Document:

Material Contracts

CREDIT AGREEMENT

dated as of

JANUARY 12, 2001

by and among

WILSON GREATBATCH LTD.,

                                                          the LENDERS Party Hereto

                                                                     and

MANUFACTURERS AND TRADERS TRUST COMPANY

                                                          as Administrative Agent

$60,000,000

TABLE OF CONTENTS

         ARTICLE I         DEFINITIONS                                         1

         1.01   Defined Terms.                                                 1
         1.02   Terms Generally.                                              15
         1.03   Accounting Terms; GAAP.                                       16

         ARTICLE II        THE CREDIT FACILITIES                              17

         2.01   Term Loan Facilities.                                         17
         2.02   Revolving Credit Facilities.                                  19
         2.03   Requests for Revolving Credit Borrowings.                     20
         2.04   Letters of Credit.                                            21
         2.05   Funding of Borrowings.                                        25
         2.06   Interest Elections.                                           26
         2.07   Termination and Reduction of the Commitments.                 27
         2.08   Repayment and Prepayment of Loans; Evidence of Debt.          28
         2.09   Fees.                                                         30
         2.10   Interest.                                                     31
         2.11   Alternate Rate of Interest.                                   31
         2.12   Increased Costs.                                              32
         2.13   Break Funding Payments.                                       33
         2.14   Taxes.                                                        33
         2.15   Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  34
         2.16   Mitigation Obligations; Replacement of Lenders.               36

         ARTICLE III       REPRESENTATIONS AND WARRANTIES                     37

         3.01   Organization; Powers.                                         37
         3.02   Authorization; Enforceability.                                37
         3.03   Governmental Approvals; No Conflicts.                         37
         3.04   Financial Condition; No Material Adverse Change.              38
         3.05   Properties.                                                   38
         3.06   Litigation and Environmental Matters.                         39
         3.07   Compliance with Laws and Agreements.                          39
         3.08   Subordinated Indebtedness.                                    39
         3.09   Investment and Holding Company Status.                        39
         3.10   Taxes.                                                        39
         3.11   ERISA.                                                        40
         3.12   Disclosure.                                                   40
         3.13   Use of Credit.                                                40

         ARTICLE IV        CONDITIONS                                         40

         4.01   Effective Date.                                               40
         4.02   Each Credit Event.                                            42

         ARTICLE V         AFFIRMATIVE COVENANTS                              43

         5.01   Financial Statements and Other Information.                   43
         5.02   Notices of Material Events.                                   44
         5.03   Existence: Conduct of Business.                               44
         5.04   Future Subsidiaries; Subsidiary Guarantors.                   45
         5.05   Future Parent Entities; Parent Guarantors.                    45
         5.06   Payment of Obligations.                                       45
         5.07   Maintenance of Properties; Insurance.                         45
         5.08   Books and Records; Inspection Rights.                         45
         5.09   Compliance with Laws.                                         46
         5.10   Use of Proceeds.                                              46

         ARTICLE VI        NEGATIVE COVENANTS                                 46

         6.01   Indebtedness.                                                 46
         6.02   Liens.                                                        47
         6.03   Fundamental Changes.                                          48
         6.04   Lines of Business.                                            49
         6.05   Restrictive Agreements.                                       50
         6.06   Investments, Loans, Advances, Guarantees and Acquisitions;
                Hedging Agreements.                                           50
         6.07   Restricted Payments.                                          51
         6.08   Transactions with Affiliates.                                 51
         6.09   Sale and Lease-Back Transactions.                             51
         6.10   Certain Financial Covenants.                                  52

         ARTICLE VII       EVENTS OF DEFAULT                                  52

         ARTICLE VIII      THE ADMINISTRATIVE AGENT                           54

         ARTICLE IX        MISCELLANEOUS                                      56

         9.01    Notices.                                                     56
         9.02    Waivers; Amendments.                                         58
         9.03    Expenses; Indemnity; Damage Waiver.                          59
         9.04    Successors and Assigns.                                      60
         9.05    Survival.                                                    63
         9.06    Counterparts; Integration; Effectiveness.                    63
         9.07    Severability.                                                64
         9.08    Right of Setoff.                                             64
         9.09    Governing Law; Jurisdiction: Etc.                            64
         9.10    WAIVER OF JURY TRIAL.                                        65
         9.11    Headings.                                                    65
         9.12    Treatment of Certain Information: Confidentiality.           65

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

         EXHIBIT A - Form of Assignment and Acceptance
         EXHIBIT B - Form of Opinion of Counsel to the Borrower
         EXHIBIT C - Form of Term Note
         EXHIBIT D - Form of Revolving Credit Note
         EXHIBIT E - Form of Revolving Credit Borrowing Request
         EXHIBIT F1 - Form of Interest Election Request for Term Loan Borrowing
         EXHIBIT F2 - Form of Interest Election Request for Revolving Credit
                      Borrowing
         EXHIBIT G - Form of Borrower Compliance Certificate

     CREDIT AGREEMENT dated as of January 12, 2001, by and among WILSON
         GREATBATCH LTD., a New York corporation, the LENDERS party hereto, and
         MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation,
         as Administrative Agent.

     The Borrower (as hereinafter defined) has requested that the Lenders (as so defined)
extend credit to it in an aggregate principal or face amount not exceeding Sixty
Million Dollars ($60,000,000) at any one time outstanding. The Lenders are
prepared to extend such credit upon the terms and conditions hereof, and,
accordingly, the parties hereto agree as follows:

ARTICLE I     DEFINITIONS

1.1     Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

     "Adjusted LIBOR" means, with respect to any ALR Loan for the related Interest
Period, the rate per annum that is equal to the sum of (a) the
Applicable Margin, plus (b) the rate per annum obtained by
multiplying (i) the LIBOR, by (ii) the Eurocurrency Reserve Rate, all as
conclusively determined by the Administrative Agent, such sum to be rounded up,
if necessary, to the nearest whole multiple of one hundredth
(1/100th) of one percent (1%).

     "Adjusted Prime Rate" means, for any day, a rate per annum equal to the
sum of the Prime Rate in effect on such day plus the Applicable
Margin in effect for such day.

     "Administrative Agent" means M&T, in its capacity as administrative agent for the
Lenders hereunder.

     "Administrative Agent Account" means an account designated by the Administrative
Agent in a notice to the Borrower and the Lenders.

     "Administrative Questionnaire" means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

     "Affiliate" means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified.

     "ALR", when used in reference to any Loan or Borrowing, indicates that such Loan,
or the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBOR.

     "Applicable Margin" means, for any day, (a) with respect to any
APR Loan the applicable rate per annum set forth below under the
caption "APR Spread", (b) with respect to any ALR Loan, the applicable rate per annum set forth below under the
caption "LIBOR Spread", or (c) with respect to the revolving
credit fees payable hereunder, the applicable rate per annum set
forth below under the caption "Revolving Credit Fee Rate",
respectively, based upon the Leverage Ratio as at the end of the most
recent fiscal quarter; provided that until March 30, 2001 the
"Applicable Margin" shall be the applicable rate per annum set
forth below in Category 4:

                                                    APR       LIBOR         Revolving

                                                                                                                                                                      Leverage Ratio (= "x")
                                                   Spread     Spread     Credit Fee Rate
==============================================================================================
 Category 1: x > 3.5 : 1.0                        -0.25        2.00          0.375

 Category 2: 3.0 : 1.0 < x ‹ 3.5 : 1.0            -0.50        1.75          0.250

 Category 3: 2.5 : 1.0 < x ‹ 3.0 : 1.0            -0.75        1.50          0.250

 Category 4: x ‹ 2.5 : 1.0                        -1.00        1.25          0.250
==============================================================================================

For purposes of the foregoing, each change in the Applicable Margin resulting from a
change in the Leverage Ratio shall be effective as to any Loans then
outstanding or thereafter made during the period commencing on and
including the date three (3) Business Days after delivery to the Administrative Agent of the Consolidated financial statements pursuant to
Section 5.01(a) or 5.01(b), as applicable, indicating such change and
ending on the date immediately preceding the effective date of the next
such change; provided that the Applicable Margin shall be deemed to be in
Category 1: (i) at any time that an Event of Default has occurred and is
continuing; and (ii) if the Borrower fails to deliver the Consolidated
financial statements required to be delivered by it pursuant to Section 5.01(a) or 5.01(b), during the period commencing on the expiration date of
the time for delivery thereof and ending on the date three (3) Business
Days after such Consolidated financial statements are delivered.

     "Applicable Percentage" means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment as set
forth opposite such Lender’s name on Schedule I or in the
Assignment and Acceptance pursuant to which such Lender shall have
assumed its Commitment, as applicable. If the Commitments have terminated or
expired, each Lender’s Applicable Percentage shall be determined
based upon the Commitments most recently in effect, after giving effect
to any assignments of any Commitments by or among the Lenders.

     “APR”,
when used in reference to any Loan or Borrowing, indicates that such Loan, or
the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted Prime Rate.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.

     “Availability
Period” means, with respect to the Revolving Credit Commitments, the
period from and including the Effective Date to but excluding the
earlier of the Revolving Credit Commitment Termination Date and the date
of termination of the Revolving Credit Commitments.

     “Board” means the Board of Governors of the Federal Reserve System of the United States

         of America.

     “Borrower” means Wilson Greatbatch Ltd., a New York corporation.

     “Borrower
Pledge Agreement” shall have the meaning ascribed to such term in
Section4.01(h), as such agreement may be modified, amended or supplemented
from time to time.

     “Borrowing”
means (a) all APR Loans made, converted or continued on the same date, or (b)
all ALR Loans that have the same Interest Period. For the purposes
hereof, the Term Loans shall be treated as a single Borrowing.

     “Borrowing
Request” means a request by the Borrower for a Borrowing of Revolving
Credit Loans in accordance with Section 2.03.

     “Business Day” means any day (a) that is not a Saturday, Sunday or other day on
which commercial banks in Buffalo, New York are authorized or required
by law to remain closed, and (b) if such day relates to a borrowing of,
a payment or prepayment of principal of or interest on, a continuation
or conversion of or into, or the Interest Period for, an ALR Borrowing, or to a
notice by the Borrower with respect to any such Borrowing, payment,
prepayment, continuation, conversion, or Interest Period, a day that is
also a day on which dealings in deposits for United States Dollars are
carried out in the London interbank market.

     “Capital
Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted
for as capital leases on a balance sheet of such Person under GAAP, and the
amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

     “Cash
Interest Expense” of any Person means, for any period, the sum (without
duplication and in accordance with GAAP) of the following: (a) all
interest in respect of Indebtedness (including the interest component of
any payments in respect of Capital Lease Obligations) accrued or capitalized
during such period (whether or not actually paid during such period),
plus (b) the net amount payable (or minus the net amount
receivable) under interest rate Hedging Agreements during such period (whether or not actually paid or received during such period), minus
(c) the sum of (i) interest income during such period, plus (ii)
all amounts attributable to non-cash items of interest expense, all as determined in accordance with GAAP.

     “Change
in Control” means any time at which (a) Wilson Greatbatch Technologies,
Inc. shall cease to beneficially own in the aggregate one hundred
percent (100%) of the total combined voting power of all classes of
voting stock of Wilson Greatbatch Intermediate Holdings, Inc., free and clear
of all Liens (including, without limitation, pursuant to any voting
trust or other agreement to which such shareholder becomes a party or
bound by, that in any way limits the right or ability of such
shareholder to exercise one hundred percent (100%) of such total combined
voting powers); or (b) Wilson Greatbatch Intermediate Holdings, Inc.
shall cease to beneficially own in the aggregate one hundred percent
(100%) of the total combined voting power of all classes of voting stock of the
Borrower, free and clear of all Liens (including, without limitation,
pursuant to any voting trust or other agreement to which such
shareholder becomes a party or bound by, that in any way limits the
right or ability of such shareholder to exercise one hundred percent (100%)
of such total combined voting powers).

     “Change
in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or
in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement, or (c) compliance by any Lender
or the Issuing Lender (or, for purposes of Section 2.12(b), by any lending
office of such Lender or by such Lender’s or the Issuing
Lender’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

        “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

     “Commitment”
means, with respect to a Lender, the commitment of such Lender to make
Loans and to acquire participations in Letters of Credit hereunder, expressed
as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Commitment and Term Loan Commitment
hereunder. The initial amount of each Lender’s Commitment is set forth on
Schedule I, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The
“Commitments” shall mean the aggregate amounts of all
Lenders’ commitments to make Loans and to acquire participations in
Letters of Credit hereunder; the initial amount of the Commitments is
Sixty Million Dollars ($60,000,000).

     “Compliance Certificate” means a certificate of a Financial Officer as described in Section
5.01(c).

     “Consolidated”,“Consolidating” or “Consolidated Basis” means,
except as otherwise specifically provided for in this Agreement, the
consolidation of the accounts of the Borrower and its Subsidiaries in
accordance with GAAP, including principles of consolidation.

     “Consolidated EBITDA” means, for any period, the sum of the following on a
Consolidated basis: (a) Net Income for such period, plus (b)
without duplication and to the extent deducted in computing such Net
Income for such period, the sum of (i) Cash Interest Expense, plus (ii)
income tax expense, plus (iii) depreciation and amortization
expense, plus (iv) amortization or write-off of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), plus (v)
amortization of intangibles (including, but
not limited to, goodwill) and organization costs, plus (vi) any
extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate itemin such Net
Income for such period, losses on sales of assets outside of the ordinary course
of business), plus (vii) any other non-cash charges, and
minus (c) to the extent included in computing such Net Income for
such period, the sum of (i) any extraordinary, unusual or nonrecurring income
or gains (including, whether or not otherwise includable as a separate
item in such Net Income for such period, gains on the sales of assets
outside of the ordinary course of business), plus (ii) any other
non-cash income. Solely in connection with the determination of Consolidated
EBITDA for any period ending on March 30, 2001, the premium
(“premium”) payable to the holders of Borrower’s
13% Senior Subordinated Notes due 2007 in the original principal amount of
Twenty Five Million Dollars ($25,000,000) in connection with the
repayment of such notes prior to their stated maturity shall be added
back to Net Income pursuant to clause (b) of this definition; provided,
in no event shall the aggregate amount of the premium to be added back
to Net Income in determining Consolidated EBITDA pursuant to this
sentence exceed an amount equal to One Million Seven Hundred Thirty Four
Thousand Dollars ($1,734,000).

     “Consolidated
Fixed Charges” means, for any period, the sum of the following on a
Consolidated basis: (a) capital expenditures, plus (b) Cash
Interest Expense, plus (c) all regularly scheduled repayments of
principal of Indebtedness (including principal repayments of the Term Loan
and principal repayments of any Capital Lease Obligations), minus, (d)
for such period, the sum of (i) the cost of financing any capital
expenditures described in clause (a) of this definition, plus (ii)
interest income during such period.

     “Consolidated
Interest Expense” means, for any period, the sum of the following on a
Consolidated basis: (a) all interest in respect of Indebtedness
(including the interest component of any payments in respect of Capital
Lease Obligations) accrued or capitalized during such period (whether or
not actually paid during such period), plus (b) the net amount payable
(or minus the net amount receivable) under interest rate Hedging
Agreements during such period (whether or not actually paid or received
during such period), minus (c) interest income during such period.

     “Consolidated
Senior Debt” means the difference, on a Consolidated basis, between (a)
all Indebtedness created, renewed, assumed or suffered to exist during
such period, minus (b) all Subordinated Indebtedness created,
renewed, assumed or suffered to exist during such period.

     “Control”
and “Controlling” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlled” has the
correlative meaning to such terms.

     “Credit
Exposure” means, with respect to a Lender, at any time, the sum of (a)
such Lender’s Revolving Credit Exposure at such time, plus
(b) the outstanding principal amount of such Lender’s Term Loan at
such time.

     “Default”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

     “Disclosed
Matters” means the actions, suits and proceedings disclosed in
Schedule III and the environmental matters disclosed in
Schedule IV.

     “Dollars”
or “$” refers to lawful money of the United States of America.

     “Effective
Date” means the date on which the conditions specified in Section 4.01
are satisfied (or waived in accordance with Section 9.02).

     “Environmental
Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

     “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment, or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
         time to time.

     “ERISA
Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a single employer
under Section 414 of the Code.

     “ERISA
Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30-day notice period is
waived), (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan, (d)
the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any
Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC of
any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan, (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Multiemployer Plan, or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

     “Event
of Default” has the meaning assigned to such term in ARTICLE VII.

     “Eurocurrency
Reserve Rate” means, for any Interest Period, a fraction (expressed as
a decimal) the numerator of which is the number one (1) and the
denominator of which is the number one (1) minus the arithmetic
mean, taken over each day in such Interest Period, of the aggregate of
the maximum reserve percentages established by the Board (including any
marginal, special, emergency or supplemental reserves) expressed as a
decimal to which the Administrative Agent is subject for
“Eurocurrency Liabilities” (as that term is used in Regulation D of
the Board). ALR Loans shall be deemed to constitute “Eurocurrency
Liabilities” and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any
comparable regulation. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage for “Eurocurrency Liabilities”.

“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case
of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which the Borrower is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.16(b)), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a
Change in Law) to deliver documentation prescribed by applicable law
that permits payments made to such Foreign Lender to be made without
holding taxes, except to the extent that such Foreign Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional
amounts from the Borrower with respect to such withholding tax pursuant
to Section 2.14(a).

     “Federal
Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next one hundredth (1/100th) of
one percent (1%)) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average (rounded upwards, if necessary,
to the next one hundredth (1/100th) of one percent (1%)) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

     “Financial Officer” means the chief financial officer, treasurer or vice president-finance of the
Borrower.

