S-1

As filed with the Securities and Exchange Commission on January 16, 2002

Registration No. 333-          

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

MedSource Technologies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	3841	52-2094496
(State of Incorporation)	(Primary S.I.C. Code Number)	(IRS Employer Identification No.)

110 Cheshire Lane, Suite 100

Minneapolis, MN 55305

(952) 807-1234

(Address, including zip code and telephone number, of registrant’s principal executive offices)

Richard J. Effress

Chairman of the Board of Directors and Chief Executive Officer

MedSource Technologies, Inc.

110 Cheshire Lane, Suite 100

Minneapolis, MN 55305

(952) 807-1234

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies to:

Edward R. Mandell Jenkens & Gilchrist Parker Chapin LLP 405 Lexington Avenue New York, NY 10174 Telephone No.: (212) 704-6000 Telecopier No.: (212) 704-6288 Joseph J. Caffarelli Senior Vice President and Chief Financial Officer MedSource Technologies, Inc. 110 Cheshire Lane, Suite 100 Minneapolis, MN 55305 Telephone No.: (952) 807-1234 Telecopier No.: (952) 807-1235 Patrick O’Brien Ropes & Gray One International Place Boston, MA 02110 Telephone No.: (617) 951-7000 Telecopier No.: (617) 951-7050

Approximate date of commencement of proposed sale to public:    From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)		Amount of Registration Fee
Common Stock, par value $.01 per share	$	138,000,000	$	32,982

(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued January 16, 2002

                     Shares

MedSource Technologies, Inc.

COMMON STOCK

MedSource Technologies, Inc. is offering shares of its common stock. This is our initial public offering and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $            and $            per share.

We have applied for approval for quotation of our common stock on the Nasdaq National Market under the symbol “MEDT.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 9.

PRICE $         A SHARE

	Price  to Public	Underwriting  Discounts  and Commissions	Proceeds  to Company
Per Share	$	$	$
Total	$	$	$

MedSource Technologies, Inc. and two selling stockholders have granted the underwriters the right to purchase up to an additional                     shares and             shares, respectively, to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on                 , 2002.

MORGAN STANLEY BEAR, STEARNS & CO. INC.

THOMAS WEISEL PARTNERS LLC

WACHOVIA SECURITIES

, 2002

TABLE OF CONTENTS

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	Page
Prospectus Summary	3
Risk Factors	9
Forward-Looking Statements	19
Use of Proceeds	20
Dividend Policy	21
Capitalization	22
Dilution	24
Selected Unaudited Pro Forma Condensed Combined Financial Information	25
Selected Consolidated Financial Data	30
Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Selected Financial Data of Predecessor Companies	40
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Predecessor Companies	42

	Page
Business	46
Management	56
Certain Transactions	65
Principal and Selling Stockholders	67
Description of Capital Stock	70
Shares Eligible for Future Sale	73
Underwriting	75
Legal Matters	78
Experts	78
Where You Can Find Additional Information	79
Index to Consolidated Financial Statements and Predecessor Company Financial Statements	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is current only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of common stock. Unless otherwise provided, in this prospectus, the “Company,” “we,” “us” and “our” refer to MedSource Technologies, Inc. and its subsidiaries.

Until                          , 2002, all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus, including the more detailed information and the financial statements appearing elsewhere in this prospectus.

Our Business

We are a leading engineering and manufacturing services provider to the medical device industry. Our customers include many of the largest medical device companies in the world, such as Boston Scientific, Guidant, Johnson & Johnson affiliates and Medtronic, as well as other large and emerging medical device companies. We provide product development and design services, precision metal and plastic part manufacturing, product assembly services and supply chain management. Through these products and services, we offer our customers a single source solution for their device development and manufacturing needs, accelerated product development time, and reduced costs, allowing them to focus on their core competencies such as research and sales and marketing. Our revenues have grown from $89.4 million in fiscal 2000 to $128.5 million in fiscal 2001, or $149.8 million in fiscal 2001 on a pro forma basis.

The global medical device market in 2000 exceeded $170 billion, with the United States portion alone constituting approximately $70 billion, according to Frost & Sullivan. Our initial target markets are the surgical instrumentation, electro-medical implant, interventional and orthopedic markets. We selected these target markets based on their size, growth, margins, customer dynamics and competitive environment. We believe that medical device companies’ cost of goods sold largely represents the market for medical engineering and manufacturing services. Based on Frost & Sullivan data, we believe the cost of goods sold for our four target markets currently represents at least a $10 billion annual worldwide opportunity.

According to Frost & Sullivan, outsourcing of manufacturing by medical device companies in the United States grew at an annual rate in excess of 18% from 1999 to 2000. We believe that manufacturing outsourcing by medical device companies will continue to increase at approximately the same rate through 2005 and expect several trends to drive this growth, including:

r the need for faster product innovation, which requires accelerating product development cycle times;

r cost containment pressures in healthcare, which necessitate a more efficient supply chain; and

r increased competition and industry consolidation.

As a result of these factors, medical device companies are focusing on their core competencies in research and sales and marketing and are outsourcing other functions such as manufacturing and related engineering and product development services. We believe that the medical engineering and manufacturing services industry is highly fragmented with over 3,000 companies, many of which have annual revenues of less than $5 million and limited capabilities that do not satisfy current market requirements. We believe we address this market opportunity by providing our customers:

r a single source solution;

r accelerated time to market;

r quality products and practices;

r reduced costs; and

r a financially stable product and service provider.

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The key elements of our strategy are to:

r focus on manufacturing excellence and leading process technologies;

r strengthen our customer relationships by collaborating in the design and engineering of new products;

r drive additional component manufacturing business by continuing to expand our device assembly services;

r pursue product line transfers and acquisitions of customers’ manufacturing assets; and,

r selectively acquire companies to complement our product and service offerings.

We began operations during March 1999 through the acquisition of seven companies with complementary capabilities, and subsequently broadened our capabilities through five additional acquisitions. Since our launch, we have focused our efforts on integrating and growing our business and have made significant investments in our product design and development capabilities, sales and marketing teams, operations, quality systems and information technology infrastructure to support that growth. We currently have 15 manufacturing facilities with approximately 600,000 total square feet and over 1,350 employees.

Recent Development

On January 4, 2002, we acquired HV Technologies, a market leader in the specialized manufacture of polymide and composite micro-tubing that is used in interventional and minimally invasive catheters, delivery systems and instruments. The acquisition of HV Technologies advances our position in the interventional device market by expanding our offering of proprietary manufacturing capabilities to our customers.

We were formed under the name Veratek International, Inc. in Delaware in April 1998, changed our name to MedSource Technologies, Inc. in January 1999 and began operations in March 1999. Our principal executive offices are located at 110 Cheshire Lane, Suite 100, Minneapolis, Minnesota 55305 and our telephone number is (952) 807-1234. Our internet address is www.medsourcetech.com. Information on our web site is not part of this prospectus.

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The Offering

Common stock to be offered by us	shares
Common stock to be outstanding after this offering	shares
Over-allotment option	shares of our common stock to be sold by us and an aggregate of 325,000 shares of our common stock to be sold by two selling stockholders.
Use of proceeds	For repayment of debt, redemption of our Series E and Series F preferred stock issued in connection with our acquisition of HV Technologies in January 2002, payment of accrued dividends on our Series B preferred stock, termination of certain management agreements and working capital and other general corporate purposes, including acquisitions, all as further described under the caption “Use of Proceeds.”
Dividend policy	We do not intend to pay dividends on our common stock. We plan to retain earnings for use in the operation of our business and to fund future growth.
Proposed Nasdaq National Market symbol	MEDT

Except as otherwise indicated, whenever we present the number of shares of common stock outstanding, we have given effect, as of December 30, 2001, to the following issuances of our common stock upon completion of this offering:

r the conversion of all of our:

r Series A preferred stock into an aggregate of 1,918,500 shares of our common stock;

r Series B preferred stock into an aggregate of 3,327,280 shares of our common stock;

r Series C preferred stock into an aggregate of                shares of our common stock (assuming that the initial public offering price is the midpoint of the price range on the cover of this prospectus), subject to adjustment depending upon the initial public offering price of our common stock in this offering as provided in the second paragraph under the caption “Description of Capital Stock — General”;

r Series D preferred stock into an aggregate of 1,769,569 shares of our common stock; and

r Series Z preferred stock into an aggregate of 650,000 shares of our common stock; and

r the exercise of a warrant to purchase 525 shares of our Series C preferred stock, and the conversion of preferred stock into an aggregate of                shares of our common stock (assuming that the initial public offering price is the midpoint of the price range on the cover of this prospectus), subject to adjustment depending upon the initial public offering price of our common stock in this offering as provided in the second paragraph under the caption “Description of Capital Stock — General.”

We calculated the number of shares outstanding after this offering on the assumption that the underwriters do not exercise their over-allotment option, and we also excluded:

r 2,991,684 shares of our common stock issuable, at a weighted average exercise price of $15.60 per share, upon exercise of stock options outstanding as of December 30, 2001;

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r 1,659,858 shares of our common stock available for future grant under our 1999 Stock Plan as of December 30, 2001;

r 500,000 shares of our common stock available for purchase under our Employee Stock Purchase Plan; and

r 200,000 shares of our common stock issuable upon exercise of outstanding warrants as of December 30, 2001 at an exercise price of $.01 per share.

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Summary Consolidated Financial Data

The following table summarizes historical and pro forma consolidated financial data for our business. You should read this table along with “Selected Unaudited Pro Forma Condensed Combined Financial Information,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

The unaudited pro forma statement of operations data set forth below for the year ended June 30, 2001 show our pro forma results of operations as if our acquisition of ACT Medical in December 2000 and as if our acquisition of HV Technologies in January 2002 and our related issuances of Series E preferred stock and warrants and Series F preferred stock had all occurred on July 2, 2000, and the unaudited pro forma statement of operations data set forth below for the three months ended September 30, 2001 show our pro forma results of operations as if the acquisition of HV Technologies in January 2002 and the related issuance of Series E preferred stock and warrants and Series F preferred stock had all occurred on July 1, 2001, as further discussed under the caption “Selected Unaudited Pro Forma Condensed Combined Financial Information.”

The unaudited pro forma balance sheet data set forth below and the unaudited pro forma as adjusted balance sheet data set forth below both give effect to our acquisition of HV Technologies in January 2002 and our related issuances of Series E preferred stock and warrants and Series F preferred stock as if they had all occurred on September 30, 2001, as further discussed under the caption “Selected Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma as adjusted balance sheet data set forth below also give effect to this offering and the conversion of all of our outstanding convertible preferred stock and the exercise of the warrant described in the first and second paragraphs of the table under “Summary — The Offering” on page 5.

	Fiscal Year Ended						Pro Forma Fiscal Year Ended June 30, 2001(b)			Three Months Ended September 30,						Pro Forma Three Months Ended September 30, 2001(b)
	July 1, 2000(a)			June 30, 2001						2000			2001
Statement of Operations Data:	(In thousands, except share and per share data)
Revenues	$	89,352		$	128,462		$	149,769		$	27,611		$	33,865		$	36,338
Costs and expenses:
Cost of products sold		59,811			94,386			108,126			20,793			26,106			27,196
Selling, general and administrative expense		21,167			26,199			31,334			5,621			6,402			7,125
Amortization of goodwill and other intangibles(c)		4,255			5,640			6,544			1,125			90			90
Restructuring charge(d)		—			11,464			11,464			—			—			—
Total costs and expenses		85,233			137,689			157,468			27,539			32,598			34,411
Operating income (loss)		4,119			(9,227	)		(7,699	)		72			1,267			1,927
Interest (expense), net		(10,682	)		(10,213	)		(10,155	)		(2,994	)		(2,468	)		(2,461	)
Other income (expense)		(7	)		53			64			63			(21	)		(17	)
Loss before income taxes		(6,570	)		(19,387	)		(17,790	)		(2,859	)		(1,222	)		(551	)
Income tax benefit (expense)		535			(70	)		(251	)		—			—			(40	)
Net loss		(6,035	)		(19,457	)		(18,041	)		(2,859	)		(1,222	)		(591	)
Preferred stock dividends and accretion of discount on preferred stock		(8,345	)		(9,688	)		(12,514	)		(2,104	)		(2,648	)		(3,025	)
Net loss attributed to common stockholders	$	(14,380	)	$	(29,145	)	$	(30,555	)	$	(4,963	)	$	(3,870	)	$	(3,616	)
Net loss per share attributed to common stockholders (basic and diluted)	$	(3.10	)	$	(5.55	)	$	(5.03	)	$	(0.95	)	$	(0.74	)	$	(0.60	)
Weighted average number of shares of common stock outstanding (basic and diluted)		4,633,571			5,252,749			6,076,974			5,248,341			5,255,958			6,080,183
Other Data:
Net cash provided by (used in) operating activities(e)	$	6,290		$	1,253					$	(2,074	)	$	(3,305	)
Net cash used in investing activities(e)		(22,244	)		(11,627	)					(1,000	)		(1,619	)
Net cash provided by (used in) financing activities(e)		16,356			28,453						931			(1,111	)
EBITDA(f)		12,867			3,021		$	6,262			2,764			3,197		$	4,001
Adjusted EBITDA(f)(g)		14,373			16,140			19,381			3,125			3,663			4,467

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	As of September 30, 2001
	Actual			Pro Forma(b)		Pro Forma As Adjusted(b)
	(In thousands)
Balance Sheet Data:
Cash and cash equivalents	$	14,254		$	16,264	$
Working capital		24,055			28,009
Total assets		197,929			224,064
Total debt (h)		88,493			88,493
Mandatory redeemable convertible stock		100,972			104,608
Total stockholders’ equity (deficit)		(17,725	)		3,935

(a) Our fiscal years originally ended on the Saturday closest to June 30. Effective July 1, 2001, our fiscal year end was changed to June 30.

(b) In connection with our acquisition of HV Technologies in January 2002, we issued $6.0 million of our Series E preferred stock, and we issued warrants to purchase an aggregate of 200,000 shares of our common stock. We will record a discount of $2.5 million to the carrying value of the Series E preferred stock equal to the consideration allocated to the warrants. We plan to accrete this discount over the 12 month period ending December 31, 2002 because we plan to redeem our Series E preferred stock by that date. The effect of the accretion is excluded from the pro forma and pro forma as adjusted presentation.

(c) The Statement of Operations Data for the three months ended September 30, 2001 does not include a charge for the amortization of goodwill. Effective with our quarter ended September 30, 2001, we adopted the provisions of Statement of Financial Accounting Standards, or SFAS, No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, and, accordingly, we reclassified certain identifiable intangibles to goodwill and will no longer amortize goodwill and intangible assets that are deemed to have indefinite lives under SFAS 142. Had we continued to amortize goodwill during the three months ended September 30, 2001, amortization expense in that period would have increased by approximately $1.4 million or $0.27 per common share.

(d) In June 2001, we completed a strategic review of our manufacturing operations and support functions. Based on this review and with board approval, we began actions to eliminate redundant facilities. These actions resulted in pre-tax charges of $11.5 million. The charges include employee termination benefits of $3.8 million, other exit costs of $2.2 million, impairment of goodwill and other intangibles of $3.6 million and impairment of property, plant, and equipment of $1.9 million.

(e) Because of the subjectivity inherent in the assumptions concerning the nature and timing of the uses of cash generated by the pro forma interest and other expenses, cash flows from operating, investing and financing activities are not presented for the pro forma periods.

(f) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA should not be considered in isolation from, or as a substitute for, net income, cash flow from operations or other cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of our profitability or liquidity. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure, and we believe that it provides relevant and useful information. A calculation of EBITDA may not be comparable to similarly titled measures reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. Our EBITDA calculation is not intended to represent cash provided by (used in) operating activities since it does not include interest and taxes and changes in operating assets and liabilities, nor is it intended to represent a net increase in cash since it does not include cash provided by (used in) investing and financing activities.

(g) Adjusted EBITDA further adjusts EBITDA to exclude management fees for all periods presented and excludes restructuring charges of $11.5 million for year ended June 30, 2001.

(h) In connection with the repayment of our debt, as discussed under the caption “Use of Proceeds,” we will expense $3.2 million of unamortized deferred financing costs, $2.6 million of unamortized discount and a redemption premium of $1.6 million.

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RISK FACTORS

You should carefully consider the risks described below, together with all of the other information included in this prospectus, before deciding whether to invest in our common stock. The following risks and uncertainties are not the only ones we face. However, these are the risks our management believes are material. If any of the following risks materializes, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business

Our business depends on industry trends and the business success of our customers

Our business depends on trends in the medical device industry, which is subject to rapid technological changes, short product life-cycles, frequent new product introductions and evolving industry standards, as well as economic cycles. Conditions or technological innovations adversely affecting any of our major customers, the medical device industry in general or the surgical instrumentation, electro-medical implant, interventional and orthopedic markets we target in particular, could adversely affect our operating results. For example, the discovery and market acceptance of non-device treatments for specific medical conditions could make the medical devices used to treat these conditions obsolete. In addition, the products and services that we provide to our customers generally are specific to a particular medical device being developed or marketed by them. If a customer’s medical device does not gain or maintain market acceptance because of competing medical devices or treatments, changing market conditions, unfavorable regulatory actions or other reasons, our revenues from that customer and our results of operations would be adversely affected.

We rely on a few large customers

The medical device industry is concentrated, with relatively few companies accounting for a large percentage of sales in the surgical instrumentation, electro-medical implant, interventional and orthopedic markets that we target. Accordingly, our revenue and profitability are highly dependent on our relationships with a limited number of large medical device companies. In fiscal 2001, our top four customers accounted for approximately 41% of our revenues, with one customer accounting for 18% of our revenues and another accounting for 12% of our revenues. In fiscal 2000, our top four customers accounted for approximately 42% of our revenues, with one customer accounting for 16% of our revenues and another accounting for 14% of our revenues. We provide products and services to several different divisions of our top customers. We are likely to continue to experience a high degree of customer concentration, particularly if there is further consolidation within the medical device industry. We cannot assure you that there will not be a loss or reduction in business from one or more of our major customers. In addition, we cannot assure you that revenues from customers that have accounted for significant revenues in the past, either individually or as a group, will reach or exceed historical levels in any future period. The loss or a significant reduction of business from any of our major customers would adversely affect our results of operations.

Our growth may depend on continued outsourcing

To date, we have benefited from the growing trend of medical device companies to outsource all or a portion of their engineering, product development, manufacturing and assembly requirements. Although we expect medical device companies to increase their outsourcing of these requirements in the future, we cannot be certain that this trend will continue or that, if it continues, we will benefit from it. Even if the outsourcing trend in the industry continues, one or more of our principal customers could decide to decrease its reliance on or use of outsourcing, which would reduce our customer base.

Also, as part of our growth strategy, we are seeking to accept full supply chain management and manufacturing responsibility for selected product lines from our customers and, in some cases, to acquire the related manufacturing assets from these customers. While we believe that product line transfers and asset

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acquisitions of this kind are becoming increasingly attractive to our customers, we have only consummated one of these transactions to date. We cannot be sure that opportunities of this nature will be available, especially if the trend toward outsourcing does not continue.

We have few contracts that ensure us future business

Generally, we work with our customers on a project-by-project or purchase order-by-purchase order basis, without any long term revenue, volume or other commitments to ensure us future business. Customer orders typically may be cancelled and volume levels may be changed or delayed at any time. We cannot assure you that we can replace delayed, cancelled or reduced projects with new business in a timely manner. Also, we may not fully recover our costs in connection with cancelled, delayed or reduced projects.

Our results of operations fluctuate

Our operating results have fluctuated in the past from quarter to quarter and are likely to fluctuate significantly in the future due to a variety of factors, including:

r the timing of actual customer orders and the accuracy of our customers’ forecasts of future production requirements;

r the introduction and market acceptance of our customers’ new products and changes in demand for our customers’ existing products;

r changes in the relative portion of our revenue represented by our various products, services and customers, including the relative mix of our business across our target markets;

r changes in competitive or economic conditions generally or in our customers’ markets;

r changes in availability or costs of raw materials or supplies; and

r demand for our products and services, which, during our limited operating history, has been higher than average during the last quarter of our fiscal year and lower than average during the first quarter of our fiscal year.

For all these reasons, our quarterly results are difficult to predict and should not be relied upon as an indication of future performance. Fluctuations in our quarterly results could result in our failing to meet the expectations of the investment community, which could adversely affect the market price of our common stock even if those fluctuations are unrelated to our long term operating performance or prospects.

We may not successfully manage our growth and integrate acquired businesses

We were formed in March 1999 through the acquisition of seven separate businesses. In January 2000, we acquired the business of Tenax Corporation; in February 2000, we acquired Apex Engineering; in May 2000, we acquired Thermat Precision Technology, Inc.; in December 2000, we acquired ACT Medical, Inc.; and in January 2002, we acquired HV Technologies. As a result, we are experiencing rapid growth that could strain our managerial and other resources.

The successful integration and operation of an acquired business requires communication and cooperation among key managers, the transition of customer relationships, the management of ongoing projects of acquired companies and the management of new projects across previously independent facilities. Acquisitions also involve a number of other risks, including:

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r the diversion of management attention;

r difficulties in integrating the operations and products of an acquired business or in realizing projected operational results, synergies and cost savings;

r inaccurate assessments of undisclosed liabilities; and

r potential loss of key customers or employees of the acquired businesses.

Customer satisfaction or performance problems with an acquired company could also harm our reputation as a whole, and any acquired business could significantly underperform relative to our expectations. Because all of our acquisitions were completed in the past 36 months, we are currently facing all of these challenges and our ability to meet them over the long term has not been established. For all these reasons, our pursuit of an overall acquisition strategy or any individual completed, pending or future acquisition may adversely affect the realization of our strategic goals.

In addition, while we anticipate cost savings, operating efficiencies and other synergies as a result of our acquisitions, the consolidation of functions and the integration of departments, systems and procedures present significant management challenges. We cannot assure you that we will:

r successfully accomplish those actions as rapidly as anticipated;

r achieve the cost savings and efficiencies that we expect from our acquisitions;

r successfully manage the integration of new locations or acquired operations;

r fully use new capacity; or

r enhance our business as a result of any past or future acquisition, including those mentioned above.

The acquisition of new operations can also introduce new types of risks to our business. For example, new acquisitions may require greater levels of financing or greater effort to address United States Food and Drug Administration, or FDA, regulation or similar foreign regulation.

