, any standard of care inconsistent with the foregoing).
(h) DISBURSEMENT PROCEDURES. The Issuing Lender shall, within a reasonable time following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Lender shall promptly after such examination notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Lender has made or will make an LC Disbursement thereunder; PROVIDED that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i) INTERIM INTEREST. If the Issuing Lender shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate PER ANNUM then applicable to ABR Loans; PROVIDED that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section, then Section 2.11(c) shall apply. Interest accrued pursuant to this paragraph shall be for account of the Issuing Lender, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f) of this Section to reimburse the Issuing Lender shall be for account of such Lender to the extent of such payment.
(j) REPLACEMENT OF THE ISSUING LENDER. The Issuing Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Lender. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for account of the replaced Issuing Lender pursuant to Section 2.10(b). From and after the effective date of any such replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the replaced Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter, and (ii) references herein to the term "Issuing Lender" shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
(k) CASH COLLATERALIZATION. If either (i) an Event of Default shall occur and be continuing and the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing
27

      greater than fifty one percent (51%) of the total LC Exposure) demanding
      the deposit of cash collateral pursuant to this paragraph, or (ii) the
      Borrower shall be required to provide cover for LC Exposure pursuant to
      Section 2.09, the Borrower shall immediately deposit into an account
      established and maintained on the books and records of the Administrative
      Agent, which account may be a "securities account" (within the meaning of
      Section 8-501 of the Uniform Commercial Code as in effect in the State of
      New York), in the name of the Administrative Agent and for the benefit of
      the Lenders, an amount in cash equal to, in the case of an Event of
      Default, the LC Exposure as of such date PLUS any accrued and unpaid
      interest thereon and, in the case of cover pursuant to Section 2.09, the
      amount required under Section 2.09; PROVIDED that the obligation to
      deposit such cash collateral shall become effective immediately, and such
      deposit shall become immediately due and payable, without demand or other
      notice of any kind, upon the occurrence of any Event of Default with
      respect to the Borrower described in clause (i) or (j) of ARTICLE VII.
      Such deposit shall be held by the Administrative Agent as collateral for
      the LC Exposure under this Agreement, and for this purpose the Borrower
      hereby grants a security interest to the Administrative Agent for the
      benefit of the Lenders in such collateral account and in any financial
      assets (as defined in the Uniform Commercial Code as in effect in the
      State of New York) or other property held therein.

2.06        FUNDING OF BORROWINGS.

            (a) FUNDING BY LENDERS. Each Lender shall make each Term Loan
      required to be made by it hereunder on the Effective Date by wire transfer
      of immediately available funds by 12:00 noon, Local Time, to the account
      of the Administrative Agent most recently designated by it for such
      purpose by notice to the Lender. Each Lender shall make (i) each Credit
      Line Loan to be made by it hereunder on the proposed Borrowing Date
      thereof, and (ii) each Swingline Loan to be made by it hereunder pursuant
      to the provisions of Section 2.04 on the day immediately following such
      Loan's Borrowing Date, by wire transfer of immediately available funds by
      12:00 noon, Local Time, to the account of the Administrative Agent most
      recently designated by it for such purpose by notice to the Lenders. The
      Administrative Agent will make such Revolving Credit Loans available to
      the Borrower by promptly crediting the amounts so received, in like funds,
      to an account of the Borrower designated by the Borrower in the applicable
      Borrowing Request; PROVIDED that ABR Borrowings made to finance the
      reimbursement of an LC Disbursement as provided in Section 2.05(f) shall
      be remitted by the Administrative Agent to the Issuing Lender.

            (b) PRESUMPTION BY THE ADMINISTRATIVE AGENT. Unless the
      Administrative Agent shall have received notice from a Lender (i) at least
      one (1) Business Day prior to the proposed Borrowing Date of any Borrowing
      of a Credit Line Loan, or (ii) within one (1) hour of the Swingline
      Lender's notification of such Lender of its receipt of a Borrowing Request
      for a Swingline Loan, that such Lender will not make available to the
      Administrative Agent such Lender's share of such Borrowing, the
      Administrative Agent may assume that such Lender (A) in the case of a
      Credit Line Loan, has made such share available on such Borrowing Date,
      and (B) in the case of a Swingline Loan, will make such share available on
      the day immediately following the Borrowing Date of such Loan, in
      accordance with paragraph (a) of this Section and may, in reliance upon
      such assumption, make available to the Borrower a corresponding amount. In
      such event, if a Lender has not so notified the Administrative Agent and
      has not in fact made its share of the applicable Borrowing available to
      the Administrative Agent, then the applicable Lender and the Borrower
      severally agree to pay to the Administrative Agent	

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      forthwith on demand such corresponding amount with interest thereon, for
      each day from and including the date such amount is made available to the
      Borrower to but excluding the date of payment to the Administrative Agent,
      at (y) in the case of such Lender, the Federal Funds Effective Rate, or
      (z) in the case of the Borrower, the interest rate then applicable to ABR
      Loans. If such Lender pays such amount to the Administrative Agent, then
      such amount shall constitute such Lender's Loan included in such
      Borrowing.

2.07        INTEREST ELECTIONS.

            (a) ELECTIONS BY THE BORROWER FOR BORROWINGS. The Loans constituting
      each Borrowing initially shall be of the Type specified by the Borrower
      (i) to the Administrative Agent prior to the Effective Date with respect
      to the Term Loans, and (ii) with respect to any Revolving Credit
      Borrowing, as specified by the Borrower in the applicable Borrowing
      Request, and (iii) in the case of any portion of the Terms Loans that is
      an ALR Borrowing, shall have the Interest Period specified by the Borrower
      to the Administrative Agent at least three (3) Business Days prior to the
      Effective Date, and in the case of any portion of the Revolving Credit
      Loans that is an ALR Borrowing shall have the Interest Period specified by
      the Borrower in such Borrowing Request, respectively. Thereafter, the
      Borrower may elect to convert such Borrowing to a Borrowing of a different
      Type or to continue such Borrowing as a Borrowing of the same Type and, in
      the case of a ALR Borrowing, may elect the Interest Period therefor, all	

as provided in this Section, and in form attached hereto as EXHIBIT F1 with respect to the Term Loans, (an "INTEREST ELECTION REQUEST FOR TERM LOAN BORROWING"), and in form attached hereto as EXHIBIT F2 with respect to a Revolving Credit Borrowing (an "INTEREST ELECTION REQUEST FOR REVOLVING CREDIT BORROWING"), respectively (each such request to be referred to as an "INTEREST ELECTION REQUEST"). The Borrower may elect different options with respect to different portions of any Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans constituting such Borrowing, and the Loans constituting each such portion shall be considered a separate Borrowing.
Notwithstanding anything to the contrary herein, at no point in time shall more than six (6) ALR Borrowings be outstanding, and any election by the Borrower pursuant to Section 2.07 to continue or convert any Borrowing as or to, as the case may be, an ALR Borrowing in excess of this limit shall be treated by the Administrative Agent as an election by the Borrower to continue or convert such Borrowing as or to, as the case may be, an ABR Borrowing.
(b) INTEREST ON SWINGLINE LOANS. Notwithstanding anything to the contrary contained herein, each Swingline Loan shall at all times bear interest at the Adjusted Base Rate.
(c) NOTICE OF ELECTIONS. To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Credit Borrowing of the Type resulting from such election to be made on the effective date of such election (regardless of whether the Borrowing to which such election applies is a Term Loan Borrowing or Revolving Credit Borrowing). Each such telephonic interest election request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in the form of EXHIBIT F1 or EXHIBIT F2, as applicable, and signed by the Borrower.
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            (d) CONTENT OF INTEREST ELECTION REQUESTS. Each telephonic and
      written Interest Election Request shall specify the following information
      in compliance with Section 2.01 or Section 2.02 (as applicable):

                  (i) the Borrowing to which such Interest Election Request
            applies and, with respect to any Borrowing if different options are
            being elected with respect to different portions thereof, the
            portions thereof to be allocated to each resulting Borrowing (in
            which case the information to be specified pursuant to clauses (iii)
            and (iv) of this paragraph shall be specified for each resulting
            Borrowing);

                  (ii) the effective date of the election made pursuant to such
            Interest Election Request, which shall be a Business Day;

                  (iii) whether the Borrowing is to be an ABR Borrowing or an
            ALR Borrowing; and

                  (iv) if the Borrowing is an ALR Borrowing, the Interest Period
            therefor after giving effect to such election, which shall be a
            period contemplated by the definition of the term "Interest Period"
            and permitted under paragraph (g) of this Section.

            (e) NOTICE BY THE ADMINISTRATIVE AGENT TO THE LENDERS. Promptly
      following receipt of an Interest Election Request, the Administrative
      Agent shall advise each Lender of the details thereof and of such Lender's
      portion of each resulting Borrowing.

            (f) FAILURE TO ELECT: EVENTS OF DEFAULT. If the Borrower fails to
      deliver a timely and complete Interest Election Request with respect to an
      ALR Borrowing prior to the end of the Interest Period therefor, then,
      unless such Borrowing is repaid as provided herein, at the end of such
      Interest Period such Borrowing shall be converted to an ABR Borrowing.
      Notwithstanding any contrary provision hereof, if an Event of Default has
      occurred and is continuing and the Administrative Agent, at the request of
      the Required Lenders, so notifies the Borrower, then, so long as an Event
      of Default is continuing (A) no outstanding Borrowing may be converted to
      an ALR Borrowing, and (B) unless repaid, each ALR Borrowing shall be
      converted to an ABR Borrowing at the end of the Interest Period therefor.

            (g) LIMITATIONS ON INTEREST PERIODS. Notwithstanding any other
      provision of this Agreement, the Borrower shall not be entitled to (i)
      request (or to elect to convert to or continue as an ALR Borrowing) any
      Revolving Credit Borrowing if the Interest Period requested therefor would
      end after the Revolving Credit Commitment Termination Date, or (ii) elect
      to convert to or continue as an ALR Borrowing any Term Loan Borrowing if
      the Interest Period requested therefor would end after the Maturity Date.

2.08        TERMINATION AND REDUCTION OF THE COMMITMENTS.

            (a) SCHEDULED TERMINATION. Unless previously terminated, the Term
      Loan Commitments shall terminate on the Effective Date and the obligation
      of each Lender to make a Term Loan shall terminate on such date; PROVIDED,
      that notwithstanding such termination of the Term Loan Commitments,
      following the Effective Date each Lender's "Term Loan Commitment" shall	

refer to each Lender's respective rights with respect to the Term Loans and the Term
30

      Note as specifically provided herein (E.G., for the purposes of
      determining the allocation of payments among the Lenders pursuant to
      Section 2.16(c)). Unless previously terminated, the Revolving Credit
      Commitments shall terminate on the Revolving Credit Commitment Termination
      Date, and the obligations of the Lenders to make Revolving Credit Loans
      shall terminate on such date.

            (b) VOLUNTARY TERMINATION OR REDUCTION. The Borrower may at any time
      terminate, or from time to time reduce, the Revolving Credit Commitments;
      PROVIDEd that (i) each reduction of the Revolving Credit Commitments shall
      be in an amount that is One Million Dollars ($1,000,000) or a larger
      multiple of Five Hundred Thousand Dollars ($500,000), and (ii) the
      Borrower shall not terminate or reduce the Revolving Credit Commitments
      if, after giving effect to any concurrent prepayment of the Revolving
      Credit Loans in accordance with Section 2.09, the total Revolving Credit
      Exposures would exceed the total Revolving Credit Commitments.

            (c) NOTICE OF VOLUNTARY TERMINATION OR REDUCTION. The Borrower shall
      notify the Administrative Agent of any election to terminate or reduce the
      Revolving Credit Commitments under paragraph (b) of this Section at least
      three (3) Business Days prior to the effective date of such termination or
      reduction, specifying such election and the effective date thereof.
      Promptly following receipt of any notice, the Administrative Agent shall
      advise the Lenders of the contents thereof. Each notice delivered by the
      Borrower pursuant to this Section shall be irrevocable; PROVIDED that a
      notice of termination of the Revolving Credit Commitments delivered by the
      Borrower may state that such notice is conditioned upon the effectiveness
      of other credit facilities, in which case such notice may be revoked by
      the Borrower (by notice to the Administrative Agent on or prior to the
      specified effective date) if such condition is not satisfied.

            (d) EFFECT OF TERMINATION OR REDUCTION. Any termination or reduction
      of the Revolving Credit Commitments shall be permanent. Each reduction of
      the Revolving Credit Commitments shall be made ratably among the Lenders
      in accordance with their respective Revolving Credit Commitments.

2.09        REPAYMENT AND PREPAYMENT OF LOANS; EVIDENCE OF DEBT.

            (a) REPAYMENT. The Borrower hereby unconditionally promises to pay
      the Loans as follows:

                  (i) to the Administrative Agent for account of the Lenders the
            outstanding principal amounts of the Term Loans as provided for in
            Section 2.01(d), and the outstanding principal amounts of the
            Revolving Credit Loans on the Revolving Credit Commitment
            Termination Date, and

                  (ii) in addition to the amounts described immediately above,
            the Borrower unconditionally promises to pay to the Administrative
            Agent for the account of the Lenders, and for the account of the
            Issuing Lender, as applicable, (A) on the Maturity Date all accrued
            and unpaid interest, all fees, costs and expenses, and all other
            amounts payable on or in connection with the Term Loans, and (B)
            on the Revolving Credit Commitment Date all accrued and unpaid
            interest, all fees, costs and expenses, and all

                                                                              31	

            other amounts payable on or in connection with the Revolving
            Credit Loans and Letters of Credit.

      (b)   PREPAYMENTS.