     “Fixed
Charges Coverage Ratio” means the ratio of Consolidated EBITDA to
Consolidated Fixed Charges as at the end of each fiscal quarter and
measured for the four (4) consecutive fiscal quarters ending on the last
day of such fiscal quarter; provided, (i) the items contained in clauses
(a) and (d) of the definition of Consolidated Fixed Charges as at the
end of any fiscal quarter shall be measured for the four (4) consecutive
fiscal quarters ending on the last day of such fiscal quarter, and (ii)
the items contained in clauses (b) and (c) of the definition of Consolidated
Fixed Charges (collectively, the “debt fixed charges”)
(A) as at the end of first (1st) fiscal quarter ending in 2001 shall
equal the product of four (4) multiplied by the debt fixed charges as
measured solely for such fiscal quarter, (B) as at the end of the second
(2nd) fiscal quarter ending in 2001 shall equal the product of
two (2) multiplied by the debt fixed charges as measured for the two (2)
consecutive fiscal quarters ending on the last day of such fiscal
quarter, and (C) as at the end of the third (3rd) fiscal quarter
ending in 2001 shall equal the product of one and one-third (1.33) multiplied
by the debt fixed charges as measured for the three (3) consecutive
fiscal quarters ending on the last day of such fiscal quarter. The
determination of the Fixed Charges Coverage Ratio shall be based upon the
Consolidated financial statements delivered pursuant to Section 5.01(a) or
5.01(b), as applicable.

     “Foreign
Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

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

     “Governmental
Authority” means the government of the United States of America, or of
any other nation, or any political subdivision thereof, whether state or
local, and any agency, authority,instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

     “Guarantee”
of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of
any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or
other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to
pay such Indebtedness or other obligation; or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary
course of business.

“Guaranty
Agreement” shall have the meaning ascribed to such term in Section
4.01(f), as any such agreement may be modified, amended or supplemented
from time to time.

     “Hazardous
Materials” means all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyl’s, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

     “Hedging
Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement.

     “Holdings” means WGL Intermediate Holdings, Inc., a Delaware corporation and the owner
of all of the issued and outstanding capital stock of the Borrower.

     “Indebtedness”
of any Person means, without duplication (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been
assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances.
The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide
that such Person is not liable therefor.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Intellectual
Property Security Agreements” shall have the meaning ascribed to such
term in Section 4.01(g), as the same may be modified, amended or supplemented
from time to time.

     “Interest
Coverage Ratio” means the ratio of Consolidated EBITDA to Cash Interest
Expense as at the end of each fiscal quarter and measured for the four
(4) consecutive fiscal quarters ending on the last day of such fiscal
quarter; provided, Cash Interest Expense (a) as at the end of first
(1st) fiscal quarter ending in 2001 shall equal the product
of four (4) multiplied by the Cash Interest Expense as measured solely
for such fiscal quarter, (b) as at the end of the second (2nd) fiscal
quarter ending in 2001 shall equal the product of two (2) multiplied by
the Cash Interest Expense as measured for the two (2) consecutive fiscal
quarters ending on the last day of such fiscal quarter, and (c) as at
the end of the third (3rd) fiscal quarter ending in 2001 shall equal
the product of one and one- third (1.33) multiplied by the Cash Interest
Expense as measured for the three (3) consecutive fiscal quarters
ending on the last day of such fiscal quarter. The determination of the Interest
Coverage Ratio shall be based upon the Consolidated financial statements
delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.

     “Interest
Election Request” means a request by the Borrower to convert a
Borrowing to, or continue a Borrowing as an APR Borrowing or ALR
Borrowing in accordance with Section 2.06.

     “Interest
Payment Date” means (a) with respect to any APR Loan, the first day of
each calendar month, and (b) with respect to any ALR Loan, the next
Business Day immediately following the last day of each Interest Period
therefor.

     “Interest
Period” means, for any ALR Loan or ALR Borrowing, the period commencing
on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one (1), two (2), or
three (3) months thereafter, or, with respect to such portion of any ALR
Loan or Borrowing that is scheduled to be repaid on the Commitment Termination
Date, a period of less than one (1) month’s duration commencing on
the date of such Loan or Borrowing and ending on the Commitment
Termination Date, as specified in the applicable Borrowing Request or
Interest Election Request; provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and
(ii) any Interest Period (other than an Interest Period pertaining to an
ALR Borrowing that ends on the Commitment Termination Date that is
permitted to be of less than one (1) month’s duration as provided in this
definition) that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business
Day of the last calendar month of such Interest Period. For purposes hereof,
the date of a Revolving Credit Loan initially shall be the date on which
such Loan is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Loan as an ALR Loan, and the date of a
Borrowing comprising ALR Revolving Credit Loans that have been converted
or continued shall be the effective date of the most recent conversion
or continuation of such Loans. The date of the Term Loans shall be the
date on which such Loans are made.

     “Issuing
Lender” means M&T, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.04(j).

     “LC Disbursement” means a payment made by the Issuing Lender pursuant to a Letter of
 Credit.

     “LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn
amounts of all outstanding Letters of Credit at such time, plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure
of any Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.

     “Lenders”
means the Persons listed on Schedule I and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to
an Assignment and Acceptance.

     “Letter of Credit” means any standby letter of credit issued pursuant to this
Agreement.

     “Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at risk
with respect to such Letter of Credit, or (b) any collateral security
for any of such obligations, each as the same may be modified and
supplemented and in effect from time to time.

     “Leverage
Ratio” means the ratio of Consolidated Senior Debt as at the end of
each fiscal quarter to Consolidated EBITDA as at the end of each fiscal
quarter and measured for the four (4) consecutive fiscal quarters ending
on the last day of such fiscal quarter. The determination of the
Leverage Ratio shall be based upon the Consolidated financial statements
delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.

     “LIBOR”
means for any Interest Period, the per annum rate, as determined by the
Administrative Agent from any broker, quoting service or commonly
available source utilized by the Administrative Agent, at which United
States Dollar deposits in immediately available funds are offered to leading
banks in the London interbank deposit market at 11:00 a.m. Greenwich
Mean Time (or as soon thereafter as practicable) on the Quotation Date
for delivery on the first day of such Interest Period and for a period
equal to such Interest Period.

     “Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset, and (c) in the case of
securities, any purchase option, call or similar right of a third party
with respect to such securities.

     “Loan
Documents” means, collectively, this Agreement, the Notes, the Letter
of Credit Documents, the Guaranty Agreements, the Security Agreements,
Borrower Pledge Agreement, the Intellectual Property Security Agreements
and all other agreements, documents, certificates and instruments
executed and delivered by the Borrower, any Subsidiary of the Borrower,
Technologies, Holdings, and any other Person pursuant to the terms
hereof to the Administrative Agent and/or the Lenders in connection with
the Transactions, as each of such Loan Documents may be modified,
amended or supplemented from time to time.

     “Loans”
means the Revolving Credit Loans and/or the Term Loans made by the Lenders to
the Borrower pursuant to this Agreement.

     “Local
Time” means the local time in Buffalo, New York.

     “M&T” means Manufacturers and Traders Trust Company.

     “Margin Stock” means "margin stock" within the meaning of Regulations T, U and X of the
 Board.

     “Material
Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Borrower
and its Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under this Agreement or any of the
other Loan Documents, or (c) the ability of the Lenders to enforce or assert
any right or interest granted to the Lenders under this Agreement or any
of the other Loan Documents.

     “Maturity Date” means, with respect to the Term Loans and the
Term Note, January 1, 2006.

     “Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

     “Net
Income” of any Person, means, with respect to any period, all amounts
which, in conformity with GAAP, would be included under net income on an
income statement of such Person for such period.

     “Note” and “Notes” means, individually and collectively, the Revolving Credit Note and the
Term Note.

     “Other
Taxes” means any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Loan
Document.

     “Parent
Guarantor” and “Parent Guarantors” means, individually
and collectively, Technologies, Holdings and each Person in relation to
which the Borrower or any Subsidiary of the Borrower becomes a
Subsidiary and that has executed and delivered to the Administrative Agent a
Guaranty Agreement as provided in Section 4.01 or Section 5.05.

     “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Permitted
Investments” means: (a) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by,
the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of
acquisition thereof; (b) investments in commercial paper maturing within
two hundred seventy (270) days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating obtainable from
Standard & Poor’s Ratings Services or Moody’s Investors
Services, Inc; (c) investments in certificates of deposit, banker’s
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America
or any State thereof which has a combined capital and surplus and undivided
profits of not less than Two
Hundred Fifty Million Dollars ($250,000,000); and (d) fully collateralized
repurchase agreements with a term of not more than thirty (30) days for
securities described in clause (a) of this definition and entered into
with a financial institution satisfying the criteria described in clause (c) of
this definition.

     “Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or
other entity.

     “Plan”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

     “Prime
Rate” means the rate of interest per annum publicly announced from time
to time by M&T as its prime rate in effect at its principal office
in Buffalo, New York; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.

     “Quotation
Date” means, for any Interest Period, the date that is two (2) Business
Days prior to the first day of such Interest Period.

     “Quarterly
Dates” means the last Business Day of March, June, September and
December in each year, the first of which shall be the first such day
after the date hereof.

     “Register” has the meaning set forth in Section 9.04.

     “Related Parties” means, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person’s
Affiliates.

     “Required
Lenders” means, at any time, Lenders having Credit Exposures and unused
Revolving Credit Commitments representing greater than fifty percent
(50%) of the sum of the total Credit Exposures and unused Revolving
Credit Commitments at such time.>

     “Restricted
Payment” means (a) any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of
capital stock of the Borrower or any of its Subsidiaries, or (b) any
payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares
of capital stock of the Borrower or any option, warrant or other right
to acquire any such shares of capital stock of the Borrower, or (c) any
dividend, distribution or other payment by the Borrower or any of its
Subsidiaries to any shareholder of the Borrower or such Subsidiary
(other than the Borrower), or to any Affiliate of the Borrower, any of
its Subsidiaries, or to such shareholder, whether in cash, securities or
other property.

     “Revolving
Credit Commitment” means, with respect to a Lender, the commitment of
such Lender to make Revolving Credit Loans and to acquire participations
in Letters of Credit hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender’s Revolving Credit Exposure
hereunder and its Applicable Percentage of the unused principal amount of the
Revolving Credit Note, as such commitment may be (a) reduced from time
to time pursuant to Section 2.07, and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender’s Revolving Credit Commitment
is set forth on Schedule I, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as
applicable. The “Revolving Credit Commitments” shall mean the
aggregate amounts of all Lenders’ commitments to make Revolving
Credit Loans and to acquire participations in Letters of Credit
hereunder; the initial amount of the Revolving Credit Commitments is
Twenty Million Dollars ($20,000,000).

     “Revolving
Credit Commitment Termination Date” means, with respect to the
Revolving Credit Loans, Revolving Credit Note and the Letters of Credit,
January 1, 2006.

     “Revolving
Credit Exposure” means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender’s Revolving
Credit Loans and its LC Exposure at such time.

     “Revolving Credit Facility” means the credit extended to the Borrower as described in Section
2.02.

     “Revolving
Credit Loan” and “Revolving Credit Loans” means,
individually and collectively, each Loan made by the Lenders pursuant to
Section 2.02.

     “Revolving
Credit Note” means the Note executed and delivered by the Borrower to
the Administrative Agent pursuant to Section 2.02 and in the form of
Exhibit E hereto, and allsubstitutions and replacements thereof.

     “Security Agreement” shall have the meaning ascribed to such term in Section
4.01(g), as any such agreement may be modified, amended or supplemented
from time to time.

     “Senior
Executive Officer” with respect to any Person, means the Chief
Executive Officer, President or Executive Vice President of such Person.

     “Subordinated Indebtedness” means, with respect to the Borrower
and its Subsidiaries, all nsecured Indebtedness that is subordinated in
right of payment to the payment of the Loans and is otherwise junior to
the rights of the Lenders with respect to the Loans in all respects.

     “Subsidiary”
means, with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of
the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such
date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other ownership
interests representing more than fifty percent (50%) of the equity or more than
fifty percent (50%) of the ordinary voting power or, in the case of a
partnership, more than fifty percent (50%) of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that
is, as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent. Unless otherwise specified, “Subsidiary” means
a Subsidiary of the Borrower.

     “Subsidiary Guarantor” and “Subsidiary
Guarantors” means, individually and collectively, each
Subsidiary of the Borrower or of any Subsidiary of the Borrower that has
executed and delivered to the Administrative Agent the Loan Documents as
provided in Section 4.01 or Section 5.04.

     “Technologies” means Wilson Greatbatch Technologies, Inc., a Delaware corporation and
the owner of all of the issued and outstanding capital stock of Holdings.

     “Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

     “Term Loan” and “Term Loans” means,
individually and collectively, each Term Loan made by a Lender pursuant
to Section 2.01.

     “Term
Loan Commitment” means, with respect to a Lender, the commitment of
such Lender to make a Term Loan hereunder on the Effective Date,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Applicable Percentage of the Term Note as such commitment
may be reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The amount of each Lender’s
Term Loan Commitment is set forth on Schedule I, or in the
Assignment and Acceptance pursuant to which such Lender shall have
assumed its Commitment, as applicable. The “Term Loan
Commitments” shall mean the aggregate amounts of all
Lenders’ commitments to make Term Loans hereunder on the Effective Date;
the aggregate amount of the Term Loan Commitments is Forty Million
Dollars ($40,000,000).

     “Term
Loan Facility” means the credit extended to the Borrower as described
in Section 2.01.

     “Term
Note” means the Note executed and delivered by the Borrower to the
Administrative Agent pursuant to Section 2.01 and in the form of
Exhibit D hereto, and all substitutions and replacements thereof.

     “Transactions”
means the execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

     “Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans constituting such Borrowing, is
determined by reference to the Adjusted LIBOR or the Adjusted Prime
Rate, and, accordingly, whether such Loan or Borrowing is an ALR Loan or
Borrowing or APR Loan or Borrowing, respectively.

     “Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

1.2  Terms Generally.

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

1.3  Accounting Terms; GAAP.

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

     (b)  Changes in Fiscal Periods. To enable the ready and consistent
determination of compliance with the covenants set forth in Section
ARTICLE VI, the Borrower will not change the last day of its fiscal year
from the Friday nearest to December 31 of each year (whether or not such
last day occurs in the same calendar year or the next following calendar
year), or the last days of the first three fiscal quarters in each of their
fiscal years from the Friday
closest to March 31, June 30 or September 30 of each year, respectively. By way
of illustration of the foregoing, fiscal year 2000 will end on December
29, 2000.

     (c)  Pro Forma Treatment of Acquisitions. For the purposes of
computing Consolidated EBITDA, Consolidated Fixed Charges, Cash Interest
Expense, Consolidated Senior Debt, the Fixed Charges Coverage Ratio, the
Interest Coverage Ratio and the Leverage Ratio (and any financial
calculations required to be made or included within such amounts or ratios)
as of the end of any measurement period, in the event any Person (an
“acquired Person”) is acquired by the Borrower or any
of its Subsidiaries after the beginning of and prior to the end of such
measurement period, all components of such amounts or ratios (other than
capital expenditures as determined in accordance with GAAP) shall be computed
on a pro  forma basis as if such acquisition has
occurred on the first day of such measurement period, and shall, without
duplication, and to the extent applicable:

          (i)  
include, for purposes of calculating Consolidated EBITDA, the actual items of income and expense of the acquired Person as measured for the four
(4) consecutive fiscal quarters of such acquired Person ending on the
date of its acquisition by the Borrower or such Subsidiary;

          (ii)  include, for purposes of calculating Consolidated Fixed Charges, the
actual items of fixed charges of the acquired Person as measured for the four
(4) consecutive fiscal quarters of such acquired Person ending on the
date of its acquisition by the Borrower or such Subsidiary;

          (iii)  
include, for purposes of determining Cash Interest Expense, the actual
items of cash interest expense of the acquired Person as measured for the
four (4) consecutive fiscal quarters of such acquired Person ending on
the date of its acquisition by the Borrower or such Subsidiary;

          (iv)  
include, for the purposes of determining Consolidated Senior Debt, the actual amount of Indebtedness of the acquired entity as at the date of its
acquisition by the Borrower or such Subsidiary;

          (v)   exclude any Indebtedness of the acquired Person that has been retired
or discharged on or prior to the date the Borrower or such Subsidiary
acquired such acquired Person (the “acquisition date”);

          (vi)  calculate interest payable during such measurement period with
respect to any Indebtedness of such acquired Person at a rate of interest
equal to the actual weighted average interest rate in effect for the
Loans hereunder on the date of such acquisition; and

          (vii)  
include all cost savings to be realized by the Borrower or such
Subsidiary in connection with such acquisition during the twelve (12) month
period ending on the first (1st) anniversary of the
acquisition date, as determined in good faith
by the Borrower or such Subsidiary and set forth in the relevant Compliance
Certificate delivered by the Financial Officer of the Borrower for such
measurement period (collectively, the “projected cost
savings”); provided, however, in computing each such
amount or ratio (A) no cost savings which would accrue or occur after the
first (1st) year anniversary of the acquisition date shall be
considered, and (B) the actual cost savings realized by the Borrower or
such Subsidiary (if any) during each measurement period commencing after
the end of the measurement period containing the acquisition date,
rather than the projected cost savings expected to be realized during
such measurement period, shall (to the extent applicable) be used in computing each such amount or ratio as of the end of such measurement period.

ARTICLE II  THE CREDIT FACILITIES

2.1  Term Loan Facilities.

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

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

     (c)  Type of Borrowing. On the Effective Date the Term Loans shall consist
of one Borrowing entirely of APR Loans or of ALR Loans as the Borrower
may request in writing and delivered to the Administrative Agent on or
prior to the Effective Date. Subject to the provisions of Section 2.11,
the Borrower may elect to change the Type of the Borrowing constituting
all of the Term Loans after the Effective Date in accordance with the provisions
of Section 2.06. Each such election by the Borrower to change the Type
of the Borrowing constituting the Term Loans shall apply to the entire
amount of the Term Loans then outstanding.

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

  Payment         2001           2002         2003           2004          2005           2006
   Date

 January 1         N/A        $1,000,000    $1,500,000     $2,000,000    $2,500,000    $3,000,000

   April 1     $1,000,000     $1,500,000    $2,000,000     $2,500,000    $3,000,000        N/A

    July 1     $1,000,000     $1,500,000    $2,000,000     $2,500,000    $3,000,000        N/A

 October 1     $1,000,000     $1,500,000    $2,000,000     $2,500,000    $3,000,000        N/A

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

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

2.2  Revolving Credit Facilities.

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

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

     (c)  Type of Revolving Credit Loans. Each Borrowing of Revolving Credit
Loans shall be constituted entirely of APR Loans or of ALR Loans as the
Borrower may request in accordance herewith. Subject to the provisions
of Section 2.11, the Borrower may elect to change the Type of any
Borrowing of Revolving Credit Loans after the Effective Date in
accordance with the provisions of Section 2.06.

