Document:

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                                                                  Exhibit 10.16*

The confidential portions of this exhibit, which have been removed and
replaced with an asterisk, have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 406.

                                                                    CONFIDENTIAL
                                                                    CONFIDENTIAL

                                SUPPLY AGREEMENT
                                  SVO BATTERIES

      This Supply Agreement (this "Agreement") is made as of the 31st day of
July, 1991 by and between Wilson Greatbatch Ltd., a corporation duly organized
under the laws of the State of New York, U.S.A. and having its principal place
of business at 10,000 Wehrle Drive, Clarence, New York 14031 (hereinafter
"WGL"), and Medtronic, Inc., a corporation duly organized under the laws of the
State of Minnesota, U.S.A. and having its principal place of business at 7000
Central Avenue, N.E., Minneapolis, Minnesota 55432 (hereinafter "Medtronic").

                                    RECITALS

A. WGL has the capability and desire to manufacture for and supply to Medtronic
SVO Batteries, as defined below, for use in Products, as defined below.

B. Medtronic desires to purchase a supply of SVO Batteries from WGL for use in
Products all in accordance with the terms of this Agreement.

C. In addition, WGL desires to grant to Medtronic and Medtronic desires to
obtain from WGL on the date first set forth above a worldwide, nonexclusive.
royalty free license to utilize defined Subject Patents and Know-How of WGL
relating to SVO Batteries, all in accordance with the terms of the License
Agreement, as defined below.

D. The parties acknowledge that Medtronic's purpose in entering into this
Agreement is to obtain a reliable source of SVO Batteries of high quality and
that WGL agrees to provide such a source subject to all of the terms and
conditions set forth in this Agreement. The parties further acknowledge that
Medtronic intends over time to develop both its internal capabilities to
manufacture SVO Batteries to meet its anticipated requirements for such SVO
Batteries, and in addition is establishing by this Agreement a second source
supply arrangement with WGL for supply of SVO Batteries to substantially assist
Medtronic in meeting its requirements for SVO Batteries.

      NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

1.1 Affiliate. "Affiliate" of any entity is any other entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the

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first entity. Control shall mean owning more than 50 percent of the total voting
power of the entity.

1.2 Confidential Information. "Confidential Information" shall mean know-how,
trade secrets, and unpublished information disclosed by one of the parties (the
"disclosing party") to the other party (the "receiving party") or generated
under this Agreement, excluding information which:

      (a) was already in the possession of receiving party prior to its receipt
      from the disclosing party, provided that the receiving party shall provide
      the disclosing party with reasonable documentary proof thereof;

      (b) is or becomes part of the public domain by reason of acts not
      attributable to the receiving party;

      (c) is or becomes available to receiving party from a source other than
      the disclosing party which source, to the receiving party's knowledge, has
      rightfully obtained such information and has no obligation of
      non-disclosure or confidentiality to the disclosing party with respect
      thereto; or

      (d) is made available by the disclosing party to a third party
      unaffiliated with the disclosing party on an unrestricted basis.

All Confidential Information disclosed by one party to the other under this
Agreement, insofar as practicable, shall ultimately be in writing and bear a
legend "Company Proprietary", "Company Confidential" or words of similar import.
Accordingly, all Confidential Information disclosed in any manner other than
writing shall, insofar as practicable, be preceded by an oral statement
indicating that the information is company proprietary or confidential, and
shall be followed by transmittal of a reasonably detailed written summary of the
information provided to the receiving party with identification as Confidential
Information designated as above within thirty (30) days.

1.3 Intellectual Property. "Intellectual Property" shall mean all patents,
inventions, discoveries, know-how, trade secrets, data, information, technology,
processes, formulas, drawings, designs, computer programs, licenses, and all
amendments, modifications, and improvements to any of the foregoing.

1.4 Contract Year. "Contract Year" shall mean each respective annual period
during the term of this Agreement which commences on August 1 and ends on the
next following July 31.

1.5 First Contract Period, Second Contract Period, and Third Contract Period.
"First Contract Period", "Second Contract Period", and "Third Contract Period"
shall mean, respectively, the

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periods of (i) August 1, 1991 to July 31, 1995, (ii) August 1, 1995 to July 31,
1998, and (iii) August 1, 1998 to July 31, 2001.

1.6 License Agreement. "License Agreement" shall mean the License Agreement to
be executed by WGL and Medtronic on even date herewith, in the form of the
attached Exhibit A hereto.

1.7 Product. "Product" shall mean implantable medical products used in the
treatment of cardiac tachycardia or fibrillation now and hereafter manufactured
by or for Medtronic.

1.8 Quota. "Quota" shall mean the respective period minimum quantities of SVO
Batteries which Medtronic shall be expected to purchase from WGL in accordance
with the terms and conditions of Article 5 of this Agreement.

1.9 SVO Batteries. "SVO Batteries" shall mean any battery for use in a Product
which battery uses silver vanadium oxide as a cathode material.

1.10 Security Agreement. "Security Agreement" shall mean the Security Agreement
to be executed by WGL on even date herewith, in the form of the attached Exhibit
B hereto, which shall secure WGL's performance of its obligations to Medtronic
under this Agreement.

1.11 New Battery. "New Battery" shall mean any SVO Battery that requires full
WGL qualification as a new cell and that has been in implantable grade
production for less than 180 days. WGL Models 8830 and 8615 are not, for
purposes of this Agreement, considered "New Batteries."

                                    ARTICLE 2
                        GENERAL OBLIGATIONS OF Medtronic

2.1 Quality Control. Medtronic agrees to follow reasonable quality control
standards with respect to the storage, preservation, and use of SVO Batteries
purchased under this Agreement and consistent in all material respects with the
reasonable recommendations of WGL. Medtronic shall maintain production,
inventory and sales records with respect to Product incorporating SVO
Batteries purchased from WGL under this Agreement, in sufficient detail to
enable Medtronic to conduct an effective recall of such Product should such a
recall be deemed appropriate by Medtronic.

2.2 Regulatory Approval Efforts. During the term of this Agreement Medtronic
shall have responsibility for obtaining at its expense, in its name and at its
discretion any necessary device regulatory approvals from the U.S. Food and
Drug Administration (i.e., PMA's or 510(k)'s as the case may be), and
applicable regulatory agencies of such other countries in which Product
incorporating the SVO Batteries will be sold. WGL shall supply

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Medtronic with all documents, instruments, information, reports and advice and
general assistance as is necessary to complete, and as is reasonably requested
by Medtronic in connection with, such regulatory approval efforts.

                                    ARTICLE 3
                           GENERAL OBLIGATIONS OF WGL

3.1 WGL's Manufacture and Supply of SVO Batteries. Except as otherwise provided
in Section 4.2 hereof, WGL shall use all reasonable commercial efforts during
the term of this Agreement to supply to Medtronic SVO Batteries in the
quantities ordered by Medtronic, in accordance with the specifications now in
effect and hereafter agreed to by the parties and with Medtronic's schedules for
delivery thereof. WGL acknowledges that such quantities ordered by Medtronic may
amount to   *   of Medtronic's requirements for SVO Batteries for use in
Products during the term of this Agreement.

3.2 SVO Battery Specifications. The current specifications for the SVO Batteries
to be purchased under this Agreement are attached hereto as Exhibit C, except
for the specifications for the SVO Battery to be used in Medtronic PCD Model
7218 which specifications are now being finalized by mutual agreement (the SVO
Batteries specifications attached are presently intended for use in Medtronic's
PCD Models 7216, 7217 and 7219). It is the expectation of both parties that WGL
will maintain commercially competitive capabilities in the research, design,
development and manufacture of SVO Batteries. Subject to Section 6.3 hereof, WGL
agrees that it will promptly undertake to implement any changes to existing
designs of SVO Batteries and any new designs of SVO Batteries proposed for
purchase by Medtronic under this Agreement to the extent reasonably requested by
Medtronic from time to time, provided that such efforts requested are reasonably
within the then-existing or imminently planned-for capabilities of WGL and such
efforts are reasonably deemed by Medtronic as likely to enhance Medtronic's
competitive position in and/or profit from the development and sale of Products.
Such implementations shall be conditional upon the successful completion of such
evaluation and qualification procedures as WGL shall reasonably require
to ensure the safety, reliability, quality, and manufacturability of such
proposed changes and new designs. Medtronic may not require delivery of SVO
Batteries incorporating such changes until sixty (60) days after completion of
such qualification procedures and such delivery shall be subject to the
provisions of Section 4.7.

3.3 Compliance With U.S. Laws and Regulations; Compliance With Specifications.
WGL shall be responsible for compliance with present and future applicable
statutes, laws, ordinances and regulations of United States and foreign
national, federal, state and local governments relating to the manufacture and,
except as otherwise provided in Section 2.2 hereof, the sale of SVO Batteries

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to Medtronic under this Agreement. WGL will provide such Medtronic personnel
as Medtronic reasonably deems appropriate with reasonable access from time to
time to WGL's facilities and records for the purpose of confirming WGL's
compliance with requirements noted in this Section, and for the further purpose
of confirming, if reasonably deemed necessary by Medtronic, WGL's compliance
with applicable specifications for SVO Batteries.

3.4 Failure to Meet Delivery Schedules. If WGL is unable for any reason, other
than Force Majeure, to meet any scheduled deliveries specified by Medtronic for
SVO Batteries, as provided for in Article 4 hereof, and such inability is
material to Medtronic in amount and significance, WGL shall on written request
of Medtronic then allocate, with respect to the Contract Period within which the
delay in delivery originated, the following respective percentages of WGL's SVO
Battery manufacturing capacity to fulfill Medtronic's orders for SVO Batteries:
  *   percent for the First Contract Period,   *   percent for the Second
Contract Period, and   *   percent for the Third Contract Period. Such
allocation of plant capacity by WGL shall continue until the delivery schedule
for SVO Batteries to Medtronic is being met on a current basis. Furthermore, in
the event of any aforementioned inability of WGL to meet scheduled deliveries to
Medtronic, WGL will engage in communications with and will fully cooperate with
Medtronic as requested by Medtronic, and provide appropriate, mutually agreed
upon Medtronic personnel with reasonable access to WGL's SVO Battery
manufacturing facility as requested by Medtronic, to determine the causes of
such inability and possible measures to correct such inability and prevent its
recurrence in the future.

                                    ARTICLE 4
                            ORDERS FOR SVO BATTERIES

4.1 Orders for SVO Batteries. Medtronic will submit orders for SVO Batteries to
WGL in writing, whether by mail, telecopy, telex or otherwise, and such orders
will set forth at a minimum: (a) an identification of SVO Batteries ordered, (b)
quantities ordered, (c) delivery dates, and (d) shipping instructions.

4.2 Order Limitations. In the event orders placed by Medtronic for delivery
within any month exceed the monthly average of Product units ordered by
Medtronic under the most recent prior period of   *   consecutive months of
Medtronic firm purchase orders by more than   *   or by more than   *   SVO
Battery units, whichever is greater, then WGL shall not be obligated to supply
any such excess above such   *   or   *   unit overage as applicable, however,
WGL shall use all reasonable commercial efforts to supply amounts requested for
delivery which are in excess of such overage, it being understood that in the
supply of any such excess beyond the permitted overage WGL may take into account
delivery commitments to other customers. Notwithstanding the foregoing, WGL
shall not be required to supply within any

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forecast period a number of SVO Battery units which is in excess of * times the
aggregate number of SVO Battery units forecast for delivery by Medtronic during
such forecast period under Section 4.5 hereof. It is understood by the parties,
however, that in the event WGL refuses to supply any SVO Batteries to Medtronic
because of the foregoing cap on WGL's periodic supply requirements and such
refusal makes it impossible for Medtronic to meet a purchase quota under Article
5 hereof, then the relevant Medtronic purchase quota requirement shall be deemed
reduced by the number of SVO Battery units which WGL so refuses to deliver.

4.3 Modification of Orders. No aforementioned order shall be modified or
canceled except upon the mutual agreement of the parties. Mutually agreed change
orders shall be subject to all provisions of this Agreement, whether or not
the change order so states. Notwithstanding the foregoing, Medtronic may in its
sole discretion by written notice to WGL cancel orders for and deliveries of any
SVO Batteries which are not delivered within sixty (60) days of the delivery
date requested by Medtronic and in the event of such cancellation by Medtronic,
Medtronic may then make such appropriate adjustments to any outstanding orders
and forecasts as it deems advisable in light of any shortfalls in supply which
relate to such cancellation. The foregoing rights of cancellation and adjustment
by Medtronic, together with the rights of Medtronic set forth in Section 3.4
hereof and in Section 4.6 hereof, the right of reduction in Quotas set forth in
Section 5.4 hereof, and the right of termination of this Agreement by Medtronic
for material breach of this Agreement set forth in Section 12.2 hereof, shall be
the exclusive remedies to which Medtronic may be entitled as a result of delayed
deliveries by WGL.

4.4 Delivery Terms. All deliveries of SVO Batteries shall be F.O.B. WGL's
manufacturing facility at 10,000 Wehrle Drive, Clarence, New York. Accordingly,
all risk of damage to or loss or delay of SVO Batteries purchased under this
Agreement shall pass to Medtronic upon their delivery at the F.O.B. point to a
common carrier specified by Medtronic or, in the event that no carrier shall
have been specified by Medtronic on or before the date fifteen (15) days prior
to the requested shipment date, a common carrier reasonably selected by WGL.

4.5 Medtronic's Forecasts. Upon execution of this Agreement by the parties,
Medtronic agrees to provide WGL with a twelve (12) month forecast indicating
Medtronic's forecast purchases of SVO Batteries from WGL during the period
August 1, 1991 through July 31, 1992 (and which shall take into account orders
for SVO Batteries placed by Medtronic prior to execution of this Agreement).
Such forecast shall be updated monthly (prior to the final day of each full
month during the term of this Agreement) by Medtronic in writing to WGL on a
rolling basis such that the forecast shall at all times cover the prospective
twelve (12) month period. Such rolling forecasts by Medtronic shall be used

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for purposes of facilitating each party's planning and in order to meet the
lead times required by certain of WGL's suppliers. Such forecasts are not
legally binding in any manner and may be revised from time to time by Medtronic
as it deems appropriate, provided, however, that SVO Batteries scheduled for
delivery within the first four months of each aforesaid twelve month forecast
period shall represent and constitute a firm order by Medtronic.

4.6 Penalties for Specified Delivery Delays. The provisions of this Section 4.6
shall become effective 9 months after the date of both parties signing this
Supply Agreement. If, prior to July 31, 1995 or, while WGL is the sole supplier
of a particular SVO Battery model as to which delays are occurring, WGL is
unable for any reason (other than force majeure) to meet any scheduled
deliveries specified by Medtronic for SVO Batteries, as provided for in Article
4 hereof, and such delay is material to Medtronic in amount and significance
(including but not necessarily limited to any such delay which would cause
Medtronic to reduce its planned production of Products, which shall be deemed
material to Medtronic) then, notwithstanding any contrary provisions of the
Security Agreement or this Agreement or of law, with the exception of Section
3.4 hereof, the rights of cancellation and adjustment set forth in Section 4.3
hereof, the right of reduction in Quotas set forth in Section 5.4 hereof, and
the right of termination of this Agreement by Medtronic for material breach of
this Agreement set forth in Section 11.2 hereof: at Medtronic's request and
until such time as WGL can promptly deliver from its current production
quantities of delayed SVO Batteries to fully support Medtronic manufacturing
requirements, WGL shall use SVO Batteries comprising Inventory under the
Security Agreement (to the extent such SVO Batteries are available in the
appropriate models) to offset delayed SVO Batteries. Subject to the foregoing
conditions of this Section 4.6, for each SVO Battery unit which is not
delivered, whether out of said Inventory or from current production, within
sixty (60) days of the delivery date requested by Medtronic pursuant to the
order and delivery terms of this Agreement, WGL shall immediately make a
repayment to Medtronic of a portion of the * sum referenced in Section 6.7
hereof, to the extent such sum has not already been repaid in whole by WGL under
this Section 4.6 or Section 6.7 of this Agreement or under the Security
Agreement, which repayment shall be determined by multiplying * times the number
of such delayed units. The total of any aforementioned repayments by WGL under
this Section 4.6 together with any repayments under Section 6.7 and under the
Security Agreement shall in no event exceed *. Any such repayments made to
Medtronic shall not relieve WGL of its responsibility to deliver the delayed
units as soon as possible in the event the orders for such delayed units have
not been cancelled by Medtronic. The foregoing provisions shall not reduce or
otherwise affect the adjustments to Medtronic's permitted outstanding account
payable to WGL for SVO Batteries to the extent provided for in Section 6.2

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hereof. The foregoing rights in this Section 4.6, together with the rights of
Medtronic set forth in Section 3.4 hereof and in Section 4.3 hereof, the right
of reduction in Quotas set forth in Section 5.4 hereof, and the right of
termination of this Agreement by Medtronic for material breach of this Agreement
set forth in Section 11.2 hereof, shall be the exclusive remedies to which
Medtronic may be entitled as a result of delayed deliveries by WGL.

