Document:

Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT

                                      among

                                GREATBATCH, INC.,

                                   as Issuer,

                                       and

                  EACH OF THE INITIAL PURCHASERS PARTY HERETO,

                              as Initial Purchasers

                           Dated as of March 28, 2007

<PAGE>

         REGISTRATION RIGHTS AGREEMENT dated as of March 28, 2007 among
Greatbatch, Inc., a Delaware corporation (the "Company"), and each of the
initial purchasers of the Company's Debentures (as defined below) named in
Exhibit A hereto (each, an "Initial Purchaser" and collectively, the "Initial
Purchasers") pursuant to an Exchange and Purchase Agreement (each, an "Exchange
Agreement" and collectively, the "Exchange Agreements"), between the Company and
each of the Initial Purchasers. In order to induce each Initial Purchaser to
enter into an Exchange Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.

         The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Debentures (as
defined herein) and the beneficial owners from time to time of the Underlying
Common Stock (as defined herein) issued upon conversion of the Debentures (each
of the foregoing a "Holder" and together the "Holders"), as follows:

         Section  1.   Definitions.   Capitalized   terms  used  herein  without
definition  shall  have  their  respective  meanings  set forth in the  Exchange
Agreement.  As used in this  Agreement,  the  following  terms  shall  have  the
following meanings:

         "Additional Debentures" has the meaning set forth in Section 8(b)
hereof.

          "Affiliate" means with respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.

         "Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

         "Common Stock" means the shares of common stock, $0.001 par value per
share, of the Company, together with the Rights evidenced by such common stock
to the extent provided in the Stockholder Rights Agreement dated as of March 18,
2002 between the Company and Mellon Investor Services LLC, and any other shares
of common stock as may constitute "Common Stock" for purposes of the Indenture,
including the Underlying Common Stock.

         "Conversion Price" has the meaning assigned such term in the Indenture.

         "Damages Accrual Period" has the meaning set forth in Section 2(e)
hereof.

         "Damages Payment Date" means each June 15 and December 15.

         "Debentures" means the 2 1/4% Convertible Subordinated Debentures Due
2013 of the Company to be issued under the Indenture.

         "Deferral Notice" has the meaning set forth in Section 3(h) hereof.

<PAGE>

         "Deferral Period" has the meaning set forth in Section 3(h) hereof.

         "Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.

         "Effectiveness Period" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

         "Event" has the meaning set forth in Section 2(e) hereof.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         "Exchange Agreement" has the meaning set forth in the preamble hereof.

         "Filing Deadline Date" has the meaning set forth in Section 2(a)
hereof.

         "Holder" has the meaning set forth in the second paragraph of this
Agreement.

         "Indenture" means the Indenture, dated as of March 28, 2007, between
the Company and Manufacturers and Traders Trust Company, as trustee, pursuant to
which the Debentures are being issued.

         "Initial Purchasers" has the meaning set forth in the preamble hereof.

         "Initial Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.

         "Issue Date" means the first date of original issuance of the
Debentures.

         "Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.

         "Material Event" has the meaning set forth in Section 3(h) hereof.

         "New Holder" has the meaning set forth in Section 8(b) hereof.

         "Notice Holder" means, on any date, any Holder that has delivered a
Selling Securityholder Questionnaire to the Company on or prior to such date.

         "Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

         "Record Holder" means with respect to any Damages Payment Date relating
to any Debentures or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Debenture or Underlying Common
Stock on the June 1 immediately preceding a Damages Payment Date occurring on a
June 15, and on the December 1 immediately preceding a Damages Payment Date
occurring on a December 15.

                                       2
<PAGE>

         "Registrable Securities" means the Debentures until such Debentures
have been converted into or exchanged for the Underlying Common Stock and, at
all times subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto under Rule 144(k) or (iii) its
sale to the public pursuant to Rule 144 (or any similar provision then in force,
but not Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture is
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

         "Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

         "Restricted  Securities"  means  "Restricted  Securities" as defined in
Rule 144.

         "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

         "Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

         "Selling Securityholder Questionnaire" means a written notice delivered
to the Company containing substantially the information called for by the
Selling Securityholder Questionnaire attached as Exhibit B hereto.

         "Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.

         "Special Counsel" means counsel as shall be specified by the Holders of
a majority of the Registrable Securities, but which may, with the written
consent of the Initial Purchasers (which shall not be unreasonably withheld), be
a nationally recognized law firm experienced in securities law matters
designated by the Company, the reasonable fees and expenses of which will be
paid by the Company pursuant to Section 5 hereof. For purposes of determining
the holders of a majority of the Registrable Securities in this definition,
Holders of Debentures shall be deemed to be the Holders of the number of shares
of Underlying Common Stock into which such Debentures are or would be
convertible as of the date the consent is requested.

                                       3
<PAGE>

         "Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.

         "TIA" means the Trust Indenture Act of 1939, as amended.

         "Trustee" means Manufacturers and Traders Trust Company, the Trustee
under the Indenture.

         "Underlying Common Stock" means the Common Stock into which the
Debentures are convertible or issued upon any such conversion.

         Section 2. Shelf Registration.

               (a) The  Company  shall  prepare and file or cause to be prepared
and filed with the SEC, as soon as practicable but in any event by the date (the
"Filing  Deadline  Date") thirty (30) days after the Issue Date, a  Registration
Statement for an offering to be made on a delayed or continuous  basis  pursuant
to Rule 415 of the Securities Act (a "Shelf Registration Statement") registering
the  resale  from  time to time by  Holders  thereof  of all of the  Registrable
Securities  (the  "Initial  Shelf  Registration  Statement").  The Initial Shelf
Registration  Statement  shall  be on  Form  S-3  or  another  appropriate  form
permitting  registration  of such  Registrable  Securities  for  resale  by such
Holders in accordance  with the methods of  distribution  elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
its reasonable best efforts to cause the Initial Shelf Registration Statement to
be declared effective under the Securities Act as promptly as is practicable but
in any event by the date (the "Effectiveness Deadline Date") that is ninety (90)
days after the Issue Date, and to keep the Initial Shelf Registration  Statement
(or any Subsequent Shelf Registration  Statement)  continuously  effective under
the Securities Act until the expiration of the Effectiveness Period. At the time
the Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice  Holder on or prior to the date ten (10)  Business Days prior to
such time of  effectiveness  shall be named as a selling  securityholder  in the
Initial Shelf Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers of Registrable
Securities in accordance  with  applicable  law. None of the Company's  security
holders (other than the Holders of Registrable  Securities) shall have the right
to include any of the Company's securities in the Shelf Registration Statement.

               (b) If the Initial Shelf Registration Statement or any Subsequent
Shelf  Registration  Statement ceases to be effective for any reason at any time
during the Effectiveness  Period (other than because all Registrable  Securities
registered  thereunder  shall have been  resold  pursuant  thereto or shall have
otherwise  ceased  to be  Registrable  Securities),  the  Company  shall use its
reasonable best efforts to obtain the prompt  withdrawal of any order suspending
the  effectiveness  thereof,  and in any event shall within  thirty (30) days of
such  cessation of  effectiveness  amend the Shelf  Registration  Statement in a
manner reasonably  expected to obtain the withdrawal of the order suspending the
effectiveness  thereof,  or  file an  additional  Shelf  Registration  Statement
covering  all of  the  securities  that  as of  the  date  of  such  filing  are
Registrable  Securities (a  "Subsequent  Shelf  Registration  Statement").  If a
Subsequent  Shelf  Registration  Statement is filed,  the Company  shall use its
reasonable best efforts to cause the Subsequent Shelf Registration  Statement to
become  effective  as promptly as is  practicable  after such filing and to keep
such  Registration  Statement  (or  subsequent  Shelf  Registration   Statement)
continuously effective until the end of the Effectiveness Period.

                                       4
<PAGE>

               (c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules,  regulations or  instructions  applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the  Securities  Act or as necessary to name a Notice Holder as a
selling securityholder pursuant to Section (d) below.

               (d)  Each  Holder  agrees  that if  such  Holder  wishes  to sell
Registrable  Securities  pursuant to a Shelf Registration  Statement and related
Prospectus,  it will do so only in accordance with this Section 2(d) and Section
3(h) of this Agreement.  Following the date that the Initial Shelf  Registration
Statement  is  declared  effective,  each  Holder  wishing  to sell  Registrable
Securities  pursuant to a Shelf  Registration  Statement and related  Prospectus
agrees to deliver a Selling Securityholder Questionnaire to the Company at least
ten  (10)  Business  Days  prior to any  intended  distribution  of  Registrable
Securities under the Shelf Registration  Statement.  From and after the date the
Initial Shelf Registration  Statement is declared effective,  the Company shall,
as promptly as practicable after the date a Selling Securityholder Questionnaire
is delivered  pursuant to Section  8(c),  and in any event upon the later of (x)
fifteen (15)  Business  Days after such date or (y) fifteen (15)  Business  Days
after  the  expiration  of any  Deferral  Period  in  effect  when  the  Selling
Securityholder Questionnaire is delivered or put into effect within fifteen (15)
Business Days of such delivery date:

                    (i) if  required  by  applicable  law,  file  with the SEC a
post-effective  amendment to the Shelf Registration Statement or prepare and, if
required by applicable  law,  file a supplement  to the related  Prospectus or a
supplement  or amendment to any  document  incorporated  therein by reference or
file any other  required  document so that the Holder  delivering  such  Selling
Securityholder  Questionnaire is named as a selling  securityholder in the Shelf
Registration  Statement and the related Prospectus in such a manner as to permit
such  Holder  to  deliver  such  Prospectus  to  purchasers  of the  Registrable
Securities in accordance  with  applicable  law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its reasonable
best efforts to cause such  post-effective  amendment  to be declared  effective
under the Securities Act as promptly as is practicable,  but in any event by the
date (the "Amendment  Effectiveness Deadline Date") that is forty-five (45) days
after the date such  post-effective  amendment  is required by this clause to be
filed;

                    (ii)  provide  such  Holder  copies of any  documents  filed
pursuant to Section 2(d)(i); and

                    (iii)  notify such Holder as promptly as  practicable  after
the effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i);

provided, that if such Selling Securityholder Questionnaire is delivered during
a Deferral Period, the Company shall so inform the Holder delivering such
Selling Securityholder Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(h). Notwithstanding anything contained herein to the
contrary, (i) the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Registration Statement
or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall
be extended by up to ten (10) Business Days from the expiration of a Deferral
Period (and the Company shall incur no obligation to pay Liquidated Damages
during such extension) if such Deferral Period shall be in effect on the
Amendment Effectiveness Deadline Date.

                                       5
<PAGE>

               (e) The  parties  hereto  agree that the  Holders of  Registrable
Securities will suffer  damages,  and that it would not be feasible to ascertain
the  extent  of such  damages  with  precision,  if,  other  than  as  permitted
hereunder,

                    (i) the Initial  Shelf  Registration  Statement has not been
filed on or prior to the Filing Deadline Date,

                    (ii) the Initial Shelf  Registration  Statement has not been
declared  effective  under the Securities  Act on or prior to the  Effectiveness
Deadline Date,

                    (iii) the Company has failed to perform its  obligations set
forth in Section 2(d)(i) within the time period required therein,

                    (iv) any  post-effective  amendment to a Shelf  Registration
Statement filed pursuant to Section  2(d)(i) has not become  effective under the
Securities Act on or prior to the Amendment Effectiveness Deadline Date,

                    (v) the aggregate duration of Deferral Periods in any period
exceeds  the number of days  permitted  in respect of such  period  pursuant  to
Section 3(h) hereof, or

                    (vi) the number of  Deferral  Periods in any period  exceeds
the number permitted in respect of such period pursuant to Section 3(h) hereof.

Each event described in any of the foregoing clauses (i) through (vi) is
individually referred to herein as an "Event." For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table set forth below:
<TABLE>
<CAPTION>
<S>                                      <C>                                        <C>

Type of
Event by
 Clause                      Beginning Date                                           Ending Date
--------- ------------------------------------------------------- ------------------------------------------------------
   (i)    Filing Deadline Date                                    the date the Initial Shelf Registration Statement is
                                                                   filed

  (ii)    Effectiveness Deadline Date                             the date the Initial Shelf Registration Statement
                                                                   becomes effective under the Securities Act

  (iii)   the date by which the Company is required to perform    the date the Company performs its obligations set
           its obligations under Section 2(d)(i)                   forth in Section 2(d)(i)

  (iv)    the Amendment Effectiveness Deadline Date               the date the applicable post-effective amendment to a
                                                                   Shelf Registration Statement becomes effective under
                                                                   the Securities Act

   (v)    the date on which the aggregate duration of Deferral    termination of the Deferral Period that caused the
           Periods in any period exceeds the number of days        limit on the aggregate duration of Deferral Periods
           permitted by Section 3(h)                               to be exceeded

  (vi)    the date of commencement of a Deferral Period that      termination of the Deferral Period that caused the
           causes the number of Deferral Periods to exceed the     number of Deferral Periods to exceed the number
           number permitted by Section 3(h)                        permitted by Section 3(h)
</TABLE>

                                       6
<PAGE>

For purposes of this Agreement, Events shall begin on the dates set forth in the
table above and shall continue until the ending dates set forth in the table
above.

         Commencing on (and including) any date that an Event has begun and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "Damages Accrual Period"), the Company shall pay,
as liquidated damages and not as a penalty, to Record Holders of Registrable
Securities an amount (the "Liquidated Damages Amount") accruing, for each day in
the Damages Accrual Period, in respect of any Debenture, at a rate per annum
equal to 0.5% of the aggregate principal amount of such Debenture; provided that
in the case of a Damages Accrual Period that is in effect solely as a result of
an Event of the type described in clause (iii) or (iv) of the preceding
paragraph, such Liquidated Damages Amount shall be paid only to the Holders (as
set forth in the succeeding paragraph) that have delivered Selling
Securityholder Questionnaires that caused the Company to incur the obligations
set forth in Section 2(d) the non-performance of which is the basis of such
Event. Notwithstanding the foregoing, no Liquidated Damages Amount shall accrue
as to any Debentures from and after the earlier of (x) the date such Debenture
is no longer a Registrable Security and (y) expiration of the Effectiveness
Period. The rate of accrual of the Liquidated Damages Amount with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events.

         The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damage Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the Debentures
entitled thereto. The Trustee shall be entitled, on behalf of registered holders
of Debentures, to seek any available remedy for the enforcement of this
Agreement, including for the payment of such Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude any Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

         If a Holder has converted some or all of its Debentures into Common
Stock, the Holder will not be entitled to receive the Liquidated Damages Amount
with respect to such Common Stock or the principal amount of the Debentures that
have been so converted. In addition, in no event will the Liquidated Damages
Amount be payable in connection with an Event relating to a failure to register
the Common Stock deliverable upon conversion of the Debentures. For the
avoidance of doubt, if the Company fails to register both the Debentures and the
Common Stock deliverable upon conversion of the Debentures, then the Liquidated
Damages Amount will be payable solely in connection with the Event relating to
the failure to register the Debentures.

                                       7
<PAGE>

         All of the Company's obligations set forth in this Section 2(e) to pay
any Liquidated Damages Amount that is outstanding with respect to any Debenture
at the time such security ceases to be a Registrable Security shall survive
until such time as all such obligations with respect to such Debenture have been
satisfied in full (notwithstanding termination of this Agreement pursuant to
Section 8(k)).

         The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Debentures by reason of the failure of the Shelf
Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

         Section 3. Registration Procedures. In connection with the registration
obligations  of the Company  under  Section 2 hereof,  during the  Effectiveness
Period, the Company shall:

               (a) Prepare  and file with the SEC a  Registration  Statement  or
Registration  Statements  on any  appropriate  form  under  the  Securities  Act
available for the sale of the  Registrable  Securities by the Holders thereof in
accordance with the intended method or methods of distribution  thereof, and use
its reasonable best efforts to cause each such Registration  Statement to become
effective and remain effective as provided  herein;  provided that before filing
any  Registration  Statement or  Prospectus  or any  amendments  or  supplements
thereto with the SEC, furnish to each Initial  Purchaser and the Special Counsel
of such offering,  if any, copies of all such documents  proposed to be filed at
least three (3) Business Days prior to the filing of such Registration Statement
or amendment thereto or Prospectus or supplement thereto.

               (b) Subject to Section  3(h),  prepare and file with the SEC such
amendments and post-effective  amendments to each Registration  Statement as may
be necessary to keep such Registration  Statement continuously effective for the
applicable period specified in Section 2(a); cause the related  Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar  provisions  then in force) under the
Securities  Act;  and use  its  reasonable  best  efforts  to  comply  with  the
provisions  of  the  Securities  Act  applicable  to  it  with  respect  to  the
disposition of all securities covered by such Registration  Statement during the
Effectiveness  Period in accordance with the intended  methods of disposition by
the sellers  thereof set forth in such  Registration  Statement as so amended or
such Prospectus as so supplemented.

               (c) As promptly as practicable give notice to the Notice Holders,
the Initial Purchasers and the Special Counsel (if any) (i) when any Prospectus,
prospectus supplement,  Registration Statement or post-effective  amendment to a
Registration  Statement  has been  filed  with the SEC and,  with  respect  to a
Registration Statement or any post-effective  amendment,  when the same has been
declared  effective,  (ii) of any request,  following the  effectiveness  of the
Initial Shelf Registration Statement under the Securities Act, by the SEC or any
other federal or state  governmental  authority for amendments or supplements to
any Registration Statement or related Prospectus or for additional  information,
(iii) of the  issuance  by the SEC or any other  federal  or state  governmental
authority of any stop order  suspending the  effectiveness  of any  Registration
Statement or the initiation or threatening of any  proceedings for that purpose,
(iv) of the  receipt by the  Company  of any  notification  with  respect to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable  Securities  for  sale  in any  jurisdiction  or the  initiation  or
threatening of any  proceeding  for such purpose,  (v) of the occurrence of, but
not the  nature  of or  details  concerning,  a  Material  Event and (vi) of the
determination by the Company that a  post-effective  amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required  pursuant to Section 3(h)),  state that it constitutes a
Deferral Notice, in which event the provisions of Section 3(h) shall apply.

                                       8
<PAGE>

               (d) Use its  reasonable  best efforts to obtain the withdrawal of
any order  suspending  the  effectiveness  of a  Registration  Statement  or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable  Securities for sale in any jurisdiction in which they
have been  qualified for sale, in either case at the earliest  possible  moment,
and provide immediate notice to each Notice Holder and the Initial Purchasers of
the withdrawal of any such order.

               (e) As promptly as practicable furnish to each Notice Holder, the
Special  Counsel (if any) and the Initial  Purchasers,  upon request and without
charge,  at least one (1) conformed copy of the  Registration  Statement and any
amendment thereto,  including exhibits and all documents  incorporated or deemed
to be incorporated therein by reference.

               (f)  During the  Effectiveness  Period,  deliver  to each  Notice
Holder, the Special Counsel, if any, and the Initial  Purchasers,  in connection
with any sale of Registrable  Securities  pursuant to a Registration  Statement,
without  charge,  as many copies of the Prospectus or  Prospectuses  relating to
such  Registrable  Securities  (including each  preliminary  prospectus) and any
amendment or supplement  thereto as such Notice Holder may  reasonably  request;
and the Company  hereby  consents  (except  during such  periods that a Deferral
Notice is outstanding and has not been revoked) to the use of such Prospectus or
each  amendment or supplement  thereto by each Notice Holder in connection  with
any offering and sale of the Registrable  Securities  covered by such Prospectus
or any amendment or supplement thereto in the manner set forth therein.

               (g) Prior to any public  offering of the  Registrable  Securities
pursuant  to a  Registration  Statement,  use its  reasonable  best  efforts  to
register or qualify or cooperate with the Notice Holders and the Special Counsel
(if any) in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer and
sale  under the  securities  or Blue Sky laws of such  jurisdictions  within the
United States as any Notice Holder reasonably requests in writing (which request
may be  included  in the  Selling  Securityholder  Questionnaire);  prior to any
public offering of the Registrable Securities pursuant to the Shelf Registration
Statement,  use its reasonable  best efforts to keep each such  registration  or
qualification (or exemption therefrom) effective during the Effectiveness Period
in connection with such Notice Holder's offer and sale of Registrable Securities
pursuant to such registration or qualification  (or exemption  therefrom) and do
any and all other acts or things reasonably necessary or advisable to enable the
disposition in such  jurisdictions of such Registrable  Securities in the manner
set forth in the relevant  Registration  Statement  and the related  Prospectus;
provided  that the  Company  will not be  required  to (i)  qualify as a foreign
corporation or as a dealer in securities in any jurisdiction  where it would not
otherwise be required to qualify but for this  Agreement or (ii) take any action
that would  subject it to general  service of process in suits or to taxation in
any such jurisdiction where it is not then so subject.

                                       9
<PAGE>

               (h) Upon (A) the  issuance by the SEC of a stop order  suspending
the  effectiveness  of the Shelf  Registration  Statement or the  initiation  of
proceedings with respect to the Shelf Registration  Statement under Section 8(d)
or 8(e) of the Securities  Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall  contain  any untrue  statement  of a  material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not  misleading,  or (C) the occurrence or existence
of any pending corporate  development that, in the reasonable  discretion of the
Company,  makes  it  appropriate  to  suspend  the  availability  of  the  Shelf
Registration Statement and the related Prospectus:

                    (i) in the case of clause  (B)  above,  subject  to the next
sentence,  as promptly as practicable prepare and file, if necessary pursuant to
applicable law, a post-effective  amendment to such Registration  Statement or a
supplement  to the related  Prospectus or any document  incorporated  therein by
reference or file any other  required  document  that would be  incorporated  by
reference  into  such  Registration   Statement  and  Prospectus  so  that  such
Registration  Statement does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and such Prospectus does not contain
any untrue  statement  of a  material  fact or omit to state any  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
the light of the  circumstances  under which they were made, not misleading,  as
thereafter delivered to the purchasers of the Registrable  Securities being sold
thereunder,  and, in the case of a  post-effective  amendment to a  Registration
Statement,  subject to the next  sentence,  use its  reasonable  best efforts to
cause it to be declared effective as promptly as is practicable, and

                    (ii) give  notice to the  Notice  Holders,  and the  Special
Counsel,  if any, that the availability of the Shelf  Registration  Statement is
suspended (a "Deferral  Notice") and, upon receipt of any Deferral Notice,  each
Notice  Holder  agrees not to sell any  Registrable  Securities  pursuant to the
Registration  Statement  until  such  Notice  Holder's  receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until it
is advised in writing by the Company that the  Prospectus  may be used,  and has
received copies of any additional or supplemental  filings that are incorporated
or deemed incorporated by reference in such Prospectus.

                                       10
<PAGE>

         The Company will use its reasonable best efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event would
not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as in the reasonable
discretion of the Company, such suspension is no longer appropriate. The Company
shall be entitled to exercise its right under this Section 3(h) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay liquidated damages pursuant to
Section 2(e), no more than one (1) time in any three month period or three (3)
times in any twelve month period, and any such period during which the
availability of the Registration Statement and any Prospectus is suspended (the
"Deferral Period") shall, without incurring any obligation to pay liquidated
damages pursuant to Section 2(e), not exceed 30 days; provided that the
aggregate duration of any Deferral Periods shall not exceed 30 days in any three
month period (or 60 days in any three month period in the event of a Material
Event pursuant to which the Company has delivered a second notice as permitted
below) or 90 days in any twelve (12) month period; provided that in the case of
a Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay liquidated damages
pursuant to Section 2(e), deliver to Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the Deferral
Period by up to an additional 30 days, or such shorter period of time as is
specified in such second notice.

               (i) If requested in writing in connection  with a disposition  of
Registrable  Securities  pursuant to a Registration  Statement,  make reasonably
available for inspection  during normal business hours by a  representative  for
the Notice Holders of such Registrable Securities, any broker-dealers, attorneys
and  accountants  retained by such Notice  Holders,  and any  attorneys or other
agents retained by a broker-dealer  engaged by such Notice Holders, all relevant
financial and other records and pertinent  corporate documents and properties of
the Company and its subsidiaries,  and cause the appropriate officers, directors
and employees of the Company and its  subsidiaries to make reasonably  available
for inspection  during normal  business hours on reasonable  notice all relevant
information  reasonably requested by such representative for the Notice Holders,
or any such  broker-dealers,  attorneys or accountants  in connection  with such
disposition,   in  each  case  as  is  customary  for  similar  "due  diligence"
examinations;  provided  that such persons shall first agree in writing with the
Company  that any  non-public  information  shall be kept  confidential  by such
persons and shall be used solely for the  purposes of  exercising  rights  under
this Agreement,  unless (i) disclosure of such  information is required by court
or  administrative  order or is necessary to respond to inquiries of  regulatory
authorities,  (ii) disclosure of such  information is required by law (including
any disclosure  requirements  pursuant to federal  securities laws in connection
with the  filing  of any  Registration  Statement  or the use of any  prospectus
referred  to in  this  Agreement),  (iii)  such  information  becomes  generally
available  to the public  other than as a result of a  disclosure  or failure to
safeguard by any such person or (iv) such information  becomes  available to any
such person from a source other than the Company and such source is not bound by
a confidentiality  agreement, and provided further that the foregoing inspection
and information gathering shall, to the greatest extent possible, be coordinated
on behalf of all the Notice  Holders and the other parties  entitled  thereto by
Special Counsel.  Any person legally compelled to disclose any such confidential
information  made available for inspection shall provide the Company with prompt
prior  written  notice  of such  requirement  so that  the  Company  may  seek a
protective order or other appropriate remedy.

                                       11
<PAGE>

               (j) Comply with all applicable  rules and  regulations of the SEC
and make generally  available to its  securityholders  earning statements (which
need  not  be  audited)  satisfying  the  provisions  of  Section  11(a)  of the
Securities Act and Rule 158 thereunder  (or any similar rule  promulgated  under
the  Securities  Act) for a 12-month  period  commencing on the first day of the
first fiscal  quarter of the Company  commencing  after the effective  date of a
Registration  Statement,  which statements shall be made available no later than
45 days after the end of the 12-month  period or 90 days if the 12-month  period
coincides with the fiscal year of the Company.

               (k) Cooperate  with each Notice  Holder to facilitate  the timely
preparation and delivery of  certificates  representing  Registrable  Securities
sold or to be sold  pursuant to a  Registration  Statement,  which  certificates
shall not bear any restrictive legends, and cause such Registrable Securities to
be in such  denominations  as are permitted by the  Indenture and  registered in
such  names as such  Notice  Holder  may  request  in  writing  at least one (1)
Business Day prior to any sale of such Registrable Securities.

               (l) Provide a CUSIP number for all Registrable Securities covered
by each  Registration  Statement  not  later  than  the  effective  date of such
Registration  Statement  and provide the Trustee and the transfer  agent for the
Common Stock with printed  certificates for the Registrable  Securities that are
in a form eligible for deposit with The Depository Trust Company.

               (m) Cooperate and assist in any filings  required to be made with
the National Association of Securities Dealers, Inc.

               (n)  Upon  (i)  the  filing  of the  Initial  Shelf  Registration
Statement  and  (ii)  the  effectiveness  of  the  Initial  Shelf   Registration
Statement,  announce  the same,  in each case by  release  to  Reuters  Economic
Services and Bloomberg Business News.

         Section 4. Holder's Obligations.  Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable  Securities  pursuant to a  Registration  Statement  or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
Selling Securityholder Questionnaire as required pursuant to Section 2(d) hereof
(including   the   information   required  to  be   included  in  such   Selling
Securityholder  Questionnaire)  and  the  information  set  forth  in  the  next
sentence.  Each  Notice  Holder  agrees  promptly  to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished  to the Company by such  Notice  Holder not  misleading  and any other
information   regarding  such  Notice  Holder  and  the   distribution  of  such
Registrable  Securities as the Company may from time to time reasonably request.
Any  sale  of any  Registrable  Securities  by any  Holder  shall  constitute  a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus  delivered
by such Holder in connection  with such  disposition,  that such Prospectus does
not as of the time of such sale contain any untrue  statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus  does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution  necessary to
make the statements in such Prospectus,  in the light of the circumstances under
which they were made, not misleading.

                                       12
<PAGE>

         Section 5. Registration  Expenses.  The Company shall bear all fees and
expenses  incurred  in  connection  with the  performance  by the Company of its
obligations  under  Sections  2 and 3 of  this  Agreement  whether  or  not  any
Registration  Statement  is declared  effective.  Such fees and  expenses  shall
include,  without  limitation,  all  registration  and filing  fees  (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the  National  Association  of  Securities  Dealers,  Inc.  and (y) of
compliance  with  federal  and  state  securities  or Blue Sky laws  (including,
without limitation,  reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable  Securities under the
laws of such  jurisdictions  as Notice Holders of a majority of the  Registrable
Securities  being sold  pursuant to a  Registration  Statement  may  designate),
printing  expenses   (including,   without  limitation,   expenses  of  printing
certificates for Registrable  Securities in a form eligible for deposit with The
Depository  Trust  Company),  duplication  expenses  relating  to  copies of any
Registration  Statement or Prospectus  delivered to any Holders hereunder,  fees
and  disbursements  of  counsel  for the  Company in  connection  with the Shelf
Registration Statement, reasonable fees and disbursements of the Trustee and its
counsel and of the  registrar  and  transfer  agent for the Common Stock and any
Securities  Act  liability  insurance  obtained  by  the  Company  in  its  sole
discretion.  In addition,  the Company  shall pay the  internal  expenses of the
Company (including,  without  limitation,  all salaries and expenses of officers
and employees  performing legal or accounting duties), the expense of any annual
audit,  the fees and  expenses  incurred in  connection  with the listing by the
Company  of the  Registrable  Securities  on any  securities  exchange  on which
similar  securities  of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company.  Notwithstanding
the  provisions of this Section 5, each seller of Registrable  Securities  shall
pay selling expenses,  including any underwriting discount and commissions,  and
all registration expenses to the extent required by applicable law.

         Section 6. Indemnification and Contribution.

               (a)  Indemnification  by  the  Company.  The  Company  agrees  to
indemnify  and hold  harmless  each Notice  Holder,  each  person,  if any,  who
controls  any  Notice  Holder  within the  meaning  of either  Section 15 of the
Securities  Act or Section 20 of the  Exchange  Act,  and each  affiliate of any
Notice Holder within the meaning of Rule 405 under the  Securities  Act from and
against any and all losses, claims, damages and liabilities (including,  without
limitation,  any legal or other expenses  reasonably incurred in connection with
defending  or  investigating  any such  action  or claim)  caused by any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
Registration  Statement or any amendment thereof, any preliminary  prospectus or
the Prospectus (as amended or  supplemented  if the Company shall have furnished
any  amendments  or  supplements  thereto),  caused by any  omission  or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements therein not misleading,  except insofar as such
losses,  claims,  damages or liabilities are caused by any such untrue statement
or omission or alleged  untrue  statement  or  omission  based upon  information
relating  to any Holder  furnished  to the  Company  in  writing by such  Holder
expressly for use therein;  provided that the indemnification  contained in this
paragraph shall not inure to the benefit of any Holder (or to the benefit of any
person controlling such Holder) on account of any such losses,  claims,  damages
or liabilities  caused by any untrue  statement or alleged  untrue  statement or
omission or alleged omission made in any preliminary prospectus provided in each
case the Company has  performed  its  obligations  under  Section 3(f) hereof if
either  (A)(x)  such Holder  failed to send or deliver a copy of the  Prospectus
with or prior to the delivery of written confirmation of the sale by such Holder
to the person  asserting  the claim from which such losses,  claims,  damages or
liabilities  arise and (y) the  Prospectus  would  have  corrected  such  untrue
statement or alleged untrue statement or such omission or alleged  omission,  or
(B)(x) such untrue  statement or alleged untrue  statement,  omission or alleged
omission is corrected in an amendment or  supplement to the  Prospectus  and (y)
having  previously  been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or  supplemented,  such Holder  thereafter fails to
deliver  such  Prospectus  as so amended or  supplemented,  with or prior to the
delivery of written  confirmation  of the sale of a Registrable  Security to the
person  asserting  the  claim  from  which  such  losses,   claims,  damages  or
liabilities arise.