                  (i) VOLUNTARY PREPAYMENT OF THE TERM LOANS. The Borrower shall
            have the right at any time and from time to time prior to the
            Maturity Date to prepay outstanding principal amounts of the Term
            Loans, in whole or in part, subject to the requirements of this
            Section. Any prepayment of less than the entire outstanding
            principal amounts of the Term Loans shall be in a minimum aggregate
            principal amount of One Million Dollars ($1,000,000) or in a larger
            multiple of Five Hundred Thousand Dollars ($500,000), and shall be
            applied to the installments of principal repayments of the Term
            Loans (as described in Section 2.01) in their stated order of
            maturity. Prepayments of the Term Loans made at any time at which
            the Borrowing being repaid (in whole or in part) is (A) an ABR
            Borrowing shall be without premium or penalty, and (B) an ALR
            Borrowing shall be subject to the provisions of Section 2.14.

            (ii)        MANDATORY PREPAYMENTS OF THE TERM LOANS.

                        [A] MANDATORY PRINCIPAL PREPAYMENT FROM EXCESS CASH
                  FLOW. Notwithstanding anything to the contrary contained in
                  this Agreement or in any other Loan Document, in addition to
                  any scheduled payments of principal to be made by the
                  Borrower, the Borrower shall apply twenty five percent (25%)
                  of the amount of any Excess Cash Flow with respect to any
                  fiscal year to repay the outstanding and unpaid principal
                  balance of the Term Loans. Excess Cash Flow shall be
                  determined at the end of each fiscal year based on the audited
                  consolidating financial statements to be supplied to the Agent
                  pursuant to Section5.01(a), and the amount of any Excess Cash
                  Flow to be applied as a prepayment of the Term Loans pursuant
                  to this Section shall be paid by the Borrower to the Agent
                  within one hundred twenty (120) days of the end of such fiscal
                  year. All amounts of Excess Cash Flow applied by the Borrower
                  to the outstanding and unpaid principal balance of the Term
                  Loans pursuant to this Section shall be applied to the
                  installments of principal repayments of the Term Loans (as
                  described in Section2.01) in their stated order of maturity.
                  Prepayments of the Term Loans made at any time at which the
                  Borrowing being repaid (in whole or in part) is (A) an ABR
                  Borrowing shall be without premium or penalty, and (B) an ALR
                  Borrowing shall be subject to the provisions of Section 2.14.

                        [B] MANDATORY PRINCIPAL PREPAYMENT OF THE TERM LOANS
                  FROM QUALIFYING SALE PROCEEDS. The Borrower hereby covenants
                  and agrees that the Borrower shall, and shall cause each
                  Subsidiary to, deposit with the Administrative Agent all net
                  cash proceeds (net of selling expenses and taxes, but only to
                  the extent such expenses and taxes are paid or payable and
                  adequate reserves have been established therefor) received by
                  the Borrower or any Subsidiary (such cash proceeds to be
                  referred to as	

32

"QUALIFYING SALE PROCEEDS") from each sale, assignment or other disposition (in one or in a series of related transactions) of any asset or assets of the Borrower or of any Subsidiary of the Borrower if the aggregate book value of the asset or assets sold, assigned or disposed of equals or exceeds ten percent (10%) of the aggregate book value of the Consolidated assets of the Borrower and the Guarantors at the time of such sale, assignment or disposition (each, a "QUALIFYING SALE"). All Qualifying Sale Proceeds shall by deposited with the Administrative Agent within ninety (90) calendar days from the closing of the Qualifying Sale and shall be held by the Administrative Agent in an interest bearing account. At any time prior to the period ending three hundred sixty (360) days from the closing date of the Qualifying Sale the Borrower may upon five (5) Business Days' notice request the Administrative Agent to return the applicable amount of Qualifying Sale Proceeds held by the Administrative Agent to the Borrower for application by the Borrower or a Subsidiary of the Borrower to the acquisition of an asset or assets that is or are, as the case may be, similar to the asset or assets disposed of in the respective Qualifying Sale, or to any acquisition permitted pursuant to the provisions of Section 6.03(c)(iii) (any such acquisition to be referred to as a "QUALIFYING ACQUISITION"); PROVIDED, HOWEVER, that the Borrower may elect at any time during such three hundred sixty (360) day period to apply all or any part of such Qualifying Sale Proceeds to prepay any portion of the outstanding principal of the Term Loans in accordance with
Section 2.09(b)(i). In the event any Qualifying Acquisition described in the notice of the Borrower described above is not closed by the Borrower or a Subsidiary of the Borrower within sixty (60) calendar days from the date of delivery by the Administrative Agent to the Borrower of the requested Qualifying Sale Proceeds, the Borrower shall promptly return all such Qualifying Sale Proceeds (net of any voluntary prepayments of the principal of the Term Loans made by the Borrower in accordance with Section 2.09(b)(i) during such sixty (60) day period)to the Administrative Agent All Qualifying Sale Proceeds that remain in the possession of the Administrative Agent pursuant to the provisions of this clause
[B] (including all Qualifying Sale Proceeds returned to the Agent pursuant to the above) more than three hundred sixty
(360) calendar days after the closing of the Qualifying Sale to which such Qualifying Sale Proceeds relate shall be applied by the Borrower to the outstanding and unpaid principal balance of the Term Loans pursuant to this Section shall be applied to the installments of principal repayments of the Term Loans (as described in Section2.01) in their stated order of maturity. Prepayments of the Term Loans made at any time the Borrowing being repaid (in whole or in part) is (A) an ABR Borrowing shall be without premium or penalty, and (B) an ALR Borrowing shall be subject to the provisions of Section 2.14.
(iii) REVOLVING CREDIT LOANS. The Borrower shall have the right at any time and from time to time prior to the Revolving Credit Commitment Termination Date to prepay the Revolving Credit Note, in whole or in part, subject to the requirements of this Section. Any prepayment of less than the outstanding principal amount of the
33

            Revolving Credit Loans shall be in a minimum aggregate principal
            amount of Five Hundred Thousand Dollars ($500,000) or in a larger
            multiple of Two Hundred Fifty Thousand Dollars ($250,000).
            Prepayments of the Revolving Credit Loans made at any time the
            Borrowing being repaid (in whole or in part) is (A) an ABR Borrowing
            shall be without premium or penalty, and (B) an ALR Borrowing shall
            be subject to the provisions of Section 2.14.

                  (iv) MANNER OF PREPAYMENT; NOTICES; ETC. The Borrower shall
            notify the Administrative Agent by telephone (confirmed by telecopy)
            of any prepayment hereunder (A) in the case of a prepayment of an
            ALR Borrowing, not later than 11:00 a.m., Local Time, three (3)
            Business Days before the date of prepayment, and (B) in the case of
            prepayment of an ABR Borrowing, not later than 11:00 a.m., Local
            Time, on the date of the proposed prepayment. Each such notice shall
            be irrevocable and shall specify the Loans to be prepaid (whether
            Term Loans or Revolving Credit Loans), the prepayment date, and the
            principal amount of [I] in the case of the Term Loans, the principal
            amount to be prepaid, and [II] in the case of Revolving Credit
            Loans, the principal amount of each Borrowing (or portion thereof)
            to be prepaid; PROVIDED that, if a notice of prepayment is given in
            connection with a conditional notice of termination of the Revolving
            Credit Commitments as contemplated by Section 2.08, then such notice
            of prepayment may be revoked if such notice of termination is
            revoked in accordance with Section 2.08. Promptly following receipt
            of any such notice, the Administrative Agent shall advise the
            Lenders of the contents thereof. Each prepayment of the Borrowing
            constituting the Term Loans shall be applied ratably to each
            Lender's Term Loan Commitment pursuant to Section 2.16, and each
            prepayment of a Borrowing (or portion thereof) constituting
            Revolving Credit Loans (or a portion thereof, respectively) shall be
            applied ratably to each Lender's Revolving Credit Commitment
            pursuant to Section 2.16. Prepayments shall be accompanied by
            accrued interest to the extent required by Section 2.11 and shall be
            made in the manner specified in Section 2.16.

            (c) MAINTENANCE OF RECORDS BY LENDERS. Each Lender shall maintain in
      accordance with its usual practice records evidencing the indebtedness of
      the Borrower to such Lender resulting from each Loan made by such Lender,
      including the amounts of principal and interest payable and paid to such
      Lender from time to time hereunder.

            (d) EFFECT OF ENTRIES. The entries made in the records maintained
      pursuant to paragraph (c) of this Section and Section 2.01(e) or Section
      2.02(e), as applicable, shall be PRIMA FACIE evidence of the existence and
      amounts of the obligations recorded therein; PROVIDED that the failure of
      any Lender or the Administrative Agent to maintain such records or any
      error therein shall not in any manner affect the obligation of the
      Borrower to repay the Loans in accordance with the terms of this
      Agreement.

2.10        FEES.

            (a) REVOLVING CREDIT FEES. The Borrower agrees to pay to the
      Administrative Agent for account of each Lender revolving credit fees
      which shall accrue at the Applicable Margin on the average daily unused
      amount of the Revolving Credit Commitment of such Lender during the period
      from and including the date hereof to but excluding the earlier to occur
      of (i) the	

34

date such Revolving Credit Commitment terminates, and (ii) the Revolving Credit Termination Date. Accrued revolving credit fees shall be payable in arrears on the third (3rd) Business Day following each Quarterly Date, and on the earlier to occur of (A) the date the Revolving Credit Commitments terminate, and (B) the Revolving Credit Termination Date, commencing on the first such date to occur after the date hereof. All revolving credit fees shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing revolving credit fees, the Revolving Credit Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Credit Loans and LC Exposure of such Lender.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay (i) to the Administrative Agent for account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at a rate PER ANNUM equal to seventy-five one hundredths (75/100ths) of one percent (1%) on the average daily amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Revolving Credit Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Lender a fronting fee, which shall accrue at the rate of twenty-five one hundredths (25/100ths) of one percent (1%) PER ANNUM on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Credit Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Lender's standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including each Quarterly Date shall be payable on the third (3rd) Business Day following such Quarterly Date, commencing on the first such date to occur after the Effective Date; PROVIDED that all such fees shall be payable on the date on which the Revolving Credit Commitments terminate and any such fees accruing after the date on which the Revolving Credit Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Lender pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) COMMITMENT FEES AND ADMINISTRATIVE AGENT FEES. The Borrower agrees to pay to the Administrative Agent, the fees payable in the amounts and at the times separately agreed upon in a "FEE LETTER" between the Borrower and the Administrative Agent.
(d) PAYMENT OF FEES. All fees payable hereunder shall be paid on the dates due in immediately available funds to the Administrative Agent (or to the Issuing Lender, in the case of fees payable to it) for distribution, in the case of revolving credit fees and Letters of Credit participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.
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2.11        INTEREST.

            (a) ABR LOANS. The Loans constituting each ABR Borrowing shall bear
      interest at a rate PER ANNUM equal to the Adjusted Base Rate.

            (b) ALR LOANS. The Loans constituting each ALR Borrowing shall bear
      interest at a rate PER ANNUM equal to the Adjusted LIBOR for the Interest
      Period for such Borrowing.

            (c) DEFAULT INTEREST. Notwithstanding the foregoing, if any
      principal of or interest on any Loan or any fee or other amount payable by
      the Borrower hereunder is not paid when due, whether at stated maturity,
      upon acceleration, or otherwise, such overdue amount shall bear interest,
      after as well as before judgment, at a rate PER ANNUM equal to (i) in the
      case of overdue principal of any Loan, two percent (2%) above the rate
      otherwise applicable to such Loan as provided above or (ii) in the case of
      any other amount, two percent (2%) above the Adjusted Base Rate.

            (d) PAYMENT OF INTEREST. Accrued interest on each Loan shall be
      payable in arrears on each Interest Payment Date for such Loan and, (i) in
      the case of a Term Loan, on the Maturity Date, and (ii) in the case of a
      Revolving Credit Loan, on the Revolving Credit Commitment Termination
      Date; PROVIDED that (A) interest accrued pursuant to paragraph (c) of this
      Section shall be payable on demand, (B) in the event of any prepayment of
      any ALR Loan, accrued interest on the principal amount prepaid shall be
      payable on the date of such prepayment, (C) in the event of prepayment of
      any ABR Loan, accrued interest on the principal amount prepaid shall be
      payable on the next scheduled Interest Payment Date, and (C) in the event
      of any conversion of an ALR Borrowing prior to the end of the Interest
      Period therefor, accrued interest on such Borrowing shall be payable on
      the effective date of such conversion.

            (e) COMPUTATION. Interest on ABR Loans shall be computed on the
      basis of a year of three hundred sixty five (365) days (or three hundred
      sixty six (366) as applicable), and shall be payable for the actual number
      of days elapsed. Interest on ALR Loans and all fees payable hereunder
      shall be computed on the basis of a year of three hundred sixty (360) days
      and shall be payable for the actual number of days elapsed. The applicable
      Adjusted Base Rate and/or Adjusted LIBOR shall be determined by the
      Administrative Agent, and such determination shall be conclusive absent
      manifest error.