We may face product liability claims

We may be exposed to product liability claims and product recalls, including those which may arise from misuse or malfunction of, or design flaws in, our customers’ products, whether or not such problems directly relate to the products and services we have provided. Generally, we do not at this time have agreements in place with our customers governing liability for product liability and recalls. Even where we have agreements with customers that contain provisions attempting to limit our damages, these provisions may not be enforceable or may otherwise fail to protect us from liability. Product liability claims or product recalls, regardless of their ultimate outcome, could require us to spend significant time and money in litigation or require us to pay significant damages. The occurrence of product liability claims or product recalls could cause our results of operations to be adversely affected.

We carry $20.0 million of product liability insurance coverage which is limited in scope. Our management believes that our insurance coverage is adequate given the risks we face. We cannot assure you that we will be able to maintain this insurance or to do so at reasonable cost and on reasonable terms. We also cannot assure you that this insurance will be adequate to protect us against a product liability claim that may arise in the future.

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We may experience decreasing prices for the products and services we offer

We may experience decreasing prices for the products and services we offer due to:

r pricing pressure experienced by our customers from managed care organizations and other third-party payors;

r increased market power of our customers as the medical device industry consolidates; and

r increased competition among medical engineering and manufacturing services providers.

If the prices for our products and services decrease for whatever reason and we are unable to reduce our expenses, our results of operations will be adversely affected.

Quality problems could harm our reputation and erode our competitive position

Quality is extremely important to us and our customers due to the serious and costly consequences of product failure. Our success depends in part on our ability to manufacture to exact design specifications precision engineered plastic and metal components, subassemblies and finished devices from multiple materials. If our products and services fail to meet the highest quality standards or fail to adapt to evolution in those standards, our reputation could be harmed and our competitive position could be damaged. In addition, our quality systems and certifications are critical to the marketing success of our products and services. If we fail to maintain our quality systems or certifications, our reputation could be damaged and our results of operations could be adversely affected.

We face competition from a variety of sources

Our current and prospective customers often evaluate our product and service offerings against the merits of internal design and engineering, manufacturing, assembly and supply chain management. In this sense, we often compete for business with the internal resources of our customers, many of whom are leading medical device companies with long-standing internal design and engineering, manufacturing and supply chain management capabilities. Our success therefore depends heavily upon our ability to demonstrate and deliver cost savings and accelerated time to market for our customers as compared to use of internal resources, without loss of quality, confidentiality or reliability.

In addition, we believe the medical engineering and manufacturing services industry is very competitive and fragmented with over 3,000 companies, many of which are specialized. To the extent that medical device companies seek to outsource more of the design, prototyping and manufacturing of their products, we will face increasing competitive pressures to broaden our capabilities and grow our business in order to maintain our competitive position, and we may encounter competition from other companies with design, technological and manufacturing capabilities similar or superior to ours.

Our indebtedness could have negative consequences for our business

Failure to comply with the covenants under our senior credit facility or with respect to any future indebtedness may result in an event of default. If an event of default occurs and is not cured or waived, substantially all of our indebtedness could become immediately due and payable. We anticipate that upon the closing of this offering our total debt will be approximately $40 million and our annual interest expense will be approximately $             million. The ability to pay interest and principal on our debt obligations will depend on our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control. There can be no assurance that our operations will generate earnings in any future period sufficient to cover the fixed charges. In addition, we may experience variable financial results as a consequence of floating interest rate debt. As interest rates fluctuate, we may

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experience increases in interest expense, which may materially affect financial results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” on page 35.

We may require additional capital

Our growth strategy will require additional capital for, among other purposes, completing acquisitions of companies and customers’ product lines and manufacturing assets, integrating acquired companies and assets, acquiring new equipment and maintaining the condition of existing equipment. In connection with this offering, we intend to repay all of our subordinated indebtedness and replace our existing senior credit facility with a new senior credit facility. If cash generated internally is insufficient to fund capital requirements, or if funds are not available under our new senior credit facility, we will require additional debt or equity financing. Adequate financing may not be available or, if available, may not be available on terms satisfactory to us. If we fail to obtain sufficient additional capital in the future, we could be forced to curtail our growth strategy by reducing or delaying capital expenditures and acquisitions, selling assets or restructuring or refinancing our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” on page 35.

Our growth may depend upon our ability to make acquisitions

Our continued growth may depend on our ability to identify and acquire on acceptable terms companies that complement or enhance our business. We may not be able to identify or complete future acquisitions. Some of the risks that we may encounter include expenses associated with, and difficulties in identifying, potential targets, the costs associated with incomplete acquisitions and higher prices for acquired companies because of competition for attractive acquisition targets. If we fail to acquire additional capabilities, we may be unable to compete with other companies in our industry that are able to provide more complete outsourcing capabilities and services to medical device companies, which could adversely affect our results of operations.

Our business depends on identifying quality suppliers and subcontractors

Our current capabilities do not include all elements that are required to satisfy all of our customers’ requirements. As we increasingly position ourselves to provide our customers with a single source solution, we may rely increasingly on third party suppliers, subcontractors and other outside sources for components or services. Manufacturing problems may occur with these third parties. A supplier may fail to develop and supply products and components to us on a timely basis, or may supply us with products and components that do not meet our quality, quantity or cost requirements. If any of these problems occur, we may be unable to obtain substitute sources of these products and components on a timely basis or on terms acceptable to us, which could harm our ability to manufacture our own products and components profitably or on time. In addition, if the processes that our suppliers use to manufacture products and components are proprietary, we may be unable to obtain comparable components from alternative suppliers.

We may fail to maintain our manufacturing capabilities

We use highly engineered, proprietary processes and sophisticated machining equipment to meet the specifications of our customers. Without the timely incorporation of new processes and enhancements, particularly relating to quality standards and cost-effective production, our manufacturing capabilities would likely become outdated, which would cause us to lose customers. In addition, new or revised technologies could render our existing process technology less competitive or obsolete or could reduce demand for our products and services. It is also possible that finished medical device products introduced by our customers may require fewer of our components or may require components that we lack the capabilities to manufacture or assemble. In addition, we cannot assure you that any investment that we make in new technologies will result in commercially viable processes for our business.

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Although we anticipate that our manufacturing and marketing expertise will enable us to successfully develop and market our capabilities, any failure by us to anticipate or respond in a cost-effective and timely manner to technological developments or changes in industry standards or customer requirements, or any significant delays in capability development or introduction could adversely affect our results of operations.

There are risks associated with international operations

We operate a manufacturing facility in Navojoa, Mexico and are in the process of significantly expanding that facility. In addition, we may seek to build or acquire additional manufacturing or other facilities outside the United States in the future. Our international operations may expose us to risks and uncertainties, including political, social and economic instability, difficulties in staffing and managing international operations and controlling manufacturing quality, product or material transportation delays or disruption, trade restrictions, currency fluctuation and changes in tariffs, regulatory restrictions and import and export license requirements. If any of these risks materializes, our business may be harmed.

The availability and price of the raw materials that we use in our products fluctuates

Raw materials needed for our business are susceptible to fluctuations in price and availability due to transportation costs, government regulations, price controls, changes in economic climate or other unforeseen circumstances. In particular, stainless steel, titanium and platinum are used in some of our products and are in limited supply and subject to fluctuations in price. Our cost of products sold may be adversely impacted by decreases in the availability and increases in the market prices of the raw materials used in our manufacturing processes. There can be no assurance that price increases in raw materials can be passed on to our customers through increases in product prices. Even when we are able to pass along all or a portion of our raw material price increases, there is typically a lag time between the actual cost increase of raw materials and the corresponding increase in the price of our products.

We and our customers are subject to governmental regulation

We and our customers are subject to federal, state and local health and safety and consumer product regulation, including regulation by the FDA, and to similar regulatory requirements in other countries. These regulations govern a wide variety of activities from product safety and effectiveness to design and development to labeling, manufacturing, promotion, sales and distribution. We believe that we are in compliance with the requirements of FDA, of state and local authorities and, as applicable, of equivalent foreign authorities. In the event that we build or acquire additional facilities outside the United States, we will be subject to medical device manufacturing regulation in those jurisdictions as well. Also, our customers’ products are subject to regulation, including manufacturing standards, of other countries in which they sell their products. As a result, we also may be obliged to comply with these manufacturing standards.

To maintain manufacturing approvals, we are generally required, among other things, to register certain of our manufacturing facilities with the FDA and with certain state and foreign agencies, maintain extensive records and submit to periodic inspections by the FDA and certain state and foreign agencies. We may be required to incur significant expenses and to spend significant amounts of time to comply with these regulations or to remedy past violations of these regulations. These efforts could be burdensome. In addition, any failure by us to comply with applicable government regulations could result in cessation of portions or all of our operations, imposition of fines and restrictions on our ability to carry on or expand our operations. Compliance by our customers with governmental regulations and their remedying of past violations of these regulations also may be time consuming, burdensome and expensive and could negatively affect our customers’ abilities to sell their products, which in turn could adversely affect our ability to sell our products and services.

The regulations to which we are subject are complex, change frequently and have tended to become more stringent over time. In addition, future laws and regulations may increase governmental involvement in

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healthcare, lower reimbursement rates or otherwise change the environment in which healthcare industry participants operate.

Our facilities are subject to environmental regulation

Federal, state and local laws impose various environmental controls on the management, handling, generation, manufacturing, transportation, storage, use and disposal of hazardous chemicals and other materials used or generated in our manufacturing activities. If we fail to comply with any present or future environmental laws, we could be subject to future liabilities or the suspension of production. We cannot assure you that our operations will not require expenditures for clean-up in the future. Although we do not anticipate that these remediation efforts will be material, we cannot assure you that the costs associated with these efforts will not have an adverse effect on our business, financial condition or results of operations. Changes in environmental laws may impose costly compliance requirements on us or otherwise subject us to future liabilities and additional laws relating to the management, handling, generation, manufacture, transportation, storage, use and disposal of materials used in or generated by the manufacture of our products may be imposed. In addition, we cannot predict the effect that these potential requirements may have on us or our customers.

Accidents at our facilities could delay production and adversely affect operations

Our business involves complex manufacturing processes and hazardous materials that can be dangerous to our employees. Although we employ safety procedures in the design and operation of our facilities and we have not experienced any serious accidents or deaths, there is a risk that an accident or death could occur in one of our facilities. Any accident could result in significant manufacturing delays or claims for damages resulting from injuries, which would harm our operations and financial condition. The potential liability resulting from any such accident or death could cause our business to suffer. Any disruption of operations at any of our facilities could harm our business.

We depend on a few key personnel

Our future success depends in part on our ability to attract and retain key executive, engineering, marketing and sales personnel. Our key personnel include Mr. Effress and our other executive officers and the loss of certain key personnel could have a material adverse effect on us. We face intense competition for these professionals from our competitors, our customers and other companies operating in our industry. To the extent that the services of members of our senior management team and key technical personnel would be unavailable to us for any reason, we would be required to hire other personnel to manage and operate our company and to develop our products and technology. We cannot assure you that we would be able to locate or employ such qualified personnel on acceptable terms.

We need to continue to attract qualified personnel

Our success will depend in large part upon our ability to attract, train, retain and motivate highly skilled employees and management. There is currently aggressive competition for employees who have experience in the engineering and technology used in our products and services. We compete intensely with other companies to recruit and hire from this pool. The industries in which we compete for employees are characterized by high levels of employee attrition. Although we believe we offer competitive salaries and benefits, we may have to increase spending in order to retain personnel.

We and our customers may be subject to infringement claims by third parties, and we may be unable to protect our intellectual property

Litigation to enforce and defend patent and other intellectual property rights is common in the medical device industry. Although we do not believe that any of our products, services or processes infringe the

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intellectual property rights of third parties, we may be accused of infringing the rights of others. Our customers’ products also may be the subject of third-party infringement claims, which could seek damages from both the customer and from us. With most of our customers, we do not have formal agreements governing allocation of liability for such claims. Even where we do not have liability to third parties, an infringement claim against one of our customers could result in reduced demand for our products and services or increased pricing pressure. Any infringement claim, significant charge or injunction against our products or those of our customers could harm our business.

We rely on a combination of patent, trade secret and trademark laws, confidentiality procedures and contractual provisions to protect our intellectual property, which relates principally to proprietary manufacturing processes. We cannot be sure that the steps we take to protect our proprietary rights will adequately deter unauthorized disclosure or misappropriation of our intellectual property, technical knowledge, practice or procedures. We may be required to spend significant resources to monitor and defend our intellectual property rights, we may be unable to detect or defend against infringement of these rights and we may lose any competitive advantage associated with these rights.

Risks Related to this Offering and Our Stock

Our stock price could be extremely volatile and, as a result, you may not be able to resell your shares at or above the price you paid for them

Before this offering there has not been a public market for our common stock, and an active public market for our common stock may not develop or be sustained after this offering. Further, the market price of our common stock may decline below the price you paid for your shares.

Among the factors that could affect our stock price are:

r industry trends and the business success of our customers;

r loss of a key customer;

r fluctuations in our results of operations;

r our failure to meet the expectations of the investment community and changes in investment community recommendations or estimates of our future results of operations;

r strategic moves by our competitors, such as product announcements or acquisitions;

r regulatory developments;

r litigation;

r general market conditions; and

r other domestic and international macroeconomic factors unrelated to our performance.

The stock market has recently experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our common stock.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. If a securities class action suit is filed against us, we would incur

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substantial legal fees and our management’s attention and resources would be diverted from operating our business in order to respond to the litigation.

There may be sales of a substantial amount of our common stock 180 days after this offering, or earlier, by our stockholders, and these sales could cause our stock price to fall

MedSource and each of its directors, executive officers and stockholders have entered into a lock-up agreement with Morgan Stanley on behalf of the underwriters for a period of 180 days after the date of this prospectus. Sales of substantial amounts of our common stock in the public market after this offering, or the perception that such sales will occur, could adversely affect the market price of our common stock and make it difficult for us to raise funds through equity offerings in the future. A substantial number of outstanding shares of common stock and shares issuable upon exercise of outstanding options and warrants will become available for resale in the public market at prescribed times. Of the             shares to be outstanding after the offering,             shares offered by this prospectus will be eligible for immediate sale in the public market without restriction by persons other than our affiliates. The remaining         %, or            shares, of our total outstanding shares will become available for resale in the public market as shown in the chart below.

Number of Shares	Date Available for Resale
	Immediately
	90 days after this offering (            , 2002)
	180 days after this offering             , 2002) or earlier in the sole discretion of Morgan Stanley & Co. Incorporated
	Various dates beginning in             , 2002.

Beginning 180 days after this offering (             , 2002), holders of              shares of our common stock may require us to register their shares for resale under the federal securities laws, and holders of an additional            shares of our common stock are entitled to have their shares included in the registration statement, all subject to reduction upon the request of the underwriter in the offering, if any. Registration of those shares would allow the holders to immediately resell their shares in the public market. Any such sales or anticipation thereof could cause the market price of our common stock to decline.

In addition, after this offering, we intend to register             shares of common stock subject to outstanding options or reserved for issuance under our stock purchase plan. For more information, see “Shares Eligible for Future Sale.”

Our principal stockholders and management own a significant percentage of our company and will be able to exercise significant influence over our company

After this offering, our executive officers and directors and principal stockholders and their affiliated entities will together control approximately     % of our outstanding common stock. Accordingly, these stockholders, if they act together, will be able to control the composition of our board of directors and many other matters requiring stockholder approval and will continue to have significant influence over our affairs. They may exercise this influence in a manner that advances their best interests and not necessarily those of other stockholders. This concentration of ownership also could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us.

Provisions in our charter documents and Delaware law may deter takeover efforts that you feel would be beneficial to stockholder value

Our certificate of incorporation and bylaws and Delaware law contain provisions which could make it difficult for a third party to acquire us without the consent of our board of directors. These provisions include a

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classified board of directors and limitations on actions by our stockholders. In addition, our board of directors has the right to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror. Delaware law also imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. While we believe these provisions provide for an opportunity to receive a higher bid by requiring potential acquirors to negotiate with our board of directors, these provisions apply even if the offer may be considered beneficial by some stockholders, and a takeover bid otherwise favored by a majority of our stockholders might be rejected by our board of directors.

You will suffer immediate and substantial dilution

The initial public offering price of our common stock will be substantially higher than the net tangible book value per share of our outstanding common stock. If you purchase common stock in this offering, you will incur immediate and substantial dilution in the net tangible book value per share of the common stock from the price you paid. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial additional dilution.

Absence of dividends could reduce our attractiveness to investors

Some investors favor companies that pay dividends, particularly in market downturns. We currently intend to retain any future earnings to finance the continued development and expansion of our business, and therefore, we do not anticipate paying cash dividends on our common stock in the future. In addition, our new senior credit facility will restrict our payment of dividends. Because we likely will not pay dividends, your return on this investment likely depends on your ability to sell our stock for a profit.

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FORWARD-LOOKING STATEMENTS

You should not rely on forward-looking statements in this prospectus. This prospectus contains forward-looking statements within the meaning of federal securities laws that relate to future events or our future financial performance. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology.

Some of the factors that may cause actual results to differ materially from the results expressed or implied by these forward-looking statements are set forth under “Risk Factors.”

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We do not intend to update any of the forward-looking statements after the date of this prospectus or to conform these statements to actual results.

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USE OF PROCEEDS

Our net proceeds from the sale of             shares of common stock in this offering at an assumed initial public offering price of $            per share will be approximately $            million (approximately $            million if the underwriters’ over-allotment option is exercised in full), after deducting the underwriting discount and estimated offering expenses payable by us.

We intend to use those proceeds as follows:

	Approximate dollar amount
	(In millions)
Repayment of our senior credit facility(a)	$	28.3
Repayment of our 12.5% senior subordinated notes(b)		21.6
Redemption of our Series E preferred stock and our Series F preferred stock(c)		10.4
Payment of accrued and unpaid dividends on our Series B preferred stock(d)		4.0
One-time payments to terminate agreements with Kidd & Company and Whitney Mezzanine Management Company(e)		2.9
Working capital and other general corporate purposes, including potential acquisitions(f)
Total	$

(a) As of the date of this prospectus, we owed $68.3 million under our existing senior credit facility. We expect to repay this facility in full with $28.3 million of the proceeds of this offering and $40.0 million from our new senior credit facility, described below under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — New Senior Credit Facility.” The outstanding loans under our existing senior credit facility mature between March 2005 and March 2007 and presently bear interest at rates ranging from 5.4% to 6.9% per year.

(b) The senior subordinated notes mature in 2009, but we will prepay the notes in full, together with a redemption premium of $1.6 million, with the proceeds from this offering, as further discussed below under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Senior Subordinated Notes.”

(c) Our Series E preferred stock and Series F preferred stock were issued in connection with our acquisition of HV Technologies in January 2002. The Series E preferred stock was issued to investors for cash that was paid to shareholders of HV Technologies, and the Series F preferred stock was issued to one of the shareholders of HV Technologies. Our Series E preferred stock and our Series F preferred stock accrue dividends at the rate of 6% per year until December 31, 2002 and January 4, 2003, respectively, and accrue dividends at 16% per year on a retroactive basis thereafter. We expect to use a portion of the proceeds of this offering to redeem our Series E preferred stock before December 31, 2002, and we will use a portion of the proceeds of this offering to redeem our Series F preferred stock within 45 days after we complete this offering.

(d) This amount represents payment of accrued and unpaid dividends on our Series B preferred stock, which accrues dividends at the rate of 6% per year. As discussed above under the first paragraph after the table under the caption “Summary — The Offering” on page 5, the Series B preferred stock will convert into common stock upon completion of this offering.

(e) This amount represents amounts payable to terminate agreements with Kidd & Company and Whitney Mezzanine Management Company described below under the caption “Certain Transactions — Certain Services.”

(f) From time to time, in the ordinary course of business, we evaluate possible acquisitions of, or investments in, businesses, products and technologies that are complementary to our business. We currently have no arrangements, agreements or understandings for any such acquisitions or investments.

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The amounts and timing of our use of the proceeds of this offering will depend upon numerous factors, including the amount of proceeds actually raised in this offering, the timing of any acquisitions we complete, the availability of debt financing and the amount of cash generated by our operations. Until used as described above, we intend to invest the proceeds of this offering in short-term, investment-grade securities.

The above description represents our present intentions based on our current plans and business conditions. Unforeseen events or changed business conditions, however, could result in the application of the net proceeds from this offering in a manner other than as described in this prospectus. Our management will have broad discretion to allocate the net proceeds from this offering.

DIVIDEND POLICY

We anticipate that we will retain future earnings, if any, to finance the continued development and expansion of our business. In addition, our new senior credit facility will restrict our payment of dividends. Any future determination with respect to the payment of dividends will be dependent upon, among other things, our earnings, capital requirements, the terms of our then existing indebtedness, applicable requirements of Delaware corporate law, general economic conditions and other factors considered relevant by our board of directors.

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2001:

r on an actual basis;

r on a “pro forma” basis to reflect our acquisition of HV Technologies in January 2002 and the related issuance of our Series E preferred stock and warrants and Series F preferred stock as if they had all occurred on September 30, 2001; and

r on a “pro forma as adjusted” basis to reflect, in addition to the pro forma adjustments discussed above, (1) the sale of             shares of common stock by us in this offering at an assumed initial public offering price of $             , after deducting the underwriting discount and estimated offering expenses payable by us; (2) the conversion of the preferred stock and the exercise of the warrant as described in the first and second paragraphs after the table under the caption “Summary — The Offering” on page 5; and (3) the application of the net proceeds of this offering, together with proceeds of approximately $40.0 million from the new senior credit facility described in footnote (a) below.