4.7 Scheduled Deliveries for New Battery. It is expressly understood that the
first six (6) months of scheduled delivery for any New Battery as defined herein
will be strictly on a best efforts basis by WGL and will not be subject to any
provision regarding failure to deliver including Section 3.4, 4.3, 4.6, 5.4 and
11.2.

                                    ARTICLE 5
                                 PURCHASE QUOTAS

5.1 Contract Year Quota. Medtronic agrees to purchase and take delivery from WGL
of a quota of SVO batteries during each Contract Year in an amount equal to the
lesser of (a) * SVO Batteries, or (b) * of Medtronic's requirements for SVO
Batteries for that Contract Year.

5.2 Contract Period Quota. During the First Contract Period, Second Contract
Period and Third Contract Period, respectively, Medtronic agrees to purchase and
take delivery from WGL of the following quotas of SVO Batteries:

      (a) A quota for the First Contract Period in an amount equal to * of
      Medtronic's requirements for SVO Batteries during such Contract Period;

      (b) A quota for the Second Contract Period in an amount equal to * of
      Medtronic's requirements for SVO Batteries during such Contract Period;
      and

      (c) A quota for the Third Contract Period in an amount equal to * of
      Medtronic's requirements for SVO Batteries during such Contract Period.

5.3 Purchase Carry Forwards. For purposes of determining whether Medtronic has
met any Contract Period quota, Medtronic may carry forward from any one Contract
Period to any future Contract Periods such number of purchased SVO Battery units
as is in excess of the Contract Period quota for the period from which such
carry forward is being made. Notwithstanding the foregoing, the maximum number
of purchased SVO Battery units which Medtronic may carry forward from any one
Contract Period to any future Contract Period or Periods shall be * units.

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5.4 Reductions in Quota. Notwithstanding Medtronic's obligations pursuant to
Sections 5.1 and 5.2 hereof, Medtronic's Quota for any quota period shall be
reduced (a) in the case of subpart (i) below by an amount equal to * times the
amount of SVO Batteries, the order and delivery of which has been canceled by
Medtronic pursuant to Section 4.3 hereof, (b) in the case of subpart (ii) below,
by an amount equal to * times the amount of SVO Batteries affected by such
recall or withdrawal, and (c) in the case of subpart (iii) below, by an amount
equal to * times the amount of SVO Batteries of the revised design noted below
which Medtronic itself manufactures and incorporates into Product (or has a
third party manufacture, as permitted under this Agreement), following WGL's
failure to supply such revised design battery.

      (i) If WGL fails for any reason to deliver ordered SVO Batteries within
      sixty (60) days of the date scheduled for delivery thereof, including but
      not limited to a failure to deliver SVO Batteries which conform to the
      then current specifications for SVO Batteries;

      (ii) If any Product incorporating SVO Batteries provided under this
      Agreement is recalled from the market or withdrawn from sale for reasons
      of product safety or quality due to battery performance as determined by
      any applicable governmental authority or by Medtronic in its reasonable
      judgment after consultation with WGL; or

      (iii) If WGL is unable or for any other reason fails to implement any
      revised SVO Battery design requested by Medtronic under the provisions of
      Section 3.2 hereof.

Subject to Section 4.6 regarding penalties for specified delivery delays, the
foregoing adjustments to Quotas shall not be deemed to waive or otherwise
adversely affect any other remedy to which Medtronic may be entitled as a result
of the occurrence of events giving rise to any such reduction in Quotas which
remedy is specifically set forth in Section 3.4, 4.3, 4.6 or 11.2 hereof. The
rights of Medtronic set forth in this Section 5.4, together with the rights of
Medtronic set forth in Section 3.4 hereof, Section 4.3 hereof and in Section 4.6
hereof, and the right of termination of this Agreement by Medtronic for material
breach of this Agreement set forth in Section 11.2 hereof, shall be the
exclusive remedies to which Medtronic may be entitled as a result of delayed
deliveries by WGL.

5.5 Reports and Records. Within ninety (90) days after the end of each Contract
Year, Medtronic shall provide WGL with a written report indicating the number of
Product units manufactured by or for Medtronic during such period which
incorporate an SVO Battery. Upon reasonable notice and during regular business
hours, but no more frequently than once for any Contract Year and only with
respect to a Contract Year which has been completed in the prior

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three year period, Medtronic shall at WGL's written request make available
appropriate records substantiating the number of Product units manufactured by
Medtronic in such prior Contract Years which incorporate an SVO Battery for
audit at WGL's expense by an independent certified accounting representative to
verify the accuracy of the reports provided to WGL. Such representative shall
execute a suitable confidentiality agreement reasonably acceptable to Medtronic
prior to conducting such audit. Such representative may disclose to WGL only its
conclusions regarding the accuracy and completeness of said reports, and shall
not disclose Confidential Information of Medtronic to WGL without the prior
written consent of Medtronic.

5.6 Cure of Quota Shortfalls. In the event WGL determines that Medtronic has
failed to meet a Contract Year or Contract Period Quota as provided for in this
Article 5 it shall promptly notify Medtronic in writing of such failure and the
amount by which the applicable Quota has not been met. Notwithstanding any
contrary provisions of this Agreement, Medtronic shall have a period of ninety
(90) days after receipt of any such written notice from WGL and verification of
the alleged deficiency to cure any failure to purchase Quotas by placing firm
orders for appropriate additional purchases of SVO Batteries from WGL. Any such
purchases made to cure a failure to meet Quota shall not be counted as purchases
for Quota purposes for any Contract Year or Contract Period other than the ones
as to which such cure has been effected.

5.7 Determining Quota Percentage. For purposes of determining whether
Medtronic's Quota for any period has been met (subject to such adjustments as
are provided for in this Agreement), the numerator of the fraction which
determines the percentage of Quota shall be the number of SVO Battery units
delivered by WGL to Medtronic during such period (less the number of such
delivered units, if any, which were rightfully not accepted by Medtronic) and
the denominator of such fraction shall be the total number of SVO Battery units
incorporated in Product units of Medtronic which enter into commercial
production (and are intended for commercial sale, as opposed to use for
development, demonstration, testing or other purposes) during such period.

                                    ARTICLE 6
                               PRICES AND PAYMENTS

6.1 SVO Batteries Prices. Except as otherwise provided in Section 6.10 hereof,
the price to be paid by Medtronic for SVO Batteries purchased from WGL during
the term of this Agreement shall be * U.S. per SVO Battery. All prices are
F.O.B. WGL's manufacturing facility in Clarence, New York. Except as otherwise
provided in Section 6.5, the foregoing * U.S. per unit price shall apply to all
SVO Batteries purchased from WGL whether such units are prototypes, pilot
production or commercial run units.

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6.2 Unit Payment Terms. Payments made by Medtronic for SVO Batteries purchased
hereunder shall be due and payable thirty (30) days after shipping date F.O.B.
from Clarence, New York. Notwithstanding the foregoing sentence, once the * sum
referenced in Section 6.7 hereof has been delivered to WGL from escrow as
provided for in said Section 6.7, Medtronic shall not be required during the
term of this Agreement to pay down its account payable to WGL for SVO Batteries
purchased hereunder to any amount below the greater of (a) * and (b) * plus the
dollar amount derived by multiplying the then current per unit purchase price
for SVO Batteries under this Agreement times the number of SVO Battery units
which results from subtracting (i) the actual average number of SVO Battery
units in the Minimum Inventory (whether or not the required level of Minimum
Inventory, as defined in the Security Agreement, has been met) during the most
recently completed semi-annual period in the latest Contract Year from (ii) the
threshold level of * units; provided, however, that this sentence shall no
longer be applicable from and after the date WGL shall have repaid in full the *
sum referenced in Section 6.7 hereof. Any interest earned on the advance payment
while in escrow at Chemical Bank, as provided for in Section 6.7, shall be
credited to Medtronic's account, with such credit to be applied by WGL at the
instruction and discretion of Medtronic against any purchases of SVO Batteries
by Medtronic made after the escrowed funds have been disbursed to WGL. In the
event the aforesaid * and interest thereon have been disbursed to Medtronic in
accordance with the terms of the escrow agreement referenced in Section 6.7,
then Medtronic shall have no further right to the aforementioned purchase price
credit relating to interest earned on the escrowed *.

6.3 Design Fees. In the event that during the term of this Agreement Medtronic
requests that WGL supply to it a new model or models of SVO Battery under this
Agreement, then Medtronic will pay to WGL a reasonable design fee for WGL's
efforts in designing such new model or models of SVO Battery. Such design fee
shall be mutually agreed to by the parties in good faith and in no event will
such fee be greater than an amount equal in all material respects to that being
paid at or near the time of such design changes by other purchasers for a
comparable degree of design changes to SVO Batteries purchased from WGL. Any
significant design changes for SVO Batteries in production shall cost a minimum
of *.

6.4 Taxes. Medtronic shall be responsible for and shall pay, or reimburse WGL
for, all taxes, duties, import fees, assessments and other governmental charges
(except net income taxes) including those that relate to the import of SVO
Batteries into countries to which Medtronic has requested delivery of such SVO
Batteries. Notwithstanding the foregoing, WGL shall be responsible for and pay
any import taxes or fees for any importation of SVO Batteries into

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the United States should WGL elect to manufacture the SVO Batteries outside of
the United States.

6.5 Adjustments Relating to Outstanding Order. Notwithstanding any contrary
prior agreements or understandings of the parties with respect to SVO Batteries
presently on order by Medtronic from WGL as of the execution date of this
Agreement (i.e., the WGL #8830 battery for use in Medtronic's #7217 PCD), such
on order units will remain priced at * U.S. per SVO Battery provided, however,
that the last * of such SVO Batteries (currently scheduled for delivery after
January 1, 1992) will be priced at * U.S. per SVO Battery. Moreover, all of such
SVO Batteries on order by Medtronic from WGL as of the execution date of this
Agreement shall be considered as purchases from WGL during the term of this
Agreement for the purpose of determining if Medtronic has met its quota
responsibilities under Article 5 of this Agreement.

6.6 Most Favored Terms. WGL acknowledges and agrees that the price charged to
Medtronic for SVO Batteries shall at no time during the term of this Agreement
be higher than or otherwise less favorable than the price in effect from time to
time during the term of this Agreement for substantially comparable SVO
Batteries purchased by any other party from WGL in equal or lesser quantities
than are to be purchased by Medtronic hereunder, provided, however, that the
foregoing clause shall not apply to SVO Batteries that are not intended for, and
in fact do not rightfully enter into, commercial sale to end user customers,
such as those used for development, demonstration, or testing purposes.
Accordingly, within thirty (30) days of the completion of each Contract Year,
WGL shall provide to Medtronic a written certification by an executive officer
of WGL that WGL has fully complied with the terms of this Section 6.6. Upon
reasonable notice and during regular business hours, but no more frequently than
once for any Contract Year and only with respect to a Contract Year which has
been completed in the prior three year period, WGL shall at Medtronic's written
request make available appropriate records substantiating the accuracy of WGL's
certifications referenced above for audit at Medtronic's expense by an
independent certified accounting representative to verify the accuracy of such
certifications. Such representative shall execute a suitable confidentiality
agreement reasonably acceptable to WGL prior to conducting such audit. Such
representative may disclose to Medtronic only its conclusions regarding the
accuracy and completeness of said certifications, and shall not disclose
Confidential Information of WGL to Medtronic without the prior written consent
of WGL. If appropriate based on information provided by WGL or based on the
result of an audit provided for above, the price charged to Medtronic for SVO
Batteries hereunder shall be downwardly adjusted to the lowest level that such
comparable SVO Batteries are being sold to third parties. Such downward price
adjustment shall be made

                                      -12-
<PAGE>

retroactively effective to the date upon which the aforesaid lower pricing first
commenced, with an appropriate adjusting payment to be made to Medtronic for
prior overcharges (which adjusting payment Medtronic may elect to take in the
form of a lump sum cash payment from WGL or in the form of an offsetting credit
against future purchases of SVO Batteries from WGL).

6.7 Advance Payment. Promptly following execution of this Agreement by the
parties hereto, Medtronic shall deliver a check in the amount of * to Chemical
Bank, Buffalo, New York as escrow agent ("Escrow Agent"). The Escrow Agent shall
cause the escrowed funds to be deposited in an interest-bearing account and to
be delivered to WGL, together with all interest earned thereon, upon receipt of
a statement from WGL's independent auditors certifying that WGL's Inventory (as
defined in the Security Agreement) is then comprised of not less that * SVO
Battery units. Such statement shall be provided to Medtronic for review and
comments not less than fifteen (15) days before it is provided by WGL to the
Escrow Agent. If the Escrow Agent shall not have received such certificate
within 365 days of the date this Agreement is executed by both parties, the
Escrow Agent shall deliver the escrowed funds to Medtronic, together with all
interest earned thereon. The parties agree to execute such form of escrow
agreement with the Escrow Agent as sets forth the foregoing terms and such other
terms as are reasonably customary in such agreements. Such sum of * (if received
by WGL) shall constitute an advance payment of purchase price for the last * of
purchases of SVO Batteries by Medtronic from WGL under this Agreement. WGL shall
have the right to repay at any time the * advanced by Medtronic under this
Section 6.7, less the amount of any repayments by WGL under Section 4.6 hereof,
in which event the Security Agreement shall automatically terminate (as provided
for therein) and the credits against the payment of purchase price for the last
* of purchases of SVO Batteries provided for in this Section 6.7 shall no longer
apply. If for any reason it occurs that at the time of any termination of this
Agreement Medtronic has not recouped the entire aforesaid * amount, less the
amount of any repayments already made by WGL under Section 4.6 hereof, in the
form of purchase price credits for SVO Batteries purchased from WGL under this
Agreement, then any unrecouped portion of such * shall constitute a repayment
obligation of WGL which shall be immediately due and payable to Medtronic in
full upon demand by Medtronic of payment thereof. In the event that during
either or both of the final Contract Year of the First Contract Period or the
final Contract Year of the Second Contract Period the actual number of SVO
Batteries delivered to Medtronic in such respective Contract Year totals less
than * units, and the forecast for the succeeding year is less than * units,
then WGL shall immediately make a repayment to Medtronic of a percentage of the
aforesaid

                                      -13-
<PAGE>

* which percentage amount shall equal the percentage by which said actual number
of delivered units is short of said * unit level. Any repayment amount due to
Medtronic with respect to the Second Contract Period under the foregoing
provision may be reduced by the amount of any repayment made under such
provision with respect to the First Contract Period.