2.12  ALTERNATE RATE OF INTEREST. If prior to the commencement of the Interest	

Period for any ALR Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBOR for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the LIBOR for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their respective Loans included in such Borrowing for such Interest Period; then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
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notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or the continuation of any Borrowing as, an ALR Borrowing shall be ineffective and such Borrowing (unless prepaid) shall be continued as, or converted to, an ABR Borrowing, and (ii) if any Borrowing Request requests an ALR Borrowing, such Borrowing shall be made as an ABR Borrowing.
2.13 INCREASED COSTS.
(a) INCREASED COSTS GENERALLY. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBOR) or the Issuing Lender; or
(ii) impose on any Lender or the Issuing Lender or the London interbank market any other condition affecting this Agreement or ALR Loans made by such Lender or any Letter of Credit or participation therein; and
(iii) the result of any of the foregoing shall be to increase the cost to such Lenders of making or maintaining any ALR Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Lender of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Lender hereunder (whether of principal, interest or otherwise); then
the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.
(b) CAPITAL REQUIREMENTS. If any Lender or the Issuing Lender reasonably determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Lender's capital or on the capital of such Lender's or the Issuing Lender's holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender's or the Issuing Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Lender's policies and the policies of such Lender's or the Issuing Lender's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender's or the Issuing Lender's holding company for any such reduction suffered.
(c) CERTIFICATES FROM LENDERS. A certificate of a Lender or the Issuing Lender setting forth the amount or amounts, necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall
37

be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.
(d) DELAY IN REQUESTS. Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the Issuing Lender's right to demand such compensation; PROVIDED that the Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs or reductions incurred more than six (6) months prior to the date that such Lender or the Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Lender's intention to claim compensation therefor; PROVIDED FURTHER that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period referred to above shall be extended to include the period of retroactive effect thereof.
2.14 BREAK FUNDING PAYMENTS. In the event of (a) the payment of any principal of any ALR Loan other than on the applicable Interest Payment Date therefor (including as a result of an Event of Default), (b) the conversion of any ALR Loan other than on the last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.08 and is revoked in accordance herewith), or
(d) the assignment as a result of a request by the Borrower pursuant to Section 2.17(b) of any ALR Loan other than on the last day of an Interest Period therefor, then, in any such event, the Borrower shall pay to each Lender an amount as will (in the reasonable determination of such Lender) compensate such Lender for losses, costs and expenses attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.
2.15 TAXES.
(a) PAYMENTS FREE OF TAXES. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions, (including deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or the Issuing Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) PAYMENT OF OTHER TAXES BY THE BORROWER. In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Lender, within ten (10) Business Days after written
38

demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.
(d) EVIDENCE OF PAYMENTS. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
2.16 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.
(a) PAYMENTS BY THE BORROWER. The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or under Section 2.13, 2.14 or 2.15, or otherwise) or under any other Loan Document (except to the extent otherwise provided therein) prior to 12:00 noon, Local Time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Administrative Agent's Account, except as otherwise expressly provided in the relevant Loan Document and except payments to be made directly to the Issuing Lender as expressly provided herein and payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03, which shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All amounts owing under this Agreement (including revolving credit fees, and for payments required under Section 2.14) or under any other Loan Document (except to the extent otherwise provided therein) are payable in Dollars.
(b) APPLICATION OF INSUFFICIENT PAYMENTS. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
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(c) PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(i)(A) the Borrowing constituting the Term Loans shall be made from the Lenders PRO RATA according to the amounts of their respective Term Loan Commitments; (B) each Revolving Credit Borrowing shall be made from the Lenders PRO RATA according to the amounts of their respective Revolving Credit Commitments, (C) each payment of revolving credit fees under Section 2.10 shall be made for account of the Lenders PRO RATA according to the amounts of their respective Revolving Credit Commitments, and (D) each termination or reduction of the amount of the Revolving Credit Commitments under Section 2.08 shall be applied to the Revolving Credit Commitments of the Lenders PRO RATA according to the amounts of their respective Revolving Credit Commitments; (ii) the Borrowing constituting the Term Loans and each Revolving Credit Borrowing shall be allocated PRO RATA among the Lenders (in the case of the making of Loans) according to the amounts of their respective Term Loan Commitments or Revolving Credit Commitments, as applicable, or their respective Loans that are to be included in such Borrowing (in the case of conversions and continuations of Borrowings); (iii) each payment or prepayment of principal of the Term Loans or Revolving Credit Loans by the Borrower shall be made for account of the Lenders PRO RATA in accordance with the respective unpaid principal amounts of the Term Loans or Revolving Credit Loans, respectively, held by them; and (iv) each payment of interest on the Term Loans or Revolving Credit Loans by the Borrower shall be made for account of the Lenders PRO RATA in accordance with the amounts of interest on the Term Loans or Revolving Credit Loans then due and payable to the respective Lenders.
(d) SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon then due than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; PROVIDED that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
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(e) PRESUMPTIONS OF PAYMENT. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for account of the Lenders or the Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) CERTAIN DEDUCTIONS BY THE ADMINISTRATIVE AGENT. If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(e), 2.06(b) or 2.16(e), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for account of such Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid.
2.17 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF A DIFFERENT LENDING OFFICE. If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) REPLACEMENT OF LENDERS. If any Lender requests compensation under
Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.15, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, the Issuing Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements accrued interest thereon, accrued fees and all other amounts payable to it
41

hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant to
Section 2.15, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
ARTICLE III REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that (a) on the Effective Date, and (b) if any representation or warranty below is expressly stated to have been made as of a specific date, as of such specific date:
3.01 ORGANIZATION; POWERS. Each of the Borrower, its Subsidiaries, Technologies and Holdings is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted, and is qualified to do business in and is in good standing in every jurisdiction where such qualification is required, except where the failure to be so qualified, individually or in the aggregate, could not result in a Material Adverse Effect. Holdings is the owner of one hundred percent (100%) of the issued and outstanding capital stock of the Borrower, and Technologies is the owner of one hundred percent (100%) of the issued and outstanding capital stock of Holdings. Greatbatch-Hittman, Inc. is the owner of one hundred percent (100%) of the issued and outstanding capital stock of GBAC.
3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions are within the Borrower's and its Subsidiaries' corporate powers and have been duly authorized by all necessary corporate and, if required, by all necessary shareholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each of the other Loan Documents when executed and delivered will constitute, a legal, valid and binding obligation of the Borrower or its Subsidiaries, as the case may be, enforceable in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights, and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries other than Liens in favor of the Administrative Agent and the Lenders in connection with the Transactions.
42

3.04        FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.

            (a) FINANCIAL CONDITION. The Borrower has heretofore furnished to
      the Lenders (i) a Consolidated balance sheet and statements of income,
      stockholders' equity and cash flows of Technologies and its Subsidiaries
      (including the Borrower and its Subsidiaries) as of and for each of the
      fiscal years ended January 1, 1999, December 31, 1999, and December 29,
      2000, reported on by Deloitte & Touche, LLP, independent public
      accountants, (ii) a Consolidated unaudited balance sheet and statements of
      income, stockholders' equity and cash flows of Technologies and its
      Subsidiaries (including the Borrower and its Subsidiaries) as of and for
      the fiscal quarter ended March 30, 2001, and (iii) projections, including
      the assumptions therefor, of Technologies and its Subsidiaries (including
      the Borrower, its Subsidiaries and GBAC (after giving effect to Sierra
      Acquisition)) for the fiscal years 2001 through 2006. The financial
      statements referred to in clause (i) above present fairly, in all material
      respects, the financial position and results of operations and cash flows
      of Technologies and its Subsidiaries as of such dates and for such periods
      in accordance with GAAP. Subject to normal year-end adjustments and
      disclosures as would be made in the financial statements referred to in
      clause (ii) above if audited, the financial statements referred to in
      clause (ii) above present fairly, in all material respects, the financial
      position and results of operations and cash flows of Technologies and its
      Subsidiaries as of such date and for such period in accordance with GAAP.
      The projections referred to in clause (iii) above reflect the best
      estimate the management of Borrower and the management of Technologies of
      the future performance of Technologies and its Subsidiaries (including the
      Borrower and its Subsidiaries), based upon historical financial
      information and reasonable assumptions of each such management group.

            (b) NO MATERIAL ADVERSE CHANGE. Since March 30, 2001, there has been
      no material adverse change in the business, assets, operations or
      condition, financial or otherwise, of (i) Technologies and its
      Subsidiaries, taken as a whole, or (ii) the Borrower and its Subsidiaries,
      taken as a whole.

3.05        PROPERTIES.

            (a) PROPERTY GENERALLY. Each of the Borrower and its Subsidiaries
      has good title to, or valid leasehold interests in, all its real and
      personal property material to its business, subject only to Liens
      permitted by Section 6.02 and except for minor defects in title that do
      not interfere with its ability to conduct its business as currently
      conducted or to utilize such properties for their intended purposes.

            (b) INTELLECTUAL PROPERTY. Each of the Borrower and its Subsidiaries
      owns all trademarks, tradenames, copyrights, patents and other
      intellectual property material to its business, and the use thereof by the
      Borrower and its Subsidiaries does not materially infringe upon the rights
      of any other Person. All patents, trademarks and tradenames owned by the
      Borrower or any of its Subsidiaries on the Effective Date are listed on
      Part D of SCHEDULE II hereto.

3.06     LITIGATION AND ENVIRONMENTAL MATTERS.

            (a) ACTIONS. SUITS AND PROCEEDINGS. Except for the Disclosed
      Matters, there are no actions, suits or proceedings by or before any
      arbitrator or Governmental Authority now pending against, or to the
      knowledge of the Borrower threatened against, or affecting the Borrower or	