This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Unaudited Pro Forma Condensed Combined Financial Information” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

	As of September 30, 2001
	Actual			Pro Forma			Pro Forma As Adjusted
	(In thousands, except share data)
Cash and cash equivalents	$	14,254		$	16,264		$
Existing senior credit facility, including current portion	$	70,513		$	70,513		$	—
New senior credit facility, including current portion(a)		—			—			40,000
12.5% senior subordinated notes, including current portion and unamortized discount(b)		20,000			20,000			—
Other long-term debt including current portion		562			562			562
Mandatory redeemable stock:
Series B, Series C, Series D and Series F preferred stock, par value $.01 per share, 495,329 shares authorized in the aggregate actual, 499,329 shares authorized in the aggregate pro forma, none authorized pro forma as adjusted, 408,360 shares outstanding in the aggregate actual, 412,360 outstanding in the aggregate pro forma, and none outstanding pro forma as adjusted		100,972			104,608			—
Stockholders’ equity:
Series A, Series E and Series Z preferred stock, par value $.01 per share, 165,000 shares authorized in the aggregate actual, 171,000 shares authorized in the aggregate pro forma, none authorized pro forma as adjusted, 103,370 shares outstanding in the aggregate actual, 109,370 shares outstanding in the aggregate pro forma, and none outstanding pro forma as adjusted		1			3,538
Common stock, par value $.01 per share, 40,000,000 shares authorized, 5,256,158 shares outstanding actual, 6,080,380 shares outstanding pro forma and         shares outstanding pro forma as adjusted		53			61
Additional paid-in capital		33,880			51,995
Accumulated other comprehensive loss		(2,771	)		(2,771	)
Accumulated deficit		(48,709	)		(48,709	)		(c	)(d)
Unaccrued compensation		(179	)		(179	)
Total stockholders’ equity		(17,725	)		3,935
Total capitalization	$	174,322		$	199,618		$

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(a) Concurrently with this offering, we intend to replace our existing senior credit facility with a new $85.0 million senior credit facility described under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — New Senior Credit Facility.”

(b) In connection with the repayment of our debt, as discussed under the caption “Use of Proceeds,” we will expense $3.2 million of unamortized deferred financing costs, $2.6 million of unamortized discount and a redemption premium of $1.6 million.

(c) As discussed in the second paragraph under the caption “Description of Capital Stock — General,” our Series C preferred stock converts into a number of shares of our common stock that depends upon the public offering price of our common stock. The pro forma as adjusted accumulated deficit therefore reflects a deemed preferred stock dividend of $         million as the value of the additional shares of our common stock issued to the holders of our Series C preferred stock upon conversion in this offering. We determined the value of the dividend in accordance with Emerging Issues Task Force, or EITF, 00-27 by multiplying the number of additional shares of our common stock that are issuable upon conversion of our Series C preferred stock, determined as set forth in the second paragraph under the caption “Description of Capital Stock — General,” by the value that an independent appraisal assigned to our common stock on the date that investors first committed to purchase our Series C preferred stock.

(d) In connection with our acquisition of HV Technologies in January 2002, we issued $6.0 million of our Series E preferred stock, and we issued warrants to purchase an aggregate of 200,000 shares of our common stock. We will record a discount of $2.5 million to the carrying value of the Series E preferred stock equal to the consideration allocated to the warrants. We plan to accrete this discount over the 12 month period ending December 31, 2002 since we plan to redeem our Series E preferred stock by that date.

The above table excludes the shares of common stock issuable upon exercise of outstanding options and warrants described in the second paragraph after the table under the caption “Summary — The Offering” on page 5.

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DILUTION

Our pro forma net tangible book value (deficit) as of September 30, 2001 is $             million, or $             per share of common stock. Pro forma net tangible book value (deficit) per share represents the amount of total tangible assets less total liabilities, divided by the number of outstanding shares of common stock after giving effect to the conversion of all outstanding convertible preferred stock and the exercise of the warrant described in the first paragraph after the table under “Summary—The Offering” on page 5.

After giving effect to the sale of             shares of common stock offered by us in this prospectus at an assumed initial public offering price of $             per share, less the underwriting discount and estimated offering expenses payable by us, our pro forma net tangible book value at September 30, 2001 would have been $            million, or $             per share. This represents an immediate increase in the pro forma net tangible book value to existing stockholders of $             per share and an immediate dilution to new investors of $             per share. The following table illustrates this dilution on a per share basis:

Initial public offering price per share			$
Pro forma net tangible book value per share as of September 30, 2001	$	$
Increase per share attributable to new investors	$
Pro forma net tangible book value per share after this offering			$
Dilution per share to new investors			$

The following table summarizes, on a pro forma basis as of September 30, 2001, the difference between the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid (1) by our existing stockholders and (2) by the new investors purchasing stock in this offering:

	Shares Purchased			Total Consideration			Average Price Per Share
	Number	Percent		Amount	Percent
Exiting stockholders		%			%		$
New investors
Total		100.0	%		100.0	%

The above table excludes the outstanding options and warrants described in the third paragraph after the table under “Summary — The Offering” on page 5. The exercise of all options outstanding as of September 30, 2001 having an exercise price less than the assumed initial public offering price would increase the dilutive effect to new investors to $            per share.

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined statement of operations, for the year ended June 30, 2001 is presented as if the acquisition of ACT Medical in December 2000 and as if the acquisition of HV Technologies in January 2002 and the related issuance of Series E preferred stock and warrants and Series F preferred stock had all occurred on July 2, 2000.

The following selected unaudited pro forma condensed combined statement of operations for the three months ended September 30, 2001 is presented as if the acquisition of HV Technologies in January 2002 and the related issuance of Series E preferred stock and warrants and Series F preferred stock had all occurred on July 1, 2001.

The following selected unaudited pro forma condensed combined balance sheet for the three months ended September 30, 2001 is presented as if the acquisition of HV Technologies in January 2002 and the related issuance of Series E preferred stock and warrants and Series F preferred stock had all occurred on September 30, 2001.

The following selected unaudited pro forma condensed combined financial information should be read in conjunction with the historical financial statements of MedSource and ACT Medical and the notes thereto appearing elsewhere in this prospectus. The historical financial statements of HV Technologies are not separately presented in this prospectus.

The following selected unaudited pro forma condensed combined financial information does not purport to represent the results that would have been reported had such events actually occurred on the dates specified, nor is it indicative of our future results.

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MEDSOURCE TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2001

	Historical						Pro Forma						Historical			Pro Forma
	MedSource			ACT Medical			Adjustments			Combined			HV Technologies			Adjustments			Combined
	(In thousands, except share and per share amounts)
Revenues	$	128,462		$	12,786		$	—		$	141,248		$	8,521		$	—		$	149,769
Costs and expenses:
Cost of products sold		94,386			9,988			—			104,374			3,752			—			108,126
Selling, general and administrative expenses		26,199			3,257			—			29,456			1,878			—			31,334
Amortization of goodwill and other intangibles		5,640			58			(58	)(a)		6,544			—			—			6,544
								904	(b)
Restructuring charge		11,464			—			—			11,464			—			—			11,464
Total costs and expenses		137,689			13,303			846			151,838			5,630			—			157,468
Operating (loss) income		(9,227	)		(517	)		(846	)		(10,590	)		2,891			—			(7,699	)
Interest (expense), net		(10,213	)		(560	)		560	(c)		(10,213	)		7			51	(c)		(10,155	)
Other income (expense)		53			—			—			53			285			(274	)(d)		64
(Loss) income before income taxes		(19,387	)		(1,077	)		(286	)		(20,750	)		3,183			(223	)		(17,790	)
Income tax benefit (expense)		(70	)		—			—			(70	)		(181	)		—			(251	)
Net (loss) income		(19,457	)		(1,077	)		(286	)		(20,820	)		3,002			(223	)		(18,041	)
Preferred stock dividends and accretion of discount on preferred stock		(9,688	)					(1,317	)(e)		(11,005	)		—			(1,509	)(f)		(12,514	)
Net (loss) income attributed to common stockholders	$	(29,145	)	$	(1,077	)	$	(1,603	)	$	(31,825	)	$	3,002		$	(1,732	)	$	(30,555	)
Net loss per common share attributed to common stockholders — basic and diluted	$	(5.55	)							$	(6.06	)							$	(5.03	)
Weighted average common shares — basic and diluted		5,252,749									5,252,749						824,222	(g)		6,076,971

See notes to pro forma condensed combined financial information.

26

MEDSOURCE TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2001

	Historical					Pro Forma
	MedSource			HV Technologies		Adjustments			Combined
	(In thousands, except share and per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	14,254		$	1,626	$	6,000	(h)	$	16,264
							(5,616	)(i)
Accounts and notes receivable, net		20,288			1,386		—			21,674
Inventories		14,242			1,197		—			15,439
Prepaid expenses and other current assets		3,165			—		—			3,165
Deferred income taxes		1,335			—		—			1,335
Total current assets		53,284			4,209		384			57,877
Property, plant and equipment, net		38,631			2,147		—			40,778
Goodwill, net		96,813			—		19,392	(j)		116,205
Other identifiable intangible assets, net		4,342			—		—			4,342
Deferred financing costs		3,209			—		—			3,209
Interest escrow fund		1,224			—		—			1,224
Other assets		426			3		—			429
Total assets	$	197,929		$	6,359	$	19,776		$	224,064
Liabilities, mandatory redeemable convertible stock and stockholders’ equity (deficit)
Current liabilities	$	29,229		$	639	$	—		$	29,868
Long term debt, less unamortized discount and current  portion		80,844			568		(568	)(k)		80,844
Deferred income taxes		1,335			—		—			1,335
Other long-term liabilities		3,274			200		—			3,474
Mandatory redeemable stock		100,972			—		3,636	(l)		104,608
Stockholders’ equity (deficit)
Series A, Series E and Series Z preferred stock		1			—		3,537	(h)		3,538
Common Stock		53			50		8	(l)		61
							(50	)(m)
Additional paid-in capital		33,880			—		2,463	(h)		51,995
							15,652	(l)
Accumulated other comprehensive loss		(2,771	)		—		—			(2,771	)
Retained earnings (accumulated deficit)		(48,709	)		4,902		(4,902	)(m)		(48,709	)
Unearned compensation		(179	)		—		—			(179	)
Total stockholders’ equity (deficit)		(17,725	)		4,952		16,708			3,935
Total liabilities, mandatory redeemable convertible stock and stockholders’ equity (deficit)	$	197,929		$	6,359	$	19,776		$	224,064

See notes to pro forma condensed combined financial information.

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MEDSOURCE TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001

	Historical						Pro Forma
	MedSource			HV Technologies			Adjustments			Combined
	(In thousands, except share and per share amounts)
Revenues	$	33,865		$	2,473		$	—		$	36,338
Costs and expenses:
Cost of products sold		26,106			1,090			—			27,196
Selling, general and administrative expense		6,402			723			—			7,125
Amortization of goodwill and other intangibles		90			—			—			90
Total costs and expenses		32,598			1,813			—			34,411
Operating income		1,267			660			—			1,927
Interest (expense), net		(2,468	)		(5	)		12	(n)		(2,461	)
Other income (expense)		(21	)		54			(50	)(o)		(17	)
(Loss) income before income taxes		(1,222	)		709			(38	)		(551	)
Income tax benefit (expense)		—			(40	)		—			(40	)
Net (loss) income		(1,222	)		669			(38	)		(591	)
Preferred stock dividends and accretion of discount on preferred stock		(2,648	)		—			(377	)(p)		(3,025	)
Net (loss) income attributable to common stockholders	$	(3,870	)	$	669		$	(415	)	$	(3,616	)
Net loss per common share attributed to common stockholders — basic and diluted	$	(0.74	)							$	(0.60	)
Weighted average shares — basic and diluted		5,255,958						824,222	(q)		6,080,180

See notes to pro forma condensed combined financial information.

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MEDSOURCE TECHNOLOGIES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. Unaudited Pro Forma Statement of Operations Adjustments for the Year Ended June 30, 2001

We have made the following pro forma adjustments to arrive at our pro forma statement of operations for the year ended June 30, 2001:

(a) Represents elimination of the amortization of goodwill that existed on ACT Medical’s balance sheet at the time of the acquisition.

(b) Represents the amortization of goodwill and other intangibles resulting from the acquisition of ACT Medical.

(c) Represents elimination of the interest income and interest expense incurred by ACT Medical or HV Technologies, as applicable, because the debt associated with the interest expense was paid off in connection with the acquisition.

(d) Represents elimination of HV Technologies licensing and royalty income related to licenses cancelled in connection with the acquisition.

(e) Represents recognition of the dividends and amortization of discount on the preferred stock issued in conjunction with the acquisition of ACT Medical.

(f) Represents recognition of the dividends and accretion of discount on the Series E and Series F preferred stock.

(g) Represents shares of common stock issued in connection with the acquisition of HV Technologies.

2. Unaudited Pro Forma Balance Sheet Adjustments as of September 30, 2001

We have made the following pro forma adjustments to arrive at our pro forma balance sheet as of

September 30, 2001:

(h) Represents issuance of $6.0 million of Series E preferred stock and related warrants to finance our acquisition of HV Technologies. The Series E preferred stock and warrants are recorded at their respective fair market values of $3.5 million and $2.5 million, respectively. We plan to accrete the discount allocated to the Series E preferred stock over the 12 month period ending December 31, 2002 because we plan to redeem the Series E preferred stock by that date.

(i) Represents cash paid to acquire HV Technologies.

(j) Represents excess of purchase price over book value of assets acquired in the acquisition of HV Technologies based on a preliminary purchase price allocation.

(k) Represents repayment of debt of HV Technologies on the date of acquisition.

(l) Represents issuance of Series F preferred stock and common stock in consideration of the acquisition of HV Technologies. The Series F preferred stock is recorded at its fair market value of $3.6 million. We will record an expense of $0.4 million when we redeem the Series F preferred stock.

(m) Represents elimination of existing equity of HV Technologies as of September 30, 2001.

3. Unaudited Pro Forma Statement of Operations Adjustments for the Three Months Ended

September 30, 2001

We have made the following pro forma adjustment to arrive at our pro forma statement of operations for the three months ended September 30, 2001:

(n) Represents elimination of interest expense incurred by HV Technologies because the debt associated with the interest expense was paid off in connection with the acquisition.

(o) Represents elimination of HV Technologies licensing and royalty income related to licenses cancelled in connection with the acquisition.

(p) Represents recognition of the dividends and accretion of discount on the Series E and Series F preferred stock.

(q) Represents shares of common stock in connection with the acquisition of HV Technologies.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data as of and for the dates and periods indicated have been derived from our consolidated financial statements. The selected consolidated statement of operations data for our fiscal period from March 31, 1999 (inception) through July 3, 1999 and our fiscal years ended July 1, 2000 and June 30, 2001 and the selected consolidated balance sheet data as of July 1, 2000 and June 30, 2001 were derived from the historical consolidated financial statements that were audited by Ernst & Young LLP, whose report appears elsewhere in this prospectus. The selected consolidated balance sheet data as of July 3, 1999 were derived from historical consolidated financial statements audited by Ernst & Young LLP, which do not appear elsewhere in this prospectus. The selected consolidated statement of operations data for the three months ended September 30, 2000 and September 30, 2001 and the selected consolidated balance sheet data as of September 30, 2001 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus, which, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the financial condition and results of operations for those periods.

You should read the selected consolidated financial data set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

	Period from March 31, 1999 (inception) through July 3, 1999(a)			Fiscal Year Ended						Three Months Ended September 30,
				July 1, 2000(a)			June 30, 2001			2000			2001
	(In thousands, except share and per share data)
Statement of Operations Data:
Revenues	$	21,968		$	89,352		$	128,462		$	27,611		$	33,865
Costs and expenses:
Cost of products sold		13,437			59,811			94,386			20,793			26,106
Selling, general and administrative expense		4,458			21,167			26,199			5,621			6,402
Amortization of goodwill and other intangibles(b)		4,135			4,255			5,640			1,125			90
Organization and start-up costs		4,981			—			—			—			—
Restructuring charge(c)		—			—			11,464			—			—
Total costs and expenses		27,011			85,233			137,689			27,539			32,598
Operating (loss) income		(5,043	)		4,119			(9,227	)		72			1,267
Interest expense, net		(2,658	)		(10,682	)		(10,213	)		(2,994	)		(2,468	)
Other income (expense)		(289	)		(7	)		53			63			(21	)
Loss before income taxes		(7,990	)		(6,570	)		(19,387	)		(2,859	)		(1,222	)
Income tax benefit (expense)		2,975			535			(70	)		—			—
Net loss		(5,015	)		(6,035	)		(19,457	)		(2,859	)		(1,222	)
Preferred stock dividends and accretion of discount on preferred stock		(2,078	)		(8,345	)		(9,688	)		(2,104	)		(2,648	)
Net loss attributed to common stockholders	$	(7,093	)	$	(14,380	)	$	(29,145	)	$	(4,963	)	$	(3,870	)
Net loss per share attributed to common stockholders (basic and diluted)	$	(1.60	)	$	(3.10	)	$	(5.55	)	$	(0.95	)	$	(0.74	)
Weighted average number of shares of common stock outstanding (basic and diluted)		4,448,000			4,633,571			5,252,749			5,248,341			5,255,958
Other Data:
Net cash (used in) provided by operating activities	$	(244	)	$	6,290		$	1,253		$	(2,074	)	$	(3,305	)
Net cash used in investing activities		(93,744	)		(22,244	)		(11,627	)		(1,000	)		(1,619	)
Net cash provided by (used in) financing activities		95,796			16,356			28,453			931			(1,111	)
EBITDA(d)		(329	)		12,867			3,021			2,764			3,197
Adjusted EBITDA(d)(e)		5,007			14,373			16,140			3,125			3,663

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	Period from March 31, 1999 (inception) through July 3, 1999(a)		Fiscal Year Ended
			July 1, 2000(a)		June 30, 2001			Three Months Ended September 30, 2001
Balance Sheet Data (at end of period):	(In thousands)
Cash and cash equivalents	$	1,808	$	2,210	$	20,289		$	14,254
Current assets		18,109		28,903		59,577			53,284
Property and equipment, net		21,550		34,956		38,873			38,631
Total assets		126,792		151,722		205,300			197,929
Total debt		81,224		98,653		89,544			88,493
Mandatory redeemable convertible stock		16,250		22,293		98,867			100,972
Total stockholders’ equity (deficit)		21,248		15,072		(13,261	)		(17,725	)

(a) Our fiscal years originally ended on the Saturday closest to June 30. Effective July 1, 2001, our fiscal year end was changed to June 30.

(b) The Statement of Operations Data for the three months ended September 30, 2001 is not comparable to prior periods because we have stopped amortizing goodwill. Effective with our quarter ended September 30, 2001, we adopted the provisions of SFAS No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, and, accordingly, we reclassified certain identifiable intangibles to goodwill and will no longer amortize goodwill and intangible assets that are deemed to have indefinite lives under SFAS 142. Had we continued to amortize goodwill during the three months ended September 30, 2001, amortization expense in that period would have increased by approximately $1.4 million, or $0.27 per common share.

(c) In June 2001, we completed a strategic review of our manufacturing operations and support functions. Based on this review and with board approval, we began actions to eliminate redundant facilities. These actions resulted in pre-tax charges of $11.5 million. The charges include employee termination benefits of $3.8 million, other exit costs of $2.2 million, impairment of goodwill and other intangibles of $3.6 million and impairment of property, plant, and equipment of $1.9 million.

(d) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA should not be considered in isolation from, or as a substitute for, net income, cash flow from operations or other cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of our profitability or liquidity. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure, and we believe that it provides relevant and useful information. A calculation of EBITDA may not be comparable to similarly titled measures reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. Our EBITDA calculation is not intended to represent cash provided by (used in) operating activities since it does not include interest and taxes and changes in operating assets and liabilities, nor is it intended to represent a net increase in cash since it does not include cash provided by (used in) investing and financing activities.

(e) Adjusted EBITDA further adjusts EBITDA to exclude management fees for all periods presented, start-up costs of $5.0 million for the period ended July 3, 1999 and restructuring charges of $11.5 million for year ended June 30, 2001.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with “Selected Consolidated Financial Data,” our financial statements and related notes appearing elsewhere in this prospectus. The following discussion contains forward-looking statements that involve risks and uncertainties. These statements refer to our future plans, objectives, expectations and intentions. These statements may be identified by the use of words such as “believes,” “expects,” “anticipates,” “intends,” “plans” and similar expressions. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements. Factors that could contribute to these differences include, but are not limited to, the risks discussed below and elsewhere in this prospectus, particularly under the caption “Risk Factors.”

A discussion about the financial results of six of our seven predecessors, Kelco Industries, W.N. Rushwood d/b/a Hayden Precision Industries, National Wire and Stamping, The MicroSpring Company, Portlyn and Texcel, appears under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Predecessor Companies.” No discussion about the financial results of our seventh predecessor, Brimfield Precision, is presented in this prospectus.

Overview

We provide product development and design services, precision metal and plastic part manufacturing, product assembly services and supply chain management. We provide our products and services to each of the following primary target markets:

& surgical instrumentation devices and components;

& electro-medical devices and components;

& custom interventional devices and components; and

& custom orthopedic devices and instruments.

Our revenues have grown from $89.4 million in fiscal 2000 to $128.5 million in fiscal 2001, or $149.8 million on a pro forma basis in fiscal 2001.

Company History

During 1998, our co-founders, Richard J. Effress and William J. Kidd, established MedSource to identify business opportunities in the medical engineering and manufacturing services industry. During March 1999, with additional equity capital from Whitney & Co., we acquired seven unaffiliated businesses to begin our operations. The original seven acquisitions were Kelco Industries, W.N. Rushwood d/b/a Hayden Precision Industries, National Wire and Stamping, The MicroSpring Company, Portlyn, Texcel and Brimfield Precision. Our first fiscal period, which ended July 3, 1999, consisted of only three months of consolidated results, which included material one-time expenses for business combination and formation.

Since our initial acquisitions, we have acquired five additional businesses. In fiscal 2000, we acquired the businesses of Apex Engineering, Tenax and Thermat Precision, in fiscal 2001 we acquired the business of ACT Medical and in fiscal 2002, we acquired the business of HV Technologies. All of our acquisitions were accounted for using the purchase method of accounting.

32

Results of Operations

Revenues

In the case of the sale of products, we recognize revenue at the time products are shipped. Product shipments are supported by purchase orders from customers that indicate the price for each product. In the case of services, we recognize revenues primarily on a time and materials basis. Service revenues are supported by customer orders or contracts that indicate the price for the services being rendered. For fiscal 2001, service revenues were less than 10% of total revenues. Revenues for product shipments and services rendered must also have reasonable assurance of collectability from the customer. Reserves for returns and allowances are recorded against revenues based on management’s estimates and historical experience.

Our top four customers accounted for 41% of our revenues for the year ended June 30, 2001, with one customer accounting for 18% of our revenues and another accounting for 12% of our revenues. For the three months ended September 30, 2001, our top four customers accounted for 48% of our revenues, with one customer accounting for 21% of our revenues and another accounting for 12% of our revenues. We expect revenues from our largest customers to continue to constitute a significant portion of our total revenues.