     (d)  Minimum Amounts; Limitation on Number of Revolving Credit Borrowings.
Each ALR Revolving Credit Borrowing shall be in an aggregate amount
equal to Five Hundred Thousand Dollars ($500,000) or a larger multiple
of Two Hundred Fifty Thousand Dollars ($250,000). Each APR Revolving
Credit Borrowing shall be in an aggregate amount equal to Five Hundred
Thousand Dollars ($500,000) or a larger multiple of Two Hundred Fifty
Thousand Dollars ($250,000); provided that an APR Revolving Credit
Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Revolving Credit Commitments or that is
required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.04(f). Notwithstanding anything to the contrary
herein, at no point in time shall more than six (6) ALR Revolving Credit
Borrowings be outstanding, and any election by the Borrower pursuant to
Section 2.06 to continue or convert any Revolving Credit Borrowing as or
to, as the case may be, an ALR Borrowing in excess of this limit shall
be treated by the Administrative Agent as an election by the Borrower to
continue or convert such Borrowing as or to, as the case may be, an APR
Borrowing.

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

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

2.3  Requests for Revolving Credit Borrowings.

     (a)  Notice by the Borrower. To request a Revolving Credit Borrowing, the
Borrower  shall notify the Administrative Agent of such request by
telephone (i) in the case of an ALR  Borrowing, not later than 11:00
a.m., Local Time, three (3) Business Days before the date  of the
proposed Borrowing, or (ii) in the case of an APR Borrowing (including an APR
 Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section  2.04(f)), not later than 11:00 a.m., Local Time,
on the date of the proposed Borrowing. Each  such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by  hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in the  form of Exhibit E hereto and signed by the Borrower on or
prior to the date of such  Borrowing as required pursuant to the
foregoing.

     (b)  Content of Borrowing Requests. Each telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

          (i)           the aggregate amount of the requested Borrowing;

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

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

          (iv)   in the case of an ALR Borrowing, the Interest Period therefor, which
shall be a period contemplated by the definition of the term “Interest
Period” and  permitted under Section 2.06(f).

     (c)  Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a  Borrowing Request in accordance with this Section, the
Administrative Agent shall advise  each Lender of the details thereof and
of the amount of such Lender’s Revolving Credit  Loan to be made as
part of the requested Borrowing.

     (d)  Failure to Elect. If the Borrower fails to elect the Type of a
requested Revolving  Credit Borrowing, then the requested Borrowing shall
be an APR Borrowing. If no Interest  Period is specified with respect to
any requested ALR Revolving Credit Borrowing, the  requested Borrowing
shall be made instead as an APR Borrowing.

2.4     Letters of Credit.

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

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

     (c)  Limitations on Amounts. A Letter of Credit shall be issued, amended,
renewed or  extended only if (and upon issuance, amendment, renewal or
extension of each Letter of  Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to  such issuance,
amendment, renewal or extension (i) the aggregate LC Exposure of the
Issuing Lender (determined for these purposes without giving effect to the
participations  therein of the Lenders pursuant to paragraph (e) of this
Section) shall not exceed Ten  Million Dollars ($10,000,000), and (ii)
the total Revolving Credit Exposures shall not exceed  the total
Revolving Credit Commitments.

     (d)  Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business  on the earlier of (i) the date which is twelve (12)
months after the date of the issuance of such  Letter of Credit (or, in
the case of any renewal or extension thereof, twelve (12) months after
the then current expiration date of such Letter of Credit, so long as such
renewal or  extension occurs within three (3) months of such then-current
expiration date), and (ii) the  date that is five (5) Business Days prior
to the Revolving Credit Commitment Termination  Date.

     (e)  
Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of  Credit increasing the amount thereof) by the Issuing
Lender, and without any further action  on the part of the Issuing Lender
or the Lenders, the Issuing Lender hereby grants to each  Lender, and
each Lender hereby acquires from the Issuing Lender, a participation in such
 Letter of Credit equal to such Lender’s Applicable Percentage of
the aggregate amount  available to be drawn under such Letter of Credit.
Each Lender acknowledges and agrees  that its obligation to acquire
participations pursuant to this paragraph in respect of Letters  of
Credit is absolute and unconditional and shall not be affected by any
circumstance  whatsoever, including any amendment, renewal or extension
of any Letter of Credit or the  occurrence and continuance of a Default
or reduction or termination of the Commitments.  In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for account of the
Issuing  Lender, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing  Lender promptly upon the request of the
Issuing Lender at any time from the time of such  LC Disbursement until
such LC Disbursement is reimbursed by the Borrower or at any time  after
any reimbursement payment is required to be refunded to the Borrower for any
 reason. Such payment shall be made without any offset, abatement,
withholding or  reduction whatsoever. Each such payment shall be made in
the same manner as provided  in Section 2.05 with respect to Loans made
by such Lender (and Section 2.05 shall apply,  mutatis mutandis,
to the payment obligations of the Lenders), and the Administrative Agent
shall promptly pay to the Issuing Lender the amounts so received by it from
the Lenders.  Promptly following receipt by the Administrative Agent of
any payment from the Borrower  pursuant to the next following paragraph,
the Administrative Agent shall distribute such  payment to the Issuing
Lender or, to the extent that the Lenders have made payments pursuant
to this paragraph to reimburse the Issuing Lender, then to such Lenders and the
 Issuing Lender as their interests may appear. Any payment made by a
Lender pursuant to  this paragraph to reimburse the Issuing Lender for
any LC Disbursement shall not  constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC  Disbursement.

     (f)  
Reimbursement. If the Issuing Lender shall make any LC Disbursement in
respect  of a Letter of Credit, the Borrower shall reimburse the Issuing
Lender in respect of such LC  Disbursement by paying to the
Administrative Agent an amount equal to such LC  Disbursement not later
than 12:00 noon, Local Time, on (i) the Business Day that the  Borrower
receives notice of such LC Disbursement, if such notice is received prior to
10:00  a.m., Local Time, or (ii) the Business Day immediately following
the day that the Borrower  receives such notice, if such notice is not
received prior to such time, provided that the  Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
 with Section 2.03 that such payment be financed with an APR Borrowing in
an equivalent  amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall  be discharged and replaced by the
resulting APR Borrowing. If the Borrower fails to make  such payment when
due, the Administrative Agent shall notify each Lender of the applicable
LC Disbursement, the payment then due from the Borrower in respect thereof
and such  Lender’s Applicable Percentage thereof.

     (g)  Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as  provided in paragraph (f) of this Section shall be
absolute, unconditional and irrevocable,  and shall be performed strictly
in accordance with the terms of this Agreement under any  and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability  of any Letter of Credit, or any term or provision
therein, (ii) any draft or other document  presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect  or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the  Issuing Lender under a Letter of Credit against presentation of a
draft or other document  that does not comply strictly with the terms of
such Letter of Credit, and (iv) any other event  or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but
for the provisions of this Section, constitute a legal or equitable discharge
of the Borrower’s  obligations hereunder. Neither the Administrative
Agent, the Lenders nor the Issuing  Lender, nor any of their Related
Parties, shall have any liability or responsibility by reason  of or in
connection with the issuance or transfer of any Letter of Credit by the Issuing
 Lender or any payment or failure to make any payment thereunder
(irrespective of any of  the circumstances referred to in the preceding
sentence), or any error, omission,  interruption, loss or delay in
transmission or delivery of any draft, notice or other  communication
under or relating to any Letter of Credit (including any document required
to make a drawing thereunder), any error in interpretation of technical terms
or any  consequence arising from causes beyond the control of the Issuing
Lender; provided that the  foregoing shall not be construed to
excuse the Issuing Lender from liability to the Borrower  to the extent
of any direct damages (as opposed to consequential damages, claims in respect
 of which are hereby waived by the Borrower to the extent permitted by
applicable law)  suffered by the Borrower that are caused by the Issuing
Lender’s gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter
 of Credit comply with the terms thereof. The parties hereto expressly
agree that:

          (i)  
the Issuing Lender may accept documents that appear on their face to
be in substantial compliance with the terms of a Letter of Credit without
 responsibility for further investigation, regardless of any notice or
information to the  contrary, and may make payment upon presentation of
documents that appear on  their face to be in substantial compliance with
the terms of such Letter of Credit;

          (ii)  
the Issuing Lender shall have the right, in its sole discretion, to decline
 to accept such documents and to make such payment if such documents are
not in  strict compliance with the terms of such Letter of Credit; and

          (iii)   this sentence shall establish the standard of care to be exercised by the
 Issuing Lender when determining whether drafts and other documents
presented  under a Letter of Credit comply with the terms thereof (and
the parties hereto  hereby waive, to the extent permitted by applicable
law, any standard of care  inconsistent with the foregoing).

     (h)  
Disbursement Procedures. The Issuing Lender shall, within a reasonable
time  following its receipt thereof, examine all documents purporting to
represent a demand for  payment under a Letter of Credit. The Issuing
Lender shall promptly after such examination  notify the Administrative
Agent and the Borrower by telephone (confirmed by telecopy) of  such
demand for payment and whether the Issuing Lender has made or will make an LC
 Disbursement thereunder; provided that any failure to give or
delay in giving such notice  shall not relieve the Borrower of its
obligation to reimburse the Issuing Lender and the  Lenders with respect
to any such LC Disbursement.

     (i)  
Interim Interest. If the Issuing Lender shall make any LC
Disbursement, then, unless  the Borrower shall reimburse such LC
Disbursement in full on the date such LC  Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date
that the  Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to APR  Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due  pursuant to
paragraph (f) of this Section, then Section 2.10(c) shall apply. Interest
accrued  pursuant to this paragraph shall be for account of the Issuing
Lender, except that interest  accrued on and after the date of payment by
any Lender pursuant to paragraph (f) of this  Section to reimburse the
Issuing Lender shall be for account of such Lender to the extent of  such
payment.

     (j)  Replacement of the Issuing Lender. The Issuing Lender may be replaced
at any time  by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing  Lender and the successor Issuing Lender. The
Administrative Agent shall notify the Lenders  of any such replacement of
the Issuing Lender. At the time any such replacement shall  become
effective, the Borrower shall pay all unpaid fees accrued for account of the
replaced Issuing Lender pursuant to Section 2.09(b). From and after the effective date of any
such  replacement, (i) the successor Issuing Lender shall have all the
rights and obligations of the  replaced Issuing Lender under this
Agreement with respect to Letters of Credit to be issued  thereafter, and
(ii) references herein to the term “Issuing Lender” shall be deemed to
refer  to such successor or to any previous Issuing Lender, or to such
successor and all previous  Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender  hereunder, the
replaced Issuing Lender shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Lender under this Agreement
with respect  to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue  additional Letters of
Credit.

     (k)  Cash Collateralization. If either (i) an Event of Default shall occur
and be continuing  and the Borrower receives notice from the
Administrative Agent or the Required Lenders  (or, if the maturity of the
Loans has been accelerated, Lenders with LC Exposure  representing
greater than fifty percent (50%) of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, or (ii) the Borrower
shall be required  to provide cover for LC Exposure pursuant to Section
2.08, the Borrower shall immediately  deposit into an account established
and maintained on the books and records of the  Administrative Agent,
which account may be a “securities account” (within the meaning of
 Section 8-501 of the Uniform Commercial Code as in effect in the State
of New York), in the  name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash  equal to, in the case of an
Event of Default, the LC Exposure as of such date plus any
accrued and unpaid interest thereon and, in the case of cover pursuant to
Section 2.08, the  amount required under Section 2.08; provided
that the obligation to deposit such cash  collateral shall become
effective immediately, and such deposit shall become immediately due  and
payable, without demand or other notice of any kind, upon the occurrence of any
Event  of Default with respect to the Borrower described in clause (i) or
(j) of ARTICLE VII. Such  deposit shall be held by the Administrative
Agent as collateral for the LC Exposure under  this Agreement, and for
this purpose the Borrower hereby grants a security interest to the
Administrative Agent for the benefit of the Lenders in such collateral
account and in any  financial assets (as defined in the Uniform
Commercial Code as in effect in the State of New  York) or other property
held therein.

2.5  Funding of Borrowings.

     (a)  Funding by Lenders. Each Lender shall make each Term Loan required to
be made  by it hereunder on the Effective Date by wire transfer of
immediately available funds by  12:00 noon, Local Time, to the account of
the Administrative Agent most recently  designated by it for such purpose
by notice to the Lender. Each Lender shall make each  Revolving Credit
Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, Local Time, to the
account of the  Administrative Agent most recently designated by it for
such purpose by notice to the  Lenders. The Administrative Agent will
make such Revolving Credit Loans available to the  Borrower by promptly
crediting the amounts so received, in like funds, to an account of the
Borrower designated by the Borrower in the applicable Borrowing Request;
provided that APR Borrowings made to finance the reimbursement of an LC Disbursement as provided
 in Section 2.04(f) shall be remitted by the Administrative Agent to the
Issuing Lender.

     (b)  
Presumption by the Administrative Agent. Unless the Administrative
Agent shall  have received notice from a Lender at least one (1) Business
Day prior to the proposed date  of any Borrowing that such Lender will
not make available to the Administrative Agent such  Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with paragraph (a)
of this Section  and may, in reliance upon such assumption, make
available to the Borrower a corresponding  amount. In such event, if a
Lender has not so notified the Administrative Agent and has not  in fact
made its share of the applicable Borrowing available to the Administrative
Agent,  then the applicable Lender and the Borrower severally agree to
pay to the Administrative  Agent forthwith on demand such corresponding
amount with interest thereon, for each day  from and including the date
such amount is made available to the Borrower to but excluding  the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
 Federal Funds Effective Rate, or (ii) in the case of the Borrower, the
interest rate then  applicable to APR Loans. If such Lender pays such
amount to the Administrative Agent,  then such amount shall constitute
such Lender’s Loan included in such Borrowing.

2.6     Interest Elections.

     (a)  
Elections by the Borrower for Borrowings. The Loans constituting each
Borrowing  initially shall be of the Type specified by the Borrower (i)
to the Administrative Agent with  respect to the Term Loans pursuant to
Section 2.01, and (ii) with respect to any Revolving  Credit Borrowing,
as specified by the Borrower in the applicable Borrowing Request, and
(iii) in the case of an ALR Borrowing, shall have the Interest Period
specified by the  Borrower to the Administrative Agent pursuant to
Section 2.01 or in such Borrowing  Request, respectively. Thereafter, the
Borrower may elect to convert such Borrowing to a  Borrowing of a
different Type or to continue such Borrowing as a Borrowing of the same
Type and, in the case of a ALR Borrowing, may elect the Interest Period
therefor, all as  provided in this Section, and in form attached hereto
as Exhibit F1 with respect to the Term  Loans, (an
“Interest Election Request for Term Loan Borrowing”), and in
form attached  hereto as Exhibit F2 with respect to a Revolving
Credit Borrowing (an “Interest Election  Request
for Revolving Credit Borrowing”), respectively (each such request to be
referred  to as an “Interest Election Request”). The
Borrower may elect different options with respect  to different portions
of a Revolving Credit Borrowing, in which case each such portion shall
be allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and  the Loans constituting each such portion shall be
considered a separate Borrowing. The  Borrower shall be entitled to elect
at any time only one (1) option as to Type with respect to  the Borrowing
constituting the Term Loans.

     (b)  
Notice of Elections. To make an election pursuant to this Section, the
Borrower shall  notify the Administrative Agent of such election by
telephone by the time that a Borrowing  Request would be required under
Section 2.03 if the Borrower were requesting a Revolving  Credit
Borrowing of the Type resulting from such election to be made on the effective
date of such election (regardless of whether the Borrowing to which such election
applies is a  Term Loan Borrowing or Revolving Credit Borrowing). Each
such telephonic interest  election request shall be irrevocable and shall
be confirmed promptly by hand delivery or  telecopy to the Administrative
Agent of a written Interest Election Request in the form of  Exhibit
F1 or Exhibit F2, as applicable, and signed by the Borrower.

     (c)  
Content of Interest Election Requests. Each telephonic and written
Interest Election  Request shall specify the following information in
compliance with Section 2.01 or Section  2.02 (as applicable):

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

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

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

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

     (d)  Notice by the Administrative Agent to the Lenders. Promptly following
receipt of an  Interest Election Request, the Administrative Agent shall
advise each Lender of the details  thereof and of such Lender’s
portion of each resulting Borrowing.

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

     (f)  Limitations on Interest Periods. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to (i) request (or to elect to convert to or continue
as an ALR Borrowing) any Revolving Credit Borrowing if the Interest Period
requested therefor would end after the Revolving Credit Commitment
Termination Date,  or (ii) elect to convert to or continue as an ALR
Borrowing the Borrowing constituting the  Term Loans if the Interest
Period requested therefor would end after the Maturity Date.

2.7     Termination and Reduction of the Commitments.

     (a)  Scheduled Termination. Unless previously terminated, the Term Loan
Commitments  shall terminate on the Effective Date and the obligation of
each Lender to make a Term  Loan shall terminate on such date;
provided, that notwithstanding such termination of the  Term Loan
Commitments, following the Effective Date each Lender’s “Term Loan
 Commitment” shall refer to each Lender’s respective rights
with respect to the Term Loans  and the Term Note as specifically
provided herein (e.g., for the purposes of determining the
allocation of payments among the Lenders pursuant to Section 2.15(c)). Unless
previously  terminated, the Revolving Credit Commitments shall terminate
on the Revolving Credit  Commitment Termination Date, and the obligations
of the Lenders to make Revolving  Credit Loans shall terminate on such
date.

     (b)  
Voluntary Termination or Reduction. The Borrower may at any time
terminate, or  from time to time reduce, the Revolving Credit
Commitments; provided that (i) each  reduction of the Revolving
Credit Commitments shall be in an amount that is One Million  Dollars
($1,000,000) or a larger multiple of Five Hundred Thousand Dollars ($500,000),
and  (ii) the Borrower shall not terminate or reduce the Revolving Credit
Commitments if, after  giving effect to any concurrent prepayment of the
Revolving Credit Loans in accordance  with Section 2.08, the total
Revolving Credit Exposures would exceed the total Revolving  Credit
Commitments.