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any of its Subsidiaries (i) that, if adversely determined, could, individually or in the aggregate, result in a Material Adverse Effect, or
(ii) in connection with this Agreement or the Transactions.
(b) ENVIRONMENTAL MATTERS. Except for the Disclosed Matters, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, which noncompliance or failure could, individually or in the aggregate, result in a Material Adverse Effect, (ii) has become subject to any material Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability, or (iv) knows of any basis for any Environmental Liability.
(c) DISCLOSED MATTERS. Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or could result in, a Material Adverse Effect.
3.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower and its Subsidiaries is in material compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing.
3.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower nor any of its Subsidiaries is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940, or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.
3.09 TAXES. Each of Technologies, Holdings, the Borrower and its Subsidiaries has timely filed or caused to be filed all tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves and (b) for such failures to timely file Tax returns or reports or nonpayment of Taxes which could not, individually or in the aggregate, result in a Material Adverse Effect.
3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur that has resulted in or that could result in a Material Adverse Effect. No Plan is subject to Title IV of ERISA.
3.11 DISCLOSURE. None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower or its Subsidiaries to the Lenders in connection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
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3.12 USE OF CREDIT. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any extension of credit hereunder will be used to buy or carry any Margin Stock.
ARTICLE IV CONDITIONS
4.01 EFFECTIVE DATE. The obligations of the Lenders to make Loans and of the Issuing Lender to issue Letters of Credit hereunder shall not become effective until the date on which the Administrative Agent shall have received each of the following documents, each of which shall be satisfactory to the Administrative Agent (and to the extent specified below, to each Lender) in form and substance (or such condition shall have been waived in accordance with Section 9.02):
(a) EXECUTED COUNTERPARTS. From each party hereto either (i) a counterpart of this Agreement signed on behalf of such party, or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page to this Agreement) that such party has signed a counterpart of this Agreement.
(b) OPINION OF COUNSEL. A favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Weil, Gotshal & Manges, LLP, counsel to the Borrower, its Subsidiaries, Technologies and Holdings, substantially in the form of EXHIBIT B, and covering such other matters relating to the Borrower, this Agreement or the Transactions as the Required Lenders shall reasonably request (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).
(c) CORPORATE DOCUMENTS. Such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, its Subsidiaries, Technologies and Holdings, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(d) OFFICER'S CERTIFICATE. A certificate, dated the Effective Date and signed by a Senior Executive Officer or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in the lettered clauses of the first sentence of Section 4.02.
(e) REAFFIRMATION AGREEMENT. Each of the Borrower, each Parent Guarantor and Subsidiary Guarantor (other than GBAC) shall have executed and delivered to the Administrative Agent a Reaffirmation Agreement (the "REAFFIRMATION AGREEMENT") in form and content acceptable to the Administrative Agent (on behalf of the Lenders), acknowledging and confirming the continuing effectiveness and enforceability of each of the other Loan Documents to which such Person is a party.
(f) GUARANTY AGREEMENTS. Technologies, Holdings and each domestic Subsidiary of the Borrower (including GBAC) shall have executed and delivered to the Administrative Agent a Guaranty Agreement (each such agreement, a "GUARANTY AGREEMENT") in form and content acceptable to the Administrative Agent (on behalf of the Lenders), providing for the guarantee
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of payment by such Person of the Borrower's obligations to the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender under the Loan Documents.
(g) SECURITY AGREEMENTS. The Borrower and each domestic Subsidiary of the Borrower (including GBAC) shall have executed and delivered to the Administrative Agent a Security Agreement (each such agreement, a "SECURITY AGREEMENT") in form and content acceptable to the Administrative Agent, granting to the Administrative Agent (on behalf of the Lenders) a Lien in all of such Person's equipment, inventory, fixtures, accounts, chattel paper, general intangibles, documents, investment property, instruments, deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, and general intangibles including, without limitation, payment intangibles, whether now owned or hereafter acquired, wherever located, and any and all products and proceeds thereof, and shall secure the payment of any and all Indebtedness and liabilities, whether now existing or hereafter incurred, of the Borrower or such Subsidiary to the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender under the Loan Documents; and the Administrative Agent shall have received appropriate financing statements to perfect each such Lien, which Lien shall be superior in priority to all other Liens, other than Liens arising after the date of this Agreement having priority over the Liens of the Administrative Agent by operation of applicable law or Liens permitted pursuant to the provisions of Section 6.02. The Borrower and each domestic Subsidiary of the Borrower (including GBAC) shall have executed and delivered to the Administrative Agent a Patent Security Agreement, a Trademark Security Agreement and a Copyright Security Agreement, each in form and substance acceptable to the Administrative Agent (collectively, the "INTELLECTUAL PROPERTY SECURITY AGREEMENTS").
(h) BORROWER PLEDGE AGREEMENT. The Borrower shall have executed and delivered to the Administrative Agent a Pledge Agreement (the "BORROWER PLEDGE AGREEMENT") in form and content acceptable to the Administrative Agent pursuant to which the Borrower has pledged to the Administrative Agent (on behalf of the Lenders) all issued and outstanding securities of each domestic Subsidiary of the Borrower, which shall secure the payment of any and all Indebtedness and liabilities, whether now existing or hereafter incurred, of the Borrower to the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender under the Loan Documents, and in connection therewith shall have delivered to the Administrative Agent certificates representing such issued and outstanding securities with related stock powers duly endorsed in blank.
(i) HITTMAN PLEDGE AGREEMENT. Greatbatch-Hittman, Inc. shall have executed and delivered to the Administrative Agent a Pledge Agreement (the "HITTMAN PLEDGE AGREEMENT") in form and content acceptable to the Administrative Agent pursuant to which Greatbatch-Hittman, Inc. has pledged to the Administrative Agent (on behalf of the Lenders) all issued and outstanding securities of GBAC, which shall secure the payment of any and all Indebtedness and liabilities, whether now existing or hereafter incurred, of the Borrower or of Greatbatch-Hittman, Inc. to the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender under the Loan Documents, and in connection therewith shall have delivered to the Administrative Agent certificates representing such issued and outstanding securities with related stock powers duly endorsed in blank.
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(j) CERTIFICATES OF INSURANCE. The Administrative Agent shall have received certificates of insurance and insurance policies, in form and content acceptable to the Administrative Agent, evidencing the insurance required to be carried by the Borrower pursuant to Section 5.07 hereof with endorsements, satisfactory to the Agent, designating the Agent as an additional insured and a loss payee and further designating that each such insurance policy contains a notice of cancellation provision satisfactory to the Agent.
(k) CLOSING OF THE SIERRA ACQUISITION. Subject only to the delivery by the Borrower to Maxwell Electronic Components Group, Inc. of the proceeds of any Loans to be used by the Borrower in connection with the acquisition by GBAC of the substantially all of the assets of the Sierra-KD Components Division of Maxwell Electronic Components Group, Inc., on or before the Effective Date GBAC shall have acquired substantially all of the assets of the Sierra-KD Components Division of Maxwell Electronic Components Group, Inc. as described in an asset purchase agreement between GBAC and Maxwell Electronics Components Group, Inc. (the "ASSET PURCHASE AGREEMENT") and such other agreements, documents and instruments executed and delivered in connection therewith (collectively, the "SIERRA ACQUISITION DOCUMENTS"), free and clear of all Liens (other than Liens permitted pursuant to the provisions of Section 6.02) (such transaction to be referred to as the "SIERRA ACQUISITION").
(l) PAYMENT OF FEES. On or before Effective Date the Administrative Agent the Administrative Agent shall have received all fees payable to the Administrative Agent for itself as Administrative Agent pursuant to one or more agreements with the Borrower relating to such fees.
(m) GENERAL ASSURANCES. All other documents and legal matters in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be satisfactory in form and substance to the Administrative Agent. The Borrower shall have delivered such further documents to the Administrative Agent and taken such further action respecting this Agreement and the other Loan Documents as the Administrative Agent or any Lender or counsel to M&T may reasonably request.
The obligation of any Lender to make its initial extension of credit hereunder is also subject to the payment by the Borrower of such fees as the Borrower shall have agreed to pay to any Lender or the Administrative Agent in connection herewith, including, without limitation, the reasonable fees and expenses of Lippes, Silverstein, Mathias & Wexler LLP, counsel to the Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
4.02 EACH CREDIT EVENT. The obligation of each Lender to make any Loan, and of the Issuing Lender to issue, amend, renew or extend any Letter of Credit, is additionally subject to the satisfaction of the following conditions:
(a) the representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of such Loan or the issuance, amendment, renewal or
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extension of such Letter or Credit (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and
(b) at the time of and immediately after giving effect to such Loan or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.
ARTICLE V AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of and interest on each Note and all fees and expenses payable under the Loan Documents shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Administrative Agent, the Swingline Lender, the Issuing Lender and the Lenders that:
5.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will furnish, or cause to be furnished, to the Administrative Agent and each Lender:
(a) within ninety (90) days after the end of each fiscal year of the Borrower, the Consolidated and Consolidating balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, in form substantially similar to the statements described in Section 3.04(a), and all based on the results of operations and calculations reported on by Deloitte & Touche, LLP or other independent public accountants of recognized national standing as contained in the financial statements described in Section 5.01(e), below, such Consolidated and Consolidating financial statements to present fairly in all material respects the financial condition and results of operations on a Consolidated basis in accordance with GAAP consistently applied, subject to the absence of footnotes;
(b) within forty five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of the Borrower, the Consolidated and Consolidating balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of the corresponding period or periods of the previous fiscal year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results of operations on a Consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under clause (a) or (b) of this Section, a certificate of a Financial Officer of the Borrower in the form of EXHIBIT G (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.01, 6.07 and
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6.10, and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under clause (e) of this Section, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);
(e) within ninety (90) days after the end of each fiscal year of Technologies, the audited consolidated and consolidating balance sheet and related statements of operations, stockholders' equity and cash flows of Technologies and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche, LLP or other independent public accountants of recognized national standing (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Technologies and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(f) promptly following submission to the United States Securities and Exchange Commission, a copy of Form 10-Q (with all attachments), Form 10-K and all other forms, documents or certificates filed by Technologies or any of its Subsidiaries with such Commission; and
(g) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as the Administrative Agent or any Lender may reasonably request.
5.02 NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any of its Affiliates that, if adversely determined, could result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event;
(d) the assertion of any material environmental matter by any Person against, or with respect to the activities of, the Borrower or any of its Subsidiaries and any alleged material violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations; and
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(e) any other development that results in, or could result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
5.03 EXISTENCE: CONDUCT OF BUSINESS. The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; PROVIDED that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.
5.04 FUTURE SUBSIDIARIES; SUBSIDIARY GUARANTORS. The Borrower shall cause each domestic Subsidiary of the Borrower on the Effective Date, and each Person that becomes a domestic Subsidiary of the Borrower or of any Subsidiary of the Borrower after the Effective Date, to execute and deliver to the Administrative Agent a Guaranty Agreement, a Security Agreement, Intellectual Property Security Agreements, and such other agreements, documents and instruments reasonably requested by the Administrative Agent. All Subsidiaries of the Borrower on the Effective Date are listed on Part E of SCHEDULE II. Upon the request of the Required Lenders, the Borrower shall execute and deliver to the Administrative Agent (on behalf of the Lenders) a Borrower Pledge Agreement with respect to the capital stock or other securities of any Subsidiary of the Borrower that is domiciled outside of the United States, or of any Person that is domiciled outside of the United States that becomes a Subsidiary of the Borrower or of any Subsidiary of the Borrower after the Effective Date, pursuant to which the Borrower shall pledge to the Administrative Agent (on behalf of the Lenders) up to a maximum of sixty six and two thirds percent (66 2/3 %) of the issued and outstanding securities of such foreign Subsidiary, and shall secure the payment of any and all Indebtedness and liabilities, whether now existing or hereafter incurred, of the Borrower to the Administrative Agent, the Lenders and the Issuing Lender, and in connection therewith shall have delivered to the Administrative Agent certificates representing such issued and outstanding securities with related stock powers duly endorsed in blank
5.05 FUTURE PARENT ENTITIES; PARENT GUARANTORS. If the Borrower or any Subsidiary of the Borrower becomes a Subsidiary of any Person other than Technologies or Holdings after the Effective Date, the Borrower shall cause each such Person to execute and deliver to the Administrative Agent a Guaranty Agreement (each such Person to be referred to as a "PARENT GUARANTOR").
5.06 PAYMENT OF OBLIGATIONS. The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including tax liabilities before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not result in a Material Adverse Effect.
5.07 MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good
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working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. Part F of SCHEDULE II lists and generally describes each policy of insurance covering the business of, or any material asset of, the Borrower or any of its Subsidiaries on the Effective Date.
5.08 BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice and during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
5.09 COMPLIANCE WITH LAWS. The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property in all material respects.
5.10 USE OF PROCEEDS. The proceeds of the Revolving Credit Loans will only be used, and Letters of Credit will be issued only to support obligations incurred by the Borrower and its Subsidiaries, to extend and replace the Original Credit Facilities, to finance acquisitions permitted pursuant to the terms hereof (specifically including the Sierra Acquisition) and capital expenditures relating to existing and acquired properties, and for the general corporate purposes of the Borrower and its Subsidiaries in the ordinary course of business. The proceeds of the Term Loans will only be used by the Borrower and its Subsidiaries to extend and replace the Original Credit Facilities, and to finance acquisitions permitted pursuant to the terms hereof (specifically including the Sierra Acquisition) and capital expenditures relating to existing and acquired properties. No part of the proceeds of any Loan will be used whether directly or indirectly, for any purpose that entails violation of any of the Regulations of the Board, including Regulations U and X. in the ordinary course of business.
ARTICLE VI NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and interest on each Note and all fees and expenses payable under the Loan Documents have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Administrative Agent, the Issuing Lender, the Swingline Lender and the Lenders that:

6.01     INDEBTEDNESS.

            (a) The Borrower will not, nor will it permit any of its Guarantors
      to, create, incur, assume or permit to exist any Indebtedness, except:

                  (i) Indebtedness created hereunder;	

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(ii) Indebtedness existing on the date hereof and set forth in Part A of SCHEDULE II and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;
(iii) Indebtedness of the Borrower to any Subsidiary Guarantor and of any Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor;
(iv) secured Indebtedness (including, without limitation, Indebtedness incurred in connection with Capital Lease Obligations, and Hedging Agreements) of the Borrower or such Guarantor in excess of Indebtedness permitted by Sections 6.01(a)(i) and (ii), above, PROVIDED that (i) the incurrence and/or repayment of such Indebtedness would not cause a violation of Section 6.10(c), (ii) the ratio of Consolidated Funded Debt (including the Indebtedness to be incurred) to Consolidated EBITDA (as at the end of the last fiscal quarter for which financial statements are available but giving PRO FORMA effect to such additional Indebtedness as set forth in Section1.03) is less than the then-applicable Leverage Ratio as set forth in Section 6.10(a), (iii) in the case of Indebtedness incurred in connection with Capital Lease Obligations, the obligations incurred do not exceed the fair market value of such property or assets (as determined in good faith by the Board of Directors of the Borrower or of the Guarantor incurring such Indebtedness), (iv) the creditors in respect of such additional Indebtedness (other than creditors with respect to Indebtedness secured by Liens permitted pursuant to Section 6.02) shall become parties to an intercreditor agreement by and among the Lenders (the "COLLATERAL AGENCY AGREEMENT") whereby the Administrative Agent shall agree to act as collateral agent for itself, the Lenders and such additional creditors as provided for herein, and the Collateral Agency Agreement shall be amended if necessary to reflect such additional Indebtedness and otherwise be in form and substance satisfactory to the Lenders, (v) if subordinated in right of payment to the Indebtedness to the Lenders hereunder, such Indebtedness is created under an agreement pursuant to which such Indebtedness is subordinated in right of payment to the Indebtedness to the Lenders hereunder pursuant to a subordination agreement in form and content acceptable to the Lenders, and (vi) no Default or Event of Default shall occur or be continuing after incurring such Indebtedness;
(v) unsecured Indebtedness of the Borrower or such Guarantor in excess of Indebtedness permitted by Sections 6.01(a)(i) and (ii), above, PROVIDED that (i) the incurrence and/or repayment of such Indebtedness would not cause a violation of Section 6.10(c), (ii) the ratio of Consolidated Funded Debt to Consolidated EBITDA (as at the end of the last fiscal quarter for which financial statements are available but giving PRO FORMA effect to such additional Indebtedness as set forth in Section1.03) is less than the then-applicable Leverage Ratio, (iii) in the case of Indebtedness incurred in connection with Capital Lease Obligations, the obligations incurred do not exceed the fair market value of such property or assets (as determined in good faith by the Board of Directors of the Borrower or of the Guarantor incurring such Indebtedness), (iv) such Indebtedness is Subordinated Indebtedness, and (v) no Default or Event of Default shall occur or be continuing after incurring such Indebtedness;
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(vi) if no Default or Event of Default shall have occurred and be continuing, the provisions of this Section 6.01(a) will not prevent the Borrower or any Guarantor from becoming liable for secured Indebtedness PARI PASSU to the Indebtedness to the Lenders hereunder, or for Subordinated Indebtedness, in each case incurred for the purpose of extending, renewing, replacing or refinancing the same type of debt, PROVIDED that (i) the principal amount of such Indebtedness shall not exceed the principal amount of the debt being extended, renewed, replaced or refinanced, together with any accrued interest and premium with respect thereto and any costs and expenses related to such extension, renewal, replacement or refinancing, and
(ii) such Indebtedness (A) shall not mature prior to the stated maturity of the PARI PASSU Indebtedness or Subordinated Indebtedness so extended, renewed, replaced or refinanced, (B) shall have an average life equal to or greater than the remaining average life of the Indebtedness so extended, renewed, replaced or refinanced, and
(C) if Indebtedness other than Subordinated Indebtedness is being extended, renewed, replaced or refinanced, such Indebtedness shall continue to be subject to the Collateral Agency Agreement, and if Subordinated Indebtedness is being extended, renewed, replaced or refinanced, such Subordinated Indebtedness (as extended, renewed, replaced or refinanced) shall be created under an agreement pursuant to which such Indebtedness is subordinated in right of payment to the Indebtedness to the Lenders hereunder pursuant to a subordination agreement in form and content acceptable to the Lenders;
(b) The Borrower will not, nor will it permit any of its Subsidiary Guarantors to, create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness assumed by the Borrower and/or by any of its Subsidiary Guarantors in any acquisition permitted pursuant to
Section 6.03(c)(iii) to the extent, and solely to the extent, the aggregate principal amount of all such Indebtedness at any time outstanding does not exceed Seven Million Five Hundred Thousand Dollars ($7,500,000), and refinancings and replacements thereof (A) in a principal amount not exceeding in the aggregate the principal amount of the Indebtedness so refinanced or replaced plus any prepayment penalties, fees and expenses incurred in connection with such refinancings or replacements, (B) with an all-in cost which is less than the Indebtedness so refinanced or replaced, and (C) with an average life to maturity of not less than the then average life to maturity of the Indebtedness so refinanced or replaced; and
(ii) Indebtedness of the Borrower or any Subsidiary Guarantor incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; PROVIDED that (A) such Indebtedness is incurred prior to or within thirty (30) days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (ii) shall not exceed Five Million Dollars ($5,000,000) at any time outstanding.
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6.02 LIENS. The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(a) any Lien on any property or asset of the Borrower or any of its Subsidiaries existing on the date hereof and set forth in Part B of SCHEDULE II;