6.8 Medtronic Manufacturing Payments. If during the Third Contract Period
Medtronic manufactures more than * but * or less of its requirements for SVO
Batteries during such period, Medtronic will pay WGL a per unit fee of * per SVO
Battery manufactured by Medtronic within such * through * category. In addition,
if during the Third Contract Period Medtronic manufactures more than * but * or
less of its requirements for SVO Batteries during such period, Medtronic will
pay WGL a per unit fee of * per SVO Battery manufactured by Medtronic within
such * through * category. Any such payments due by Medtronic shall be made
annually within ninety (90) days of the completion of each Contract Year within
such Third Contract Period. The annual payment due by Medtronic, if any, for
the first Contract Year within such Third Contract Period shall be calculated
based on the number of SVO Batteries manufactured by Medtronic during such first
Contract Year. The annual payment due by Medtronic, if any, for the second
Contract Year within such Third Contract Period shall be calculated based on the
aggregate number of SVO Batteries manufactured by Medtronic during both the
first and second Contract Years within such Third Contract Period, and any such
payment shall take into account and reflect appropriate adjustments for any
overpayments or underpayments by Medtronic with respect to the aforementioned
first Contract Year. The annual payment due by Medtronic, if any, for the third
Contract Year within such Third Contract Period shall be calculated based on the
aggregate number of SVO Batteries manufactured by Medtronic during all of the
first, second and third Contract Years within such Third Contract Period, and
any such payment shall take into account and reflect appropriate adjustments for
any overpayments or underpayments by Medtronic with respect to the
aforementioned first or second Contract Years. In the event it is determined,
after completion of the Third Contract Period, that Medtronic has made annual
payments under this Section 6.8 which in total exceed the aggregate amount to
which WGL is entitled under this Section 6.8 due to Medtronic manufacturing
during the Third Contract Period, then WGL shall promptly repay (but in no event
more than 15 days after written notice from Medtronic identifying the amount of
excess payment by Medtronic) to Medtronic in cash the amount of such excess
payment by Medtronic. In the event that the Quota for the Third Contract Period
is reduced in accordance with the provisions of Section 5.4 hereof, then the
aggregate number of units by which such Quota has been so reduced shall be
considered as SVO Battery units purchased by Medtronic from WGL during the Third
contract Period for purposes of determining any manufacturing payments due from
Medtronic to WGL under the terms of this Section 6.8. References in this Section

                                      -14-
<PAGE>

6.8 to SVO Batteries manufactured by Medtronic shall be deemed to include any
SVO Batteries manufactured for Medtronic by a person or entity other than WGL.
For purposes of determining the applicable Medtronic manufacturing payment due
from Medtronic under this Section, if any, there shall be considered only those
SVO Battery units manufactured by Medtronic to be incorporated in Products
intended for commercial sale, as opposed to SVO Battery units manufactured by
Medtronic and to be used alone or with Products for development, demonstration,
testing or other "not for sale" purposes. Any SVO Batteries manufactured by or
for Medtronic (other than by WGL) and in Medtronic's finished goods inventory at
the end of the Third Contract Period shall for purposes of this Section 6.8 be
deemed to be intended for commercial sale and a manufacturing payment shall be
due thereon.

6.9 Meet or Release Provision. On and after August 1, 1995, the following
provisions shall become effective:

Notwithstanding any contrary terms or provisions of this Supply Agreement,
Medtronic shall have the right to solicit written bids from time to time from
any qualified manufacturers (other than an affiliate or a spinoff of Medtronic)
of comparable implantable grade SVO Batteries other than WGL, as defined herein.
Medtronic may submit any such bids it receives to WGL and upon such submission
WGL shall have a period of sixty (60) days in which to advise Medtronic in
writing that WGL is willing and agrees to provide to Medtronic the SVO Batteries
covered by such bid on the pricing terms set forth in such bid. In the event
that WGL elects to provide said SVO Batteries to Medtronic on said terms, then
this Supply Agreement shall then be deemed appropriately amended to incorporate
such revised pricing terms for the SVO Batteries covered by such bid (and any
SVO Batteries purchased by Medtronic relating to such bid shall be deemed to be
SVO Batteries purchased from WGL for all purposes under this Supply Agreement,
including but not limited to the purposes of Article 5 and Section 6.8 hereof).
In the event that WGL does not make a timely election to provide said SVO
Batteries to Medtronic on said pricing terms, then Medtronic may in its
discretion accept such bid and purchase said SVO Batteries from the bidding
manufacturer on the pricing terms set forth in such bid or such other pricing
terms as may be more favorable to Medtronic than the terms set forth in the
initial bid (and any SVO Batteries so purchased by and delivered to Medtronic
under said bid shall be deemed to be SVO Batteries manufactured by Medtronic
with the exception that solely for purposes of calculating Quotas under Article
5 hereof the SVO Battery units delivered to Medtronic by said third party
bidding manufacturer shall be treated as though they were purchased by Medtronic
from WGL.

Such purchases shall not relieve Medtronic of the obligation under Section 5.1
to purchase the lesser of * of its requirements or

                                      -15-
<PAGE>

SVO Batteries per year for the term of this Supply Agreement, from WGL.

For the purposes of this Supply Agreement, a qualified manufacturer is defined
to be a legal entity that has delivered production quantities of SVO Batteries
to a Medtronic competitor for use in FDA (or the regulatory equivalent in any
other country) approved "Products" as defined herein, and who is not involved in
patent or know-how litigation with WGL regarding the Subject Patents and
Know-How, as defined in the License Agreement. Furthermore, if Medtronic accepts
a bid from a qualified manufacturer who contracts to deliver SVO Batteries that
WGL otherwise would have delivered and who fails to deliver within the
contracted time period those quantities contracted for, then Medtronic shall
fully comply with all Article 5 quota terms of this Supply Agreement by, if
necessary to meet the applicable quota reordering from WGL any SVO Batteries not
delivered by said qualified manufacturer.

6.10 Permitted Price Adjustments.

      (a) The price of * per SVO Battery provided for in Section 6.1 is subject
to upward modification, from time to time, by WGL during the period which
commences on August 1, 1995 and ends on July 31, 2001 if WGL incurs a
"Significant Cost Increase." The amount of any such permitted price increase due
to a Significant Cost Increase shall in no event exceed the lesser of (1) the
actual per unit amount of the increase over WGL's fully allocated product cost
of SVO Batteries as of the date of this Agreement, or (2) the actual per unit
increase attributable to cost items set forth in (i) through (v) below. For
purposes of this Section 6.10, the term "Significant Cost Increase", shall mean
an increase by * or more in WGL's fully allocated product cost of manufacturing
SVO Batteries over WGL's fully allocated product cost of SVO Batteries as of the
date of this Agreement. Fully allocated product cost as referenced in this
Section shall be reasonably determined in accordance with generally accepted
accounting principles and shall allocate all general, administrative and other
indirect expenses among each of WGL's products proportionately based upon their
respective manufactured product unit volumes. Furthermore, the future fully
allocated product cost of manufacturing SVO Batteries shall be calculated in a
manner consistent with that used for the calculation of the fully allocated
product cost of manufacturing SVO Batteries as of the date of this Agreement.
WGL shall have its independent auditors calculate WGL's fully allocated per unit
product cost of manufacturing SVO Batteries as of the date of this Agreement and
document such determination and the methodology used in such calculation (with
such efforts to be completed not later than 30 days following the date this
Agreement is signed by both of the parties hereto).

                                      -16-
<PAGE>

            (i)   Any requirement under applicable environmental or labor laws,
                  rules or regulations including but not limited to OSHA,
                  relating to or affecting work conditions for WGL employees
                  involved in the manufacture, testing and handling of SVO
                  Batteries, including, but not limited to, the handling,
                  storage and disposal of raw materials used by WGL or any waste
                  resulting therefrom.

            (ii)  Any requirement under applicable environmental laws, rules or
                  regulations pertaining to the transportation, handling,
                  storage and disposal of material actually used by WGL in
                  manufacturing SVO Batteries, including disposal of any waste
                  resulting therefrom.

            (iii) Any price increases imposed by WGL vendors of raw materials or
                  parts for the manufacture of SVO Batteries.

            (iv)  Any state or Federal law, rule, regulation or mandated
                  program, including, but not limited to, any of the foregoing
                  which imposes on WGL a new tax, fee, surcharge or employee
                  benefit, welfare or insurance program (excluding increases in
                  any existing taxes, fees, surcharges or employee benefit,
                  welfare or insurance programs).

            (v)   Any incremental increases in the costs of production labor,
                  equipment and materials which are directly and exclusively
                  related to changes expressly required by Medtronic in the
                  materials, structure or manufacture of SVO Batteries to be
                  provided by WGL to Medtronic (excluding any labor, equipment,
                  materials and other WGL costs which are covered by the design
                  fees provided for in Section 6.3 hereof).

      (b) If WGL is entitled and determines to impose a price increase under
this Section 6.10, WGL shall give not less than five months' written notice
thereof in order that the forecasts provided for in Section 4.5 to be made by
Medtronic can take into account any such price increase. WGL may not impose a
price increase during the permitted period hereunder more frequently than once
every 12 months. Notwithstanding the foregoing provisions of this Agreement, WGL
may, at any time before or after August 1, 1995, give immediate effect to price
increases based on costs identified in subpart (v) above if and when such costs
constitute a Significant Cost Increase. WGL shall deliver to Medtronic together
with the notice provided for herein a written report which describes in
reasonable detail the basis for WGL's determination that a price increase is
permitted under this Section 6. 10. WGL

                                      -17-
<PAGE>

shall at Medtronic's written request make available appropriate records
substantiating the basis for its determination that a significant Cost Increase
has occurred (including the fully allocated per Unit product cost of
manufacturing SVO Batteries as of the date of this Agreement and methodology
used in such calculation determined as required above) for audit at Medtronic's
expense by an independent certified public accounting representative to verify
the accuracy of the reports provided to Medtronic. Such representative shall
execute a suitable confidentiality agreement reasonably satisfactory to WGL
prior to conducting such audit. Such representative may disclose to Medtronic
only its conclusions regarding the accuracy and completeness of such reports,
and shall not disclose Confidential Information of WGL to Medtronic without the
prior written consent of WGL. Any such request for an audit must be made by
Medtronic within six months of any announced price increase hereunder.

      (c) The provisions of this Subsection (c) shall not apply price increases
based on costs identified in subpart (v) paragraph (a) above. Subject to the
preceding sentence notwithstanding any contrary provisions of this Agreement
including but not limited to Medtronic's obligations pursuant to Sections 5.1
and 5.2 hereof, during the period in which price increases are permitted under
this Agreement (i) in the event the price of SVO Batteries is increased beyond *
then each of the purchase Quotas set forth in Section 5.2 shall thereupon be
automatically reduced by * percent *, and (ii) in the event the price of SVO
Batteries is increased beyond * then each of the purchase Quotas set forth in
Section 5.2 shall thereupon be automatically reduced by * percent *, and (iii)
in the event the price of SVO Batteries is increased beyond * then each of the
purchase Quotas set forth in Section 5.1 and 5.2 shall thereupon be
automatically reduced to *, and Medtronic shall not be required to purchase *
SVC Batteries from WGL. Any aforementioned reduction in Quota will not affect
the validity or term of the License Agreement.

                                    ARTICLE 7
                        INSPECTION, WARRANTY AND SERVICE

7.1 Inspection of SVO Batteries. Medtronic shall conduct any incoming inspection
tests not later than forty five (45) days from the date of receipt of SVO
Batteries at the shipping address to which Medtronic has requested delivery of
such SVO Batteries. SVO Batteries not rejected by Medtronic by written notice to
WGL within such period shall be deemed accepted, with the exception of SVO
Batteries with latent defects that are not readily observable by Medtronic. In
the event of any shortage, damage or discrepancy in or to a shipment of SVO
Batteries or in the event any SVO Batteries fail to comply with the then current
specifications for SVO Batteries, Medtronic shall promptly report the same to
WGL and furnish such written evidence or other documentation as WGL

                                      -18-
<PAGE>

reasonably may deem appropriate. If evidence indicates that such shortage,
damage or discrepancy or non-conformity with specifications existed at the time
of delivery of SVO Batteries at the F.O.B. point, Medtronic may return the SVO
Batteries to WGL at WGL's expense, and at Medtronic's request WGL shall promptly
deliver substitute SVO Batteries to Medtronic in accordance with the delivery
procedures set forth herein.

7.2 Warranty. WGL warrants to Medtronic that SVO Batteries sold by WGL to
Medtronic under this Agreement shall be in conformance with applicable
specifications and shall be free from defects in material and workmanship at the
time of delivery of said svo Batteries at the F.O.B. point.

7.3 Limited Warranty. THE WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY WGL,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE.

                                    ARTICLE 8
                                 CONFIDENTIALITY

8.1 Non-Disclosure. Each party agrees not to use any Confidential Information
of the other party during the term of this Agreement and for a period of five
(5) years thereafter for any purpose other than as permitted or required for
performance by the party receiving such Confidential Information of its rights
or duties hereunder or under the License Agreement. Each party further agrees
not to disclose or provide any of such Confidential Information of the other
party to any third party, other than as permitted or required for performance by
the parties receiving such Confidential Information of its rights or duties
hereunder or under the License Agreement, and to take appropriate measures to
prevent any such disclosure by its present and future employees, officers,
agents, subsidiaries, or consultants during the term of this Agreement and for a
period of five (5) years thereafter. Without limitation of the foregoing, the
recipient of Confidential Information of the other party shall protect such
Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use, dissemination or
publication of the Confidential Information, as the recipient uses to protect
its own proprietary information of a like nature.

                                    ARTICLE 9
                              INTELLECTUAL PROPERTY

9.1 Ownership. WGL represents and warrants to Medtronic the following: Neither
WGL, its business nor any of WGL's SVO Batteries nor the execution and
performance of this Agreement and the License Agreement and the transactions
contemplated herein and

                                      -19-
<PAGE>

therein, infringes, misuses, misappropriates or conflicts with the patent and
other intellectual property rights or contract rights, of others. WGL has full
corporate right and authority to enter into this Agreement, the License
Agreement and the Security Agreement. WGL agrees to defend and hold Medtronic
harmless against monetary liability to any third party arising out of any claim
by such third party of patent or other intellectual property rights infringement
or contract rights violation based upon Medtronic's sale of Products
incorporating SVO Batteries supplied by WGL, including reasonable legal fees and
expenses, but excluding incidental, special or consequential damages and,
without limitation, loss of sales, profits or revenues. The provisions of this
Section shall survive the termination and expiration of the Supply Agreement.

                                   ARTICLE 10
                           LIMITATION OF WGL LIABILITY

10.1 Remedies for Breach of Warranty. In the event that any SVO Battery
manufactured or sold by WGL to Medtronic under this Agreement fails to comply
with the limited warranty provided for in Article 7 and Medtronic delivers
notice of such noncompliance to WGL, within 12 :months of the delivery of such
SVO Battery to Medtronic (or within 12 months of Medtronic's discovery of any
latent defects in an SVO Battery that are not readily observable by Medtronic),
WGL will, upon substantiation that the SVO Battery has been stored, preserved
and used in accordance with Section 2.1, correct such failure by suitable repair
or replacement at its own expense. WGL agrees that it will promptly inform
Medtronic in writing of any actual or potential problems of which WGL becomes
aware relating to the performance of any SVO Battery design manufactured for
Medtronic relative to the specifications for such design.

10.2 Limitation of Liability. The repair or replacement of any defective SVO
Battery or any SVO Battery which does not conform with applicable specifications
as provided, for herein, in the manner provided above, shall (except with
respect to the remedies specifically provided for in this Agreement regarding
delivery delays and such other remedies as are specifically provided for in this
Agreement, including the remedy provided to Medtronic in Section 10.3 hereof)
constitute the full extent of WGL's liability to Medtronic with respect to SVO
Batteries sold hereunder. In no event shall WGL be liable under this Supply
Agreement or the License Agreement for incidental, special or consequential
damages, including, but not limited to, loss of sales, profits or revenues or
costs of any partial or total recall of Product in which SVO Batteries may have
been incorporated, and in no event shall WGL be liable in an amount in excess of
its product liability insurance as provided for under Section 10.3. The
provisions of Sections 10.1 and 10.2 shall survive the expiration or termination
of this Agreement.