We generally do not have long-term volume commitments from our customers, and they may cancel their orders or change or delay volume levels at any time.

Cost and Expenses

Cost of products sold includes expenses for raw materials, purchased components, outside services, supervisory, engineering and direct production manpower, including benefits, production supplies, depreciation and other related expenses to support product manufacturing. We purchase most of the raw materials that are used in our products at prevailing market prices and, as a result, are subject to fluctuations in the market price of those raw materials. In particular, the prices of stainless steel, titanium and platinum have historically fluctuated, and the prices that we pay for these materials, and, in some cases, their availability, are dependent upon general market conditions.

Selling, general and administrative expense includes local support of our facilities for production and shipment to the customer as well as strategic investments in our sales and marketing, operations and quality teams and our corporate support staff.

We have accounted for all of our acquisitions by using the purchase method of accounting. Until our year ended June 30, 2001, we amortized the goodwill and other intangibles attributable to our acquisitions and incurred associated amortization expense of $4.3 million in fiscal 2000 and $5.6 million in fiscal 2001. In connection with our implementation of SFAS No. 142, “Goodwill and Other Intangibles,” we no longer amortize goodwill. Instead, as discussed below, we will periodically test goodwill and intangibles for impairment and record an expense if those assets become impaired, as further discussed under the caption “— Recent Accounting Pronouncements.”

In connection with our acquisition of HV Technologies in January 2002, we issued Series E preferred stock and warrants to purchase an aggregate of 200,000 shares of our common stock and we issued Series F preferred stock. We will record a discount of $2.5 million to the carrying value of the Series E preferred stock equal to the consideration allocated to the warrants. We plan to accrete this discount over the twelve month period ending December 31, 2002 because we plan to redeem our Series E preferred stock by that date.

33

As discussed in the second paragraph under the caption “Description of Capital Stock — General,” our Series C preferred stock converts into a number of shares of our common stock that depends upon the initial public offering price of our common stock in this offering. Our net income for the year ending June 30, 2002 will therefore reflect a deemed preferred stock dividend of approximately $         million as the value of the additional shares of our common stock issued to the holders of our Series C preferred stock upon conversion. We determined the value of the dividend in accordance with EITF 00-27 by multiplying the number of additional shares of our common stock that are issuable upon conversion of our Series C preferred stock, determined as set forth in the second paragraph under the caption “Description of Capital Stock — General,” by the value that an independent appraisal assigned to our common stock on the date that investors first committed to purchase our Series C preferred stock.

Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000

Revenues for the three-month period ended September 30, 2001 were $33.9 million compared to $27.6 million for the same period of the prior year. This represented an increase of 23%, largely due to the impact of the acquisition of ACT Medical in December 2000.

Cost of products sold for the three-month period ended September 30, 2001 totaled $26.1 million (resulting in gross margin of 23%), compared to $20.8 million (resulting in gross margin of 25%) for the three-month period ended September 30, 2000. The increase in cost of products sold resulted from the increased revenues over the same prior year period. The 2% decrease in gross margin reflects our acquisition of ACT Medical, which had lower margins than our existing businesses.

Selling, general and administrative expense for the three-month period ended September 30, 2001 was $6.4 million, or 19% of revenues, compared to $5.6 million, or 20% of revenues, for the same prior year period. The increase in expense was attributable to our acquisition of ACT Medical. We anticipate selling, general and administrative expense as a percentage of revenues to decrease over time as our business grows.

Net interest expense for the three-month period ended September 30, 2001 was $2.5 million, compared to $3.0 million for the same prior year period. This decrease was due to the lower amounts outstanding under our existing senior credit facility.

Comparison of Fiscal Years Ended June 30, 2001 and July 1, 2000

Revenues for our fiscal year ended June 30, 2001 totaled $128.5 million compared to $89.4 million for the fiscal year ended July 1, 2000, an increase of 44%. Approximately two-thirds of this increase was due to acquisitions during fiscal year 2001 and 2000, with the other third due to base business growth. The strong performance in our base business was driven by increased demand for both new and existing products from established customers as well as new customers.

Cost of products sold for the fiscal year ended June 30, 2001 totaled $94.4 million (resulting in gross margin of 27%), compared to $59.8 million (resulting in gross margin of 33%) for the fiscal year ended July 1, 2000. The decrease in gross margin during fiscal year 2001 compared to fiscal year 2000 reflected the full year impact of businesses acquired during fiscal 2000 and 2001, all with lower margins than the base businesses, and growth in revenues from lower margin assembly of completed devices.

Selling, general and administrative expense was $26.2 million, or 20% of revenues, for the fiscal year ended  June 30, 2001 and $21.2 million, or 24% of revenues, for the fiscal year ended July 1, 2000. Of the $5.0 million increase in selling, general and administrative expense, $2.5 million was attributable to the acquisition of ACT Medical in December 2000, while annualized operating expenses for the businesses acquired during fiscal 2000 accounted for $1.1 million of the increase. The balance of the increase occurred largely as a result of our investment in our sales and marketing infrastructure to support future growth.

34

In June 2001, we completed a strategic review of our manufacturing operations and support functions. Based on this review and with board approval, we began actions to eliminate redundant facilities. These actions resulted in a pre-tax charge of $11.5 million. The charge includes employee termination benefits of $3.8 million, other exit costs of $2.2 million, impairment of goodwill and other intangibles of $3.6 million and impairment of property, plant, and equipment of $1.9 million. The accrual balance at June 30, 2001 of $6.0 million includes the accrual for employee termination benefits and other exit costs.

Net interest expense was $10.2 million for the fiscal year ended June 30, 2001 compared to $10.7 million for the fiscal year ended July 1, 2000. This decrease was due to the lower amounts outstanding under our existing senior credit facility.

We incurred charges related to the accrual of dividends and accretion of discount on preferred stock of $9.7 million for our fiscal year ended June 30, 2001, compared to $8.3 million for our fiscal year ended July 1, 2000. The increase was due to the increase in the amount of preferred stock outstanding during fiscal year 2001. Following completion of this offering, the preferred stock will be redeemed as described under the caption “Use of Proceeds” or will convert into common stock. We will record a discount of $2.5 million to the carrying value of the Series E preferred stock equal to the consideration allocated to the warrants. We plan to accrete this discount over the twelve month period ending December 31, 2002 since we plan to redeem our Series E preferred stock by that date. We also will have accrued approximately $0.4 million relating to dividends on our Series E and Series F preferred stock prior to redemption.

Comparison of Fiscal Year Ended July 1, 2000 and Period from March 31, 1999 (Inception) through  July 3, 1999

We began operations on March 30, 1999, and our first fiscal period ended July 3, 1999. This first fiscal period therefore only consisted of three months consolidated results, which included material one-time expenses for our business combination and formation. The following comments present comparisons to annualized results for our period ended July 3, 1999.

Revenues for the fiscal year ended July 1, 2000 were $89.4 million, compared to annualized revenues, excluding a one-time payment resulting from the cancellation of a customer contract, of $71.7 million for our period ended July 3, 1999. The increase in revenues was partially due to the acquisitions of Apex Engineering, Tenax and Thermat Precision in fiscal 2000 and partially from increased sales to our top volume customers, especially those purchasing components.

Gross margin as a percentage of revenues for the twelve-month period ended July 1, 2000 was 33% compared to 39% annualized results for our period ended July 3, 1999. The gross margin shortfall compared to our annualized fiscal 1999 results was predominantly the result of four factors. First, significant increased volume of new business led to increased overtime, manufacturing outsourcing, and professional services as well as normal inefficiencies of first run parts. Second, reduced volume in our laser welding business occurred as we refocused the business on medical customers. Third, we provided increased prototyping services, which deliver low or no margins. Fourth, we lost a major contract in 1999. These shortfalls were partially offset by significant improvement in other areas of our business with strong revenue growth driving high contribution margins.

Operating expenses, as a percentage of net sales, for the fiscal year ended July 1, 2000 were 22%. There is no relevant comparison to annualized fiscal 1999 results.

Other expenses of $10.7 million for the fiscal year ended July 1, 2000 mainly consisted of net interest expense.

Liquidity and Capital Resources

As of September 30, 2001, we had cash and cash equivalents totaling $14.3 million. Following completion of this offering, our principal sources of liquidity will be cash provided by operations and borrowings under our

35

new senior credit facility. Prior to this offering, our principal uses of cash have been to finance acquisitions, meet debt service requirements and finance capital expenditures. We expect that these uses will continue in the future.

Net cash used in operating activities totaled $3.3 million for the three-month period ended September 30, 2001 compared to net cash used in operating activities of $2.1 million for the same period of the prior year. The increase in cash used in operating activities over the prior year period is primarily the result of a $5.2 million decrease in accounts payable and accrued expenses, including the payment of the fiscal 2001 management bonus accrued during fiscal year 2000, partly offset by a $1.6 million decrease in our net loss. Cash provided by operating activities was $1.3 million for the year ended June 30, 2001 compared to $6.3 million for year ended July 1, 2000. This decrease occurred because the growth of our base business, acquisitions during fiscal 2001 and a full year of results for acquisitions completed during fiscal year 2000 were more than offset by increased strategic investments in our sales and marketing, operations and quality teams, as well as our corporate support staff.

Management believes that current cash balances and cash generated from operations, combined with the net proceeds of this offering and unused available borrowings totaling approximately $45.0 million under our new senior credit facility, will be adequate to fund requirements for working capital and capital expenditures through fiscal 2003.

Cash used in investing activities was $1.6 million for the three months ended September 30, 2001, compared to $1.0 million for the three months ended September 30, 2000. This increase was primarily due to an increase in capital expenditures. Cash used in investing activities was $11.6 million for the fiscal year ended June 30, 2001, compared to $22.2 million for the fiscal year ended July 1, 2000. The decrease was primarily the result of a $15.1 million decrease in net cash used in acquisitions, partially offset by an increase in capital expenditures of $4.7 million. We expect capital expenditures in fiscal 2002 and fiscal 2003 to be approximately $12.0 million in each year.

Cash used in financing activities was $1.1 million for the three months ended September 30, 2001 compared to $0.9 million provided by financing activities for the three months ended September 30, 2000. Cash provided by financing activities was $28.5 million for the fiscal year ended June 30, 2001 compared to $16.4 million for the fiscal year ended July 1, 2000. This increase resulted from net proceeds of $37.9 million from the sale of our Series C preferred stock, partially offset by $9.6 million in debt repayments.

New Senior Credit Facility

Concurrent with this offering, we intend to replace our existing senior credit facility with a new $85.0 million senior credit facility that would provide a $25.0 million revolving credit facility, a $40.0 million term loan and $20.0 million for acquisitions. All loans under the new senior credit facility would mature on the fifth anniversary of the date of this offering. The term loan would provide for annual principal repayments of  $4.0 million, $6.0 million, $8.0 million, $10.0 million and $12.0 million, respectively, payable quarterly, beginning  at the end of the first full quarter following this offering. We expect that the other terms and provisions of the new senior credit facility would be similar to those of our existing credit facility. Following this offering and the use of the proceeds of this offering, we will have an outstanding balance of approximately $40.0 million under our new senior credit facility.

Existing Senior Credit Facility

Our wholly-owned subsidiary, MedSource Technologies, LLC, has an existing credit facility that provides for an aggregate of $65.0 million under two term loans, an aggregate of $30.0 million for acquisitions and an aggregate of $25.0 million under a revolving credit facility, which includes a sub-limit for letters of credit. At September 30, 2001, MedSource Technologies, LLC, our wholly-owned subsidiary and the borrower under our existing credit facility, had $18.0 million outstanding under the first term loan, $39.1 million outstanding under the second term loan, $13.4 million outstanding under the acquisition line and nothing outstanding under the revolving credit facility. The first term loan provides for principal payments pursuant to an agreed-upon schedule

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and with the balance due in March 2005. The second term loan provides for quarterly principal payments of $0.1 million and the balance, of $37.0 million, is due in March 2007. The acquisition line provides for quarterly principal repayment pursuant to an agreed-upon schedule and the balance is due in March 2005.

In July 1999, the borrower under the existing credit facility entered into two interest rate swap transactions, designed to be interest rate hedges, for the majority of the first and second term loans.

As of September 30, 2001, the interest rate on the first term loan was 6.7%, the interest rate on the second term loan was 6.9% and the interest rate on the acquisition line was 5.4%.

The existing credit facility contains certain affirmative and negative covenants and limitations, including, but not limited to, restrictions on our ability to enter into acquisition and sales transactions, limitations on liens, restrictions on payments and limitations on our ability to incur additional indebtedness.

The existing senior credit facility contains various events of default, including, without limitation, defaults for non-payment of principal, interest, fees or reimbursement obligations in respect of letters of credit, breaches of warranties or covenants, bankruptcy or insolvency, changes in control, ERISA violations, and cross-defaults to other indebtedness.

Senior Subordinated Notes

In March 1999, our wholly-owned subsidiary, MedSource Technologies, LLC, sold an aggregate of $20.0 million of its 12.5% senior subordinated notes due 2008. The borrower pledged $7.5 million of the proceeds that it received from the issuance of the notes to secure payments that are due thereunder. As of September 30, 2001, there is an unamortized discount of $2.6 million on these notes.

We intend to repay these notes in full out of the proceeds of this offering, as described under the caption “Use of Proceeds.” We are also required to redeem the notes at the redemption price set forth below upon the occurrence of any change in control.

On any redemption of the notes that occurs prior to March 30 of the calendar year set forth below, we are required to pay the redemption prices set forth below (expressed as a percentage of the outstanding principal amount), as amended during December 2001, plus accrued and unpaid interest:

Period	Redemption Price
2002	108	%
2003	107	%
2004	106	%
2005 and thereafter	105	%

Pursuant to the terms of the notes, we are also required to comply with various affirmative and negative covenants and limitations, including, but not limited to, our ability to enter into acquisition and sales transactions, limitations on liens, restricted payments and our ability to incur additional indebtedness. The notes also contain various events of default, including, without limitation, defaults for non-payment of principal, interest, fees or reimbursement obligations in respect of letters of credit, breaches of warranties or covenants, bankruptcy or insolvency, changes in control, ERISA violations, and cross-defaults to other indebtedness.

Issuances of Preferred Stock for Cash

In March 1999 and May 1999, we received an aggregate of $24.4 million from the issuance of our Series B preferred stock.

In October 2000 and June 2001, we received an aggregate of $40.3 million from the issuance of our Series C preferred stock. In connection with the issuance of our Series C preferred stock in October 2000, we paid a cash fee of $2.1 million to a placement agent and issued a warrant to purchase an additional 525 shares of our Series C preferred stock to the placement agent.

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In December 2001, we received an aggregate of $6.0 million from the issuance of our Series E preferred stock. In connection with the issuance, we also issued warrants to purchase an aggregate of 200,000 shares of our common stock at $.01 per share. The warrants entitle the holders thereof to purchase an additional 45,000 shares on each of the first five anniversaries of the date of issuance of the Series E preferred stock that the Series E preferred stock remains outstanding. We intend to use a portion of the proceeds of this offering to redeem the Series E preferred stock by December 31, 2002, which is prior to the first anniversary of the date of its issuance.

Quarterly Results

The following tables set forth selected unaudited quarterly consolidated financial information for the nine quarters ended September 30, 2001. This unaudited quarterly consolidated information, in the opinion of management, includes all adjustments necessary for a fair presentation of such information in accordance with generally accepted accounting principles. These quarterly results are not necessarily indicative of future results, growth rates or quarter-to-quarter comparisons.

We have completed five acquisitions since October 2, 1999, but the quarterly consolidated financial information set forth below is presented on an actual historical basis, not on a pro forma basis for any of those acquisitions. The increase in revenues over the periods presented resulted from both acquisitions and growth in our base business. In addition, during our limited operating history, excluding the impact of acquisitions, we have experienced higher than average revenues during the last quarter of our fiscal year and lower than average revenues during the first quarter of our fiscal year, but we cannot predict whether this will continue.

	Quarter Ended
	October 2, 1999			January 1,  2000			April 1,  2000			July 1,  2000			September 30,  2000			December 31,  2000			March 31,  2001			June 30,  2001			September 30,  2001
	(In millions)
Statement of Operations Data:
Revenues	$	18.9		$	19.4		$	24.7		$	26.4		$	27.6		$	27.9		$	34.8		$	38.2		$	33.9
Costs and expenses:
Cost of products sold		12.1			12.1			16.5			19.1			20.8			20.7			26.1			26.8			26.1
Selling, general and administrative expense		3.9			4.0			5.2			8.1			5.6			6.1			7.3			7.2			6.4
Amortization of goodwill and other intangibles(a)		1.0			1.1			1.1			1.1			1.2			1.2			1.7			1.5			0.1
Restructuring charge(b)		—			—			—			—			—			—			—			11.5			—
Operating income (loss)		1.9			2.2			1.9			(1.9	)		—			(0.1	)		(0.3	)		(8.8	)		1.3
Interest expense, net		(2.3	)		(2.2	)		(2.7	)		(3.5	)		(2.9	)		(2.5	)		(2.3	)		(2.5	)		(2.5	)
Other expense		—			—			—			—			(0.2	)		(0.2	)		0.3			0.1			—
Income tax benefit (expense)		0.3			0.1			0.3			(0.1	)		—			—			—			(0.1	)		—
Net loss	$	(0.1	)	$	0.1		$	(0.5	)	$	(5.5	)	$	(3.1	)	$	(2.8	)	$	(2.3	)	$	(11.3	)	$	(1.2	)
Other Data:
EBITDA(c)	$	3.8		$	4.2		$	4.3		$	0.6		$	2.5		$	2.4		$	3.4		$	(5.3	)	$	3.2

(a) The information for the three months ended September 30, 2001 does not include a charge for the amortization of goodwill. Effective with our quarter ended September 30, 2001, we adopted the provisions of SFAS No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, and, accordingly, we reclassified certain identifiable intangibles to goodwill and will no longer amortize goodwill and intangible assets that are deemed to have indefinite lives under SFAS 142. Had we continued to amortize goodwill during the three months ended September 30, 2001, amortization expense in that period would have increased by approximately $1.4 million, or $0.27 per common share.

(b) In June 2001, we completed a strategic review of our manufacturing operations and support functions. Based on this review and with board approval, we began actions to eliminate redundant facilities. These actions resulted in pre-tax charges of $11.5 million. The charges include employee termination benefits of $3.8 million, other exit costs of $2.2 million, impairment of goodwill and other intangibles of $3.6 million and impairment of property, plant, and equipment of $1.9 million.

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(c) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA should not be considered in isolation from, or as a substitute for, net income, cash flow from operations or other cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of our profitability or liquidity. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure, and we believe that it provides relevant and useful information. A calculation of EBITDA may not be comparable to similarly titled measures reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. Our EBITDA calculation is not intended to represent cash provided by (used in) operating activities since it does not include interest and taxes and changes in operating assets and liabilities, nor is it intended to represent a net increase in cash since it does not include cash provided by (used in) investing and financing activities.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk.    Amounts outstanding under our existing senior credit facility bear interest at a floating rate, and we expect that amounts outstanding under our new senior credit facility will also bear interest at a floating rate. To reduce our exposure to interest rate risk, we entered into interest rate swap agreements, and we expect to either continue these swap agreements or enter into similar swap agreements to hedge our exposure to interest rate risk under our new senior credit facility. Under the existing swap agreements, we swap a variable interest rate for fixed interest rates ranging from 6.245% to 6.395%. Changes in the fair value of the swaps are recorded in Accumulated Other Comprehensive Loss in Stockholders’ Equity. The effect of a 10% increase in interest rates would have resulted in an immaterial increase in interest expense during our year ended June 30, 2001.

Foreign Currency Risk.    Most of our sales and purchases are denominated in United States dollars and as a result, we have relatively little exposure to foreign currency exchange risk with respect to our sales. Accordingly, we do not use forward exchange contracts to hedge exposures denominated in foreign currencies or any other derivative financial instrument for trading or speculative purposes. The effect of a 10% change in exchange rates as of June 30, 2001 would not have had a material impact on our operating results for the fiscal year then ended.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, Accounting for Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001, with early adoption permitted for companies with fiscal years beginning after March 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized, but will be subject to annual impairment tests. Other intangible assets will continue to be amortized over their useful lives.

We adopted the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of fiscal 2002. Amounts previously recorded as separately identifiable intangibles for acquired work force and customer base have been subsumed into goodwill in accordance with SFAS 141, increasing goodwill by $34.6 million as of the date of adoption. Effective with the July 1, 2001 adoption of SFAS 142, goodwill will no longer be amortized but is instead subject to an annual impairment test. The transitional impairment test that we conducted in connection with the adoption of SFAS 142 resulted in no impairment being required. As a result of our adoption of SFAS 142, our amortization expense will be reduced by approximately $5.8 million or $1.10 per common share for fiscal 2002 and $1.4 million or $0.27 per common share for the quarter ended September 30, 2001 (based on the common shares outstanding prior to this offering). See note 6 to our audited financial statements.

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SELECTED FINANCIAL DATA OF PREDECESSOR COMPANIES

We began operations on March 30, 1999 through the acquisition of seven unaffiliated businesses, to which we refer as our “predecessor companies.” The following tables set forth certain historical financial data of six of the individual predecessor companies derived from audited financial statements included elsewhere in this prospectus and from audited and unaudited financial statements that are not included in this prospectus.