                                       13
<PAGE>

               (b) Indemnification by Holders.  Each Holder agrees severally and
not jointly to indemnify  and hold harmless the Company and its  directors,  its
officers and each person,  if any, who controls the Company  (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or
any other Holder, to the same extent as the foregoing indemnity from the Company
to such Holder,  but only with reference to information  relating to such Holder
furnished  to the  Company in writing by such Holder  expressly  for use in such
Registration  Statement or Prospectus or amendment or supplement  thereto. In no
event shall the liability of any Holder  hereunder be greater in amount than the
dollar  amount of the  proceeds  received  by such  Holder  upon the sale of the
Registrable  Securities  pursuant to the  Registration  Statement giving rise to
such indemnification obligation.

               (c)  Conduct  of   Indemnification   Proceedings.   In  case  any
proceeding  (including  any  governmental  investigation)  shall  be  instituted
involving  any person in respect of which  indemnity  may be sought  pursuant to
Section  6(a) or 6(b)  hereof,  such  person  (the  "indemnified  party")  shall
promptly  notify the  person  against  whom such  indemnity  may be sought  (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified  party,   shall  retain  counsel  reasonably   satisfactory  to  the
indemnified  party  to  represent  the  indemnified  party  and any  others  the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and  disbursements of such counsel related to such proceeding.  In any such
proceeding,  any  indemnified  party  shall  have the  right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such  indemnified  party unless (i) the  indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such counsel or (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel  would be  inappropriate  due to actual or potential
differing  interests between them. It is understood that the indemnifying  party
shall  not,  in  respect  of the  legal  expenses  of any  indemnified  party in
connection with any proceeding or related  proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate  firm (in addition
to any local  counsel) for all such  indemnified  parties and that all such fees
and  expenses  shall be  reimbursed  as they are  incurred.  Such firm  shall be
designated in writing by, in the case of parties indemnified pursuant to Section
6(a),  the Holders of a majority  (with Holders of  Debentures  deemed to be the
Holders,  for purposes of determining such majority,  of the number of shares of
Underlying  Common Stock into which such  Debentures are or would be convertible
as of the date on which such designation is made) of the Registrable  Securities
covered  by the  Registration  Statement  held by Holders  that are  indemnified
parties  pursuant  to  Section  6(a)  and,  in the case of  parties  indemnified
pursuant to Section  6(b),  the  Company.  The  indemnifying  party shall not be
liable  for any  settlement  of any  proceeding  effected  without  its  written
consent,  but if settled with such  consent or if there be a final  judgment for
the plaintiff,  the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding  the foregoing  sentence,  if at any time an  indemnified  party
shall have requested an indemnifying  party to reimburse the  indemnified  party
for fees and  expenses  of  counsel  as  contemplated  by the  second  and third
sentences  of this  paragraph,  the  indemnifying  party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such  settlement  is entered into more than 30 days after receipt by such
indemnifying  party of the aforesaid  request and (ii) such  indemnifying  party
shall not have reimbursed the indemnified  party in accordance with such request
prior to the date of such settlement.  No indemnifying party shall,  without the
prior written  consent of the  indemnified  party,  effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity  could have been sought  hereunder by such
indemnified party, unless such settlement  includes an unconditional  release of
such indemnified  party from all liability on claims that are the subject matter
of such proceeding.

                                       14
<PAGE>

               (d) Contribution. To the extent that the indemnification provided
for  in  Section  6(a)  or  6(b)  is  unavailable  to an  indemnified  party  or
insufficient in respect of any losses,  claims,  damages or liabilities referred
to  therein,  then each  indemnifying  party  under such  paragraph,  in lieu of
indemnifying such indemnified  party thereunder,  shall contribute to the amount
paid or payable by such  indemnified  party as a result of such losses,  claims,
damages or liabilities  (i) in such  proportion as is appropriate to reflect the
relative benefits received by the indemnifying  party or parties on the one hand
and the indemnified party or parties on the other hand or (ii) if the allocation
provided  by clause  (i)  above is not  permitted  by  applicable  law,  in such
proportion as is appropriate to reflect not only the relative  benefits referred
to in clause (i) above but also the relative fault of the indemnifying  party or
parties  on the one hand and of the  indemnified  party or  parties on the other
hand in  connection  with the  statements  or  omissions  that  resulted in such
losses, claims, damages or liabilities,  as well as any other relevant equitable
considerations.  The  relative  fault  of the  Holders  on the one  hand and the
Company on the other hand shall be  determined  by  reference  to,  among  other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied by the Holders or by the  Company,  and the parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement  or  omission.  The  Holders'  respective  obligations  to  contribute
pursuant to this Section 6 are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement,  and
not joint.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

                                       15
<PAGE>

               (e) The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies  which may  otherwise be available to
an indemnified party at law or in equity, hereunder, under an Exchange Agreement
or otherwise.

               (f) The indemnity and contribution  provisions  contained in this
Section 6 shall remain operative and in full force and effect  regardless of (i)
any termination of this Agreement,  (ii) any investigation  made by or on behalf
of any Holder,  any person controlling any Holder or any affiliate of any Holder
or by or on behalf of the  Company,  its  officers  or  directors  or any person
controlling the Company and (iii) the sale of any Registrable  Securities by any
Holder.

         Section 7. Information Requirements.  The Company covenants that, if at
any time before the end of the  Effectiveness  Period the Company is not subject
to the reporting  requirements  of the Exchange Act, it will  cooperate with any
Holder and take such  further  reasonable  action as any  Holder may  reasonably
request  in writing  (including,  without  limitation,  making  such  reasonable
representations  as any such Holder may reasonably  request),  all to the extent
required from time to time to enable such Holder to sell Registrable  Securities
without  registration  under the  Securities  Act within the  limitation  of the
exemptions  provided  by Rule 144 and Rule  144A  under the  Securities  Act and
customarily taken in connection with sales pursuant to such exemptions. Upon the
written  request of any  Holder,  the  Company  shall  deliver to such  Holder a
written  statement as to whether it has complied with such filing  requirements,
unless such a statement has been  included in the  Company's  most recent report
filed  pursuant to Section 13 or Section 15(d) of Exchange Act.  Notwithstanding
the foregoing,  nothing in this Section 7 shall be deemed to require the Company
to  register  any of its  securities  (other  than the Common  Stock)  under any
section of the Exchange Act.

         Section 8. Miscellaneous.

               (a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement,  enter
into,  any agreement  with respect to its  securities  that  conflicts  with the
rights  granted to the Holders in this  Agreement.  The Company  represents  and
warrants  that the rights  granted to the  Holders  hereunder  do not in any way
conflict  with the rights  granted to the  holders of the  Company's  securities
under any other agreements.

                                       16
<PAGE>

               (b)  Amendments and Waivers.  The  provisions of this  Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority  of the then  outstanding  Underlying  Common  Stock  constituting
Registrable Securities (with Holders of Debentures deemed to be the Holders, for
purposes of this  Section,  of the number of  outstanding  shares of  Underlying
Common Stock into which such  Debentures  are or would be  convertible as of the
date on which such  consent is  requested).  Notwithstanding  the  foregoing,  a
waiver or consent to depart from the provisions  hereof with respect to a matter
that relates  exclusively  to the rights of Holders whose  securities  are being
sold  pursuant  to a  Registration  Statement  and  that  does not  directly  or
indirectly  affect  the  rights of other  Holders  may be given by Holders of at
least a  majority  of the  Registrable  Securities  being  sold by such  Holders
pursuant to such  Registration  Statement;  provided that the provisions of this
sentence may not be amended,  modified or supplemented except in accordance with
the  provisions  of the  immediately  preceding  sentence.  Notwithstanding  the
foregoing two  sentences,  this  Agreement  may be amended by written  agreement
signed by the  Company and the  Initial  Purchasers,  without the consent of the
Holders  of  Registrable  Securities,  to cure any  ambiguity  or to  correct or
supplement any provision  contained herein that may be defective or inconsistent
with any other provision  contained  herein, or to make such other provisions in
regard to matters or  questions  arising  under  this  Agreement  that shall not
adversely  affect the  interests of the Holders of  Registrable  Securities.  In
addition,  notwithstanding  the  foregoing  three  sentences,  if after the date
hereof  the  Company  enters  into  one or more  Exchange  Agreements  to  issue
additional Debentures (the "Additional  Debentures") to such persons or entities
as the Company in its sole discretion may determine (each, a "New Holder"), such
New Holder may,  upon  execution  and delivery by such New Holder of a signature
page to an Exchange  Agreement and this Agreement,  become an Initial  Purchaser
under this  Agreement,  entitled to the benefits and subject to the  obligations
hereunder,  and this Agreement may be amended  without the consent of any Holder
solely to make such New Holder an Initial  Purchaser  party hereto and to update
Exhibit A hereto  to  reflect  the name of and  principal  amount of  Debentures
issued to such New Holder. Each Holder of Registrable  Securities outstanding at
the time of any such amendment,  modification,  supplement, waiver or consent or
thereafter  shall  be bound by any  such  amendment,  modification,  supplement,
waiver or consent  effected  pursuant to this Section  8(b),  whether or not any
notice, writing or marking indicating such amendment, modification,  supplement,
waiver or consent appears on the Registrable  Securities or is delivered to such
Holder.

               (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier  guaranteeing  overnight delivery or by first-class mail, return receipt
requested,  and shall be deemed given (i) when made,  if made by hand  delivery,
(ii) upon confirmation,  if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier,  if made by overnight  courier or (iv) on the
date  indicated on the notice of receipt,  if made by  first-class  mail, to the
parties as follows:

                    (i)                 if  to  Holder,   at  the  most  current
                                        address  given  by  such  Holder  to the
                                        Company  in  a  Selling   Securityholder
                                        Questionnaire or any amendment thereto;

                   (ii)                 if to the Company, to:

                                        Greatbatch, Inc.
                                        9645 Wehrle Drive
                                        Clarence, New York 14031
                                        Attention:  Corporate Secretary
                                        Telecopy No.:  (716) 759-5672

                                        and

                                       17
<PAGE>

                                        Hodgson Russ LLP
                                        The Guaranty Building
                                        140 Pearl Street, Suite 100
                                        Buffalo, New York 14202-4040
                                        Attention:  John J. Zak
                                                    Ronald J. Battaglia Jr.
                                        Telecopy No.:  (716) 849-0349

                    (iii)               if  to  an  Initial  Purchaser,  to  the
                                        address  set  forth  in  its  respective
                                        Exchange  Agreement,  or to  such  other
                                        address   as  such   person   may   have
                                        furnished    to   the   other    persons
                                        identified   in  this  Section  8(c)  in
                                        writing in accordance herewith.

               (d)  Approval  of  Holders.  Whenever  the consent or approval of
Holders  of  a  specified  percentage  of  Registrable  Securities  is  required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the  Securities  Act)  (other than the Initial
Purchasers or  subsequent  Holders if such  subsequent  Holders are deemed to be
such  affiliates  solely  by  reason  of  their  holdings  of  such  Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

               (e)  Successors  and  Assigns.   Any  person  who  purchases  any
Registrable Securities from the Initial Purchasers shall be deemed, for purposes
of this Agreement,  to be an assignee of the Initial Purchasers.  This Agreement
shall inure to the benefit of and be binding upon the  successors and assigns of
each of the parties  and shall inure to the benefit of and be binding  upon each
Holder of any  Registrable  Securities,  provided  that nothing  herein shall be
deemed to permit any  assignment,  transfer or other  disposition of Registrable
Securities in violation of the terms of the Indenture.  If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the  terms  of this  Agreement,  and by  taking  and  holding  such  Registrable
Securities,  such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and  provisions  of this  Agreement  and such
person shall be entitled to receive the benefits hereof.

               (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so executed  shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

               (g) Headings.  The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               (h)  Governing  Law.  THIS  AGREEMENT  SHALL BE  GOVERNED  BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

               (i) Severability.  If any term provision, covenant or restriction
of this Agreement is held to be invalid,  illegal,  void or  unenforceable,  the
remainder of the terms, provisions,  covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected,  impaired
or invalidated  thereby,  and the parties hereto shall use their best efforts to
find and employ an alternative  means to achieve the same or  substantially  the
same  result  as  that  contemplated  by  such  term,  provision,   covenant  or
restriction,  it being  intended  that all of the rights and  privileges  of the
parties shall be enforceable to the fullest extent permitted by law.

                                       18
<PAGE>

               (j) Entire  Agreement.  This Agreement is intended by the parties
as a final  expression  of their  agreement and is intended to be a complete and
exclusive  statement of the agreement and understanding of the parties hereto in
respect of the  subject  matter  contained  herein and the  registration  rights
granted by the Company with  respect to the  Registrable  Securities.  Except as
provided  in the  Exchange  Agreements,  there  are no  restrictions,  promises,
warranties  or  undertakings,  other than those set forth or referred to herein,
with respect to the  registration  rights granted by the Company with respect to
the Registrable  Securities.  This Agreement supersedes all prior agreements and
undertakings  among the parties with  respect to such  registration  rights.  No
party  hereto  shall have any  rights,  duties or  obligations  other than those
specifically  set forth in this  Agreement.  In no event  will such  methods  of
distribution  take  the  form of an  underwritten  offering  of the  Registrable
Securities without the prior agreement of the Company.

               (k)  Termination.  This  Agreement  and  the  obligations  of the
parties  hereunder  shall  terminate upon the end of the  Effectiveness  Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e)  hereof  to  the  extent  such  damages  accrue  prior  to  the  end of the
Effectiveness  Period,  each of which shall remain in effect in accordance  with
its terms.

                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                 GREATBATCH, INC.

                                 By:______________________________________
                                      Name:
                                      Title:

Confirmed and accepted as of the date first above written:

[EACH INITIAL PURCHASER]

By:________________________________________
      Name:
      Title:

<PAGE>

                                    EXHIBIT A

                           List of Initial Purchasers

<PAGE>

                                    EXHIBIT B

                      Selling Securityholder Questionnaire

         The undersigned beneficial owner (the "Selling Securityholder") of the
2 1/4% Convertible Subordinated Debentures due 2013 (the "Debentures") of
Greatbatch, Inc. (the "Company") or the shares of the Company's Common Stock,
par value $0.001 per share, issuable upon conversion of the Debentures (the
"Common Stock" and, together with the Debentures, the "Registrable Securities")
hereby gives notice to the Company of its intention to sell or otherwise dispose
of Registrable Securities beneficially owned by it and listed below in Item 3
(unless otherwise specified under Item 3) pursuant to the Shelf Registration
Statement. The undersigned, by signing and returning this Selling Securityholder
Questionnaire, understands that it will be bound by the terms and conditions of
this Selling Securityholder Questionnaire and the Registration Rights Agreement,
dated as of March 28, 2007, among the Company and the Initial Purchasers party
thereto.

         Pursuant to the Registration Rights Agreement, the undersigned has
agreed to indemnify and hold harmless the Company's directors, the Company's
officers and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), from and against certain losses
arising in connection with statements concerning the undersigned made in the
Shelf Registration Statement or the related prospectus in reliance upon the
information provided in this Selling Securityholder Questionnaire. The
undersigned hereby acknowledges its obligations under the Registration Rights
Agreement to indemnify and hold harmless certain persons set forth therein.

         The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:

         (1)              (a)    Full Legal Name of Selling Securityholder:

                                 _________________________________________

                          (b)    Full Legal Name of Registered Holder
                                 (if not the same as (a) above) through
                                 which Registrable Securities listed in
                                 (3) below are held:

                                 ________________________________________

                          (c)    Full Legal Name of DTC Participant (if
                                 applicable and if not the same as (b)
                                 above) through which Registrable
                                 Securities listed in (3) below are
                                 held:

                                 _______________________________________

         (2)              Address for Notices to Selling Securityholder:

                          ______________________________________________

                          Telephone (including area code):______________

<PAGE>

                          Fax (including area code):____________________

                          Contact Person:_______________________________

         (3)              Beneficial Ownership of Registrable Securities:
                          ______________________________________________

                          (a) Type and Principal Amount/Number of Registrable
                              Securities beneficially owned:
                              __________________________________________

                          (b) CUSIP No(s). of such Registrable Securities
                              beneficially owned:
                              __________________________________________

         (4)              Beneficial Ownership of Other Securities of the
                          Company Owned by the Selling Securityholder:

                          Except as set forth below in this Item (4), the
                          undersigned is not the beneficial or registered owner
                          of any securities of the Company other than the
                          Registrable Securities listed above in Item (3).

                          (a) Type and Amount of Other Securities beneficially
                              owned by the Selling Securityholder:
                              _________________________________________

                          (b) CUSIP No(s). of such Other Securities beneficially
                              owned:
                              _________________________________________

         (5)              Relationship with the Company:

                          Except as set forth below, neither the undersigned nor
                          any of its affiliates, officers, directors or
                          principal equity holders (5% or more) has held any
                          position or office or has had any other material
                          relationship with the Company (or its predecessors or
                          affiliates) during the past three years.

                          State any exceptions here:_________________________

         (6)              Is the Selling Securityholder a registered broker
                          -dealer?

                          Yes      |_|

                          No       |_|

                          If "Yes", please answer subsection (a) and subsection
                          (b):

                          (a)   Did the Selling Securityholder acquire the
                                Registrable Securities as compensation for
                                underwriting/broker-dealer activities to the
                                Company?

                                       2
<PAGE>

                                              Yes    |_|

                                              No     |_|

                          (b)   If you answered "No" to question 6(a), please
                                explain your reason for acquiring the
                                Registrable Securities:
                                ____________________________________________
                                ____________________________________________

         (7)              Is the Selling Securityholder an affiliate of a
                          registered broker-dealer?

                          Yes      |_|

                          No       |_|

                          If "Yes", please identify the registered
                          broker-dealer(s), describe the nature of the
                          affiliation(s) and answer subsection (a) and
                          subsection (b):
                          ________________________________________________

                          (a)   Did the Selling Securityholder purchase the
                                Registrable Securities in the ordinary course of
                                business (if no, please explain)?

                                              Yes    |_|

                                              No     |_|

                                              Explain:___________________

                          (b)   Did the Selling Securityholder have an agreement
                                or understanding, directly or indirectly, with
                                any person to distribute the Registrable
                                Securities at the same time the Registrable
                                Securities were originally purchased (if yes,
                                please explain)?

                                              Yes    |_|

                                              No     |_|

                                              Explain:___________________

         (8)              Is the Selling Securityholder a non-public entity?

                          Yes      |_|

                          No       |_|

                          If "Yes", please answer subsection (a):

                          (a)   Identify the natural person or persons that have
                                voting or investment control over the
                                Registrable Securities that the non-public
                                entity owns:
                                ________________________________________

                                       3
<PAGE>

         (9)               Plan of Distribution:

                           Except as set forth below, the undersigned Selling
                           Securityholder (including its donees and pledgees)
                           intends to distribute the Registrable Securities
                           listed above in Item (3) pursuant to the Shelf
                           Registration Statement only as follows (if at all):
                           Such Registrable Securities may be sold from time to
                           time directly by the undersigned Selling
                           Securityholder or, alternatively, in accordance with
                           the Registration Rights Agreement, through
                           underwriters, broker-dealers or agents. If the
                           Registrable Securities are sold through underwriters
                           or broker-dealers, the Selling Securityholders will
                           be responsible for underwriting discounts or
                           commissions or agent commissions. Such Registrable
                           Securities may be sold in one or more transactions at
                           fixed prices, at prevailing market prices at the time
                           of sale, at varying prices determined at the time of
                           sale, or at negotiated prices. Such sales may be
                           effected in transactions (which may involve cross or
                           block transactions) (i) on any national securities
                           exchange or quotation service on which the
                           Registrable Securities may be listed or quoted at the
                           time of sale, (ii) in the over-the-counter market,
                           (iii) in transactions otherwise than on such
                           exchanges or services or in the over-the-counter
                           market, or (iv) through the writing of options. In
                           connection with sales of the Registrable Securities
                           or otherwise, the undersigned Selling Securityholder
                           may enter into hedging transactions with
                           broker-dealers, which may in turn engage in short
                           sales of the Registrable Securities in the course of
                           hedging positions they assume. The undersigned
                           Selling Securityholder may also sell Registrable
                           Securities short and deliver Registrable Securities
                           to close out short positions, or loan or pledge
                           Registrable Securities to broker-dealers that in turn
                           may sell such securities.

                          State any exceptions here:_________________________

         Note:  In no event will such method(s) of distribution take the form of
an underwritten offering of the Registrable Securities without the prior
agreement of the Company.

         The undersigned Selling Securityholder acknowledges that it understands
its obligations to comply with the provisions of the Securities Exchange Act of
1934, as amended, and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations), in
connection with any offering of Registrable Securities pursuant to the Shelf
Registration Agreement. The undersigned agrees that neither it nor any person
acting on its behalf will engage in any transaction in violation of such
provisions.

         The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth herein. Pursuant to the Registration Rights Agreement, the Company
has agreed under certain circumstances to indemnify the Selling Securityholder
against certain liabilities.

         In the event the undersigned transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company other than pursuant to the Shelf
Registration Statement, the undersigned agrees to notify the transferee(s) at
the time of the transfer of its rights and obligations under this Selling
Securityholder Questionnaire and the Registration Rights Agreement.

                                       4
<PAGE>

         In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law or by the
staff of the Commission for inclusion in the Shelf Registration Statement, the
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at anytime while the Shelf Registration Statement remains effective. All notices
hereunder and pursuant to the Registration Rights Agreement shall be made in
writing, by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery to the address set forth below.

         By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items (1) through (9) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.

         Once this Selling Securityholder Questionnaire is executed by the
undersigned and received by the Company, the terms of this Selling
Securityholder Questionnaire, and the representations, warranties and agreements
contained herein, shall be binding on, shall inure to the benefit of and shall
be enforceable by the respective successors, heirs, personal representatives,
and assigns of the Company and the undersigned with respect to the Registrable
Securities beneficially owned by the undersigned and listed in Item (3) above.
This Selling Securityholder Questionnaire shall be governed in all respects by
the laws of the State of New York.

         IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Selling Securityholder Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

         Dated:_________________________

                                         ___________________________________
                                         Beneficial Owner

                                         By:________________________________
                                         Name:______________________________
                                         Title:_____________________________

                                       5
<PAGE>

         PLEASE RETURN THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER
                        QUESTIONNAIRE TO THE COMPANY AT:

                                GREATBATCH, INC.
                                9645 Wehrle Drive
                            Clarence, New York 14031
                               Tel: (716) 759-5600
                               Fax: (716) 759-5672
                              Attn: General CounselExhibit 10.3

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                                   Page
                                                                                                                   ----

<S>     <C>                                                                                                          <C>
ARTICLE 1 DEFINITIONS.................................................................................................1
         Section 1.01.     Definitions................................................................................1

ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES.....................................11
         Section 2.01.     Designation Amount And Issue of Debentures................................................11
         Section 2.02.     Form of Debentures........................................................................12
         Section 2.03.     Date and Denomination of Debentures; Payments of Interest.................................13
         Section 2.04.     Execution of Debentures...................................................................14
         Section 2.05.     Exchange and Registration of Transfer of Debentures; Restrictions on Transfer.............15
         Section 2.06.     Mutilated, Destroyed, Lost or Stolen Debentures...........................................21
         Section 2.07.     Temporary Debentures......................................................................22
         Section 2.08.     Cancellation of Debentures................................................................23
         Section 2.09.     CUSIP Numbers.............................................................................23

ARTICLE 3 REDEMPTION OF DEBENTURES...................................................................................23
         Section 3.01.     Redemption of Debentures..................................................................23
         Section 3.02.     Notice of Optional Redemption; Selection of Debentures....................................23
         Section 3.03.     Payment of Debentures Called for Redemption by the Company................................25
         Section 3.04.     Conversion Arrangement on Call for Redemption.............................................26
         Section 3.05.     Redemption at Option of Holders upon a Fundamental Change.................................26

ARTICLE 4 SUBORDINATION OF DEBENTURES................................................................................29
         Section 4.01.     Agreement of Subordination................................................................29
         Section 4.02.     Payments to Debentureholders..............................................................29
         Section 4.03.     Subrogation of Debentures.................................................................32
         Section 4.04.     Authorization to Effect Subordination.....................................................33
         Section 4.05.     Notice to Trustee.........................................................................33
         Section 4.06.     Trustee's Relation to Senior Indebtedness.................................................34
         Section 4.07.     No Impairment of Subordination............................................................34
         Section 4.08.     Certain Conversions Not Deemed Payment....................................................34
         Section 4.09.     Article Applicable to Paying Agents.......................................................35
         Section 4.10.     Senior Indebtedness Entitled to Rely......................................................35
         Section 4.11.     Reliance on Judicial Order or Certificate of Liquidating Agent............................35

ARTICLE 5 CONTINGENT INTEREST........................................................................................35
         Section 5.01.     Contingent Interest.......................................................................35
         Section 5.02.     Payment of Contingent Interest............................................................36
         Section 5.03.     Contingent Interest Notification..........................................................36

ARTICLE 6 PARTICULAR COVENANTS OF THE COMPANY........................................................................36
         Section 6.01.     Payment of Principal, Premium and Interest................................................36
</TABLE>

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<CAPTION>

                                TABLE OF CONTENTS
                                   (continued)
                                                                                                                   Page
                                                                                                                   ----

<S>              <C>                                                                                                <C>
         Section 6.02.     Maintenance of Office or Agency...........................................................36
         Section 6.03.     Appointments to Fill Vacancies in Trustee's Office........................................37
         Section 6.04.     Provisions as to Paying Agent.............................................................37
         Section 6.05.     Existence.................................................................................38
         Section 6.06.     Maintenance of Properties.................................................................38
         Section 6.07.     Payment of Taxes and Other Claims.........................................................38
         Section 6.08.     Rule 144A Information Requirement.........................................................39
         Section 6.09.     Stay, Extension and Usury Laws............................................................39
         Section 6.10.     Compliance Certificate....................................................................39
         Section 6.11.     Liquidated Damages Notice.................................................................40
         Section 6.12.     Contingent Debt Tax Treatment.............................................................40
         Section 6.13.     Calculation of Original Issue Discount....................................................40

ARTICLE 7 DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.........................................40
         Section 7.01.     Debentureholders' Lists...................................................................40
         Section 7.02.     Preservation and Disclosure of Lists......................................................41
         Section 7.03.     Reports By Trustee........................................................................41
         Section 7.04.     Reports by Company........................................................................41

ARTICLE 8 REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT........................................42
         Section 8.01.     Events of Default.........................................................................42
         Section 8.02.     Payments of Debentures on Default; Suit Therefor..........................................44
         Section 8.03.     Application of Monies Collected By Trustee................................................46
         Section 8.04.     Proceedings by Debentureholder............................................................46
         Section 8.05.     Proceedings by Trustee....................................................................47
         Section 8.06.     Remedies Cumulative and Continuing........................................................47
         Section 8.07.     Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders...........48
         Section 8.08.     Notice of Defaults........................................................................48
         Section 8.09.     Undertaking to Pay Costs..................................................................48

ARTICLE 9 THE TRUSTEE................................................................................................49
         Section 9.01.     Duties and Responsibilities of Trustee....................................................49
         Section 9.02.     Reliance on Documents, Opinions, Etc......................................................50
         Section 9.03.     No Responsibility for Recitals, Etc.......................................................51
         Section 9.04.     Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures.................52
         Section 9.05.     Monies to Be Held in Trust................................................................52
         Section 9.06.     Compensation and Expenses of Trustee......................................................52
         Section 9.07.     Officers' Certificate as Evidence.........................................................53
         Section 9.08.     Conflicting Interests of Trustee..........................................................53
</TABLE>

                                      -ii-
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<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
                                   (continued)
                                                                                                                   Page
                                                                                                                   ----

<S>              <C>                                                                                                <C>
         Section 9.09.     Eligibility of Trustee....................................................................53
         Section 9.10.     Resignation or Removal of Trustee.........................................................53
         Section 9.11.     Acceptance by Successor Trustee...........................................................54
         Section 9.12.     Succession by Merger......................................................................55
         Section 9.13.     Preferential Collection of Claims.........................................................56

ARTICLE 10 THE DEBENTUREHOLDERS......................................................................................56
         Section 10.01.    Action by Debentureholders................................................................56
         Section 10.02.    Proof of Execution by Debentureholders....................................................56
         Section 10.03.    Who are Deemed Absolute Owners............................................................56
         Section 10.04.    Company-owned Debentures Disregarded......................................................57
         Section 10.05.    Revocation of Consents, Future Holders Bound..............................................57

ARTICLE 11 MEETINGS OF DEBENTUREHOLDERS..............................................................................57
         Section 11.01.    Purpose of Meetings.......................................................................57
         Section 11.02.    Call of Meetings by Trustee...............................................................58
         Section 11.03.    Call of Meetings by Company or Debentureholders...........................................58
         Section 11.04.    Qualifications For Voting.................................................................58
         Section 11.05.    Regulations...............................................................................58
         Section 11.06.    Voting....................................................................................59
         Section 11.07.    No Delay of Rights by Meeting.............................................................59

ARTICLE 12 SUPPLEMENTAL INDENTURES...................................................................................60
         Section 12.01.    Supplemental Indentures Without Consent of Debentureholders...............................60
         Section 12.02.    Supplemental Indenture with Consent of Debentureholders...................................61
         Section 12.03.    Effect of Supplemental Indenture..........................................................62
         Section 12.04.    Notation on Debentures....................................................................62
         Section 12.05.    Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee...............62

ARTICLE 13 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.........................................................63
         Section 13.01.    Company May Consolidate on Certain Terms..................................................63
         Section 13.02.    Successor to be Substituted...............................................................63
         Section 13.03.    Opinion of Counsel to be Given Trustee....................................................64

ARTICLE 14 SATISFACTION AND DISCHARGE OF INDENTURE...................................................................64
         Section 14.01.    Discharge of Indenture....................................................................64
         Section 14.02.    Deposited Monies to be Held in Trust by Trustee...........................................65
         Section 14.03.    Paying Agent to Repay Monies Held.........................................................65
         Section 14.04.    Return of Unclaimed Monies................................................................65
         Section 14.05.    Reinstatement.............................................................................65
</TABLE>

                                     -iii-
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<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
                                   (continued)
                                                                                                                   Page
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<S>     <C>                                                                                                         <C>
ARTICLE 15 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................................65
         Section 15.01.    Indenture and Debentures Solely Corporate Obligations.....................................65

ARTICLE 16 CONVERSION OF DEBENTURES..................................................................................66
         Section 16.01. Right to Convert.............................................................................66
         Section 16.02. Exercise of Conversion Privilege; Issuance of Common
         Stock on Conversion; No Adjustment for Interest or Dividends................................................69
         Section 16.03.    Cash Payments in Lieu of Fractional Shares................................................71
         Section 16.04.    Conversion Rate...........................................................................71
         Section 16.05.    Adjustment of Conversion Rate.............................................................71
         Section 16.06.    Effect of Reclassification, Consolidation, Merger or Sale.................................80
         Section 16.07.    Taxes on Shares Issued....................................................................81
         Section 16.08.    Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental
                  Requirements; Listing of Common Stock..............................................................81
         Section 16.09.    Responsibility of Trustee.................................................................82
         Section 16.10.    Notice to Holders Prior to Certain Actions................................................82
         Section 16.11.    Stockholder Rights Plans..................................................................83
         Section 16.12.    Payment of Cash in Lieu of Common Stock...................................................83
         Section 16.13.    Physical Settlement Election..............................................................85

ARTICLE 17 MISCELLANEOUS PROVISIONS..................................................................................85
         Section 17.01.    Provisions Binding on Company's Successors................................................85
         Section 17.02.    Official Acts by Successor Corporation....................................................85
         Section 17.03.    Addresses For Notices, Etc................................................................85
         Section 17.04.    Governing Law.............................................................................86
         Section 17.05.    Evidence of Compliance with Conditions Precedent, Certificates to Trustee.................86
         Section 17.06.    Legal Holidays............................................................................86
         Section 17.07.    Trust Indenture Act.......................................................................87
         Section 17.08.    No Security Interest Created..............................................................87
         Section 17.09.    Benefits of Indenture.....................................................................87
         Section 17.10.    Table of Contents, Headings, Etc..........................................................87
         Section 17.11.    Authenticating Agent......................................................................87
         Section 17.12.    Execution in Counterparts.................................................................88
         Section 17.13.    Severability..............................................................................88

         Exhibit A         Form of Debenture........................................................................A-1
</TABLE>

                                      -iv-
<PAGE>

       ------------------------------------------------------------------
                                GREATBATCH, INC.