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

     (d)  
Effect of Termination or Reduction. Any termination or reduction of
the Revolving  Credit Commitments shall be permanent. Each reduction of
the Revolving Credit  Commitments shall be made ratably among the Lenders
in accordance with their respective  Revolving Credit Commitments.

2.8     Repayment and Prepayment of Loans; Evidence of Debt.

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

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

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

     (b)  Prepayments.

          (i)  Term Loans. The Borrower shall have the right at any time and from
 time to time prior to the Maturity Date to prepay outstanding principal
amounts of  the Term Loans, in whole or in part, subject to the
requirements of this Section. Any  prepayment of less than the entire
outstanding principal amounts of the Term Loans  shall be in a minimum
aggregate principal amount of One Million Dollars  ($1,000,000) or in a
larger multiple of Five Hundred Thousand Dollars ($500,000),  and shall
be applied to the installments of principal repayments of the Term Loans
(as described in Section 2.01) in their stated order of maturity. Prepayments
of the  Term Loans made at any time at which the Borrowing constituting
the Term Loans  is (A) an APR Borrowing shall be without premium or
penalty, and (B) an ALR  Borrowing shall be subject to the provisions of
Section 2.13.

          (ii)  
Revolving Credit Loans. The Borrower shall have the right at any time
 and from time to time prior to the Revolving Credit Commitment
Termination Date  to prepay the Revolving Credit Note, in whole or in
part, subject to the requirements  of this Section. Any prepayment of
less than the outstanding principal amount of the  Revolving Credit Loans
shall be in a minimum aggregate principal amount of Five  Hundred
Thousand Dollars ($500,000) or in a larger multiple of Two Hundred Fifty
Thousand Dollars ($250,000). Prepayments of the Revolving Credit Loans made
at  any time the Borrowing being repaid (in whole or in part) is (A) an
APR Borrowing  shall be without premium or penalty, and (B) an ALR
Borrowing shall be subject to  the provisions of Section 2.13.

           (iii)         Manner of Prepayment; Notices; Etc. The Borrower shall notify the
                     Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (A) in the case of a prepayment of an ALR Borrowing, not later than
11:00 a.m., Local Time, three (3) Business Days before the date of
prepayment, and  (B) in the case of prepayment of an APR Borrowing, not
later than 11:00 a.m., Local  Time, on the date of the proposed
prepayment. Each such notice shall be irrevocable  and shall specify the
Loans to be prepaid (whether Term Loans or Revolving Credit  Loans), the
prepayment date, and the principal amount of [I] in the case of the Term
Loans, the principal amount to be prepaid, and [II] in the case of Revolving
Credit  Loans, the principal amount of each Borrowing (or portion
thereof) to be prepaid;  provided that, if a notice of prepayment
is given in connection with a conditional  notice of termination of the
Revolving Credit Commitments as contemplated by  Section 2.07, then such
notice of prepayment may be revoked if such notice of  termination is
revoked in accordance with Section 2.07. Promptly following receipt  of
any such notice, the Administrative Agent shall advise the Lenders of the
contents  thereof. Each prepayment of the Borrowing constituting the Term
Loans shall be  applied ratably to each Lender’s Term Loan
Commitment pursuant to Section 2.15,  and each prepayment of a Borrowing
(or portion thereof) constituting Revolving  Credit Loans (or a portion
thereof, respectively) shall be applied ratably to each  Lender’s
Revolving Credit Commitment pursuant to Section 2.15. Prepayments shall
be accompanied by accrued interest to the extent required by Section 2.10 and
shall  be made in the manner specified in Section 2.15.

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

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

2.9  Fees.

     (a)  
Revolving Credit Fees. The Borrower agrees to pay to the
Administrative Agent for  account of each Lender revolving credit fees
which shall accrue at the Applicable Margin  on the average daily unused
amount of the Revolving Credit Commitment of such Lender  during the
period from and including the date hereof to but excluding the earlier to occur
 of (i) the date such Revolving Credit Commitment terminates, and (ii)
the Revolving Credit  Termination Date. Accrued revolving credit fees
shall be payable in arrears on the on the  third (3rd)
Business Day following each Quarterly Date, and on the earlier to occur of (A)
 the date the Revolving Credit Commitments terminate, and (B) the
Revolving Credit  Termination Date, commencing on the first such date to
occur after the date hereof. All  revolving credit fees shall be computed
on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first
day but  excluding the last day). For purposes of computing revolving
credit fees, the Revolving  Credit Commitment of a Lender shall be deemed
to be used to the extent of the outstanding  Revolving Credit Loans and
LC Exposure of such Lender.

     (b)  
Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for  account of each Lender a participation fee with
respect to its participations in Letters of  Credit, which shall accrue
at a rate per annum equal to seventy-five one hundredths
(75/100ths) of one percent (1%) on the average daily amount of such
Lender’s LC Exposure  (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the  period from and including the
Effective Date to but excluding the later of the date on which  such
Lender’s Revolving Credit Commitment terminates and the date on which such
Lender  ceases to have any LC Exposure, and (ii) to the Issuing Lender a
fronting fee, which shall  accrue at the rate of twenty-five one
hundredths (25/100ths) of one percent (1%) per annum  on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable  to unreimbursed LC Disbursements) during the period from
and including the Effective  Date to but excluding the later of the date
of termination of the Revolving Credit  Commitments and the date on which
there ceases to be any LC Exposure, as well as the  Issuing Lender’s
standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees  and fronting fees accrued through and including each
Quarterly Date shall be payable on  the third (3rd) Business
Day following such Quarterly Date, commencing on the first such  date to
occur after the Effective Date; provided that all such fees shall be
payable on the date  on which the Revolving Credit Commitments terminate
and any such fees accruing after the  date on which the Revolving Credit
Commitments terminate shall be payable on demand.  Any other fees payable
to the Issuing Lender pursuant to this paragraph shall be payable  within
ten (10) days after demand. All participation fees and fronting fees shall be
computed  on the basis of a year of three hundred sixty (360) days and
shall be payable for the actual  number of days elapsed (including the
first day but excluding the last day).

     (c)  
Commitment Fees and Administrative Agent Fees. The Borrower agrees to
pay to the  Administrative Agent, the fees payable in the amounts and at
the times separately agreed  upon in a “Fee Letter”
between the Borrower and the Administrative Agent.

     (d)  
Payment of Fees. All fees payable hereunder shall be paid on the dates
due in  immediately available funds to the Administrative Agent (or to
the Issuing Lender, in the  case of fees payable to it) for distribution,
in the case of revolving credit fees and Letters of  Credit participation
fees, to the Lenders entitled thereto. Fees paid shall not be refundable
under any circumstances.

        2.10        Interest.

     (a)  
APR Loans. The Loans constituting each APR Borrowing shall bear
interest at a rate  per annum equal to the Adjusted Prime Rate.

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

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

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

     (e)  
Computation. All interest hereunder shall be computed on the basis of
a year of three  hundred sixty (360) days and shall be payable for the
actual number of days elapsed. The  applicable Adjusted Prime Rate and/or
Adjusted LIBOR shall be determined by the  Administrative Agent, and such
determination shall be conclusive absent manifest error.

         2.11        Alternate Rate of Interest.

   If prior to the commencement of the Interest Period for any ALR Borrowing:

     (a)  
the Administrative Agent determines (which determination shall be conclusive
absent  manifest error) that adequate and reasonable means do not exist
for ascertaining the LIBOR  for such Interest Period; or

     (b)  
the Administrative Agent is advised by the Required Lenders that the LIBOR
for  such Interest Period will not adequately and fairly reflect the cost
to such Lenders of making  or maintaining their respective Loans included
in such Borrowing for such Interest Period;  then the Administrative
Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the
Administrative  Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such  notice no longer exist, (i) any
Interest Election Request that requests the conversion of any  Borrowing
to, or the continuation of any Borrowing as, an ALR Borrowing shall be
ineffective and such Borrowing (unless prepaid) shall be continued as, or
converted to, an APR Borrowing, and (ii) if any Borrowing Request requests an ALR Borrowing, such
 Borrowing shall be made as an APR Borrowing.

         2.12        Increased Costs.

     (a)      Increased Costs Generally.  If any Change in Law shall:

          (i)  
impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for account of, or
credit  extended by, any Lender (except any such reserve requirement
reflected in the  LIBOR) or the Issuing Lender; or

          (ii)  
impose on any Lender or the Issuing Lender or the London interbank
market any other condition affecting this Agreement or ALR Loans made by such
 Lender or any Letter of Credit or participation therein; and

          (iii)  
the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any ALR Loan (or of maintaining its
obligation  to make any such Loan) or to increase the cost to such Lender
or the Issuing Lender  of participating in, issuing or maintaining any
Letter of Credit or to reduce the  amount of any sum received or
receivable by such Lender or the Issuing Lender  hereunder (whether of
principal, interest or otherwise); then the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
 additional amount or amounts as will compensate such Lender or the
Issuing Lender, as the  case may be, for such additional costs incurred
or reduction suffered.

     (b)  Capital Requirements. If any Lender or the Issuing Lender reasonably
determines  that any Change in Law regarding capital requirements has or
would have the effect of  reducing the rate of return on such
Lender’s or the Issuing Lender’s capital or on the capital  of
such Lender’s or the Issuing Lender’s holding company, if any, as a
consequence of this  Agreement or the Loans made by, or participations in
Letters of Credit held by, such  Lender, or the Letters of Credit issued
by the Issuing Lender, to a level below that which  such Lender or the
Issuing Lender or such Lender’s or the Issuing Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration such  Lender’s or the Issuing Lender’s policies
and the policies of such Lender’s or the Issuing  Lender’s
holding company with respect to capital adequacy), then from time to time the
 Borrower will pay to such Lender or the Issuing Lender, as the case may
be, such additional  amount or amounts as will compensate such Lender or
the Issuing Lender or such Lender’s  or the Issuing Lender’s
holding company for any such reduction suffered.

     (c)      Certificates from Lenders. A certificate of a Lender or the Issuing Lender setting
            forth the amount or amounts, necessary to compensate such Lender or the Issuing Lender
            or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
            Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender or the Issuing Lender, as the case may be, the amount
shown as due on any such certificate within ten (10) Business Days after
receipt thereof.

     (d)  
Delay in Requests. Failure or delay on the part of any Lender or the
Issuing Lender  to demand compensation pursuant to this Section shall not
constitute a waiver of such  Lender’s or the Issuing Lender’s
right to demand such compensation; provided that the  Borrower
shall not be required to compensate a Lender or the Issuing Lender pursuant to
 this Section for any increased costs or reductions incurred more than
six (6) months prior  to the date that such Lender or the Issuing Lender,
as the case may be, notifies the Borrower  of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s  or
the Issuing Lender’s intention to claim compensation therefor; provided
further that, if  the Change in Law giving rise to such increased
costs or reductions is retroactive, then the  six (6) month period
referred to above shall be extended to include the period of retroactive
effect thereof.

2.13   Break Funding Payments.

      In the event of (a) the payment of any principal of
any ALR Loan other than on the  applicable Interest Payment Date therefor
(including as a result of an Event of Default), (b)  the conversion of
any ALR Loan other than on the last day of an Interest Period therefor, (c)
the failure to borrow, convert, continue or prepay any Loan on the date
specified in any notice  delivered pursuant hereto (regardless of whether
such notice is permitted to be revocable  under Section 2.07 and is
revoked in accordance herewith), or (d) the assignment as a result  of a
request by the Borrower pursuant to Section 2.16(b) of any ALR Loan other than
on the  last day of an Interest Period therefor, then, in any such event,
the Borrower shall pay to each  Lender an amount as will (in the
reasonable determination of such Lender) compensate such  Lender for
losses, costs and expenses attributable to such event. A certificate of any
Lender  setting forth any amount or amounts that such Lender is entitled
to receive pursuant to this  Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. The  Borrower shall pay
such Lender the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.

         2.14        Taxes.

     (a)  
Payments Free of Taxes. Any and all payments by or on account of any
obligation of  the Borrower hereunder or under any other Loan Document
shall be made free and clear  of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the  Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all  required deductions, (including deductions applicable
to additional sums payable under this  Section) the Administrative Agent,
any Lender or the Issuing Lender (as the case may be)  receives an amount
equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full  amount deducted to the relevant Governmental
Authority in accordance with applicable  law.

     (b)  
Payment of Other Taxes by the Borrower. In addition, the Borrower
shall pay any  Other Taxes to the relevant Governmental Authority in
accordance with applicable law.

     (c)  
Indemnification by the Borrower. The Borrower shall indemnify the
Administrative  Agent, each Lender and the Issuing Lender, within ten
(10) Business Days after written  demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including  Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts  payable
under this Section) paid by the Administrative Agent, such Lender or the Issuing
 Lender, as the case may be, and any penalties, interest and reasonable
expenses arising  therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes  were correctly or legally imposed or
asserted by the relevant Governmental Authority. A  certificate as to the
amount of such payment or liability delivered to the Borrower by a
Lender or the Issuing Lender, or by the Administrative Agent on its own
behalf or on behalf  of a Lender or the Issuing Lender, shall be
conclusive absent manifest error.

     (d)  
Evidence of Payments. As soon as practicable after any payment of
Indemnified  Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Borrower shall  deliver to the Administrative Agent the
original or a certified copy of a receipt issued by  such Governmental
Authority evidencing such payment, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to the
Administrative  Agent.

         2.15        Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

     (a)  
Payments by the Borrower. The Borrower shall make each payment
required to be  made by it hereunder (whether of principal, interest,
fees or reimbursement of LC  Disbursements, or under Section 2.12, 2.13
or 2.14, or otherwise) or under any other Loan  Document (except to the
extent otherwise provided therein) prior to 12:00 noon, Local Time,  on
the date when due, in immediately available funds, without set-off or
counterclaim. Any  amounts received after such time on any date may, in
the discretion of the Administrative  Agent, be deemed to have been
received on the next succeeding Business Day for purposes  of calculating
interest thereon. All such payments shall be made to the Administrative Agent
 at the Administrative Agent’s Account, except as otherwise
expressly provided in the  relevant Loan Document and except payments to
be made directly to the Issuing Lender as  expressly provided herein and
payments pursuant to Sections 2.12, 2.13, 2.14 and 9.03,  which shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
 distribute any such payments received by it for account of any other
Person to the  appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be  due on a day that is not a Business
Day, the date for payment shall be extended to the next  succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
 shall be payable for the period of such extension. All amounts owing
under this Agreement  (including revolving credit fees, and for payments
required under Section 2.13) or under any  other Loan Document (except to
the extent otherwise provided therein) are payable in  Dollars.

     (b)  
Application of Insufficient Payments. If at any time insufficient
funds are received  by and available to the Administrative Agent to pay
fully all amounts of principal,  unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be  applied (i) first, to
pay interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due
to such parties,  and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder,  ratably among the parties entitled
thereto in accordance with the amounts of principal and  unreimbursed LC
Disbursements then due to such parties.

     (c)  
Pro Rata Treatment. Except to the extent otherwise
provided herein: (i)(A) the  Borrowing constituting the Term Loans shall
be made from the Lenders pro rata according  to the amounts of
their respective Term Loan Commitments; (B) each Revolving Credit
Borrowing shall be made from the Lenders pro rata according to the
amounts of their  respective Revolving Credit Commitments, (C) each
payment of revolving credit fees under  Section 2.09 shall be made for
account of the Lenders pro rata according to the amounts of  their
respective Revolving Credit Commitments, and (D) each termination or reduction
of  the amount of the Revolving Credit Commitments under Section 2.07
shall be applied to the  Revolving Credit Commitments of the Lenders
pro rata according to the amounts of their  respective Revolving
Credit Commitments; (ii) the Borrowing constituting the Term Loans  and
each Revolving Credit Borrowing shall be allocated pro rata among the
Lenders (in the  case of the making of Loans) according to the amounts of
their respective Term Loan  Commitments or Revolving Credit Commitments,
as applicable, or their respective Loans  that are to be included in such
Borrowing (in the case of conversions and continuations of  Borrowings);
(iii) each payment or prepayment of principal of the Term Loans or Revolving
 Credit Loans by the Borrower shall be made for account of the Lenders
pro rata in  accordance with the respective unpaid principal
amounts of the Term Loans or Revolving  Credit Loans, respectively, held
by them; and (iv) each payment of interest on the Term  Loans or
Revolving Credit Loans by the Borrower shall be made for account of the Lenders
 pro rata in accordance with the amounts of interest on the Term
Loans or Revolving Credit  Loans then due and payable to the respective
Lenders.

     (d)  
Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of  set-off or counterclaim or otherwise, obtain payment in respect
of any principal of or interest  on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving  payment of a greater
proportion of the aggregate amount of its Loans and participations in  LC
Disbursements and accrued interest thereon then due than the proportion received
by  any other Lender, then the Lender receiving such greater proportion
shall purchase (for  cash at face value) participations in the Loans and
participations in LC Disbursements of  other Lenders to the extent
necessary so that the benefit of all such payments shall be shared  by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued  interest on their respective Loans and participations in LC
Disbursements; provided that  (i) if any such participations are
purchased and all or any portion of the payment giving rise  thereto is
recovered, such participations shall be rescinded and the purchase price
restored  to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall  not be construed to apply to any
payment made by the Borrower pursuant to and in accordance
with the express terms of this Agreement or any payment obtained by a Lender
 as consideration for the assignment of or sale of a participation in any
of its Loans or  participations in LC Disbursements to any assignee or
participant, other than to the  Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph  shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant  to the foregoing arrangements may exercise
against the Borrower rights of set-off and  counterclaim with respect to
such participation as fully as if such Lender were a direct  creditor of
the Borrower in the amount of such participation.