            (b) Liens for taxes, assessments, governmental charges or levies,
      statutory Liens of landlords and Liens of carriers, warehousemen,
      mechanics and materialmen incurred in the ordinary course of business for
      sums not yet due or which are being actively contested in good faith by
      appropriate proceedings;

            (c) Liens (other than Liens imposed on the Borrower or any of its
      Subsidiaries under ERISA) incurred or deposits made in the ordinary course
      of business (a) in connection with workers' compensation, unemployment
      insurance and other types of social security or (b) to secure (or to
      obtain letters of credit that secure) performance of tenders, statutory
      obligations, surety and appeal bonds, bids, leases, performance bonds,
      sales contracts and other similar obligations; PROVIDED that, in each
      case, such Liens do not materially detract from the value of the property
      or assets of the Borrower or its Subsidiaries or materially impair the use
      thereof in the operation of the business of the Borrower or its
      Subsidiaries;

            (d) Liens (i) securing Capital Lease Obligations, or (ii) placed on
      property acquired by the Borrower or any of its Subsidiaries (other than
      property consisting of securities or constituting the assets of a business
      acquired in whole or in part from any Person or Persons) and existing at
      the time of the acquisition of such property, or (iii) placed on property
      being acquired or constructed by the Borrower or any of its Subsidiaries
      to secure the purchase price or cost thereof, or (iv) securing
      Indebtedness incurred to finance any acquisition or construction described
      in clauses (i) through (iii) immediately above and permitted under Section
      6.01, PROVIDED that the Lien is confined to the property so acquired or
      constructed; and

            (e) Liens extending, renewing or replacing any Lien permitted by
      clauses (a) and (d) above, PROVIDED that (i) such Lien shall not apply to
      any other property or assets of the Borrower or any Subsidiary, (ii) such
      extensions, renewals and replacements thereof that do not increase the
      outstanding principal amount thereof and (iii) that, at the time of and
      immediately after giving effect to such extension, renewal or replacement
      is in effect, no Default shall have occurred and be continuing.

6.03     FUNDAMENTAL CHANGES.

            (a) The Borrower will not, nor will it permit any of its
      Subsidiaries to, enter into any transaction of merger or consolidation or
      amalgamation, or liquidate, wind up or dissolve itself (or suffer any
      liquidation or dissolution), except:

                  (i) any Subsidiary of the Borrower may be merged or
            consolidated with or into the Borrower or another Subsidiary,
            PROVIDED (A) that if any such transaction shall be between a
            Subsidiary and the Borrower, the Borrower shall be the continuing or
            surviving corporation, and (B) if any such transaction shall be
            between a Subsidiary	

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and another Subsidiary, the surviving or continuing Subsidiary shall be a Subsidiary Guarantor; and
(ii) any merger or consolidation permitted under clause (iii) of paragraph (c) of this Section.
(b) The Borrower will not, nor will it permit any of its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or a substantial part of its business or property, whether now owned or hereafter acquired, except:
(i) any Subsidiary Guarantor of the Borrower may sell, lease, transfer or otherwise dispose of any or all of its property (upon voluntary liquidation or otherwise) to the Borrower or another Subsidiary Guarantor of the Borrower; and
(ii) the capital stock of any Subsidiary of the Borrower may be sold, transferred or otherwise disposed of to the Borrower or another Subsidiary Guarantor of the Borrower.
(c) The Borrower will not, nor will it permit any of its Subsidiaries to, acquire any business or property from, or capital stock of, or be a party to any acquisition of, any Person (whether by way of purchase of such assets or stock, by merger or consolidation or otherwise), except:
(i) for any merger or consolidation permitted under clause (i) of paragraph (a) of this Section;
(ii) for purchases of inventory and other property to be sold or used in the ordinary course of business and Investments permitted under Section 6.06(a); and
(iii) the Borrower or any Subsidiary Guarantor of the Borrower may acquire any business, and the related assets, of any other Person (whether by way of purchase of assets or stock, by merger or consolidation or otherwise), so long as:
[A] if such acquisition shall be effected by merger or consolidation involving the Borrower, the Borrower shall be the continuing or surviving entity;
[B] such acquisition (if by purchase of stock) shall be effected in such manner so that the acquired entity becomes a Subsidiary Guarantor of the Borrower;
[C] after giving effect to such acquisition (and the provisions of Section1.03) the Borrower and its Subsidiaries shall be in compliance with Section 6.10 ;
[D] the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer in the form of EXHIBIT G showing
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calculations in reasonable detail to demonstrate compliance with clause (iii)[C] immediately above;
[E] the Borrower shall have obtained the prior written consent of the Required Lenders in the event that:
[I] with respect to any acquisition consummated during the period commencing on the Effective Date and ending on the last day of Borrower's fiscal year ending nearest to December 31, 2001 (other than the Sierra Acquisition) (a) the aggregate amount of cash expenditures in respect of such acquisition would exceed Ten Million Dollars ($10,000,000), or (b) such acquisition would constitute the third (3rd) or greater acquisition to be consummated by the Borrower and/or any of its Subsidiaries (whether individually or collectively) during such period; and
[II] with respect to any acquisition consummated during Borrower's fiscal year ending nearest to December 31, 2002 and ending on the last day of such fiscal year
(a) the aggregate amount of cash expenditures in respect of such acquisition would exceed Fifteen Million Dollars ($15,000,000), or (b) such acquisition would constitute the third (3rd) or greater acquisition to be consummated by the Borrower and/or any of its Subsidiaries (whether individually or collectively) during such fiscal year; and
[III] with respect to any acquisition consummated after the end of Borrower's fiscal year ending nearest to December 31, 2002, such acquisition would require any payment in cash by the Borrower or any of its Subsidiaries; and
[F] immediately prior to such acquisition and after giving effect thereto, no Default shall have occurred and be continuing.
6.04 LINES OF BUSINESS. The Borrower will not, nor will it permit any of its Subsidiaries to, engage to any material extent in any business other than the business of manufacturing, distributing and selling components and assemblies for medical devices, batteries, capacitors and precision components and assemblies for select industrial and medical market segments.
6.05 RESTRICTIVE AGREEMENTS. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement prohibiting:
(a) (i) the creation or assumption of any Lien in favor of the Administrative Agent and/or the Lenders upon its properties, revenues or assets, whether now owned or hereafter acquired; PROVIDED, the Borrower may, and may permit any of its Subsidiaries to, enter into any agreement restricting the right of Administrative Agent's and/or the Lenders' to make subject to a Lien any property to the extent (A) such property is subject to a security interest in favor of another Person, (B) the Indebtedness incurred by the Borrower or such Subsidiary is otherwise permitted pursuant to Section 6.01, and (C) the Lien in favor of such third Person is
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otherwise permitted pursuant to Section 6.02, or (ii) the ability of the Borrower or any Guarantor Subsidiary to amend or otherwise modify this Agreement or any other Loan Document; and
(b) any Subsidiary from making any payments, directly or indirectly, to the Borrower by way of dividends, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to the Borrower.
6.06 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS; HEDGING AGREEMENTS.
(a) INVESTMENTS, ETC. The Borrower will not, nor will it permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:
(i) investments existing on the date hereof and set forth in
Part C of SCHEDULE II;
(ii) Permitted Investments;
(iii) investments by the Borrower in the capital stock of its Subsidiaries;
(iv) loans or advances made by the Borrower to any Subsidiary Guarantor and made by any Subsidiary Guarantor to the Borrower or another Subsidiary Guarantor;
(v) Guarantees constituting Indebtedness permitted by Section 6.01; and
(vi) any transaction permitted under Section 6.03.
(b) HEDGING AGREEMENTS. The Borrower will not, nor will it permit any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities.
6.07 RESTRICTED PAYMENTS. The Borrower will not, nor will it permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment; PROVIDED (a) the Borrower may declare and pay dividends with respect to its capital stock payable (i) in additional shares of its common stock, (ii) in cash only if, and solely to the extent, the aggregate amount of cash dividends declared and paid by the Borrower for any period does not exceed the difference between: (A) fifty percent (50%) of the Net Income of the Borrower and its Subsidiaries for such period, MINUS (B) the aggregate amount of cash paid (as dividends
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or otherwise) by the Borrower during such period pursuant to clause (b) immediately below, and (iii) in any combination of the foregoing, (b) in any fiscal year the Borrower may declare and pay cash dividends with respect to its capital stock, and/or may make payments of cash to any parent corporation or to Donaldson, Lufkin & Jenrette Securities Corporation (or its successor), in an aggregate amount not to exceed the amount of advisory fees and retainer payable in such fiscal year by Technologies to Donaldson, Lufkin & Jenrette Securities Corporation (or its successor) pursuant to an agreement by and between Technologies and such party dated July 10, 1997 and as in effect on the Effective Date; PROVIDED, in no event shall the aggregate amount of cash dividends and cash payments made pursuant to this clause (b) exceed One Hundred Thousand Dollars ($100,000) in any fiscal year of the Borrower, (c) the Borrower may make payments to its Affiliates only if, and solely to the extent, the transaction or transactions giving rise to such payments satisfy the requirements of Section 6.08, and (d) the Borrower may make payments to former participants of the Borrower's existing employee stock ownership plan qualified under ERISA (the "ESOP") in connection with the redemption of the securities of the Borrower held in such former participant's ESOP account, as permitted pursuant to the terms of the ESOP or as otherwise required by ERISA. Nothing herein shall be deemed to prohibit the payment of dividends by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary Guarantor of the Borrower.
6.08 TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor will it permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except
(a) transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliate and (c) any Restricted Payment permitted by Section 6.07.
6.09 SALE AND LEASE-BACK TRANSACTIONS. The Borrower will not, nor will it permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
6.10 CERTAIN FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio as at:
(i) the last day of Borrower's fiscal year ending on December 28, 2001, to exceed 3.00 to 1.00;
(ii) the last day of the Borrower's fiscal year ending on December 27, 2002, to exceed 2.75 to 1.00; and
(iii) the last day of the Borrower's fiscal year ending on December 26, 2003, and as at each fiscal quarter thereafter, to exceed 2.50 to 1.00.
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(b) FIXED CHARGES COVERAGE RATIO. The Borrower will not permit the Fixed Charges Coverage Ratio to be less than 1.25 to 1.00 as at the last day of any fiscal quarter ending after the Effective Date.
(c) INTEREST COVERAGE RATIO. The Borrower will not permit the Interest Coverage Ratio to be less than 3.00 to 1.00 as at the last day of any fiscal quarter ending after the Effective Date.
ARTICLE VII EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or Note or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or Note or any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or under any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) or more Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, shall prove to have been incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a) or 5.03 (with respect to the Borrower's existence) or in ARTICLE VI;
(e) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clauses (a), (b) or (d) of this Article) or any other Loan Document and such failure shall continue unremedied for a period of ten
(10) or more Business Days after notice thereof from the Administrative Agent (given at the request of any Lender) to the Borrower;
(f) any Subsidiary Guarantor or Parent Guarantor shall fail to observe or perform any covenant, condition or agreements contained in any Loan Document to which it is a party, and such failure shall continue unremedied for a period of ten (10) or more Business Days after notice thereof from the Administrative Agent (given at the request of any Lender) to such Subsidiary Guarantor or Parent Guarantor;
(g) the Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Indebtedness, the outstanding and unpaid principal amount of which at the time equals or exceeds One Million Dollars ($1,000,000), when and as the same shall become due and payable;
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(h) any event or condition occurs that results in any Indebtedness, the outstanding and unpaid principal amount of which at the time equals or exceeds One Million Dollars ($1,000,000), becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Indebtedness or any trustee or agent on its or their behalf to cause such Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
(i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of sixty (60) or more days or an order or decree approving or ordering any of the foregoing shall be entered;
(j) the Borrower or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(k) the Borrower or any of its Subsidiaries shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(l) one or more judgments for the payment of money in an aggregate amount in excess of applicable insurance coverage of One Million Dollars ($1,000,000) or more shall be rendered against the Borrower or any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any of its Subsidiaries to enforce any such judgment;
(m) an ERISA Event shall have occurred that is reasonably likely to result in a liability or loss to the Borrower or any of its Subsidiaries in an amount in excess of One Million Dollars ($1,000,000);
(n) a Change in Control shall occur; or
(o) any Loan Document or Lien granted thereunder shall terminate or cease to be effective (other than pursuant to its terms) or cease to be legally valid, binding and enforceable
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obligation of the Borrower, a Subsidiary Guarantor or a Parent Guarantor party thereto (other than as a result of any termination in accordance with the terms thereof); the Borrower, any Subsidiary Guarantor or Parent Guarantor party to any Loan Documents shall, directly or indirectly, contest in any manner the effectiveness of any such Loan Document or Lien granted thereunder or the validity, binding nature, or enforceability thereof; or any Lien shall cease to have the priority purported to be given under the applicable Loan Document;
then, and in every such event (other than an event with respect to the Borrower described in clause (i) or (j) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (i) or (j) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Lender hereby irrevocably appoints the Administrative Agent as its agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except as expressly set forth herein and in the other Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is
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communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein,
(iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in ARTICLE IV or elsewhere herein or therein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the Lenders, the Issuing Lender and the Borrower. Upon any such resignation, the Required Lenders shall have the right, with the prior written consent of the Borrower (which consent shall not be unreasonably withheld), to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent's resignation shall nonetheless become effective and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and (2) the Required Lenders shall perform the duties of the Administrative Agent (and all payments and communications provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly) until such time as the Required Lenders appoint a successor agent as provided for above in this paragraph. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers,
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privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Except as otherwise provided in Section 9.02(b) with respect to this Agreement, the Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents.
ARTICLE IX MISCELLANEOUS
9.01 NOTICES. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower:
Wilson Greatbatch Ltd.
10000 Wehrle Drive
Clarence, New York 14031
Tel: 716 759 5602
Fax: 716 759 5614
Attn: Arthur J. Lalonde Senior Vice President - Finance with a copy to:
Warren Buhle, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Tel: 212 310 8898
Fax: 212 310 8007
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(b) if to the Administrative Agent:
Manufacturers and Traders Trust Company One Fountain Plaza
12th Floor
Buffalo, New York 14203 Tel: 716 848 7303
Fax: 716 848 7318
Attn: Shelley Drake
Administrative Vice President
with a copy to:
William E. Mathias, Esq.
Lippes, Silverstein, Mathias & Wexler LLP 700 Guaranty Building
28 Church Street
Buffalo, New York 14202 Tel: 716 853 5100
Fax: 716 853 5199
(c) if to the Issuing Lender:
Manufacturers and Traders Trust Company One Fountain Plaza
12th Floor
Buffalo, New York 14203 Tel: 716 848 7303
Fax: 716 848 7318
Attn: Shelley Drake
Administrative Vice President
with a copy to:
William E. Mathias, Esq.
Lippes, Silverstein, Mathias & Wexler LLP 700 Guaranty Building
28 Church Street
Buffalo, New York 14202 Tel: 716 853 5100
Fax: 716 853 5199
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(d) if to the Swingline Lender:
Manufacturers and Traders Trust Company One Fountain Plaza
12th Floor
Buffalo, New York 14203 Tel: 716 848 7303
Fax: 716 848 7318
Attn: Shelley Drake
Administrative Vice President
with a copy to:
William E. Mathias, Esq.
Lippes, Silverstein, Mathias & Wexler LLP 700 Guaranty Building
28 Church Street
Buffalo, New York 14202 Tel: 716 853 5100
Fax: 716 853 5199
(e) if to a Lender, to it at its address (or telecopy number) set forth in SCHEDULE I.
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto (or, in the case of any such change by a Lender, by notice to the Borrower and the Administrative Agent). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Unless otherwise specified herein, each notice or other communication required or permitted to be given hereunder by the Borrower shall be given or made only by a Senior Executive Officer or Financial Officer of the Borrower.