                                       To

                    MANUFACTURERS AND TRADERS TRUST COMPANY,

                                   as Trustee

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

                                    INDENTURE

                                   Dated as of

                                 March 28, 2007

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

               2 1/4% Convertible Subordinated Debentures Due 2013

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

<PAGE>

                                    INDENTURE

         INDENTURE dated as of March 28, 2007 between Greatbatch, Inc., a
Delaware corporation (hereinafter called the "Company"), having its principal
office at 9645 Wehrle Drive, Clarence, New York 14031 and Manufacturers and
Traders Trust Company, a New York banking corporation, as trustee hereunder
(hereinafter called the "Trustee").

                                   WITNESSETH:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2 1/4% Convertible Subordinated Debentures Due 2013
(hereinafter called the "Debentures") and to provide the terms and conditions
upon which the Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution and delivery of this Indenture; and

         WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect redemption
upon a fundamental change, a form of repurchase notice and a form of conversion
notice to be borne by the Debentures are to be substantially in the forms
hereinafter provided for; and

         WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:

                                   ARTICLE 1
                                  DEFINITIONS

         Section  1.01  Definitions.  The terms  defined  in this  Section  1.01
(except as herein otherwise  expressly  provided or unless the context otherwise
requires) for all purposes of this  Indenture and of any indenture  supplemental
hereto shall have the  respective  meanings  specified in this Section 1.01. All
other terms used in this Indenture  that are defined in the Trust  Indenture Act
or which are by  reference  therein  defined in the  Securities  Act  (except as
herein otherwise  expressly  provided or unless the context otherwise  requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities  Act as in force at the date of the execution of this  Indenture.
The words "herein",  "hereof",  "hereunder" and words of similar import refer to
this  Indenture as a whole and not to any particular  Article,  Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.

<PAGE>

         "Accepted Purchased Shares" has the meaning specified in Section
16.05(g).

         "Additional Debentures" means any Debentures (other than the Initial
Debentures) issued under this Indenture in accordance with Section 2.01 hereof,
as part of the same series and with the same CUSIP number as the Initial
Debentures.

         "Additional Shares" has the meaning specified in Section 16.01(d).

         "Adjustment Event" has the meaning specified in Section 16.05(l).

         "Agent Members" has the meaning specified in Section 2.05(a).

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

         "Board of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.

         "Business Day" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.

         "Cash Percentage" has the meaning specified in Section 16.12(b).

         "Closing Sale Price" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq or by the National Quotation
Bureau Incorporated. In the absence of such quotations, the Company shall be
entitled to determine the Closing Sale Price on the basis it considers
appropriate. The Closing Sale Price shall be determined without reference to
extended or after hours trading.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

                                       2
<PAGE>

         "Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 16.06, however, shares issuable on conversion of Debentures shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $.001) or shares
of any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.

         "Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.

         "Contingent Interest" means interest that accrues and is payable as
provided in Article 5.

         "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.

         "Conversion Price" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.

         "Conversion Rate" has the meaning specified in Section 16.04.

         "Conversion Reference Period" means:

                  (i) for Debentures that are converted during the 60 days prior
         to, but excluding, any Fundamental Change Redemption Date or the
         maturity date of the Debentures, the 20 consecutive Trading Days
         beginning on the third Trading Day following the relevant Fundamental
         Change Redemption Date or the maturity date; and

                  (ii) in all other instances, the 20 consecutive Trading Days
         beginning on the third Trading Day following the date of conversion.

                                       3
<PAGE>

         "Conversion Value" means, for each $1,000 principal amount of
Debentures, the average of the Daily Conversion Values for each of the 20
consecutive Trading Days of the Conversion Reference Period.

         "Corporate Trust Office" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at One M&T Plaza,
Buffalo, New York 14203.

         "Current Market Price" has the meaning specified in Section 16.05(h).

         "Custodian" means Manufacturers and Traders Trust Company, as custodian
with respect to the Debentures in global form, or any successor entity thereto.

         "Daily Conversion Value" means, with respect to any Trading Day, the
product of (1) the applicable Conversion Rate and (2) the Volume Weighted
Average Price on such Trading Day.

         "Daily Share Amount" means, for each Trading Day of the Conversion
Reference Period and for each $1,000 principal amount of Debentures surrendered
for conversion, a number of shares (but in no event less than zero) equal to (i)
the amount of (a) the Volume Weighted Average Price for such Trading Day
multiplied by the applicable Conversion Rate, less (b) $1,000; divided by (ii)
the Volume Weighted Average Price for such Trading Day multiplied by 20.

         "Debenture" or "Debentures" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.

         "Debenture Register" has the meaning specified in Section 2.05.

         "Debenture Registrar" has the meaning specified in Section 2.05.

         "Debentureholder" or "holder" as applied to any Debenture, or other
similar terms (but excluding the term "Beneficial Holder"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.

         "Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.

         "Defaulted Interest" has the meaning specified in Section 2.03.

         "Depositary" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.

                                       4
<PAGE>

         "Designated Senior Indebtedness" means (i) all obligations under the
Senior Credit Facilities and (ii) any other Senior Indebtedness of the Company
which, at the date of determination, is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.

         "Determination Date" has the meaning specified in Section 16.05(l).

         "Effective Date" has the meaning specified in Section 16.01(d).

         "Event of Default" means any event specified in Section 8.01 as an
Event of Default.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

         "Ex-Dividend Time" has the meaning specified in Section 16.01(b).

         "Expiration Time" has the meaning specified in Section 16.05(f).

         "Fair Market Value" has the meaning specified in Section 16.05(h).

         "Extension Fee" has the meaning specified in Section 8.01(e).

         "Extension Period" has the meaning specified in Section 8.01(e).

         "Filing Failure" has the meaning specified in Section 8.01(e).

         "Fiscal Quarter" means, with respect to the Company, first, second and
third quarters comprised of 13 weeks and fourth quarters comprised of either 13
weeks (in 52-week fiscal years) or 14 weeks (in 53-week fiscal years). The
Company has a 52 or 53 week fiscal year that ends on the Friday closest to
December 31. The Company shall confirm the ending dates of its fiscal quarters
for the current fiscal year to the Trustee upon the Trustee's request.

         "Fundamental Change" means the occurrence of one or more of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Company, its
Subsidiaries, or the Company's or any Subsidiary's employee benefit plans, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding Voting Stock of the Company, (b) the Company
consolidates with or merges into any other corporation, any other corporation
(other than a subsidiary) merges into the Company, or the Company effects a
share exchange, other than: (i) any merger or consolidation (A) that does not
result in any reclassification, conversion, exchange or cancellation of Common
Stock and (B) pursuant to which shareholders of the Company immediately before
such transaction own, directly or indirectly immediately following such
transaction, at least a majority of the combined voting power of the then
outstanding Voting Stock of the corporation resulting from such transaction in
substantially the same respective proportions as their ownership of the Voting
Stock of the Company immediately before such transaction; or (ii) any merger or
consolidation solely for the purpose of changing the Company's jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of common stock of the
surviving entity, (c) the Company, or the Company and its subsidiaries taken as
a whole, sells, assigns, conveys, transfers or leases all or substantially all
assets of the Company, or of the Company and its subsidiaries taken as a whole,
as applicable (other than to one or more wholly-owned subsidiaries of the
Company), (d) any time the Continuing Directors do not constitute a majority of
the Board of Directors of the Company (or, if applicable, a successor
corporation to the Company), (e) the Company undertakes a liquidation,
dissolution or winding up, or (f) a Termination of Trading; provided, however,
that a Fundamental Change under (a), (b) and (c) above shall not be deemed to
have occurred if at least 95% of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the
Fundamental Change consists of shares of common stock that are, or upon issuance
will be, traded on a U. S. national securities exchange or approved for trading
on an established automated over-the-counter trading market in the U.S.

                                       5
<PAGE>

         "Fundamental Change Notice" has the meaning specified in Section
3.05(b).

         "Fundamental Change Expiration Time" has the meaning specified in
Section 3.05(b).

         "Fundamental Change Redemption Date" has the meaning specified in
Section 3.05(a).

         "Global Debenture" has the meaning specified in Section 2.02.

         "Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property; (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement; (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d); (f) any indebtedness or
other obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).

                                       6
<PAGE>

         "Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

         "Initial Debentures" means Debentures in an aggregate principal amount
of $130,000,000 initially issued under this Indenture.

         "Interest" or "interest" means, when used with reference to the
Debentures, any interest payable under the terms of the Debentures, including
contingent interest, if any, and Liquidated Damages, if any, payable under the
terms of the Registration Rights Agreement.

         "Liquidated Damages" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.

         "Liquidated Damages Notice" has the meaning specified in Section 6.11.

         "Notice Date" means the date of mailing of the notice of redemption
pursuant to Section 3.02.

         "Offer Expiration Time" has the meaning specified in Section 16.05(g).

         "Officers' Certificate", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
the Treasurer or any Assistant Treasurer, or the Secretary or Assistant
Secretary of the Company.

         "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

         "Optional Redemption" has the meaning specified in Section 3.02.

                                       7
<PAGE>

         "Outstanding", when used with reference to Debentures and subject to
the provisions of Section 10.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:

                  (a) Debentures theretofore canceled by the Trustee or
         delivered to the Trustee for cancellation;

                  (b) Debentures, or portions thereof, (i) for the redemption of
         which monies in the necessary amount shall have been deposited in trust
         with the Trustee or with any paying agent (other than the Company) or
         (ii) which shall have been otherwise defeased in accordance with
         Article 14;

                  (c) Debentures in lieu of which, or in substitution for which,
         other Debentures shall have been authenticated and delivered pursuant
         to the terms of Section 2.06; and

                  (d) Debentures converted into Common Stock pursuant to Article
         16 and Debentures deemed not outstanding pursuant to Article 3.

         "Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.

         "Physical Settlement Election" has the meaning specified in Section
16.13(a).

         "Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

         "Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.

         "Premium" means any premium payable under the terms of the Debentures.

         "Purchased Shares" has the meaning specified in Section 16.05(f).

         "Record date" has the meaning specified in Section 16.05(h).

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 28, 2007, between the Company and the
Debentureholders party thereto, as amended from time to time in accordance with
its terms.

         "Regular Cash Dividend" has the meaning specified in Section 5.01.

                                       8
<PAGE>

         "Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.

         "Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.

         "Restricted Securities" has the meaning specified in Section 2.05(c).

         "Rights" has the meaning specified in Section 16.11.

         "Rule 144A" means Rule 144A as promulgated under the Securities Act.

         "Securities" has the meaning specified in Section 16.05(d).

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

         "Senior Credit Facilities" means the Senior Credit Facilities, (i)
under that certain Second Amended and Restated Credit Agreement dated as of May
31, 2005, among Greatbatch Ltd., as borrower, and Manufacturers and Traders
Trust Company, as lender and administrative agent and the other financial
institutions from time to time party thereto, together with the documents now or
hereafter related thereto (including, without limitation, any guarantee
agreements and any security documents) or (ii) contemplated by that certain
Commitment Letter and Term Sheet dated as of February 21, 2007 between
Greatbatch, Inc. and Manufacturers and Traders Trust Company, as lender and
administrative agent, providing for a senior secured credit facility to
Greatbatch, Ltd., as borrower, in an original maximum principal amount of
$200,000,000 (which may be increased at the borrower's option to $300,000,000),
as evidenced by the loan documents hereafter entered into in connection
therewith (including, without limitation, a credit agreement, any guarantee
agreements and any security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including by way
of increasing the maximum principal amount of the Indebtedness thereunder or by
way of adding the Company or any Subsidiaries of the Company as additional
borrowers or guarantors thereunder) the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders (or other institutions).

                                       9
<PAGE>

         "Senior Indebtedness" means, whether outstanding on the date of this
Indenture or thereafter issued, all Indebtedness of the Company, including
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceeding) and premium, if any,
thereon, and other monetary amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness rank pari passu with the Securities; provided, however, that Senior
Indebtedness will not include (1) any obligation of the Company to any
majority-owned Subsidiary, (2) any liability for federal, state, foreign, local
or other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors of the Company arising in the ordinary course of
business, (4) any Indebtedness or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness or
obligation of the Company, or (5) obligations in respect of any Common Stock.

         "Share Price" has the meaning specified in Section 16.10(d).

         "Shelf Registration Statement" has the meaning given such term in the
Registration Rights Agreement.

         "Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "significant subsidiary" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.

         "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).

         "Tax Original Issue Discount" means the amount of ordinary interest
income on a Debenture that must be accrued as original issue discount for United
States Federal income tax purposes pursuant to U.S. Treasury Regulation Section
1.1275-4.

         "Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Debentures are then convertible) is
neither listed for trading on a U.S. national securities exchange nor approved
for trading on an established automated over-the-counter trading market in the
U.S.

         "Trading Day" has the meaning specified in Section 16.05(h).

                                       10
<PAGE>

         "Trading Price" means, on any date, the average of the secondary market
bid quotations for the Debentures obtained by the Trustee for $10,000,000
principal amount of Debentures at approximately 3:30 p.m., New York City time,
on such date from three independent nationally recognized securities dealers
selected by the Company; provided that if at least three such bids cannot
reasonably be obtained by the Trustee, but two bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Trustee, one bid shall be used; and provided further that if
the Trustee cannot reasonably obtain at least one bid for $10,000,000 principal
amount of Debentures from a nationally recognized securities dealer, then the
Trading Price per $1,000 principal amount of Debentures shall be deemed to be
less than 98% of the product of (a) the number of shares of Common Stock
issuable upon conversion of $1,000 principal amount of Debentures and (b) the
Closing Sale Price on such date.

         "Trigger Event" has the meaning specified in Section 16.05(d).

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 12.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "Trust Indenture Act" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.

         "Trustee" means Manufacturers and Traders Trust Company and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.

         "Volume Weighted Average Price" per share of Common Stock on any
Trading Day means such price as displayed on Bloomberg (or any successor
service) page "GB EQUITY VAP" in respect of the period from 9:30 a.m. to 4:00
p.m., New York City time, on such Trading Day; or, if such price is not
available, the Volume Weighted Average Price means the market value per share of
Common Stock on such day as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.

         "Voting Stock" of a corporation means all classes of capital stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.

         "Waiver Election" has the meaning specified in Section 16.14(c).

                                   ARTICLE 2
     ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES

         Section 2.01 Designation Amount And Issue of Debentures. The Debentures
shall be designated as "2 1/4%  Convertible  Subordinated  Debentures Due 2013".
Initial  Debentures in an aggregate  principal  amount of $130,000,000  upon the
execution of this  Indenture  shall be executed by the Company and  delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said  Initial  Debentures  to or upon the written  order of the Company,
signed by its Chairman of the Board, Chief Executive  Officer,  President or any
Vice  President  (whether  or not  designated  by a number or numbers or word or
words added before or after the title "Vice  President"),  the  Treasurer or any
Assistant Treasurer or the Secretary or Assistant Secretary, without any further
action by the Company  hereunder.  The Company may,  from time to time after the
execution   of  this   Indenture,   execute  and  deliver  to  the  Trustee  for
authentication  Additional  Debentures of an aggregate principal amount, and the
Trustee shall thereupon  authenticate and deliver said Additional  Debentures to
or upon the written  order of the  Company,  without  any further  action by the
Company  hereunder;  provided  however  that the  Company  may issue  Additional
Debentures  only if: (1) such Additional  Debentures and Initial  Debentures are
treated  as part of the same  issue of debt  instruments  for  purposes  of U.S.
federal  income tax laws;  (2) such  Additional  Debentures  shall have the same
CUSIP  number  as the  Initial  Debentures;  and (3) the  Trustee  receives  and
Officers' Certificate and an Opinion of Counsel to the effect that such issuance
of  Additional  Debentures  complies  with  the  provisions  of this  Indenture,
including each provision of this paragraph.

                                       11
<PAGE>

         Section  2.02 Form of  Debentures.  The  Debentures  and the  Trustee's
certificate  of   authentication  to  be  borne  by  such  Debentures  shall  be
substantially  in the form set forth in  Exhibit  A. The  terms  and  provisions
contained  in  the  form  of  Debenture  attached  as  Exhibit  A  hereto  shall
constitute,  and are hereby expressly made, a part of this Indenture and, to the
extent applicable,  the Company and the Trustee, by their execution and delivery
of this Indenture,  expressly agree to such terms and provisions and to be bound
thereby.

         Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on The Portal Market or as may be required for the Debentures to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Debentures are subject.

         So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "Global Debenture"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial owners of a
Global Debenture shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Debenture.

                                       12
<PAGE>

         Any Global Debenture shall represent such of the outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Debentures from time to time endorsed thereon
and that the aggregate amount of outstanding Debentures represented thereby may
from time to time be increased or reduced to reflect redemptions, repurchases,
conversions, transfers or exchanges permitted hereby. Any endorsement of a
Global Debenture to reflect the amount of any increase or decrease in the amount
of outstanding Debentures represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Debentures in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Debenture shall be made to the holder of such Debenture.

         Section 2.03 Date and Denomination of Debentures; Payments of Interest.
The  Debentures  shall  be  issuable  in  registered  form  without  coupons  in
denominations of $1,000 principal amount and integral  multiples  thereof.  Each
Debenture shall be dated the date of its  authentication and shall bear interest
from the date specified on the face of the form of Debenture attached as Exhibit
A hereto. Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.

         The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except that the interest payable
upon redemption will be payable to the Person to whom principal is payable
pursuant to such redemption (unless the redemption date is an interest payment
date, in which case the semi-annual payment of interest becoming due on such
date shall be payable to the holders of such Debentures registered as such on
the applicable record date). Notwithstanding the foregoing, if any Debenture (or
portion thereof) is converted into Common Stock during the period after a record
date for the payment of interest to, but excluding, the next succeeding interest
payment date and such Debenture (or portion thereof) has been called or tendered
for redemption on a redemption date which occurs during such period, the Company
shall not be required to pay interest on such interest payment date in respect
of any such Debenture (or portion thereof). Interest shall be payable at the
office of the Company maintained by the Company for such purposes in the Borough
of Manhattan, City of New York, which shall initially be an office or agency of
the Trustee. The Company shall pay interest (i) on any Debentures in
certificated form by check mailed to the address of the Person entitled thereto
as it appears in the Debenture Register (or upon written notice, by wire
transfer in immediately available funds, if such Person is entitled to interest
on aggregate principal in excess of $2 million) or (ii) on any Global Debenture
by wire transfer of immediately available funds to the account of the Depositary
or its nominee. The term "Record Date" with respect to any interest payment date
shall mean the June 1 or December 1 preceding the applicable June 15 or December
15 interest payment date, respectively.

         Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any June 15 or December 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Debentureholder
on the relevant record date by virtue of his having been such Debentureholder,
and such Defaulted Interest shall be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below:

                                       13
<PAGE>

         (1) The Company may elect to make payment of any Defaulted  Interest to
the  Persons in whose  names the  Debentures  (or their  respective  Predecessor
Debentures) are registered at the close of business on a special record date for
the payment of such  Defaulted  Interest,  which shall be fixed in the following
manner.  The  Company  shall  notify  the  Trustee  in  writing of the amount of
Defaulted  Interest  proposed to be paid on each  Debenture  and the date of the
proposed  payment (which shall be not less than  twenty-five (25) days after the
receipt by the Trustee of such notice,  unless the Trustee  shall  consent to an
earlier  date),  and at the same time the Company shall deposit with the Trustee
an amount of money equal to the  aggregate  amount to be paid in respect of such
Defaulted  Interest or shall make  arrangements  satisfactory to the Trustee for
such  deposit on or prior to the date of the proposed  payment,  such money when
deposited  to be held in trust for the benefit of the  Persons  entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special  record date for the payment of such  Defaulted  Interest which shall be
not more than  fifteen  (15)  days and not less than ten (10) days  prior to the
date of the proposed payment,  and not less than ten (10) days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify  the  Company of such  special  record  date and,  in the name and at the
expense of the  Company,  shall  cause  notice of the  proposed  payment of such
Defaulted   Interest  and  the  special  record  date  therefor  to  be  mailed,
first-class  postage prepaid, to each holder at his address as it appears in the
Debenture  Register,  not less than ten (10) days prior to such  special  record
date. Notice of the proposed payment of such Defaulted  Interest and the special
record date therefor  having been so mailed,  such  Defaulted  Interest shall be
paid  to the  Persons  in  whose  names  the  Debentures  (or  their  respective
Predecessor  Debentures) are registered at the close of business on such special
record date and shall no longer be payable  pursuant to the following clause (2)
of this Section 2.03.

         (2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities  exchange
or  automated  quotation  system  on  which  the  Debentures  may be  listed  or
designated  for  issuance,  and upon  such  notice  as may be  required  by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the  proposed  payment  pursuant to this  clause,  such manner of
payment shall be deemed practicable by the Trustee.

         Section 2.04 Execution of Debentures. The Debentures shall be signed in
the name and on behalf of the Company by the manual or  facsimile  signature  of
its  Chairman  of the Board,  Chief  Executive  Officer,  President  or any Vice
President  (whether  or not  designated  by a number or numbers or word or words
added before or after the title "Vice  President") and attested by the manual or
facsimile signature of its Secretary or any of its Assistant  Secretaries or its
Treasurer or any of its Assistant Treasurers (which may be printed,  engraved or
otherwise  reproduced thereon, by facsimile or otherwise).  Only such Debentures
as shall bear thereon a certificate of authentication  substantially in the form
set forth on the form of  Debenture  attached  as  Exhibit  A  hereto,  manually
executed by the Trustee (or an authenticating  agent appointed by the Trustee as
provided by Section 17.11),  shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose.  Such  certificate by the Trustee (or
such an authenticating  agent) upon any Debenture  executed by the Company shall
be  conclusive  evidence  that the  Debenture  so  authenticated  has been  duly
authenticated  and  delivered  hereunder  and that the holder is entitled to the
benefits of this Indenture.

                                       14
<PAGE>

         In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.

         Section  2.05  Exchange  and  Registration  of Transfer of  Debentures;
Restrictions  on  Transfer.  (a)  The  Company  shall  cause  to be  kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other  office or agency of the Company  designated  pursuant to Section 6.02
being herein sometimes  collectively referred to as the "Debenture Register") in
which, subject to such reasonable  regulations as it may prescribe,  the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture  Register shall be in written form or in any form capable of being
converted  into  written  form within a reasonably  prompt  period of time.  The
Trustee is hereby appointed "Debenture Registrar" for the purpose of registering
Debentures  and  transfers of  Debentures  as herein  provided.  The Company may
appoint one or more co-registrars in accordance with Section 6.02.

         Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

         Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.

         All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.

         All Debentures presented or surrendered for registration of transfer or
for exchange, redemption or conversion shall (if so required by the Company or
the Debenture Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Debentures shall be duly executed by the Debentureholder thereof or his
attorney duly authorized in writing.

                                       15
<PAGE>

         No service charge shall be made to any holder for any registration of,
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures.

         Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.02; (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 16; or (d) any Debentures or portions thereof
tendered for redemption (and not withdrawn) pursuant to Section 3.05.

               (b)  The  following   provisions   shall  apply  only  to  Global
Debentures:

                    (i) Each Global Debenture authenticated under this Indenture
shall be  registered  in the name of the  Depositary  or a nominee  thereof  and
delivered to such  Depositary or a nominee  thereof or Custodian  therefor,  and
each such Global  Debenture shall constitute a single Debenture for all purposes
of this Indenture.

                    (ii)  Notwithstanding any other provision in this Indenture,
no  Global  Debenture  may be  exchanged  in  whole  or in part  for  Debentures
registered,  and no  transfer of a Global  Debenture  in whole or in part may be
registered,  in the name of any Person  other than the  Depositary  or a nominee
thereof  unless the Depositary (i) has notified the Company that it is unwilling
or unable to continue as  Depositary  for such Global  Debenture and a successor
depositary  has not been appointed by the Company within ninety days or (ii) has
ceased to be a clearing  agency  registered  under the Exchange Act, an Event of
Default has occurred and is continuing or the Company,  in its sole  discretion,
notifies  the  Trustee  in  writing  that it no  longer  wishes  to have all the
Debentures  represented by Global  Debentures.  Any Global  Debenture  exchanged
pursuant  to clause (A) or (B) above shall be so  exchanged  in whole and not in
part and any  Global  Debenture  exchanged  pursuant  to clause (C) above may be
exchanged in whole or from time to time in part as directed by the Company.  Any
Debenture issued in exchange for a Global Debenture or any portion thereof shall
be a Global  Debenture;  provided  that any such  Debenture  so  issued  that is
registered  in the  name of a Person  other  than the  Depositary  or a  nominee
thereof shall not be a Global Debenture.

                    (iii)  Securities  issued in exchange for a Global Debenture
or any  portion  thereof  pursuant  to  clause  (ii)  above  shall be  issued in
definitive,  fully registered  form,  without  interest  coupons,  shall have an
aggregate  principal  amount  equal to that of such Global  Debenture or portion
thereof to be so  exchanged,  shall be  registered  in such names and be in such
authorized  denominations  as the Depositary  shall designate and shall bear any
legends required hereunder.  Any Global Debenture to be exchanged in whole shall
be surrendered by the Depositary to the Trustee,  as Debenture  Registrar.  With
regard to any Global  Debenture  to be  exchanged  in part,  either  such Global
Debenture  shall be so surrendered  for exchange or, if the Trustee is acting as
Custodian  for the  Depositary  or its  nominee  with  respect  to  such  Global
Debenture,  the principal amount thereof shall be reduced, by an amount equal to
the portion  thereof to be so exchanged,  by means of an appropriate  adjustment
made on the records of the Trustee.  Upon any such surrender or adjustment,  the
Trustee  shall  authenticate  and make  available  for  delivery  the  Debenture
issuable on such exchange to or upon the written  order of the  Depositary or an
authorized representative thereof.

                                       16
<PAGE>

                    (iv) In the  event of the  occurrence  of any of the  events
specified in clause (ii) above,  the Company will promptly make available to the
Trustee a reasonable  supply of  certificated  Debentures in  definitive,  fully
registered form, without interest coupons.

                    (v)  Neither  any  members  of,  or  participants   in,  the
Depositary ("Agent Members") nor any other Persons on whose behalf Agent Members
may act shall have any rights  under this  Indenture  with respect to any Global
Debenture  registered in the name of the Depositary or any nominee thereof,  and
the  Depositary  or such  nominee,  as the case may be,  may be  treated  by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner  and  holder  of  such  Global  Debenture  for  all  purposes  whatsoever.
Notwithstanding  the foregoing,  nothing  herein shall prevent the Company,  the
Trustee or any agent of the  Company or the Trustee  from  giving  effect to any
written certification,  proxy or other authorization furnished by the Depositary
or such nominee,  as the case may be, or impair, as between the Depositary,  its
Agent  Members and any other Person on whose behalf an Agent Member may act, the
operation of customary  practices of such Persons  governing the exercise of the
rights of a holder of any Debenture.

                    (vi) At such  time as all  interests  in a Global  Debenture
have been redeemed, repurchased, converted, canceled or exchanged for Debentures
in certificated  form, such Global  Debenture shall,  upon receipt  thereof,  be
canceled by the Trustee in accordance with standing  procedures and instructions
existing  between the Depositary  and the  Custodian.  At any time prior to such
cancellation,  if any interest in a Global  Debenture is redeemed,  repurchased,
converted,  canceled or exchanged  for  Debentures  in  certificated  form,  the
principal amount of such Global Debenture shall, in accordance with the standing
procedures and  instructions  existing between the Depositary and the Custodian,
be  appropriately  reduced,  and an  endorsement  shall  be made on such  Global
Debenture,  by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction.

               (c) Every  Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c)  (together with any
Common Stock issued upon  conversion of the  Debentures and required to bear the
legend set forth in Section 2.05(c),  collectively, the "Restricted Securities")
shall be subject  to the  restrictions  on  transfer  set forth in this  Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the holder of
each such Restricted  Security,  by such Debenture holder's  acceptance thereof,
agrees to be bound by all such  restrictions  on  transfer.  As used in  Section
2.05(c) and 2.05(d),  the term "transfer"  encompasses any sale,  pledge,  loan,
transfer  or other  disposition  whatsoever  of any  Restricted  Security or any
interest therein.

                                       17
<PAGE>

         Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(c), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:

         THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS DEBENTURE EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH
TO MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS DEBENTURE PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS DEBENTURE PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS
DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING
RESTRICTION.

                                       18
<PAGE>

         THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $950 PER $1,000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS MARCH 28, 2007 AND THE COMPARABLE YIELD IS 8.4588%,
COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: GREATBATCH, INC., 9645 WEHRLE DRIVE, CLARENCE, NEW YORK
14031, ATTN: TREASURER.

         Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Debenture for exchange
to the Debenture Registrar in accordance with the provisions of this Section
2.05, be exchanged for a new Debenture or Debentures, of like tenor and
aggregate principal amount, which shall not bear the restrictive legend required
by this Section 2.05(c). If the Restricted Security surrendered for exchange is
represented by a Global Debenture bearing the legend set forth in this Section
2.05(c), the principal amount of the legended Global Debenture shall be reduced
by the appropriate principal amount and the principal amount of a Global
Debenture without the legend set forth in this Section 2.05(c) shall be
increased by an equal principal amount. If a Global Debenture without the legend
set forth in this Section 2.05(c) is not then outstanding, the Company shall
execute and the Trustee shall authenticate and deliver an unlegended Global
Debenture to the Depositary.

               (d) Until the  expiration  of the holding  period  applicable  to
sales  thereof  under Rule 144(k)  under the  Securities  Act (or any  successor
provision),   any  stock  certificate  representing  Common  Stock  issued  upon
conversion of any Debenture shall bear a legend in  substantially  the following
form,  unless  such  Common  Stock  has been  sold  pursuant  to a  registration
statement that has been declared  effective  under the Securities Act (and which
continues to be effective at the time of such  transfer) or pursuant to Rule 144
under the Securities Act or any similar  provision then in force, or such Common
Stock has been issued upon conversion of Debentures  that have been  transferred
pursuant to a registration  statement that has been declared effective under the
Securities  Act or pursuant to Rule 144 under the  Securities Act or any similar
provision then in force,  or unless  otherwise  agreed by the Company in writing
with written notice thereof to the transfer agent:

                                       19
<PAGE>

         THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK
EVIDENCED HEREBY EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
1(D) ABOVE), IT WILL FURNISH TO MELLON INVESTOR SERVICES LLC, AS TRANSFER AGENT
(OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY
IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE
1(D) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

         Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).

               (e) Any Debenture or Common Stock issued upon the conversion of a
Debenture  that,  prior to the  expiration of the holding  period  applicable to
sales  thereof  under Rule 144(k)  under the  Securities  Act (or any  successor
provision),  is purchased or owned by the Company or any  Affiliate  thereof may
not be resold by the  Company  or such  Affiliate  unless  registered  under the
Securities  Act  or  resold  pursuant  to an  exemption  from  the  registration
requirements  of the  Securities  Act in a  transaction  which  results  in such
Debentures  or Common  Stock,  as the case may be, no longer  being  "Restricted
Securities" (as defined under Rule 144).

                                       20
<PAGE>

               (f) The Trustee shall have no responsibility or obligation to any
Agent  Members or any other  Person with respect to the accuracy of the books or
records,  or the acts or omissions,  of the  Depository or its nominee or of any
participant  or member  thereof,  with respect to any ownership  interest in the
Debentures  or with  respect to the delivery to any Agent Member or other Person
(other than the  Depositary) of any notice  (including any notice of redemption)
or the  payment of any amount,  under or with  respect to such  Debentures.  All
notices and communications to be given to the  Debentureholder  and all payments
to be made to Debentureholders  under the Debentures shall be given or made only
to or upon the  order of the  registered  Debentureholders  (which  shall be the
Depository  or its  nominee  in the case of a Global  Debenture).  The rights of
beneficial  owners in any Global  Debenture  shall be exercised only through the
Depository  subject to the customary  procedures of the Depository.  The Trustee
may rely and shall be fully protected in relying upon  information  furnished by
the Depository with respect to its Agent Members.

         The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or among Agent Members in any
Global Indenture) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.