                                      -20-
<PAGE>

10.3 products Liability Insurance. WGL shall maintain product liability
insurance in such amounts as ordinary good business practice for its type of
business would make advisable and shall provide Medtronic with evidence of this
coverage. Such product liability insurance shall name Medtronic, Inc. as an
additional named insured thereunder, it being understood that Medtronic shall
have the right to seek recovery under said, product liability insurance for any
claims for damages, liabilities, costs (including but not limited to attorneys'
fees), settlements or judgments which may be made against Medtronic on account
of personal injury or property damage to any person caused by or arising from
defects in materials, design, workmanship, or manufacture of SVO Batteries
supplied by WGL to Medtronic under this Agreement, and Medtronic agrees to seek
recovery for any such claims directly from WGL's product liability insurance
carrier. Medtronic acknowledges and agrees that the amount of product liability
insurance maintained by WGL on the date of this Agreement, which is set forth in
the certificate of insurance to be delivered to Medtronic simultaneously
herewith, satisfies the criteria set forth in this Section 10.3.

                                   ARTICLE 11
                              TERM AND TERMINATION

11.1 Term. This Agreement shall become binding and enforceable on the date upon
which it is fully executed by the parties hereto, however, the terms and
provisions hereof shall become operative and shall take effect as of July 31,
1991, and this Agreement shall continue in force through July 31, 2001 at which
time it shall expire.

11.2 Termination. Notwithstanding the provisions of Section 11.1 above, this
Agreement may be terminated in accordance with the following provisions:

      (a) A party may terminate this Agreement by giving notice in writing to
      the other party in the event the other party is in breach of any material
      representation, warranty or covenant of this Agreement and shall have
      failed to cure such breach within ninety (90) days of receipt of written
      notice thereof from the first party;

      (b) A party may terminate this Agreement at any time by giving notice in
      writing to the other party, which notice shall be effective upon dispatch,
      should the other party file a petition of any type as to its bankruptcy,
      be declared bankrupt, become insolvent, make an assignment for the benefit
      of creditors, go into liquidation or receivership; or

      (c) A party may terminate this Agreement by giving notice in writing to
      the other party should an event of Force Majeure continue for more than
      one hundred eighty (180) consecutive days as provided in section 12.1
      below.

                                      -21-
<PAGE>

11.3 Rights-and Obligations on Termination. Termination of this Agreement shall
not release either party from the obligation to make payment of all amounts
previously due and payable, or which become due and payable due to termination
of this Agreement.

                                   ARTICLE 12
                                  FORCE MAJEURE

12.1 Force Majeure. Force Majeure shall mean any event or condition, not
existing as of the date of signature of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of either
party, which prevents in whole or in material part the performance by one of the
parties of its obligations hereunder.

12.2 Notice. Upon giving notice to the other party, a party affected by an event
of Force Majeure shall be released without any liability on its part from the
performance of its obligations under this Agreement, except for the obligation
to pay any amounts due and owing hereunder, but only to the extent and only for
the period that its performance of such obligations is prevented by the event of
Force Majeure.

12.3 Suspension of Performance. During the period that the performance by one of
the parties of its obligations under this Agreement has been suspended by reason
of an event of Force Majeure, the other party may likewise suspend the
performance of all or part of its obligations hereunder to the extent that such
suspension is commercially reasonable.

                                   ARTICLE 13
                                  MISCELLANEOUS

13.1 Relationship. This Agreement does not make either party the employee, agent
or legal, representative of the other for any purpose whatsoever. Neither party
is granted any right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the other
party. In fulfilling its obligations pursuant to this Agreement, each party
shall be acting as an independent contractor.

13.2 Assignment. This Supply Agreement shall inure to the benefit of and be
binding upon each of the parties hereto and their respective permitted
successors and assigns. It may not be voluntarily assigned in whole or in part
by either party without the prior written consent of the other; provided,
however, that a successor in interest by merger, by operation of law, purchase
or otherwise of the entire business (with respect to Medtronic, the business
being that relating to Products; with respect to WGL, the business being that
relating to SVO Batteries) of either party shall acquire all interest of such
party hereunder, and further provided that a party may assign this Supply
Agreement to an

                                      -22-
<PAGE>

Affiliate of such party (the party to this Supply Agreement who makes any such
assignment to an Affiliate shall, notwithstanding such assignment, remain fully
responsible for assuring, and for any failure to assure, prompt performance by
such Affiliate of all of such assigning party's obligations under this Supply
Agreement). Any prohibited assignment shall be null and void. Nothing
contained in this assignment provision shall be construed as limiting or
restricting in any way WGL's ability to restructure as a publicly owned entity.

13.3 Entire Agreement. This Agreement and the License Agreement and Security
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and Supersedes all previous proposals or agreements, oral
or written, and all negotiations, conversations or discussions heretofore had
between the parties related to the subject matter of this Agreement, the License
Agreement and the Security Agreement. Notwithstanding the foregoing, those
provisions of the existing development contract between WGL and Medtronic dated
July 1990 for WGL battery Model 8952 (for use in Medtronic PCD Model 7219),
those of the development contract between WGL and Medtronic for WGL battery
#8830 (for use in Medtronic PCD Model 7217) and those provisions of any other
development agreements which have provisions which were effective prior to the
date of this Agreement, shall remain in effect to the extent such provisions are
not contrary to the terms and provisions of this Agreement.

13.4 Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York, U.S.A.

13.5 Survival. All of the representations, warranties, and indemnifications made
in this Agreement, and all terms and provisions hereof intended to be observed
and performed by the parties after the termination hereof, shall survive such
termination and continue thereafter in full force and effect, subject to
applicable statute of limitations.

13.6 Waiver, Discharge, etc. This Agreement may not be released, discharged,
abandoned, changed or modified in any manner, except by an instrument in writing
signed on behalf of each of the parties to this Agreement by their duly
authorized representatives. The failure of either party to enforce at any time
any of the provisions of this Agreement shall in no way be construed to be a
waiver of any such provision, nor in any way to affect the validity of this
Agreement or any part of it or the right of either party after any such failure
to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach.

13.7 Execution in Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and

                                      -23-
<PAGE>

the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other party.

13.8 Titles and Headings; Construction. The titles and headings to Sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
This Agreement shall be construed without regard to any presumption or other
rule requiring construction hereof against the party causing this Agreement to
be drafted.

13.9 Benefit. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties to this Agreement or their
respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

13.10 Notices. All notices or other communications to a party required or
permitted hereunder shall be in writing and shall be delivered personally or by
telecopy (receipt confirmed) to such party (or, in the case of an entity, to an
executive officer of such party) or shall be given by certified mail, postage
prepaid with return receipt requested, addressed as follows:

if to Manufacture, to:

             Wilson Greatbatch Ltd.
             10,000 Wehrle Drive
             Clarence, New York 14031
             Attention: Edward F. Voboril, President and Chief Executive Officer

and if to Medtronic, to:

             Medtronic, Inc.
             Corporate Center
             7000 Central Avenue N.E.
             Minneapolis, Minnesota 55432
             Attention: Michael D. Ellwein,  Vice President  Corporate
                        Development and Assistant General counsel

WGL or Medtronic may change their respective above-specified recipient and/or
mailing address by notice to the other party given in the manner herein
prescribed. All notices shall be deemed given on the day when actually delivered
as provided above (if delivered personally or by telecopy) or on the day shown
on the return receipt (if delivered by mail).

13.11 Severability. If any provision of this Agreement is held invalid by a
court of competent jurisdiction, the remaining provisions shall nonetheless be
enforceable according to their

                                      -24-
<PAGE>

terms. Further, if any provision is held to be overbroad as written, such
provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to applicable law and
shall be enforced as amended.

13.12 Execution of Further Documents. Each party agrees to execute and
deliver without further consideration any further applications, Licenses,
assignments or other documents, and to perform such other lawful acts as the
other party may reasonably require to fully secure and/or evidence the rights
or interests herein.

13.13 No Modification by Form Documents. In no event will the use by Medtronic
of any form of purchase order, or the use by WGL of any form of acknowledgement
or shipping document, be effective to vary, alter or modify the terms and
provisions of this Agreement; nor will such use have the effect of substituting
the provisions set forth on such form for the provisions contained in this
Agreement.

13.14 Contemporaneous Agreements. Contemporaneous with the execution of this
Agreement, each of the parties hereto shall execute and deliver to the other the
License Agreement in form attached hereto as Exhibit A, and WGL shall execute
and deliver to Medtronic the Security Agreement in form attached hereto as
Exhibit B.

      IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed below in the manner appropriate to each.

                                        WILSON GREATBATCH LTD.

                                        By /s/ Edward F. Voboril
                                          --------------------------------------

                                        Its President / CEO
                                           -------------------------------------

                                        MEDTRONIC, INC.

                                        By /s/ B. Kristine Johnson
                                          --------------------------------------
                                        Its Vice President
                                           -------------------------------------

                                      -25-<PAGE>

                                                                  Exhibit 10.21

The confidential portions of this exhibit, which have been removed and
replaced with an asterisk, have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 406.

                                  CONFIDENTIAL

                  AGREEMENT BETWEEN WILSON GREATBATCH LTD. AND
                                PACESETTER, INC.

THIS AGREEMENT (the "Agreement") is between Wilson Greatbatch Ltd. located in
Clarence, New York ("WGL") and Pacesetter, Inc., a St. Jude Medical Company,
located in Sylmar, California ("Pacesetter").

            RECITALS: WGL and a predecessor of the Company are parties to a
Purchase Contract, entered into by WGL and the Company's
predecessor-in-interest, Siemens Pacesetter, Inc. on January 1, 1995 (the "1995
Purchase Contract"). WGL and the Company desire to amend the 1995 Purchase
Contract and to expand the business relationship between them as set forth in
this Agreement. The effective date of this Agreement shall be April 16, 1997
("Effective Date").

            AGREEMENT: In consideration of the foregoing Recitals, which are
hereby made part of this Agreement, and for valuable consideration, receipt of
which is hereby acknowledged, and in consideration of the mutual covenants and
agreements herein contained, WGL and the Company agree as follows:

                                 1. DEFINITIONS

            For purposes of this Agreement, the following specially capitalized
terms shall have the meanings set forth below:

            1.1 Affiliates. "Affiliates" shall mean any other entity that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the first entity, including both
other entities which are Affiliates at the date of execution (signature of both
parties hereto) of this Agreement and other entities which become Affiliates
after the date of execution of this Agreement. Control of an entity shall mean
ownership of 50 percent or more of the total voting securities or other voting
interests of the entity.

            1.2 Batteries. "Battery" and "Batteries" shall mean power sources
for use in the Company's implantable medical devices including, but not limited
to, cardiac rhythm management devices.

            1.3 Company. "Company" as used herein shall include both
Pacesetter, Inc. and all of its Affiliates.

            1.4 Consignment Batteries. "Consignment Batteries" shall mean
Batteries
<PAGE>

consigned by WGL to the Company at a Company facility pursuant to Section 2.5 of
this Agreement.

            1.5 Contract Year. "Contract Year" shall mean each calendar year.

            1.6 Micro-Electronic Components. "Micro-Electronic Components" shall
mean hybrids, electronic circuitry, and components therefor which are used in
Company's implantable cardiac rhythm management devices.

            1.7 Non-Hybrid Products. "Non-Hybrid Products" shall mean all
components and assemblies, other than Micro-Electric Components, high-voltage
capacitors and Batteries, which are used in the Company's implantable cardiac
rhythm devices, and which are within one of the following categories: (a)
enclosures, (b) pre-molded header components, (c) connectors, (d) coated and
uncoated precious metals, (e) coils, (f) feedthroughs, (g) precision machined
parts and (h) mechanical spacers and other mechanical components used in such
implantable devices. The initial set of such components and assemblies is listed
on Attachment A hereto, and may include such other components or assemblies as
the parties shall agree upon in writing by amending Attachment A.

            1.8 Relevant Cost Factors. "Relevant Cost Factors" shall mean the
following:

            (a)   Any price increases imposed by WGL vendors of raw materials or
                  purchased components for the manufacture of products covered
                  by this Agreement ("Raw Material Costs").

            (b)   Any state or Federal law, rule, regulation or mandated program
                  which imposes on WGL a new tax, fee or surcharge or additional
                  costs and which either (i) relates to the handling, storage,
                  transportation or disposal of hazardous or other materials
                  that are regulated under environmental laws or (ii) is a tax,
                  fee or surcharge imposed on WGL based on the nature of the
                  business operated by WGL (collectively, "Regulatory Costs").

            (c)   Any incremental increases in the costs of labor, equipment and
                  materials which are directly and exclusively related to
                  changes expressly required by the Company in the materials,
                  structure or manufacture of products to be provided by WGL to
                  the Company pursuant to this Agreement (excluding any labor,
                  equipment, materials and other WGL costs which are covered by
                  any design fees payable by the Company to WGL)("New Design
                  Costs").

                                     Page 2
<PAGE>

                       2. POWER SOURCE SUPPLY ARRANGEMENTS

            2.1 Supply of Requirements. The Company hereby agrees to purchase
from WGL, and WGL hereby agrees to sell to the Company, * of the Company's
requirements for Batteries for use in the Company's implantable medical
devices during the term of this Agreement, upon and subject to the terms and
conditions set forth in this Agreement. This Agreement shall apply to all of
the facilities of the Company and of its Affiliates on a worldwide basis. In
addition, regardless of location, the Company will not replace any existing
WGL battery models with Batteries supplied by others.

            2.2 Price. Pricing for Batteries during the remainder of 1997 shall
be as set forth in the 1995 Purchase Contract. Subject to Section 2.8, the
prices for Batteries to be purchased by the Company commencing as of January 1,
1998 shall be determined as provided for in this Section 2.2, and shall apply
regardless of the location of the Company's facility to which Batteries will be
delivered.

            (a)   The prices for lithium iodine batteries having a thickness of
                  5 mm or greater shall be * per cell, beginning on January 1,
                  1998 through the termination of this Agreement on December 31,
                  2001.

            (b)   The prices for (i) lithium iodine Batteries having a thickness
                  of less than 5 mm and (ii) lithium iodine Battery models the
                  volume of which is less than * cells per Contract Year shall
                  be the price set forth in Section 2.2(a) plus a premium of *.

            (c)   The price for titanium CFx Batteries are * per cell, beginning
                  January 1, 1998 through the termination of this Agreement on
                  December 31, 2001.

            (d)   There shall be an extra charge to the Company for unique pin
                  modifications in the Batteries including, but not limited to,
                  a modification such as the gold plating requirement in
                  Pacesetter Model 9438.

            (e)   If the Company requires power sources which are other than
                  WGL's current standard production cells or which use
                  alternative battery chemistry, the pricing shown on Attachment
                  B will apply.

                                     Page 3
<PAGE>

            (f)   If the Company proceeds with the development of a "hi-value
                  pacemaker," WGL will propose separate pricing and
                  specifications for the Battery and other components for any
                  such new pacemaker product of the Company. In that regard, the
                  Company agrees to involve WGL during the planning and design
                  of such pacemaker in order to ensure that the product will be
                  competitive in cost (including Battery) for the intended
                  market. WGL agrees that if the Company determines that, for
                  competitive reasons, the new product must include a power
                  source that WGL does not then have rights to, WGL will use its
                  reasonable best efforts to obtain a license or other rights to
                  manufacture and sell such Battery. The parties will agree in
                  writing on the pricing and other terms and conditions of sale
                  for WGL's Battery and any other components for any such
                  hi-value pacemaker product.

            2.3 Forecasts. The parties agree as follows:

            (a) The Company will provide WGL with a forecast setting forth three
(3) months firm orders for Batteries and an additional nine (9) months forecast
stating anticipated Battery needs. This forecast will provide WGL with a total
of twelve (12) months projected requirements for planning purposes at all times.
Such forecast, including a new firm order for Batteries, will be provided each
succeeding month.

            (b) WGL shall not be required to manufacture more than * of the
Company's twelve (12) month forecast quantity of Batteries in any one three (3)
month period, except upon not less than a six (6) month prior written notice.
The sole exception to this provision shall be if WGL has fallen behind on past
deliveries due to its own fault, in which case WGL shall be required to
manufacture and deliver each month up to * more than the average monthly
quantities which were scheduled for the preceding three-month period until WGL
is back on schedule with its deliveries.