     (e)  
Presumptions of Payment. Unless the Administrative Agent shall have
received notice  from the Borrower prior to the date on which any payment
is due to the Administrative  Agent for account of the Lenders or the
Issuing Lender hereunder that the Borrower will  not make such payment,
the Administrative Agent may assume that the Borrower has made  such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Lender, as the case may
be, the amount  due. In such event, if the Borrower has not in fact made
such payment, then each of the  Lenders or the Issuing Lender, as the
case may be, severally agrees to repay to the  Administrative Agent
forthwith on demand the amount so distributed to such Lender or the
Issuing Lender with interest thereon, for each day from and including the
date such amount  is distributed to it to but excluding the date of
payment to the Administrative Agent, at the  Federal Funds Effective
Rate.

     (f)  
Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any  payment required to be made by it pursuant to Section
2.04(e), 2.05(b) or 2.15(e), then the  Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof),  apply any
amounts thereafter received by the Administrative Agent for account of such
Lender to satisfy such Lender’s obligations under such Sections until
all such unsatisfied  obligations are fully paid.

         2.16        Mitigation Obligations; Replacement of Lenders.

     (a)  
Designation of a Different Lending Office. If any Lender requests
compensation  under Section 2.12, or if the Borrower is required to pay
any additional amount to any  Lender or any Governmental Authority for
account of any Lender pursuant to Section 2.14,  then such Lender shall
use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to  another of its offices, branches or affiliates,
if, in the judgment of such Lender, such  designation or assignment (i)
would eliminate or reduce amounts payable pursuant to  Section 2.12 or
2.14, as the case may be, in the future and (ii) would not subject such Lender
 to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such  Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by  any Lender in connection with
any such designation or assignment.

     (b)  
Replacement of Lenders. If any Lender requests compensation under
Section 2.12,  or if the Borrower is required to pay any additional
amount to any Lender or any  Governmental Authority for account of any
Lender pursuant to Section 2.14, or if any  Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such  Lender to assign and delegate, without recourse (in
accordance with and subject to the  restrictions contained in Section
9.04), all its interests, rights and obligations under this  Agreement to
an assignee that shall assume such obligations (which assignee may be another
 Lender, if a Lender accepts such assignment); provided that (i)
the Borrower shall have  received the prior written consent of the
Administrative Agent (and, if a Commitment is  being assigned, the
Issuing Lender), which consent shall not unreasonably be withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal  of its Loans and participations in LC Disbursements accrued
interest thereon, accrued fees  and all other amounts payable to it
hereunder, from the assignee (to the extent of such  outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other  amounts), and (iii) in the case of any such assignment resulting
from a claim for  compensation under Section 2.12 or payments required to
be made pursuant to Section 2.14,  such assignment will result in a
reduction in such compensation or payments. A Lender shall  not be
required to make any such assignment and delegation if, prior thereto, as a
result of  a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require  such assignment and delegation cease
to apply.

ARTICLE III  REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that (a) on the Effective Date,
and (b)  if any representation or warranty below is expressly stated to
have been made as of a specific  date, as of such specific date:

3.1  Organization; Powers. Each of the Borrower, its Subsidiaries, Technologies
and Holdings is duly organized, validly  existing and in good standing
under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted, and
is qualified to  do business in and is in good standing in every
jurisdiction where such qualification is  required, except where the
failure to be so qualified, individually or in the aggregate, could not
result in a Material Adverse Effect. Holdings is the owner of one hundred
percent (100%) of  the issued and outstanding capital stock of the
Borrower, and Technologies is the owner of one  hundred percent (100%) of
the issued and outstanding capital stock of Holdings.

3.2  Authorization; Enforceability. The Transactions are within the
Borrower’s and its Subsidiaries’ corporate powers and have
been duly authorized by all necessary corporate and, if required, by all
necessary shareholder  action. This Agreement has been duly executed and
delivered by the Borrower and constitutes,  and each of the other Loan
Documents when executed and delivered will constitute, a legal,  valid
and binding obligation of the Borrower or its Subsidiaries, as the case may be,
 enforceable in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability
 affecting the enforcement of creditors’ rights, and (b) the
application of general principles of  equity (regardless of whether such
enforceability is considered in a proceeding in equity or at  law).

3.3  Governmental Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with,  or any other action
by, any Governmental Authority, except such as have been obtained or
made and are in full force and effect, (b) will not violate any applicable
law or regulation or  the charter, by-laws or other organizational
documents of the Borrower or any of its  Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a  default
under any indenture, agreement or other instrument binding upon the Borrower or
 any of its Subsidiaries or assets, or give rise to a right thereunder to
require any payment to  be made by any such Person, and (d) will not
result in the creation or imposition of any Lien  on any asset of the
Borrower or any of its Subsidiaries other than Liens in favor of the
Administrative Agent and the Lenders in connection with the Transactions.

3.4  Financial Condition; No Material Adverse Change.

     (a)   
Financial Condition. The Borrower has heretofore furnished to the
Lenders (i) a  Consolidated balance sheet and statements of income,
stockholders’ equity and cash flows  of Technologies and its
Subsidiaries (including the Borrower and its Subsidiaries) as of and  for
the fiscal years ended January 2, 1998, January 1, 1999 and December 31, 1999,
reported  on by Deloitte & Touche, LLP, independent public
accountants, (ii) a Consolidated  unaudited balance sheet and statements
of income, stockholders’ equity and cash flows of  Technologies and
its Subsidiaries (including the Borrower and its Subsidiaries) as of and for
 the fiscal quarter ended September 29, 2000, and (iii) projections,
including the assumptions  therefor, of Technologies and its Subsidiaries
(including the Borrower and its Subsidiaries)  for the fiscal years 2000
through 2003. The financial statements referred to in clause (i)  above
present fairly, in all material respects, the financial position and results of
operations  and cash flows of Technologies and its Subsidiaries as of
such dates and for such periods in  accordance with GAAP. Subject to
normal year-end adjustments and disclosures as would  be made in the
financial statements referred to in clause (ii) above if audited, the financial
 statements referred to in clause (ii) above present fairly, in all
material respects, the financial  position and results of operations and
cash flows of Technologies and its Subsidiaries as of  such date and for
such period in accordance with GAAP. The projections referred to in
clause (iii) above reflect the best estimate the management of Borrower and
the management  of Technologies of the future performance of Technologies
and its Subsidiaries (including  the Borrower and its Subsidiaries),
based upon historical financial information and  reasonable assumptions
of each such management group.

     (b)  No Material Adverse Change. Since September 29, 2000, there has been
no material  adverse change in the business, assets, operations or
condition, financial or otherwise, of (i)  Technologies and its
Subsidiaries, taken as a whole, or (ii) the Borrower and its Subsidiaries,
taken as a whole.

3.5     Properties.

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

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

3.6     Litigation and Environmental Matters.

     (a)  
Actions. Suits and Proceedings. Except for the Disclosed Matters,
there are no  actions, suits or proceedings by or before any arbitrator
or Governmental Authority now  pending against, or to the knowledge of
the Borrower threatened against, or affecting the  Borrower or any of its
Subsidiaries (i) that, if adversely determined, could, individually or
in the aggregate, result in a Material Adverse Effect, or (ii) in connection
with this  Agreement or the Transactions.

     (b)  
Environmental Matters. Except for the Disclosed Matters, neither the
Borrower nor  any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain,  maintain or comply with any permit,
license or other approval required under any  Environmental Law, which
noncompliance or failure could, individually or in the aggregate,  result
in a Material Adverse Effect, (ii) has become subject to any material
Environmental  Liability, (iii) has received notice of any claim with
respect to any Environmental Liability,  or (iv) knows of any basis for
any Environmental Liability.

     (c)  
Disclosed Matters. Since the date of this Agreement, there has been no
change in the  status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or  could result in, a Material Adverse
Effect.

3.7  Compliance with Laws and Agreements. 
Each of the Borrower and its
Subsidiaries is in material compliance with all laws, regulations  and
orders of any Governmental Authority applicable to it or its property and all
indentures,  agreements and other instruments binding upon it or its
property. No Default has occurred  and is continuing.

3.8  Subordinated Indebtedness. 
On the Effective Date, the aggregate amount
necessary to repay in full the Indebtedness of  the Borrower under the
Borrower’s 13% Senior Subordinated Notes due 2007 in the original
principal amount of Twenty Five Million Dollars ($25,000,000), including, but
not limited to,  all fees, charges, interest, and other amounts payable
pursuant to the repayment (whether  scheduled or prior to the due date
thereof) of such Indebtedness on the Effective Date, shall  equal Twenty
One Million Eight Hundred Sixty Four Thousand Dollars ($21,864,000.00).

3.9  Investment and Holding Company Status.
 Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” as defined  in, or
subject to regulation under, the Investment Company Act of 1940, or (b) a
“holding  company” as defined in, or subject to regulation
under, the Public Utility Holding Company  Act of 1935.

3.10  Taxes.
  Each of Technologies, Holdings, the Borrower and its Subsidiaries has timely filed or caused
         to be filed all tax returns and reports required to have been filed and has paid or caused to be paid
all Taxes required to have been paid by it, except (a) Taxes that are being
contested in  good faith by appropriate proceedings and for which such
Person has set aside on its books  adequate reserves and (b) for such
failures to timely file Tax returns or reports or nonpayment  of Taxes
which could not, individually or in the aggregate, result in a Material Adverse
Effect.

3.11  ERISA.
  No ERISA Event has occurred or is reasonably expected to occur that has resulted in or that
         could result in a Material Adverse Effect. No Plan is subject to Title IV of ERISA.

3.12  Disclosure.
 None of the reports, financial statements, certificates or other
information furnished by or  on behalf of the Borrower or its
Subsidiaries to the Lenders in connection with the negotiation  of this
Agreement and the other Loan Documents or delivered hereunder or thereunder (as
 modified or supplemented by other information so furnished) contains any
material  misstatement of fact or omits to state any material fact
necessary to make the statements  therein, in the light of the
circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the
Borrower represents only  that such information was prepared in good
faith based upon assumptions believed to be  reasonable at the time.

3.13  Use of Credit.
 Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its  important activities, in the business of
extending credit for the purpose, whether immediate,  incidental or
ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any
 extension of credit hereunder will be used to buy or carry any Margin
Stock.

                                   ARTICLE IV  CONDITIONS

4.1  Effective Date.
 The obligations of the Lenders to make Loans and of the
Issuing Lender to issue Letters of  Credit hereunder shall not become
effective until the date on which the Administrative Agent  shall have
received each of the following documents, each of which shall be satisfactory to
the  Administrative Agent (and to the extent specified below, to each
Lender) in form and  substance (or such condition shall have been waived
in accordance with Section 9.02):

     (a)  Executed Counterparts. From each party hereto either (i) a counterpart
of this  Agreement signed on behalf of such party, or (ii) written
evidence satisfactory to the  Administrative Agent (which may include
telecopy transmission of a signed signature page  to this Agreement) that
such party has signed a counterpart of this Agreement.

     (b)  
Opinion of Counsel. A favorable written opinion (addressed to the
Administrative  Agent and the Lenders and dated the Effective Date) of
Weil, Gotshal & Manges, LLP,  counsel to the Borrower, its
Subsidiaries, Technologies and Holdings, substantially in the  form of
Exhibit B, and covering such other matters relating to the Borrower, this
Agreement  or the Transactions as the Required Lenders shall reasonably
request (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative
            Agent).

     (c)  
Corporate Documents. Such documents and certificates as the
Administrative Agent  or its counsel may reasonably request relating to
the organization, existence and good  standing of the Borrower, its
Subsidiaries, Technologies and Holdings, the authorization of  the
Transactions and any other legal matters relating to the Borrower, this
Agreement or  the Transactions, all in form and substance satisfactory to
the Administrative Agent and its  counsel.

     (d)  
Officer’s Certificate. A certificate, dated the Effective Date
and signed by a Senior  Executive Officer or a Financial Officer of the
Borrower, confirming compliance with the  conditions set forth in the
lettered clauses of the first sentence of Section 4.02.

     (e)  
Repayment of Existing Indebtedness; Termination of Liens. Evidence
that the  principal of and interest on, and all other amounts owing in
respect of, the Indebtedness  (including any contingent or other amounts
payable in respect of letters of credit) indicated  on Part A of
Schedule II that is to be repaid on the Effective Date shall have been
(or shall  be simultaneously) paid in full, that any commitments to
extend credit under the agreements  or instruments relating to such
Indebtedness shall have been canceled or terminated and  that all
Guarantees in respect of, and all Liens securing, any such Indebtedness shall
have  been released (or arrangements for such release satisfactory to the
Required Lenders shall  have been made).

     (f)  
Guaranty Agreements. Technologies, Holdings and each domestic
Subsidiary of the  Borrower shall have executed and delivered to the
Administrative Agent a Guaranty  Agreement (each such agreement, a
“Guaranty Agreement”) in form and content acceptable  to
the Administrative Agent (on behalf of the Lenders), providing for the guarantee
of  payment by such Person of the Borrower’s obligations to the
Administrative Agent, the  Lenders and the Issuing Lender under the Loan
Documents.

     (g)  
Security Agreements. The Borrower and each domestic Subsidiary of the
Borrower  shall have executed and delivered to the Administrative Agent a
Security Agreement (each  such agreement, a “Security
Agreement”) in form and content acceptable to the
Administrative Agent, granting to the Administrative Agent (on behalf of the
Lenders) a  Lien in all of such Person’s equipment, inventory,
fixtures, accounts, chattel paper, general  intangibles, documents,
investment property and instruments, whether now owned or  hereafter
acquired, wherever located, and any and all products and proceeds thereof, and
 shall secure the payment of any and all Indebtedness and liabilities,
whether now existing  or hereafter incurred, of the Borrower or such
Subsidiary to the Administrative Agent, the  Lenders and the Issuing
Lender under the Loan Documents; and the Administrative Agent  shall have
received appropriate financing statements to perfect each such Lien, which Lien
 shall be superior in priority to all other Liens, other than Liens
arising after the date of this  Agreement having priority over the Liens
of the Administrative Agent by operation of  applicable law. The Borrower
and each domestic Subsidiary of the Borrower shall have executed
and delivered to the Administrative Agent a Patent Security Agreement, a
Trademark Security Agreement and a Copyright Security Agreement, each in form
and  substance acceptable to the Administrative Agent (collectively, the
“Intellectual Property Security
Agreements”).

     (h)  Borrower Pledge Agreement. The Borrower shall have executed and
delivered to the  Administrative Agent a Pledge Agreement (the
“Borrower Pledge Agreement”) in form and  content
acceptable to the Administrative Agent pursuant to which the Borrower has
pledged  to the Administrative Agent (on behalf of the Lenders) all
issued and outstanding securities  of each domestic Subsidiary of the
Borrower, which shall secure the payment of any and all  Indebtedness and
liabilities, whether now existing or hereafter incurred, of the Borrower to
the Administrative Agent, the Lenders and the Issuing Lender under the Loan
Documents,  and in connection therewith shall have delivered to the
Administrative Agent certificates  representing such issued and
outstanding securities with related stock powers duly endorsed  in blank.

          (i)  
Certificates of Insurance. The Administrative Agent shall have
received certificates  of insurance and insurance policies, in form and
content acceptable to the Administrative  Agent, evidencing the insurance
required to be carried by the Borrower pursuant to Section  5.07 hereof
with endorsements, satisfactory to the Agent, designating the Agent as an
additional insured and a loss payee and further designating that each such
insurance policy  contains a notice of cancellation provision
satisfactory to the Agent.

     (j)  Payment of Fees. On or before Effective Date the Administrative Agent
the  Administrative Agent shall have received all fees payable to the
Administrative Agent for  itself as Administrative Agent pursuant to one
or more agreements with the Borrower  relating to such fees.

     (k)  
General Assurances. All other documents and legal matters in
connection with the  transactions contemplated by this Agreement and the
other Loan Documents shall be  satisfactory in form and substance to the
Administrative Agent. The Borrower shall have  delivered such further
documents to the Administrative Agent and taken such further action
respecting this Agreement and the other Loan Documents as the Administrative
Agent or  any Lender or counsel to M&T may reasonably request.

     The obligation of any Lender to make its initial extension of credit hereunder is
also  subject to the payment by the Borrower of such fees as the Borrower
shall have agreed to pay  to any Lender or the Administrative Agent in
connection herewith, including, without  limitation, the reasonable fees
and expenses of Lippes, Silverstein, Mathias & Wexler LLP,  counsel
to the Administrative Agent, in connection with the negotiation, preparation,
 execution and delivery of this Agreement and the other Loan Documents
and the extensions  of credit hereunder (to the extent that statements
for such fees and expenses have been  delivered to the Borrower).

     The Administrative Agent shall notify the Borrower and the Lenders of the Effective
 Date, and such notice shall be conclusive and binding.

4.2     Each Credit Event.
  The obligation of each Lender to make any Loan, and of the Issuing Lender to issue, amend,
         renew or extend any Letter of Credit, is additionally subject to the satisfaction of the following
         conditions:

     (a)  
the representations and warranties of the Borrower set forth in this
Agreement shall  be true and correct on and as of the date of such Loan
or the issuance, amendment, renewal  or extension of such Letter or
Credit (or, if any such representation or warranty is expressly  stated
to have been made as of a specific date, as of such specific date); and

     (b)  
at the time of and immediately after giving effect to such Loan or the
issuance,  amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall  have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit  shall be deemed to constitute a representation and warranty by
the Borrower on the date  thereof as to the matters specified in the
preceding sentence.