         Section 2.06 Mutilated,  Destroyed,  Lost or Stolen Debentures. In case
any  Debenture  shall become  mutilated  or be  destroyed,  lost or stolen,  the
Company in its discretion may execute,  and upon its written request the Trustee
or an authenticating  agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture,  bearing a number not contemporaneously
outstanding,  in exchange and  substitution for the mutilated  Debenture,  or in
lieu of and in substitution for the Debenture so destroyed,  lost or stolen.  In
every case,  the  applicant  for a  substituted  Debenture  shall furnish to the
Company, to the Trustee and, if applicable,  to such  authenticating  agent such
security or indemnity  as may be required by them to save each of them  harmless
for any  loss,  liability,  cost or  expense  caused by or  connected  with such
substitution,  and, in every case of destruction,  loss or theft,  the applicant
shall also furnish to the Company,  to the Trustee and, if  applicable,  to such
authenticating agent evidence to their satisfaction of the destruction,  loss or
theft of such Debenture and of the ownership thereof.

         Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for redemption upon a Fundamental Change (and not withdrawn) or is to
be converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.

                                       21
<PAGE>

         Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or redemption or repurchase of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.

         Section  2.07  Temporary   Debentures.   Pending  the   preparation  of
Debentures in  certificated  form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the  Company,   authenticate  and  deliver  temporary   Debentures  (printed  or
lithographed).   Temporary  Debentures  shall  be  issuable  in  any  authorized
denomination  and  substantially  in the form of the Debentures in  certificated
form, but with such  omissions,  insertions and variations as may be appropriate
for temporary  Debentures,  all as may be determined by the Company.  Every such
temporary  Debenture shall be executed by the Company and  authenticated  by the
Trustee  or  such   authenticating   agent  upon  the  same  conditions  and  in
substantially  the same manner,  and with the same effect,  as the Debentures in
certificated  form.  Without  unreasonable  delay,  the Company will execute and
deliver to the Trustee or such  authenticating  agent Debentures in certificated
form  and  thereupon  any or all  temporary  Debentures  may be  surrendered  in
exchange  therefor,  at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating  agent shall authenticate
and make  available  for delivery in exchange for such  temporary  Debentures an
equal  aggregate  principal  amount of Debentures  in  certificated  form.  Such
exchange  shall be made by the Company at its own expense and without any charge
therefor.  Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same  benefits  and subject to the same  limitations  under this
Indenture  as  Debentures  in  certificated  form  authenticated  and  delivered
hereunder.

                                       22
<PAGE>

         Section 2.08 Cancellation of Debentures. All Debentures surrendered for
the purpose of payment,  redemption,  conversion,  exchange or  registration  of
transfer  shall,  if  surrendered  to the  Company  or any  paying  agent or any
Debenture  Registrar or any conversion  agent, be surrendered to the Trustee and
promptly  canceled by it, or, if surrendered  to the Trustee,  shall be promptly
canceled  by it, and no  Debentures  shall be issued in lieu  thereof  except as
expressly  permitted by any of the  provisions  of this  Indenture.  The Trustee
shall  dispose of such  canceled  Debentures  in  accordance  with its customary
procedures. If the Company shall acquire any of the Debentures, such acquisition
shall  not  operate  as  a  redemption  or  satisfaction  of  the   indebtedness
represented  by such  Debentures  unless and until the same are delivered to the
Trustee for cancellation.

         Section 2.09 CUSIP  Numbers.  The Company in issuing the Debentures may
use "CUSIP"  numbers (if then  generally in use),  and, if so, the Trustee shall
use   "CUSIP"   numbers  in  notices  of   redemption   as  a   convenience   to
Debentureholders; provided that any such notice may state that no representation
is  made  as to the  correctness  of  such  numbers  either  as  printed  on the
Debentures  or as contained in any notice of a redemption  and that reliance may
be placed only on the other  identification  numbers  printed on the Debentures,
and any such  redemption  shall not be  affected by any defect in or omission of
such numbers.  The Company will promptly notify the Trustee of any change in the
"CUSIP" numbers.

                                   ARTICLE 3
                            REDEMPTION OF DEBENTURES

         Section 3.01 Redemption of Debentures.  Except as otherwise provided in
Section 3.05, the Company may not redeem any Debentures  prior to June 20, 2012.
At any time on or after June 20, 2012 and prior to maturity,  the Debentures may
be redeemed at the option of the  Company,  in whole or in part,  upon notice as
set forth in Section  3.02,  at the  redemption  prices set forth in the form of
Debenture  attached  as  Exhibit A hereto,  together  with  accrued  and  unpaid
interest, if any, to, but excluding, the date fixed for redemption.

         Section 3.02 Notice of Optional Redemption; Selection of Debentures. In
case the Company  shall  desire to  exercise  the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.01, it shall fix a
date for  redemption and it or, at its written  request  received by the Trustee
not fewer than forty-five (45) days prior (or such shorter period of time as may
be acceptable to the Trustee) to the date fixed for  redemption,  the Trustee in
the name of and at the expense of the Company,  shall mail or cause to be mailed
a notice of such  redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the redemption date to each holder of Debentures so to be redeemed
as a whole or in part at its last address as the same  appears on the  Debenture
Register;  provided  that if the Company  shall give such notice,  it shall also
give written notice of the redemption date to the Trustee. Such mailing shall be
by first class mail. The notice, if mailed in the manner herein provided,  shall
be  conclusively  presumed  to have been duly  given,  whether or not the holder
receives  such notice.  In any case,  failure to give such notice by mail or any
defect in the notice to the holder of any Debenture designated for redemption as
a whole or in part shall not  affect the  validity  of the  proceedings  for the
redemption  of any other  Debenture.  Concurrently  with the mailing of any such
notice of redemption,  the Company shall issue a press release  announcing  such
redemption,  the form and content of which press  release shall be determined by
the Company in its sole discretion.  The failure to issue any such press release
or any defect therein shall not affect the validity of the redemption  notice or
any  of  the  proceedings  for  the  redemption  of  any  Debenture  called  for
redemption.

                                       23
<PAGE>

         Each such notice of redemption shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number or numbers of the
Debentures being redeemed, the date fixed for redemption (which shall be a
Business Day), the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest thereon or on the portion thereof to be redeemed will cease to
accrue. Such notice shall also state the current Conversion Rate and the date on
which the right to convert such Debentures or portions thereof into Common Stock
will expire. If fewer than all the Debentures are to be redeemed, the notice of
redemption shall identify the Debentures to be redeemed (including CUSIP
numbers, if any). In case any Debenture is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that, on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof will be issued.

         On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 6.04) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Debentures (or portions thereof) so called
for redemption (other than those theretofore surrendered for conversion into
Common Stock) at the appropriate redemption price, together with accrued
interest to, but excluding, the redemption date; provided that if such payment
is made on the redemption date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m. New York City time on such date. The
Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price and accrued
interest to, but excluding, the redemption date. If any Debenture called for
redemption is converted pursuant hereto prior to such redemption date, any money
deposited with the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Debenture shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust. Whenever any Debentures are to be redeemed, the Company will give the
Trustee written notice in the form of an Officers' Certificate not fewer than
forty-five (45) days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate principal amount of
Debentures to be redeemed.

         If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or multiples thereof) by lot, on a pro rata basis or by another method
the Trustee deems fair and appropriate. If any Debenture selected for partial
redemption is submitted for conversion in part after such selection, the portion
of such Debenture submitted for conversion shall be deemed (so far as may be
possible) to be the portion to be selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is submitted for
conversion in part before the mailing of the notice of redemption.

                                       24
<PAGE>

         Upon any redemption of less than all of the outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and outstanding
at the time of redemption, treat as outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Debenture
authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.

         Section  3.03  Payment  of  Debentures  Called  for  Redemption  by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of  Debentures  with respect to which such notice has been
given shall,  unless  converted  into Common Stock pursuant to the terms hereof,
become  due and  payable on the date  fixed for  redemption  and at the place or
places stated in such notice at the applicable  redemption price,  together with
interest  accrued to (but excluding) the redemption  date, and on and after said
date (unless the Company shall default in the payment of such  Debentures at the
redemption  price,  together with interest accrued to said date) interest on the
Debentures  or portion of  Debentures  so called for  redemption  shall cease to
accrue  and,  after  the  close of  business  on the  Business  Day  immediately
preceding the  redemption  date (unless the Company shall default in the payment
of such Debentures at the redemption  price,  together with interest  accrued to
said date) such Debentures  shall cease to be convertible into Common Stock and,
except as provided  in Section  9.05 and  Section  14.04,  to be entitled to any
benefit or security under this Indenture,  and the holders thereof shall have no
right in respect of such  Debentures  except the right to receive the redemption
price thereof and unpaid  interest to (but  excluding) the  redemption  date. On
presentation  and  surrender  of such  Debentures  at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable  redemption  price,  together
with interest accrued thereon to, but excluding,  the redemption date;  provided
that if the applicable redemption date is an interest payment date, the interest
payable on such  interest  payment date shall be paid on such  interest  payment
date to the holders of record of such  Debentures on the applicable  record date
instead of the holders surrendering such Debentures for redemption on such date.

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.

         Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of redemption during the continuance of a default
in payment of interest or premium, if any, on the Debentures. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the redemption date at a rate equal to 1% per
annum plus the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, and
interest shall have been paid or duly provided for.

                                       25
<PAGE>

         Section  3.04  Conversion  Arrangement  on  Call  for  Redemption.   In
connection  with any redemption of  Debentures,  the Company may arrange for the
purchase and  conversion  of any  Debentures  by an  agreement  with one or more
investment  banks or other  purchasers to purchase such  Debentures by paying to
the Trustee in trust for the  Debentureholders,  on or before the date fixed for
redemption,  an amount not less than the applicable  redemption price,  together
with interest accrued to, but excluding, the date fixed for redemption,  of such
Debentures.  Notwithstanding  anything to the contrary contained in this Article
3, the obligation of the Company to pay the redemption price of such Debentures,
together with interest accrued to, but excluding, the date fixed for redemption,
shall be deemed to be satisfied  and  discharged to the extent such amount is so
paid by such  purchasers.  If such an agreement is entered into, a copy of which
will be filed  with the  Trustee  prior to the date  fixed for  redemption,  any
Debentures not duly  surrendered  for conversion by the holders  thereof may, at
the option of the Company,  be deemed,  to the fullest extent  permitted by law,
acquired by such purchasers from such holders and  (notwithstanding  anything to
the  contrary  contained  in Article  16)  surrendered  by such  purchasers  for
conversion,  all as of  immediately  prior to the close of  business on the date
fixed for  redemption  (and the right to convert  any such  Debentures  shall be
extended  through  such  time),  subject  to  payment  of the  above  amount  as
aforesaid.  At the direction of the Company,  the Trustee shall hold and dispose
of any such amount paid to it in the same  manner as it would  monies  deposited
with it by the Company for the redemption of  Debentures.  Without the Trustee's
prior written  consent,  no arrangement  between the Company and such purchasers
for the purchase and  conversion of any  Debentures  shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the Trustee
as set forth in this Indenture.

         Section 3.05 Redemption at Option of Holders upon a Fundamental Change.
(a) If there shall occur a  Fundamental  Change at any time prior to maturity of
the Debentures, then each Debentureholder shall have the right, at such holder's
option, to require the Company to redeem all of such holder's Debentures, or any
portion thereof that is a multiple of $1,000 principal  amount, on the date (the
"Fundamental Change Redemption Date") that is thirty (30) days after the date of
the  Fundamental   Change  Notice  (as  defined  in  Section  3.05(b))  of  such
Fundamental  Change  (or,  if such  30th  day is not a  Business  Day,  the next
succeeding  Business  Day) at a redemption  price equal to 100% of the principal
amount  thereof,   together  with  accrued  interest  to,  but  excluding,   the
Fundamental  Change  Redemption Date;  provided that if such Fundamental  Change
Redemption  Date  falls  after a record  date and on or prior the  corresponding
interest  payment date, then the interest  payable on such interest payment date
shall be paid to the  holders  of record  of the  Debentures  on the  applicable
record date instead of the holders surrendering the Debentures for redemption on
such date.

                                       26
<PAGE>

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and, upon the Company's written direction to the Trustee, the
Trustee shall authenticate and make available for delivery to the holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Debentures presented.

               (b)  On or  before  the  tenth  day  after  the  occurrence  of a
Fundamental  Change,  the  Company  or at its  written  request  (which  must be
received  by the Trustee at least five (5)  Business  Days prior to the date the
Trustee is requested to give notice as described below, unless the Trustee shall
agree in writing to a shorter  period),  the Trustee,  in the name of and at the
expense  of the  Company,  shall  mail or cause to be mailed to all  holders  of
record on the date of the Fundamental  Change a notice (the "Fundamental  Change
Notice") of the  occurrence  of such  Fundamental  Change and of the  redemption
right at the option of the  holders  arising as a result  thereof.  Such  notice
shall be  mailed  in the  manner  and with the  effect  set  forth in the  first
paragraph  of  Section  3.02  (without  regard  for the time  limits  set  forth
therein).  If the Company shall give such notice, the Company shall also deliver
a copy of the  Fundamental  Change Company Notice to the Trustee at such time as
it  is  mailed  to  Debentureholders.  Concurrently  with  the  mailing  of  any
Fundamental  Change Notice,  the Company shall issue a press release  announcing
such Fundamental  Change referred to in the Fundamental  Change Notice, the form
and content of which press  release  shall be  determined  by the Company in its
sole  discretion.  The  failure  to issue any such  press  release or any defect
therein  shall not affect the validity of the  Fundamental  Change Notice or any
proceedings  for the redemption of any Debenture which any  Debentureholder  may
elect to have the Company redeem as provided in this Section 3.05.

         Each Fundamental Change Notice shall specify the circumstances
constituting the Fundamental Change, the Fundamental Change Redemption Date, the
price at which the Company shall be obligated to redeem Debentures, that the
holder must exercise the redemption right on or prior to the close of business
on the Fundamental Change Redemption Date (the "Fundamental Change Expiration
Time"), that the holder shall have the right to withdraw any Debentures
surrendered prior to the Fundamental Change Expiration Time, a description of
the procedure which a Debentureholder must follow to exercise such redemption
right and to withdraw any surrendered Debentures, the place or places where the
holder is to surrender such holder's Debentures, the amount of interest accrued
on each Debenture to the Fundamental Change Redemption Date and the CUSIP number
or numbers of the Debentures (if then generally in use).

         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the redemption of the Debentures pursuant to
this Section 3.05.

               (c) For a  Debenture,  other  than a  Global  Debenture  to be so
redeemed at the option of the holder,  the Company must receive at the office or
agency of the  Company  maintained  for that  purpose  or, at the option of such
holder,  the  Corporate  Trust  Office,  such  Debenture  with the form entitled
"Option to Elect  Repayment  Upon A Fundamental  Change" on the reverse  thereof
duly completed,  together with such Debentures duly endorsed for transfer, on or
before the Fundamental Change Expiration Time. All questions as to the validity,
eligibility  (including  time of receipt) and  acceptance  of any  Debenture for
redemption  shall be determined  by the Company,  whose  determination  shall be
final and binding absent manifest error.

                                       27
<PAGE>

               (d) On or prior to the Fundamental  Change  Redemption  Date, the
Company will deposit with the Trustee or with one or more paying  agents (or, if
the Company is acting as its own paying agent, set aside,  segregate and hold in
trust as provided in Section  6.04) an amount of money  sufficient  to redeem on
the Fundamental Change Redemption Date all the Debentures to be redeemed on such
date at the appropriate redemption price, together with accrued interest to, but
excluding, the Fundamental Change Redemption Date; provided that if such payment
is made on the  Fundamental  Change  Redemption  Date it must be received by the
Trustee or paying  agent,  as the case may be, by 10:00 a.m. New York City time,
on such  date.  Payment  for  Debentures  surrendered  for  redemption  (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
by  mailing  checks for the amount  payable  to the  holders of such  Debentures
entitled thereto as they shall appear in the Debenture Register.

               (e) In the  case of a  reclassification,  change,  consolidation,
merger, combination, sale or conveyance to which Section 16.06 applies, in which
the Common  Stock of the  Company is changed or  exchanged  as a result into the
right to receive stock, securities or other property or assets (including cash),
which  includes  shares of Common Stock of the Company or shares of common stock
of another  Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter  trading market in the United States and such shares constitute
at the time such change or exchange  becomes  effective  in excess of 50% of the
aggregate  fair market  value of such  stock,  securities  or other  property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive  and binding),  then the Person  formed by such  consolidation  or
resulting  from such merger or which  acquires such assets,  as the case may be,
shall execute and deliver to the Trustee a supplemental  indenture  (accompanied
by an Opinion of Counsel  that such  supplemental  indenture  complies  with the
Trust  Indenture  Act as in force at the date of execution of such  supplemental
indenture)  modifying the provisions of this Indenture  relating to the right of
holders of the  Debentures  to cause the Company to  repurchase  the  Debentures
following a Fundamental  Change,  including  without  limitation  the applicable
provisions  of this  Section  3.05  and the  definitions  of  Common  Stock  and
Fundamental  Change, as appropriate,  as determined in good faith by the Company
(which  determination shall be conclusive and binding),  to make such provisions
apply to such other  Person if  different  from the Company and the common stock
issued  by such  Person  (in lieu of the  Company  and the  Common  Stock of the
Company).

               (f) The Company will comply with the provisions of Rule 13e-4 and
any  other  tender  offer  rules  under  the  Exchange  Act to the  extent  then
applicable in connection with the redemption rights of the holders of Debentures
in the event of a Fundamental Change.

                                       28
<PAGE>

                                   ARTICLE 4
                           SUBORDINATION OF DEBENTURES

         Section 4.01  Agreement of  Subordination.  The Company  covenants  and
agrees, and each holder of Debentures issued hereunder by its acceptance thereof
likewise  covenants and agrees,  that all Debentures  shall be issued subject to
the  provisions  of this  Article 4, and each  Person  holding  any  Debentures,
whether upon  original  issue or upon  registration  of transfer,  assignment or
exchange thereof, accepts and agrees to be bound by such provisions.

         The payment of the principal of, premium, if any, and interest on all
Debentures (including, but not limited to, the redemption price with respect to
the Debentures called for redemption in accordance with Section 3.02 or
submitted for redemption in accordance with Section 3.05, as the case may be, as
provided in this Indenture) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.

         No provision of this Article 4 shall prevent the occurrence of any
default or Event of Default hereunder or have any effect on the rights of the
holders of the Debentures or the Trustee to accelerate the maturity of the
Debentures.

         Section 4.02  Payments to  Debentureholders.  No payment  shall be made
with respect to the principal of, premium, if any, or interest on the Debentures
(including,  but not  limited  to,  the  redemption  price  with  respect to the
Debentures  to be called for  redemption  in  accordance  with  Section  3.02 or
submitted for redemption in accordance with Section 3.05, as the case may be, as
provided in this  Indenture),  except  payments  and  distributions  made by the
Trustee as permitted by the first or second paragraph of Section 4.05, if:

               (i) a default  in the  payment  of  principal,  premium,  if any,
interest, rent or other obligations in respect of Designated Senior Indebtedness
occurs and is continuing (or, in the case of Designated Senior  Indebtedness for
which there is a period of grace,  in the event of such a default that continues
beyond  the  period of  grace,  if any,  specified  in the  instrument  or lease
evidencing such Designated Senior Indebtedness) (a "Payment Default"); or

               (ii) a default,  other than a Payment Default,  on any Designated
Senior  Indebtedness  occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity (or in the case of any
lease that is Designated Senior Indebtedness, a default occurs and is continuing
that permits the lessor to either  terminate the lease or require the Company to
make an irrevocable  offer to terminate the lease  following an event of default
thereunder)  and the  Trustee  receives  a notice  of the  default  (a  "Payment
Blockage  Notice")  from  a  holder  of  Designated  Senior  Indebtedness  or  a
Representative of Designated Senior Indebtedness (a "Non-Payment Default").

         If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.02 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.

                                       29
<PAGE>

         The Company may and shall resume payments on and distributions in
respect of the Debentures (including, but not limited to, the redemption price
with respect to the Debentures to be redeemed) upon the earlier of:

               (1) in the case of a Payment  Default,  the date  upon  which any
such Payment Default is cured or waived or ceases to exist, or

               (2) in the case of a Non-Payment  Default, the earlier of (a) the
date upon  which  such  default is cured or waived or ceases to exist or (b) 179
days after the applicable  Payment Blockage Notice is received by the Trustee if
the maturity of such Designated Senior Indebtedness has not been accelerated (or
in the case of any lease,  179 days after  notice is received if the Company has
not received  notice that the lessor under such lease has exercised its right to
terminate  the lease or  require  the  Company to make an  irrevocable  offer to
terminate  the lease  following  an event of default  thereunder),  unless  this
Article 4 otherwise  prohibits the payment or  distribution  at the time of such
payment or distribution.

         Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Debentures (except payments made pursuant to
Article 14 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding up, liquidation or
reorganization), and upon any such dissolution or winding up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
similar proceeding, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article 4, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the holders of the
Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their Representative or
Representatives, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
Debentures or to the Trustee.

                                       30
<PAGE>

         For purposes of this Article 4, the words, "Cash, Property or
Securities" shall not be deemed to include shares of Common Stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
4 with respect to the Debentures to the payment of all Senior Indebtedness which
may at the time be outstanding; provided that (i) the Senior Indebtedness is
assumed by the new corporation, if any, resulting from any reorganization or
readjustment, and (ii) the rights of the holders of Senior Indebtedness (other
than leases which are not assumed by the Company or the new corporation, as the
case may be) are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another Person upon the
terms and conditions provided for in Article 13 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.02 if such other Person shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 13.

         In the event of the acceleration of the Debentures because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
holder of Debentures in respect of the principal of, premium, if any, or
interest on the Debentures (including, but not limited to, the redemption price
with respect to the Debentures called for redemption in accordance with Section
3.02 or submitted for redemption in accordance with Section 3.05, as the case
may be, as provided in this Indenture), except payments and distributions made
by the Trustee as permitted by the first or second paragraph of Section 4.05,
until all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Debentures is accelerated because of an Event of Default, the Company or, at the
Company's request and expense, the Trustee shall promptly notify holders of
Senior Indebtedness of the acceleration.

         In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.02, shall be received by the Trustee or the holders of the Debentures before
all Senior Indebtedness is paid in full in cash or other payment satisfactory to
the holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, to the extent that the Trustee or any
holder of the Debentures has acquired notice, by whatever means, that all Senior
Indebtedness has not been paid in full, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

                                       31
<PAGE>

         Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.06. This Section 4.02 shall be
subject to the further provisions of Section 4.05.

         Section 4.03 Subrogation of Debentures.  Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior  Indebtedness  pursuant to the provisions of this Article 4 (equally
and ratably  with the holders of all  Indebtedness  of the Company  which by its
express  terms  is  subordinated  to  other   Indebtedness  of  the  Company  to
substantially the same extent as the Debentures are subordinated and is entitled
to  like  rights  of  subrogation)  to the  rights  of  the  holders  of  Senior
Indebtedness  to  receive  payments  or  distributions  of  cash,   property  or
securities  of the  Company  applicable  to the  Senior  Indebtedness  until the
principal,  premium,  if any,  and interest on the  Debentures  shall be paid in
full, and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior  Indebtedness  of any cash,  property or securities to
which the holders of the Debentures or the Trustee would be entitled  except for
the  provisions of this Article 4, and no payment  pursuant to the provisions of
this Article 4, to or for the benefit of the holders of Senior  Indebtedness  by
holders of the  Debentures  or the Trustee,  shall,  as among the  Company,  its
creditors  other than  holders of Senior  Indebtedness,  and the  holders of the
Debentures,  be deemed to be a payment  by the  Company  to or on account of the
Senior  Indebtedness,  and no payments  or  distributions  of cash,  property or
securities  to or for the benefit of the holders of the  Debentures  pursuant to
the  subrogation  provisions of this Article 4, which would  otherwise have been
paid to the holders of Senior  Indebtedness,  shall be deemed to be a payment by
the Company to or for the account of the  Debentures.  It is understood that the
provisions  of this Article 4 are  intended  solely for the purposes of defining
the relative rights of the holders of the  Debentures,  on the one hand, and the
holders of the Senior Indebtedness, on the other hand.

         Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or, subject to Section 8.04, the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 4 of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.

         Upon any payment or distribution of assets of the Company referred to
in this Article 4, the Trustee, subject to the provisions of Section 9.01, and
the holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 4.

                                       32
<PAGE>

         Section 4.04  Authorization to Effect  Subordination.  Each holder of a
Debenture by the holder's  acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate  the  subordination  as provided in this  Article 4 and  appoints the
Trustee to act as the holder's  attorney-in-fact  for any and all such purposes.
If the  Trustee  does not  file a proper  proof of claim or proof of debt in the
form required in any  proceeding  referred to in the third  paragraph of Section
8.02 hereof at least thirty (30) days before the  expiration of the time to file
such claim, the holders of any Senior Indebtedness or their  Representatives are
hereby  authorized to file an appropriate claim for and on behalf of the holders
of the Debentures.

         Section 4.05 Notice to Trustee.  The Company shall give prompt  written
notice in the form of an Officers'  Certificate to a Responsible  Officer of the
Trustee  and to any  paying  agent of any fact known to the  Company  that would
prohibit  the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article 4.
Notwithstanding  the provisions of this Article 4 or any other provision of this
Indenture,  the Trustee shall not be charged with  knowledge of the existence of
any facts that would  prohibit  the making of any payment of monies to or by the
Trustee in respect of the Debentures  pursuant to the provisions of this Article
4, unless and until a  Responsible  Officer of the Trustee  shall have  received
written  notice  thereof at the Corporate  Trust Office from the Company (in the
form of an Officers'  Certificate) or a Representative or a holder or holders of
Senior  Indebtedness,  and before the receipt of any such  written  notice,  the
Trustee,  subject to the  provisions of Section  9.01,  shall be entitled in all
respects to assume that no such facts  exist;  provided,  however,  that if on a
date not less than one  Business  Day prior to the date upon  which by the terms
hereof any such monies may become  payable for any purpose  (including,  without
limitation,  the payment of the principal of, or premium, if any, or interest on
any Debenture) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 4.05, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
apply monies received to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
such prior date.

         Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Debenture holders of monies
deposited with it pursuant to Section 14.01, if a Responsible Officer of the
Trustee shall not have received written notice at the Corporate Trust Office on
or before one Business Day prior to the date such payment is due that such
payment is not permitted under Section 4.01 or 4.02.

         The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 4 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4.

                                       33
<PAGE>

         Section 4.06 Trustee's Relation to Senior Indebtedness. The Trustee, in
its individual  capacity,  shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior  Indebtedness  at any time held by it, to the
same extent as any other holder of Senior  Indebtedness,  and nothing in Section
9.13 or  elsewhere  in this  Indenture  shall  deprive the Trustee of any of its
rights as such holder.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 9.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver money to holders of
Debentures, the Company or any other Person in compliance with this Article 4.

         Section 4.07 No Impairment of Subordination. No right of any present or
future  holder of any Senior  Indebtedness  to enforce  subordination  as herein
provided  shall at any time in any way be  prejudiced  or impaired by any act or
failure to act on the part of the  Company  or by any act or failure to act,  in
good faith, by any such holder,  or by any noncompliance by the Company with the
terms,  provisions and covenants of this Indenture,  regardless of any knowledge
thereof  which any such holder may have or  otherwise  be charged  with.  Senior
Indebtedness  may  be  created,  renewed  or  extended  and  holders  of  Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness,  including,  without limitation, any waiver of default
thereunder,  without any notice to or consent from the holders of the Debentures
or the Trustee. No compromise, alteration, amendment,  modification,  extension,
renewal or other  change of, or waiver,  consent or other  action in respect of,
any liability or obligation  under or in respect of the Senior  Indebtedness  or
any terms or conditions  of any  instrument  creating or evidencing  such Senior
Indebtedness  shall in any way alter or  affect  any of the  provisions  of this
Article 4 or the subordination of the Debentures provided thereby.

         Section 4.08 Certain  Conversions Not Deemed Payment.  For the purposes
of this Article 4 only, (1) the issuance and delivery of Junior  Securities upon
conversion  of  Debentures  in  accordance  with Article 16 and (2) the payment,
issuance or  delivery  of cash,  property or  securities  upon  conversion  of a
Debenture as a result of any transaction specified in Section 16.06 shall not be
deemed to constitute a payment or  distribution  on account of the principal of,
premium,  if any,  or interest on  Debentures  or on account of the  purchase or
other acquisition of Debentures. For the purposes of this Section 4.08, the term
"Junior  Securities"  means (a) Common Stock of the Company or (b) securities of
the Company that are subordinated in right of payment to all Senior Indebtedness
that may be outstanding  at the time of issuance or delivery of such  securities
to substantially the same extent as, or to a greater extent than, the Debentures
are so  subordinated  as provided in this Article 4.  Nothing  contained in this
Article 4 or elsewhere in this  Indenture or in the Debentures is intended to or
shall impair, as among the Company,  its creditors (other than holders of Senior
Indebtedness)  and the  Debentureholders,  the  right,  which  is  absolute  and
unconditional,  of the Holder of any  Debenture  to convert  such  Debenture  in
accordance with Article 16.

                                       34
<PAGE>

         Section 4.09 Article  Applicable to Paying  Agents.  If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting  hereunder,  the term  "Trustee"  as used in this Article 4 shall
(unless the  context  otherwise  requires)  be  construed  as  extending  to and
including  such  paying  agent  within its  meaning as fully for all intents and
purposes as if such paying  agent were named in this Article 4 in addition to or
in place of the Trustee; provided,  however, that the first paragraph of Section
4.05 shall not apply to the  Company or any  Affiliate  of the  Company if it or
such Affiliate acts as paying agent.

         The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.

         Section  4.10  Senior  Indebtedness  Entitled  to Rely.  The holders of
Senior   Indebtedness   (including,   without   limitation,   Designated  Senior
Indebtedness) shall have the right to rely upon this Article 4, and no amendment
or modification of the provisions  contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.

         Section 4.11 Reliance on Judicial  Order or  Certificate of Liquidating
Agent.  Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the  Debentureholders  shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such  insolvency,   bankruptcy,   receivership,   liquidation,   reorganization,
dissolution,  winding  up  or  similar  case  or  proceeding  is  pending,  or a
certificate  of the  trustee  in  bankruptcy,  liquidating  trustee,  custodian,
receiver,  assignee for the benefit of  creditors,  agent or other Person making
such   payment   or   distribution,   delivered   to  the   Trustee  or  to  the
Debentureholders,  for the  purpose of  ascertaining  the  Persons  entitled  to
participate in such payment or distribution,  the holders of Senior Indebtedness
and other  indebtedness of the Company,  the amount thereof or payable  thereon,
the amount or amounts paid or distributed  thereon and all other facts pertinent
thereto or to this Article 4.

                                   ARTICLE 5
                               CONTINGENT INTEREST

         Section 5.01 Contingent Interest. Beginning with the six-month interest
period commencing June 15, 2012, the Company will pay contingent interest during
a six month  interest  period if the Trading  Price for each of the five Trading
Days immediately  preceding the first day of the applicable  six-month  interest
period equals or exceeds 120% of the principal amount of the Debentures.  During
any  six-month  interest  period  when  Contingent  Interest  is  payable,   the
Contingent  Interest  payable on each $1,000 principal amount of Debenture shall
equal  0.25  of the  average  Trading  Price  for  $1,000  principal  amount  of
Debentures  during the five Trading Day measuring period  immediately  preceding
the first day of applicable  six-month interest period used to determine whether
Contingent Interest must be paid.

                                       35
<PAGE>

         The Trustee's sole responsibility pursuant to Section 5.01 hereof shall
be to obtain the Trading Price of the Debentures for each of the five Trading
Days immediately preceding the first day of the applicable six-month interest
period and to provide such information to the Company. The Company shall
determine whether holders are entitled to receive Contingent Interest, and if
so, provide notice pursuant to Section 5.03. Notwithstanding any term contained
in this Indenture or any other document to the contrary, the Trustee shall have
no responsibilities, duties or obligations for or with respect to (i)
determining whether the Company must pay Contingent Interest or (ii) determining
the amount of Contingent Interest, if any, payable by the Company.

         Section 5.02 Payment of Contingent  Interest.  Contingent  Interest for
any six-month  interest period shall be paid on the applicable  interest payment
date to the Person in whose name any Debenture (or its Predecessor Debenture) is
registered  on  the  Debenture  Register  at  the  corresponding   record  date.
Contingent  Interest  due under this Article 5 shall be treated for all purposes
of this Indenture like any other interest accruing on the Debentures.