            2.4 Payment Terms. Payment terms for Batteries are as follows: (a)
for Consignment Batteries purchased by the Company, by the thirtieth (30th) day
after the day on which Consignment Batteries shall have been withdrawn by the
Company or (b) for all other Batteries purchased by the Company, net 30 days
from the date of the invoice, F.O.B. Clarence, NY or point of shipment,
whichever is applicable. Payment terms for tooling and engineering charges are
net 30 days from the date of the invoice. If payments are delinquent, a late
charge fee of * per month will be imposed. The calculation will be based on
thirty (30) day months the percentage will be pro rated based upon the exact
number of days late. Payment terms for these charges will be net 30 days.

                                     Page 4
<PAGE>

            2.5 Consignment.

            (a) As promptly after the execution and delivery of this Agreement
as the operations of WGL will permit, but by no means later than January 31,
1998, and the parties shall mutually agree, WGL will consign and ship to itself,
in care of the Company, Consignment Batteries the number of which shall be
approximately equal to * (calculated by dollar cost) of the Batteries purchased
by the Company from WGL in 1997. Thereafter, during the term of this Agreement,
WGL will ship additional quantities of Consignment Batteries to the Company so
that the number of Consignment Batteries at all times shall be approximately
equal to * of the Company's total purchases of Batteries for the preceding
Contract Year (calculated by dollar cost). WGL shall use its reasonable best
efforts to maintain the model mix of Consignment Batteries as close as is
reasonably possible to Company's most recent twelve (12) month forecast of
projected Battery requirements. The Consignment Batteries shall be delivered to
the Company location at which the Company will use the Batteries, based upon
information supplied by the Company to WGL. However, WGL shall have the option
not to make any such shipment unless the Company shall have paid all sums owing
with respect to all previous quantities of Batteries purchased by the Company.

            (b) WGL shall use Federal Express or UPS or other recognized courier
services to ship Consignment Batteries, as directed by the Company, and shall
charge the Company's account with such courier service. Consignment Batteries
shall be received by the Company and stored by the Company as WGL's property.
All charges and expenses for receiving, handling, and storing such material
shall be paid by the Company. The Consignment Batteries in all cases shall be
carefully segregated from other goods either of the same or different character
belonging either to the Company or to any third person, shall be marked as WGL's
property, and shall be stored in an area in the Company's facilities separate
from and not mingled with other goods of the Company or of any third person.

            (c) The Company shall inspect all Batteries (including the
Consignment Batteries) and notify WGL within one month if any of the Batteries
fail to meet the Company's specifications and quality standards for such
Batteries.

            (d) The Company shall comply with all laws which might in any way
affect WGL's ownership of the Consignment Batteries from time to time stored in
the Company's facility(s) and shall indemnify and hold harmless WGL from and
against all loss, damage, and expense arising out of any levy, attachment, lien
or process involving the Consignment Batteries. The Company shall be responsible
for, and shall indemnify WGL against, any loss or shrinkage in the quantity of
the Consignment Batteries while so stored, whether such loss or shrinkage is
caused by theft or pilferage or by fire, flood, tornado or other similar

                                     Page 5
<PAGE>

catastrophe. The Company shall purchase and maintain insurance covering all such
losses and naming WGL as additional insured.

            (e) The Company shall keep at all times a complete list or inventory
of the Consignment Batteries so stored, copies of which list shall be furnished
to WGL upon request. Upon not less than three (3) business days prior notice,
WGL's representatives shall have reasonable access to the Consignment Batteries
at the Company's facilities for the purpose of verifying such lists or
inspecting the condition of Consignment Batteries.

            (f) All public charges, whether in the nature of sales, occupational
or other taxes or assessment or license fees, which shall be levied or assessed
against the Consignment Batteries at the Company's facilities, or against the
Company or WGL by reason hereof, by any federal, state or municipal authority,
shall be paid by the Company.

            (g) All Consignment Products shall remain the property of WGL and
shall be held by the Company as such until withdrawn from the consigned stock
and purchased by the Company pursuant to this Agreement. The Company will
withdraw Batteries from the inventory of Consignment Batteries on a
first-in-first-out basis for each Battery model.

            (h) From time to time, as the Company shall purchase Batteries from
WGL, it may withdraw the Consignment Batteries so purchased from WGL's consigned
stock of the products at the Company's facility(s). Upon each such withdrawal
for purchase by the Company pursuant to this Agreement, title to the Consignment
Batteries so withdrawn shall pass to the Company.

            (i) Upon expiration of this Agreement or in the event that this
Agreement shall be terminated by the Company or WGL for any reason whatsoever,
the Company shall purchase, or be deemed to have purchased from WGL, all of the
remaining Consignment Batteries located at a Company facility, which met the
Company's specifications and quality standards at the time of receipt, as of the
date of expiration or termination, at the prices in effect at such time. Payment
shall be made in accordance with Section 2.4.

            (j) In the event that the Company changes the model mix of the
Batteries which it requires, the Company agrees to purchase, within six (6)
months, all units of Consignment Batteries which are no longer required by the
Company.

            2.6 Changes by WGL. WGL will not change the form, fit, or function
of any Battery supplied to the Company without prior written notice.

            2.7 Failure to Deliver Requirements.

                                     Page 6
<PAGE>

            (a) If WGL is unable for any reason to deliver sufficient quantities
of Batteries meeting the Company's specifications and quality standards to the
Company to meet its requirements therefor which are set forth in the firm
purchase order forecasts delivered pursuant to this Agreement, whether through
replenishment of Consignment Batteries or otherwise, for a period of three (3)
months, the Company shall have the right to purchase Batteries from third
parties, including pursuant to a supply agreement with a third party for up to a
one (1) year period if such a commitment is reasonably necessary in order for
the Company to obtain Batteries from a third party; provided, however, that,
upon the expiration of any such supply agreement or if Company does not enter
into a binding supply agreement, as soon as the Company is able to deliver the
Company's requirements, the Company shall resume purchasing its requirements of
Batteries from WGL.

            (b) In the event of fire, explosion, strikes, war, act of any
governmental agency, material or labor shortage, transportation contingency, act
of God or any other causes beyond the control of WGL ("Force Majeure"), WGL
shall not be liable for any delay in shipment or non-delivery of Batteries
covered by this Agreement arising from Force Majeure, and the Company shall be
bound to accept the delayed shipment or delivery made within a reasonable time.
In the event of Force Majeure, the Company shall be excused for the failure to
take and pay for Batteries ordered under this Agreement, until such Force
Majeure condition is removed. In the event such conditions cannot be corrected
by the party affected within six (6) months of the date of the occurrence of a
Force Majeure event, then the other party shall have the option to terminate
this Agreement upon one (1) month prior notice.

            2.8 Price Adjustment.

            (a) If the Company shall not comply with the provisions of Article
3, then WGL shall have the right to increase the prices for all Batteries upon
three (3) months prior notice. If the Company shall not accept any such new
"pricing" for Batteries, then WGL shall have the option and right to terminate
this Agreement upon not less than thirty (30) days prior notice. WGL agrees that
the rights specified in this Section 2.8(a) shall be WGL's sole remedy if the
Company does not comply with the provisions of Article 3 of this Agreement.

            (b) The prices for Batteries provided for in this Article 2 are
subject to upward modification, from time to time, by WGL during the period
which commences after December 31, 1998 if WGL incurs a Battery Cost Increase.
For purposes of this Section 3.4, the term "Battery Cost Increase" shall mean an
increase by * or more in WGL's 1998 standard product cost for one or more of the
Relevant Cost Factors listed in Section 1.8 above. The amount of any such
permitted price increase for a Battery due to a

                                     Page 7
<PAGE>

Battery Cost Increase shall be determined as follows:

            (i) In the case of Raw Material Costs, an amount equal to * times
the amount of such Battery Cost Increase.

            (ii) In the case of Regulatory Costs, it shall be * to the amount of
any such Battery Cost Increase; and

            (iii) In the case of New Design Costs, it shall be an amount equal *
the amount of such Battery Cost Increase.

            (c) If after any increase in a price for a Battery due to a Battery
Cost Increase, there occurs a decrease of * or more over WGL's standard product
costs (as adjusted by any such prior Battery Cost Increase) for such Battery for
one or more of the Relevant Cost Factors listed in Section 1.8 above ("Battery
Cost Decrease"), then WGL shall reduce the adjusted price for such Battery in
the same manner and proportion as provided for in Section 2.8(b) for Battery
Cost Increases; provided, however, that in no event shall the price for
Batteries be reduced below the prices set forth in Section 2.2.

            (d) If WGL is entitled and determines to impose a price increase
under Paragraph (c) of this Section 2.8, WGL shall give not less than three (3)
months written notice thereof in order that the forecasts provided for in
Section 2.3 to be made by the Company can take into account any such price
increase. WGL may not impose a price increase during the permitted period under
Paragraph (b) of this Section 2.3 more frequently than once every Contract Year.
WGL shall at the Company's written request make available appropriate records
substantiating the basis for its determination that a Battery Cost Increase has
occurred, or any Battery Cost Decrease, for audit at the Company's expense by an
independent certified public accounting representative to verify the accuracy of
the reports provided to the Company. Such representative shall execute a
suitable confidentiality agreement reasonably satisfactory to WGL prior to
conducting such audit. Such representative may disclose to the Company only its
conclusions regarding the accuracy and completeness of such reports, and shall
not disclose Confidential Information of WGL to the Company without the prior
written consent of WGL. Any such request for an audit must be made by the
Company within six months after any announced price increase under Paragraph
(b) of this Section 2.3 or any announced price decrease under Paragraph (c) of
this Section 2.3.

            (e) Prior to imposing any increase in the price of Batteries due to
a Battery Cost Increase for Raw Materials Costs, WGL shall allow the Company's
purchasing department a period of one (1) month after the price increase notice
referred to in Section

                                     Page 8
<PAGE>

2.8(d) to find alternative, qualified sources for any raw materials at a lower
cost than those determined by WGL, and WGL shall be obligated to buy from any
such lower cost sources before imposing any increase in the price of a Battery.

            2.9 WGL Warranty. WGL warrants that the Batteries delivered to the
Company will be free from defects in materials and workmanship at the time of
sale. WGL's sole obligation under this warranty is the replacement of any
Battery which is defective without charge. SELLER MAKES NO OTHER WARRANTY WITH
RESPECT TO THE BATTERIES, WRITTEN OR ORAL, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
THE COMPANY EXPRESSLY ASSUMES ALL LIABILITY ARISING FROM OR IN CONNECTION WITH
THE USE OF THE BATTERIES PURCHASED HEREUNDER, WHETHER BASED ON CONTRACT,
WARRANTY, TORT OR OTHERWISE AND AGREES TO HOLD WGL HARMLESS FROM SUCH CLAIMS.

                             3. NON-HYBRID PRODUCTS.

            3.1 Product Development. Subject to all of the terms and conditions
of this Agreement, the Company has agreed to purchase Non-Hybrid Products which
meet the Company's specifications and quality standards, and the pricing
guidelines contained in Section 3.3 below from WGL. The Company and WGL
acknowledge and agree that WGL is not manufacturing or assembling any Non-Hybrid
Products at the present time for the Company and that WGL must complete its
design, tooling, plans and production lines for Non-Hybrid Products, and must
qualify such products with the Company, prior to any purchases of such products
by the Company from WGL. The Company agrees to provide WGL with all
qualification protocols and requirements, plans, designs, specifications,
drawings and other information in the Company's possession as reasonably
requested by WGL ("Qualification and Design Data") which may be necessary or
advisable in order for WGL to be able to manufacture Non-Hybrid Products for the
Company and to cooperate with WGL in connection with WGL's efforts to qualify
Non-Hybrid Products for Company purchase and use. Representatives of the Company
and WGL who have authority to make decisions including, but not limited to, in
the case of the Company, decisions with respect to qualification and purchasing,
shall meet not less frequently than once every three (3) months to discuss WGL's
progress in becoming qualified to supply Non-Hybrid Products to the Company and
any issue which then may exist with respect to WGL's qualification efforts
("Progress Meetings"). If either the Company or WGL believes at any time that
the other party is not fulfilling its obligations under this Article 3 with
respect to qualification, it can request a meeting with the other party, upon
reasonable notice, to discuss any issues or

                                     Page 9
<PAGE>

problems in that regard.

            3.2 Purchase Commitment. Upon execution and delivery of this
Agreement, the Company will provide WGL with * in purchase orders for Non-Hybrid
Products each of which WGL reasonably believes that WGL can qualify and deliver
during calendar years 1997-1998, a copy of which is attached hereto as
Attachment C. The Company further agrees that during the term of this Agreement
the Company will provide WGL with purchase orders for not less than (a) *
(calculated by dollar cost) of the Company's requirements for each such
Non-Hybrid Product in the twelve (12) months beginning with the month following
the first date of qualification of each such Non-Hybrid Product by WGL in
accordance with the Company's specifications and quality standards ("Initial
12-Month Period"); and (b) * (calculated by dollar cost) of the Company's
requirements for each such Non-Hybrid Product after the Initial 12-Month Period.
Subject to the other conditions of this Article 3, the Company shall be deemed
to be in compliance with the purchase commitment requirements for Non-Hybrid
Products of this Section 3.2 immediately upon the delivery to WGL of such
purchase orders. Subject to the other provisions of this Article 3, the Company
will not be deemed to be out of compliance with its purchase commitment due to
failure of WGL to qualify any Non-Hybrid Product or to meet the pricing
guidelines contained in Section 3.3 below, or to deliver any Non-Hybrid Products
as covered by Section 3.10(d) below. Following any failure of WGL to qualify any
such Non-Hybrid Product within six months after the Target Date For
Qualification for such product, or to meet the pricing guidelines contained in
Section 3.3 for any Non-Hybrid Product available to the Company from other
qualified vendors, the Company shall have the right to place purchase orders
with other qualified vendors for a sufficient quantity of such Non-Hybrid
Product to satisfy its requirements for a period not to exceed twelve (12)
months. During this 12-month period or thereafter, if WGL successfully qualifies
such Non-Hybrid Product, the Company will provide WGL with purchase orders for
delivery after the 12-month period for not less than * (calculated by dollar
cost) of the Company's yearly requirements for such Non-Hybrid Product, as
specified in (a) above. For purposes hereof, the term Target Date For
Qualification shall mean the date for each separate Non-Hybrid Product which
shall be specified in writing by WGL, when the Company issues its qualification
order, subject to the Company's approval, which shall not be unreasonably
withheld.

            3.3 Pricing.

            (a) Base Prices. "Base Prices" for Non-Hybrid Products shall mean
the prices charged to the Company by WGL for Non-Hybrid Products, exclusive of
tooling, shipping, and delivery charges. The Base Prices for certain Non-Hybrid
Products are set forth on Attachment A which may be amended from time to time in
a written instrument

                                    Page 10
<PAGE>

signed by authorized representatives of both parties to add additional
Non-Hybrid Products to Attachment A. - Except for the price adjustments provided
for in Section 3.4 below, pricing for the Non-Hybrid Products on Attachment A
will remain fixed for the term of this Agreement. Base Prices for Non-Hybrid
products not initially included in Attachment A which the Company is currently
purchasing shall be fixed for the term of this Agreement at the average
historical price that the Company has paid for each such Non-Hybrid Product
during 1997. Subject to Section 3.4, Base Prices for newly designed Non-Hybrid
products will be fixed for the term of this Agreement at the lower of (a) WGL's
pricing, or (b) the average of the pricing available to the Company from two
other qualified vendors.