                                                   ARTICLE V  AFFIRMATIVE COVENANTS

     Until the Commitments have expired or been terminated and the principal of and
interest on each Note and all fees and expenses payable under the Loan
Documents shall have  been paid in full and all Letters of Credit shall
have expired or terminated and all LC  Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the  Administrative
Agent, the Issuing Lender and the Lenders that:

5.1     Financial Statements and Other Information.

     The Borrower will furnish, or cause to be furnished, to the Administrative Agent and each
         Lender:

     (a)  within ninety (90) days after the end of each fiscal year of the Borrower,
the  Consolidated and Consolidating balance sheet and related statements
of operations,  stockholders’ equity and cash flows as of the end of
and for such year, setting forth in each  case in comparative form the
figures for the previous fiscal year, in form substantially  similar to
the statements described in Section 3.04(a), and all based on the results of
 operations and calculations reported on by Deloitte & Touche, LLP or
other independent  public accountants of recognized national standing as
contained in the financial statements  described in Section 5.01(e),
below, such Consolidated and Consolidating financial  statements to
present fairly in all material respects the financial condition and results of
 operations on a Consolidated basis in accordance with GAAP consistently
applied, subject  to the absence of footnotes;

     (b)  within forty five (45) days after the end of each of the first three (3)
fiscal quarters  of each fiscal year of the Borrower, the Consolidated
and Consolidating balance sheet and  related statements of operations,
stockholders’ equity and cash flows as of the end of and for  such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case  in comparative form the figures for (or, in the case of the
balance sheet, as of the end of the  corresponding period or periods of
the previous fiscal year, all certified by a Financial  Officer of the
Borrower as presenting fairly in all material respects the financial condition
 and results of operations on a Consolidated basis in accordance with
GAAP consistently  applied, subject to normal year-end audit adjustments
and the absence of footnotes;

     (c)  concurrently with any delivery of financial statements under clause (a) or
(b) of this  Section, a certificate of a Financial Officer of the
Borrower in the form of Exhibit G (i)  certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting  forth reasonably detailed calculations
demonstrating compliance with Sections 6.01, 6.07 and  6.10, and (iii)
stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and,  if any such change has occurred, specifying the effect
of such change on the financial  statements accompanying such
certificate;

     (d)  concurrently with any delivery of financial statements under clause (e) of
this Section,  a certificate of the accounting firm that reported on such
financial statements stating  whether they obtained knowledge during the
course of their examination of such financial  statements of any Default
(which certificate may be limited to the extent required by  accounting
rules or guidelines);

     (e)  within ninety (90) days after the end of each fiscal year of Technologies,
the audited  consolidated and consolidating balance sheet and related
statements of operations,  stockholders’ equity and cash flows of
Technologies and its Subsidiaries as of the end of and  for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Deloitte & Touche, LLP or other
independent public  accountants of recognized national standing (without
a “going concern” or like qualification  or exception and
without any qualification or exception as to the scope of such audit) to the
 effect that such consolidated financial statements present fairly in all
material respects the  financial condition and results of operations of
Technologies and its Subsidiaries on a  consolidated basis in accordance
with GAAP consistently applied;

     (f)  
promptly following submission to the United States Securities and Exchange
 Commission, a copy of Form 10-Q (with all attachments), Form 10-K and
all other forms,  documents or certificates filed by Technologies or any
of its Subsidiaries with such  Commission; and

     (g)  
promptly following any request therefor, such other information regarding the
 operations, business affairs and financial condition of the Borrower or
any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan
Documents, as the Administrative Agent or any Lender may reasonably request.

5.2    Notices of Material Events.
  The Borrower will furnish to the Administrative Agent and each Lender prompt written
         notice of the following:

     (a)      the occurrence of any Default;

     (b)  
the filing or commencement of any action, suit or proceeding by or before any
 arbitrator or Governmental Authority against or affecting the Borrower
or any of its  Affiliates that, if adversely determined, could result in
a Material Adverse Effect;

     (c)      the occurrence of any ERISA Event;

     (d)  the assertion of any material environmental matter by any Person against, or
with  respect to the activities of, the Borrower or any of its
Subsidiaries and any alleged material  violation of or non-compliance
with any Environmental Laws or any permits, licenses or  authorizations;
and

      (e)      any other development that results in, or could result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a
Financial  Officer or other executive officer of the Borrower setting
forth the details of the event or  development requiring such notice and
any action taken or proposed to be taken with respect  thereto.

5.3     Existence: Conduct of Business.
  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things
         necessary to preserve, renew and keep in full force and effect its legal existence and the rights,
         licenses, permits, privileges and franchises material to the conduct of its business; provided
                                                                                               --------
         that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution
         permitted under Section 6.03.

5.4  Future Subsidiaries; Subsidiary Guarantors.
 The Borrower shall cause each
domestic Subsidiary of the Borrower on the Effective Date,  and each
Person that becomes a domestic Subsidiary of the Borrower or of any Subsidiary
of  the Borrower after the Effective Date, to execute and deliver to the
Administrative Agent a  Guaranty Agreement, a Security Agreement,
Intellectual Property Security Agreements, and  such other agreements,
documents and instruments reasonably requested by the  Administrative
Agent. All Subsidiaries of the Borrower on the Effective Date are listed on Part
 E of Schedule II. Upon the request of the Required Lenders, the
Borrower shall execute and  deliver to the Administrative Agent (on
behalf of the Lenders) a Borrower Pledge Agreement  with respect to the
capital stock or other securities of any Subsidiary of the Borrower that is
domiciled outside of the United States, or of any Person that is domiciled
outside of the United States that becomes a Subsidiary of the Borrower or of any Subsidiary of the Borrower
after  the Effective Date, pursuant to which the Borrower shall pledge to
the Administrative Agent  (on behalf of the Lenders) up to a maximum of
sixty six and two thirds percent (66 2/3 %) of  the issued and
outstanding securities of such foreign Subsidiary, and shall secure the payment
 of any and all Indebtedness and liabilities, whether now existing or
hereafter incurred, of the  Borrower to the Administrative Agent, the
Lenders and the Issuing Lender, and in connection  therewith shall have
delivered to the Administrative Agent certificates representing such issued
and outstanding securities with related stock powers duly endorsed in blank

5.5   Future Parent Entities; Parent Guarantors.
 If the Borrower or any Subsidiary
of the Borrower becomes a Subsidiary of any Person other  than
Technologies or Holdings after the Effective Date, the Borrower shall cause each
such  Person to execute and deliver to the Administrative Agent a
Guaranty Agreement (each such  Person to be referred to as a
“Parent Guarantor”).

5.6  Payment of Obligations. 
The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including tax  liabilities before
the same shall become delinquent or in default, except where (a) the validity
 or amount thereof is being contested in good faith by appropriate
proceedings, (b) the  Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto  in accordance with GAAP and
(c) the failure to make payment pending such contest would not  result in
a Material Adverse Effect.

5.7  Maintenance of Properties; Insurance.
 The Borrower will, and will cause each
of its Subsidiaries to, (a) keep and maintain all  property material to
the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance  companies, insurance in such amounts and against
such risks as are customarily maintained  by companies engaged in the
same or similar businesses operating in the same or similar  locations.
Part F of Schedule II lists and generally describes each policy of
insurance covering  the business of, or any material asset of, the
Borrower or any of its Subsidiaries on the  Effective Date.

5.8  Books and Records; Inspection Rights.
 The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and  account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries  to, permit any representatives designated by
the Administrative Agent or any Lender, upon  reasonable prior notice and
during normal business hours, to visit and inspect its properties,  to
examine and make extracts from its books and records, and to discuss its
affairs, finances  and condition with its officers and independent
accountants, all at such reasonable times and  as often as reasonably
requested.

5.9  Compliance with Laws.
  The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules,
         regulations and orders of any Governmental Authority applicable to it or its property in all
         material respects.

5.10   Use of Proceeds.
 The proceeds of the Loans will only be used, and Letters of
Credit will be issued only to  support obligations incurred by the
Borrower and its Subsidiaries, to repay the existing  Indebtedness of the
Borrower (as set forth in Part A of Schedule II), for the general
corporate  purposes of the Borrower and its Subsidiaries in the ordinary
course of business, and to  finance acquisitions permitted pursuant to
Section 6.03(c)(iii). No part of the proceeds of any  Loan will be used
whether directly or indirectly, for any purpose that entails violation of any
 of the Regulations of the Board, including Regulations U and X. in the
ordinary course of  business.

ARTICLE VI  NEGATIVE COVENANTS

     Until
the Commitments have expired or terminated and the principal of and interest
 on each Note and all fees and expenses payable under the Loan Documents
have been paid in  full and all Letters of Credit have expired or
terminated and all LC Disbursements shall have  been reimbursed, the
Borrower covenants and agrees with the Administrative Agent, the  Issuing
Lender and the Lenders that:

6.1     Indebtedness.
  The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, assume or
         permit to exist any Indebtedness, except:

     (a)      Indebtedness created hereunder;

     (b)  
Indebtedness assumed by the Borrower and/or by its Subsidiaries in any
acquisition  permitted pursuant to Section 6.03(c)(iii) to the extent,
and solely to the extent, the  aggregate principal amount of all such
Indebtedness at any time outstanding does not exceed  Seven Million Five
Hundred Thousand Dollars ($7,500,000), and refinancings and  replacements
thereof (i) in a principal amount not exceeding in the aggregate the principal
 amount of the Indebtedness so refinanced or replaced plus any prepayment
penalties, fees  and expenses incurred in connection with such
refinancings or replacements, (ii) with an all-  in cost which is less
than the Indebtedness so refinanced or replaced, and (iii) with an
average life to maturity of not less than the then average life to maturity
of the Indebtedness  so refinanced or replaced;

     (c)  
Indebtedness existing on the date hereof and set forth in Part A of
Schedule II  (excluding, however, following the making of
the initial Loans hereunder, the Indebtedness  to be repaid with the
proceeds of such Loans, as indicated on Schedule II), and extensions,
 renewals and replacements of any such Indebtedness that do not increase
the outstanding  principal amount thereof;

     (d)      Indebtedness of the Borrower to any Subsidiary Guarantor and of any Subsidiary
            Guarantor to the Borrower or any other Subsidiary Guarantor; and

     (e)  
Indebtedness of the Borrower or any Subsidiary Guarantor incurred to finance
the  acquisition, construction or improvement of any fixed or capital
assets, including Capital  Lease Obligations and any Indebtedness assumed
in connection with the acquisition of any  such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the  outstanding principal amount thereof; provided that
(i) such Indebtedness is incurred prior  to or within thirty (30) days
after such acquisition or the completion of such construction  or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this  clause (e) shall not exceed Five Million Dollars ($5,000,000) at
any time outstanding.

6.2  Liens.
 The Borrower will not, nor will it permit any of its Subsidiaries to,
create, incur, assume or  permit to exist any Lien on any property or
asset now owned or hereafter acquired by it, or  assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
 thereof, except:

     (a)  
any Lien on any property or asset of the Borrower or any of its Subsidiaries
existing  on the date hereof and set forth in Part B of Schedule
II (excluding, however, following the  making of the initial Loans
hereunder, Liens (if any) securing Indebtedness to be repaid  with the
proceeds of such Loans, as indicated on Schedule II);

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

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

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

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

6.3     Fundamental Changes.

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

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

          (ii)  any merger or consolidation permitted under clause (iii) of paragraph
                     (c) of this Section.

     (b)  
The Borrower will not, nor will it permit any of its Subsidiaries to, convey,
sell, lease,  transfer or otherwise dispose of, in one transaction or a
series of transactions, all or a  substantial part of its business or
property, whether now owned or hereafter acquired,  except:

          (i)  any Subsidiary Guarantor of the Borrower may sell, lease, transfer or
otherwise dispose of any or all of its property (upon voluntary liquidation
or  otherwise) to the Borrower or another Subsidiary Guarantor of the
Borrower; and

          (ii)  the capital stock of any Subsidiary of the Borrower may be sold,
transferred or otherwise disposed of to the Borrower or another Subsidiary
 Guarantor of the Borrower.

     (c)  
The Borrower will not, nor will it permit any of its Subsidiaries to, acquire
any  business or property from, or capital stock of, or be a party to any
acquisition of, any Person  (whether by way of purchase of such assets or
stock, by merger or consolidation or  otherwise), except:

          (i)           for any merger or consolidation permitted under clause (i) of
                     paragraph (a) of this Section;

          (ii)          for purchases of inventory and other property to be sold or used in the
                     ordinary course of business and Investments permitted under Section 6.06(a); and

          (iii)  
the Borrower or any Subsidiary Guarantor of the Borrower may  acquire
any business, and the related assets, of any other Person (whether by way of
 purchase of assets or stock, by merger or consolidation or otherwise),
so long as:

               [A]  
if such acquisition shall be effected by merger or consolidation
involving the Borrower, the Borrower shall be the continuing or surviving
 entity;

               [B]  
such acquisition (if by purchase of stock) shall be effected in such
manner so that the acquired entity becomes a Subsidiary Guarantor of
the Borrower;

               [C]  
after giving effect to such acquisition (and the provisions of
Section 1.03(c)) the Borrower and its Subsidiaries shall be in compliance
 with Section 6.10 ;

               [D]  
the Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer in the form of Exhibit G showing
 calculations in reasonable detail to demonstrate compliance with clause
 (iii)[C] immediately above;

               [E]  
the Borrower shall have obtained the prior written consent of the
Required Lenders in the event that:

                    [I]  
 with respect to any acquisition consummated during  the period
commencing on the Effective Date and ending on the last  day of
Borrower’s fiscal year ending nearest to December 31, 2001
(a) the aggregate amount of cash expenditures in respect of such
acquisition would exceed Ten Million Dollars ($10,000,000), or (b)
such acquisition would constitute the third (3rd)
or greater  acquisition to be consummated by the Borrower and/or any of
its  Subsidiaries (whether individually or collectively) during such
period; and

                    [II]  
with respect to any acquisition consummated during  Borrower’s
fiscal year ending nearest to December 31, 2002 and  ending on the last
day of such fiscal year (a) the aggregate amount of  cash
expenditures in respect of such acquisition would exceed Fifteen  Million
Dollars ($15,000,000), or (b) such acquisition would constitute
the third (3rd) or greater acquisition to be consummated by
the Borrower and/or any of its Subsidiaries (whether individually or
collectively) during such fiscal year; and

                    [III]  
with respect to any acquisition consummated after the  end of
Borrower’s fiscal year ending nearest to December 31, 2002,  such
acquisition would require any payment in cash by the Borrower  or any of
its Subsidiaries; and

               [F]  
immediately prior to such acquisition and after giving effect
thereto, no Default shall have occurred and be continuing.

6.4  Lines of Business.
 The Borrower will not, nor will it permit any of its
Subsidiaries to, engage to any material  extent in any business other
than the business of manufacturing, distributing and selling  components
and assemblies for medical devices, batteries, capacitors and precision
components  and assemblies for select industrial and medical market
segments.

6.5     Restrictive Agreements.
  The Borrower will not, and will not permit any of its Subsidiaries to, enter into any
         agreement prohibiting:

     (a)    (i) the creation or assumption of any Lien in favor of the Administrative
Agent  and/or the Lenders upon its properties, revenues or assets,
whether now owned or hereafter  acquired; provided, the Borrower
may, and may permit any of its Subsidiaries to, enter into  any agreement
restricting the right of Administrative Agent’s and/or the Lenders’ to
make  subject to a Lien any property to the extent (A) such property is
subject to a security interest  in favor of another Person, (B) the
Indebtedness incurred by the Borrower or such  Subsidiary is otherwise
permitted pursuant to Section 6.01, and (C) the Lien in favor of such
third Person is otherwise permitted pursuant to Section 6.02, or (ii) the
ability of the  Borrower or any Guarantor Subsidiary to amend or
otherwise modify this Agreement or any  other Loan Document; and

     (b)  any Subsidiary from making any payments, directly or indirectly, to the
Borrower  by way of dividends, advances, repayments of loans or advances,
reimbursements of  management and other intercompany charges, expenses
and accruals or other returns on  investments, or any other agreement or
arrangement which restricts the ability of any such  Subsidiary to make
any payment, directly or indirectly, to the Borrower.

6.6     Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements.

     (a)   
Investments, Etc. The Borrower will not, nor will it permit any of its
Subsidiaries to,  purchase, hold or acquire (including pursuant to any
merger with any Person that was not  a wholly owned Subsidiary prior to
such merger) any capital stock, evidences of  indebtedness or other
securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, Guarantee
any  obligations of, or make or permit to exist any investment or any
other interest in, any other  Person, or purchase or otherwise acquire
(in one transaction or a series of transactions) any  assets of any other
Person constituting a business unit, except:

          (i)  investments existing on the date hereof and set forth in Part C of
                     Schedule II;

          (ii)   Permitted Investments;

          (iii)  investments by the Borrower in the capital stock of its Subsidiaries;

          (iv)  loans or advances made by the Borrower to any Subsidiary Guarantor
                     and made by any Subsidiary Guarantor to the Borrower or another Subsidiary
                     Guarantor;

             (v)           Guarantees constituting Indebtedness permitted by Section 6.01; and

           (vi)          any transaction permitted under Section 6.03.

     (b)  
Hedging Agreements. The Borrower will not, nor will it permit any of
its Subsidiaries  to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the  ordinary course of business to
hedge or mitigate risks to which the Borrower or any  Subsidiary is
exposed in the conduct of its business or the management of its liabilities.

6.7  Restricted Payments.
 The Borrower will not, nor will it permit any of its
Subsidiaries to, declare or make, or agree  to pay or make, directly or
indirectly, any Restricted Payment; provided (a) the Borrower may
declare and pay dividends with respect to its capital stock payable (i) in
additional shares of  its common stock, (ii) in cash only if, and solely
to the extent, the aggregate amount of cash  dividends declared and paid
by the Borrower for any period does not exceed the difference  between:
(A) fifty percent (50%) of the Net Income of the Borrower and its Subsidiaries
for  such period, minus (B) the aggregate amount of cash paid (as
dividends or otherwise) by the  Borrower during such period pursuant to
clause (b) immediately below, and (iii) in any  combination of the
foregoing, (b) in any fiscal year the Borrower may declare and pay cash
dividends with respect to its capital stock, and/or may make payments of cash
to any parent  corporation or to Donaldson, Lufkin & Jenrette
Securities Corporation, in an aggregate  amount not to exceed the amount
of advisory fees and retainer payable in such fiscal year by
Technologies to Donaldson, Lufkin & Jenrette Securities Corporation
pursuant to an  agreement by and between Technologies and such party
dated July 10, 1997 and as in effect  on the Effective Date;
provided, in no event shall the aggregate amount of cash dividends and
 cash payments made pursuant to this clause (b) exceed One Hundred
Thousand Dollars  ($100,000) in any fiscal year of the Borrower, (c) the
Borrower may make payments to its  Affiliates only if, and solely to the
extent, the transaction or transactions giving rise to such  payments
satisfy the requirements of Section 6.08, and (d) the Borrower may make payments to
former participants of the Borrower’s existing employee stock ownership
plan qualified  under ERISA (the “ESOP”) in connection
with the redemption of the securities of the  Borrower held in such
former participant’s ESOP account, as permitted pursuant to the terms
of the ESOP or as otherwise required by ERISA. Nothing herein shall be deemed
to prohibit  the payment of dividends by any Subsidiary of the Borrower
to the Borrower or to any other  Subsidiary Guarantor of the Borrower.