         Section 5.03 Contingent  Interest  Notification.  By the first Business
Day of a six-month  interest  period  during which  Contingent  Interest will be
paid, the Company will  disseminate a press release through Dow Jones & Company,
Inc. or Bloomberg Business News stating that Contingent Interest will be paid on
the Debentures and identifying the six month interest period.

                                   ARTICLE 6
                       PARTICULAR COVENANTS OF THE COMPANY

         Section 6.01 Payment of Principal,  Premium and  Interest.  The Company
covenants  and agrees that it will duly and  punctually  pay or cause to be paid
the  principal of and  premium,  if any  (including  the  redemption  price upon
redemption,  and  interest,  on each of the  Debentures  at the  places,  at the
respective times and in the manner provided herein and in the Debentures.

         Section 6.02 Maintenance of Office or Agency. The Company will maintain
an office or agency in the Borough of Manhattan, the City of New York, where the
Debentures may be surrendered  for  registration  of transfer or exchange or for
presentation  for payment or for  conversion or redemption and where notices and
demands to or upon the Company in respect of the  Debentures  and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location,  and  any  change  in the  location,  of such  office  or  agency  not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof,  such presentations,  surrenders,  notices and demands
may be made or served at the  Corporate  Trust  Office  or the  corporate  trust
office of the Trustee in The Borough of Manhattan  which office is located at 55
Water Street, The Jeanette Park Entrance, New York, New York 10041.

         The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.

                                       36
<PAGE>

         The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in The Borough of
Manhattan, shall be considered as one such office or agency of the Company for
each of the aforesaid purposes.

         So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.

         Section 6.03  Appointments to Fill Vacancies in Trustee's  Office.  The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint,  in the manner provided in Section 9.10, a Trustee,  so that there
shall at all times be a Trustee hereunder.

         Section 6.04  Provisions as to Paying  Agent.  (a) If the Company shall
appoint a paying agent other than the Trustee,  or if the Trustee  shall appoint
such a paying  agent,  the Company  will cause such paying  agent to execute and
deliver to the  Trustee an  instrument  in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:

                    (1) that it will hold all sums held by it as such  agent for
the  payment  of the  principal  of and  premium,  if any,  or  interest  on the
Debentures  (whether  such sums have  been paid to it by the  Company  or by any
other obligor on the  Debentures) in trust for the benefit of the holders of the
Debentures;

                    (2) that it will give the  Trustee  notice of any failure by
the Company (or by any other obligor on the  Debentures)  to make any payment of
the  principal of and premium,  if any, or interest on the  Debentures  when the
same shall be due and payable; and

                    (3) that at any time during the  continuance  of an Event of
Default,  upon request of the Trustee,  it will forthwith pay to the Trustee all
sums so held in trust.

         The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying agent a
sum (in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.

               (b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of, premium, if any, or interest on the
Debentures,  set  aside,  segregate  and hold in trust  for the  benefit  of the
holders of the Debentures a sum sufficient to pay such  principal,  premium,  if
any, or interest so  becoming  due and will  promptly  notify the Trustee of any
failure to take such  action and of any  failure  by the  Company  (or any other
obligor under the  Debentures) to make any payment of the principal of, premium,
if any,  or  interest  on the  Debentures  when the same  shall  become  due and
payable.

                                       37
<PAGE>

               (c)   Anything   in   this   Section   6.04   to   the   contrary
notwithstanding,  the Company  may, at any time,  for the purpose of obtaining a
satisfaction  and discharge of this Indenture,  or for any other reason,  pay or
cause to be paid to the  Trustee  all sums held in trust by the  Company  or any
paying agent hereunder as required by this Section 6.04, such sums to be held by
the  Trustee  upon the  trusts  herein  contained  and upon such  payment by the
Company or any paying  agent to the  Trustee,  the Company or such paying  agent
shall be released from all further liability with respect to such sums.

               (d)   Anything   in   this   Section   6.04   to   the   contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
6.04 is subject to Sections 14.03 and 14.04.

         The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.

         Section 6.05  Existence.  Subject to Article 13, the Company will do or
cause to be done all things  necessary  to  preserve  and keep in full force and
effect its  existence  and rights  (charter and  statutory);  provided  that the
Company  shall not be required to preserve  any such right if the Company  shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not  disadvantageous in
any material respect to the Debentureholders.

         Section  6.06  Maintenance  of  Properties.  The Company will cause all
properties  used or useful in the conduct of its business or the business of any
Significant  Subsidiary to be maintained and kept in good condition,  repair and
working  order and supplied  with all  necessary  equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof,  all as in the  judgment of the Company  may be  necessary  so that the
business carried on in connection  therewith may be properly and  advantageously
conducted at all times;  provided that nothing in this Section shall prevent the
Company  from  discontinuing  the  operation  or  maintenance  of  any  of  such
properties if such discontinuance is, in the judgment of the Company,  desirable
in the  conduct  of its  business  or the  business  of any  subsidiary  and not
disadvantageous in any material respect to the Debentureholders.

         Section 6.07 Payment of Taxes and Other Claims. The Company will pay or
discharge,  or  cause to be paid or  discharged,  before  the  same  may  become
delinquent,  (i) all  taxes,  assessments  and  governmental  charges  levied or
imposed  upon the  Company or any  Significant  Subsidiary  or upon the  income,
profits or  property  of the  Company or any  Significant  Subsidiary,  (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the  property of the Company or any  Significant  Subsidiary
and (iii) all stamp taxes and other duties,  if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange,  conversion or redemption of any Debentures or
with respect to this  Indenture;  provided  that, in the case of clauses (i) and
(ii),  the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim (A) if the failure to do
so will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.

                                       38
<PAGE>

         Section 6.08 Rule 144A Information Requirement. Within the period prior
to the expiration of the holding  period  applicable to sales thereof under Rule
144(k)  under the  Securities  Act (or any  successor  provision),  the  Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act,  make  available to any holder or
beneficial  holder of  Debentures  or any Common  Stock  issued upon  conversion
thereof which continue to be Restricted  Securities in connection  with any sale
thereof  and any  prospective  purchaser  of  Debentures  or such  Common  Stock
designated  by such  holder  or  beneficial  holder,  the  information  required
pursuant to Rule  144A(d)(4)  under the  Securities  Act upon the request of any
holder or beneficial  holder of the  Debentures or such Common Stock and it will
take such further action as any holder or beneficial  holder of such  Debentures
or such Common Stock may  reasonably  request,  all to the extent  required from
time to time to enable such holder or beneficial  holder to sell its  Debentures
or Common  Stock  without  registration  under the  Securities  Act  within  the
limitation of the  exemption  provided by Rule 144A, as such Rule may be amended
from time to time.  Upon the request of any holder or any  beneficial  holder of
the  Debentures or such Common Stock,  the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.

         Section 6.09 Stay,  Extension and Usury Laws. The Company covenants (to
the  extent  that it may  lawfully  do so) that it shall not at any time  insist
upon,  plead, or in any manner whatsoever claim or take the benefit or advantage
of,  any stay,  extension  or usury law or other law  which  would  prohibit  or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Debentures as contemplated herein,  wherever enacted,
now or at any time hereafter in force,  or which may affect the covenants or the
performance  of this Indenture and the Company (to the extent it may lawfully do
so) hereby  expressly  waives  all  benefit or  advantage  of any such law,  and
covenants that it will not, by resort to any such law,  hinder,  delay or impede
the  execution of any power herein  granted to the Trustee,  but will suffer and
permit the execution of every such power as though no such law had been enacted.

         Section 6.10 Compliance  Certificate.  The Company shall deliver to the
Trustee,  within one hundred twenty (120) days after the end of each fiscal year
of the  Company,  a  certificate  signed  by the  principal  executive  officer,
principal  financial  officer or  principal  accounting  officer of the Company,
stating  whether or not to the best  knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms,  provisions
and  conditions  of this  Indenture  (without  regard to any  period of grace or
requirement  of notice  provided  hereunder)  and,  if the  Company  shall be in
default,  specifying  all such defaults and the nature and the status thereof of
which the signer may have knowledge.

                                       39
<PAGE>

         The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

         Any notice required to be given under this Section 6.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

         Section 6.11 Liquidated  Damages Notice.  In the event that the Company
is required to pay Liquidated  Damages to holders of Debentures  pursuant to the
Registration   Rights  Agreement,   the  Company  will  provide  written  notice
("Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen  (15) days prior to the proposed  payment date for
the Liquidated  Damages,  and the Liquidated  Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or  responsibility to any holder
of  Debentures  to  determine  the  Liquidated  Damages,  or with respect to the
nature,  extent or calculation of the amount of Liquidated Damages when made, or
with  respect to the  method  employed  in such  calculation  of the  Liquidated
Damages.

         Section 6.12 Contingent Debt Tax Treatment.  The Company agrees, and by
acceptance of a Debenture,  each beneficial holder of a Debenture will be deemed
to have agreed to treat the Debentures as  indebtedness  of the Company for U.S.
federal  income  tax  purposes  that are  subject to the  regulations  governing
contingent  payment  debt  instruments.  A Holder of  Debentures  may obtain the
amount of original issue  discount,  issue date,  yield to maturity,  comparable
yield and  projected  payment  schedule for the  Debentures,  determined  by the
Company pursuant to Treas. Reg. Sec.  1.1275-4,  by submitting a written request
for it to the Company at the following  address:  Greatbatch,  Inc., 9645 Wehrle
Drive, Clarence, NY 14031, Attention: Treasurer.

         Section 6.13 Calculation of Original Issue Discount.  The Company shall
file with the Trustee  promptly at the end of each  calendar  year (i) a written
notice  specifying the amount of Tax Original Issue  Discount  (including  daily
rates and accrual  periods)  accrued on outstanding  Debentures as of the end of
such year and (ii) such other specific information relating to such Tax Original
Issue Discount as may then be required under the Internal  Revenue Code of 1986,
as  amended  from  time  to  time,  or  the  Treasury  regulations   promulgated
thereunder.

                                   ARTICLE 7
       DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         Section 7.01 Debentureholders'  Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee,  semiannually, not
more than  fifteen  (15) days  after  each  June 1 and  December  1 in each year
beginning  with June 1, 2007, and at such other times as the Trustee may request
in writing,  within  thirty  (30) days after  receipt by the Company of any such
request (or such lesser time as the Trustee may  reasonably  request in order to
enable it to timely provide any notice to be provided by it  hereunder),  a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of  Debentures as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such  information  is furnished,  except that no such
list need be  furnished  by the Company to the Trustee so long as the Trustee is
acting as the sole Debenture Registrar.

                                       40
<PAGE>

         Section 7.02  Preservation  and  Disclosure  of Lists.  (a) The Trustee
shall  preserve,  in as  current  a  form  as  is  reasonably  practicable,  all
information as to the names and addresses of the holders of Debentures contained
in the  most  recent  list  furnished  to it as  provided  in  Section  7.01  or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the  Debentures,  if so acting.  The  Trustee may destroy any list
furnished  to it as  provided  in  Section  7.01 upon  receipt  of a new list so
furnished.

               (b) The  rights of  Debentureholders  to  communicate  with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.

               (c) Every  Debentureholder,  by  receiving  and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any  agent of  either  of them  shall be held  accountable  by reason of any
disclosure  of  information  as to names and  addresses of holders of Debentures
made pursuant to the Trust Indenture Act.

         Section  7.03  Reports By  Trustee.  (a)  Within  sixty (60) days after
December  15 of each year  commencing  with the year  2007,  the  Trustee  shall
transmit to holders of  Debentures  such reports  dated as of December 15 of the
year in which such reports are made concerning the Trustee and its actions under
this  Indenture as may be required  pursuant to the Trust  Indenture  Act at the
times and in the manner provided pursuant  thereto.  In the event that no events
have  occurred  under the  applicable  sections of the Trust  Indenture  Act the
Trustee shall be under no duty or obligation to provide such reports.

               (b) A copy of such report shall, at the time of such transmission
to holders of  Debentures,  be filed by the Trustee with each stock exchange and
automated  quotation  system upon which the  Debentures  are listed and with the
Company.  The  Company  will  promptly  notify the  Trustee in writing  when the
Debentures  are listed on any stock  exchange or automated  quotation  system or
delisted therefrom.

                                       41
<PAGE>

         Section  7.04  Reports  by  Company.  The  Company  shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust  Indenture  Act),  and transmit to holders of  Debentures,  such
information,  documents and other reports and such summaries thereof,  as may be
required  pursuant  to the Trust  Indenture  Act at the times and in the  manner
provided  pursuant to such Act,  whether or not the  Debentures  are governed by
such Act; provided that any such  information,  documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee  within  fifteen  (15) days after the same is so
required to be filed with the Commission.  Delivery of such reports, information
and  documents  to the  Trustee  is for  informational  purposes  only  and  the
Trustee's  receipt  of such  shall  not  constitute  constructive  notice of any
information   contained  therein  or  determinable  from  information  contained
therein,  including the Company's compliance with any of its covenants hereunder
(as to which  the  Trustee  is  entitled  to rely  exclusively  on an  Officers'
Certificates).

                                   ARTICLE 8
       REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT

         Section  8.01 Events of Default.  In case one or more of the  following
Events of Default  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of  any  administrative  or  governmental  body)  shall  have  occurred  and  be
continuing:

               (a) default in the payment of any  installment  of interest  upon
any of the  Debentures  as and when the same shall become due and  payable,  and
continuance  of such  default for a period of thirty  (30) days  (whether or not
such payment is prohibited by the subordination  provisions set forth in Article
4 of this Indenture); or

               (b) default in the  payment of the  principal  of or premium,  if
any, on any of the  Debentures as and when the same shall become due and payable
either at maturity or in connection  with any  redemption or otherwise,  in each
case pursuant to Article 3, by  acceleration  or otherwise  (whether or not such
payment is prohibited by the subordination  provisions set forth in Article 4 of
this Indenture); or

               (c) default in the Company's  obligation to provide a Fundamental
Change Notice upon a Fundamental Change as provided in Section 3.05; or

               (d)  failure to deliver  all cash and any shares of Common  Stock
when such cash and Common  Stock,  if any,  are  required to be  delivered  upon
conversion  of a Debenture  (whether or not such  payment is  prohibited  by the
subordination provisions set forth in Article 4 of this Indenture); or

               (e) failure on the part of the Company duly to observe or perform
any other of the  covenants  or  agreements  on the part of the  Company  in the
Debentures or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 8.01 specifically
dealt  with)  continued  for a period of sixty (60) days after the date on which
written notice of such failure,  requiring the Company to remedy the same, shall
have been given to the Company by the Trustee,  or the Company and a Responsible
Officer of the Trustee by the holders of at least  twenty-five  percent (25%) in
aggregate principal amount of the Debentures at the time outstanding  determined
in accordance with Section 10.04; provided, however, that the Company shall have
up to 120 days  after  receipt of a written  notice  hereunder  (the  "Extension
Period")  to remedy,  or receive a waiver  for,  any  failure to comply with the
Company's obligation to file annual or quarterly reports in accordance with this
Indenture or to comply with the  requirements of Section  314(a)(1) of the Trust
Indenture Act (a "Filing  Failure") so long as the Company elects,  within sixty
(60)  days of the date of notice of such  failure,  to pay to the  holders a fee
(the  "Extension  Fee") accruing at the rate of 1.00% per annum of the aggregate
principal  amount of Debentures that are then  outstanding,  on the terms and in
the manner described below; or

                                       42
<PAGE>

               (f)  the  Company  shall  commence  a  voluntary  case  or  other
proceeding seeking  liquidation,  reorganization or other relief with respect to
the Company or its debts under any  bankruptcy,  insolvency or other similar law
now or hereafter in effect or seeking the  appointment  of a trustee,  receiver,
liquidator,   custodian  or  other  similar  official  of  the  Company  or  any
substantial  part of the property of the Company,  or shall  consent to any such
relief or to the appointment of or taking  possession by any such official in an
involuntary case or other  proceeding  commenced  against the Company,  or shall
make a general assignment for the benefit of creditors,  or shall fail generally
to pay its debts as they become due; or

               (g) an involuntary  case or other  proceeding  shall be commenced
against the Company  seeking  liquidation,  reorganization  or other relief with
respect to the Company or its debts under any  bankruptcy,  insolvency  or other
similar law now or hereafter in effect or seeking the  appointment of a trustee,
receiver, liquidator,  custodian or other similar official of the Company or any
substantial  part of the property of the Company,  and such  involuntary case or
other  proceeding  shall remain  undismissed  and unstayed for a period of sixty
(60)  consecutive  days;  then,  and in each and every such case  (other than an
Event of Default specified in Section 8.01(f) or 8.01(g)),  unless the principal
of all of the Debentures  shall have already become due and payable,  either the
Trustee or the holders of not less than  twenty-five  percent (25%) in aggregate
principal  amount of the Debentures  then  outstanding  hereunder  determined in
accordance  with Section 10.04,  by notice in writing to the Company (and to the
Trustee if given by Debentureholders), may declare the principal of and premium,
if any, on all the  Debentures  and the interest  accrued  thereon to be due and
payable  immediately,  and upon any such  declaration  the same shall become and
shall be  immediately  due and  payable,  anything in this  Indenture  or in the
Debentures  contained  to the contrary  notwithstanding.  If an Event of Default
specified  in Section  8.01(f)  or  8.01(g)  occurs,  the  principal  of all the
Debentures  and  the  interest   accrued   thereon  shall  be  immediately   and
automatically  due  and  payable  without  necessity  of  further  action.  This
provision,  however, is subject to the conditions that if, at any time after the
principal of the  Debentures  shall have been so declared  due and payable,  and
before any  judgment or decree for the payment of the monies due shall have been
obtained or entered as  hereinafter  provided,  the  Company  shall pay or shall
deposit with the Trustee a sum  sufficient  to pay all matured  installments  of
interest upon all  Debentures  and the principal of and premium,  if any, on any
and all Debentures  which shall have become due otherwise  than by  acceleration
(with interest on overdue  installments  of interest (to the extent that payment
of such interest is enforceable  under applicable law) and on such principal and
premium,  if any,  at the  rate  borne  by the  Debentures,  to the date of such
payment or deposit) and amounts due to the Trustee pursuant to Section 9.06, and
if any and all  defaults  under this  Indenture,  other than the  nonpayment  of
principal of and premium, if any, and accrued interest on Debentures which shall
have  become due by  acceleration,  shall have been cured or waived  pursuant to
Section 8.07, then and in every such case the holders of a majority in aggregate
principal  amount of the Debentures then  outstanding,  by written notice to the
Company  and to the  Trustee,  may waive all  defaults  or Events of Default and
rescind and annul such declaration and its  consequences;  but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent  default
or Event of Default, or shall impair any right consequent  thereon.  The Company
shall  notify in writing a  Responsible  Officer of the Trustee,  promptly  upon
becoming aware thereof, of any Event of Default.

                                       43
<PAGE>

         Any Extension Fee shall be paid on the same times and in the same
manner as interest shall be paid in accordance with this Indenture. The
Extension Fee shall accrue on the Debentures from the date that is sixty (60)
days after date notice is given by the Trustee or the holders in accordance with
this Section 8.01 to, but excluding, the earlier of (i) the date on which the
Company has made the filings initially giving rise to the Filing Failure and
(ii) the date that is one hundred twenty (120) days after the date notice is
given by the Trustee or the holders in accordance with Section 8.01.
Notwithstanding the foregoing, if an additional Filing Failure occurs during an
Extension Period, the Debentures will only be subject to acceleration for such
additional Filing Failure at the earlier of (x) the end of the Extension Period
and (y) in the event that the Company has agreed to pay an additional Extension
Fee in accordance with the terms of this Section 8.01 as to such additional
Filing Failure, the end of the additional Extension Period as to such additional
Filing Failure. For the avoidance of doubt, notwithstanding the occurrence of
multiple concurrent Filing Failures, the Extension Fee shall not exceed the rate
provided for in this paragraph.

         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.

         Section 8.02  Payments of  Debentures on Default;  Suit  Therefor.  The
Company  covenants  that in case  default  shall be made in the  payment  of any
installment  of interest  upon any of the  Debentures as and when the same shall
become due and payable,  and such default  shall have  continued for a period of
thirty  (30)  days,  or in case  default  shall  be made in the  payment  of the
principal of or premium,  if any, on any of the  Debentures as and when the same
shall have become due and payable,  whether at maturity of the  Debentures or in
connection  with any  redemption,  by or under  this  Indenture  declaration  or
otherwise,  then,  upon  demand  of the  Trustee,  the  Company  will pay to the
Trustee, for the benefit of the holders of the Debentures, the whole amount that
then shall have become due and payable on all such  Debentures for principal and
premium, if any, or interest, as the case may be, with interest upon the overdue
principal and premium,  if any, and (to the extent that payment of such interest
is enforceable  under applicable law) upon the overdue  installments of interest
at the rate borne by the  Debentures,  plus 1% and,  in addition  thereto,  such
further  amount  as shall be  sufficient  to cover the  costs  and  expenses  of
collection,  including  reasonable  compensation  to the  Trustee,  its  agents,
attorneys and counsel, and all other amounts due the Trustee under Section 9.06.
Until such  demand by the  Trustee,  the Company  may pay the  principal  of and
premium,  if any,  and interest on the  Debentures  to the  registered  holders,
whether or not the Debentures are overdue.

                                       44
<PAGE>

         In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.

         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Debentures, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 9.06, and to take any other action with respect to such claims,
including participating as a member of any official committee of creditors, as
it reasonably deems necessary or advisable, and, unless prohibited by law or
applicable regulations, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Debentureholders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments directly
to the Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.

         All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.

                                       45
<PAGE>

         In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.

         Section 8.03  Application  of Monies  Collected By Trustee.  Any monies
collected  by the  Trustee  pursuant  to this  Article 8 shall be applied in the
order following,  at the date or dates fixed by the Trustee for the distribution
of such  monies,  upon  presentation  of the several  Debentures,  and  stamping
thereon the payment,  if only partially  paid, and upon  surrender  thereof,  if
fully paid:

         FIRST: To the payment of all amounts due the Trustee under Section
9.06;

         SECOND: In case the principal of the outstanding Debentures shall not
have become due and be unpaid, to the payment of interest on the Debentures in
default in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee)
upon the overdue installments of interest at the rate borne by the Debentures,
such payments to be made ratably to the Persons entitled thereto;

         THIRD: In case the principal of the outstanding Debentures shall have
become due, by declaration or otherwise, and be unpaid to the payment of the
whole amount then owing and unpaid upon the Debentures for principal and
premium, if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate borne by the
Debentures, and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Debentures, then to the payment of such
principal and premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Debenture over any other Debenture, ratably to the aggregate
of such principal and premium, if any, and accrued and unpaid interest; and

         FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.

         Section 8.04 Proceedings by Debentureholder. No holder of any Debenture
shall  have any right by  virtue of or by  reference  to any  provision  of this
Indenture to institute  any suit,  action or proceeding in equity or at law upon
or  under  or with  respect  to this  Indenture,  or for  the  appointment  of a
receiver, trustee,  liquidator,  custodian or other similar official, or for any
other remedy  hereunder,  unless such holder  previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore  provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate  principal  amount of the Debentures then outstanding
shall have made written request upon the Trustee to institute such action,  suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such  reasonable  security or  indemnity  as it may require  against the
costs,  expenses  and  liabilities  to be incurred  therein or thereby,  and the
Trustee for sixty (60) days after its receipt of such notice,  request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee  pursuant to Section  8.07;  it being  understood  and
intended,  and being  expressly  covenanted  by the  taker  and  holder of every
Debenture with every other taker and holder and the Trustee, that no one or more
holders of Debentures  shall have any right in any manner  whatever by virtue of
or by  reference  to any  provision  of this  Indenture  to  affect,  disturb or
prejudice the rights of any other holder of Debentures,  or to obtain or seek to
obtain  priority over or preference to any other such holder,  or to enforce any
right under this  Indenture,  except in the manner  herein  provided and for the
equal,  ratable  and common  benefit of all  holders  of  Debentures  (except as
otherwise  provided herein).  For the protection and enforcement of this Section
8.04, each and every  Debentureholder  and the Trustee shall be entitled to such
relief as can be given either at law or in equity.

                                       46
<PAGE>

         Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article 8), and accrued interest on such Debenture, on or
after the respective due dates expressed in such Debenture or in the event of
redemption, or to institute suit for the enforcement of any such payment on or
after such respective dates against the Company shall not be impaired or
affected without the consent of such holder.

         Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

         Section 8.05  Proceedings  by Trustee.  In case of an Event of Default,
the Trustee  may, in its  discretion,  proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate  judicial  proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding  in  bankruptcy or otherwise,  whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or  equitable  right  vested in the Trustee by this  Indenture or by
law.

         Section 8.06 Remedies Cumulative and Continuing.  Except as provided in
Section 2.06,  all powers and remedies given by this Article 8 to the Trustee or
to the  Debentureholders  shall,  to the  extent  permitted  by law,  be  deemed
cumulative  and not exclusive of any thereof or of any other powers and remedies
available  to  the  Trustee  or  the  holders  of the  Debentures,  by  judicial
proceedings  or  otherwise,  to enforce the  performance  or  observance  of the
covenants and agreements  contained in this Indenture,  and no delay or omission
of the Trustee or of any holder of any of the  Debentures  to exercise any right
or power accruing upon any default or Event of Default  occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such  default or any  acquiescence  therein,  and,  subject to the
provisions of Section 8.04, every power and remedy given by this Article 8 or by
law to the  Trustee or to the  Debentureholders  may be  exercised  from time to
time,  and as often  as shall be  deemed  expedient,  by the  Trustee  or by the
Debentureholders.

                                       47
<PAGE>

         Section  8.07  Direction  of  Proceedings  and  Waiver of  Defaults  by
Majority of  Debentureholders.  The holders of a majority in aggregate principal
amount of the Debentures at the time  outstanding  determined in accordance with
Section  10.04  shall  have the right to direct  the time,  method  and place of
conducting any proceeding for any remedy  available to the Trustee or exercising
any trust or power  conferred on the Trustee;  provided that (a) such  direction
shall not be in conflict  with any rule of law or with this  Indenture,  (b) the
Trustee may take any other action which is not inconsistent with such direction,
(c) the  Trustee  may  decline  to take  any  action  that  would  benefit  some
Debentureholder to the detriment of other  Debentureholders  and (d) the Trustee
may  decline  to take any action  that would  involve  the  Trustee in  personal
liability.  The  holders  of a majority  in  aggregate  principal  amount of the
Debentures at the time  outstanding  determined in accordance with Section 10.04
may, on behalf of the holders of all of the  Debentures,  waive any past default
or Event of Default  hereunder and its consequences  except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of the redemption price pursuant to Article 3 or (iv) a
default in respect of a covenant or  provisions  hereof  which under  Article 12
cannot be modified or amended  without the consent of the holders of each or all
Debentures  then  outstanding  or affected  thereby.  Upon any such waiver,  the
Company,  the  Trustee and the  holders of the  Debentures  shall be restored to
their former positions and rights hereunder;  but no such waiver shall extend to
any  subsequent  or other  default  or Event of  Default  or  impair  any  right
consequent  thereon.  Whenever any default or Event of Default  hereunder  shall
have been waived as  permitted by this  Section  8.07,  said default or Event of
Default shall for all purposes of the Debentures and this Indenture be deemed to
have been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other  default or Event of Default or impair any right  consequent
thereon.

         Section 8.08 Notice of Defaults.  The Trustee shall, within ninety (90)
days after a Responsible  Officer of the Trustee has knowledge of the occurrence
of a default, mail to all  Debentureholders,  as the names and addresses of such
holders  appear upon the Debenture  Register,  notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such  notice;  provided  that except in the case of default in the
payment of the  principal  of, or  premium,  if any,  or  interest on any of the
Debentures,  the Trustee shall be protected in withholding such notice if and so
long as a trust  committee  of  directors  and/or  Responsible  Officers  of the
Trustee in good faith  determines  that the withholding of such notice is in the
interests of the Debentureholders.

         Section 8.09  Undertaking  to Pay Costs.  All parties to this Indenture
agree,  and each holder of any  Debenture  by his  acceptance  thereof  shall be
deemed to have agreed,  that any court may, in its discretion,  require,  in any
suit for the enforcement of any right or remedy under this Indenture,  or in any
suit against the Trustee for any action  taken or omitted by it as Trustee,  the
filing by any party  litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its  discretion  assess  reasonable  costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such  suit,  having  due  regard to the  merits  and good faith of the claims or
defenses  made by such party  litigant;  provided  that the  provisions  of this
Section  8.09 (to the  extent  permitted  by law)  shall  not  apply to any suit
instituted by the Trustee,  to any suit  instituted by any  Debentureholder,  or
group of  Debentureholders,  holding in the  aggregate  more than ten percent in
principal  amount  of the  Debentures  at the  time  outstanding  determined  in
accordance with Section 10.04, or to any suit instituted by any  Debentureholder
for the  enforcement  of the payment of the principal of or premium,  if any, or
interest on any Debenture on or after the due date  expressed in such  Debenture
or to any suit for the  enforcement  of the right to convert  any  Debenture  in
accordance with the provisions of Article 16.

                                       48
<PAGE>

                                    ARTICLE 9
                                   THE TRUSTEE

         Section 9.01 Duties and Responsibilities of Trustee. The Trustee, prior
to the  occurrence  of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties  as are  specifically  set forth in this  Indenture.  In case an Event of
Default has  occurred  (which has not been cured or waived),  the Trustee  shall
exercise such of the rights and powers vested in it by this  Indenture,  and use
the same degree of care and skill in their  exercise,  as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.

         No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

               (a) prior to the  occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:

                    (i) the  duties  and  obligations  of the  Trustee  shall be
determined  solely by the express  provisions  of this  Indenture  and the Trust
Indenture Act, and the Trustee shall not be liable except for the performance of
such duties and obligations as are  specifically set forth in this Indenture and
no implied  covenants or  obligations  shall be read into this Indenture and the
Trust Indenture Act against the Trustee; and

                    (ii) in the absence of bad faith and willful  misconduct  on
the part of the Trustee,  the Trustee may  conclusively  rely as to the truth of
the statements and the correctness of the opinions expressed  therein,  upon any
certificates  or  opinions  furnished  to  the  Trustee  and  conforming  to the
requirements  of this  Indenture;  but, in the case of any such  certificates or
opinions  which  by  any  provisions  hereof  are  specifically  required  to be
furnished to the Trustee,  the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;

               (b) the  Trustee  shall not be liable  for any error of  judgment
made in good faith by a Responsible  Officer or Officers of the Trustee,  unless
the Trustee was negligent in ascertaining the pertinent facts;

                                       49
<PAGE>

               (c) the Trustee  shall not be liable  with  respect to any action
taken or omitted to be taken by it in good faith in accordance  with the written
direction of the holders of not less than a majority in principal  amount of the
Debentures  at the time  outstanding  determined  as provided  in Section  10.04
relating to the time,  method and place of  conducting  any  proceeding  for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;

               (d)  whether or not therein  provided,  every  provision  of this
Indenture  relating to the conduct or affecting  the  liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;

               (e) the Trustee shall not be liable in respect of any payment (as
to the  correctness  of amount,  entitlement  to  receive  or any other  matters
relating to payment)  or notice  effected by the Company or any paying  agent or
any records maintained by any co-registrar with respect to the Debentures;

               (f) if any party  fails to deliver a notice  relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred;  and

               (g) the  Trustee  shall not be deemed  to have  knowledge  of any
Event of Default hereunder unless it shall have been notified in writing of such
Event of Default  by the  Company  or the  holders of at least 10% in  aggregate
principal amount of the Debentures.