	Kelco Industries, Inc.						W.N. Rushwood, Inc. d/b/a Hayden Precision Industries
	Year Ended April 30,				Eleven Months Ended March 30,		Year Ended December 31,									Three Months Ended March 30,
	1997		1998		1999		1996			1997			1998			1999
	(In thousands)
Statement of Operations Data:
Net sales	$	19,518	$	23,192	$	22,877	$	6,149		$	6,003		$	9,777		$	2,227
Gross profit		7,883		9,742		9,951		1,881			1,583			2,787			448
Operating expenses		2,738		2,830		2,784		954			949			1,072			195
Operating income (loss)		5,145		6,912		7,167		927			634			1,715			253
Other income (expense)		56		99		76		(142	)		(201	)		(241	)		(100	)
Income before taxes		5,201		7,011		7,243		785			433			1,474			153
Income taxes		—		—		—		—			—			—			—
Net income (loss)	$	5,201	$	7,011	$	7,243	$	785		$	433		$	1,474		$	153
Balance Sheet Data (at end of period):
Total assets	$	9,803	$	13,484	$	18,962	$	3,655		$	3,410		$	7,066		$	7,206
Long-term debt		5		—		—		2,193			1,804			3,174			3,744
Shareholders’ equity		7,905		11,229		16,215		406			739			1,685			1,753

	National Wire and Stamping, Inc.										The MicroSpring Company, Inc.
	Year Ended December 31,							Three Months Ended March 30,			Year Ended December 31,								Three Months Ended March 30,
	1996			1997		1998		1999			1996		1997			1998			1999
	(In thousands)
Statement of Operations Data:
Net sales	$	6,823		$	9,513	$	8,619	$	1,636		$	11,264	$	11,782		$	10,176		$	1,792
Gross profit		2,921			3,730		3,618		669			5,520		3,321			2,896			394
Operating expenses		2,237			3,112		3,057		800			2,060		3,420			3,343			1,314
Operating income (loss)		684			618		561		(131	)		3,460		(99	)		(447	)		(920	)
Other income (expense)		(47	)		65		126		125			52		7			(32	)		1
Income before taxes		637			683		687		(6	)		3,512		(92	)		(479	)		(919	)
Income taxes		257			275		264		45			83		31			7			3
Net income (loss)	$	380		$	408	$	423	$	(51	)	$	3,429	$	(123	)	$	(486	)	$	(922	)
Balance Sheet Data (at end of period):
Total assets	$	3,038		$	3,894	$	4,373	$	3,250		$	4,983	$	6,185		$	3,984		$	3,895
Long-term debt		112			117		107		—			—		250			250			—
Shareholders’ equity		2,036			2,290		2,757		2,664			3,916		3,377			2,990			3,076

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	Portlyn Corporation												Texcel, Inc.
	Year Ended December 31,									Three Months Ended March 30,			Year Ended December 31,									Three Months Ended March 30,
	1996			1997			1998			1999			1996			1997			1998			1999
	(In thousands)
Statement of Operations Data:
Net sales	$	5,578		$	6,955		$	5,773		$	1,180		$	2,303		$	4,310		$	6,184		$	2,045
Gross profit		2,835			3,391			2,573			473			708			1,677			2,295			941
Operating expenses		2,905			3,259			2,572			522			521			900			952			270
Operating income (loss)		(70	)		132			1			(49	)		187			777			1,343			671
Other income (expense)		1			(76	)		(74	)		(14	)		(94	)		(62	)		(68	)		(11	)
Income before taxes		(69	)		56			(73	)		(63	)		93			715			1,275			660
Income taxes		—			—			—			—			42			307			15			14
Net income (loss)	$	(69	)	$	56		$	(73	)	$	(63	)	$	51		$	408		$	1,260		$	646
Balance Sheet Data (at end of period):
Total assets	$	1,646		$	2,710		$	1,886		$	1,818		$	1,216		$	2,324		$	3,278		$	3,363
Long-term debt		28			113			82			75			462			504			451			770
Shareholders’ equity		647			651			578			514			377			749			2,009			1,265

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF PREDECESSOR COMPANIES

You should read the following discussion of our predecessor companies, Kelco Industries, W.N. Rushwood d/b/a Hayden Precision Industries, National Wire and Stamping, The MicroSpring Company, Portlyn and Texcel, in conjunction with their financial statements and related notes appearing elsewhere in this prospectus.

A discussion about our financial results appears under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” elsewhere in the prospectus.

Kelco Industries

Kelco Industries was a manufacturer of precision machined parts, primarily for medical device companies.

Comparison of Eleven Months Ended March 30, 1999 and Twelve Months Ended April 30, 1998

Net sales for the eleven-month period ended March 30, 1999 totaled $22.9 million compared with $23.2 million for the previous twelve-month period, a decrease of 1%. The eleven-month period had approximately 8% fewer days, but sales volume increased approximately 7% over the prior year.

Gross margin as a percentage of net sales for the eleven-month period ended March 30, 1999 was 43%, versus 42% for the previous twelve months. The 1% improvement was due primarily to reduced platinum material costs.

Operating expenses for the eleven-month period ended March 30, 1999 and for the twelve month period ended April 30, 1998 each totaled $2.8 million, or 12% of net sales.

W.N. Rushwood d/b/a Hayden Precision Industries

Hayden Precision Industries was a manufacturer of components used primarily in surgical instrumentation for the medical and dental industries.

Comparison of Annualized Three Months Ended March 30, 1999 and Twelve Months Ended December 31, 1998

Net sales for the three months ended March 30, 1999 were $2.2 million, or $8.9 million on an annualized basis. This represented a decline of $0.8 million, or 9%, over 1998. The sales decrease was driven primarily by an increase in new product introductions in the surgical instrumentation business during the three months ended March 30, 1999.

Gross margin as a percentage of net sales for the three months ended March 30, 1999, annualized, decreased to 20% from 29% in 1998. A combination of increased costs due to facility expansion, higher than normal scrap and “learning curve” costs associated with new product introductions were the main drivers.

Annualized operating expenses for the three month period ended March 30, 1999 were $0.8 million, or 9% of net sales, versus $1.1 million, or 11% of net sales, for the year ended December 31, 1998. The operating expense decrease was attributable to a reduction in administrative salaries.

Comparison of Twelve Months Ended December 31, 1998 and Twelve Months Ended December 31, 1997

Net sales for the year ended December 31, 1998 increased $3.8 million or 63% versus the prior year. This increase was driven by rapid growth in the surgical instrumentation market during 1998.

Gross margin as a percentage of net sales for the year ended December 31, 1998 increased to 29% from 26% in the prior year. This improvement in margin was driven primarily by increases in volume and a resulting leverage of fixed costs.

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Operating expenses for the year ended December 31, 1998 increased over the prior year by $0.1 million, or 13%. This increase reflects the hiring of a controller in 1998 and increases in bonus amounts due to a larger employee base to support the growth in sales. However, operating expenses as a percentage of net sales dropped from 16% in 1997 to 11% in 1998 due to the growth in sales.

National Wire and Stamping

National Wire and Stamping was an engineering and manufacturing company specializing in metal stamping and wire forming, primarily for the medical device industry. When we acquired National Wire, its total sales had decreased in the prior year due to a decrease in sales to non-medical device companies.

Comparison of Annualized Three Months Ended March 30, 1999 and Twelve Months Ended December 31, 1998

Net sales for the three months ended March 30, 1999 were $1.6 million, or $6.5 million annualized. This represented a decrease of $2.1 million or 24% over 1998. The primary driver of the decline was a continued reduction in the non-medical business during the first quarter of 1999.

Gross margin as a percentage of net sales for the three months ended March 30, 1999, annualized, decreased to 41% from 42% in the prior year. Margins were negatively impacted by lower plant capacity utilization as a result of lower volumes.

Operating expenses for the three month period ended March 30, 1999, annualized, were $3.2 million, or 49% of net sales, versus $3.1 million, or 35% of net sales, for the year ended December 31, 1998. The increase was due to a one-time payoff of deferred compensation contracts to current and former employees during the first quarter of 1999.

Comparison of Twelve Months Ended December 31, 1998 and Twelve Months Ended December 31, 1997

Net sales for the year ended December 31, 1998 declined 9% to $8.6 million versus $9.5 million for the year ended December 31, 1997. The main driver of the sales decline was a reduction in major non-medical accounts for stamping and assembly.            

Gross margin as a percentage of net sales for the year ended December 31, 1998 increased to 42% from 39% in the prior year. The improvement in margin can be attributed to the loss of lower margin sales and a shift in product mix from industrial to medical.

Operating expenses for the year ended December 31, 1998 were $3.1 million, or 35% of net sales, versus $3.1 million, or 33% of net sales, for the year ended December 31, 1997.

The MicroSpring Company

The MicroSpring Company was engaged in manufacturing metal-based spring components, developing and manufacturing percutaneous transluminal coronary angioplasty, or PTCA, guidewires, manufacturing interventional neuroradiology guidewires and providing design and engineering services.

Comparison of Annualized Three Months Ended March 30, 1999 and Twelve Months Ended December 31, 1998

Net sales for the three months ended March 30, 1999 were $1.8 million, or $7.2 million on an annualized basis. This represented a decrease of $3.0 million or 30% versus full year 1998. The decline in annualized 1999 sales was due to cancellations of guidewire business during the first quarter of 1999.

Gross margin as a percentage of net sales for the three months ended March 30, 1999, annualized, decreased to 22% from 28% in the prior year. The deterioration in gross margin reflects the loss of high margin guidewire business coupled with pricing pressures.

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Annualized operating expenses for the three-month period ended March 30, 1999 were $5.3 million, or 73% of net sales, versus $3.3 million, or 33% of net sales, for the year ended December 31, 1998. Operating expenses for the three months ended March 30, 1999 included $0.5 million in compensation expense for additional shares issued to a principal owner.

Comparison of Twelve Months Ended December 31, 1998 and Twelve Months Ended December 31, 1997

Net sales for the year ended December 31, 1998 totaled $10.2 million compared with $11.8 million for the prior year, a decline of 14%. The sales decline was driven by the loss of stent business.

Gross margin as a percentage of net sales for the year ended December 31, 1998 remained unchanged from the prior year at 28%.

Operating expenses for the year ended December 31, 1998 were $3.3 million, or 33% of net sales versus $3.4 million, or 29% of net sales, during the prior year.

Portlyn

Portlyn manufactured components and surgical instruments used in the medical device industry, primarily to its customers’ proprietary design specifications. Portlyn also sold an insignificant amount of products directly to end-users.

Comparison of Annualized Three Months Ended March 30, 1999 and Twelve Months Ended December 31, 1998

Net sales for the three months ended March 30, 1999 were $1.2 million, or an annualized $4.7 million. This represented a decrease of $1.0 million or 18% over full year 1998. The sales decline was primarily driven by a reduction in the surgical instrumentation business throughout 1998.

Gross margin as a percentage of net sales for the three months ended March 30, 1999, annualized, decreased to 40% from 45% in the prior year. Reduced volumes in the high margin surgical instrumentation business was the primary driver of the margin decline.

Operating expenses for the three-month period ended March 30, 1999, annualized, decreased $0.5 million or 19% over full year 1998. The operating expense decline was primarily driven by reduced key employee compensation. Operating expenses as a percentage of sales for the three-month period ended March 30, 1999 totaled 44% compared to 45% in the prior year, remaining virtually unchanged.            

Comparison of Twelve Months Ended December 31, 1998 and Twelve Months Ended December 31, 1997

Net sales for the year ended December 31, 1998 declined 17% to $5.8 million, compared with $7.0 million for the year ended December 31, 1997. The decline in sales was primarily due to a reduction in the surgical instrumentation business.

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Gross margins as a percentage of net sales for the year ended December 31, 1998 decreased to 45% from 49% in the prior year. This margin decline was attributed to the loss of higher margin sales, a shift in product mix and increased labor costs. These factors were partially offset by a reduction in material costs to 16% of sales in 1998, versus 20% in 1997.

Operating expenses for the year ended December 31, 1998 were $2.6 million or 45% of net sales, compared with $3.3 million and 47% for the prior year. The decline in operating expenses was primarily driven by reduced key employee compensation.

Texcel

Texcel was a contract precision laser welding service provider and component manufacturer. With respect to laser welding services, Texcel performed seam and bond welding services using hermetic and multi-fiber laser welding machinery, laser marking, leak testing and documentation services on customer-owned materials. With respect to component manufacturing, Texcel purchased raw materials and preformed welding services leading to final assembly of a finished product to the customer.

Comparison of Annualized Three Months Ended March 30, 1999 and Twelve Months Ended December 31, 1998

Net sales for the three-month period ended March 30, 1999, annualized, increased versus full year 1998 by $2.0 million or 32%. The sales increase was driven primarily by the rapid expansion of the telecommunications market segment.

Gross margin as a percentage of net sales for the three-month period ended March 30, 1999, annualized, increased to 46% from 37% in 1998. The margin improvement was attributable primarily to the telecommunications business growth coupled with increased manufacturing efficiencies.

Operating expenses for the three-month period ended March 30, 1999, annualized, were $1.1 million, or 13% of net sales, versus $1.0 million, or 15% of net sales, for the year ended December 31, 1998. The increase was due primarily to an active recruitment effort targeted at both engineering and quality professionals to support sales growth.

Comparison of Year Ended December 31, 1998 and Twelve Months Ended December 31, 1997

Net sales for the year ended December 31, 1998 increased $1.9 million or 43% versus the prior year ended December 31, 1997. The sales increase was driven primarily by growth in the medical sector, including both surgical instruments and biomedical implants. In addition, the telecommunication business also experienced growth.

Gross margin as a percentage of net sales for the year ended December 31, 1998 was 37%, declining slightly over gross margin as a percentage of net sales of 39% for the prior year ended December 31, 1997. The decline was driven by new product development costs.

Operating expenses for the year ended December 31, 1998 were $0.9 million, or 15% of net sales, as compared to $0.9 million, or 21% of net sales, for the year ended December 31, 1997.

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BUSINESS

Overview

We are a leading engineering and manufacturing services provider to the medical device industry. Our customers include many of the largest medical device companies in the world, such as Boston Scientific, Guidant, Johnson & Johnson affiliates and Medtronic, as well as other large and emerging medical device companies. We provide product development and design services, precision metal and plastic part manufacturing, product assembly services and supply chain management. Through these products and services, we offer our customers a single source solution for their device development and manufacturing needs, accelerated product development time, and reduced costs, allowing them to focus on their core competencies such as research and sales and marketing.

We began operations during March 1999 through the acquisition of seven companies with complementary capabilities and subsequently broadened our capabilities through five additional acquisitions. Since our launch, we have focused our efforts on integrating and growing our business and have made significant investments in our product design and development capabilities, sales and marketing teams, operations, quality systems and information technology infrastructure to support that growth. We currently have 15 manufacturing facilities with approximately 600,000 total square feet and over 1,350 employees.

Market Opportunity

The Market for Medical Devices

According to a report prepared for us by Frost & Sullivan, the global medical device market in 2000 exceeded $170 billion, with the United States portion alone constituting approximately $70 billion. This market has grown consistently over the past ten years due to the continued increase in overall healthcare expenditures resulting from the demographic shift towards an older population and the development of new and innovative products. Spending for medical devices, like the rest of healthcare expenditures, has realized strong growth with little sensitivity to recession.

The medical device market may be separated into many distinct product segments, with the defining characteristic being the medical specialty served. The products in the medical device market can also be broadly categorized as either value-added or commodity products. Value-added products such as electro-medical and orthopedic implantable devices, general surgical instrumentation and minimally invasive surgical instruments typically have lower unit sales and higher profit margins. Commodity products such as needles, syringes, gloves and gowns typically have higher unit sales and lower profit margins. Frost & Sullivan estimates that the global market for value-added products in 2000 exceeded $100 billion.

Initially, we are targeting outsourcing opportunities in select value-added medical device markets: surgical instrumentation, electro-medical implants, interventional and orthopedics. We believe that these markets are currently the most attractive based on their size, growth, profit margins, customer dynamics, competitive environment and need for the engineering and manufacturing services we offer. We selectively serve customers in other value-added portions of the medical device market.

According to Frost & Sullivan, our four target markets accounted for at least $14 billion of medical device sales in the United States during 2000, with each of the target markets individually accounting for more than $3 billion in sales. We believe that the ratio of United States sales to international sales in our four target markets is consistent with Frost & Sullivan’s estimated ratio of United States sales (approximately 40%) to international sales (approximately 60%) for the 2000 global medical device market as a whole. This indicates that the total global market for end-user sales in our four target markets in 2000 exceeded $35 billion.

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Global Medical Device Markets

MEDICAL DEVICE MARKETS	EXAMPLES		MAJOR PLAYERS
MedSource Target Markets
Surgical Instrumentation	—  Arthroscopic —  Ophthalmology	—  Endo-laparoscopic —  Electro-surgical	—  Boston Scientific —  Johnson & Johnson	—  Stryker —  Tyco
Electro-Medical Implants	—  Pacemakers —  Defibrillators	—  Hearing assist devices —  Heart pumps	—  Biotronik —  Guidant	—  Medtronic —  St. Jude
Interventional	—  Stents —  Angioplasty	—  Catheter ablation —  Distal protection	—  Boston Scientific —  Guidant	—  Johnson & Johnson —  Medtronic
Orthopedics	—  Spinal fixation —  Hip implants	—  Knee implants	—  Biomet —  Johnson & Johnson	—  Stryker —  Zimmer
Other Markets
Other Value-Added Products	—  Urology —  Renal / hemodialysis	—  Respiratory —  Dental	—  Abbott —  Baxter	—  C.R. Bard —  Fresenius
Commodity Products	—  Needles / syringes —  Gloves / gowns	—  Wound care	—  Allegiance —  Becton Dickinson	—  3M —  Tyco
Imaging Equipment	—  MRI —  Ultrasound	—  X-ray	—  General Electric —  Philips	—  Siemens —  Toshiba

We believe that the market opportunity for medical engineering and manufacturing services is largely represented by the cost of goods sold of medical device companies. Applying Frost & Sullivan’s estimated average gross margin for value-added medical device products of 70%, we believe that on a global basis our four target markets currently represent at least a $10 billion annual cost of goods sold opportunity. In addition, there are market opportunities for us outside of cost of goods sold, consisting largely of a portion of the development and selling, general and administrative expenditures that support the cost of goods sold in these markets.

Medical Device Company Outsourcing Trend

Frost & Sullivan estimates that the growth in manufacturing outsourcing by medical device companies in the United States from 1999 to 2000 was in excess of 18%. Frost & Sullivan further estimates that in the United States in 2000, 25% of the cost of goods sold for value-added products was outsourced and projects that by 2005, 42% of the cost of goods sold for value-added products will be outsourced. Frost & Sullivan also estimates that the United States medical device market will grow at 5% per year over the next five years. Based on these estimated increases in outsourcing and market growth, we expect that outsourcing of value-added products by medical device companies in the United States will grow at 17% per year through 2005. We believe that international markets will experience similar growth rates in manufacturing outsourcing as the United States.

In the past, medical device companies relied very little on manufacturing outsourcing because: (1) the cost benefits of outsourcing were not as important due to the limited cost pressures that existed before managed care; (2) they were unwilling to outsource to a supply base which, due to the small size and limited capabilities of most supplier companies, was not prepared for the heavy ramp-up and delivery requirements of new product introductions; and (3) suppliers were typically diversified across several industries and therefore did not focus on the requirements of the medical device industry, such as FDA compliance and medical quality standards.

The medical device industry has experienced rapid change in the past decade and we expect many of these developments will lead medical device companies to increase their use of manufacturing outsourcing. We believe the key drivers of this increase in outsourcing include:

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r the need for innovation and accelerated time-to-market, including design for manufacturability and rapid prototyping to support new product introductions;

r cost containment pressures from healthcare providers such as managed care organizations, which necessitate a more efficient supply chain; and

r increased competition and industry consolidation.

As a result of these factors, medical device companies are increasingly focusing on their core competencies in research and sales and marketing, and outsourcing other functions such as manufacturing and related engineering and product development activities. We believe that the medical engineering and manufacturing services industry is highly fragmented with over 3,000 companies, many of which have annual revenues of less than $5 million and limited capabilities that do not satisfy current market requirements. We believe our products and services address this market opportunity.

Our Products and Services

We offer our customers a broad range of products and services for their medical engineering and manufacturing needs, including:

r Product design and development.    Our product design, design for manufacturability and prototyping capabilities allow us to participate early in the product development process to help reduce our customers’ costs, accelerate product development times and secure ongoing manufacturing relationships. Equipping our facilities with rapid prototyping technologies and using these technologies across multiple disciplines (e.g., machining and plastic molding) is an important element of our product development services. In providing these services, our internal application engineering group and internal product design engineers provide our customers with expertise in desired disciplines (e.g., mechanical design, electrical design, electronics and software).

r Precision metal and plastic parts manufacturing.    Precision metal manufacturing is a core element of our manufacturing capabilities. Our metal manufacturing capabilities include milling, lathe turning, drilling, grinding, polishing, lapping, laser cutting, sintering, wire forming, stamping and precision metal injection manufacturing with materials as diverse as stainless steel and titanium. Trends in the medical industry towards minimally-invasive surgical techniques have made our micro-machining capabilities increasingly important. These micro-machining capabilities include computer numerically controlled, or CNC, multi-axis and Swiss-machining, as well as electric discharge machining, or EDM. Our plastic part manufacturing capabilities include tubing (dip coating and extrusion), molding (injection, insert and thermoforming) and machining.

r Product assembly services and supply chain management.    Our product assembly and supply chain management capabilities allow us to provide customers with completed medical devices and subassemblies. Our assembly capabilities include mechanical, electromechanical and instrumentation assembly, as well as functional testing, inspection, complex integration (with advanced materials), kitting and packaging. We use our supply chain management services to source components and services, either from internal operations or from third party suppliers, for the devices we assemble. Our assembly and supply chain management capabilities enable us to extend our vertically integrated manufacturing business and further distinguish us from suppliers with more limited capabilities.

We provide our products and services to each of the following primary target markets:

r Surgical instrumentation devices and components,  for both the minimally invasive and general surgery markets. Surgical instruments are typically produced from metal or plastic materials and, in the case of powered products, electronic components. We manufacture a variety of surgical products for our customers such as clip appliers, endoscopic instruments, forceps, electrocautery blades, staple cartridges and suturing devices.

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r Electro-medical implant devices and components,  for the cardiac rhythm management, or CRM, neurologic, and hearing assist markets, including pacemakers and defibrillators. These products are high precision and are typically produced from metal and plastic materials and electronic components. We provide our customers with laser welding services and manufacture guidewires, set screws, pins, ferrules, connector blocks and other components.

r Custom interventional devices and components,  for the cardiology, radiology, neuroradiology, vascular access and electrophysiology markets. Interventional products are typically produced from a combination of metal and plastic materials. We manufacture a variety of interventional products for our customers, including precision catheters, PTCA guidewires, electrophysiology catheters and distal protection devices.

r Custom orthopedic devices and instruments,  for the reconstructive, spinal implant and trauma markets. Orthopedic products are typically produced from metal, plastic and ceramic materials. We manufacture a variety of orthopedic implants for our customers, such as hips, knees, spinal cages, hooks and plates and instruments for the placement of these implants.