6.8  Transactions with Affiliates.
 The Borrower will not, nor will it permit any
of its Subsidiaries to, sell, lease or otherwise  transfer any property
or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a)  transactions in the ordinary course of business
at prices and on terms and conditions not less  favorable to the Borrower
or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, (b) transactions between or among the Borrower
and its  Subsidiaries not involving any other Affiliate and (c) any
Restricted Payment permitted by  Section 6.07.

6.9  Sale and Lease-Back Transactions.
 The Borrower will not, nor will it permit
any of its Subsidiaries to, enter into any  arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereafter  acquired, and thereafter rent or lease such property or
other property which it intends to use  for substantially the same
purpose or purposes as the property being sold or transferred.

6.10  Certain Financial Covenants.

     (a)      Leverage Ratio.  The Borrower will not permit the Leverage Ratio as at:

          (i)  the last day of Borrower's fiscal year ending on December 30, 2000,
                     to exceed 3.00 to 1.00;

          (ii)  the last day of the Borrower's fiscal year ending on December 28, 2001,
                   to exceed 2.75 to 1.00; and

          (iii)  the last day of the Borrower’s fiscal year ending on January 2, 2003,
 and as at each fiscal quarter thereafter, to exceed 2.50 to 1.00.

     (b)  Fixed Charges Coverage Ratio. The Borrower will not permit the Fixed
Charges  Coverage Ratio to be less than 1.25 to 1.00 as at the last day
of any fiscal quarter ending  after the Effective Date.

      (c)     Interest Coverage Ratio. The Borrower will not permit the Interest Coverage Ratio
            to be less than 2.50 to 1.00 as at the last day of any fiscal quarter ending after the Effective
            Date.

       ARTICLE VII  EVENTS OF DEFAULT

     If
any of the following events (“Events of Default”) shall occur: 

     (a)  
the Borrower shall fail to pay any principal of any Loan or Note or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall  become due and payable, whether at the due date thereof or at
a date fixed for prepayment  thereof or otherwise;

     (b)  the Borrower shall fail to pay any interest on any Loan or Note or any fee or
any  other amount (other than an amount referred to in clause (a) of this
Article) payable under  this Agreement or under any other Loan Document,
when and as the same shall become due  and payable, and such failure
shall continue unremedied for a period of five (5) or more  Business
Days;

     (c)  
any representation or warranty made or deemed made by or on behalf of the
 Borrower or any of its Subsidiaries in or in connection with this
Agreement or any other  Loan Document or any amendment or modification
hereof or thereof, or in any report,  certificate, financial statement or
other document furnished pursuant to or in connection  with this
Agreement or any other Loan Document or any amendment or modification hereof
 or thereof, shall prove to have been incorrect when made or deemed made;

     (d)  
the Borrower shall fail to observe or perform any covenant, condition or
agreement  contained in Section 5.02(a) or 5.03 (with respect to the
Borrower’s existence) or in  ARTICLE VI;

     (e)  
the Borrower shall fail to observe or perform any covenant, condition or
agreement  contained in this Agreement (other than those specified in
clauses (a), (b) or (d) of this  Article) or any other Loan Document and
such failure shall continue unremedied for a  period of ten (10) or more
Business Days after notice thereof from the Administrative Agent  (given
at the request of any Lender) to the Borrower;

     (f)  
any Subsidiary Guarantor or Parent Guarantor shall fail to observe or perform
any  covenant, condition or agreements contained in any Loan Document to
which it is a party,  and such failure shall continue unremedied for a
period of ten (10) or more Business Days  after notice thereof from the
Administrative Agent (given at the request of any Lender) to  such
Subsidiary Guarantor or Parent Guarantor;

     (g)  
the Borrower or any of its Subsidiaries shall fail to make any payment
(whether of  principal or interest and regardless of amount) in respect
of any Indebtedness, the  outstanding and unpaid principal amount of
which at the time equals or exceeds One  Million Dollars ($1,000,000),
when and as the same shall become due and payable;

     (h)  any event or condition occurs that results in any Indebtedness, the
outstanding and  unpaid principal amount of which at the time equals or
exceeds One Million Dollars ($1,000,000), becoming due prior to its scheduled maturity or that enables or permits (with
 or without the giving of notice, the lapse of time or both) the holder
or holders of such  Indebtedness or any trustee or agent on its or their
behalf to cause such Indebtedness to  become due, or to require the
prepayment, repurchase, redemption or defeasance thereof,  prior to its
scheduled maturity;

          (i)  
an involuntary proceeding shall be commenced or an involuntary petition shall
be  filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any  of its Subsidiaries or its debts, or of a
substantial part of its assets, under any Federal, state  or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
or  (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar  official for the Borrower or any of its
Subsidiaries or for a substantial part of its assets, and,  in any such
case, such proceeding or petition shall continue undismissed for a period of
sixty  (60) or more days or an order or decree approving or ordering any
of the foregoing shall be  entered;

     (j)  the Borrower or any of its Subsidiaries shall (i) voluntarily commence any
proceeding  or file any petition seeking liquidation, reorganization or
other relief under any Federal,  state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in  effect, (ii) consent to
the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (i) of this Article, (iii)
apply for or consent to  the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official  for the
Borrower or any of its Subsidiaries or for a substantial part of its assets,
(iv) file an  answer admitting the material allegations of a petition
filed against it in any such  proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action  for the purpose of
effecting any of the foregoing;

     (k)  
the Borrower or any of its Subsidiaries shall become unable, admit in writing
its  inability or fail generally to pay its debts as they become due;

     (l)  one or more judgments for the payment of money in an aggregate amount in
excess  of applicable insurance coverage of One Million Dollars
($1,000,000) or more shall be  rendered against the Borrower or any of
its Subsidiaries or any combination thereof and the  same shall remain
undischarged for a period of thirty (30) consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment  creditor to attach or levy upon any assets of the
Borrower or any of its Subsidiaries to  enforce any such judgment;

     (m)  
an ERISA Event shall have occurred that is reasonably likely to result in a
 liability or loss to the Borrower or any of its Subsidiaries in an
amount in excess of One  Million Dollars ($1,000,000);

       (n)      a Change in Control shall occur; or

     (o)  
any Loan Document or Lien granted thereunder shall terminate or cease to be
 effective (other than pursuant to its terms) or cease to be legally
valid, binding and  enforceable obligation of the Borrower, a Subsidiary
Guarantor or a Parent Guarantor  party thereto (other than as a result of
any termination in accordance with the terms  thereof); the Borrower, any
Subsidiary Guarantor or Parent Guarantor party to any Loan  Documents
shall, directly or indirectly, contest in any manner the effectiveness of any
such  Loan Document or Lien granted thereunder or the validity, binding
nature, or enforceability  thereof; or any Lien shall cease to have the
priority purported to be given under the  applicable Loan Document; then,
and in every such event (other than an event with respect to the Borrower
described in  clause (i) or (j) of this Article), and at any time
thereafter during the continuance of such  event, the Administrative
Agent may, and at the request of the Required Lenders shall, by  notice
to the Borrower, take either or both of the following actions, at the same or
different  times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate  immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or  in part, in which case
any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be  due and payable, together with accrued interest thereon
and all fees and other obligations of  the Borrower accrued hereunder,
shall become due and payable immediately, without  presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described
in clause (i) or  (j) of this Article, the Commitments shall
automatically terminate and the principal of the  Loans then outstanding,
together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable,  without presentment, demand, protest or other notice of any
kind, all of which are hereby  waived by the Borrower.

                                                ARTICLE VIII  THE ADMINISTRATIVE AGENT

     Each
of the Lenders and the Issuing Lender hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan
Documents and  authorizes the Administrative Agent to take such actions
on its behalf and to exercise such  powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together  with such
actions and powers as are reasonably incidental thereto.

     The
Person serving as the Administrative Agent hereunder shall have the same rights
 and powers in its capacity as a Lender as any other Lender and may
exercise the same as  though it were not the Administrative Agent, and
such Person and its Affiliates may accept  deposits from, lend money to
and generally engage in any kind of business with the Borrower  or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
 hereunder.

     The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting
the generality of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other  implied duties, regardless of whether a Default has
occurred and is continuing, (b) the  Administrative Agent shall not have
any duty to take any discretionary action or exercise any  discretionary
powers, except discretionary rights and powers expressly contemplated hereby
 or by the other Loan Documents that the Administrative Agent is required
to exercise in  writing by the Required Lenders, and (c) except as
expressly set forth herein and in the other  Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not
be liable for the failure to disclose, any information relating to the
Borrower or any of its  Subsidiaries that is communicated to or obtained
by the bank serving as Administrative Agent  or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders or  in the absence of its own gross negligence or
willful misconduct. The Administrative Agent  shall be deemed not to have
knowledge of any Default unless and until written notice thereof  is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative  Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any  statement, warranty or representation
made in or in connection with this Agreement or any  other Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or  observance of any of the covenants, agreements or other
terms or conditions set forth herein  or therein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document, or (v)
the satisfaction  of any condition set forth in ARTICLE IV or elsewhere
herein or therein, other than to  confirm receipt of items expressly
required to be delivered to the Administrative Agent.

     The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability  for relying upon, any notice, request, certificate, consent,
statement, instrument, document or  other writing believed by it to be
genuine and to have been signed or sent by the proper  Person. The
Administrative Agent also may rely upon any statement made to it orally or by
 telephone and believed by it to be made by the proper Person, and shall
not incur any liability  for relying thereon. The Administrative Agent
may consult with legal counsel (who may be  counsel for the Borrower),
independent accountants and other experts selected by it, and shall  not
be liable for any action taken or not taken by it in accordance with the advice
of any such  counsel, accountants or experts.

     The
Administrative Agent may perform any and all its duties and exercise its rights
and  powers by or through any one or more sub-agents appointed by the
Administrative Agent. The  Administrative Agent and any such sub-agent
may perform any and all its duties and exercise  its rights and powers
through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the  Administrative Agent and any such sub-agent, and shall
apply to their respective activities in  connection with the syndication
of the credit facilities provided for herein as well as activities  as
Administrative Agent.

     The Administrative Agent may resign at any time by notifying the Lenders, the
Issuing  Lender and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, with the prior written consent of the Borrower (which consent shall not be
unreasonably  withheld), to appoint a successor. If no successor shall
have been so appointed by the Required  Lenders and shall have accepted
such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent’s  resignation shall nonetheless become
effective and (1) the retiring Administrative Agent shall  be discharged
from its duties and obligations hereunder and (2) the Required Lenders shall
 perform the duties of the Administrative Agent (and all payments and
communications  provided to be made by, to or through the Administrative
Agent shall instead be made by or  to each Lender directly) until such
time as the Required Lenders appoint a successor agent as  provided for
above in this paragraph. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed
to and become  vested with all the rights, powers, privileges and duties
of the retiring (or retired)  Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties  and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative
Agent shall be  the same as those payable to its predecessor unless
otherwise agreed between the Borrower and  such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for its benefit in respect
of any actions taken  or omitted to be taken by it while it was acting as
Administrative Agent.

     Each Lender acknowledges that it has, independently and without reliance upon the
 Administrative Agent or any other Lender and based on such documents and
information as  it has deemed appropriate, made its own credit analysis
and decision to enter into this  Agreement. Each Lender also acknowledges
that it will, independently and without reliance  upon the Administrative
Agent or any other Lender and based on such documents and  information as
it shall from time to time deem appropriate, continue to make its own decisions
 in taking or not taking action under or based upon this Agreement, any
other Loan Document  or any related agreement or any document furnished
hereunder or thereunder.

     Except as otherwise provided in Section 9.02(b) with respect to this Agreement, the
 Administrative Agent may, with the prior consent of the Required Lenders
(but not  otherwise), consent to any modification, supplement or waiver
under any of the Loan  Documents.

            ARTICLE IX  MISCELLANEOUS

9.1  Notices. 
Except in the case of notices and other communications expressly
permitted to be given by  telephone, all notices and other communications
provided for herein shall be in writing and  shall be delivered by hand
or overnight courier service, mailed by certified or registered mail  or
sent by telecopy, as follows:

                 (a)    if to the Borrower:

                        Wilson Greatbatch Ltd.
                        10000 Wehrle Drive
                        Clarence, New York  14031
                        Tel:  716 759 5602
                        Fax: 716 759 5614

                        Attn: Arthur J. Lalonde
                              Senior Vice President, Finance and Treasurer

                        with a copy to:

                        Warren Buhle, Esq.
                        Weil, Gotshal & Manges LLP
                        767 Fifth Avenue
                        New York, New York  10153
                        Tel:  212 310 8898
                        Fax: 212 310 8007

                 (b)    if to the Administrative Agent:

                        Manufacturers and Traders Trust Company
                        One Fountain Plaza
                        12th Floor
                        Buffalo, New York  14203
                        Tel:  716 848 7392
                        Fax: 716 848 7318

                        Attn: Shelley Drake
                              Administrative Vice President

                        with a copy to:

                        William E. Mathias, Esq.
                        Lippes, Silverstein, Mathias & Wexler LLP
                        700 Guaranty Building
                        28 Church Street
                        Buffalo, New York  14202
                        Tel:  716 853 5100
                        Fax: 716 853 5199

                 (c)    if to the Issuing Lender:

                        Manufacturers and Traders Trust Company
                        One Fountain Plaza
                        12th Floor
                        Buffalo, New York  14203
                        Tel:  716 848 7392
                        Fax: 716 848 7318

                        Attn: Shelley Drake
                              Administrative Vice President

                        with a copy to:

                        William E. Mathias, Esq.
                        Lippes, Silverstein, Mathias & Wexler LLP
                        700 Guaranty Building
                        28 Church Street
                        Buffalo, New York  14202
                        Tel:  716 853 5100
                        Fax: 716 853 5199

     (d)      if to a Lender, to it at its address (or telecopy number) set forth in Schedule I.

Any party hereto may change its address or telecopy number for notices and other
 communications hereunder by notice to the other parties hereto (or, in
the case of any such  change by a Lender, by notice to the Borrower and
the Administrative Agent). All notices  and other communications given to
any party hereto in accordance with the provisions of  this Agreement
shall be deemed to have been given on the date of receipt. Unless otherwise
specified herein, each notice or other communication required or permitted to
be given  hereunder by the Borrower shall be given or made only by a
Senior Executive Officer or  Financial Officer of the Borrower.

9.2     Waivers; Amendments.

     (a)  No Deemed Waivers: Remedies Cumulative. No failure or delay by the
 Administrative Agent, the Issuing Lender or any Lender in exercising any
right or power  hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any  such right or power, or any
abandonment or discontinuance of steps to enforce such a right  or power,
preclude any other or further exercise thereof or the exercise of any other
right  or power. The rights and remedies of the Administrative Agent, the
Issuing Lender and the  Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they  would otherwise have. No
waiver of any provision of this Agreement or consent to any  departure by
the Borrower therefrom shall in any event be effective unless the same shall be
 permitted by paragraph (b) of this Section, and then such waiver or
consent shall be  effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall  not be construed as a waiver of any Default, regardless of
whether the Administrative Agent,  any Lender or the Issuing Lender may
have had notice or knowledge of such Default at the  time.

     (b)  Amendments. Neither this Agreement nor any provision hereof may be
waived,  amended or modified except pursuant to an agreement or
agreements in writing entered into  by the Borrower and the Required
Lenders or by the Borrower and the Administrative  Agent with the consent
of the Required Lenders; provided that no such agreement shall:

          (i)  increase the Commitment of any Lender without the written consent
                     of such Lender,

          (ii)  reduce the principal amount of any Loan or LC Disbursement or  reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
 written consent of each Lender affected thereby,

     (iii)  postpone the scheduled date of payment of the principal amount of any
Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder,  or reduce the amount of, waive or excuse any such payment, or
postpone the  scheduled date of expiration of any Commitment, without the
written consent of each  Lender affected thereby,

     (iv)  change Section 2.15(d) without the consent of each Lender affected
                     thereby, or

     (v)  change any of the provisions of this Section or the percentage in the
definition of the term “Required Lenders” or any other provision
hereof specifying  the number or percentage of Lenders required to waive,
amend or modify any rights  hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, and provided further that no such
agreement  shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent or  the Issuing Lender hereunder without the
prior written consent of the Administrative Agent  the Issuing Lender, as
the case may be.

9.3     Expenses; Indemnity; Damage Waiver.

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

     (b)  
Indemnification by the Borrower. The Borrower shall indemnify the
Administrative  Agent, the Issuing Lender and each Lender, and each
Related Party of any of the foregoing  Persons (each such Person being
called an “Indemnitee”) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related  expenses, including the reasonable fees, charges and
disbursements of any counsel for any  Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection  with, or as a
result of (i) the execution or delivery of this Agreement, any of the other Loan
 Documents or any agreement or instrument contemplated hereby or thereby,
the  performance by the parties hereto of their respective obligations
hereunder or the  consummation of the Transactions or any other
transactions contemplated hereby, (ii) any  Loan or Letter of Credit or
the use of the proceeds therefrom (including any refusal by the  Issuing
Lender to honor a demand for payment under a Letter of Credit if the documents
 presented in connection with such demand do not strictly comply with the
terms of such  Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on  or from any property owned or operated
by the Borrower or any of its Subsidiaries, or any  Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
 any actual or prospective claim, litigation, investigation or proceeding
relating to any of the  foregoing, whether based on contract, tort or any
other theory and regardless of whether any  Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee,
 be available to the extent that such losses, claims, damages,
liabilities or related expenses are  determined by a court of competent
jurisdiction by final and nonappealable judgment to  have resulted from
the gross negligence or willful misconduct of such Indemnitee.