            (b) Tooling charges, which are over and above the Base Prices listed
in Attachment A, shall be determined prior to or at the time WGL qualifies a
Non-Hybrid Product. WGL may charge the Company tooling charges covering the
entire cost of tooling for "L" Connector Assemblies and for Case Halves, but not
for any other Non-Hybrid Products which the Company is currently purchasing from
other vendors. To the extent that Company-owned tooling at the Company's current
vendors (i) is in usable condition, (ii) is compatible with WGL's manufacturing
machinery and (iii) can be transferred from the Company's current vendors. WGL
shall, at its reasonable discretion, use such tooling rather than purchasing new
tooling. Tooling charges may be charged by WGL for any new Non-Hybrid Product
that it qualifies, but not for any new Non-Hybrid Product that it fails to
qualify.

            3.4 Permitted Price Adjustments.

            (a) The Base Prices for Non-Hybrid Products provided for in this
Article 3 are subject to increase, from time to time, by WGL if WGL, incurs a
Non-Hybrid Cost Increase except that, in the case of changes in Raw Material
Costs (other than costs related to precious metal, no such increase can be made
prior to the second anniversary of the Effective Date. For purposes of this
Section 3.5, the term "Non-Hybrid Cost Increase" shall mean an increase by * or
more in WGL's standard product costs for one or more of the Relevant Cost
Factors listed in Section 1.8 above (other than Raw Material Cost changes
related to precious metals), determined as of the date WGL shall have qualified
such product for sale to the Company. The amount of any such permitted price
increase due to a Non-Hybrid Cost Increase shall be determined as follows:

            (i) In the case of Raw Material Costs other than costs related to
precious metals, it shall be an amount equal to * times the amount of such
Non-Hybrid Cost Increase.

                                    Page 11
<PAGE>

            (ii) In the case of Regulatory Costs, it shall be an amount * the
amount of the Non-Hybrid Cost Increase.

            (iii) In the case of New Design Costs, it shall be an amount equal *
the amount of the Non-Hybrid Cost Increase.

If the cost of precious metals included in any Non-Hybrid Product increases or
decreases from the Base Cost, then the Base Price for such Non-Hybrid Product
will be increased or decreased, as the case may be by an amount equal * times
the change in the Base Cost. Any such change may be made at any time during the
term of this Agreement but not more frequently than once every two months. For
purposes hereof, the "Base Cost" shall mean the price of the precious metal on
the date of this Agreement as reported in the Wall Street Journal; and changes
in the Base Cost for any precious metal shall be determined by changes in the
prices for the metal as reported in the Wall Street Journal.

            (b) If after any increase in a price for a Non-Hybrid Product due to
a Non-Hybrid Cost Increase, there occurs a decrease of * or more over WGL's
standard product costs (as adjusted by any such prior Non-Hybrid Cost Increase)
for such Non-Hybnd Product for one or more of the Relevant Cost Factors listed
in Section 1.8 above ("Non-Hybrid Cost Decrease"), then WGL shall reduce the
adjusted price for such Non-Hybrid Product in the same manner and proportion as
provided for in Section 3.4(a) for Non-Hybrid Cost Increases; provided, however,
that in no event shall the price for any such Non-Hybrid Product be reduced
below the Base Price for such Non-Hybrid Product.

            (c) If WGL is entitled and determines to impose a price increase
under this Section 3.4, WGL shall give not less than three months' written
notice thereof. For Non-Hybrid Products other than those fabricated from
precious metals, WGL may not impose a price increase more frequently than once
every six (6) months. The prices for Non-Hybrid Products fabricated from
precious metals may be increased more frequently as provided for in Section
3.4(a). WGL shall deliver to the Company together with the notice provided for
herein a written report which describes in reasonable detail the basis for WGL's
determination that a price increase is permitted under this Section 3.4. WGL
shall at the Company's written request make available appropriate records
substantiating the basis for its determination that a Non-Hybrid Cost Increase
has occurred, or any Non-Hybrid Cost Decrease, for audit at the Company's
expense by an independent certified public accounting representative to verify
the accuracy of the reports provided to the Company. Such representative shall
execute a suitable confidentiality agreement reasonably satisfactory to WGL
prior to conducting such audit. Such representative may disclose to the Company
only its conclusions regarding the accuracy and completeness of such reports,
and shall not disclose Confidential Information of WGL to the Company without
the prior written consent

                                    Page 12
<PAGE>

of WGL. Any such request for an audit must be made by the Company within six (6)
months of any announced price increase hereunder.

            (d) Prior to imposing any increase in the price of Non-Hybrid
Products due to a Non-Hybrid Cost Increase for Raw Material Costs, WGL shall
allow the Company's purchasing department a period one (1) month after the price
increase notice referred to in Section 2.8(d) to find alternative, qualified
sources for any raw materials at a lower cost than those determined by WGL, and
WGL shall be obligated to buy from any such lower cost sources before imposing
any increase in the price of a Non-Hybrid Product.

            3.5 Additional Non-Hybrid Products. The Company agrees that it will
notify WGL of all Non-Hybrid Products for new and existing models of its
implantable medical devices, or modifications of existing models, which are not
Micro-Electronic Components. In connection therewith, at WGL's request, the
Company will provide WGL with Qualification and Design Data for each such new
and existing Non-Hybrid Product and cooperate with WGL in connection with WGL's
efforts to qualify for the supply of such Non-Hybnd Product to the Company,
including participation in Progress Meetings. The Company and WGL agree that
Attachment A will be amended in writing, from time to time as specified in
Section 3.3 above, to reflect all such additions.

            3.6 License. The Company hereby grants WGL a license or sublicense
(as applicable) to use any and all Qualification and Design Data, and all
patents, copyrights and know-how which the Company owns, or which it has the
right to use and sublicense, which cover Non-Hybrid Products, solely in
connection with WGL's manufacture and supply of Non-Hybrid Products to the
Company. This license shall permit WGL to subcontract out the manufacture the
production of Non-Hybrid Products.

            3.7 Estimated Annual Usage.

            (a) "Estimated Annual Usage" as used herein shall mean the
quantities of Non-Hybrid Products which the Company estimates as its needs for
Non-Hybrid Products from WGL for the ensuing twelve (12) month period and will
be subject to the minimum purchase quantities specifed in Section 3.2 above.
Initial Estimated Annual Usages for each of the initial Non-Hybrid Products
shall be specified in Attachment A. As additions are made to the Non-Hybrid
Products specified in Attachment A as provided in Section 3.3 above, the Company
shall provide written notice as to the initial Estimated Annual Usage for each
Non-Hybrid Product so added at the time of addition to the Non-Hybrid Products
specified in Attachment A.

            (b) As soon as practicable after WGL qualifies a Non-Hybrid Product
as

                                    Page 13
<PAGE>

contemplated by this Article 3, the Company will provide WGL with its Estimated
Annual Usage for that Non-Hybrid Product, and will provide WGL with a twelve
(12) months forecast stating anticipated needs. This forecast will provide WGL
with a total of twelve (12) months projected requirements for planning purposes.
Such forecast will be updated each succeeding calendar quarter.

            (c) WGL shall not be required to manufacture more than * of the
Company's twelve (12) month Estimated Annual Usage of a Non-Hybrid Product in
any one three (3) month period, except upon not less than a three (3) month
prior written notice. The sole exception to this provision shall be if WGL has
fallen behind on past deliveries due to its own fault, in which case WGL shall
be required to manufacture and deliver each month up to * more than the average
monthly quantities which were scheduled for the preceding three-month period
until WGL is back on schedule with its deliveries.

            3.8 Supplier Inventory. "Supplier Inventory" shall mean those
quantities of Non-Hybrid Products which WGL is required by this Agreement to
maintain. The levels of Supplier Inventory for each of the Non-Hybrid Products
shall not exceed twenty-five percent (25%), and the specific level for each
Non-Hybrid Product shall be as specified in Attachment A. WGL must be capable of
shipping its entire Supplier Inventory of any and/or all Non-Hybrid Products to
the Company as finished goods within a period of not less than seven (7) nor
more than twenty-one (21) days. The specific period which is applicable for each
Non-Hybrid Product shall be as specified in Attachment A.

            3.9 Maintenance of Supplier Inventory by WGL.

            (a) Build-Up of Supplier Inventory. It is recognized by the parties
that at the outset of this Agreement, or at the time new Non-Hybrid Products are
added to this Agreement, WGL may not have sufficient Supplier Inventory to meet
the requirements of this Agreement. WGL agrees that within a period of not more
than three (3) months from the date of qualification of each Non-Hybrid Product
it shall possess sufficient Supplier Inventory to meet the requirements of this
Agreement as to all Non-Hybrid Products included in this Agreement at the date
of execution of the Agreement. WGL further agrees that within a period of not
more than three (3) months from the date of qualification of any new Non-Hybrid
Product(s) under this Agreement, WGL shall possess sufficient Supplier Inventory
to meet the requirements of this Agreement as to those Non-Hybrid Products added
to this Agreement. When Company provides WGL with an update in Company's
Estimated Annual Usage for one or more of the Products specified in Attachment A
as provided in Section 3.7 above, and when Estimated Annual Usage for any
Non-Hybrid Product has increased from a previous Estimated Annual Usage, WGL
agrees to use its best efforts to increase the level of Supplier Inventory for
the affected Non-Hybrid Product(s) within a

                                    Page 14
<PAGE>

period of forty (40) days from the date that Company notifies WGL of the
increase in Company's Estimated Annual Usage for the affected Non-Hybrid
Product(s).

            (b) Agreement by WGL to Maintain Supplier Inventory. During the Term
of this Agreement, and subject to the limitations of Sections 3.9(a) above and
3.9(c) below. WGL agrees to maintain sufficient Supplier Inventories of the
Non-Hybrid Products to meet the requirements of this Agreement.

            (c) Replenishment of Supplier Inventory. In the event that the
Supplier Inventories of any or all of the Non-Hybrid Products are totally
depleted, WGL agrees to use its best efforts to replenish the Supplier
Inventories within a period of forty (40) days.

            (d) Reductions in Supplier Inventories. When the Company provides
WGL with an update in Company's Estimated Annual Usage for one or more of the
Non-Hybrid Products specified in Attachment A, as provided in Section 3.7 above,
and when the Estimated Annual Usage for any Non-Hybrid Product(s) has dropped
from a previous Estimated Annual Usage, WGL agrees to reduce the level of
Supplier Inventory for the affected Product(s) by not rebuilding inventory as it
is provided to the Company until the level of Supplier Inventory for the
affected Non-Hybrid Product(s) drops to the most recent Estimated Annual Usage
level. Within one month after the end of each Contract Year, WGL shall review
the level of Supplier Inventory of each Non-Hybrid Product then maintained by
WGL. If based on the Company's actual usage of any Non-Hybrid Product in such
prior Contract Year, WGL is holding Supplier Inventory of any Non-Hybrid Product
in excess of the level required for such Non-Hybrid Product, the Company, at
WGL's request, shall take delivery and purchase any such excess Supplier
Inventory of that Non-Hybrid Product within two months after the end of such
Contract Year.

            (e) Location of Non-Hybrid Product Inventories. WGL agrees to
maintain the Supplier Inventories of the Non-Hybrid Products in the Clarence, NY
area from which the Supplier Inventories of the Non-Hybrid Products can be
shipped within the seven (7) to twenty-one (21) working day period as specified
in Section 3.8 above.

            (f) Delivery of the Non-Hybrid Products. WGL agrees to properly
manage its supplies of raw materials, work-in-progress, and finished goods in
order to ensure that it will be capable of shipping the entire Supplier
Inventory as finished goods within the seven (7) to twenty-one (21) working day
period as specified in Section 3.7 above, except and only to the extent that WGL
is delayed in shipping a portion of the Non-Hybrid Products in the Supplier
Inventories due to WGL being in the process of building or timely renewing the
Supplier Inventories of the Products pursuant to Sections 3.9(a) and 3.9(c)
above.

                                    Page 15
<PAGE>

            3.10 Purchase of Non-Hybrid Products by the Company.

            (a) Orders: Non-Hybrid Products shall be ordered by the Company from
WGL with purchase orders issued from time to time by the Company. Acceptance by
WGL of such purchase orders submitted by the Company shall create a contract for
sale and purchase on the terms and conditions contained in this Agreement.

            (b) Purchase of Supplier Inventories. Upon expiration of this
Agreement or in the event that this Agreement shall be terminated by the Company
or WGL for any reason whatsoever, the Company agrees to purchase the Supplier
Inventories of the Non-Hybrid Products from WGL to the extent that WGL is in
compliance with the terms of this Agreement governing the levels of the Supplier
Inventories. The Company will not be required to purchase excess inventories
from WGL to the extent that such inventories exceed the most recent level of
Estimated Annual Usage provided by the Company, except and only to the extent
that the excess inventory was due to reduction(s) in the Estimated Annual Usage
levels provided by the Company without sufficient intervening purchases by the
Company to allow the levels of the Supplier Inventories to drop to the most
recent Estimated Annual Usage levels.

            (c) Option to Purchase Supplier Inventories As Is. At the Company's
option, WGL will supply the Supplier Inventories of Non-Hybrid Products to the
Company either as finished goods within one (1) month after termination of the
Agreement, or as the combination of raw materials, work-in-progress, and/or
finished goods remaining upon termination of the Agreement within one (1) month
after of termination of the Agreement. The parties shall negotiate prices to be
paid by the Company to WGL for Non-Hybrid Products which are work-in-progress or
in raw material form.

            (d) Failure to Deliver:

                  (i) If WGL is unable for any reason, and other than as
provided for in Paragraph (iii) of this Section 3.10(d), to deliver sufficient
quantities of any Non-Hybrid Product meeting the Company's specifications and
quality standards to the Company to meet its requirements therefore which are
set forth in the firm purchase order forecasts delivered pursuant to this
Agreement, and WGL is not able to remedy this situation for a period of three
(3) months, the Company shall have the right to place purchase orders with other
qualified vendors for sufficient quantity of such Non-Hybrid Product to satisfy
its requirements for a period not to exceed six (6) months, except that with
respect to the following categories of Non-Hybrid Products the time period may
be up to twelve (12) months: (A) feed-throughs, (B) Ti Nitrate machined parts,
(C) L-connector assemblies and (D) case halves having an annual requirement of *
units or less. After the applicable

                                    Page 16
<PAGE>

period, if WGL successfully re-establishes its ability to deliver such
Non-Hybrid Product, the Company will resume purchasing such Non-Hybrid Product
from WGL at the rate specified in Section 3.2 above, i.e., at a forty percent
(40%) rate if the supply disruption occurs during the first year after initial
qualification, or at an eighty percent (80%) rate if the supply disruption
occurs during the second or subsequent years after initial qualification of such
Non-Hybrid Product.

                  (ii) In the event of Force Majeure, WGL shall not be liable
for any delay in shipment or non-delivery of Non-Hybrid Products covered by this
Agreement arising from Force Majeure, and the Company shall be bound to accept
the delayed shipment or delivery made within a reasonable time. In the event of
Force Majeure, the Company shall be excused for the failure to take and pay for
Non-Hybrid Products ordered under this Agreement, until such Force Majeure
condition is removed. In the event such conditions cannot be corrected by the
party affected within six (6) months of the date of the occurrence of a Force
Majeure event, then the other party shall have the option to terminate this
Agreement upon one (1) month prior notice.

                  (iii) If the Company (A) rejects or refuses to accept any
Non-Hybrid Product from WGL on the basis of quality, failure to meet or maintain
then current product specifications or qualification standards, or some other
similar or comparable reason and (B) would otherwise purchase a Non-Hybrid
Product from one or more third parties in amounts which would result in the
Company not satisfying the applicable quota set forth in Section 3.2, then the
Company shall send WGL a written notice which sets forth (1) the product
involved and (2) the basis upon which it has determined that WGL is not
satisfactorily delivering the Company's requirements of the Non-Hybrid Product
at issue ("Non-Delivery Notice"). At WGL's written request, the Company agrees
to provide one or more senior managers of the Company to meet with
representatives of WGL to review the reasons set forth in the Company's
Non-Delivery Notice, and to discuss and, if practicable, establish an action
plan to correct any deficiency or failure by WGL in order that the Company shall
purchase or resume purchasing Non-Hybrid Products.