Our Customer Solution

Our medical engineering and manufacturing capabilities enable our customers to concentrate their internal resources on developing innovative technologies and broadening their product offerings. The key components of our customer solution are:

r Provide a single source solution.    By providing a broad range of engineering, development, manufacturing, assembly and supply chain management capabilities, we offer our customers the ability to outsource all or part of the production of a device to a single provider. We have won several significant projects under which we design, manufacture and package finished devices for leading global medical device companies. In addition, we work closely with smaller, emerging medical device companies as their engineering and manufacturing partner.

r Accelerate product development cycle time.    Our experience in design engineering and rapid prototyping positions us as a valuable resource early in the new product development process and enables critical processes to occur simultaneously, which reduces the overall time-to-market. We employ over 85 engineers of whom approximately 50 are devoted to new product introductions. Our engineers provide technical expertise to transform our customers’ concepts into finished devices that can be efficiently manufactured on a commercial scale.

r Provide quality products and practices.    Quality is of the highest importance to our customers due to the serious and costly consequences of product failure. We operate our facilities under a single integrated quality system and they comply with the ISO 9001 quality management standard and ISO 13485 medical device-specific standard. We believe that our quality system also complies with FDA quality system regulations.

r Reduce costs for customers.    We reduce our customers’ total costs associated with manufacturing by:

– designing for manufacturability;

– providing purchasing power on raw materials and machinery; and

– delivering manufacturing processes that lower costs through increased efficiencies and continuous improvement efforts.

In addition, by offering a single source solution encompassing design, engineering, manufacturing and other services such as assembly, sterilization and packaging, we are able to lower the total cost of the products that we deliver to our customers by designing optimal manufacturing processes and reducing coordination costs, redundant engineering and overhead related to quality and purchasing.

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r Offer financial stability.    We believe the medical engineering and manufacturing services industry includes over 3,000 companies, many of which have annual revenues of less than $5 million. We believe our customers prefer working with large and well capitalized medical engineering and manufacturing service providers such as MedSource, who can ensure a stable supply of products and services. Additionally, we have the financial capacity to allow us to respond rapidly to our customers’ requirements, such as higher production volumes.

Our Strategy

Our objective is to be the leading medical engineering and manufacturing services provider to established, as well as emerging, medical device companies. We expect to grow by focusing our sales and marketing teams on cross-selling our design and engineering, manufacturing, assembly and supply chain management services to both existing customers and new customers.

The key elements of our business strategy include:

r Focus on manufacturing excellence and leading process technologies.    We are committed to maintaining and improving our manufacturing processes and services, which we believe has made us one of the most efficient and high quality medical engineering and manufacturing services providers. Our manufacturing capabilities are supported by advanced manufacturing process technologies and a strong culture of continuous improvement. We are implementing a manufacturing strategy founded on the principles of employee excellence, technology deployment, quality-driven operations, an integrated low-cost manufacturing network, lean manufacturing and customer satisfaction.

r Strengthen our customer relationships by collaborating in the design and engineering of new products.    Working closely with customers in the design and engineering of new products provides significant opportunity to anticipate customers’ needs and secure ongoing manufacturing relationships. Increasingly, our customers provide only functional or system performance specifications and request that we provide much of the design and engineering specifications associated with new products or product modifications. Our ability to provide product design and development services enables us to secure long term manufacturing relationships for finished devices, sub-assemblies and components.

r Drive additional component manufacturing business by continuing to expand our device assembly services.    As we increase our assembly business, we have the opportunity to also increase our manufacturing of components because the assembler, or sub-assembler, of a device typically controls the source of the components used in that device. Our manufacturing capabilities position us well to produce many of the components for the products we assemble.

r Pursue product line transfers and acquisitions of customers’ manufacturing assets.    We believe that the transfer of the manufacturing responsibility for product lines and our acquisition of customer manufacturing facilities will provide a vehicle for substantial growth, as well as a mechanism to develop closer relationships with leading medical device companies. These transactions allow our customers to reduce capital employed and focus resources on their core competencies, including research and sales and marketing. During October 2001, we acquired a manufacturing assembly facility for a product line from one of our major customers, a leading medical device company. As part of this transaction, we signed a multi-year supply agreement with this customer. We believe that product line transfers and asset acquisitions of this kind are becoming increasingly attractive to our customers.

r Selectively acquire new companies.    We plan to make select acquisitions of complementary medical engineering and manufacturing services providers that bring desired capabilities, customers or geographic coverage and either strengthen our position in our target markets or provide us with a significant presence in a new market. We have an experienced business development team focusing on acquisitions and integrating these acquisitions into our operations. Since our formation through the acquisition of seven companies in March 1999, we have completed five additional acquisitions. We believe that our ability to identify, close and integrate acquisitions is a competitive advantage.

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We intend to continue to build our brand name and deploy our sales and marketing team, as well as to use our information technology infrastructure, to further implement our strategy. In addition, we believe that our scale and resources provide our customers with security and reliability.

Sales and Marketing

Our sales organization uses a team approach that integrates approximately 50 account managers, application engineering managers, customer support managers and project managers. This team approach is designed to allow us to serve our customers while providing a single point of contact through each phase of a project. We believe this customer team approach distinguishes us by enabling us to handle complex projects involving outsourcing of completed medical devices from design to delivery.

We have a group of applications engineering managers who are trained in our various manufacturing technologies and processes. These managers assist our customers’ engineering groups and our sales professionals by specifying the best manufacturing technology for a particular device or component. These managers are supported by our process experts in each of the facilities who provide functional expertise in each of the various manufacturing processes.

Our market development team provides strategic marketing support to our sales and operations organizations. Market development helps to optimize the allocation of our sales and application engineering resources across our four key target markets and aligns their efforts with our manufacturing capabilities and capacity. In addition, this team plays an important role in tailoring our broad product and service offerings, including key account and market strategies, pricing strategies, capability bundling strategies, marketing campaigns and establishing strategic alliances with business partners in each of our target markets.

We invest significant resources to develop the MedSource brand name by participating in a number of medical related tradeshows, including medical design and manufacturing shows in the United States and Europe and by advertising our capabilities in a number of medical device and equipment industry magazines and trade publications.

Customers

We serve leading medical device companies as well as many other private and public emerging medical device companies. During fiscal 2001, we had sales to over 200 medical device companies, and our customers include eight of the largest ten medical device companies (by revenues), including Boston Scientific, Guidant, Johnson & Johnson affiliates and Medtronic. Johnson & Johnson affiliates and Medtronic each accounted for more than 10% of our revenues during our year ended June 30, 2001 and during our three months ended September 30, 2001.

We work with our customers on a product by product basis and often work with many different divisions of our largest customers. To date, most of our new sales have been made to existing customers that, we believe, have typically ordered new products from us based upon their previous satisfactory experiences. The products that we manufacture are made to order based on the customer’s specifications and may be designed using our design and engineering services. Our customers retain ownership of and the rights to their product’s design while we generally retain the rights to any of our proprietary manufacturing processes.

Information Technology

We believe that our use of information technology will be a competitive advantage. We are installing the Oracle 11i enterprise resource planning, or ERP, system in all of our facilities. We successfully completed the implementation at our initial site and are in the process of installing the Oracle 11i software and business processes at additional sites. We also installed the Oracle integrated financial reporting system at all locations and generally convert newly acquired facilities to this system within six months to one year. In addition, we have standardized our computer aided design, or CAD, and computer aided manufacturing, or CAM, software at our facilities.

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We expect these systems to provide several key benefits to us, our customers and our suppliers. The systems enable the sharing of customer, supplier and engineering data across our company. We believe that this will enable us to better understand and predict customer demand, take advantage of economies of scale, provide greater flexibility to move product design between sites and improve the accuracy of capturing and estimating our manufacturing and engineering costs. In addition, the systems provide greater visibility into the operations of the enterprise through integrated financial and management reporting capabilities. This system also benefits our suppliers by giving them more accurate and timely information about our requirements. Overall, these systems will provide the infrastructure that will enable us to provide additional value to our customers through improved supply chain management capability, reduced costs and accelerated product development.

Manufacturing

To achieve excellence in manufacturing, we combine advanced manufacturing technology, such as CAD/CAM, with manufacturing techniques such as just-in-time manufacturing and total quality management, or TQM. Just-in-time manufacturing is a production technique that minimizes work-in-process inventory and manufacturing cycle time while enabling delivery of products to customers in the quantities and time frame required. TQM is a management philosophy that seeks to impart high levels of quality in every operation. TQM is accomplished by setting quality objectives for every operation, tracking performance against those objectives, identifying work flow and policy changes required to achieve higher quality levels, and committing executive management to support changes required to deliver higher quality.

To serve our market as a comprehensive manufacturing solution for medical device companies, we address customers’ requirements from a “quote-to-order,” “order-to-fill” and a post-order perspective. We have identified the key processes within this structure and are currently implementing standard operating procedures to create a seamless process within our organization structure and with our customers. This approach to customer service is vital in maintaining and developing customer relationships and differentiating us from our competitors.

We intend to continue to offer our customers advanced manufacturing process technologies, which currently include computer integrated manufacturing, CNC machines, laser cutting, injection molding, stamping, dip coating, extruding and our patented precision metal injection manufacturing. Our flexible manufacturing capability allows us to efficiently produce both high-volume products and low-volume products. Our investment in new equipment will position us to continue to provide efficient and flexible medical engineering and manufacturing services to medical device companies.

We operate a multi-facility manufacturing network strategically located throughout the United States and in Mexico. In addition to providing redundancy in the event of an unexpected disaster, this manufacturing network helps us to better meet our customers’ needs.

Quality

We believe that product quality is a critical success factor in the medical engineering and manufacturing services market. We strive for continuous improvements of our processes and have adopted a number of quality improvement and measurement techniques to monitor our performance.

We operate our facilities under a single integrated quality system and they comply with the ISO 9001 quality management standard and the ISO 13485 medical device-specific quality management standard. The ISO 9001 standard specifies quality system requirements for product design and production. ISO 13485 establishes additional, more specific requirements for medical devices in particular. Newly acquired facilities are promptly brought into conformity with our integrated quality system, generally within six months to one year. We believe our quality system also complies with FDA quality system regulations with respect to all of our products, services and internal processes. With our integrated company-wide quality system in place, customers are able to audit select MedSource facilities knowing that every facility that has been integrated into the system is subject to the same quality system and process controls, as applicable to the facility’s particular operations. This system can provide significant time and cost savings for customers, as well as reduced risk of non-conforming products resulting in customer dissatisfaction, product recall or patient adverse events.

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Supply Arrangements

We have established relationships with many of our materials providers. However, most of the raw materials that are used in our products are subject to fluctuations in market price. In particular, the prices of stainless steel, titanium and platinum have historically fluctuated, and the prices that we pay for these materials, and, in some cases, their availability, are dependent upon general market conditions. In the short term, we generally cannot pass these cost increases on to our customers.

Our current capabilities do not include all elements that are required to satisfy all of our customers’ requirements. As we increasingly position ourselves to provide our customers with a fully integrated supply chain solution, we may rely increasingly on third party suppliers, subcontractors and other outside sources for components or services.

To date we have not experienced any difficulty obtaining necessary raw materials or subcontractor services.

Intellectual Property

The products that we manufacture are made to order based on the customer’s specifications and may be designed using our design and engineering services. Our customers retain ownership of and the rights to their product’s design while we generally retain the rights to any of our proprietary manufacturing processes.

We rely on a combination of patents, licenses, trade secrets and know-how to establish and protect the proprietary rights to our technologies and products. We have been issued patents in the United States and select foreign countries in connection with our guidewire technology, plastic tubing manufacturing processes and precision metal injection manufacturing processes.

In addition, we are a party to several license agreements with third parties pursuant to which we have obtained, on varying terms, non-exclusive rights to patents held by third parties in connection with precision metal injection manufacturing technology.

It is our policy to require all employees, consultants and other parties to execute confidentiality agreements. These agreements prohibit disclosure of confidential information to third parties except in specified circumstances. In the case of employees and consultants, the agreements generally provide that all confidential information relating to our business is the exclusive property of MedSource.

We have an agreement with one of our employees that provides him with an exclusive license to our precision metal injection technology for use only outside the medical industry in the event that his employment terminates. In the event that the employee is terminated by us without cause, the license will be royalty-free. Otherwise, we will receive royalties from any sublicense of these intellectual property rights by the employee. In addition, we must obtain the employee’s consent if we desire to sublicense or exploit this technology for non-medical applications.

Competition

We compete with different companies depending on the type of product or service offered or the geographic area served. Our management believes that the primary basis of competition in our targeted markets is existing customer relationships, as well as reputation, quality, delivery, responsiveness, breadth of capabilities and price. We are not aware of a single competitor that operates in all of our target markets or offers the same range of products and services that we offer. To remain competitive, we must continue to provide a single source solution, accelerate product development time, provide quality products and practices, reduce costs for our customers and offer financial stability.

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Our existing or potential competitors include the internal operations of medical device companies themselves and other medical engineering and manufacturing services providers. Other medical engineering and manufacturing services providers currently compete in some but not all of the same target markets that we do. We believe that the medical engineering and manufacturing services industry is highly fragmented with over 3,000 companies that have limited manufacturing capabilities and limited sales and marketing expertise. Many of these 3,000 companies have less than $5 million in annual revenues from to medical device companies.

Government Regulation

We are a medical engineering and manufacturing services provider. Some of the products and components of products that we manufacture may be considered finished medical devices, and the manufacturing processes used in the production of finished medical devices are subject to FDA inspection and assessment, and must comply with FDA quality system regulation. Our products must also comply with state and foreign requirements. Also, in order to comply with regulatory requirements, our customers may wish to audit our operations to evaluate our quality systems. Accordingly, we routinely permit audits by our customers.

In addition, the FDA and state and foreign governmental agencies regulate many of our customers’ products as medical devices. FDA approval is required for those products prior to commercialization in the United States, and approval of regulatory authorities in other countries may also be required prior to commercialization in those jurisdictions. Moreover, in the event that we build or acquire additional facilities outside the United States, we will be subject to the medical device manufacturing regulations of those countries. Some other countries may rely upon compliance with United States regulations or upon ISO certification as sufficient to satisfy certain of their own regulatory requirements for a product or the manufacturing process for a product.

Other than as described in the prior two paragraphs, our business is not subject to direct governmental regulation other than the laws and regulations generally applicable to businesses in the jurisdictions in which we operate, including those federal, state and local environmental laws and regulations governing the emission, discharge, use, storage and disposal of hazardous materials and the remediation of contamination associated with the release of these materials at our facilities and at off-site disposal locations. Our manufacturing activities involve the controlled use of, and some of our products contain, small amounts of hazardous materials. Liabilities associated with hazardous material releases arise principally under the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act and analogous state laws which impose strict, joint and several liability on owners and operators of contaminated facilities and parties that arrange for the off-site disposal of hazardous materials. We are not aware of any material noncompliance with the environmental laws currently applicable to our business and we are not subject to any material claim for liability with respect to contamination at any company facility or any off-site location. We cannot assure you, however, that we will not be subject to such environmental liabilities in the future as a result of historic or current operations.

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Properties

Currently, our principal operations are conducted at the following locations:

Location	Approx. Square Feet	Leased/  Owned
Brimfield, Massachusetts	30,000	Owned
Brooklyn Park, Minnesota	70,000	Leased
Corry, Pennsylvania	40,000	Leased
Danbury, Connecticut	87,000	Leased
E. Longmeadow, Massachusetts	15,000	Leased
Englewood, Colorado	35,000	Leased
Laconia, New Hampshire	31,000	Leased
Minneapolis, Minnesota(a)	7,000	Leased
Navojoa, Mexico	38,000	Leased
Newton, Massachusetts	69,000	Leased
Norwell, Massachusetts	37,000	Leased
Orchard Park, New York	41,000	Leased
Pittsfield, Massachusetts	26,000	Owned
Redwood City, California	28,000	Leased
Santa Clara, California	10,000	Leased
Trenton, Georgia	42,000	Leased
Total	606,000

(a) Corporate offices.

We believe these facilities and the manufacturing and assembly capacity they provide are adequate for our current and foreseeable purposes and that additional space and capacity will be available when needed.

Employees

We currently employ over 1,350 people. None of our employees is represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be good.

Litigation

From time to time, we are involved in legal proceedings in the ordinary course of our business. We are not currently involved in any pending legal proceedings that we believe could have a material adverse effect on our financial position or results of operations.

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MANAGEMENT

The following table sets forth our directors, executive officers and key employees and their ages as of January 15, 2002:

Name	Age	Position
Richard Effress	31	Chairman of the Board, Chief Executive Officer and Co-founder
Joseph Caffarelli	56	Senior Vice President, Chief Financial Officer and Treasurer
Dan Croteau	36	Vice President—Corporate Development
Jim Drill	37	Vice President—Sales and Marketing
Bill Ellerkamp	42	Vice President—Market Development
Karl Hens	41	Vice President—Technology
Rick McWhorter	53	Senior Vice President—Operations
Ralph Polumbo	50	Vice President—Human Resources and Integration
Rich Snider	50	Vice President—New Product Introduction
Douglas Woodruff	44	Vice President—Regulatory Affairs and Quality Assurance
Joseph Ciffolillo (b)	63	Director
John Galiardo (a)(b)	68	Director
Wayne Kelly	39	Director and Vice President
William Kidd	60	Director and Co-founder
T. Michael Long (a)(b)	58	Director
Ross Manire (a)(b)	49	Director

(a) Member of the Compensation and Benefits Committee.

(b) Member of the Audit Committee.

Richard Effress was a co-founder of MedSource, has been the Chairman of our board of directors since inception and became Chief Executive Officer in January 2000. From May 1997 until March 1999, he worked as a partner at Kidd & Company, a venture management firm, of which he is also a founder. While at Kidd & Company he participated in the development of Chatham Technologies, a provider of custom electronic enclosure systems for the communications industry. Previously, he was an associate at Kidd, Kamm & Company, a private equity investment firm, and an investment banking analyst at Donaldson, Lufkin Jenrette Securities Corporation. Rich received a B.S. from the Wharton School of the University of Pennsylvania and an M.B.A. from Harvard Business School, where he was a Baker Scholar.

Joseph Caffarelli joined MedSource in February 2001 as Senior Vice President, Chief Financial Officer and Treasurer. From April 1999 until January 2001, he was Senior Vice President and Chief Financial Officer of Airspan Networks, a wireless communications equipment company, and from November 1994 until March 1999, he was the Executive Vice President and Chief Financial Officer of Physio-Control, a medical equipment company. Joe also served in numerous senior financial management positions at General Electric, a diversified industrial corporation. Joe received a B.A. from the State University of New York.

Dan Croteau joined MedSource in June 1999 as Director of Business Development, became our Vice President—Business Development in January 2000 and became our Vice President—Corporate Development in December 2001. From September 1997 until June 1999, he was a consultant at Booz Allen & Hamilton in Sydney, Australia. Previously, he worked at General Electric, a diversified industrial corporation, in various technical marketing, sales, and general management roles. Dan has a B.S. from the University of Vermont and an M.B.A. from Harvard Business School.

Jim Drill joined MedSource in February 1999 as Vice President—Sales and Marketing. From 1991 until 1999, he worked at Parametric Technology Corporation, a developer and marketer of design and manufacturing software platforms, where he was Senior Vice President—North America West and served in several other senior sales management positions throughout the United States and Europe. Prior to that he worked at International Business Machines, a computer manufacturer. Jim has a B.S. from the University of Wisconsin-Madison.

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Bill Ellerkamp joined MedSource in March 2000 as Vice President—Market Development. From 1995 until 2000, he worked at TFX Medical, a supplier of engineered components, assemblies and products to medical device and equipment original equipment manufacturers, most recently as President. Prior to that he spent over ten years in Europe with Teleflex and Rusch International in various sales and marketing positions. Bill has a B.A. from Colgate University and an M.B.A. from the London Business School.

Dr. Karl Hens joined MedSource in May 2000 as Vice President—Technology. From December 1995 until its acquisition by MedSource, Karl was the founder, President and Chief Executive Officer of Thermat Precision Technology, a precision metal injection manufacturing company. Previously, he held a faculty position at The Pennsylvania State University and was a founding partner of the Powder Metallurgy Lab. Karl has a B.S. from the University of Waterloo, and an M.S. and Ph.D. from Rensselaer Polytechnic Institute.

Rick McWhorter joined MedSource in March 2001 as Senior Vice President—Operations. From 1977 until 2000, he worked at Baxter Healthcare International, a global healthcare manufacturing company, where he was most recently Vice President—Manufacturing of Baxter’s I.V. Systems group. Prior to that he worked at Ludlow Corporation, a textile manufacturing company. Rick has a B.S. and M.B.A. from Delta State University.

Ralph Polumbo joined MedSource in April 1999 as Vice President—Human Resources and Integration. From 1995 until 1999, he worked at Rubbermaid, a company that produces and markets products principally in the home, juvenile and commercial products categories, where he held several positions including Vice President of Integration and Vice President of Human Resources for Rubbermaid’s Home Products division. Previously, he worked at The Stanley Works, a tool manufacturer, in a variety of positions including Vice President of Human Resources and Vice President of Operations. Ralph has a B.S. from the Wharton School of the University of Pennsylvania and a Masters of Labor and Industrial Relations from Michigan State University.

Rich Snider joined MedSource in February 2000 as Vice President—New Product Introduction. From 1996 until 2000, he worked at Bridge Medical, a start-up medical device and information company, where he was a Vice President and co-founder. Rich served in various senior management positions at Amcare Health Services, McGaw, and Quest Medical. Rich has a B.S. degree in Mechanical Engineering from Southern Methodist University and an M.B.A. from Louisiana State University.

Doug Woodruff joined MedSource in January 2000 as Vice President—Regulatory Affairs and Quality Assurance. From 1998 until 2000, he was the Vice President—Quality Assurance and Technical Services for Tenax Corporation, a company acquired by MedSource. From 1996 to 1998 he was the Director of Quality Assurance and Regulatory Affairs for the Meadox Division of Boston Scientific, a medical technology company. Doug has a B.S. and M.S. from Washington State University.            