9.02     WAIVERS; AMENDMENTS.

            (a) NO DEEMED WAIVERS: REMEDIES CUMULATIVE. No failure or delay by
      the Administrative Agent, the Issuing Lender or any Lender in exercising
      any right or power hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise of any such right or power, or any
      abandonment or discontinuance of steps to enforce such a right or power,
      preclude any other or further exercise thereof or the exercise of any
      other right or power. The rights and remedies of the Administrative Agent,
      the Issuing Lender and the Lenders hereunder are cumulative and are not
      exclusive of any rights or remedies that they would otherwise have. No
      waiver of any provision of this Agreement or consent to any departure by
      the Borrower therefrom shall in any event be effective unless the same
      shall be permitted by paragraph (b) of this Section, and then such waiver
      or consent shall be effective only in the specific instance	

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and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Lender may have had notice or knowledge of such Default at the time.
(b) AMENDMENTS. Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; PROVIDED that no such agreement shall:
(i) increase the Commitment of any Lender without the written consent of such Lender,
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.16(d) without the consent of each Lender affected thereby, or
(v) change any of the provisions of this Section or the percentage in the definition of the term "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender, and PROVIDED FURTHER that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Lender hereunder without the prior written consent of the Administrative Agent the Issuing Lender, as the case may be.
(c) Notwithstanding the foregoing, the Borrower acknowledges and agrees that the Administrative Agent reserves the right, at any time, after consulting with the Borrower, to modify pricing, tenor or terms of the Revolving Credit Facility and/or the Term Loan Facility, but not the principal amount of either of such facilities, if the Administrative Agent

      determines, on a commercially reasonable basis, that such modifications
      are advisable to ensure successful syndication of the Revolving Credit
      Facility and/or the Term Loan Facility.

9.03     EXPENSES; INDEMNITY; DAMAGE WAIVER.

            (a) COSTS AND EXPENSES. The Borrower shall pay (i) all reasonable
      out-of-pocket expenses incurred by the Administrative Agent and its
      Affiliates, including the reasonable fees, charges and disbursements of
      counsel for the Administrative Agent, in connection with the syndication

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      of the credit facilities provided for herein, the preparation and
      administration of this Agreement and the other Loan Documents or any
      amendments, modifications or waivers of the provisions hereof or thereof
      (whether or not the transactions contemplated hereby or thereby shall be
      consummated), (ii) all reasonable out-of-pocket expenses incurred by the
      Issuing Lender in connection with the issuance, amendment, renewal or
      extension of any Letter of Credit or any demand for payment thereunder,
      and (iii) all reasonable out-of-pocket expenses incurred by the
      Administrative Agent, the Issuing Lender or any Lender, including the
      reasonable fees, charges and disbursements of any counsel for the
      Administrative Agent, the Issuing Lender or any Lender, in connection with
      the enforcement or protection of its rights in connection with this
      Agreement and the other Loan Documents, including its rights under this
      Section, or in connection with the Loans made or Letters of Credit issued
      hereunder, including in connection with any workout, restructuring or
      negotiations in respect thereof.

            (b) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify
      the Administrative Agent, the Issuing Lender and each Lender, and each
      Related Party of any of the foregoing Persons (each such Person being
      called an "INDEMNITEE") against, and to hold each Indemnitee harmless
      from, any and all losses, claims, damages, liabilities and related	

expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any of the other Loan Documents or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) REIMBURSEMENT BY LENDERS. To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Issuing Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Issuing Lender, as the case may be, such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; PROVIDED that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Issuing Lender in its capacity as such.
(d) WAIVER OF CONSEQUENTIAL DAMAGES; ETC. To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
67

      actual damages) arising out of, in connection with, or as a result of,
      this Agreement or any agreement or instrument contemplated hereby, the
      Transactions, any Loan or Letter of Credit or the use of the proceeds
      thereof.

            (e) PAYMENTS. All amounts due under this Section shall be payable
      promptly after written demand therefor.

9.04     SUCCESSORS AND ASSIGNS.

            (a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall be
      binding upon and inure to the benefit of the parties hereto and their
      respective successors and assigns permitted hereby, except that the
      Borrower may not assign or otherwise transfer any of its rights or
      obligations hereunder without the prior written consent of each Lender
      (and any attempted assignment or transfer by the Borrower without such
      consent shall be null and void). Nothing in this Agreement, expressed or
      implied, shall be construed to confer upon any Person (other than the
      parties hereto, their respective successors and assigns permitted hereby
      and, to the extent expressly contemplated hereby, the Related Parties of
      each of the Administrative Agent, the Issuing Lender and the Lenders) any
      legal or equitable right, remedy or claim under or by reason of this
      Agreement.

            (b) ASSIGNMENTS BY LENDERS. Any Lender may assign to one or more
      assignees all or a portion of its rights and obligations under this
      Agreement (including all or a portion of its Commitment and the Loans at
      the time owing to it); PROVIDED that

                  (i) except in the case of an assignment to a Lender or an
            Affiliate of a Lender, each of the Borrower and the Administrative
            Agent (and, in the case of an assignment of all or a portion of a
            Commitment or any Lender's obligations in respect of its LC
            Exposure, the Issuing Lender) must give their prior written consent
            to such assignment (which consent shall not be unreasonably
            withheld),

                  (ii) except in the case of an assignment to a Lender or an
            Affiliate of a Lender, or an assignment of the entire remaining
            amount of the assigning Lender's Commitment, unless each of the
            Borrower and the Administrative Agent otherwise consent, which
            consent may be given or withheld in sole discretion of each such
            party, the amount of the Commitment of the assigning Lender subject
            to each such assignment (determined as of the date the Assignment
            and Acceptance with respect to such assignment is delivered to the
            Administrative Agent) shall not be less than Ten Million Dollars
            ($10,000,000),

                  (iii) each partial assignment shall be made as an assignment
            of a proportionate part of all the assigning Lender's Term Loan
            Commitment and Revolving Credit Commitment and of a proportionate
            part of the assigning Lender's rights and obligations under this
            Agreement,

                  (iv) the parties to each assignment shall execute and deliver
            to the Administrative Agent an Assignment and Acceptance, together
            with a processing and recordation fee of Three Thousand Five Hundred
            Dollars ($3,500) payable by either or both of the assigning Lender
            and assignee as agreed to by such parties (which	

68

processing and recordation shall not be chargeable to, assessable against, or otherwise imposed upon, the Borrower), and
(v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
PROVIDED FURTHER, that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default under clause (a), (b),
(i) or (j) of ARTICLE VII has occurred and is continuing. Upon acceptance and recording pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.
(c) MAINTENANCE OF REGISTER BY THE ADMINISTRATIVE AGENT. The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in Buffalo, New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lender, and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Lender and any Lender, at any reasonable time and from time to time upon reasonable prior notice. Each change in the Register due to the assignment by or assumption by such Lender of any Commitment as evidenced by a duly executed Assignment and Acceptance delivered to the Administrative Agent, or due to the admission of a new Lender pursuant such new Lender's assumption of a Commitment from a present Lender as evidenced by a duly executed Assignment and Acceptance delivered to the Administrative Agent, shall be reflected in SCHEDULE I.
(d) EFFECTIVENESS OF ASSIGNMENTS. Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
69

(e) PARTICIPATIONS. Any Lender may sell participations to one or more banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and the Loans owing to it); PROVIDED that (i) except in the case of the sale of a participation to a Lender or an Affiliate of a Lender, the Borrower must give its prior written consent to such sale (which consent shall not be unreasonably withheld), (ii) such Lender's obligations under this Agreement and the other Loan Documents shall remain unchanged, (iii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iv) the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or any other Loan Document; PROVIDED that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first PROVISO to Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.
(f) LIMITATIONS ON RIGHTS OF PARTICIPANTS. A Participant shall not be entitled to receive any greater payment under Section 2.13 or 2.15 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.15.
(g) CERTAIN PLEDGES. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; PROVIDED that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.
(h) NO ASSIGNMENTS TO THE BORROWER OR AFFILIATES. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan or LC Exposure held by it hereunder to the Borrower or any of its Affiliates or Subsidiaries without the prior consent of each Lender.
9.05 SURVIVAL. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Lender or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full
70

force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
9.07 SEVERABILITY. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
9.08 RIGHT OF SETOFF. If an Event of Default shall have occurred and be continuing, subject to the provisions of Section 2.16 each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
9.09 GOVERNING LAW; JURISDICTION: ETC.
(a) GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to its principles of conflicts of laws.
(b) SUBMISSION TO JURISDICTION. The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in Erie County and of the United States District Court of the Western District of New York, and any appellate court from any thereof, in any action or
71

proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Issuing Lender or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.
(c) WAIVER OF VENUE. The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9.11 HEADINGS. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
9.12 TREATMENT OF CERTAIN INFORMATION: CONFIDENTIALITY.
(a) TREATMENT OF CERTAIN INFORMATION. The Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more subsidiaries or affiliates of such Lender and the Borrower hereby authorizes each Lender to share any information delivered to such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision
72

of such Lender to enter into this Agreement, to any such subsidiary or affiliate, it being understood that any such subsidiary or affiliate receiving such information shall be bound by the provisions of paragraph
(b) of this Section as if it were a Lender hereunder. Such authorization shall survive the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
(b) CONFIDENTIALITY. Each of the Administrative Agent, the Issuing Lender and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed
(i) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this paragraph, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (vii) with the consent of the Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this paragraph or (B) becomes available to the Administrative Agent, the Issuing Lender or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this paragraph, "INFORMATION" means all information received from the Borrower relating to theBorrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Lender or any Lender on a nonconfidential basis prior to disclosure by the Borrower; PROVIDED that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
[SIGNATURE PAGES FOLLOW]
73

WILSON GREATBATCH LTD.