                           4. NON-HYBRID GENERAL TERMS

            4.1 Delivery. WGL shall deliver Non-Hybrid Products to the Company's
facility at Valley View Court in Sylmar, California, and/or to such other
location(s) as the Company may designate. Unless the Company gives WGL written
instructions as to the method of shipment and carrier, WGL shall select the
methods of shipment and the carrier for the respective purchase order. WGL shall
prepay transportation and similar charges upon shipment. Title to all Non-Hybrid
Products conforming to the Company's purchase order

                                    Page 17
<PAGE>

shall pass, free and clear of all encumbrances, at the FOB shipping point, which
shall be WGL's facility.. The Company assumes and agrees to bear all risk of
damage or loss to the goods after delivery by WGL to the carrier at the FOB
shipping point. The Company hereby releases WGL from any and all claims and
liability with respect to any such in-transit damages or losses to the goods.
The Company shall be responsible for securing insurance coverage to cover
shipments and deliveries hereunder.

            4.2 Acceptance. The Company may reject any shipments or deliveries
of Non-Hybrid Products which are short, nonconforming, defective or deficient
and may request correction and/or replacement. Rejected shipments or deliveries
of Non-Hybrid Products shall at the request of WGL be set aside for WGL
inspection, or at the request of WGL shipped freight prepaid to WGL. All
Non-Hybrid Products returned to WGL shall be accompanied by a copy of their
original shipping documents and the name and phone number of the person at the
Company to be contacted regarding such return. Promptly upon receipt of notice
of such shortage, non-conformance, defect or deficiency, WGL shall immediately
notify the Company:

            (a)   as to how WGL will replace the defective or deficient
                  Non-Hybrid Products upon return to WGL, ship replacement
                  Non-Hybrid Products, or otherwise promptly correct such
                  shortage, non-conformance, or deficiency; and/or

            (b)   whether such shipment of Non-Hybrid Products shall be set
                  aside and held by the Company or returned to WGL and the
                  address to which such affected Non-Hybrid Products should be
                  returned, or whether such Products should otherwise disposed
                  of.

If the Company elects to cancel or rescind such purchase, WGL shall promptly
refund and reimburse the Company the price paid by the Company for such
purchase, including freight and shipping costs incurred by the Company in such
purchase, prior to the return of the same to WGL. If the Company elects to have
the Non-Hybrid Product replaced, WGL shall bear or shall reimburse the Company
for all costs and expenses incurred by the Company to repackage, ship and return
affected Non-Hybrid Products to WGL and shall issue a credit memo for the amount
of the purchase price of the returned Non-Hybrid Products.

            4.3 Payment. WGL shall be paid directly by the Company the sum of
the applicable Base Prices for each Product plus all tooling, shipping and
delivery charges actually incurred by WGL for each shipment of the Products to
the Company. Invoices shall be on or after the date on which the Product(s)
specified on the invoice are shipped to the Company.

                                    Page 18
<PAGE>

            4.4 Drawings Used In Manufacture. Only Company drawings shall be
used by WGL to manufacture Non-Hybrid Products; WGL drawings shall only be used
for reference.

            4.5 Good Manufacturing Procedures. Products shall be manufactured
and tested by WGL in accordance with all applicable U.S. laws and United States
Food and Drug Administration (FDA) regulations, including but not limited to the
FDA's current Good Manufacturing Practice regulations in effect at the time of
such manufacture or testing. WGL shall notify the Company of any FDA inspection
of its production facilities used to manufacture any Non-Hybrid Products and
shall furnish the Company with copies of any Form 483 report and Establishment
Inspection Reports to the extent that they apply to any product.

            4.6 Violation of Law. The Company and WGL shall each strictly
observe and comply with all federal and local laws and regulations which may
govern the manufacture, sale, handling and disposal of any Non-Hybrid Products
herein specified. Violation of any such law or regulation may be viewed as a
breach of this Agreement, and may be cause for termination or suspension of
sales hereunder. Nothing herein shall be construed to allow either party the
right to cancel this Agreement for any inadvertent error or minor violation of
any law or regulation by the other party.

            4.7 Inspection and Acceptance. WGL shall perform testing to ensure
that the Non-Hybrid Products meet all applicable specifications. The Company
inspection of incoming Non-Hybrid Products will rely upon WGL testing and may
consist of an examination of WGL's testing documentation as well as independent
testing by the Company.

            4.8 Source Inspectors. The Company shall have the right, upon
reasonable notice, to send source inspectors to WGL's facilities for the purpose
of monitoring WGL's performance under this Agreement.

            4.9 Warranty.

            (a) WGL warrants that each of the Non-Hybrid Products delivered to
the Company will meet all applicable specifications and will be free from
defects in materials and workmanship at the time of sale. WGL's sole obligation
under this Warranty is the repair or replacement, at its election, of any
Non-Hybrid Product which is found, upon WGL's inspection not to meet such
warranty. Such product will be repaired or replaced without charge provided
that, (1) prior written approval is required before returning any product, and
(2) any product return sent to WGL without prior written approval will be
returned to the sender, freight collect.

                                    Page 19
<PAGE>

            (b) This Warranty does not apply to depletion, wear and/or any
failure occurring as a result of any of the following: normal use, abuse,
misuse, any alteration or modification made to any Non-Hybrid Product without
the express written consent of WGL, attempted disassembly, neglect, improper
installation, or any other use inconsistent with any applicable law, rule,
regulation or governmental directive, or any use inconsistent with the
specifications or warning or recommended operating practices specific to the
Non-Hybrid Product.

            (c) THE WARRANTY SET FORTH IN THIS SECTION 4.9 IS IN LIEU OF ALL
OTHER WARRANTIES (EXCEPT OF TITLE), EXPRESSED, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.

                              5. ASSEMBLY OPERATION

            5.1 Phoenix Site. Subject to the terms and conditions of this
Agreement, WGL presently intends to establish an assembly facility in the
Phoenix, Arizona area to provide pre-assembly of Non-Hybrid Products to be
supplied by WGL to the Company, and any components to be supplied by other
vendors, up to the point of integration with the Company's hybrid circuitry. WGL
shall not finalize its plans for an assembly facility in the Phoenix area until
WGL and the Company shall have agreed in writing upon the level of assembly work
and annual volume requirements, which agreement is a precondition to WGL's
establishment of such a facility. If the parties do so agree that WGL shall do
assembly for the Company, WGL will establish a Phoenix assembly facility and, in
such event, the parties will renegotiate the Supplier Inventory requirements set
forth in Article 3.

            5.2 Pricing. The parties agree to negotiate in good faith the amount
which WGL will charge for such assembly.

            5.3 Timing. The parties anticipate that WGL would establish its
Phoenix facility when it has qualified and has begun to produce a substantial
amount of the non-hybrid components for the Company implantable medial devices,
but, in any event, no later than December 31, 1999.

            5.4 Limitation. This Section 5 is written merely as a statement of
the intentions of the parties, and the parties do not intend to be legally bound
by it. The full terms and conditions of this subassembly manufacturing
arrangement shall be contained in a separate agreement which will be negotiated
between the parties. Upon execution of that

                                    Page 20
<PAGE>

agreement, the parties will become legally bound under the terms and conditions
of that agreement.

                6. LIMITATION OF LIABILITY; COMPLIANCE WITH LAW.

            6.1 LIMITATION OF LIABILITY. THE REMEDIES OF THE COMPANY IN THE
WARRANTY SET FORTH IN SECTION 2.9 WITH RESPECT TO BATTERIES AND IN THE WARRANTY
SET FORTH IN SECTION 4.9 WITH RESPECT TO NON-HYBRID PRODUCTS ARE EXCLUSIVE, AND
THE TOTAL LIABILITY OF WGL WITH RESPECT TO ANY BATTERY OR ANY NON-HYBRID PRODUCT
SOLD TO THE COMPANY, IN CONNECTION WITH THE PERFORMANCE THEREOF, OR FROM THE
SALE, DELIVERY, INSTALLATION OR REPAIR COVERED BY OR FURNISHED UNDER ANY SALE TO
THE COMPANY WHETHER BASED ON CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT
LIABILITY, OR OTHERWISE SHALL NOT EXCEED THE PURCHASE PRICE OF THE PRODUCT UPON
WHICH SUCH LIABILITY IS PLACED. WGL SHALL IN NO EVENT BE LIABLE TO THE COMPANY,
OR TO ANY SUCCESSOR IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE THEREOF, RELATING
TO THE SALE OF ANY BATTERY OR ANY NON-HYBRID PRODUCT FOR ANY CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF SUCH SALE OR
ANY DEFECTS IN, OR FAILURE OF, OR MALFUNCTION OF THE PRODUCT UNDER SUCH SALE,
INCLUDING BUT NOT LIMITED TO, DAMAGES BASED UPON LOSS OF USE, LOST PROFITS OR
REVENUE, INTEREST, LOST GOODWILL, INCREASED EXPENSES AND/OR CLAIMS OF CUSTOMERS
OF THE COMPANY, WHETHER OR NOT SUCH LOSS OR DAMAGE IS BASED ON CONTRACT,
WARRANTY, NEGLIGENCE, INDEMNITY, STRICT LIABILITY OR OTHERWISE.

            6.2 FDA Compliance. During the term of this Agreement the Company
shall have responsibility for obtaining at its expense, in its name and at its
discretion any necessary device regulatory approvals from the U.S. Food and Drug
Administration (i.e. PMA's or 501 (k)'s as the case may be), and applicable
regulatory agencies of such other countries in which product incorporating the
Batteries or Non-Hybrid Products will be sold. WGL shall supply the Company with
all documents, instruments, information, reports and advice and general
assistance as is necessary to complete, and as is reasonably requested by the
Company in connection with such regulatory approval efforts.

            6.3 WGL Compliance. WGL shall be responsible for compliance with
present and future applicable statutes, laws, ordinances and regulations of
United States and

                                    Page 21
<PAGE>

foreign national, federal state and local governments relating to the
manufacture and, except as otherwise provided in Section 6.2 above, the sale of
Batteries and Non-Hybrid Products to the Company under this Agreement. Upon not
less than three (3) business days' notice, WGL will provide such Company
personnel as the Company reasonably deems appropriate with reasonable access
from time to time to WGL's facilities and records for the purpose of confirming
WGL's compliance with requirement as noted in this Section, and for the further
purpose of confirming, if reasonably deemed necessary by the Company, WGL's
compliance with applicable specifications for Batteries and Non-Hybrid Products.

                             7. TERM AND TERMINATION

            7.1 Tenn. This Agreement shall become binding and enforceable on the
date upon which it is fully executed by the parties hereto (Effective Date"),
and this Agreement shall continue in force for a term through December 31, 2001.

            7.2 Termination. Notwithstanding the provisions of Section 7.1
above, this Agreement may be terminated in accordance with the following
provisions:

            (a)   A party may terminate this Agreement by giving notice in
                  writing to the other party in the event the other party is in
                  breach of any material representation, warranty or covenant of
                  this Agreement and shall have failed to cure such breach
                  within three (3) months after receipt of written notice
                  thereof from the first party;

            (b)   A party may terminate this Agreement at any time by giving
                  notice in writing to the other party, which notice shall be
                  effective upon dispatch, should the other party file a
                  petition of any type as to its bankruptcy, be declared
                  bankrupt, become insolvent, make an assignment for the benefit
                  of creditors, go into liquidation or receivership; or

            (c)   A party may terminate this Agreement by giving notice in
                  writing to the other party should an event of Force Majeure
                  continue for more than six (6) months.

            7.3 Rights and Obligations on Termination. Termination of this
Agreement shall not release either party from the obligation to make payment of
all amounts previously due and payable, or which become due and payable due to
termination of this Agreement.

                                    Page 22
<PAGE>

                  8. COMPANY AFFILIATES; NO OTHER BENEFICIARIES

            8.1 Company Affiliates. The Company hereby represents and warrants
to WGL that it has the power, authority and approval to bind its Affiliates to
the provisions of Articles 2 and 3 of this Agreement with respect to the
purchase of their requirements for Batteries and Non-Hybrid Products. The
Company hereby acknowledges that WGL has agreed to the pricing for the Batteries
and Non-Hybrid Products in reliance upon the foregoing representatives and
warranties of the Company.

            8.2 No Other Beneficiaries. Except as provided for in Section 6.1,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties to this Agreement or their respective successors
or assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.

                               9. CONFIDENTIALITY

            9.1 Treatment of Propriety Information. Each of WGL and the Company
(each a "receiving party") agrees to maintain all proprietary information
disclosed by the other party to this Agreement (each a "disclosing party") in
strict secrecy and confidence, and not to disclose such proprietary information
to any third party, nor make any use of such information and technology for its
own benefit or gain other than in carrying out its efforts under this Agreement.
The receiving party agrees to have its employees sign agreements, or to have an
appropriate corporate policy in effect, which requires them to keep confidential
any proprietary information they learn in their positions at the receiving
party; these agreements and/or policies shall require them to maintain
confidentiality of proprietary information disclosed by the disclosing party.
The receiving party further agrees that no proprietary information or materials
will be supplied to any other corporation, partnership, laboratory, or
individuals other than those approved in writing by the disclosing party, with
the exception of disclosure to the FDA and similar regulatory agencies of
information relative to obtaining regulatory approval.

            9.2 Limited Release. The receiving party shall be released from the
obligations of Section 9.1 to the extent that any of the disclosed information:
(a) was already part of the public domain at the time of the disclosure by the
disclosing party; (b) becomes part of the public domain through no fault of the
receiving party (but only after and only to the extent that it is published or
otherwise becomes part of the public domain); (c) was in the receiving party's
possession prior to the disclosure by the disclosing party and was not acquired,
directly, or indirectly, from the disclosing part or from a third party who was
under a continuing obligation of confidence to the disclosing party; (d) is
received (after the disclosure by the disclosing party) by the receiving party
from a third party who did not require the receiving party to hold it in
confidence and did not acquire it directly or indirectly, from the disclosing
party under a continuing obligation of

                                    Page 23
<PAGE>

confidence; or (e) is disclosed by the receiving party pursuant to judicial
compulsion, provided that the disclosing party is notified at the time such
judicial action is initiated. In addition, notwithstanding Section 9.1, WGL may
provide proprietary information of the Company to its subcontractors and vendors
without Company's prior approval provided that WGL first requires any such
subcontractor or vendor to sign a confidentiality agreement which requires them
to keep confidential such Company information and not to use it except for the
purpose of performing their obligations to WGL.

            9.3 Term of Obligation. The obligation of the receiving party to
receive and hold information disclosed by the disclosing party in confidence, as
required by this Section 8, shall terminate eight (8) years from the date of
disclosure of the information hereunder and shall survive any earlier
termination of this Agreement.

            9.4 Disposal Upon Termination. In the event this Agreement is
terminated, any samples, sketches, or other proprietary material provided by the
disclosing party to the receiving party shall be destroyed or returned to the
disclosing party, unless and to the extent such materials are necessary to the
receiving party to provide continuing support.

                                10. MISCELLANEOUS

            10.1 Relationship. This Agreement does not make either party the
employee, agent, legal representative or partner of the other for any purpose
whatsoever. Neither party is granted any right or authority to assume or to
create any obligation or responsibility, express or implied. on behalf of or in
the name of the other party. In fulfilling its obligations pursuant to this
Agreement, each party shall be acting as an independent contractor.

            10.2 Assignment. This Agreement shall inure to the benefit of and be
binding upon each of the parties hereto and their respective permitted
successors and assigns. It may not be voluntarily assigned in whole or in part
by either party without the prior written consent of the other; provided,
however, that a successor in interest by merger, by operation of law, purchase
or otherwise of the entire business of either party shall acquire all interest
of such party hereunder, and further provided that a party may assign this
Agreement to an Affiliate of such party (the patty to this Agreement who makes
any such assignment to an Affiliate shall, notwithstanding such assignment,
remain fully responsible for assuring, and for any failure to assure, prompt
performance by such Affiliate of all of such assigning party's obligations under
this Agreement). Any prohibited assignment shall be null and void.