Joseph Ciffolillo has been a director of MedSource since April 2001. From 1983 until his retirement in 1996, he worked at Boston Scientific, a medical technology company, most recently as Chief Operating Officer. Prior to Boston Scientific, he worked in several positions at Johnson & Johnson, a diversified medical products company, where he last served as president of Johnson & Johnson Orthopedics. He serves as a director of Boston Scientific and as Chairman of the Advisory Board of the Health Science Technology Division of Harvard University and Massachusetts Institute of Technology. Joe received his B.A. from Bucknell University.

John Galiardo has been a director of MedSource since January 2000. From 1977 until his retirement in 1999, he worked at Becton Dickinson, a medical technology company, where he was Vice Chairman and General Counsel. He is a director of Gynetics, a healthcare products company, VISX Incorporated, a company that develops products and procedures to improve eyesight using lasers, and the New Jersey Manufacturers Insurance Companies, an insurance company. Jack received a B.S. from the University of Maryland and an L.L.B. from Columbia Law School.

Wayne Kelly joined MedSource in March 1999 as the Vice President of our Brooklyn Park, Minnesota facility, and served in that position until March 2001, at which time he assumed his current position as a company Vice President. He has been a director of MedSource since March 1999. From 1983 until March 1999, he held various positions at Kelco Industries, a company acquired by MedSource in March 1999. Wayne received a B.S. from the University of Minnesota.

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William Kidd was a co-founder of MedSource and has been a director since our inception. Bill was a founding partner of Kidd & Company, a venture management firm he founded in 1997. Prior to Kidd & Company, Bill was a founding partner of Kidd, Kamm & Company, a private equity investment firm. Bill received a B.A. and M.B.A. from Cornell University.

T. Michael Long has been a director of MedSource since October 2000. He has been a Partner of Brown Brothers Harriman & Co., an investment bank, since 1983 and has been with Brown Brothers Harriman since 1971. He serves as a director of HCA, a company that owns and operates hospitals and related health care entities, Vaalco Energy Company, an independent energy company, and Genesee & Wyoming, a company that operates short line and regional freight railroads and provides related rail services. Michael received a B.A. from Harvard University and an M.B.A. from Harvard Business School.

Ross Manire has been a director of MedSource since November 2000. Ross is President of Flextronics Enclosures, a division of Flextronics International, an electronics contract manufacturer. He is the former President and CEO of Chatham Technologies, Inc., which merged with Flextronics in September 2000. Prior to joining Chatham in 1999, Ross was Senior Vice President of the Carrier Systems Business Unit of 3Com Corporation, a provider of networking solutions, a position he held since 1997. Previously, he served in various executive positions with U.S. Robotics including Chief Financial Officer, Senior Vice President, Operations, and General Manager, Network Systems Division. Ross holds a B.A. from Davidson College and an M.B.A. from the University of Chicago.

Our board of directors currently consists of seven members. Prior to the closing of this offering, our board of directors will be divided into three classes, with each director serving a three-year term and one class being elected at each year’s annual meeting of stockholders.             ,             and             will be in the class of directors whose initial term expires at the 2002 annual meeting of stockholders.             ,             and             will be in the class of directors whose initial term expires at the 2003 annual meeting of the stockholders.             and             will be in the class of directors whose initial term expires at the 2004 annual meeting of stockholders.

Our executive officers are elected by the board of directors and serve until their successors have been duly elected and qualified or until their earlier resignation or removal. There are no family relationships among any of our directors or officers.

Committees of the Board of Directors

Audit Committee.    The audit committee, which consists of Messrs. Ciffolillo, Galiardo, Long and Manire, assists the board in fulfilling its responsibilities of ensuring that management is maintaining an adequate system of internal controls to assure:

r that assets are safeguarded and that financial reports are properly prepared;

r consistent application of generally accepted accounting principles; and

r compliance with management’s policies and procedures.

In performing these functions, the audit committee meets periodically with the independent auditors and management to review their work and confirm that they are properly discharging their responsibilities. The audit committee also:

r recommends an independent audit firm to audit financial statements and to perform services related to audits;

r approves the audit fees payable to the independent audit firm and reviews the scope and results of audits with the independent auditors;

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r reviews with management and the independent auditors our annual operating results;

r considers the adequacy of our internal accounting control procedures; and

r considers our auditors’ independence.

Compensation and Benefits Committee.    The primary function of the compensation and benefits committee is to determine management and executive compensation and establish health and benefit plans and other compensation policies. The compensation and benefits committee is also responsible for the administration of our stock plans, including reviewing management recommendations with respect to grants of awards and taking other actions that may be required in connection with our compensation and incentive plans.

Compensation and Benefits Committee Interlocks and Insider Participation

Mr. Effress served on our compensation and benefits committee from March 1999 until he became our Chief Executive Officer in January 2000. Since then, he has participated in discussions concerning management and executive officer compensation. The members of our compensation and benefits committee are Messrs. Galiardo, Long and Manire.

Director Compensation

We reimburse directors for reasonable expenses incurred in attending board or committee meetings. Following the offering, we will pay non-employee directors $10,000 per year, payable, at their option, in cash or shares of our common stock. We also expect to grant to each non-employee director an option to purchase 2,100 shares of our common stock in connection with this offering and additional grants each year thereafter.

Executive Compensation

The following table sets forth the compensation earned by our Chief Executive Officer and our four other most highly compensated executive officers during our fiscal year ended June 30, 2001:

					Long-Term Compensation Awards
	Annual Compensation				Number of Securities Underlying Options	All Other  Compensation
	Salary		Bonus
Richard Effress	$	250,000	$	50,000	300,000	$    —
Chairman and Chief Executive Officer
Jim Drill		208,333		41,466	—	—
Vice President—Sales and Marketing
William Ellerkamp		178,750		35,750	27,500	—
Vice President—Market Development
Ralph Polumbo		175,000		35,000	—	—
Vice President—Human Resources and Integration
Rich Snider		175,000		30,641	10,000	—
Vice President—New Product Introduction

Option Grants in Fiscal 2001

The following table shows grants of stock options to our Chief Executive Officer and to the other executive officers named in the Summary Compensation Table above during our fiscal year ended June 30, 2001.

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All options were granted under our 1999 stock plan. These options were granted at exercise prices at least equal to the fair market value of our common stock as determined by our board of directors on the dates of grant. The percentage of options granted is based on options to purchase an aggregate of 1,555,660 shares of our common stock granted by us during the fiscal year ended June 30, 2001 to our employees, including the named executive officers.

The potential realizable value amounts in the last two columns of the following chart are based on the assumption that our common stock appreciates at the annual rate shown, compounded annually, from the date of grant until the expiration of the 10-year term. Potential realizable value has been calculated using the initial public offering price of $             per share, although we estimate that, in each case, the fair market value of our stock at the time the option was granted was less than that amount. These number are calculated based on the requirements of the SEC and do not reflect our estimate of future stock price growth.

Name	Individual Grants						Potential Realizable  Value at Assumed  Annual Rates  of Stock Price  Appreciation for Option
	Number of Securities Underlying Options Granted	Percent of  Total Options  Granted to Employees in  Fiscal Year (%)		Exercise Price per Share ($)		Expiration Date
							5%	10%
Richard Effress	300,000	19.3	%	$	16.24	11/21/10
Jim Drill	—	—			—	—
William Ellerkamp	27,500	*			16.24	11/21/10
Ralph Polumbo	—	—			—	—
Rich Snider	10,000	*			17.00	2/6/11

* Less than one percent.

Option Values as of June 30, 2001

The following table provides summary information concerning stock options held as of June 30, 2001 by our Chief Executive Officer and by the other executive officers named in the Summary Compensation Table above. The value of in-the-money options represents the difference between the exercise price of the option and the initial public offering price of $             per share.

	Shares Acquired on Exercise	Value Realized		Number of Securities Underlying Unexercised Options as of June 30, 2001		Value of Unexercised  In-the-Money Options as of June 30, 2001
Name				Exercisable	Unexercisable	Exercisable	Unexercisable
Richard Effress	—	$	—	75,000	225,000
Jim Drill	—		—	67,500	82,500
William Ellerkamp	616			12,509	66,875
Ralph Polumbo	—		—	32,500	37,500
Rich Snider	7,500			11,250	66,250

1999 Stock Plan

In March 1999, we adopted our 1999 Stock Plan, which, as amended to date, authorizes the issuance of up to 4,430,000 shares of common stock, subject to adjustment upon the occurrence of any stock dividend or other distribution, consolidation, combination, exchange of shares or other specified corporate transaction or event.

In accordance with our stock plan, our board of directors or a board committee composed of non-employee directors may grant non-qualified stock options or shares of common stock subject to restrictions or contingencies to employees (including directors and officers who are employees) and to consultants and directors who are not employees of MedSource or any of its subsidiaries. The term of any particular grant, including any performance-based requirements, exercise price, vesting terms and other restrictions are determined by the board or by the committee of the board that makes the grant.

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The exercise price of non-qualified options may be above, at or below fair market value of the common stock on the date of grant. The exercise period may be set by the board or the committee that makes the grant but may not exceed ten years. Stock options will be exercisable at such times and upon such conditions as the board or the committee that makes the grant may determine, as reflected in the applicable grant.

A restricted stock award is an award of common stock that is subject to any vesting, performance criteria, restrictions on transferability and other restrictions, if any, that the board or the committee making the grant may impose at the date of grant. These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments or otherwise, as the board or the committee making the grant may determine. Except to the extent restricted under the grant relating to the restricted stock, a participant granted restricted stock will have all of the rights of a stockholder, including, without limitation, the right to vote and the right to receive dividends. The board or the committee making the grant has the authority to cancel all or any portion of any outstanding restrictions.

Except as otherwise determined by the committee making the grant, options and restricted shares granted under the plan may not be transferred other than by will or by the laws of descent and distribution.

Our 1999 Stock Plan terminates in 2009. As of January 15, 2002, we had outstanding options to purchase an aggregate of 2,749,434 shares of common stock under the plan at exercise prices ranging from $12.00 per share to $20.00 per share. Our standard form of stock option contract provides for vesting of options at a rate of 25% after the first year of employment and 25% each year thereafter until all options have vested and become exercisable. The vesting of some or all of the options granted to some of our executives and directors accelerates upon the occurrence of specified change in control transactions.

ACT Medical, Inc. 1998 Omnibus Stock Plan

In connection with our acquisition of ACT Medical in December 2000, we assumed the ACT Medical 1998 Omnibus Stock Plan. The ACT Medical stock plan terminates in December 2008. As of January 15, 2002, we had outstanding options to purchase an aggregate of 242,250 shares of our common stock under the ACT Medical stock plan at exercise prices ranging from $3.39 per share to $20.00 per share. The standard form of stock option contract for options granted under the ACT Medical stock plan provides for vesting of options at a rate of 25% after the first year of employment and 25% each year thereafter until all options have vested and become exercisable. The vesting of some or all of the options granted to some of our executives and directors accelerates upon the occurrence of specified change in control transactions. We do not expect to grant any additional options under the ACT Medical stock plan.

2001 Employee Stock Purchase Plan

Our 2001 Employee Stock Purchase Plan was adopted by our board of directors in December 2001 and by our stockholders in                 , 2002. This plan provides our employees with an opportunity to purchase our common stock through accumulated payroll deductions. We initially reserved 500,000 shares of common stock for issuance under this purchase plan. As of the date of this prospectus, we had not issued any shares under this plan, but we will be begin issuing shares upon completion of this offering. The number of shares reserved for issuance under the purchase plan will be subject to an annual increase on the first day of each fiscal year equal to the lowest of: 750,000 shares; 2.5% of our outstanding stock on that date; or such lesser amount as may be determined by our board of directors.

Our purchase plan will be administered by our board of directors or by a committee appointed by our board of directors. The purchase plan permits an eligible employee to purchase our common stock through payroll deductions of up to 10% of his or her compensation or such other amount as the persons administering the plan may determine. Employees are eligible to participate in this purchase plan if they are customarily employed by us

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at least 20 hours per week and more than five months in any calendar year and only to the extent that they do not own more than 5% of our outstanding shares.

Unless our board of directors or the committee administering the plan determines otherwise, this purchase plan will be implemented in a series of consecutive offering periods, each approximately six months in duration. Offering periods will begin on the first trading day on or after May 1 and November 1 of every year and terminate on the last trading day in the period six months later, provided that the first offering period will commence on the effective date of this offering and will end on April 30, 2002, or the last trading day prior thereto.

If we are acquired and the successor corporation does not assume all outstanding options under this purchase plan, then the offering and purchase periods then in progress may be shortened so that all options will be automatically exercised immediately prior to the date of acquisition.

The price at which common stock will be purchased under this purchase plan is equal to at least 85% of the fair market value of the common stock on the first day of the applicable offering period or on the last day of the applicable purchase period, whichever is lower. Employees may end their participation in the offering period at any time, and participation automatically ends on termination of employment.

Our board of directors may not, without the adversely affected optionee’s prior written consent, amend, modify or terminate this purchase plan at any time if the amendment, modification or termination would impair the rights of plan participants. This purchase plan will terminate in November 30, 2011, unless terminated earlier in accordance with its provisions.

Employment Arrangements

Upon a change of control, the options held by our executive officers will become immediately exercisable as to 50% of the total shares subject to the options, including any portion already then exercisable. In addition, some or all of the options held by each of Messrs. Effress, Caffarelli, Croteau, Ellerkamp, McWhorter, Polumbo and Snider will become immediately exercisable in full in the event of a change of control at a specified minimum price per share of our common stock. Further, some or all of the options held by each of these executive officers will become immediately exercisable in full in the event that their employment is terminated without cause following any change of control.

We have entered into an employment agreement with Mr. Effress. The agreement provides for a base salary of $275,000, with a bonus opportunity of at least 50% of his base salary at target performance. Mr. Effress is subject to a noncompetition covenant during his employment with us and for one year after termination of his employment. Although Mr. Effress is an “at will” employee, we have agreed to pay him up to one year of his base salary if we terminate him without cause.

We have entered into an employment agreement with Mr. Caffarelli. The agreement provides for a base salary of $225,000, with a bonus opportunity of at least 50% of his base salary at target performance. Mr. Caffarelli is subject to a noncompetition covenant during his employment with us and for one year after termination of his employment. Although Mr. Caffarelli is an “at will” employee, we have agreed to pay him up to one year of his base salary if we terminate him without cause.

We have entered into an employment agreement with Mr. Drill. The agreement, which expires in April 2002, provides for a base salary of $225,000, with an annual bonus determined by our board of directors. Mr. Drill is subject to a noncompetition covenant during his employment with us and for a period of time, not to exceed one year, during which we pay him severance equal to his base salary, less any amount he receives from a new employer.

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We have entered into an employment agreement with Mr. Ellerkamp. The agreement provides for a base salary of $178,750, with a bonus opportunity of at least 50% of his base salary at target performance. Mr. Ellerkamp is subject to a noncompetition covenant during his employment with us and for one year after termination of his employment. Although Mr. Ellerkamp is an “at will” employee, we have agreed to pay him up to six months of his base salary if we terminate him without cause.

We have entered into an employment agreement with Mr. McWhorter. The agreement provides for a base salary of $225,000, with a bonus opportunity of at least 50% of his base salary at target performance. Mr. McWhorter is subject to a noncompetition covenant during his employment with us and for one year after termination of his employment. Although Mr. McWhorter is an “at will” employee, we have agreed to pay him up to one year of his base salary if we terminate him without cause.

We have entered into an employment agreement with Mr. Polumbo. The agreement, which expires in April 2002, provides for a base salary of $190,000, with an annual bonus determined by our board of directors. Mr. Polumbo is subject to a noncompetition covenant during his employment with us and for a period of time, not to exceed one year, during which we pay him severance equal to his base salary, less any amount he receives from a new employer.

Business Conduct Policy

All of our employees, including the aforementioned executives, are required as a condition of employment to read and sign our business conduct policy which includes acceptable behaviors regarding conflict of interest, lawsuits and government investigations, anti-trust, equal employment opportunity, electronic mail, and safety and health.

Employees are required to read and sign a confidentiality agreement, which includes non-disclosure and non-solicitation requirements as a condition of employment.

Cash Incentive Plans

Our management bonus plan provides for annual bonus awards to eligible employees if company-wide target performance is achieved. Awards are based on achievement of pre-determined financial and operational objectives. The plan may be changed or discontinued at the sole discretion of the board.

We are also implementing a variable compensation plan to cover all employees at all locations.

Limitation of Liability and Indemnification Matters

Our certificate of incorporation limits the liability of our stockholders, directors and officers to the maximum extent permitted by Delaware law. Delaware law provides that a director of a corporation will not be personally liable for monetary damages for breach of fiduciary duty as a director, except for liability:

r for any breach of the director’s duty of loyalty to us or our stockholders;

r for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

r under Delaware law regarding unlawful dividends and stock purchases; or

r for any transaction from which the director derived an improper personal benefit.

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As permitted by Delaware law, our certificate of incorporation and bylaws provide that we must indemnify our stockholders, directors, officers, employees and agents to the fullest extent permitted by Delaware law. We have obtained directors’ and officers’ insurance to cover our directors, officers and some of our employees for certain liabilities. We believe that these indemnification provisions and agreements and this insurance are necessary to attract and retain qualified directors and officers. The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

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CERTAIN TRANSACTIONS

Formation Transactions

In connection with our formation in March 1999:

r we issued 292,941.18 shares of our Series B preferred stock to J.H. Whitney III, L.P., an affiliate of Whitney & Co., a 5% stockholder, for aggregate consideration of $21.5 million;

r we issued 7,058.82 shares of our Series B preferred stock to Whitney Strategic Partners III, L.P., an affiliate of Whitney & Co., for aggregate consideration of $0.5 million;

r we issued a note and 48,750 shares of our Series Z preferred stock to J.H. Whitney Mezzanine Fund, L.P., an affiliate of Whitney & Co., for aggregate consideration of $15.0 million;

r we issued an aggregate of 452,650 shares of our common stock to Richard Effress, our Chairman of the Board and Chief Executive Officer, for aggregate consideration of $0.2 million; and

r we issued an aggregate of 2,374,280 shares of our common stock to William J. Kidd, a director and 5% stockholder, his wife and various trusts for the benefit of his immediate family members for aggregate consideration of $1.2 million.

At the same time that we issued the Series B preferred stock described above to the affiliates of Whitney & Co., Richard Effress and William J. Kidd, among others, entered into a share transfer agreement with those affiliates of Whitney & Co. The share transfer agreement provides that we:

r sell all or substantially all of our assets;

r liquidate;

r undergo a change in control; or

r complete an initial public offering of common stock that provides us with net proceeds of at least $40.0 million;

then, in each instance, Mr. Effress, Mr. Kidd and others may be required by the affiliates of Whitney & Co. to transfer to them a number of shares of common stock that, when added to the number of shares of Series B preferred stock owned by them (on an as-converted basis) would give the affiliates of Whitney & Co., a specified internal rate of return. In no event will Mr. Effress, Mr. Kidd and others transfer more than 1,500,000 shares of common stock to the affiliates of Whitney & Co. pursuant to the prior sentence. Based on an assumed initial public offering price of $            per share, no transfer of shares will be required. The share transfer agreement will terminate following completion of this offering.

Series C Preferred Stock

In October 2000, we issued an aggregate of:

r 35,000 shares of our Series C preferred stock to The 1818 Fund III, L.P., a 5% stockholder, for aggregate consideration of $35.0 million;

r 500 shares of our Series C preferred stock to a limited partnership controlled by Ross Manire, a director, for aggregate consideration of $0.5 million;

r 200 shares of our Series C preferred stock to John Galiardo, a director, for aggregate consideration of $0.2 million;

r 537.5 shares of our Series C preferred stock to Richard Effress, our Chairman of the Board and Chief Executive Officer, for aggregate consideration of $0.5 million;

r 3,255 shares of our Series C preferred stock to William J. Kidd, a director and 5% stockholder, his wife and a trust for his benefit for aggregate consideration of $3.3 million.

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In June 2001, we issued we issued an aggregate of 300 shares of our Series C preferred stock to a corporation controlled by Joseph Ciffolillo, a director, for aggregate consideration of $0.3 million.

Series E Preferred Stock

In December 2001, we issued an aggregate of:

r 500 shares of our Series E preferred stock, together with warrants initially exercisable to purchase an aggregate of 16,667 shares of our common stock, to Ross Manire, a director, for aggregate consideration of $0.5 million; and

r 1,435 shares of our Series E preferred stock, together with warrants initially exercisable to purchase an aggregate of 47,833 shares of our common stock, to William J. Kidd, a director and 5% stockholder, his wife and certain trusts for the benefit of his children, for aggregate consideration of $1.4 million.

We used the proceeds of the issuance of our Series E preferred stock and warrants to finance our acquisition of HV Technologies.

At the same time we issued our Series E preferred stock, we obtained the consent of certain affiliates of Whitney & Co. to complete our acquisition of HV Technologies and changed some of the covenants to which we were subject under an agreement we had with those affiliates. In connection with that consent, we paid Whitney Mezzanine Fund a fee of $37,500, and we increased by $0.8 million the amount payable by us to Whitney Mezzanine Fund upon redemption of our 12.5% senior subordinated notes.

Certain Services

Kidd & Company has agreed to perform management and acquisition-related services for us until March 2006. In exchange for these services, we paid Kidd & Company a $2.0 million fee at inception and have agreed to pay an annual fee equal to $1.0 million plus a percentage of the aggregate consideration paid by us in future acquisitions. We have also agreed to reimburse Kidd & Company for the reasonable out-of-pocket costs and expenses that it incurs, and will indemnify Kidd & Company and its agents for damages that they suffer, in connection with providing these services. We paid Kidd & Company fees of $1.1 million under these agreements during our year ended June 30, 2001. Kidd & Company has agreed to terminate these agreements in exchange for a cash payment of $2.0 million upon completion of this offering.

Whitney Mezzanine Management Company, LLC, an affiliate of Whitney & Co., has also agreed to perform management services for us until March 2006. In exchange for these services, we have agreed to pay Whitney Mezzanine Management Company an annual fee equal to the sum of $0.4 million plus a percentage of the aggregate consideration paid by us in connection with future acquisitions. We have also agreed to reimburse Whitney Mezzanine Management Company for the reasonable out-of-pocket costs and expenses that it incurs, and will indemnify Whitney Mezzanine Management Company and its agents for damages that they suffer, in connection with providing these services. We paid Whitney Mezzanine Management Company fees of $0.5 million under this agreement during our year ended June 30, 2001. Whitney Mezzanine Management Company has agreed to terminate this agreement in exchange for a cash payment of $0.9 million upon completion of this offering.