By: /s/ Arthur J. Lalonde
    ---------------------------
Name:    Arthur J. Lalonde
Title:   Senior Vice President, Finance and Treasurer	

LENDERS
MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent

By: /s/ Shelley Drake
    ---------------------------
Name:    Shelley Drake
Title:   Administrative Vice President	

MANUFACTURERS AND TRADERS TRUST COMPANY, for itself and as Swingline Lender and as Issuing Lender

By: /s/ Shelley Drake
    ---------------------------
Name:    Shelley Drake
         Title:   Administrative Vice President	

74

SCHEDULE I
COMMITMENTS
[See definitions of "Commitment" and "Lenders" in Section 1.01 ]

-----------------------------------------------------------------------------------------------------
              LENDER          REVOLVING CREDIT       TERM LOAN           COMMITMENT        APPLICABLE
                                 COMMITMENT         COMMITMENT                             PERCENTAGE
-----------------------------------------------------------------------------------------------------

  M&T                          $20,000,000.00    $80,000,000.00       $100,000,000.00      100%
One Fountain Plaza
12th Floor
Buffalo, New York
14203

-----------------------------------------------------------------------------------------------------	

I

SCHEDULE II
EXISTING INDEBTEDNESS, LIENS AND INVESTMENTS
[See Section 4.01, Section 5.04, Section 5.07, Section 6.01(a)(ii),
Section 6.02(a) and Section 6.06(a)(i)]
Part A - INDEBTEDNESS
Part B - LIENS
Part C - INVESTMENTS
Part D - PATENTS, TRADEMARKS AND TRADENAMES
Part E - SUBSIDIARIES
Part F - INSURANCE
II

SCHEDULE III
LITIGATION
[See definition of "Disclosed Matters" in Section 1.01 and Section 3.06]
III

SCHEDULE IV
ENVIRONMENTAL MATTERS
[See definition of "Disclosed Matters" in Section 1.01 and Section 3.06]
IV

SCHEDULE V
EXISTING LETTERS OF CREDIT
LETTER OF CREDIT NO. ISSUER FACE AMOUNT EXPIRE DATE
V

EXHIBIT A
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated as of June ___, 2001 (as amended and in effect on the date hereof, the "CREDIT AGREEMENT"), by and among WILSON GREATBATCH LTD., the Lenders named therein and MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent for the Lenders. Terms defined in the Credit Agreement are used herein with the same meanings.
The Assignor named below hereby sells and assigns, without recourse, to the Assignee named below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Assignment Date set forth below, the interests set forth below (the "ASSIGNED INTEREST") in the Assignor's rights and obligations under the Credit Agreement, including the interests set forth below in the Commitment of the Assignor on the Assignment Date and Loans owing to the Assignor which are outstanding on the Assignment Date, together with unpaid interest accrued on the assigned Loans to the Assignment Date, the participations in Letters of Credit and LC Disbursements held by the Assignor on the Assignment Date, and the amount, if any, set forth below of the fees accrued to the Assignment Date for account of the Assignor. The Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the Administrative Agent together with (i) if the Assignee is a Foreign Lender, any documentation required by applicable law to be delivered by the Assignee in order to permit all payments received by such Foreign Lender hereunder to be made without withholding, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 9.04(b)(iv) of the Credit Agreement.
This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:

Assignee's Address for Notices:
Effective Date of Assignment ("ASSIGNMENT DATE")1:

                                                               Principal Amount
FACILITY                                                               ASSIGNED

Commitment Assigned:                                                          $

Syndicated Loans:

Fees Assigned (if any):	

The terms set forth above and below are hereby agreed to:

[NAME OF ASSIGNOR] , as Assignor            [NAME OF ASSIGNEE] , as Assignee

By:                                         By:
   --------------------------                   ----------------------------
Name:                                       Name:	

Title: Title:
The undersigned hereby consent to the within assignment2:
WILSON GREATBATCH LTD.
By:
 Name:
Title:
MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent
By:
 Name:
Title:

1 Must be at least five (5) Business Days after execution by Assignor and Assignee.
2 Consents to be included to the extent required by Section 9.04(b) of the Credit Agreement.

2

EXHIBIT B
June 18, 2001
To Manufacturers and Traders Trust Company, as Administrative Agent, and each of the Lenders party to the Credit Agreement referred to below
Re: WILSON GREATBATCH LTD.
Ladies and Gentlemen:
We have acted as counsel to Wilson Greatbatch Ltd. (the "BORROWER"), Greatbatch-Hittman, Inc. ("HITTMAN"), GB Acquisition Co., Inc. ("GBAC"), Wilson Greatbatch Technologies, Inc. (the "PARENT") and WGL Intermediate Holdings, Inc. ("HOLDINGS" and together with the Borrower, Hittman, GBAC and the Parent, collectively, the "COMPANIES") and Battery Engineering, Inc. ("BATTERY" and together with the Companies, the "LOAN PARTIES") in connection with the preparation, execution and delivery of, and the consummation of the transactions contemplated by, the Amended and Restated Credit Agreement dated as of June 18, 2001 (the "CREDIT AGREEMENT"), by and among the Borrower, the Lenders party thereto and Manufacturers and Traders Trust Company, as agent for the Lenders (the "ADMINISTRATIVE AGENT").
This opinion is rendered to you pursuant to SECTION 4.01(B) of the Credit Agreement. Capitalized terms defined in the Credit Agreement, used herein, and not otherwise defined herein, shall have the meanings given them in the Credit Agreement.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the following documents:
(a) the Credit Agreement;
(b) the Term Loan Note and the Revolving Credit Note issued by the Borrower on the date hereof;
(c) the Security Agreement and Intellectual Property Security Agreements executed by each of the Borrower, Hittman and Battery (the "EXISTING SECURITY AGREEMENTS");
(d) the Security Agreement and the Intellectual Property Security Agreements executed by GBAC (the "GBAC SECURITY AGREEMENTS", and together with the Existing Security Agreements, the "SECURITY Documents");

(e) the Pledge Agreement executed by each of the Borrower and Hittman (the "PLEDGE AGREEMENT");
(f) the Guaranty Agreement executed by GBAC (the "GUARANTY");
(g) the Reaffirmation Agreement executed by each Loan Party other than GBAC; and
(h) the financing statements on Form UCC-1, each naming a Loan Party as debtor and the Administrative Agent as secured party (the "FINANCING STATEMENTS") to be filed in the Uniform Commercial Code Filing Offices in the jurisdictions listed on SCHEDULE I hereto (each a "RELEVANT JURISDICTION").
The agreements specified in clauses (a) through (g) above are collectively referred to as the "AGREEMENTS".
In addition, we have examined such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Loan Parties, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to these opinions that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Loan Parties and upon the representations and warranties of the Loan Parties contained in the Agreements. We have also assumed (i) the valid existence of Battery, (ii) that Battery has the requisite corporate power and authority to enter into and perform the Agreements to which it is a party and (iii) the due authorization, execution and delivery of such Agreements by Battery. As used herein "to our knowledge" and "of which we are aware" mean the conscious awareness of facts or other information by any lawyer in our firm actively involved in the transactions contemplated by the Agreements.
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:
1. The Borrower is a corporation validly existing and in good standing under the law of the State of New York and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
2. Each of the Companies (other than the Borrower and Battery) is a corporation validly existing and in good standing under the law of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
3. Each Company has all requisite corporate power and authority to execute and deliver the Agreements to which it is a party and to perform its respective obligations thereunder. The execution, delivery and performance by each of the Companies of the Agreements to which it is a party have been duly authorized by all necessary corporate action on the part of such Company. Each Company has duly executed and delivered the Agreements to which it is a party and (assuming the due
2

authorization, execution and delivery thereof by the other parties thereto) such Agreements constitute the legal, valid and binding obligations of each Loan Party party thereto, enforceable against such Loan Party in accordance with their respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity), and except that (a) rights to indemnification and contribution thereunder may be limited by federal or state securities laws or public policy relating thereto, (b) no opinion is expressed with respect to rights of set-off by participants under the Credit Agreement and (c) certain remedial provisions of each of the Security Documents and the Pledge Agreement are or may be unenforceable in whole or in part under the laws of the State of New York, but the inclusion of such provisions does not affect the validity of the Security Documents or the Pledge Agreement, and each of the Security Documents and the Pledge Agreement contains adequate provisions for the practical realization of the rights and benefits afforded thereby. No opinion is expressed in this paragraph as to the attachment, perfection or priority of any liens granted pursuant to the Security Documents or the Pledge Agreement.
4. The execution and delivery by each Loan Party of the Agreements to which it is a party and the performance by such Loan Party of its respective obligations thereunder will not conflict with, constitute a default under or violate (i) any of the terms, conditions or provisions of the Certificate of Incorporation or by-laws of such Loan Party, (ii) any of the terms, conditions or provisions of any material document, agreement or other instrument to which such Loan Party is a party or by which it is bound of which we are aware, (iii) New York or federal law or regulation, including, without limitation, Regulations U and X of the Board of Governors of the Federal Reserve System (other than federal and state securities or blue sky laws, as to which we express no opinion in this paragraph), or (iv) any judgment, writ, injunction, decree, order or ruling of any court or governmental authority binding on such Loan Party of which we are aware.
5. To our knowledge, there is no litigation, proceeding or governmental investigation pending or overtly threatened against any Loan Party that relates to any of the transactions contemplated by the Agreements or which, if adversely determined, would have a material adverse effect on the business, assets or financial condition of the Loan Parties taken as a whole.
6. No consent, approval, waiver, license or authorization or other action by or filing with any New York or federal governmental authority is required in connection with the execution and delivery by each Loan Party of the Agreements to which it is a party, the consummation by the Loan Parties of the transactions contemplated thereby or the performance by each Loan Party of its obligations thereunder, except for the filings in connection with perfecting security interests and federal and state securities or blue sky laws, as to which we express no opinion in this paragraph.
7. (a) Assuming the filing of the applicable Financing Statements on Form UCC-1 in the filing offices in the Relevant Jurisdictions, the execution and delivery of each Security Document creates in favor of the Administrative Agent, a valid and duly perfected security interest in the "Collateral" (as defined in each such Security Document) to the extent perfection of a security interest in the Collateral may be perfected by the filing of a financing statement under the Uniform Commercial Code in effect in the State of New York (the "UCC"), as security for the "Obligations" (as defined in each such Security Agreement).
(b) Assuming (i) delivery and continued possession in New York by the Administrative Agent (the "PLEDGEE") of all certificates that represent the "Pledged Stock" (as defined in the Pledge Agreement), together with stock powers properly executed in blank with respect thereto, and
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(ii) that the Pledgee was without notice of any adverse claim (as such phrase is defined in Section 8-102 of the UCC) with respect to the Pledged Stock, the execution and delivery of the Pledge Agreement creates a valid and duly perfected lien on and security interest in the Pledged Stock, as security for the Obligations (as defined in the Pledge Agreement), which is free of any adverse claim.
The opinion in subparagraph (a) and, with respect to subclause A below, subparagraph (b), are subject to the following exceptions:
A. that with respect to the rights in or title to the Collateral of any Grantor (as such term is defined in the Security Documents and the Pledge Agreement), we express no opinion, and have assumed that such Grantor has title to the Collateral;
B. to the extent that perfection of a lien or security interest in any Collateral is governed by the law of any jurisdiction other than the State of New York, we express no opinion;
C. that with respect to any Collateral which is or may become fixtures (within the meaning of Section 9-313 of the UCC) we express no opinion; and
D. that with respect to transactions excluded from Article 9 of the UCC by Section 9-104 thereof, we express no opinion.
The opinion set forth in subparagraph (b) is subject to the following exceptions and assumption:
A. that with respect to (i) federal tax liens accorded priority under law and (ii) liens created under Title IV of the Employee Retirement Income Security Act of 1974, as amended, which are properly filed after the earlier of the date hereof and the date of such Pledge Agreement, we express no opinion as to the relative priority of such liens and the security interests created by the Pledge Agreement in the Pledged Stock or as to whether such liens may be adverse claims; and
B. that with respect to any claim (including for taxes) in favor of any state or any of its respective agencies, authorities, municipalities or political subdivisions which claim is given lien status and/or priority under any law of such state, we express no opinion as to the relative priority of such liens and the security interests created by the Pledge Agreement in the Pledged Stock or as to whether such liens maybe adverse claims; and
In addition, the opinions in subparagraphs (a) and (b) are subject to (i) the limitations on perfection of security interests in proceeds resulting from the operation of Section 9-306 of the UCC; (ii) the limitations with respect to buyers in the ordinary course of business imposed by Sections 9-307 and 9-308 of the UCC; (iii) the limitations with respect to documents, instruments and securities imposed by Sections 8-302, 9-304 and 9-309 of the UCC; (iv) the provisions of Section 9-203 of the UCC relating to the time of attachment; and (v) Section 552 of Title 11 of the United States Code (the "BANKRUPTCY CODE") with respect to any Collateral acquired by any Loan Party subsequent to the commencement of a case against or by such Loan Party under the Bankruptcy Code.
We further assume (a) that all filings will be timely made and duly filed as necessary (i) in the event of a change in the name, identity or corporate structure of any Loan Party, (ii) in the event of a change in location of the Collateral, or the location of the principal office of any Loan Party or the place where any Loan Party keeps its books and records, and (iii) to continue to maintain the effectiveness of the original filings, and (b) that any money, instruments, documents or securities which may constitute part of the Collateral are and will remain in the Pledgee's possession.
4

The opinions expressed herein are limited to the laws of the State of New York, the corporate laws of the State of Delaware and federal laws of the United States, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit in connection with the transactions described herein. This opinion may not be used or relied upon by any other person, nor may this letter or any copies hereof be furnished to a third party, filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent, other than an assignee permitted under SECTION 9.04 of the Credit Agreement.
Very truly yours,

SCHEDULE I
UCC FILING JURISDICTIONS
New York Secretary of State

EXHIBIT C
FORM OF REPLACEMENT TERM NOTE
$80,000,000.00 June __, 2001 Buffalo, New York
FOR VALUE RECEIVED, the undersigned, WILSON GREATBATCH LTD., a New York corporation (the "Borrower"), promises to pay to the order of MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as Administrative Agent (the "ADMINISTRATIVE AGENT"), the principal sum of EIGHTY MILLION DOLLARS ($80,000,000.00) representing Term Loans made pursuant to that certain Amended and Restated Credit Agreement, dated as of June __, 2001, by and among the Borrower, the Lenders party thereto and the Administrative Agent (as amended, supplemented, amended and restated or otherwise modified from time to time, the "AMENDED AND RESTATED CREDIT AGREEMENT"), such principal payment to be made in accordance with the terms of the Amended and Restated Credit Agreement. All capitalized terms used in this Replacement Term Note, unless otherwise specifically defined herein, shall have the meaning ascribed to them in the Amended and Restated Credit Agreement.
The Borrower also further agrees to pay interest on the unpaid principal amount hereof from time to time outstanding from the date hereof until maturity (whether by acceleration or otherwise) and, after maturity, until paid, at the rates per annum and on the dates specified in the Amended and Restated Credit Agreement.
All payments of principal of and interest on this Replacement Term Note shall be made at the Principal Office of the Administrative Agent in lawful money of the United States and in immediately available funds, or at such other place as the Administrative Agent shall designate in writing to the Borrower.
This Replacement Term Note is a Term Note referred to in, and evidences indebtedness incurred under, the Amended and Restated Credit Agreement, to which reference is made for a description of the security for this Replacement Term Note and for a statement of the terms and conditions on which the Borrower is permitted to make prepayments and repayments of principal of the indebtedness evidenced by this Note and on which such indebtedness may be declared to be immediately due and payable. Unless otherwise defined, terms used herein have the meanings provided in the Amended and Restated Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally waive diligence, presentment for payment, demand, protest and notice of dishonor and non-payment of this Note.
This Replacement Term Note shall be construed under, and governed by the laws of the State of New York, without regard to its conflict of laws rules which would make the laws of another jurisdiction applicable.