            10.3 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all previous proposals or agreements, oral or written, and all
negotiations, conversations or discussions heretofore had

                                    Page 24
<PAGE>

between the parties related to the subject matter of this Agreement. The pates
expressly agree that none of the terms and conditions of any standard preprinted
forms used by either WGL or the Company in effectuating the purchase and sale
transactions contemplated by this Agreement (including, but not limited to,
purchase orders, acknowledgements and acceptance forms, invoices, labels and
shipping documents) which are inconsistent with, or in addition to, those
contained in this Agreement shall have any force or effect.

            10.4 Governing Law. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York.

            10.5 Waiver, Discharge, etc. This Agreement may not be released,
discharged, abandoned, changed or modified in any manner, except by an
instrument in writing signed on behalf of each of the parties to this Agreement
by their duly authorized representatives. The failure of either party to enforce
at any time any of the provisions of this Agreement shall in no way be construed
to be a waiver of any such provision, nor in any way to affect the validity of
this Agreement or any part of it or the right of either party after any such
failure to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.

            10.6 Titles and Headings; Construction. The titles and headings to
Sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to any presumption
or other rule requiring construction hereof against the party causing this
Agreement to be drafted. When reference is made in this Agreement to a "month"
or to "months" (e.g., "three (3) months notice"), it shall mean a period
commencing on a specific day of a month (e.g., the 15th) and continuing to the
corresponding day of a later month (e.g., three (3) months from April 15 would
mean a period ending on the next succeeding July 15).

            10.7 Notices. All notices or other communications to a party
required or permitted hereunder shall be in writing and shall be delivered
personally, by courier or by telecopy (receipt confirmed) to such party (or, in
the case of an entity, to an executive officer of such party) or shall be given
by certified mail, postage prepaid with return receipt requested, addressed as
follows:

if to WGL, to:

                Wilson Greatbatch Ltd.
                10,000 Wehrle Drive
                Clarence, New York 14031
                Attention: Edward F. Voboril, President and
                           Chief Executive Officer

                                    Page 25
<PAGE>

and if to the Company, to:

                Pacesetter, Inc.
                15900 Valley View Court
                Sylmar, CA 91342
                Attention: General Counsel

WGL or the Company may change their respective above-specified recipient and/or
mailing address by notice to the other party given in the manner herein
prescribed. All notices shall be deemed given on the day when actually delivered
as provided above (if delivered personally or by telecopy) or on the day shown
on the return receipt (if delivered by mail).

            9.8 Severability. If any provision of this Agreement is held invalid
by a court of competent jurisdiction, the remaining provisions shall nonetheless
be enforceable according to their terms.

            9.9 Execution of Further Documents. Each party agrees to execute and
deliver without further consideration any further applications, licenses,
assignments or other documents, and to perform such other lawful acts as the
other party may reasonably require to fully secure and/or evidence the rights or
interests herein.

WILSON GREATBATCH LTD.                  PACESETTER, INC., A ST. JUDE
                                        MEDICAL COMPANY

By: /s/ Edward F. Voboril               By: /s/ Patrick Forteau
    -----------------------                 -----------------------

Title: President/CEO                    Title: President
       --------------------                    --------------------

Date: April 22, 1997                    Date: April 21, 1997
      ---------------------                   ---------------------

                                    Page 26
<PAGE>

                                  ATTACHMENT A
                            NON-HYBRID PRODUCTS LIST

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                                                              MINIMUM     DAYS TO
                                                 WGL TARGETED                           *ESTIMATED ANNUAL    INVENTORY      SHIP
                                                QUALIFICATION      1997 ANNUAL    UNIT    USAGE FROM WGL      PERCENT     SUPPLIER
    P/N       REV           DESCRIPTION              DATE          REQUIREMENT    PRICE   40%        80%    HELD BY WGL   INVENTORY
====================================================================================================================================
<S>            <C> <C>                           <C>                    <C>         <C>    <C>        <C>        <C>         <C>
5041534-099    H   SET SCREW ALL                 Qualified Now          *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
5015435-001    B   THUMBSCREW MOST LEADS            6/1/97              *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
6041701-001    B   WASHER/1388 LEADS (2 PER)        6/1/97              *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
6041702-001    C   HELIX SHAFT 1188/1388            6/1/97              *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
6041700-002    U   TIN ELECTRODE RING/1388          1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6041700-098    U   ELECTRODE RING/1188              6/1/97              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6041641-003    J   ELECTRODE RING TIN/1242          1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6041641-004    J   ELECTRODE RING TIN/1238, 1246    1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6041743-001    G   DISTAL ELECTRODE TIP/ALL         6/1/98              *           *      *                     *           21
------------------------------------------------------------------------------------------------------------------------------------
64-16-759      0   TIN TIP                          1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
62-02-506      1   TIN TIP                          1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
61-12-523      2   TIN RING                         1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
7001630-001    H   "L" CONNECTOR ASSEMBLY/ALL       1/1/98              *           *      *                     *           21
------------------------------------------------------------------------------------------------------------------------------------
7001441-012    H   "L" CONNECTOR/MICRONY            1/1/98              *           *      *                     *           21
------------------------------------------------------------------------------------------------------------------------------------
1040175-001    K   COIL/TRILOGY                     1/1/99              *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
63-87-075      0   COIL/MICRONY/REGENCY             1/1/99              *           *      *                     *            7
------------------------------------------------------------------------------------------------------------------------------------
6010987-001    C   TRILOGY CASE HALF                1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6010987-002    C   TRILOGY CASE HALF                1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6011117-098    J   AFFINITY CASE HALF               1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
6011117-099    J   AFFINITY CASE HALF               1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
62-31-463      1   REGENCY CASE HALF                1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
62-31-471      0   REGENCY CASE HALF                1/1/98              *           *      *                     *           14
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     Page 1
<PAGE>

                                  ATTACHMENT A
                            NON-HYBRID PRODUCTS LIST

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                                                              MINIMUM     DAYS TO
                                                 WGL TARGETED                           *ESTIMATED ANNUAL    INVENTORY      SHIP
                                                QUALIFICATION      1997 ANNUAL    UNIT    USAGE FROM WGL      PERCENT     SUPPLIER
    P/N       REV           DESCRIPTION              DATE          REQUIREMENT    PRICE   40%        80%    HELD BY WGL   INVENTORY
====================================================================================================================================
<S>            <C> <C>                           <C>                    <C>         <C>    <C>        <C>        <C>         <C>
62-01-854      2   MICRONY CSE HALF                 1/1/98              *           *      *          *          *           14
------------------------------------------------------------------------------------------------------------------------------------
62-01-847      2   MICRONY CASE HALF                1/1/98              *           *      *          *          *           14
------------------------------------------------------------------------------------------------------------------------------------
1080376-001    E   QUAD FEEDTHRU/TRILOGY            1/1/99              *           *      *          *          *           21
------------------------------------------------------------------------------------------------------------------------------------
63-27-659      0   FEEDTHRU                         1/1/99              *           *      *          *          *           21
------------------------------------------------------------------------------------------------------------------------------------
63-27-634      1   FEEDTHRU                         1/1/99              *           *      *          *          *           21
------------------------------------------------------------------------------------------------------------------------------------
6041696-002    D   SPACER                           6/1/97              *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
6041504-099    J   SET SCREW                     Qualified Now          *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
6041697-001    D   RING                             6/1/97              *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
6041703-001    B   STOPPER                          6/1/97              *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
6041783-097    G   COATED ELUT. TIP                 6/1/98              *           *      *          *          *            1
------------------------------------------------------------------------------------------------------------------------------------
6041555-001    G   CONNECTOR PIN                    6/1/97              *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
6041266-002    U   PROXIMAL RING                    6/1/97              *           *      *          *          *            7
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*     Quantity Indicates applicable estimated usage.

                                     Page 2
<PAGE>

                                  ATTACHMENT B

WGL CUSTOM POWER SOURCE DEVELOPMENT PRICING

For power sources other than standard WGL production cells the following
development charges will apply:

A. Lithium Iodine Power Sources (Pacemaker Applications)

      a.    Shapes that are 5 mm or greater in thickness

            1.    * upon submission of the purchase order.
            2.    * three (3) months after submission of purchase order.
            3.    * upon shipment of prototype units.
            4.    * upon shipment of implantable grade cells.
            5.    Development charges are not refundable.
            6.    Cell will remain proprietary for two (2) years after shipment
                  of first implantable grade unit.
            7.    Price per cell will be in accordance with Section 22(a) of
                  this Agreement.
            8.    In the event Company requests the cell to continue exclusivity
                  in perpetuity the following course of action will apply:

                  o     Upon shipment of the *th unit in the same model
                        configuration, a letter stating intent of exclusivity in
                        perpetuity will be sent to WGL and an additional payment
                        of * will be required.

            9.    Any term or condition not covered above will be negotiated at
                  the time of order.

      b.    Shapes that are less than 5 mm thick.

            1.    * upon submission of the purchase order.
            2.    * three (3) months after submission of purchase order.
            3.    * upon shipment of prototype units.
            4.    * upon shipment of implantable grade cells.
            5.    Development charges are not refundable.
            6.    Cell will remain proprietary for two (2) years after shipment
                  of first implantable grade unit.
            7.    Price per cell will be in accordance with Section 2.2(b) of
                  this Agreement.
            8.    In the event the Company requests the Cell to continue
                  exclusivity in perpetuity the following course of action will
                  apply:

                  o     Upon shipment of the *th unit in the same model
                        configuration, a letter stating intent of exclusivity in
                        perpetuity will be sent to WGL and an additional payment
                        of * will be required.
<PAGE>

            9.    Any term or condition not covered above will be negotiated at
                  the time of order.

B. Solid Cathode Multiplate Power Sources (High Rate Defibrillator Applications)

      a.    All shapes using standard technology including change of existing
            shapes. Standard is defined as a rectangular shape with eight
            cathode plates or less and manufactured with current assembly
            techniques. WGL reserves the right to classify a cell as
            non-standard at the time of purchase order placement.

            1.    * upon submission of the purchase order.
            2.    * three (3) months after submission of purchase order.
            3.    * upon shipment of prototype units.
            4.    * upon shipment of implantable grade cells.
            5.    Development charges are not refundable.
            6.    Cell will remain proprietary for three (3) years after
                  shipment of first implantable grade unit.
            7.    Price per cell will be in accordance with standard pricing in
                  effect at time of delivery.
            8.    In the event the Company requests the cell to continue
                  exclusivity in perpetuity the following course of action will
                  apply:

                  o     Upon shipment of the *th unit in the same model
                        configuration, a letter stating intent of exclusivity in
                        perpetuity will be sent to WGL and an additional payment
                        of * will be required.

            9.    Any term or condition not covered above will be negotiated at
                  the time of order.

      b.    WGL expressly reserves the right to classify as non-standard, any
            technology incorporated in an SVO battery, beginning with WGL Model
            96__. Prices for batteries incorporating said non-standard
            technology will be quoted on an individual basis.

C. Power Sources for Other Applications - Development charges will be quoted on
   an individual basis.

D. Additional terms for Development Charges

      1.    Should development work be terminated at any time during the
            contract period, WGL reserves the right to continue development of
            the cell and market this product as a standard shape. Development
            charges paid up to and including the point of termination will not
            be refunded.

      2.    Cells using any WGL electrochemical couple which require the
            development of a new assembly or manufacturing technology will be
            quoted on an individual basis.

<PAGE>

      3.    WGL reserves the right to quote the lead time on a case by case
            basis. The actual project duration for a specific design will depend
            upon the complexity of the design and the workload at the time the
            order is placed.

PRICING FOR WGL POWER SOURCES OTHER THAN COVERED IN AGREEMENT

A.    Pricing for alternate chemistry power sources will be set according to the
      WGL Price List in effect at the time of purchase. The pricing will be
      based on the volume of that specific alternate chemistry model. For
      pacemakers, the chemistry alternatives to lithium iodine include lithium
      thionyl chloride, lithium silver vanadium oxide, and lithium carbon
      monofluoride. For defibrillators, the available chemistry is lithium
      silver vanadium oxide.
<PAGE>

                                  ATTACHMENT C
         INITIAL NON-HYBRID PRODUCT PURCHASE ORDERS (VALUE = $  *  )

================================================================================
                                                   QUANTITY DUE
                                                     PRIOR TO
    P/N        REV           DESCRIPTION             12/31/98       VALUE ($)
================================================================================
6041534-099     H     SETSCREW                          *               *
--------------------------------------------------------------------------------
5015435-001     B     THUMBSCREW                        *               *
--------------------------------------------------------------------------------
6041701-001     B     WASHER                            *               *
--------------------------------------------------------------------------------
6041702-001     C     HELIX SHAFT                       *               *
--------------------------------------------------------------------------------
6041700-002     U     TIN ELECTRODE RING                *               *
--------------------------------------------------------------------------------
6041700-098     U     ELECTRODE RING                    *               *
--------------------------------------------------------------------------------
6041641-003     J     ELECTRODE RING TIN                *               *
--------------------------------------------------------------------------------
6041641-004     J     ELECTRODE RING TIN                *               *
--------------------------------------------------------------------------------
6041743-001     G     DISTAL ELECTRODE TIP              *               *
--------------------------------------------------------------------------------
64-16-759       0     TIN TIP                           *               *
--------------------------------------------------------------------------------
62-02-506       1     TIN TIP                           *               *
--------------------------------------------------------------------------------
61-12-523       2     TIN RING                          *               *
--------------------------------------------------------------------------------
7001630-001     H     "L" CONNECTOR ASSEMBLY            *               *
--------------------------------------------------------------------------------
7001441-012     H     "L" CONNECTOR MICRONY             *               *
--------------------------------------------------------------------------------
6010987-001     C     TRILOGY CASE HALF                 *               *
--------------------------------------------------------------------------------
6010987-002     C     TRILOGY CASE HALF                 *               *
--------------------------------------------------------------------------------
6011117-098     J     AFFINITY CASE HALF                *               *
--------------------------------------------------------------------------------
6011117-099     J     AFFINITY CASE HALF                *               *
--------------------------------------------------------------------------------
62-31-463       1     REGENCY CASE HALF                 *               *
--------------------------------------------------------------------------------
62-31-471       0     REGENCY CASE HALF                 *               *
--------------------------------------------------------------------------------
62-01-854       2     MICRONY CASE HALF                 *               *
--------------------------------------------------------------------------------
62-02-847       2     MICRONY CASE HALF                 *               *
--------------------------------------------------------------------------------
6041696-002     D     SPACER                            *               *
--------------------------------------------------------------------------------
6041504-099     J     SET SCREW                         *               *
--------------------------------------------------------------------------------
6041697-001     D     RING                              *               *
--------------------------------------------------------------------------------

                                     Page 1
<PAGE>

                                  ATTACHMENT C
         INITIAL NON-HYBRID PRODUCT PURCHASE ORDERS (VALUE = $  *  )

================================================================================
                                                   QUANTITY DUE
                                                     PRIOR TO
    P/N        REV           DESCRIPTION             12/31/98       VALUE ($)
================================================================================
6041703-001     B     STOPPER                           *               *
--------------------------------------------------------------------------------
6041783-097     G     TIP COATED ELUT.                  *               *
--------------------------------------------------------------------------------
6041555-001     G     CONNECTOR PIN                     *               *
--------------------------------------------------------------------------------
6041266-002     C     PROXIMAL RING                     *               *
--------------------------------------------------------------------------------
6041809-099     B     CONNECTOR BLOCK                   *               *
--------------------------------------------------------------------------------

TOTAL

Connector block (6041499-098) currently being sourced by our current connector
assembly sup [ILLEGIBLE] have the following quantity and dollar amount sourced
through Wilson Great Batch, Ltd

================================================================================
                                                  QUANTITY DUE
                                                    PRIOR TO
    P/N        REV           DESCRIPTION             12/31/98       VALUE ($)
================================================================================
6041499-098     J     CONNECTOR BLOCK                    *              *
--------------------------------------------------------------------------------

GRAND TOTAL                                                             *

                                     Page 2

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