         None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         Section 9.02 Reliance on Documents,  Opinions, Etc. Except as otherwise
provided in Section 9.01:

               (a) the Trustee may  conclusively  rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document  (whether in its  original or  facsimile  form)  believed by it in good
faith to be genuine and to have been signed or  presented by the proper party or
parties;

               (b) any  request,  direction,  order  or  demand  of the  Company
mentioned  herein shall be  sufficiently  evidenced by an Officers'  Certificate
(unless other evidence in respect  thereof be herein  specifically  prescribed);
and any  resolution of the Board of Directors may be evidenced to the Trustee by
a copy  thereof  certified by the  Secretary  or an  Assistant  Secretary of the
Company;

                                       50
<PAGE>

               (c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel  shall be full and complete  authorization  and
protection  in respect of any action  taken or omitted by it  hereunder  in good
faith and in accordance with such advice or Opinion of Counsel;

               (d) the Trustee  shall be under no  obligation to exercise any of
the rights or powers  vested in it by this  Indenture at the  request,  order or
direction  of any of the  Debentureholders  pursuant to the  provisions  of this
Indenture,  unless  such  Debentureholders  shall have  offered  to the  Trustee
reasonable security or indemnity  satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;

               (e) the Trustee shall not be bound to make any investigation into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion, report, notice, request, direction,  consent, order, bond,
debenture  or other paper or  document,  but the  Trustee may make such  further
inquiry or  investigation  into such facts or matters as it may see fit, and, if
the Trustee shall  determine to make such further inquiry or  investigation,  it
shall be  entitled to examine the books,  records and  premises of the  Company,
personally or by agent or attorney; and

               (f) the Trustee may execute any of the trusts or powers hereunder
or perform  any duties  hereunder  either  directly  or by or through  agents or
attorneys  and the  Trustee  shall  not be  responsible  for any  misconduct  or
negligence  on the part of any agent or attorney  appointed  by it with due care
hereunder.

               (g)  the  Trustee  shall  not be  liable  for any  action  taken,
suffered or omitted to be taken by it in good faith and  reasonably  believed by
it to be authorized or within the discretion or rights or powers  conferred upon
it by this Indenture;

               (h) the rights, privileges,  protections, immunities and benefits
given  to  the  Trustee,   including,   without  limitation,  its  right  to  be
indemnified,  are extended to, and shall be enforceable  by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;

               (i) the Trustee may request that the Company deliver an Officers'
Certificate  setting  forth the names of  individuals  and/or titles of officers
authorized at such time to take specified  actions  pursuant to this  Indenture,
which Officers'  Certificate  may be signed by any person  authorized to sign an
Officers'  Certificate,  including any person  specified as so authorized in any
such certificate previously delivered and not superseded; and

               (j) Any  permissive  right or  authority  granted to the  Trustee
shall not be construed as a mandatory duty.

         Section  9.03  No  Responsibility  for  Recitals,   Etc.  The  recitals
contained herein and in the Debentures  (except in the Trustee's  certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility  for the correctness of the same. The Trustee makes no
representations  as to the validity or  sufficiency  of this Indenture or of the
Debentures.  The Trustee shall not be accountable  for the use or application by
the Company of any  Debentures or the proceeds of any  Debentures  authenticated
and  delivered  by the  Trustee  in  conformity  with  the  provisions  of  this
Indenture.

                                       51
<PAGE>

         Section 9.04 Trustee, Paying Agents, Conversion Agents or Registrar May
Own Debentures. The Trustee, any paying agent, any conversion agent or Debenture
Registrar,  in its  individual  or any other  capacity,  may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture Registrar.

         Section 9.05 Monies to Be Held in Trust.  Subject to the  provisions of
Section 14.04,  all monies received by the Trustee shall,  until used or applied
as herein  provided,  be held in trust  for the  purposes  for  which  they were
received.  Money held by the Trustee in trust  hereunder  need not be segregated
from other  funds  except to the extent  required by law.  The Trustee  shall be
under no liability for interest on any money received by it hereunder  except as
may be agreed in writing from time to time by the Company and the Trustee.

         Section  9.06  Compensation  and  Expenses  of  Trustee.   The  Company
covenants  and agrees to pay to the Trustee  from time to time,  and the Trustee
shall  be  entitled  to,  such  compensation  for all  services  rendered  by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the  compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing  between the Company  and the  Trustee,  and the
Company  will pay or reimburse  the Trustee upon its request for all  reasonable
expenses,  disbursements and advances reasonably incurred or made by the Trustee
in  accordance  with any of the  provisions  of this  Indenture  (including  the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ)  except any such expense,  disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad  faith.  The  Company  also  covenants  to  indemnify  the  Trustee  and any
predecessor  Trustee (or any officer,  director or employee of the Trustee),  in
any capacity  under this Indenture and its agents and any  authenticating  agent
for, and to hold them harmless  against,  any and all loss,  liability,  damage,
claim or expense  including  taxes  (other than taxes based on the income of the
Trustee) incurred without negligence,  willful  misconduct,  recklessness or bad
faith on the part of the  Trustee or such  officers,  directors,  employees  and
agent or  authenticating  agent,  as the case may be, and  arising  out of or in
connection with the acceptance or  administration  of this trust or in any other
capacity  hereunder,  including  the costs and expenses of defending  themselves
against  any claim  (whether  asserted by the  Company,  any holder or any other
Person) of liability in the premises.  The obligations of the Company under this
Section 9.06 to  compensate or indemnify the Trustee and to pay or reimburse the
Trustee for  expenses,  disbursements  and  advances  shall be secured by a lien
prior to that of the Debentures upon all property and funds held or collected by
the Trustee as such,  except  funds held in trust for the benefit of the holders
of particular Debentures. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.

                                       52
<PAGE>

         When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

         Section 9.07  Officers'  Certificate  as Evidence.  Except as otherwise
provided in Section 9.01,  whenever in the  administration  of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or  established  prior to taking or omitting any action  hereunder,  such
matter  (unless  other  evidence  in  respect  thereof  be  herein  specifically
prescribed)  may, in the absence of bad faith or willful  misconduct on the part
of the  Trustee,  be deemed to be  conclusively  proved  and  established  by an
Officers' Certificate delivered to the Trustee.

         Section 9.08  Conflicting  Interests of Trustee.  If the Trustee has or
shall acquire a conflicting  interest  within the meaning of the Trust Indenture
Act, the Trustee shall either  eliminate such interest or resign,  to the extent
and in the manner  provided  by, and  subject  to the  provisions  of, the Trust
Indenture Act and this Indenture.

         Section  9.09  Eligibility  of  Trustee.  There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined  capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank  holding  company  shall have a combined  capital  and  surplus of at least
$50,000,000).  If such Person publishes  reports of condition at least annually,
pursuant  to  law  or to  the  requirements  of  any  supervising  or  examining
authority,  then for the  purposes  of this  Section  the  combined  capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent  report of condition so  published.  If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section  9.09,  it shall  resign  immediately  in the manner and with the effect
hereinafter specified in this Article.

         Section 9.10 Resignation or Removal of Trustee.  (a) The Trustee may at
any time resign by giving written notice of such  resignation to the Company and
to the holders of Debentures.  Upon receiving  such notice of  resignation,  the
Company shall promptly  appoint a successor  trustee by written  instrument,  in
duplicate,  executed  by order  of the  Board  of  Directors,  one copy of which
instrument  shall be  delivered  to the  resigning  Trustee  and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted  appointment  sixty  (60) days  after  the  mailing  of such  notice of
resignation to the  Debentureholders,  the resigning  Trustee may, upon ten (10)
Business  Days'  notice  to the  Company  and the  Debentureholders,  appoint  a
successor  identified  in such  notice or may  petition,  at the  expense of the
Company, any court of competent  jurisdiction for the appointment of a successor
trustee,  or,  if any  Debentureholder  who has  been a bona  fide  holder  of a
Debenture  or  Debentures  for at  least  six (6)  months  may,  subject  to the
provisions  of  Section  8.09,  on behalf of himself  and all  others  similarly
situated,  petition any such court for the  appointment of a successor  trustee.
Such court may thereupon,  after such notice,  if any, as it may deem proper and
prescribe, appoint a successor trustee.

                                       53
<PAGE>

               (b) In case at any time any of the following shall occur:

                    (i) the Trustee shall fail to comply with Section 9.08 after
written request therefor by the Company or by any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six (6) months; or

                    (ii) the Trustee  shall  cease to be eligible in  accordance
with the  provisions  of  Section  9.09 and shall fail to resign  after  written
request therefor by the Company or by any such Debentureholder; or

                    (iii) the Trustee shall become incapable of acting, or shall
be  adjudged a bankrupt  or  insolvent,  or a receiver  of the Trustee or of its
property shall be appointed,  or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of  rehabilitation,
conservation or liquidation;  then, in any such case, the Company may remove the
Trustee and appoint a successor  trustee by written  instrument,  in  duplicate,
executed by order of the Board of Directors,  one copy of which instrument shall
be  delivered to the Trustee so removed and one copy to the  successor  trustee,
or, subject to the provisions of Section 8.09, any  Debentureholder who has been
a bona fide holder of a Debenture or Debentures for at least six (6) months may,
on behalf of himself and all others  similarly  situated,  petition any court of
competent  jurisdiction  for the removal of the Trustee and the appointment of a
successor  trustee;  provided  that if no  successor  Trustee  shall  have  been
appointed and have accepted appointment sixty (60) days after either the Company
or the  Debentureholders  has removed the Trustee,  or the Trustee resigns,  the
Trustee so removed may  petition,  at the expense of the  Company,  any court of
competent jurisdiction for an appointment of a successor trustee. Such court may
thereupon,  after such  notice,  if any,  as it may deem  proper and  prescribe,
remove the Trustee and appoint a successor trustee.

               (c) The holders of a majority in  aggregate  principal  amount of
the  Debentures at the time  outstanding  may at any time remove the Trustee and
nominate a  successor  trustee  which  shall be deemed  appointed  as  successor
trustee  unless,  within  ten (10)  days  after  notice to the  Company  of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Debentureholder,  or if such Trustee so removed or any Debentureholder fails
to act, the Company,  upon the terms and  conditions and otherwise as in Section
9.10(a)  provided,  may  petition  any court of  competent  jurisdiction  for an
appointment of a successor trustee.

               (d) Any  resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this Section 9.10 shall
become  effective upon  acceptance of  appointment  by the successor  trustee as
provided in Section 9.11.

               (e)  Notwithstanding  the replacement of the Trustee  pursuant to
this Section,  the Company's  obligations  under Section 9.06 shall continue for
the benefit of the retiring Trustee.

         Section 9.11  Acceptance by Successor  Trustee.  Any successor  trustee
appointed as provided in Section 9.10 shall execute,  acknowledge and deliver to
the  Company  and  to its  predecessor  trustee  an  instrument  accepting  such
appointment  hereunder,   and  thereupon  the  resignation  or  removal  of  the
predecessor  trustee shall become effective and such successor trustee,  without
any further act,  deed or  conveyance,  shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor  trustee,  the trustee  ceasing to act shall,
upon  payment of any amount then due it pursuant  to the  provisions  of Section
9.06,  execute and deliver an instrument  transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act.  Upon request of any
such  successor  trustee,  the Company shall execute any and all  instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee  all  such  rights  and  powers.  Any  trustee  ceasing  to  act  shall,
nevertheless,  retain a lien upon all  property  and funds held or  collected by
such trustee as such,  except for funds held in trust for the benefit of holders
of  particular  Debentures,  to secure any  amounts  then due it pursuant to the
provisions of Section 9.06.

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         No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.

         Section  9.12  Succession  by Merger.  Any  corporation  into which the
Trustee may be merged or converted or with which it may be consolidated,  or any
corporation resulting from any merger,  conversion or consolidation to which the
Trustee shall be a party, or any corporation  succeeding to all or substantially
all of the corporate trust business of the Trustee  (including any trust created
by this Indenture),  shall be the successor to the Trustee hereunder without the
execution  or filing of any paper or any  further  act on the part of any of the
parties hereto,  provided that in the case of any corporation  succeeding to all
or  substantially  all of the  corporate  trust  business of the  Trustee,  such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.

         In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.

                                       55
<PAGE>

         Section 9.13 Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor  of the  Company  (or any other  obligor  upon the
Debentures),  the  Trustee  shall be  subject  to the  provisions  of the  Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).

                                   ARTICLE 10
                              THE DEBENTUREHOLDERS

         Section 10.01 Action by Debentureholders. Whenever in this Indenture it
is provided that the holders of a specified  percentage  in aggregate  principal
amount of the Debentures may take any action (including the making of any demand
or  request,  the giving of any  notice,  consent or waiver or the taking of any
other action),  the fact that at the time of taking any such action, the holders
of such  specified  percentage  have joined  therein may be evidenced (a) by any
instrument  or  any  number  of   instruments   of  similar  tenor  executed  by
Debentureholders  in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of  Debentures  voting in favor thereof at any meeting
of  Debentureholders  duly called and held in accordance  with the provisions of
Article 11, or (c) by a combination of such  instrument or  instruments  and any
such record of such a meeting of  Debentureholders.  Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures,  the
Company or the  Trustee may fix in advance of such  solicitation,  a date as the
record date for  determining  holders  entitled to take such action.  The record
date shall be not more than fifteen (15) days prior to the date of  commencement
of solicitation of such action.

         Section  10.02 Proof of Execution by  Debentureholders.  Subject to the
provisions  of Sections  9.01,  9.02 and 11.05,  proof of the  execution  of any
instrument  by a  Debentureholder  or its agent or proxy shall be  sufficient if
made  in  accordance  with  such  reasonable  rules  and  regulations  as may be
prescribed  by the  Trustee or in such  manner as shall be  satisfactory  to the
Trustee.  The  holding of  Debentures  shall be proved by the  registry  of such
Debentures or by a certificate of the Debenture Registrar.

         The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 11.06.

         Section 10.03 Who are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Debenture  Registrar may deem the
Person in whose  name such  Debenture  shall be  registered  upon the  Debenture
Register  to be,  and may  treat it as,  the  absolute  owner of such  Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing  thereon made by any Person other than the Company
or any  Debenture  Registrar)  for the  purpose  of  receiving  payment of or on
account of the principal of,  premium,  if any, and interest on such  Debenture,
for  conversion of such  Debenture and for all other  purposes;  and neither the
Company nor the Trustee nor any paying  agent nor any  conversion  agent nor any
Debenture  Registrar  shall be affected by any notice to the contrary.  All such
payments so made to any holder for the time being,  or upon his order,  shall be
valid,  and, to the extent of the sum or sums so paid,  effectual to satisfy and
discharge the liability for monies payable upon any such Debenture.

                                       56
<PAGE>

         Section 10.04  Company-owned  Debentures  Disregarded.  In  determining
whether the holders of the requisite  aggregate  principal  amount of Debentures
have  concurred  in any  direction,  consent,  waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures  or  any  Affiliate  of  the  Company  or any  other  obligor  on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action,  only Debentures which a Responsible Officer knows are so owned
shall be so  disregarded.  Debentures  so owned which have been  pledged in good
faith may be regarded as  outstanding  for the purposes of this Section 10.04 if
the pledgee  shall  establish to the  satisfaction  of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the  Debentures  or any  Affiliate  of the  Company or any such other
obligor.  In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full  protection to the Trustee.  Upon
request of the Trustee,  the Company  shall  furnish to the Trustee  promptly an
Officers'  Certificate listing and identifying all Debentures,  if any, known by
the  Company  to be  owned  or held by or for the  account  of any of the  above
described  Persons,  and, subject to Section 9.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.

         Section 10.05 Revocation of Consents, Future Holders Bound. At any time
prior to (but not after) the  evidencing to the Trustee,  as provided in Section
10.01, of the taking of any action by the holders of the percentage in aggregate
principal  amount of the  Debentures  specified in this  Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the  Debentures  the holders of which have  consented to such action
may, by filing written notice with the Trustee at its Corporate Trust Office and
upon proof of holding as provided in Section 10.02, revoke such action so far as
concerns  such  Debenture.  Except as  aforesaid,  any such action  taken by the
holder of any  Debenture  shall be  conclusive  and binding upon such holder and
upon all future  holders  and  owners of such  Debenture  and of any  Debentures
issued in  exchange  or  substitution  therefor,  irrespective  of  whether  any
notation in regard thereto is made upon such  Debenture or any Debenture  issued
in exchange or substitution therefor.

                                   ARTICLE 11
                          MEETINGS OF DEBENTUREHOLDERS

         Section 11.01 Purpose of Meetings. A meeting of Debentureholders may be
called  at any time and from time to time  pursuant  to the  provisions  of this
Article 11 for any of the following purposes:

                    (1) to give any notice to the  Company or to the  Trustee or
to give any  directions to the Trustee  permitted  under this  Indenture,  or to
consent to the  waiving of any  default  or Event of Default  hereunder  and its
consequences,   or  to  take  any  other  action   authorized  to  be  taken  by
Debentureholders pursuant to any of the provisions of Article 8;

                                       57
<PAGE>

                    (2) to remove the Trustee and  nominate a successor  trustee
pursuant to the provisions of Article 9;

                    (3)  to  consent  to  the   execution  of  an  indenture  or
indentures supplemental hereto pursuant to the provisions of Section 12.02; or

                    (4) to take any other action authorized to be taken by or on
behalf  of the  holders  of any  specified  aggregate  principal  amount  of the
Debentures under any other provision of this Indenture or under applicable law.

         Section 11.02 Call of Meetings by Trustee.  The Trustee may at any time
call a meeting  of  Debentureholders  to take any  action  specified  in Section
11.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders,  setting forth the time and the
place of such  meeting and in general  terms the action  proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 10.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.

         Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.

         Section 11.03 Call of Meetings by Company or Debentureholders.  In case
at any time the Company,  pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate  principal  amount of the
Debentures then outstanding,  shall have requested the Trustee to call a meeting
of  Debentureholders,  by written request setting forth in reasonable detail the
action  proposed  to be taken at the  meeting,  and the  Trustee  shall not have
mailed the notice of such meeting  within twenty (20) days after receipt of such
request,  then the Company or such  Debentureholders  may determine the time and
the  place  for  such  meeting  and may call  such  meeting  to take any  action
authorized in Section  11.01,  by mailing  notice thereof as provided in Section
11.02.

         Section 11.04  Qualifications For Voting. To be entitled to vote at any
meeting  of  Debentureholders  a person  shall  (a) be a  holder  of one or more
Debentures  on the record  date  pertaining  to such  meeting or (b) be a person
appointed  by an  instrument  in  writing  as proxy  by a holder  of one or more
Debentures on the record date  pertaining to such meeting.  The only persons who
shall be entitled  to be present or to speak at any meeting of  Debentureholders
shall be the persons  entitled to vote at such meeting and their counsel and any
representatives  of the Trustee and its counsel and any  representatives  of the
Company and its counsel.

         Section 11.05 Regulations. Notwithstanding any other provisions of this
Indenture,  the  Trustee  may make such  reasonable  regulations  as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of  Debentures  and  of  the  appointment  of  proxies,  and  in  regard  to the
appointment and duties of inspectors of votes, the submission and examination of
proxies,  certificates  and other  evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

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<PAGE>

         The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 11.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.

         Subject to the provisions of Section 10.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
11.02 or 11.03 may be adjourned from time to time by the holders of a majority
of the aggregate principal amount of Debentures represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.

         Section 11.06  Voting.  The vote upon any  resolution  submitted to any
meeting  of  Debentureholders  shall be by  written  ballot  on  which  shall be
subscribed   the   signatures   of  the  holders  of   Debentures  or  of  their
representatives by proxy and the outstanding  principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two  inspectors  of votes who shall  count all votes cast at the  meeting for or
against any  resolution  and who shall make and file with the  secretary  of the
meeting  their  verified  written  reports in duplicate of all votes cast at the
meeting.   A  record  in  duplicate  of  the  proceedings  of  each  meeting  of
Debentureholders  shall be  prepared by the  secretary  of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge  of the facts  setting  forth a copy of the notice of the  meeting and
showing  that said notice was mailed as provided  in Section  11.02.  The record
shall show the principal amount of the Debentures  voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent  chairman and secretary of the meeting and one of the duplicates shall
be  delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

         Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

         Section 11.07 No Delay of Rights by Meeting.  Nothing contained in this
Article 11 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of  Debentureholders  or any  rights  expressly  or  impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any  right  or  rights  conferred  upon or  reserved  to the  Trustee  or to the
Debentureholders  under  any of  the  provisions  of  this  Indenture  or of the
Debentures.

                                       59
<PAGE>

                                   ARTICLE 12
                             SUPPLEMENTAL INDENTURES

         Section   12.01    Supplemental    Indentures    Without   Consent   of
Debentureholders.  The Company,  when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures  supplemental hereto for one or more of the following
purposes:

               (a) make provision  with respect to the conversion  rights of the
holders of  Debentures  pursuant to the  requirements  of Section  16.06 and the
redemption  obligations of the Company  pursuant to the  requirements of Section
3.05(e);

               (b) to  convey,  transfer,  assign,  mortgage  or  pledge  to the
Trustee as security for the Debentures, any property or assets;

               (c) to evidence the  succession of another Person to the Company,
or successive  successions,  and the  assumption by the successor  Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;

               (d)  to  add  to  the  covenants  of  the  Company  such  further
covenants,  restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of  Debentures,  and to make
the  occurrence,  or the  occurrence and  continuance,  of a default in any such
additional  covenants,  restrictions  or  conditions  a  default  or an Event of
Default  permitting  the  enforcement  of all or  any  of the  several  remedies
provided in this Indenture as herein set forth;  provided that in respect of any
such additional covenant,  restriction or condition, such supplemental indenture
may provide for a particular  period of grace after default (which period may be
shorter  or  longer  than that  allowed  in the case of other  defaults)  or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;

               (e)  to  provide  for  the  issuance   under  this  Indenture  of
Debentures  in coupon form  (including  Debentures  registrable  as to principal
only) and to provide for  exchangeability of such Debentures with the Debentures
issued  hereunder in fully  registered form and to make all appropriate  changes
for such purpose;

               (f) to  cure  any  ambiguity  or to  correct  or  supplement  any
provision  contained  herein  or in  any  supplemental  indenture  that  may  be
defective or inconsistent  with any other provision  contained  herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions  arising  under this  Indenture  that shall not  materially  adversely
affect the interests of the holders of the Debentures;

               (g) to evidence  and provide for the  acceptance  of  appointment
hereunder by a successor Trustee with respect to the Debentures;

               (h)  to  issue  Additional  Debentures  in  accordance  with  the
provisions of Section 2.01 hereof; or

                                       60
<PAGE>

               (i)  to  modify,  eliminate  or add to  the  provisions  of  this
Indenture to such extent as shall be necessary to effect the  qualifications  of
this  Indenture  under the Trust  Indenture  Act, or under any  similar  federal
statute hereafter enacted.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 12.02.

         Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

         Section 12.02 Supplemental  Indenture with Consent of Debentureholders.
With the  consent  (evidenced  as  provided  in Article 10) of the holders of at
least a majority in aggregate  principal  amount of the  Debentures  at the time
outstanding,  the Company,  when  authorized by the  resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this Indenture or any  supplemental  indenture or of modifying in any manner the
rights of the  holders of the  Debentures;  provided  that no such  supplemental
indenture  shall (i) extend the fixed maturity of any  Debenture,  or reduce the
rate or extend the time of payment of interest thereon,  or reduce the principal
amount  thereof or premium,  if any,  thereon,  or reduce any amount  payable on
redemption thereof, or impair the right of any Debentureholder to institute suit
for the payment thereof,  or make the principal  thereof or interest or premium,
if any,  thereon payable in any coin or currency other than that provided in the
Debentures,  or change the rights granted to the holders in Section  16.01(d) of
this Indenture,  or change the obligation of the Company to redeem any Debenture
on a redemption date in a manner adverse to the holders of Debentures, or change
the  obligation of the Company to redeem any  Debenture  upon the happening of a
Fundamental  Change in a manner adverse to the holders of Debentures,  or impair
the right to convert the  Debentures  into Common Stock subject to the terms set
forth herein,  including Section 16.06, in each case, without the consent of the
holder of each  Debenture so affected,  or modify any of the  provisions of this
Section  12.02 or Section  8.07,  except to increase any such  percentage  or to
provide that certain other  provisions of this  Indenture  cannot be modified or
waived  without  the consent of the holder of each  Debenture  so  affected,  or
change any  obligation  of the  Company to  maintain  an office or agency in the
places and for the purposes set forth in Section  6.01,  or reduce the quorum or
voting  requirements  set  forth in  Article  11 or (ii)  reduce  the  aforesaid
percentage  of  Debentures,  the holders of which are required to consent to any
such  supplemental  indenture,  without  the  consent  of  the  holders  of  all
Debentures then outstanding.

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<PAGE>

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

         It shall not be necessary for the consent of the Debentureholders under
this Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Section  12.03  Effect  of  Supplemental  Indenture.  Any  supplemental
indenture  executed  pursuant to the  provisions of this Article 12 shall comply
with the Trust  Indenture  Act, as then in effect,  provided  that this  Section
12.03  shall not  require  such  supplemental  indenture  or the  Trustee  to be
qualified under the Trust Indenture Act prior to the time such  qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been  qualified  under the Trust  Indenture  Act,  nor shall it  constitute  any
admission or acknowledgment by any party to such supplemental indenture that any
such  qualification is required prior to the time such  qualification is in fact
required  under the terms of the Trust  Indenture  Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any  supplemental
indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed  to be  modified  and  amended  in  accordance  therewith  and the
respective  rights,  limitation of rights,  obligations,  duties and  immunities
under this  Indenture of the Trustee,  the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such  modifications  and amendments and all the terms and conditions
of any such  supplemental  indenture  shall be and be  deemed  to be part of the
terms and conditions of this Indenture for any and all purposes.

         Section 12.04  Notation on  Debentures.  Debentures  authenticated  and
delivered  after the  execution of any  supplemental  indenture  pursuant to the
provisions  of this  Article  12 may bear a  notation  in form  approved  by the
Trustee as to any matter  provided for in such  supplemental  indenture.  If the
Company or the Trustee  shall so  determine,  new  Debentures  so modified as to
conform,  in the  opinion  of the  Trustee  and the Board of  Directors,  to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the  Trustee  (or an  authenticating  agent  duly  appointed  by the  Trustee
pursuant to Section  17.10) and  delivered in exchange for the  Debentures  then
outstanding, upon surrender of such Debentures then outstanding.

         Section 12.05  Evidence of Compliance of  Supplemental  Indenture to be
Furnished to Trustee.  Prior to entering into any  supplemental  indenture,  the
Trustee  shall be  provided  with an  Officers'  Certificate  and an  Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto  complies  with the  requirements  of this  Article  12 and is  otherwise
authorized or permitted by this Indenture.

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                                   ARTICLE 13
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

         Section 13.01 Company May Consolidate on Certain Terms.  Subject to the
provisions of Section 13.02,  the Company shall not consolidate or merge with or
into any other Person or Persons  (whether or not affiliated  with the Company),
nor shall the Company or its  successor or  successors  be a party or parties to
successive  consolidations  or  mergers,  nor shall the  Company  sell,  convey,
transfer or lease the  property  and assets of the Company  substantially  as an
entirety,  to any other Person  (whether or not  affiliated  with the  Company),
unless: (i) the Company is the surviving Person, or the resulting,  surviving or
transferee Person is a corporation  organized and existing under the laws of the
United States of America,  any state  thereof or the District of Columbia;  (ii)
upon any such consolidation,  merger, sale,  conveyance,  transfer or lease, the
due and punctual  payment of the principal of and premium,  if any, and interest
on all of the  Debentures,  according  to their  tenor and the due and  punctual
performance  and  observance  of all of the  covenants  and  conditions  of this
Indenture  to be  performed  by the  Company,  shall be  expressly  assumed,  by
supplemental  indenture  satisfactory  in  form  to the  Trustee,  executed  and
delivered  to the  Trustee by the Person (if other than the  Company)  formed by
such consolidation,  or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property,  and such  supplemental
indenture  shall  provide  for the  applicable  conversion  rights  set forth in
Section  16.06;  and (iii)  immediately  after giving effect to the  transaction
described above, no Event of Default,  and no event which, after notice or lapse
of time or both,  would become an Event of Default,  shall have  happened and be
continuing.

         Section  13.02  Successor  to be  Substituted.  In  case  of  any  such
consolidation,  merger,  sale,  conveyance,  transfer  or  lease  and  upon  the
assumption by the successor  Person,  by  supplemental  indenture,  executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual  performance of all of the covenants and
conditions  of this  Indenture to be performed  by the Company,  such  successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part.  Such  successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Greatbatch, Inc. any or all of the Debentures, issuable hereunder
that theretofore  shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject  to  all  the  terms,  conditions  and  limitations  in  this  Indenture
prescribed,  the Trustee shall  authenticate  and shall deliver,  or cause to be
authenticated  and delivered,  any Debentures  that  previously  shall have been
signed  and  delivered  by the  officers  of the  Company  to  the  Trustee  for
authentication,  and any Debentures that such successor Person  thereafter shall
cause to be signed  and  delivered  to the  Trustee  for that  purpose.  All the
Debentures  so issued shall in all respects have the same legal rank and benefit
under this  Indenture as the  Debentures  theretofore  or  thereafter  issued in
accordance with the terms of this Indenture as though all of such Debentures had
been  issued  at the  date of the  execution  hereof.  In the  event of any such
consolidation,  merger, sale, conveyance, transfer or lease, the Person named as
the "Company" in the first  paragraph of this  Indenture or any  successor  that
shall  thereafter  have become such in the manner  prescribed in this Article 13
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its  liabilities  as obligor and maker of the  Debentures
and from its obligations under this Indenture.

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<PAGE>

         In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Debentures thereafter to be issued as may be appropriate.

         Section 13.03 Opinion of Counsel to be Given Trustee. The Trustee shall
receive an  Officers'  Certificate  and an  Opinion  of  Counsel  as  conclusive
evidence that any such  consolidation,  merger,  sale,  conveyance,  transfer or
lease and any such assumption complies with the provisions of this Article 13.

                                   ARTICLE 14
                     SATISFACTION AND DISCHARGE OF INDENTURE

         Section 14.01 Discharge of Indenture. When the Company shall deliver to
the Trustee for cancellation  all Debentures  theretofore  authenticated  (other
than any Debentures that have been  destroyed,  lost or stolen and in lieu of or
in substitution  for which other Debentures  shall have been  authenticated  and
delivered) and not theretofore  canceled,  or all the Debentures not theretofore
canceled or delivered to the Trustee for cancellation  shall have become due and
payable,  or are by their terms to become due and payable within one year or are
to be called for redemption within one year under  arrangements  satisfactory to
the  Trustee  for the  giving of notice of  redemption,  and the  Company  shall
deposit with the Trustee,  in trust, funds sufficient to pay at maturity or upon
redemption of all of the Debentures  (other than any Debentures  that shall have
been mutilated,  destroyed, lost or stolen and in lieu of or in substitution for
which  other  Debentures  shall  have  been  authenticated  and  delivered)  not
theretofore  canceled or  delivered to the Trustee for  cancellation,  including
principal and premium, if any, and interest due or to become due to such date of
maturity or redemption  date, as the case may be,  accompanied by a verification
report,  as to the  sufficiency  of the deposited  amount,  from an  independent
certified  accountant  or  other  financial  professional  satisfactory  to  the
Trustee,  and if the  Company  shall also pay or cause to be paid all other sums
payable  hereunder  by the  Company,  then this  Indenture  shall cease to be of
further  effect  (except as to  remaining  rights of  registration  of transfer,
substitution  and exchange and  conversion of  Debentures,  rights  hereunder of
Debentureholders  to receive  payments of principal of and premium,  if any, and
interest on, the  Debentures  and the other rights,  duties and  obligations  of
Debentureholders,  as beneficiaries  hereof with respect to the amounts, if any,
so deposited with the Trustee and the rights,  obligations and immunities of the
Trustee  hereunder),   and  the  Trustee,  on  written  demand  of  the  Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 17.04 and at the cost and expense of the Company,  shall execute  proper
instruments  acknowledging  satisfaction of and discharging this Indenture;  the
Company,  however,  hereby  agrees to  reimburse  the  Trustee  for any costs or
expenses  thereafter  reasonably  and  properly  incurred  by the Trustee and to
compensate  the Trustee for any  services  thereafter  reasonably  and  properly
rendered by the Trustee in connection with this Indenture or the Debentures.