This Replacement Term Note is given in replacement of and substitution for, but not in payment of, the Term Note, dated January 19, 2001 in the original principal amount of $40,000,000.00 issued by the Borrower to the Administrative Agent.
WILSON GREATBATCH LTD.
By _____________________________
Name: __________________________
Title: _________________________
2

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                       Basis of
                       Interest                Amount of   Aggregate
                       Rate          Libor     Principal   Unpaid      Notation
Date Loan  Amount of   (Prime Rate   Period    Paid or     Principal   Made By
Made       Loan Made   or Libor      Dates     Prepaid     Balance     And Date
                       Rate)
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4

EXHIBIT D
FORM OF
REPLACEMENT REVOLVING CREDIT NOTE
$20,000,000.00 June __, 2001 Buffalo, New York
FOR VALUE RECEIVED, the undersigned, WILSON GREATBATCH LTD., a New York corporation (the "Borrower"), hereby promises to pay to the order of MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as Administrative Agent for the Lenders, (the "Administrative Agent"), on or before, July 1, 2006, the principal amount of TWENTY MILLION DOLLARS ($20,000,000.00) or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans made by the Lenders to the Borrower pursuant to the Amended and Restated Credit Agreement dated as of June ___, 2001, by and among the Borrower, the Lenders party thereto and the Administrative Agent (as amended, supplemented, amended and restated or otherwise modified from time to time, the "AMENDED AND RESTATED CREDIT AGREEMENT"). All capitalized terms used in this Replacement Revolving Credit Note, unless otherwise specifically defined herein, shall have the meaning ascribed to them in the Amended and Restated Credit Agreement.
The Borrower further agrees to pay interest on the unpaid principal amount of the Revolving Credit Loans outstanding from time to time under this Replacement Revolving Credit Note at the times and at the rates per annum as provided in the Amended and Restated Credit Agreement.
All payments of principal of and interest on this Replacement Revolving Credit Note shall be made at the Principal Office of the Administrative Agent in lawful money of the United States and in immediately available funds, or at such other place as the Administrative Agent shall designate in writing to the Borrower.
The Borrower hereby waives diligence, presentment, protest and demand, and also notice of protest, demand, dishonor and nonpayment of this Replacement Revolving Credit Note.
This Replacement Revolving Credit Note shall be construed under, and governed by the laws of the State of New York, without regard to its conflict of laws rules which would make the laws of another jurisdiction applicable.
This Replacement Revolving Credit Note is a Replacement Revolving Credit Note referred to in, and is entitled to the benefits of, the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement, among other things, contains provisions for acceleration of the maturity of this Replacement Revolving Credit Note upon the happening of

certain stated events and also for prepayments on account of the principal of this Replacement Revolving Credit Note prior to maturity upon the terms and conditions therein specified.
This Replacement Revolving Credit Note is given in replacement of and substitution for, but not in payment of, the Revolving Credit Note, dated January 12, 2001 in the maximum principal amount of $20,000,000.00 issued by the Borrower to the Administrative Agent.
WILSON GREATBATCH LTD.
By:__________________________
Name:________________________
Title:_______________________
2

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                       Basis of
                       Interest                Amount of   Aggregate
                       Rate          Libor     Principal   Unpaid      Notation
Date Loan  Amount of   (Prime Rate   Period    Paid or     Principal   Made By
Made       Loan Made   or Libor      Dates     Prepaid     Balance     And Date
                       Rate)
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EXHIBIT E
FORM OF REQUEST FOR CREDIT LINE LOAN
Date: ___________, ____
To: Manufacturers and Traders Trust Company, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement dated as of June __, 2001 (as from time to time amended, extended, restated, modified or supplemented, the "CREDIT AGREEMENT") among Wilson Greatbatch Ltd., a Delaware corporation (the "BORROWER"), the Lenders as a Party thereto, and Manufacturers and Traders Trust Company, as Administrative Agent (the "ADMINISTRATIVE AGENT"). Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement.
The undersigned hereby requests a Borrowing of Credit Line Loans on ___________, in the aggregate amount of $__________ consisting of the following:
/ / ALR Borrowing in the amount of $______ with an Interest Period of ____ months.
/ / ABR Borrowing in the amount of $________.
The foregoing request complies with the requirements of SECTION 2.03 of the Credit Agreement. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the above date, before and after giving effect and to the application of the proceeds of the Credit Line Loans requested hereunder:
(a) The representations and warranties made by Borrower in the Agreement, or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection therewith, are and will be correct on and as of the date of this Revolving Credit Borrowing, except to the extent that such representations and warranties specifically refer to any earlier date; and
(b) no Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to this Revolving Credit Borrowing.
WILSON GREATBATCH LTD.
By: _______________________________
Name: _____________________________
Title: ____________________________
4

FORM OF REQUEST FOR SWINGLINE LOAN
Date: ___________, ____
To: Manufacturers and Traders Trust Company, as Swingline Lender and as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement dated as of June __, 2001 (as from time to time amended, extended, restated, modified or supplemented, the "CREDIT AGREEMENT") among Wilson Greatbatch Ltd., a Delaware corporation (the "BORROWER"), the Lenders as a Party thereto, and Manufacturers and Traders Trust Company, as Administrative Agent (the "ADMINISTRATIVE AGENT"). Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement.
/ / The undersigned hereby requests a Borrowing of Swingline Loan on ___________, in the aggregate amount of $__________. Such Borrowing shall consist of one (1) ABR Borrowing.
The foregoing request complies with the requirements of SECTION 2.04 of the Credit Agreement. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the above date, before and after giving effect and to the application of the proceeds of the Swingline Loan requested hereunder:
(a) The representations and warranties made by Borrower in the Agreement, or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection therewith, are and will be correct on and as of the date of this Revolving Credit Borrowing, except to the extent that such representations and warranties specifically refer to any earlier date; and
(b) no Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to this Revolving Credit Borrowing.
WILSON GREATBATCH LTD.
By: _______________________________
Name: _____________________________
Title: ____________________________
5

EXHIBIT F1
FORM OF INTEREST ELECTION REQUEST
FOR TERM LOAN BORROWING
Date: ___________, ____
To: Manufacturers and Traders Trust Company, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement dated as of June __, 2001 (as from time to time amended, extended, restated, modified or supplemented, the "CREDIT AGREEMENT") among Wilson Greatbatch Ltd., a Delaware corporation (the "BORROWER"), the Lenders as a Party thereto, and Manufacturers and Traders Trust Company, as Administrative Agent (the "ADMINISTRATIVE AGENT"). Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement.
1. The undersigned hereby requests a [continuation] [conversion] of a Borrowing of Term Loans on ___________, 200_, (the "Effective Date") in the aggregate amount of $__________.
2. The Borrowing of Term Loans is to be [converted into]
[continued as]:
/ / ALR Borrowing with an Interest Period of ____ months.
/ / ABR Borrowing.
The foregoing request complies with the requirements of SECTION 2.07 of the Credit Agreement. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the above date, before and after giving effect and to the continuation or conversion of the Borrowing of Term Loans requested hereunder:
(a) The representations and warranties made by Borrower in the Agreement, or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection therewith, are and will be correct on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to any earlier date; and
(b) no Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to this Interest Election Request.
WILSON GREATBATCH LTD.
By: _______________________________
Name: _____________________________
Title: ____________________________
6

EXHIBIT F2
FORM OF INTEREST ELECTION REQUEST
FOR REVOLVING CREDIT BORROWING
Date: ___________, ____
To: Manufacturers and Traders Trust Company, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement dated as of June __, 2001 (as from time to time amended, extended, restated, modified or supplemented, the "CREDIT AGREEMENT") among Wilson Greatbatch Ltd., a Delaware corporation (the "BORROWER"), the Lenders as a Party thereto, and Manufacturers and Traders Trust Company, as Administrative Agent (the "ADMINISTRATIVE AGENT"). Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement.
1. The undersigned hereby requests a [continuation] [conversion] of a Borrowing of Revolving Credit Loans on ___________, 200_, (the "Effective Date") in the aggregate amount of $__________.
2. The Borrowing of Revolving Credit Loans is to be [converted into]
[continued as]:
/ / ALR Borrowing with an Interest Period of ____ months.
/ / ABR Borrowing.
The foregoing request complies with the requirements of SECTION 2.07 of the Credit Agreement. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the above date, before and after giving effect and to the continuation or conversion of a Borrowing of Revolving Credit Loans requested hereunder:
(a) The representations and warranties made by Borrower in the Agreement, or which are contained in any certificate, document or financial or other statement furnished at any time under or in connection therewith, are and will be correct on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to any earlier date; and
(b) no Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to this Interest Election Request.
WILSON GREATBATCH LTD.
By: _______________________________
Name: _____________________________
Title: ____________________________
7

EXHIBIT G
WILSON GREATBATCH LTD.

COMPLIANCE CERTIFICATE

From: WILSON GREATBATCH LTD. (the "Borrower")
To: MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent (the "Administrative Agent")
Date: __________, 200___
The undersigned certifies that he is the _________ of the Borrower and that as ________ of the Borrower, the undersigned is authorized to execute and deliver this Certificate in the name and on behalf of the Borrowers. All terms not otherwise defined herein shall have the meaning ascribed to such term in the Credit Agreement (as defined below). The undersigned further certifies that:
1. This Certificate is being delivered on the date first written above in connection with Section 5.01(c) of the Amended and Restated Credit Agreement, dated as of June ___, 2001 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Credit Agreement") among the Borrower, the Lenders party thereto (the "Lenders") and the Administrative Agent. All capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Credit Agreement.
2. Attached hereto is a true, correct and complete copy of the Consolidated financial statements of the Borrower and its Subsidiaries for the fiscal [quarter] [year] ended _______, ______ required to be delivered to the Administrative Agent pursuant to Section 5.01 of the Credit Agreement setting forth in each case in comparative form, the figures for the previous fiscal
[quarter] [year]. Such Consolidated and Consolidating financial statements present fairly in all material respects the financial condition and results of operations on a Consolidated basis in accordance with GAAP consistently applied, subject, in the case of the quarterly financial statements, to normal year-end audit adjustments and the absence of footnotes.

3. During the fiscal [quarter] [year] ended ________, _______ (the "Measurement Period") the Borrower has observed or performed all of its covenants and other agreements and satisfied every condition contained in the Credit Agreement, the Term Note, the Revolving Credit Note and all other Loan Documents to be observed, performed or satisfied by it.
4. For the Measurement Period, the Borrower and its Guarantors have complied with each of the financial covenants in Section 6.10 of the Credit Agreement. Attached to this Certificate in Schedule A are detailed calculations demonstrating the Borrower's compliance with each of said financial covenants.
5. As of the date of this Certificate no Default or Event of Default has occurred and is continuing. If an Event of Default has occurred and is continuing, attached hereto is a description specifying the details thereof and any action taken or proposed to be taken with respect thereto.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate in the name and on behalf of the Borrower on and as of the date first written above.
WILSON GREATBATCH, INC.
By: _____________________________
Title:
2

SCHEDULE A
FINANCIAL CALCULATIONS
3

EXHIBIT 21.1
SUBSIDIARIES OF WILSON GREATBATCH TECHNOLOGIES, INC.

CORPORATION                                                   INCORPORATED
-----------                                                   ------------
WGL Intermediate Holdings, Inc.                               Delaware
(direct subsidiary of Wilson Greatbatch Techologies, Inc.)

Wilson Greatbatch Ltd.                                        New York
(direct subsidiary of WGL Intermediate Holdings, Inc.)

Greatbatch-Hittman, Inc.                                      Delaware
(direct subsidiary of Wilson Greatbatch Ltd.)

Battery Engineering, Inc.                                     Massachusetts
(direct subsidiary of Wilson Greatbatch Ltd.)

Wilson Greatbatch Foreign Sales Corporation                   Barbados
(direct subsidiary of Wilson Greatbatch Ltd.)

GB Acquisition Co., Inc.                                      Delaware
(direct subsidiary of Greatbatch-Hittman, Inc.)

EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Wilson Greatbatch Technologies, Inc. on Form S-1 of our report dated January 24, 2001, appearing in the Prospectus, which is a part of this Registration Statement, and of our report dated January 24, 2001 relating to the financial statement schedule appearing elsewhere in this Registration Statement.
We also consent to the reference to us under the headings "Selected Consolidated Financial Data" and "Experts" in such Prospectus.
DELOITTE & TOUCHE LLP
Buffalo, New York
June 19, 2001

EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the use of our report dated May 25, 2001, with respect to the financial statements of the Sierra-KD Components Division included in the Registration Statement (Form S-1) and related Prospectus of Wilson Greatbatch Technologies, Inc. for the registration of 6,900,000 shares of its common stock.
ERNST & YOUNG LLP
San Diego, California
June 18, 2001