     (c)  
Reimbursement by Lenders. To the extent that the Borrower fails to pay
any amount  required to be paid by it to the Administrative Agent or the
Issuing Lender under  paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the  Administrative Agent or the Issuing
Lender, as the case may be, such Lender’s Applicable  Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed  expense or indemnified loss, claim, damage, liability or
related expense, as the case may be,  was incurred by or asserted against
the Administrative Agent or the Issuing Lender in its  capacity as such.

       (d)      Waiver of Consequential Damages; Etc. To the extent permitted by applicable law,
           the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages (as
opposed to  direct or actual damages) arising out of, in connection with,
or as a result of, this Agreement  or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter  of Credit or
the use of the proceeds thereof.

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

9.4     Successors and Assigns.

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

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

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

          (ii)  except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning
Lender’s  Commitment, unless each of the Borrower and the
Administrative Agent otherwise  consent, which consent may be given or
withheld in sole discretion of each such  party, the amount of the
Commitment of the assigning Lender subject to each such  assignment
(determined as of the date the Assignment and Acceptance with respect  to
such assignment is delivered to the Administrative Agent) shall not be less than
(A)  Ten Million Dollars ($10,000,000), or (B) Three Million Dollars
($3,000,000) if the  Commitment of each other Lender equals or exceeds
Ten Million Dollars (determined  as of the date the Assignment and
Acceptance with respect to such assignment is  delivered to the
Administrative Agent,

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

          (iv)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and  recordation fee of Three Thousand Five Hundred Dollars ($3,500)
payable by either  or both of the assigning Lender and assignee as agreed
to by such parties (which  processing and recordation shall not be
chargeable to, assessable against, or  otherwise imposed upon, the
Borrower), and

          (v)  the assignee, if it shall not be a Lender, shall deliver to the
                     Administrative Agent an Administrative Questionnaire;

provided further, that any consent of the Borrower otherwise required under this
paragraph  shall not be required if an Event of Default under clause (a),
(b), (i) or (j) of ARTICLE VII  has occurred and is continuing. Upon
acceptance and recording pursuant to paragraph (d)  of this Section, from
and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest  assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender  under this Agreement, and the
assigning Lender thereunder shall, to the extent of the  interest
assigned by such Assignment and Acceptance, be released from its obligations
under  this Agreement (and, in the case of an Assignment and Acceptance
covering all of the  assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to  be a party hereto but shall
continue to be entitled to the benefits of Sections 2.12, 2.13, 2.14  and
9.03). Any assignment or transfer by a Lender of rights or obligations under
this  Agreement that does not comply with this paragraph shall be treated
for purposes of this  Agreement as a sale by such Lender of a
participation in such rights and obligations in  accordance with
paragraph (e) of this Section.

     (c)  
Maintenance of Register by the Administrative Agent. The
Administrative Agent,  acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in  Buffalo, New York a
copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and  principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to  the terms hereof from time to time
(the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lender,
and the  Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms  hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to  the contrary. The
Register shall be available for inspection by the Borrower, the Issuing
Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior  notice. Each change in the Register due to the
assignment by or assumption by such Lender  of any Commitment as
evidenced by a duly executed Assignment and Acceptance delivered  to the
Administrative Agent, or due to the admission of a new Lender pursuant such new
 Lender’s assumption of a Commitment from a present Lender as
evidenced by a duly executed Assignment and Acceptance delivered to the Administrative Agent, shall be
reflected in Schedule I.

     (d)  
Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and  Acceptance executed by an assigning Lender and an
assignee, the assignee’s completed  Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section
and any written  consent to such assignment required by paragraph (b) of
this Section, the Administrative  Agent shall accept such Assignment and
Acceptance and record the information contained  therein in the Register.
No assignment shall be effective for purposes of this Agreement  unless
it has been recorded in the Register as provided in this paragraph.

     (e)  
Participations. Any Lender may sell participations to one or more
banks or other  entities (a “Participant”) in all or a
portion of such Lender’s rights and obligations under  this
Agreement and the other Loan Documents (including all or a portion of its
Commitment  and the Loans owing to it); provided that (i) except
in the case of the sale of a participation  to a Lender or an Affiliate
of a Lender, the Borrower must give its prior written consent to  such
sale (which consent shall not be unreasonably withheld), (ii) such Lender’s
obligations  under this Agreement and the other Loan Documents shall
remain unchanged, (iii) such  Lender shall remain solely responsible to
the other parties hereto for the performance of  such obligations, and
(iv) the Borrower, the Administrative Agent, the Issuing Lender and  the
other Lenders shall continue to deal solely and directly with such Lender in
connection  with such Lender’s rights and obligations under this
Agreement and the other Loan  Documents. Any agreement or instrument
pursuant to which a Lender sells such a  participation shall provide that
such Lender shall retain the sole right to enforce this  Agreement and
the other Loan Documents and to approve any amendment, modification  or
waiver of any provision of this Agreement or any other Loan Document;
provided that  such agreement or instrument may provide that such
Lender will not, without the consent  of the Participant, agree to any
amendment, modification or waiver described in the first  proviso
to Section 9.02(b) that affects such Participant. Subject to paragraph (f) of
this  Section, the Borrower agrees that each Participant shall be
entitled to the benefits of  Sections 2.12, 2.13 and 2.14 to the same
extent as if it were a Lender and had acquired its  interest by
assignment pursuant to paragraph (b) of this Section.

     (f)  
Limitations on Rights of Participants. A Participant shall not be
entitled to receive  any greater payment under Section 2.12 or 2.14 than
the applicable Lender would have been  entitled to receive with respect
to the participation sold to such Participant, unless the sale  of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the  benefits of Section 2.14.

     (g)  Certain Pledges. Any Lender may at any time pledge or assign a
security interest in  all or any portion of its rights under this
Agreement to secure obligations of such Lender,  including any such
pledge or assignment to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release a Lender from any of its
obligations  hereunder or substitute any such assignee for such Lender as
a party hereto.

     (h)  
No Assignments to the Borrower or Affiliates. Anything in this Section
to the  contrary notwithstanding, no Lender may assign or participate any
interest in any Loan or  LC Exposure held by it hereunder to the Borrower
or any of its Affiliates or Subsidiaries  without the prior consent of
each Lender.

9.5  Survival.
 All covenants, agreements, representations and warranties made by
the Borrower herein and  in the certificates or other instruments
delivered in connection with or pursuant to this  Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans and  issuance of any Letters of Credit, regardless of any
investigation made by any such other party  or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Lender or any
Lender may have had notice or knowledge of any Default or incorrect
representation or  warranty at the time any credit is extended hereunder,
and shall continue in full force and  effect as long as the principal of
or any accrued interest on any Loan or any fee or any other  amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is  outstanding and so long as the Commitments have not expired or
terminated. The provisions  of Sections 2.12, 2.13, 2.14 and 9.03 and
Article VIII shall survive and remain in full force and  effect
regardless of the consummation of the transactions contemplated hereby, the
repayment  of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or  the termination of this Agreement or any
provision hereof.

9.6  Counterparts; Integration; Effectiveness.
 This Agreement may be executed in
counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together  shall constitute a single contract. This Agreement
and any separate letter agreements with  respect to fees payable to the
Administrative Agent constitute the entire contract between and  among
the parties relating to the subject matter hereof and supersede any and all
previous  agreements and understandings, oral or written, relating to the
subject matter hereof. Except  as provided in Section 4.01, this
Agreement shall become effective when it shall have been  executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each
of the other  parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties  hereto and their respective
successors and assigns. Delivery of an executed counterpart of a
signature page to this Agreement by telecopy shall be effective as delivery
of a manually  executed counterpart of this Agreement.

9.7  Severability.
  Any provision of this Agreement held to be invalid, illegal or unenforceable in any
         jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality
         or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall  not invalidate such provision in any other
jurisdiction.

9.8  Right of Setoff.
 If an Event of Default shall have occurred and be
continuing, subject to the provisions of  Section 2.15 each Lender is
hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general
or special, time or  demand, provisional or final) at any time held and
other indebtedness at any time owing by  such Lender to or for the credit
or the account of the Borrower against any of and all the  obligations of
the Borrower now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this  Agreement and although such obligations may be unmatured. The
rights of each Lender under  this Section are in addition to other rights
and remedies (including other rights of setoff) which  such Lender may
have.

9.9  Governing Law; Jurisdiction: Etc.

     (a)  Governing Law. This Agreement shall be construed in accordance with and governed
            by the law of the State of New York, without regard to its principles of conflicts of laws.

     (b)  Submission to Jurisdiction. The Borrower hereby irrevocably and
unconditionally  submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court  of the State of New York
sitting in Erie County and of the United States District Court of  the
Western District of New York, and any appellate court from any thereof, in any
action  or proceeding arising out of or relating to this Agreement, or
for recognition or enforcement  of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally  agrees that all claims in
respect of any such action or proceeding may be heard and  determined in
such New York State or, to the extent permitted by law, in such Federal court.
 Each of the parties hereto agrees that a final judgment in any such
action or proceeding  shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in  any other manner provided by
law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Issuing Lender or any Lender may otherwise have to
bring any  action or proceeding relating to this Agreement against the
Borrower or its properties in the  courts of any jurisdiction.

     (c)  
Waiver of Venue. The Borrower hereby irrevocably and unconditionally
waives, to  the fullest extent it may legally and effectively do so, any
objection which it may now or  hereafter have to the laying of venue of
any suit, action or proceeding arising out of or  relating to this
Agreement in any court referred to in paragraph (b) of this Section. Each of
 the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the  defense of an inconvenient forum to the
maintenance of such action or proceeding in any  such court.

     (d)  Service of Process. Each party to this Agreement irrevocably consents to service of
            process in the manner provided for notices in Section 9.01. Nothing in this Agreement will
            affect the right of any party to this Agreement to serve process in any other manner
            permitted by law.

9.10        WAIVER OF JURY TRIAL.
  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
         BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
         LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
         TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
         (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
         HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
         ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
         SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
         ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
         OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
         AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
         CERTIFICATIONS IN THIS SECTION.

9.11  Headings.
  Article and Section headings and the Table of Contents used herein are for convenience of
         reference only, are not part of this Agreement and shall not affect the construction of, or be
         taken into consideration in interpreting, this Agreement.

9.12        Treatment of Certain Information: Confidentiality.

     (a)  Treatment of Certain Information. The Borrower acknowledges that from
time to  time financial advisory, investment banking and other services
may be offered or provided  to the Borrower or one or more of its
Subsidiaries (in connection with this Agreement or  otherwise) by any
Lender or by one or more subsidiaries or affiliates of such Lender and the
Borrower hereby authorizes each Lender to share any information delivered to
such Lender  by the Borrower and its Subsidiaries pursuant to this
Agreement, or in connection with the  decision of such Lender to enter
into this Agreement, to any such subsidiary or affiliate, it  being
understood that any such subsidiary or affiliate receiving such information
shall be  bound by the provisions of paragraph (b) of this Section as if
it were a Lender hereunder.  Such authorization shall survive the
repayment of the Loans, the expiration or termination  of the Letters of
Credit and the Commitments or the termination of this Agreement or any
provision hereof.

     (b)  Confidentiality. Each of the Administrative Agent, the Issuing Lender
and the  Lenders agrees to maintain the confidentiality of the
Information (as defined below), except  that Information may be disclosed
(i) to its and its Affiliates’ directors, officers, employees  and
agents, including accountants, legal counsel and other advisors (it being
understood that  the Persons to whom such disclosure is made will be
informed of the confidential nature of  such Information and instructed
to keep such Information confidential), (ii) to the extent  requested by
any regulatory authority, (iii) to the extent required by applicable laws or
 regulations or by any subpoena or similar legal process, (iv) to any
other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any suit, action or proceeding relating to this
Agreement or any  other Loan Document or the enforcement of rights
hereunder or thereunder, (vi) subject to  an agreement containing
provisions substantially the same as those of this paragraph, to any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its  rights or obligations under this Agreement, (vii) with
the consent of the Borrower or (viii)  to the extent such Information (A)
becomes publicly available other than as a result of a  breach of this
paragraph or (B) becomes available to the Administrative Agent, the Issuing
Lender or any Lender on a nonconfidential basis from a source other than the
Borrower.  For the purposes of this paragraph,
“Information” means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is  available to the Administrative Agent, the Issuing
Lender or any Lender on a  nonconfidential basis prior to disclosure by
the Borrower; provided that, in the case of  information received
from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the  confidentiality of Information as provided in this Section
shall be considered to have  complied with its obligation to do so if
such Person has exercised the same degree of care to  maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

         WILSON GREATBATCH LTD.

         By:__________________________

         Name:             Arthur J. Lalonde

         Title:   Senior Vice President, Finance and Treasurer

         LENDERS

         MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent

         By:__________________________

         Name:             Shelley Drake

         Title:   Administrative Vice President

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

        By:__________________________

         Name:             Shelley Drake

         Title:   Administrative Vice President

SCHEDULE I

Commitments

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

                           Revolving
                             Credit         Term Loan                   Applicable
  Lender                   Commitment       Commitment     Commitment   Percentage

M&T                      $20,000,000.00  $40,000,000.00  $60,000,000.00    100%
One Fountain Plaza

12th Floor

Buffalo, NewYork

14203

SCHEDULE II

Existing Indebtedness, Liens and Investments

        [See Section 4.01, Section 5.04, Section 5.07, Section 6.01(c), Section 6.02(a) and
Section 6.06(a)(i)]

 Part A - Indebtedness

 Part B - Liens

 Part C - Investments

 Part D - Patents, Trademarks and Tradenames

 Part E - Subsidiaries

 Part F - Insurance

SCHEDULE III

Litigation

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

SCHEDULE IV

Environmental Matters

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

SCHEDULE V

Existing Letters of Credit

  Letter of Credit No.    Issuer             Face Amount            Expire Date
  --------------------    ------             -----------            -----------

EXHIBIT A

[Form of Assignment and Acceptance]

ASSIGNMENT AND ACCEPTANCE

     Reference is made to the Credit Agreement dated as of January 12, 2001 (as amended
and in effect on the date hereof, the “Credit Agreement”),
by and among Wilson Greatbatch  Ltd., the Lenders named therein and
Manufacturers and Traders Trust Company, as  Administrative Agent for the
Lenders. Terms defined in the Credit Agreement are used herein  with the
same meanings.

     The
Assignor named below hereby sells and assigns, without recourse, to the Assignee
 named below, and the Assignee hereby purchases and assumes, without
recourse, from the  Assignor, effective as of the Assignment Date set
forth below, the interests set forth below (the  “Assigned
Interest”) in the Assignor’s rights and obligations under the
Credit Agreement,  including the interests set forth below in the
Commitment of the Assignor on the Assignment  Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, together  with
unpaid interest accrued on the assigned Loans to the Assignment Date, the
participations  in Letters of Credit and LC Disbursements held by the
Assignor on the Assignment Date, and  the amount, if any, set forth below
of the fees accrued to the Assignment Date for account of  the Assignor.
The Assignee hereby acknowledges receipt of a copy of the Credit Agreement.
From and after the Assignment Date (i) the Assignee shall be a party to and
be bound by the  provisions of the Credit Agreement and, to the extent of
the interests assigned by this  Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii)  the Assignor
shall, to the extent of the interests assigned by this Assignment and
Acceptance,  relinquish its rights and be released from its obligations
under the Credit Agreement.

     This
Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is a Foreign Lender, any documentation
required by  applicable law to be delivered by the Assignee in order to
permit all payments received by such  Foreign Lender hereunder to be made
without withholding, duly completed and executed by  the Assignee, and
(ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative
Agent, duly  completed by the Assignee. The [Assignee/Assignor] shall pay
the fee payable to the  Administrative Agent pursuant to Section
9.04(b)(iv) of the Credit Agreement.

                       This Assignment and Acceptance shall be governed by and construed in accordance
         with the laws of the State of New York.

         Date of Assignment:

 
        Legal Name of Assignor:

         Legal Name of Assignee:

         Assignee's Address for Notices:

         Effective Date of Assignment ("Assignment Date")1:

                                                        Principal Amount
 Facility                                                    Assigned
 --------                                                    --------

 Commitment Assigned:                                       $

 Syndicated Loans:

 Fees Assigned (if any):

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

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

 By:__________________________            By:__________________________
 Name:                                    Name:
 Title:                                   Title:

 The undersigned hereby consent to the within assignment2:

 
WILSON GREATBATCH LTD.

 By:__________________________

 Name:

 Title:

 MANUFACTURERS AND TRADERS TRUST COMPANY, as Administrative Agent

 By:__________________________

 Name:

 Title:

__________

1Must be at least five (5) Business Days after execution by Assignor and
Assignee.

2 Consents to be included to the extent required by
Section 9.04(b) of the Credit Agreement.

                                                              EXHIBIT B

                                           [Form of Opinion of Counsel to the Borrower]

                                                              EXHIBIT C

                                                         [Form of Term Note]

                                                              EXHIBIT D

                                                   [Form of Revolving Credit Note]

                                                              EXHIBIT E

                                            [Form of Revolving Credit Borrowing Request]

                                                             EXHIBIT F1

                                     [Form of Interest Election Request for Term Loan Borrowing]

                                                             EXHIBIT F2

                                 [Form of Interest Election Request for Revolving Credit Borrowing]

                                                              EXHIBIT G

                                             [Form of Borrower Compliance Certificate]CENTENNIAL BANK [LOGO]                                  Administrative
                              Member FDIC               Offices
Open for business.                                      675 Oak
                                                        P.O. Box 1560
                                                        Eugene, OR 97440
                                                        (541) 342-3970
                                                        FAX (541) 342-1425

                            LETTER OF AGREEMENT FOR A
                               BORROWER-IN-CUSTODY

     May 4, 2000

     Federal Reserve Bank of San Francisco
     101 Market Street
     San Francisco, California  94105

     Attention:   Rick Miller

     In consideration of being able to request advances from you and your making
     advances to us secured by our pledge to you of collateral that you will
     permit us to hold in safekeeping for you, and to secure any advance or
     indebtedness or other obligation to you that we may incur, we agree to the
     provisions of Appendix B to your Operating Circular No. 10, effective
     January 2, 1998, as amended from time to time.

     CENTENNIAL BANK

     By: /S/ MICHAEL J. NYSINGH
        ----------------------------
     Michael J. Nysingh
     Senior Vice President
     and Cashier

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