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<PAGE>

         Section 14.02 Deposited Monies to be Held in Trust by Trustee.  Subject
to Section  14.04,  all monies  deposited  with the Trustee  pursuant to Section
14.01, shall be held in trust for the sole benefit of the Debentureholders,  and
such monies shall be applied by the Trustee to the payment,  either  directly or
through  any paying  agent  (including  the  Company if acting as its own paying
agent),  to  the  holders  of the  particular  Debentures  for  the  payment  or
redemption  of which such monies have been  deposited  with the Trustee,  of all
sums due and to become due thereon for  principal  and interest and premium,  if
any.

         Section 14.03 Paying Agent to Repay Monies Held. Upon the  satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures  (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.

         Section 14.04 Return of Unclaimed  Monies.  Subject to the requirements
of applicable law, any monies  deposited with or paid to the Trustee for payment
of the principal of, premium,  if any, or interest on Debentures and not applied
but  remaining  unclaimed by the holders of  Debentures  for two years after the
date  upon  which  the  principal  of,  premium,  if any,  or  interest  on such
Debentures,  as the case may be,  shall have  become due and  payable,  shall be
repaid to the Company by the Trustee on demand and all  liability of the Trustee
shall thereupon cease with respect to such monies;  and the holder of any of the
Debentures  shall  thereafter look only to the Company for any payment that such
holder may be entitled to collect  unless an applicable  abandoned  property law
designates another Person.

         Section  14.05  Reinstatement.  If the  Trustee or the paying  agent is
unable to apply  any money in  accordance  with  Section  14.02 by reason of any
order or judgment of any court or governmental authority enjoining,  restraining
or otherwise prohibiting such application,  the Company's obligations under this
Indenture  and the  Debentures  shall be  revived  and  reinstated  as though no
deposit had occurred pursuant to Section 14.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
14.02;  provided  that if the  Company  makes  any  payment  of  interest  on or
principal of any Debenture  following the reinstatement of its obligations,  the
Company shall be  subrogated to the rights of the holders of such  Debentures to
receive such payment from the money held by the Trustee or paying agent.

                                   ARTICLE 15
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

         Section 15.01 Indenture and Debentures Solely Corporate Obligations. No
recourse for the payment of the principal of or premium,  if any, or interest on
any Debenture,  or for any claim based thereon or otherwise in respect  thereof,
and no  recourse  under or upon any  obligation,  covenant or  agreement  of the
Company in this Indenture or in any supplemental  indenture or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator,  stockholder,  employee,  agent, officer,  director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation,   either   directly  or  through  the  Company  or  any   successor
corporation,  whether by virtue of any constitution,  statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby  expressly waived and released as a
condition of, and as a  consideration  for, the execution of this  Indenture and
the issue of the Debentures.

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<PAGE>

                                   ARTICLE 16
                            CONVERSION OF DEBENTURES

         Section 16.01 Right to Convert. (a) Subject to and upon compliance with
the provisions of this Indenture and the right of the Company to pay some or all
of the conversion consideration in cash in accordance with Section 16.12 (unless
the Company has made a Physical Settlement Election), prior to June 15, 2013 the
holder of any  Debenture  shall  have the right,  at such  holder's  option,  to
convert the principal amount of the Debenture,  or any portion of such principal
amount which is a multiple of $1,000, into fully paid and non-assessable  shares
of Common Stock (as such shares  shall then be  constituted)  at the  Conversion
Rate in effect at such time, by surrender of the Debenture so to be converted in
whole or in part,  together  with any required  funds,  under the  circumstances
described in this Section 16.01 and in the manner provided in Section 16.02. The
Debentures shall be convertible only upon the occurrence of one of the following
events:

                    (i)  during  any Fiscal  Quarter  commencing  after June 30,
2007, if the Closing Sale Price exceeds 150% of the  Conversion  Price in effect
for at least 20 Trading Days in the 30 consecutive  Trading Day period ending on
the last  Trading  Day of the  immediately  preceding  Fiscal  Quarter (it being
understood for purposes of this Section 16.01(a)(i) that the Conversion Price in
effect at the  close of  business  on each of the 30  consecutive  Trading  Days
should  be used and that  Debentures  are not  convertible  under  this  Section
16.01(a)(i) prior to July 1, 2007);

                    (ii)  during the five  Business  Day  period  after any five
consecutive  Trading Day period in which the Trading Price per $1,000  principal
amount of the  Debentures  for each day of such five Trading Day period was less
than 98% of the  product of the  Closing  Sale Price and the number of shares of
Common  Stock  issuable  upon  conversion  of  $1,000  principal  amount  of the
Debentures;

                    (iii) if such Debenture has been called for  redemption,  at
any time on or after the date the notice of redemption  has been given until the
close of business on the Business Day immediately preceding the redemption date;

                    (iv) as provided in Section (b) of this Section 16.01;

                    (v) if a  Fundamental  Change  occurs or is  approved by the
Company's Board of Directors; or

                    (vi) at any time during the period  beginning  60 days prior
to, but excluding, June 15, 2013.

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<PAGE>

         The Trustee (or other conversion agent appointed by the Company) shall,
on behalf of the Company, determine on a daily basis during the time period
specified in Section 16.01(a)(i) whether the Debentures shall be convertible as
a result of the occurrence of an event specified in clause (i) above and, if the
Debentures shall be so convertible, the Trustee (or other conversion agent
appointed by the Company) shall promptly deliver to the Company and the Trustee
(if the Trustee is not the conversion agent) written notice thereof. Whenever
the Debentures shall become convertible pursuant to this Section 16.01, the
Company or, at the Company's request, the Trustee in the name and at the expense
of the Company, shall notify the holders of the event triggering such
convertibility in the manner provided in Section 17.03, and the Company shall
also publicly announce such information and publish it on the Company's web
site. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

         The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under this Section 16.01
unless the Company has requested such a determination; and the Company shall
have no obligation to make such request unless a holder provides it with
reasonable evidence that the Trading Price per $1,000 principal amount of
Debentures would be less than 98% of the product of the Closing Sale Price and
the number of shares of Common Stock issuable upon conversion of $1,000
principal amount of Debentures. If such evidence is provided, the Company shall
instruct the Trustee (or other conversion agent) to determine the Trading Price
of the Debentures beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Debentures is
greater than or equal to 98% of the product of the Closing Sale Price and the
number of shares issuable upon conversion of $1,000 principal amount of the
Debentures; provided that the Trustee shall be under no duty or obligation to
make the calculations described in Section 16.01(a)(ii) hereof or to determine
whether the Debentures are convertible pursuant to such section. For the
avoidance of doubt, the Company shall make the calculations described in Section
16.01(a)(ii), using the Trading Price provided by the Trustee.

         The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 16.01(a)(i) and Section
16.01(a)(ii) hereof (including without limitation the calculation or
determination of the Conversion Price, the Closing Sales Price and the Trading
Price), and the Company agrees, if requested by the Trustee, to cooperate with,
and provide assistance to, the Trustee in carrying out its duties under this
Section 16.01; provided, however, that nothing herein shall be construed to
relieve the Trustee of its duties pursuant to Section 16.01(a)(i) and Section
16.01(a)(ii) hereof.

               (b) In addition, if:

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<PAGE>

                    (i) (A) the Company distributes to all holders of its Common
Stock rights or warrants entitling them (for a period expiring within 45 days of
the record date for the  determination of the  stockholders  entitled to receive
such  distribution)  to subscribe for or purchase  shares of Common Stock,  at a
price per share  less than the  average  of the  Closing  Sale Price for the ten
Trading  Days  immediately   preceding,   but  not  including,   the  date  such
distribution  is first  publicly  announced by the  Company,  or (B) the Company
distributes  to all  holders of its Common  Stock,  cash or other  assets,  debt
securities or rights to purchase its securities,  where the Fair Market Value of
such distribution per share of Common Stock exceeds 5% of the Closing Sale Price
on the Trading Day  immediately  preceding the date such  distribution  is first
publicly  announced by the Company,  then, in either case, the Debentures may be
surrendered  for  conversion  at any time on and after the date that the Company
gives notice to the holders of such  distribution,  which shall be not less than
20 days prior to the Ex-Dividend Time for such  distribution,  until the earlier
of the close of business on the  Business  Day  immediately  preceding,  but not
including,  the Ex-Dividend Time or the date the Company publicly announces that
such  distribution  will not take  place;  provided  that no  adjustment  to the
Conversion  Price or the ability of a holder of a Debenture  to convert  will be
made if the holder  will  otherwise  participate  in such  distribution  without
conversion; or

                    (ii) the  Company  consolidates  with or merges with or into
another Person or is a party to a binding share exchange or conveys,  transfers,
sells,  leases  or  otherwise  disposes  of  all  or  substantially  all  of its
properties and assets in each case pursuant to which the Company's  Common Stock
is converted into cash, securities or other property, then the Debentures may be
surrendered for conversion at any time from and after the date fifteen (15) days
prior to the  anticipated  effective date of the  transaction  and ending on and
including the date fifteen (15) days after the  consummation of the transaction.
The Board of Directors  shall  determine the  anticipated  effective date of the
transaction,  and such  determination  shall be  conclusive  and  binding on the
holders  and shall be  publicly  announced  by the Company and posted on its web
site not later than two Business Days prior to such 15th day.

         "Ex-Dividend Time" means, with respect to any distribution on shares of
Common Stock, the first date on which the shares of Common Stock trade regular
way on the principal securities market on which the shares of Common Stock are
then traded without the right to receive such distribution.

               (c) A  Debenture  in  respect  of which a holder is  electing  to
exercise its option to require  redemption upon a Fundamental Change pursuant to
Section  3.05 may be  converted  only if such holder  withdraws  its election in
accordance  with  Section  3.05(b) or Section  3.08,  respectively.  A holder of
Debentures  is not entitled to any rights of a holder of Common Stock until such
holder has converted his Debentures to Common Stock, and only to the extent such
Debentures  are deemed to have been converted to Common Stock under this Article
16.

               (d) If a holder  elects to convert its  Debentures  in connection
with a corporate  transaction  that constitutes a Fundamental  Change,  then the
Conversion  Rate of the Debentures  being  converted by such holder at that time
shall be increased so that such holder will be entitled to receive,  in addition
to the cash and Common  Stock such holder is  otherwise  entitled to receive,  a
number of additional shares of Common Stock (the "Additional Shares") determined
in the  manner  set  forth  below;  provided  that if the  Share  Price  in such
transaction is greater than U.S.$90.00 or less than U.S.$26.98  (subject in each
case to adjustment as described below), no increase in the Conversion Rate shall
be made; and provided  further that in no event will the Conversion  Rate exceed
37.0219 per U.S.$1,000 principal amount of Debentures, subject to adjustments in
the same manner as the Conversion Price as set forth in this Indenture.  For the
avoidance of doubt,  the adjustment  provided for in this Section 16.01(d) shall
only be made with respect to the Debentures  being  converted in connection with
such  Fundamental  Change and shall not be effective as to any Debentures not so
converted.

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<PAGE>

         The increase in the Conversion Rate expressed as a number of Additional
Shares per U.S.$1,000 principal amount of Debentures will be determined by the
Company by reference to the table attached as Schedule A hereto, based on the
date the Fundamental Change becomes effective (the "Effective Date") and the
share price paid per share of Common Stock in the corporate transaction (the
"Share Price"); provided that if holders of the Common Stock receive only cash
in such corporate transaction, the Share Price shall be the cash amount paid per
share. Otherwise, the Share Price will be the average of the Closing Sale Price
on the five Trading Days prior to but not including the Effective Date; provided
further that if the Share Price is between two Share Price amounts in the table
or the Effective Date is between two Effective Dates in the table, the Company
shall determine the number of Additional Shares by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Share
Price amounts and the two dates, as applicable, based on a 365-day year.

         The Share Prices set forth in the first row of the table (i.e., column
headers) in Schedule A hereto will be adjusted as of any date on which the
Conversion Price of the Debentures is adjusted pursuant to the Indenture. The
adjusted Share Prices will equal the Share Prices applicable immediately prior
to such adjustment, multiplied by a fraction, the numerator of which is the
Conversion Price immediately prior to the adjustment giving rise to the Closing
Sale Price adjustment and the denominator of which is the Conversion Price as so
adjusted. The number of Additional Shares will be adjusted in the same manner as
the Conversion Price as set forth in this Indenture.

         Section  16.02  Exercise of  Conversion  Privilege;  Issuance of Common
Stock on  Conversion;  No  Adjustment  for  Interest or  Dividends.  In order to
exercise the conversion  privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder,  the Corporate  Trust Office,
such Debenture  with the original or facsimile of the form entitled  "Conversion
Notice" on the reverse  thereof,  duly completed and manually  signed,  together
with such  Debentures  duly endorsed for transfer,  accompanied by the funds, if
any,  required by the penultimate  paragraph of this Section 16.02.  Such notice
shall also state the name or names  (with  address  or  addresses)  in which the
certificate or  certificates  for shares of Common Stock which shall be issuable
on such  conversion  shall be issued,  and shall be  accompanied  by transfer or
similar taxes, if required pursuant to Section 16.07.

         In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 16.02 and
any transfer taxes if required pursuant to Section 16.07.

                                       69
<PAGE>

         As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Debentureholder (as if such transfer were a transfer of the
Debenture or Debentures (or portion thereof) so converted), the Company shall
issue and shall deliver to such Debentureholder at the office or agency
maintained by the Company for such purpose pursuant to Section 6.02, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture or portion thereof as determined
by the Company in accordance with the provisions of this Article 16 and a check
or cash in respect of any fractional interest in respect of a share of Common
Stock arising upon such conversion, calculated by the Company as provided in
Section 16.03. In case any Debenture of a denomination greater than $1,000 shall
be surrendered for partial conversion, and subject to Section 2.03, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Debenture so surrendered, without charge to him, a new Debenture or
Debentures in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Debenture.

         Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 16.02 have been satisfied as to such Debenture (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Debenture shall be surrendered.

         Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day preceding the following
interest payment date that has not been called for redemption during such period
shall be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided
that no such payment need be made (1) if the Company has specified a redemption
date that is after a record date and prior to the next interest payment date,
(2) if the Company has specified a redemption date following a Fundamental
Change that is during such period or (3) to the extent of any overdue interest,
if any overdue interest exists at the time of conversion with respect to such
debenture. Except as provided above in this Section 16.02, no payment or other
adjustment shall be made for interest accrued on any Debenture converted or for
dividends on any shares issued upon the conversion of such Debenture as provided
in this Article 16.

                                       70
<PAGE>

         Upon the conversion of an interest in a Global Debenture, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Debentures effected through any conversion agent
other than the Trustee.

         Upon the conversion of a Debenture, that portion of the accrued but
unpaid interest, including accrued contingent interest, if any, and accrued Tax
Original Issue Discount attributable to the period from the issue date of the
Debenture to the conversion date, with respect to the converted Debenture shall
not be cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the holder thereof through delivery of the Common Stock
(together with the cash payment, if any in lieu of fractional shares) in
exchange for the Debenture being converted pursuant to the provisions hereof;
and the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of fractional shares) shall be treated as issued, to the
extent thereof, first in exchange for and in satisfaction of our obligation to
pay the principal amount of the converted Debenture, the accrued but unpaid
interest, including contingent interest, if any, and accrued Tax Original Issue
Discount through the conversion date from the issue date, and the balance, if
any, of such fair market value of such Common Stock (and any such cash payment)
shall be treated as issued in exchange for and in satisfaction of the right to
convert the Debenture being converted pursuant to the provisions hereof.

         Section 16.03 Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common  Stock or scrip  certificates  representing  fractional  shares
shall be issued upon conversion of Debentures.  If more than one Debenture shall
be surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion  shall be computed on the basis of
the aggregate  principal amount of the Debentures (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable  upon the  conversion  of any  Debenture  or  Debentures,  the
Company  shall make an  adjustment  and payment  therefor in cash at the current
market price thereof to the holder of Debentures.  The current market price of a
share of Common  Stock shall be the Closing  Sale Price on the last  Trading Day
immediately  preceding the day on which the  Debentures  (or specified  portions
thereof) are deemed to have been converted.

         Section 16.04  Conversion  Rate.  Each $1,000  principal  amount of the
Debentures  shall be  convertible  into the  number of  shares  of Common  Stock
specified  in the  form of  Debenture  (herein  called  the  "Conversion  Rate")
attached as Exhibit A hereto,  subject to adjustment as provided in this Article
16.

         Section 16.05  Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:

               (a) In case the Company shall  hereafter pay a dividend or make a
distribution to all holders of the outstanding  Common Stock in shares of Common
Stock,  the Conversion  Rate shall be increased so that the same shall equal the
rate  determined by multiplying  the Conversion Rate in effect at the opening of
business  on the  date  following  the  date  fixed  for  the  determination  of
stockholders  entitled  to receive  such  dividend  or other  distribution  by a
fraction,

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<PAGE>

                    (i) the numerator of which shall be the sum of the number of
shares of Common  Stock  outstanding  at the close of business on the date fixed
for the determination of stockholders entitled to receive such dividend or other
distribution  plus the total number of shares of Common Stock  constituting such
dividend or other distribution; and

                    (ii) the  denominator of which shall be the number of shares
of Common Stock  outstanding at the close of business on the date fixed for such
determination,

         such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 16.05(a) is declared but not so paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.

               (b) In case the  Company  shall  issue  rights or warrants to all
holders of its  outstanding  shares of Common Stock entitling them (for a period
expiring within  forty-five (45) days after the date fixed for  determination of
stockholders  entitled to receive such rights or  warrants) to subscribe  for or
purchase  shares of Common  Stock at a price  per  share  less than the  Current
Market Price on the date fixed for  determination  of  stockholders  entitled to
receive such rights or warrants,  the Conversion Rate shall be increased so that
the same shall equal the rate  determined by multiplying  the Conversion Rate in
effect  immediately  prior to the date fixed for  determination  of stockholders
entitled to receive such rights or warrants by a fraction,

                    (i) the  numerator of which shall be the number of shares of
Common Stock  outstanding on the date fixed for  determination  of  stockholders
entitled to receive such rights or warrants  plus the total number of additional
shares of Common Stock offered for subscription or purchase, and

                    (ii) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on the date fixed
for  determination  of stockholders  entitled to receive such rights or warrants
plus the number of shares that the aggregate  offering price of the total number
of shares so offered would purchase at such Current Market Price.

         Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.

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<PAGE>

               (c)  In  case  outstanding   shares  of  Common  Stock  shall  be
subdivided into a greater number of shares of Common Stock,  the Conversion Rate
in effect at the  opening of business  on the day  following  the day upon which
such  subdivision  becomes  effective shall be  proportionately  increased,  and
conversely,  in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock,  the Conversion  Rate in effect at the
opening of business  on the day  following  the day upon which such  combination
becomes effective shall be proportionately  reduced, such increase or reduction,
as the case may be,  to  become  effective  immediately  after  the  opening  of
business on the day following the day upon which such subdivision or combination
becomes effective.

               (d)  In  case  the  Company  shall,  by  dividend  or  otherwise,
distribute  to all  holders of its Common  Stock  shares of any class of capital
stock of the  Company or  evidences  of its  indebtedness  or assets  (including
securities,  but  excluding  any  rights  or  warrants  referred  to in  Section
16.05(b),  and excluding any dividend or  distribution  (x) paid  exclusively in
cash or (y) referred to in Section 16.05(a) (any of the foregoing hereinafter in
this  Section  16.05(d))  called  the  "Securities")),  then,  in each such case
(unless the Company elects to reserve such  Securities for  distribution  to the
Debentureholders  upon the  conversion of the Debentures so that any such holder
converting  Debentures  will  receive upon such  conversion,  in addition to the
shares of Common Stock to which such holder is entitled,  the amount and kind of
such  Securities  which such  holder  would  have  received  if such  holder had
converted its Debentures into Common Stock immediately prior to the Record Date)
the  Conversion  Rate shall be  increased so that the same shall be equal to the
rate  determined by multiplying the Conversion Rate in effect on the Record Date
with respect to such distribution by a fraction,

               (i) the  numerator of which shall be the Current  Market Price on
such Record Date; and

               (ii) the  denominator  of which shall be the Current Market Price
on such Record Date less the fair market  value (as  determined  by the Board of
Directors,   whose  determination  shall  be  conclusive,  and  described  in  a
resolution  of the Board of  Directors) on the Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock,

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<PAGE>

         such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then fair
market value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Debentureholder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each Debenture on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 16.05(d) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Record Date.

         Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 16.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 16.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.

         No adjustment of the Conversion Rate shall be made pursuant to this
Section 16.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Debentures upon conversion by such holders of Debentures to Common Stock.

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<PAGE>

         For purposes of this Section 16.05(d) and Section 16.05(a) and (b), any
dividend or distribution to which this Section 16.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 16.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
16.05(a) and 16.05(b) with respect to such dividend or distribution shall then
be made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Section 16.05(a)
and 16.05(b) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 16.05(a).

               (e)  In  case  the  Company  shall,  by  dividend  or  otherwise,
distribute to all holders of its Common Stock cash  (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate  cash dividend per
share of Common  Stock in any Fiscal  Quarter does not exceed the greater of (A)
the  amount  per  share of Common  Stock of the next  preceding  quarterly  cash
dividend  on the  Common  Stock to the  extent  that  such  preceding  quarterly
dividend did not require any adjustment of the Conversion  Rate pursuant to this
Section  16.05(e) (as adjusted to reflect  subdivisions,  or combinations of the
Common Stock), and (B) 1.25% of the arithmetic average of the Closing Sale Price
during the ten Trading Days immediately prior to the date of declaration of such
dividend,   and  (y)  any  dividend  or  distribution  in  connection  with  the
liquidation,  dissolution  or winding up of the  Company,  whether  voluntary or
involuntary), then, in such case, the Conversion Rate shall be increased so that
the same shall equal the rate  determined by multiplying  the Conversion Rate in
effect  immediately  prior to the close of  business  on such  record  date by a
fraction,

                    (i) the numerator of which shall be the Current Market Price
on such record date; and

                    (ii) the  denominator  of which shall be the Current  Market
Price on such  record  date  less the  amount  of cash so  distributed  (and not
excluded as provided above) applicable to one share of Common Stock,

         such adjustment to be effective immediately prior to the opening of
business on the day following the record date; provided that if the portion of
the cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Debentureholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Debenture on
the record date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 16.05(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 16.05(e) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.

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<PAGE>

               (f) In case a tender or exchange offer made by the Company or any
Subsidiary  for all or any  portion of the Common  Stock  shall  expire and such
tender or exchange offer (as amended upon the expiration  thereof) shall require
the payment to stockholders of consideration  per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors,  whose determination
shall be  conclusive  and  described in a resolution  of the Board of Directors)
that as of the last time (the  "Expiration  Time")  tenders or exchanges  may be
made  pursuant to such tender or exchange  offer (as it may be amended)  exceeds
the  Closing  Sale  Price of a share of  Common  Stock on the  Trading  Day next
succeeding the Expiration  Time, the Conversion  Rate shall be increased so that
the same shall equal the rate  determined by multiplying  the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,

                    (i) the  numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration payable to
stockholders  based on the acceptance (up to any maximum  specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted up to any
such maximum,  being referred to as the "Purchased  Shares") and (y) the product
of the number of shares of Common Stock  outstanding (less any Purchased Shares)
at the Expiration  Time and the Closing Sale Price of a share of Common Stock on
the Trading Day next succeeding the Expiration Time, and

                    (ii) the denominator of which shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Closing Sale Price of a share of Common Stock
on the Trading Day next succeeding the Expiration Time such adjustment to become
effective immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such tender or exchange offer had not been made.

               (g) In case of a tender or exchange  offer made by a Person other
than the Company or any  Subsidiary  for an amount that  increases the offeror's
ownership of Common Stock to more than  twenty-five  percent (25%) of the Common
Stock  outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by the Board
of  Directors,  whose  determination  shall be  conclusive,  and  described in a
resolution  of the Board of  Directors)  that as of the last  time  (the  "Offer
Expiration  Time")  tenders or exchanges  may be made pursuant to such tender or
exchange  offer (as it shall have been  amended)  exceeds the Closing Price of a
share of Common Stock on the Trading Day next  succeeding  the Offer  Expiration
Time, and in which,  as of the Offer  Expiration  Time the Board of Directors is
not recommending  rejection of the offer, the Conversion Rate shall be increased
so that the same shall equal the rate  determined by multiplying  the Conversion
Rate in effect  immediately prior to the Offer Expiration Time by a fraction

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<PAGE>

                    (i) the  numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration payable to
stockholders  based on the acceptance (up to any maximum  specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up
to any such maximum,  being referred to as the "Accepted  Purchased Shares") and
(y) the product of the number of shares of Common  Stock  outstanding  (less any
Accepted  Purchased  Shares) at the Offer  Expiration  Time and the Closing Sale
Price of a share of Common  Stock on the Trading Day next  succeeding  the Offer
Expiration Time, and

                    (ii) the  denominator of which shall be the number of shares
of Common Stock outstanding  (including any tendered or exchanged shares) at the
Offer  Expiration Time multiplied by the Closing Sale Price of a share of Common
Stock on the Trading Day next succeeding the Offer Expiration Time,

         such adjustment to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time. If such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 16.05(g) shall not be made if, as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article 13.

               (h) For purposes of this Section 16.05, the following terms shall
have the meaning indicated:

                    (i)  "Current  Market  Price"  shall mean the average of the
daily  Closing  Sale  Prices per share of Common  Stock for the ten  consecutive
Trading  Days  selected by the Company  commencing  no more than 30 Trading Days
before and ending not later than the earlier of such date of  determination  and
the day  before  the "ex"  date  with  respect  to the  issuance,  distribution,
subdivision or combination  requiring such computation  immediately prior to the
date in question.  For purpose of this  paragraph,  the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on which
the Common  Stock  trades,  regular  way,  on the  relevant  exchange  or in the
relevant market from which the Closing Sale Price was obtained without the right
to receive such issuance or distribution,  and (2) when used with respect to any
subdivision or  combination  of shares of Common Stock,  means the first date on
which the Common Stock  trades,  regular way, on such exchange or in such market
after the time at which such subdivision or combination becomes effective.

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<PAGE>

         If another issuance, distribution, subdivision or combination to which
Section 16.05 applies occurs during the period applicable for calculating
"Current Market Price" pursuant to the definition in the preceding paragraph,
"Current Market Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such issuance,
distribution, subdivision or combination on the Closing Sale Price of the Common
Stock during such period.

                    (ii) "Fair  Market  Value"  shall  mean the  amount  which a
willing buyer would pay a willing seller in an arm's-length transaction.

                    (iii)  "Record  Date"  shall  mean,   with  respect  to  any
dividend,  distribution  or other  transaction  or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other  applicable  security)  is exchanged  for or
converted into any combination of cash,  securities or other property,  the date
fixed  for  determination  of  stockholders   entitled  to  receive  such  cash,
securities  or other  property  (whether  such  date is  fixed  by the  Board of
Directors or by statute, contract or otherwise).

                    (iv) "Trading Day" shall mean (x) if the applicable security
is quoted on the Nasdaq Stock Market,  a day on which trades may be made thereon
or (y) if the  applicable  security is listed or admitted for trading on the New
York Stock Exchange or another national securities  exchange, a day on which the
New York Stock  Exchange  or another  national  securities  exchange is open for
business  or (z) if the  applicable  security  is not so  listed,  admitted  for
trading  or quoted,  any day other  than a Saturday  or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.

               (i) The Company may make such increases in the  Conversion  Rate,
in addition to those  required by Section  16.05(a),  (b), (c), (d), (e), (f) or
(g) as the Board of Directors considers to be advisable to avoid or diminish any
income  tax to  holders  of  Common  Stock or rights to  purchase  Common  Stock
resulting  from any  dividend  or  distribution  of stock (or  rights to acquire
stock) or from any event treated as such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Debentures a notice of the increase at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.

               (j) No adjustment in the Conversion Rate shall be required unless
such  adjustment  would  require an increase or decrease of at least one percent
(1%) in such rate;  provided that any adjustments that by reason of this Section
16.05(j)  are not  required  to be made shall be carried  forward and taken into
account in any subsequent  adjustment.  All  calculations  under this Article 16
shall be made by the  Company  and shall be made to the  nearest  cent or to the
nearest  one-ten  thousandth  (1/10,000)  of a share,  as the  case  may be.  No
adjustment  need be made for  rights to  purchase  Common  Stock  pursuant  to a
Company  plan for  reinvestment  of dividends or interest or for any issuance of
Common Stock or  convertible  or  exchangeable  securities or rights to purchase
Common  Stock or  convertible  or  exchangeable  securities.  To the  extent the
Debentures become convertible into cash,  assets,  property or securities (other
than capital stock of the Company),  no adjustment need be made thereafter as to
the cash, assets,  property or such securities.  Interest will not accrue on any
cash into which the Debentures are convertible.

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<PAGE>

               (k) Whenever the Conversion Rate is adjusted as herein  provided,
the Company shall promptly file with the Trustee and any conversion  agent other
than the Trustee an Officers'  Certificate  setting  forth the  Conversion  Rate
after such adjustment and setting forth a brief statement of the facts requiring
such  adjustment.  Unless and until a  Responsible  Officer of the Trustee shall
have received  such  Officers'  Certificate,  the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion  Rate and may assume that the
last  Conversion  Rate of which it has  knowledge  is still in effect.  Promptly
after delivery of such  certificate,  the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment  becomes  effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Debenture at his
last address appearing on the Debenture Register provided for in Section 2.05 of
this  Indenture,  within twenty (20) days after  execution  thereof.  Failure to
deliver  such  notice  shall not affect the  legality  or  validity  of any such
adjustment.

               (l) In any case in which  this  Section  16.05  provides  that an
adjustment shall become effective  immediately after (1) a record date or Record
Date for an event,  (2) the date  fixed for the  determination  of  stockholders
entitled to receive a dividend or distribution pursuant to Section 16.05(a), (3)
a date fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 16.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section  16.05(f),  or (5) the Offer  Expiration Time
for a  tender  or  exchange  offer  pursuant  to  Section  16.05(g)(i)  (each  a
"Determination  Date"),  the Company may elect to defer until the  occurrence of
the  applicable  Adjustment  Event (as  hereinafter  defined) (x) issuing to the
holder of any Debenture  converted after such  Determination Date and before the
occurrence of such Adjustment  Event,  the additional  shares of Common Stock or
other  securities  issuable  upon such  conversion  by reason of the  adjustment
required by such Adjustment  Event over and above the Common Stock issuable upon
such  conversion  before giving effect to such adjustment and (y) paying to such
holder any amount in cash in lieu of any fraction pursuant to Section 16.03. For
purposes of this Section 16.05(l), the term "Adjustment Event" shall mean:

                    (i) in any  case  referred  to in  clause  (1)  hereof,  the
occurrence of such event,

                    (ii) in any case referred to in clause (2) hereof,  the date
any such dividend or distribution is paid or made,

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<PAGE>

                    (iii) in any case referred to in clause (3) hereof, the date
of  expiration  of such rights or warrants,  and

                    (iv) in any case  referred  to in clause  (4) or clause  (5)
hereof,  the date a sale or exchange of Common Stock  pursuant to such tender or
exchange offer is consummated and becomes irrevocable.

               (m) For purposes of this Section  16.05,  the number of shares of
Common  Stock at any time  outstanding  shall  not  include  shares  held in the
treasury of the Company but shall  include  shares  issuable in respect of scrip
certificates  issued in lieu of fractions of shares of Common Stock. The Company
will not pay any  dividend or make any  distribution  on shares of Common  Stock
held in the treasury of the Company.

         Section  16.06  Effect of  Reclassification,  Consolidation,  Merger or
Sale. If any of the following events occur,  namely (i) any  reclassification or
change of the  outstanding  shares of Common Stock (other than a subdivision  or
combination to which Section 16.05(c) applies),  (ii) any consolidation,  merger
or  combination  of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive  stock,  other  securities or other
property or assets  (including  cash) with  respect to or in  exchange  for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties  and assets of the  Company to any other  Person as a result of which
holders of Common Stock shall be entitled to receive stock,  other securities or
other  property or assets  (including  cash) with  respect to or in exchange for
such Common Stock,  then the Company or the successor or purchasing  Person,  as
the case may be, shall execute with the Trustee a supplemental  indenture (which
shall comply with the Trust  Indenture  Act as in force at the date of execution
of  such  supplemental   indenture)  providing  that  each  Debenture  shall  be
convertible  into the kind and amount of shares of stock,  other  securities  or
other property or assets (including cash) (the "reference  property") receivable
upon such reclassification,  change, consolidation, merger, combination, sale or
conveyance  by a holder of a number of shares  of  Common  Stock  issuable  upon
conversion of such Debentures (assuming,  for such purposes, a sufficient number
of  authorized  shares  of  Common  Stock  are  available  to  convert  all such
Debentures) immediately prior to such reclassification,  change,  consolidation,
merger,  combination,  sale or conveyance.  In the event holders of Common Stock
have the opportunity to elect the form of  consideration  to be received in such
reclassification,   change,   consolidation,   merger,   combination,   sale  or
conveyance,  the Company will make  adequate  provision  whereby  holders of the
Debentures shall have the opportunity,  on a timely basis, to determine the form
of  consideration  into which all of the Debentures,  treated as a single class,
shall be convertible. Such determination shall be based on the blended, weighted
average of elections made by the holders of the  Debentures  who  participate in
such  determination  and shall be subject to any limitations to which all of the
holders of Common Stock are subject to, such as pro rata  reductions  applicable
to any portion of the  consideration  payable.  Appropriate  provisions  will be
made, as  determined in good faith by the Company's  Board of Directors so that,
at and after the effective time of the transaction, the principal return payable
upon  conversion of the Debentures  will continue to be payable in cash (instead
of reference  property),  the Daily  Conversion Value and the Daily Share Amount
will be calculated  based on the fair value of the reference  property,  and the
Daily Share  Amount will be payable in  reference  property.  Such  supplemental
indenture shall provide for adjustments  which shall be as nearly  equivalent as
may be practicable to the adjustments provided for in this Article 16.

                                       80
<PAGE>

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.

         The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

         If this Section 16.06 applies to any event or occurrence, Section 16.05
shall not apply.

         Section 16.07 Taxes on Shares Issued.  The issue of stock  certificates
on  conversions  of Debentures  shall be made without  charge to the  converting
Debentureholder  for any documentary,  stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect  of any  transfer  involved  in the
issue and  delivery  of stock in any name  other  than that of the holder of any
Debenture  converted,  and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting the
issue  thereof  shall have paid to the  Company  the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

         Section  16.08  Reservation  of  Shares,   Shares  to  Be  Fully  Paid;
Compliance with Governmental Requirements;  Listing of Common Stock. The Company
shall provide,  free from preemptive  rights, out of its authorized but unissued
shares or shares held in treasury,  sufficient shares of Common Stock to provide
for the  conversion of the Debentures  from time to time as such  Debentures are
presented for conversion.

         Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.

         The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.

         The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.

                                       81
<PAGE>

         The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq Stock Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Debenture;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Debentures into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.

         Section  16.09  Responsibility  of  Trustee.  The Trustee and any other
conversion  agent shall not at any time be under any duty or  responsibility  to
any holder of Debentures to determine the  Conversion  Rate or whether any facts
exist which may require any adjustment of the  Conversion  Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect  to the  method  employed,  or herein or in any  supplemental  indenture
provided  to be  employed,  in  making  the  same.  The  Trustee  and any  other
conversion  agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock,  or of any  securities or
property,  which may at any time be issued or delivered  upon the  conversion of
any  Debenture;  and  the  Trustee  and  any  other  conversion  agent  make  no
representations  with respect  thereto.  Neither the Trustee nor any  conversion
agent shall be responsible for any failure of the Company to issue,  transfer or
deliver any shares of Common Stock or stock  certificates or other securities or
property  or cash  upon  the  surrender  of any  Debenture  for the  purpose  of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 16. Without limiting the generality of the
foregoing,  neither  the  Trustee  nor any  conversion  agent shall be under any
responsibility  to determine the correctness of any provisions  contained in any
supplemental indenture entered into pursuant to Section 16.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event  referred to in such Section  16.06 or to any  adjustment  to be made with
respect  thereto,  but, subject to the provisions of Section 9.01, may accept as
conclusive  evidence of the  correctness  of any such  provisions,  and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated  to  file  with  the  Trustee  prior  to the  execution  of  any  such
supplemental indenture) with respect thereto.

         Section 16.10 Notice to Holders Prior to Certain  Actions.  In case the
Company shall declare a dividend (or any other distribution) on its Common Stock
that would  require an  adjustment  in the  Conversion  Rate pursuant to Section
16.05; or

               (a) the Company  shall  authorize  the granting to the holders of
all or substantially  all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or

                                       82
<PAGE>

               (b) of any reclassification or reorganization of the Common Stock
of the Company  (other than a  subdivision  or  combination  of its  outstanding
Common Stock,  or a change in par value,  or from par value to no par value,  or
from no par value to par value),  or of any consolidation or merger to which the
Company is a party and for which approval of any  stockholders of the Company is
required,  or of the sale or transfer of all or substantially  all of the assets
of the Company; or

               (c) of the voluntary or involuntary  dissolution,  liquidation or
winding up of the Company;

         the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Debentures at his address appearing on the Debenture Register
provided for in Section 2.05 of this Indenture, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

         Section 16.11  Stockholder  Rights Plans. If the rights provided for in
the Company's stockholder rights agreement dated March 18, 2002 or in any future
rights plan  adopted by the  Company  have  separated  from the shares of Common
Stock in accordance  with the  provisions of the applicable  stockholder  rights
agreement so that the holders of the Debentures would not be entitled to receive
any  rights  in  respect  of  Common  Stock  issuable  upon  conversion  of  the
Debentures,  the conversion rate will be adjusted as if the Company  distributed
to all holders of Common Stock shares of the Company's capital stock,  evidences
of indebtedness or assets (including securities but excluding rights or warrants
to purchase  Common  Stock issued to all holders of Common  Stock,  Common Stock
issued as a dividend or  distribution  on Common Stock and cash  distributions),
subject  to  readjustment  in  the  event  of  the  expiration,  termination  or
redemption of the rights. In lieu of any such adjustment,  the Company may amend
such applicable  stockholder rights agreement to provide that upon conversion of
the  debentures  the holders  will  receive,  in  addition  to the Common  Stock
Issuable  upon such  conversion,  the rights  which would have  attached to such
Common Stock if the rights had not become  separated from the Common Stock under
such applicable stockholder rights agreement.

         Section 16.12  Payment of Cash in Lieu of Common Stock.  (a) Unless the
Company has made a Physical Settlement Election, holders surrendering Debentures
for  conversion  shall  receive for each $1,000  principal  amount of Debentures
surrendered  for  conversion:  (A) cash in an amount  equal to the lesser of (1)
$1,000 and (2) the  Conversion  Value;  and, in addition to amounts  distributed
pursuant to (A), (B) if the Conversion Value is greater than $1,000, a number of
shares of Common  Stock equal to the sum of the Daily Share  Amounts for each of
the  twenty  consecutive  Trading  Days  in  the  Conversion  Reference  Period,
appropriately adjusted to reflect stock splits, stock dividends, combinations or
similar events occurring during the Conversion Reference Period,  subject to the
Company's  right to deliver  cash in lieu of all or a portion of such  shares as
set forth in Section 16.12(b). The Company will deliver such cash and any shares
of Common Stock,  together with any cash payable for fractional  shares, to such
holder in accordance with Section 16.01.

                                       83
<PAGE>

               (b)  The  Company  may  elect  to  pay  cash  to the  holders  of
Debentures  surrendered for conversion in lieu of all or a portion of the Common
Stock otherwise issuable pursuant to Section 16.12(a)(B).  In such event, on any
day  prior to the  first  Trading  Day of the  applicable  Conversion  Reference
Period,  the Company will  specify a  percentage  of the Daily Share Amount that
will be settled in cash (the "Cash  Percentage") and the amount of cash that the
Company  will pay in respect of each  Trading Day in the  applicable  Conversion
Reference  Period will equal the product  of: (1) the Cash  Percentage,  (2) the
Daily Share  Amount for such  Trading Day and (3) the Closing  Sale Price of the
Common Stock for such Trading Day  (provided  that after the  consummation  of a
Fundamental Change in which the consideration is comprised entirely of cash, the
amount  used in this  clause  (3) will be the cash price per share  received  by
holders of the Common Stock in such  Fundamental  Change).  The number of shares
that the Company shall deliver in respect of each Trading Day in the  applicable
Conversion Reference Period will be a percentage of the Daily Share Amount equal
to 100% minus the Cash Percentage. Upon making a determination that a percentage
of the Daily Share Amount will be settled in cash,  the Company  shall  promptly
issue a press release and disclose such  information on its website prior to the
first Trading Day of the applicable  Conversion Reference Period. If the Company
does not specify a Cash  Percentage  by the start of the  applicable  Conversion
Reference  Period,  the Company  shall settle 100% of the Daily Share Amount for
each Trading Day in the applicable  Conversion  Reference  Period with shares of
Common  Stock;  provided,  however,  that the Company  shall pay cash in lieu of
fractional shares otherwise issuable upon conversion of Debentures.

               (c) For the  purposes of Sections  16.12(a) and (b), in the event
that any of Conversion  Value,  Daily Share Amounts or Volume  Weighted  Average
Price cannot be determined for all portions of the Conversion  Reference Period,
the  Company's  Board of  Directors  shall in good  faith  determine  the values
necessary to calculate  the  Conversion  Value,  Daily Share  Amounts and Volume
Weighted Average Price, as applicable.

                                       84
<PAGE>

         Section 16.13 Physical Settlement Election.(a) (a) At any time prior to
June 15, 2013, the Company may make an irrevocable election to provide, upon the
conversion of  outstanding  Debentures,  in lieu of providing cash and shares as
provided by Section 16.12,  shares of Common Stock equal to the Conversion  Rate
for each $1,000 principal amount of Debentures  converted (and the amount of any
cash in lieu of  fractional  shares  pursuant  to  Section  16.03) (a  "Physical
Settlement Election"). In the event that the Company makes a Physical Settlement
Election,  the Company shall  promptly issue a press release and mail to holders
and file with the Trustee a notice of such election.

               (b)  Notwithstanding  anything  contained in Section 16.01 to the
contrary,  and  subject  to Section  3.05,  upon  making a  Physical  Settlement
Election,  any  Debenture  or portion  thereof  that is an integral  multiple of
$1,000  principal  amount may be converted at the option of the  Debentureholder
into fully paid and  nonassessable  shares  (calculated as to each conversion to
the nearest  1/100th of a share) of Common  Stock at any time prior to the close
of business on the  Business  Day  immediately  preceding  June 15, 2013 or such
earlier  date set forth in this Article 16 at the  Conversion  Rate in effect at
such time.

               (c) Prior to making a Physical Settlement  Election,  the Company
may irrevocably  waive the right to make a Physical  Settlement  Election in the
future with respect to the  Debentures  by delivering to the Trustee a notice of
such election (a "Waiver Election"). Any Waiver Election shall irrevocably waive
the Company's ability to make a Physical  Settlement Election at any time in the
future with respect to the Debentures.  A Waiver Election may not be made if the
Company has previously made a Physical Settlement Election.

                                   ARTICLE 17
                            MISCELLANEOUS PROVISIONS

         Section  17.01  Provisions  Binding on  Company's  Successors.  All the
covenants,  stipulations,  promises and  agreements by the Company  contained in
this Indenture  shall bind its  successors  and assigns  whether so expressed or
not.

         Section  17.02  Official  Acts  by  Successor  Corporation.  Any act or
proceeding by any provision of this Indenture  authorized or required to be done
or performed by any board,  committee or officer of the Company shall and may be
done and  performed  with like force and effect by the like board,  committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

         Section 17.03 Addresses For Notices, Etc. Any notice or demand which by
any  provision of this  Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures on the Company shall be deemed to
have been  sufficiently  given or made, for all purposes,  if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter  box  or  sent  by  telecopier  transmission  addressed  as  follows:  to
Greatbatch,  Inc., 9645 Wehrle Drive, Clarence, New York 14031,  Telecopier No.:
(716) 759-5614,  Attention:  Treasurer. Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently given
or made,  for all  purposes,  if given or  served  by being  deposited,  postage
prepaid,  by registered or certified mail in a post office letter box or sent by
telecopier  transmission  addressed as follows:  Manufacturers and Traders Trust
Company, One M&T Plaza, Buffalo, New York 14203, Telecopier No.: (716) 842-4474,
Attention: Corporate Trust Department.

                                       85
<PAGE>

         The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.

         Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.

         Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

         Section 17.04 Governing Law. This Indenture and each Debenture shall be
deemed to be a contract  made  under the laws of the State of New York,  and for
all purposes shall be construed in accordance  with the laws of the State of New
York, without regard to conflicts of laws principles thereof.

         Section  17.05  Evidence  of  Compliance  with  Conditions   Precedent,
Certificates  to Trustee.  Upon any  application or demand by the Company to the
Trustee to take any action under any of the  provisions of this  Indenture,  the
Company shall furnish to the Trustee an Officers'  Certificate  stating that all
conditions  precedent,  if any,  provided for in this Indenture  relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

         Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

         Section 17.06 Legal Holidays. In any case in which the date of maturity
of interest on or  principal of the  Debentures  or the  redemption  date of any
Debenture  will not be a  Business  Day,  then  payment of such  interest  on or
principal of the  Debentures  need not be made on such date,  but may be made on
the next  succeeding  Business  Day with the same force and effect as if made on
the date of maturity or the  redemption  date,  and no interest shall accrue for
the period from and after such date.

                                       86
<PAGE>

         Section  17.07  Trust  Indenture  Act.  This  Indenture  is hereby made
subject to, and shall be governed by, the provisions of the Trust  Indenture Act
required  to be part of and to  govern  indentures  qualified  under  the  Trust
Indenture Act; provided that unless otherwise  required by law,  notwithstanding
the foregoing,  this Indenture and the Debentures  issued hereunder shall not be
subject to the provisions of subsections  (a)(1),  (a)(2), and (a)(3) of Section
314 of the  Trust  Indenture  Act as now in effect or as  hereafter  amended  or
modified;  provided  further  that this  Section  17.07 shall not  require  this
Indenture or the Trustee to be qualified  under the Trust Indenture Act prior to
the time such  qualification  is in fact  required  under the terms of the Trust
Indenture  Act, nor shall it constitute any admission or  acknowledgment  by any
party to the Indenture that any such qualification is required prior to the time
such  qualification  is in fact required under the terms of the Trust  Indenture
Act. If any  provision  hereof  limits,  qualifies  or  conflicts  with  another
provision  hereof  which is required to be  included in an  indenture  qualified
under the Trust Indenture Act, such required provision shall control.

         Section 17.08 No Security Interest  Created.  Nothing in this Indenture
or in the Debentures,  expressed or implied,  shall be construed to constitute a
security interest under the Uniform Commercial Code or similar  legislation,  as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.

         Section 17.09  Benefits of Indenture.  Nothing in this  Indenture or in
the  Debentures,  express or implied,  shall give to any Person,  other than the
parties  hereto,  any paying  agent,  any  authenticating  agent,  any Debenture
Registrar  and their  successors  hereunder  and the holders of  Debentures  any
benefit or any legal or equitable right, remedy or claim under this Indenture.

         Section 17.10 Table of Contents,  Headings,  Etc. The table of contents
and the titles and headings of the Articles and Sections of this  Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof,  and shall in no way modify or restrict  any of the terms or  provisions
hereof.

         Section  17.11  Authenticating   Agent.  The  Trustee  may  appoint  an
authenticating  agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original  issuance  thereof and  transfers  and exchanges of Debentures
hereunder,  including under Sections 2.04,  2.05,  2.06, 2.07, 3.03 and 3.05, as
fully to all intents and  purposes as though the  authenticating  agent had been
expressly  authorized by this Indenture and those Sections to  authenticate  and
deliver Debentures.  For all purposes of this Indenture,  the authentication and
delivery  of  Debentures  by the  authenticating  agent  shall be  deemed  to be
authentication   and  delivery  of  such  Debentures  "by  the  Trustee"  and  a
certificate  of  authentication   executed  on  behalf  of  the  Trustee  by  an
authenticating agent shall be deemed to satisfy any requirement  hereunder or in
the  Debentures  for  the  Trustee's   certificate   of   authentication.   Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 9.09.

                                       87
<PAGE>

         Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

         Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.

         The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

         The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.

         Section 17.12 Execution in Counterparts. This Indenture may be executed
in any number of  counterparts,  each of which  shall be an  original,  but such
counterparts shall together constitute but one and the same instrument.

         Section 17.13 Severability.  In case any provision in this Indenture or
in the  Debentures  shall be  invalid,  illegal or  unenforceable,  then (to the
extent  permitted  by law) the  validity,  legality  and  enforceability  of the
remaining provisions shall not in any way be affected or impaired thereby.

                                       88
<PAGE>

         Manufacturers and Traders Trust Company hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions herein above
set forth.

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

                         GREATBATCH, INC.

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

                         MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee

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

                                       89
<PAGE>
<TABLE>
<CAPTION>

                                   SCHEDULE A

                                  Share Price
-----------------------------------------------------------------------------------------------------------------------------
<S>                       <C>      <C>      <C>       <C>      <C>      <C>       <C>      <C>       <C>      <C>      <C>
Effective Date            $26.98   $30.00   $35.00    $40.00   $45.00   $50.00    $55.00   $60.00    $70.00   $80.00   $90.00
--------------            ------   ------   ------    ------   ------   ------    ------   ------    ------   ------   ------
March 28, 2007              8.2      6.7      4.9       3.7      2.9      2.3       1.9      1.5       1.1      0.8      0.5
June 15, 2007               8.2      6.7      4.9       3.7      2.8      2.2       1.8      1.5       1.0      0.7      0.5
June 15, 2008               8.2      6.6      4.6       3.4      2.6      2.0       1.6      1.3       0.9      0.6      0.4
June 15, 2009               7.7      6.0      4.1       2.9      2.1      1.6       1.3      1.0       0.6      0.4      0.3
June 15, 2010               7.4      5.5      3.6       2.4      1.6      1.2       0.9      0.7       0.4      0.3      0.2
June 15, 2011               7.0      4.8      2.7       1.6      1.0      0.6       0.4      0.3       0.2      0.1      0.1
June 15, 2012               6.3      3.3      0.3       0.0      0.0      0.0       0.0      0.0       0.0      0.0      0.0
June 15, 2013               6.3      3.3      0.0       0.0      0.0      0.0       0.0      0.0       0.0      0.0      0.0
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
                                                                       EXHIBIT A

         [Include only for Global Debentures:]

         [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

         [Include only for Debentures that are Restricted Securities]

         [THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS DEBENTURE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS DEBENTURE EXCEPT (A) TO GREATBATCH, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH
TO MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS DEBENTURE PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER FO SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF
THIS DEBENTURE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING
RESTRICTION.]

<PAGE>

         THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH DEBENTURE IS $950 PER $1,000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS MARCH 28, 2007 AND THE COMPARABLE YIELD IS 8.4588%,
COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS DEBENTURE MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS DEBENTURE BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: GREATBATCH, INC., 9645 WEHRLE DRIVE, CLARENCE, NEW
YORK, 14031, ATTN: TREASURER.

                                      A-2
<PAGE>

                                GREATBATCH, INC.

               2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013

                                                                CUSIP: 39153LAA4

For Global Debentures only

$
 -------------

         Greatbatch, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to [__________], [the
principal sum of _____________ DOLLARS] [the principal sum set forth on Schedule
I hereto] on June 15, 2013 at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on June 15 and December 15 of each year, commencing June 15, 2007,
on said principal sum at said office or agency, in like coin or currency, at the
rate per annum of 2 1/4%, from the June 15 or December 15, as the case may be,
next preceding the date of this Debenture to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Debenture, or
unless no interest has been paid or duly provided for on the Debentures, in
which case from March 28, 2007 until payment of said principal sum has been made
or duly provided for. Notwithstanding the foregoing, if the date hereof is after
any June 1 or December 1, as the case may be, and before the following June 15
or December 15, this Debenture shall bear interest from such June 15 or December
15; provided that if the Company shall default in the payment of interest due on
such June 15 or December 15, then this Debenture shall bear interest from the
next preceding June 15 or December 15 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such
Debenture, from March 28, 2007. Contingent interest, if any, will accrue for any
six month interest period and be payable to holders of this Debenture on the
applicable interest payment date to the person in whose name this Debenture is
registered on the corresponding record date. Except as otherwise provided in the
Indenture, the interest payable on the Debenture pursuant to the Indenture on
any June 15 or December 15 will be paid to the Person entitled thereto as it
appears in the Debenture Register at the close of business on the record date,
which shall be the June 1 or December 1 (whether or not a Business Day) next
preceding such June 15 or December 15, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. The Company shall pay interest (i) on any
Debentures in certificated form by check mailed to the address of the Person
entitled thereto as it appears in the Debenture Register or (ii) on any Global
Debenture by wire transfer of immediately available funds to the account of the
Depositary or its nominee.

                                      A-3
<PAGE>

         The Company promises to pay interest on overdue principal, premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) interest at the rate of 3 1/4%, per annum.

         Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock
of the Company on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.

         This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.

         This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.

                                      A-4
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.

                                     GREATBATCH, INC.

                                      By:
                                          --------------------------------------

                                      By:
                                          --------------------------------------

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Debentures described in the within-named Indenture.

MANUFACTURERS AND TRADERS
TRUST COMPANY, as Trustee

By:
    -------------------------------------------------
      Authorized Signatory

, or

By:
    -------------------------------------------------
      As Authenticating Agent
      (if different from Trustee)

By:
    -------------------------------------------------
      Authorized Signatory

                                      A-5
<PAGE>

                          FORM OF REVERSE OF DEBENTURE

                                GREATBATCH, INC.

               2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013

         This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 2 1/4% Convertible Subordinated Debentures Due 2013
(herein called the "Debentures"), limited in aggregate principal amount to
$[_________] of Initial Debentures (which principal amount may from time to time
be increased or decreased to such other principal amount by adjustments made on
the records of the Trustee in accordance with the below referenced Indenture),
issued and to be issued under and pursuant to an Indenture dated as of March 28,
2007 (herein called the "Indenture"), between the Company and Manufacturers and
Traders Trust Company, as trustee (herein called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. The Indenture provides that Additional Debentures may be issued
thereunder, if certain conditions are met.

         In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued interest, including contingent
interest, if any, on all Debentures may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding, and upon said declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Debentures at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Debentures; provided that no such supplemental indenture shall (i) extend the
fixed maturity of any Debenture, or reduce the rate or extend the time of
payment of interest, including contingent interest, if any, or Liquidated
Damages, if any, thereon, or reduce the principal amount thereof or premium, if
any, thereon, or reduce any amount payable upon redemption thereof, or impair
the right of any Debentureholder to institute suit for the payment thereof, or
make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Debentures, or change the
rights granted to the holders in Section 16.01(d) of the Indenture, or change
the obligation of the Company to redeem any Debenture on a redemption date in a
manner adverse to the holders or change the obligation of the Company to redeem
any Debenture upon the happening of a Fundamental Change in a manner adverse to
the holder of the Debentures, or impair the right to convert the Debentures into
Common Stock subject to the terms set forth in the Indenture, including Section
16.06 thereof, without the consent of the holder of each Debenture so affected,
or modify any of the provisions of Section 12.02 or Section 8.07 thereof, except
to increase any such percentage or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the holder of
each Debenture so affected, or change any obligation of the Company to maintain
an office or agency in the places and for the purposes set forth in Section 6.01
thereof, or reduce the quorum or voting requirements set forth in Article 11 or
(ii) reduce the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Debentures then outstanding. Subject to the provisions of the

                                      A-6
<PAGE>

Indenture, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of interest, or any premium
on, or the principal of, any of the Debentures, (B) a failure by the Company to
convert any Debentures into Common Stock of the Company, (C) a default in the
payment of the redemption price pursuant to Article 3 of the Indenture, or (D) a
default in respect of a covenant or provisions of the Indenture which under
Article 12 of the Indenture cannot be modified or amended without the consent of
the holders of each or all Debentures then outstanding or affected thereby. Any
such consent or waiver by the holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and any Debentures which
may be issued in exchange or substitution hereof, irrespective of whether or not
any notation thereof is made upon this Debenture or such other Debentures.

         The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of the Indenture or thereafter
incurred, and this Debenture is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.

         No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest, including contingent interest, if any, on this Debenture at the place,
at the respective times, at the rate and in the coin or currency herein
prescribed.

         Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.

         The Debentures are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Debentures, Debentures may be exchanged for a
like aggregate principal amount of Debentures of any other authorized
denominations.

         At any time on or after June 20, 2012 and prior to maturity, the
Debentures may be redeemed at the option of the Company, in whole or in part,
upon mailing a notice of such redemption not less than 30 days but not more than
60 days before the redemption date to the holders of Debentures at their last
registered addresses, all as provided in the Indenture, at a redemption price
equal to 100% of the principal amount of debentures being redeemed and accrued
and unpaid interest, including contingent interest, if any, to, but excluding,
the redemption date.

                                      A-7
<PAGE>

         The Company may not give notice of any redemption of the Debentures if
a default in the payment of interest, or premium, if any, on the Debentures has
occurred and is continuing.

         The Debentures are not subject to redemption through the operation of
any sinking fund.

         If a Fundamental Change occurs at any time prior to maturity of the
Debentures, this Debenture will be redeemable on a Fundamental Change Redemption
Date, 30 days after notice thereof, at the option of the holder of this
Debenture at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the redemption date; provided
that if such Fundamental Change Redemption Date falls after a record date and on
or prior the corresponding interest payment date, the interest payable on such
interest payment date shall be paid to the holder of record of this Debenture on
the preceding June 1 or December 1, respectively. The Debentures will be
redeemable in multiples of $1,000 principal amount. The Company shall mail to
all holders of record of the Debentures a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a result thereof on or
before the 10th day after the occurrence of such Fundamental Change. For a
Debenture to be so redeemed at the option of the holder, the Company must
receive at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, such Debenture with the form
entitled "Option to Elect Repayment Upon a Fundamental Change" on the reverse
thereof duly completed, together with such Debenture, duly endorsed for
transfer, on or before the 30th day after the date of such notice of a
Fundamental Change (or if such 30th day is not a Business Day, the immediately
succeeding Business Day).

         Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Debentures,
the holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into 28.8219 shares of the Company's Common Stock (a
conversion price of approximately $34.70 per share), as such shares shall be
constituted at the date of conversion and subject to adjustment from time to
time as provided in the Indenture, upon surrender of this Debenture with the
form entitled "Conversion Notice" on the reverse thereof duly completed, to the
Company at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, or at the option of such holder, the
Corporate Trust Office, and, unless the shares issuable on conversion are to be
issued in the same name as this Debenture, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or by his duly authorized attorney. The Company will notify the
holder thereof of any event triggering the right to convert the Debentures as
specified above in accordance with the Indenture.

         No adjustment in respect of interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any record date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date and
has not been called for redemption by the Company on a redemption date that
occurs during such period, this Debenture (or portion hereof being converted)
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided

                                      A-8
<PAGE>

that no such payment shall be required (1) if the Company has specified a
redemption date that is after a record date and prior to the next interest
payment date, (2) if the Company has specified a redemption date following a
fundamental change that is during such period or (3) to the extent of any
overdue interest, if any overdue interest exists at the time of conversion with
respect to such debenture.

         No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.

         Unless the Company has made a Physical Settlement Election pursuant to
Section 16.13 of the Indenture, upon conversion of the Debenture, the holder
shall receive for each $1,000 principal amount of Debentures surrendered for
conversion, cash in an amount equal to the lesser of (i) $1,000 and (ii) the
Conversion Value, and in addition, if the Conversion Value is greater than
$1,000, a number of shares of Common Stock, subject to the Company's right to
deliver cash in lieu of all or a portion of such shares as set forth in the
Indenture.

         A Debenture in respect of which a holder is exercising its right to
require redemption upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise either such right in accordance with
the terms of the Indenture.

         Any Debentures called for redemption, unless surrendered for conversion
by the holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the holders of
such Debentures for an amount equal to the applicable redemption price, together
with accrued but unpaid interest to, but excluding, the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Debentures from the holders thereof and
convert them into shares of the Company's Common Stock and (ii) to make payment
for such Debentures as aforesaid to the Trustee in trust for the holders.

         Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.

         The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Debenture Registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.

                                      A-9
<PAGE>

         No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any supplemental indenture or in
any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

         The Company agrees, and by acceptance of a Debenture, each beneficial
holder of a Debenture will be deemed to have agreed to treat the Debentures as
indebtedness of the Company for U.S. federal income tax purposes that are
subject to the regulations governing contingent payment debt instruments. A
Holder of Debentures may obtain the amount of original issue discount, issue
date, yield to maturity, comparable yield and projected payment schedule for the
Debentures, determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by
submitting a written request for it to the Company at the following address:
Greatbatch, Inc., 9645 Wehrle Drive, Clarence, NY 14031, Attention: Treasurer.

         This Debenture shall be deemed to be a contract made under the laws of
New York, and for all purposes shall be construed in accordance with the laws of
New York, without regard to conflicts of laws principles thereof.

         Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.

                                      A-10
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.

TEN COM -              as tenants in common
TEN ENT -              as tenant by the entireties
JT TEN -               as joint tenants with right of survivorship and
                       not as tenants in common
UNIF GIFT MIN ACT -    __________________________
                       (Custodian)
                        ______________________
                       (Minor)                 under Uniform Gifts to Minors Act
                                               _________________________________
                                               (State)

         Additional abbreviations may also be used though not in the above list.

                                      A-11
<PAGE>

                                CONVERSION NOTICE

TO:      GREATBATCH, INC.
         MANUFACTURERS AND TRADERS TRUST COMPANY

         The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Greatbatch, Inc. in accordance with the terms of the Indenture referred to in
this Debenture, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Debenture not converted are to be issued in the name of a person other than
the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest, including contingent
interest, if any, accompanies this Debenture.

Dated:___________________________________

Signature(s):
_________________________________________

         Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Debenture Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Debenture Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

_______________________________________
Signature Guarantee

                                      A-12
<PAGE>

         Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:

_______________________________________
(Name)

_______________________________________
(Street Address)

_______________________________________
(City, State and Zip Code)

Please print name and address

Principal amount to be converted (if less than all):

$_____________________________________

Social Security or Other Taxpayer Identification Number:

______________________________________

                                      A-13
<PAGE>

              OPTION TO ELECT REDEMPTION UPON A FUNDAMENTAL CHANGE

TO:      GREATBATCH, INC.
         MANUFACTURERS AND TRADERS TRUST COMPANY

         The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Greatbatch, Inc. (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem the entire principal amount of this Debenture,
or the portion thereof (which is $1,000 or a multiple thereof) below designated,
in accordance with the terms of the Indenture referred to in this Debenture at
the price of 100% of such entire principal amount or portion thereof, together
with accrued interest to, but excluding, the Fundamental Change Redemption Date,
to the registered holder hereof. Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.

Dated:_______________________________
_____________________________________
_____________________________________

Signature(s)

         NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.

Principal amount to be repaid (if less than all):
______________________________________
______________________________________

Social Security or Other Taxpayer Identification Number
______________________________________

                                      A-14
<PAGE>

                                   ASSIGNMENT

         For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.

         In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:

         [  ]     To Greatbatch, Inc. or a subsidiary thereof; or

         [  ]     To a "qualified institutional buyer" in compliance with Rule
144A under the Securities Act of 1933, as amended; or

         [  ]     Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or

         [ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and which continues to
be effective at the time of transfer;

         and unless the Debenture has been transferred to Greatbatch, Inc. or a
subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.

         Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.

Dated:_____________________________
___________________________________
___________________________________

Signature(s)

                                      A-15
<PAGE>

         Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Debenture Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Debenture Registrar in addition to, or in substitution for, STAMP, al in
accordance with the Securities Exchange Act of 1934, as amended.

_________________________________
Signature Guarantee

         NOTICE: The signature on the Conversion Notice, the Option to Elect
Redemption Upon a Fundamental Change, the Assignment must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.

                                      A-16
<PAGE>
                                                                      Schedule I

                [Include Schedule I only for a Global Debenture]

                                GREATBATCH, INC.
               2 1/4% Convertible Subordinated Debenture Due 2013

No. _______

<TABLE>
<CAPTION>
<S>                        <C>                    <C>                                      <C>

                           Principal                 Notation Explaining                     Authorized Signature
Date                         Amount               Principal Amount Recorded                of Trustee or Custodian
----                         ------               -------------------------                -----------------------
</TABLE>

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