Other Transactions

We lease one of our facilities from an entity controlled by the father of Wayne Kelly, a director. For the year ended June 30, 2001, our rent payments under the lease were approximately $0.4 million, and we expect to pay a similar amount in our fiscal year ending June 30, 2002.

We have also entered into registration rights agreements with some of our principal stockholders as described under “Description of Capital Stock — Registration Rights Agreements.”

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of January 15, 2002 by:

r each person or group of affiliated persons that beneficially owns more than 5% of our outstanding common stock;

r each of our directors;

r each of our executive officers named in the Summary Compensation Table; and

r all of our directors and executive officers as a group.

Unless otherwise indicated below, the address for each listed director and executive officer is MedSource Technologies, Inc., 110 Cheshire Lane, Suite 100, Minneapolis, Minnesota 55305. We have determined beneficial ownership in accordance with the rules of the SEC and, as a result, include voting and investment power with respect to shares. To our knowledge, except under applicable community property laws or as otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares shown as beneficially owned. The percentage of ownership of common stock for each stockholder is based on 16,688,654 shares of our common stock outstanding as of January 15, 2002, assuming the conversion of all outstanding convertible preferred stock and the exercise of the warrant described in the first paragraph after the table under “Summary — The Offering” on page 5. The number of shares of our common stock outstanding used in calculating the percentage for each listed person includes the shares of our common stock underlying the options and warrants held by that person that are exercisable within 60 days following January 15, 2002. The number of shares of our common stock outstanding as of January 15, 2002 is subject to adjustment as described in the second paragraph under the caption “Description of Capital Stock — General.”

		Percentage of Shares Beneficially Owned
Beneficial Owner	Number of Shares Beneficially Owned	Before Offering		After Offering
Richard Effress(a)(b)	641,443	3.8	%	%
Jim Drill(c)	75,000	*
Bill Ellerkamp(d)	20,000	*
Ralph Polumbo(e)	40,000	*
Rich Snider(f)	40,000	*
Joseph Ciffolillo(g)	21,016	*
John Galiardo(b)(h)	27,559	*
Wayne Kelly(i)	48,432	*
William J. Kidd(b)(j)(k)(l)	1,768,306	10.6
T. Michael Long(m)	2,526,045	15.1
Ross Manire(b)(l)(n)(o)	62,082	*
Funds affiliated with Whitney & Co.(p)(q)	3,487,500	20.9
177 Broad Street Stamford, Connecticut 06901
The 1818 Fund III, L.P.(b)(r)	2,526,045	15.1
59 Wall Street New York, New York 10005
All directors and executive officers as a group (8  persons)(b)(s)	5,260,228	30.8
Selling stockholders(t):
Whitney Mezzanine Fund, L.P.(q)	487,500	2.9
177 Broad Street Stamford, Connecticut 06901
German American Capital Corporation(u)	162,500	*
31 West 52nd Street New York, New York 10019

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* Represents less than 1% of our outstanding common stock.

(a) Includes (1) 150,000 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002; (2) 38,793 shares of common stock issuable upon conversion of 537.5 shares of our Series C preferred stock; and (3) 3,724 shares owned by a trust established for the benefit of Mr. Effress’s current and future children. Mr. Effress disclaims beneficial ownership of shares owned by the trust. Edward R. Mandell is a co-trustee of the foregoing trust and may be deemed to have power to vote and dispose of the shares owned by the foregoing trust.

(b) The number of shares of our common stock issuable upon conversion of our Series C preferred stock is subject to adjustment if the initial public offering price of our common stock is less than $19.50 per share as discussed in the second paragraph under the caption “Description of Capital Stock — General.”

(c) Includes 70,000 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002.

(d) Includes 19,384 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002.

(e) Includes 35,000 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002.

(f) Includes 32,500 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002.

(g) Includes 21,016 shares of common stock issuable upon conversion of 300 shares of our Series C preferred stock.

(h) Includes 13,125 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002. Includes 14,434 shares of common stock issuable upon conversion of 200 shares of our Series C preferred stock.

(i) Includes 25,000 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002.

(j) Includes (1) 843,471 shares owned by trusts established for the benefit of Mr. Kidd’s children; (2) 108,259 shares issuable upon conversion of 1,500 shares of our Series C preferred stock that are owned by a trust of which Mr. Kidd is the beneficiary; and (3) 62,249 shares of common stock issuable upon conversion of 862.5 shares of our Series C preferred stock that are owned directly by Mr. Kidd. Mr. Kidd disclaims beneficial ownership of shares owned by the foregoing trusts. Edward R. Mandell is a co-trustee of the foregoing trusts and may be deemed to have to power to vote and dispose of the shares owned by the foregoing trusts. Does not include 886,566 shares owned by Mr. Kidd’s wife, of which 62,249 shares are issuable upon conversion of 862.5 shares of our Series C preferred stock, as to all of which Mr. Kidd disclaims beneficial ownership.

(k) Includes 38,268 shares of our common stock issuable upon exercise of warrants issued in connection with the issuance of 1,148 shares, or 19.1%, of our Series E preferred stock. Does not include 9,567 shares of our common stock issuable upon exercise of warrants issued in connection with the issuance of 287 shares, or 4.8%, of our Series E preferred stock owned by Mr. Kidd’s wife, as to all of which Mr. Kidd disclaims beneficial ownership.

(l) The holders of our Series E preferred stock are entitled to vote on all matters, other than the election of directors, as to which the holders of our common stock are entitled to vote. Each holder of a share of our Series E preferred stock is entitled to one vote for each share of common stock issuable upon exercise of the warrants issued to the holder in connection with the issuance of that share of our Series E preferred stock.

(m) Mr. Long, a general partner of Brown Brothers Harriman & Co., which is the general partner of The 1818 Fund III, L.P., may be deemed to be the beneficial owner of shares held of record by The 1818 Fund III, L.P. due to his role as co-manager of The 1818 Fund III, L.P., Mr. Long disclaims beneficial ownership of the shares beneficially owned by The 1818 Fund III, L.P., except to the extent of his pecuniary interest therein.

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(n) Includes (1) 9,375 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002; and (2) 36,086 shares of our common stock issuable upon conversion of 500 shares of our Series C preferred stock, which are beneficially owned by Manire Limited Partnership. Mr. Manire is a director and officer of Odyssey Corp., the general partner of Manire Limited Partnership.

(o) Includes 16,667 shares of our common stock issuable upon exercise of warrants issued in connection with the issuance of 500 shares, or 8.3%, of our Series E preferred stock.

(p) Represents 2,929,412 shares owned by J.H. Whitney III, L.P., 70,588 shares owned by Whitney Strategic Partners III, L.P. and 487,500 shares owned by J.H. Whitney Mezzanine Fund, L.P. J.H. Whitney Equity Partners II, LLC is the general partner of J.H. Whitney III and Whitney Strategic Partners III and has voting and investment power over their shares. Whitney GP, LLC is the general partner of Whitney Mezzanine Fund and has voting and investment power over its shares. Each of these funds is affiliated with Whitney & Co.

(q) If the underwriters exercise the over-allotment option in full, Whitney Mezzanine Fund will beneficially own 243,750 shares, or     % of our common stock after this offering.

(r) Represents 2,526,045 shares owned of record by The 1818 Fund III, L.P. Brown Brothers Harriman & Co. is the general partner of The 1818 Fund III. Includes 2,526,045 shares of common stock issuable upon conversion of 35,000 shares of our Series C preferred stock.

(s) Includes (1) 386,250 shares issuable upon exercise of options that are exercisable on or within 60 days of January 15, 2002; and (2) 2,806,883 shares of common stock issuable upon conversion of 38,900 shares of our Series C preferred stock.

(t) As part of the underwriters’ over-allotment option, Whitney Mezzanine Fund and German American Capital have agreed to sell up to 243,750 and 81,250 shares of our common stock, respectively, to the underwriters for the purpose of covering over-allotments at the price offered to the public less underwriting discounts and commissions.

(u) If the underwriters exercise the over-allotment option in full, German America Capital will beneficially own 81,250 shares, or less than one percent, of our common stock after this offering.

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DESCRIPTION OF CAPITAL STOCK

General

Immediately following the closing of this offering, our authorized capital stock will consist of 70,000,000 shares of common stock, par value $.01 per share, and 1,000,000 shares of preferred stock, par value $.01 per share, of which 6,000 shares are designated Series E preferred stock and 4,000 shares are designated Series F preferred stock. As of January 15, 2002, there were outstanding 6,080,380 shares of common stock held of record by stockholders, options and warrants to purchase an aggregate of shares of common stock, 6,000 shares of Series E preferred stock held of record by 28 stockholders and 4,000 shares of Series F preferred stock held of record by one stockholder. We expect to use a portion of the proceeds of this offering to redeem our Series E preferred stock before December 31, 2002 and our Series F preferred stock within 45 days after we complete this offering.

Our Series C preferred stock converts into a number of shares of common stock that depends upon the initial public offering price of our common stock in this offering. We issued 40,000 shares of our Series C preferred stock during October 2000 and an additional 300 shares of our Series C preferred stock during April 2000. Dividends on our Series C preferred stock accrued at an annual rate of 6% of the liquidation preference of $1,000 per share, compounded quarterly, from the date of issuance until October 25, 2001 and accrue at an annual rate of 8% of the liquidation preference of $1,000 per share, compounded quarterly, from and after October 25, 2001. Each share of Series C preferred stock converts into a number of shares of our common stock equal to the liquidation preference per share of $1,000 plus accrued and unpaid dividends divided by a conversion price of $15.00. If the value of the number of shares of our common stock into which each share of our Series C preferred stock converts upon completion of this offering (valued at the initial public offering price of our common stock in this offering) is less than $1,300, then the holder of each share of our Series C preferred stock will upon conversion thereof receive a number of additional shares of our common stock so that the aggregate value of the number of shares of our common stock received upon conversion of each share of our Series C preferred stock is $1,300. However, in no event will we adjust the conversion price to an amount less than 75% of $15.00 or issue more than 88.89 shares of our common stock upon conversion of a share of our Series C preferred stock.

Common Stock

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as our board of directors may from time to time determine. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for in our certificate of incorporation, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election. Our board of directors is divided into three classes, with each director serving a three-year term and one class being elected at each year’s annual meeting of stockholders. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. Each outstanding share of common stock is, and all shares of common stock to be outstanding upon completion of this offering will be, fully paid and nonassessable.

Preferred Stock

Pursuant to our certificate of incorporation, our board of directors has the authority, without further action by the stockholders, to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges, and relative participating, optional or special rights as well as the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the common stock. Our board of directors, without stockholder approval, can issue preferred stock with voting, conversion or other rights that could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms calculated to delay or prevent a change in control or make removal of management more difficult. Additionally, the issuance of preferred stock may have the effect of

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decreasing the market price of the common stock, and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to issue any additional preferred stock following this offering.

The holders of our Series E preferred stock are entitled to cumulative dividends at the annual rate of $60 per share during the first year from issuance, payable at the discretion of our board of directors, and will be entitled to $160 per share on a retroactive basis after the first anniversary of issuance. Upon our liquidation, before any payment on any class or series of our capital stock that ranks junior as to liquidation to the Series E preferred stock, the holders of shares of Series E preferred stock are entitled to receive for each share of Series E preferred stock, cash in an amount equal to the original issuance price of the Series E preferred stock plus all accumulated but unpaid dividends thereon. Our Series E preferred stock has the same preference as our Series F preferred stock with respect to liquidation. The holder of each share of the Series E preferred stock has a limited right to convert only during the 20 day period following our change of control into the number of shares of our common stock that have an aggregate market value at the time of conversion equal to $1,000 per share of Series E preferred stock plus all accrued and unpaid dividends. Holders of shares of our Series E preferred stock are entitled to vote on any matter on which the holders of common stock are entitled to vote, except for the election of directors. On any matter on which the holders of our Series E preferred stock are entitled to vote, they are entitled to cast a number of votes equal to the number of shares of common stock issuable upon exercise of the warrants that were issued to them when they acquired the Series E preferred stock. We may, at our option, at any time, redeem our Series E preferred stock for an amount equal to the original issuance price of the Series E preferred stock plus all accumulated but unpaid dividends thereon.

The holders of our Series F preferred stock are entitled to cumulative dividends at the annual rate of $60 per share during the first year from issuance, payable at the discretion of our board of directors, and will be entitled to $160 per share on a retroactive basis after the first anniversary of issuance. Upon our liquidation, before any payment on any class or series of our capital stock that ranks junior as to liquidation to the Series F preferred stock, the holders of shares of Series F preferred stock are entitled to receive for each share of Series F preferred stock, cash in an amount equal to the original issuance price of the Series F preferred stock plus all accumulated but unpaid dividends thereon. Our Series F preferred stock has the same preference as our Series E preferred stock with respect to liquidation. The holder of each share of the Series F preferred stock has a limited right to convert only during the 20 day period following our change of control into the number of shares of our common stock that have an aggregate market value at the time of conversion equal to $1,000 per share of Series E preferred stock plus all accrued and unpaid dividends. Holders of shares of our Series F preferred stock are not entitled to vote on any matter, except as required by law. We may, at our option, at any time, redeem our Series F preferred stock for an amount equal to the original issuance price of the Series F preferred stock plus all accumulated but unpaid dividends thereon.

Warrants

The holders of our Series E preferred stock have been granted warrants to purchase an aggregate of 200,000 shares of our common stock at $.01 per share. The warrants entitle the holders thereof to purchase an additional 45,000 shares on each of the first five anniversaries of the date of issuance of the Series E preferred stock that the Series E preferred stock remains outstanding. We intend use a portion of the proceeds of this offering to redeem the Series E preferred stock by December 31, 2002, which is prior to the first anniversary of the date of its issuance.

Registration Rights

The holders of             shares of our common stock, subject to adjustment depending upon the number of shares of our common stock issued upon conversion of our Series C preferred stock, have the right to require us to register those shares under the Securities Act 180 days following this offering if:

r the holders of at least 50% of the shares from either of two groups that are party to a registration rights agreement that we entered into in March 1999 make the request to register at least 25% of those shares; or

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r the holders of at least 25% of the shares that were party to a registration rights agreement that we entered into in October 2000 make the request.

If on the first anniversary of the date on which the holders who are party to the March 1999 registration rights agreement could require us to register shares under the Securities Act, those holders have not required us to effect a registration in which Indosuez MST Partners could participate, then Indosuez MST Partners has the right to require us to register 327,280 shares under the Securities Act.

If we register any of our common stock for our own account or for the account of any of our security holders, the holders described in the two paragraphs above and the holders of an additional 9,815,783 shares of common stock are entitled to include their shares of common stock in the registration, subject to the ability of the underwriters to limit the number of shares included in the offering under certain circumstances. Furthermore, the holders of all of the foregoing shares may require us to register their shares on a Form S-3 registration statement when we are eligible to use Form S-3. We will bear all fees, costs and expenses of any such registration, other than underwriting discounts and commissions.

Delaware Anti-Takeover Law and Charter Provisions

Provisions in our certificate of incorporation and bylaws may have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of us. Such provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions allow us to issue preferred stock without any vote or further action by the stockholders, require advance notification of stockholder meetings and nominations of candidates for election as directors, provide for a classified board of directors, limit our board to ten directors unless increased by a two-thirds vote of the board, prohibit stockholders from calling a special meeting and require a two-thirds vote of our stockholders to amend any of the foregoing provisions. These provisions may make it more difficult for stockholders to take corporate actions and could have the effect of delaying or preventing a change in control.

In addition, we are subject to Section 203 of the Delaware General Corporation Law. This law prohibits a Delaware corporation from engaging in any business combination with any interested stockholder, unless any of the following conditions are met. First, this law does not apply if prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder. Second, the law does not apply if upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and those shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer. Third, the law does not apply if, at or after the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be             . The transfer agent’s telephone number is (      )       -        .

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SHARES ELIGIBLE FOR FUTURE SALE

Immediately prior to this offering, there was no public market for our common stock. Future sales of substantial amounts of common stock in the public market could adversely affect the market price of our common stock.

Upon completion of this offering, we will have outstanding an aggregate of              shares of common stock, assuming no exercise of options after            , 2002. Of these shares, the            shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by “affiliates” of MedSource as that term is defined in Rule 144 under the Securities Act. Shares purchased by affiliates may generally only be sold pursuant to an effective registration statement under the Securities Act or in compliance with limitations of Rule 144 as described below.

The remaining            shares of common stock held by existing stockholders were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act.                of these shares will be subject to “lock-up” agreements providing that the stockholders will not offer, sell or otherwise dispose of any of the shares of common stock owned by them for a period of 180 days after the date of this prospectus. Morgan Stanley & Co. Incorporated, however, may in its sole discretion, at any time without notice, release all or any portion of the shares subject to lock-up agreements. The            shares will become eligible for sale as follows:

Date Available for Resale	Shares Eligible For Sale	Comment
Immediately		Shares not subject to lock-up agreements
90 days (            , 2002)		Shares not subject to lock-up and salable under Rule 701
180 days (            , 2002)		Lock-up released, shares salable under Rules 144 (subject, in some instances, to volume limitations) and 701
Various dates beginning in            , 2002		Shares saleable under Rule 144 (subject, in some instances, to volume limitations)

Immediately after the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock issued or reserved for future issuance under our stock plans and our stock purchase plan. Based upon the number of shares subject to outstanding options as of January 15, 2002 and currently reserved for issuance under our stock plans and stock purchase plan, this registration statement would cover approximately 5.2 million shares. Shares registered under the registration statement will generally be available for sale in the open market immediately after the 180 day lock-up agreements expire (            , 2002) or earlier in the sole discretion of Morgan Stanley & Co. Incorporated.

Also beginning six months after the date of this offering, holders of            shares of our common stock, including shares issuable upon conversion of preferred stock, will be entitled to rights with respect to registration of these shares for sale in the public market. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of the registration.

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Rule 144

In general, under Rule 144 as currently in effect, beginning 180 days after the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year from the later of the date these shares were acquired from us or from one or our affiliates would be entitled to sell in “broker’s transactions” or to market makers, within any three-month period, a number of shares that does not exceed the greater of:

r 1% of the number of shares of our common stock then outstanding (which will equal approximately                     shares immediately after this offering); or

r the average weekly trading volume of our common stock as reported through Nasdaq’s automated quotation system during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 are generally subject to the availability of current public information about MedSource.

Rule 701

In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants or advisors who purchase shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering is entitled to sell such shares 90 days after the effective date of this offering in reliance on Rule 144, in the case of affiliates, without having to comply with the holding period requirements of Rule 144 and, in the case of non-affiliates, without having to comply with the public information, holding period, volume limitation or notice filing requirements of Rule 144.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., First Union Securities, Inc. and Thomas Weisel Partners LLC are acting as representatives, have severally agreed to purchase, and MedSource has agreed to sell to them, severally, the number of shares indicated below:

Underwriter	Number of Shares
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
First Union Securities, Inc.
Thomas Weisel Partners LLC.
Total

The underwriters are offering the shares of common stock subject to their acceptance of the shares from MedSource and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters over-allotment option described below.

The underwriters initially propose to offer part of the shares of common stock directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $            a share under the public offering price. Any underwriter may allow, and such dealers may reallow, a concession not in excess of $            a share to other underwriters or to certain dealers. After the initial offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the representatives.

MedSource and two selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to 243,750 and 81,250 additional shares, respectively, of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table. If the underwriters’ option is exercised in full, the total price to the public would be $            , the total underwriters’ discounts and commissions would be $        , the total proceeds to MedSource would be $            and the total proceeds to the selling stockholders would be $                .

The underwriters have informed MedSource that they do not intend sales to discretionary accounts to exceed five percent of the total number of shares of common stock offered by them.

We have applied for quotation of our common stock on the Nasdaq National Market under the symbol “MEDT.”

MedSource, each of its directors, executive officers and certain stockholders have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, they will not, during the period ending 180 days after the date of this prospectus:

r offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or

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r enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock;

whether any transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise.

The restrictions described in this paragraph do not apply to:

r the sale of shares to the underwriters;

r the issuance by MedSource of shares of common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing; or

r transactions by any person other than MedSource relating to shares of common stock or other securities acquired in open market transactions after the completion of the offering of the shares.

In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common stock. Specifically, the underwriters may over-allot in connection with the offering, creating a short position in the common stock for their own account. In addition, to cover over-allotments or to stabilize the price of the common stock, the underwriters may bid for, and purchase, shares of common stock in the open market. Finally, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the common stock in the offering, if the syndicate repurchases previously distributed common stock in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the common stock above independent market levels. The underwriters are not required to engage in these activities, and may end any of these activities at any time.

First Union Securities, Inc., one of the underwriters, is an indirect, wholly-owned subsidiary of Wachovia Corporation. Wachovia Corporation conducts its investment banking, institutional and capital markets businesses through its various bank, broker-dealer and nonbank subsidiaries (including First Union Securities, Inc.) under the trade name of Wachovia Securities. Any references to Wachovia Securities in this prospectus, however, do not include Wachovia Securities, Inc., member NASD/SIPC and a separate broker-dealer subsidiary of Wachovia Corporation and an affiliate of First Union Securities, Inc., which may or may not be participating as a selling dealer in the distribution of the securities offered by this prospectus.

Thomas Weisel Partners LLC served as placement agent with respect to our offering of our Series C preferred stock in October 2000 and received a customary placement fee consisting of $2.1 million in cash and a warrant to purchase 525 shares of our Series C preferred stock. Thomas Weisel Partners LLC does not have any material relationship with us or any of our officers, directors or other controlling persons, except with respect to its ownership of this warrant and its contractual relationship with us pursuant to the underwriting agreement entered into in connection with this offering.

MedSource and the selling stockholders, on the one hand, and the underwriters, on the other hand, have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

Directed Share Program

At the request of the Company, the underwriters have reserved for sale, at the initial offering price, up to         shares offered in this prospectus for directors, officers, employees, business associates, and related

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persons of the Company. The number of shares of common stock available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered in this prospectus.

Pricing of the Offering

Prior to this offering, there has been no public market for the common stock. The initial public offering price will be determined by negotiations between MedSource and the representatives. Among the factors to be considered in determining the initial public offering price will be the future prospects of MedSource and its industry in general, sales, earnings and certain other financial operating information of MedSource in recent periods, and the price-earnings ratios, price-cash flows, price-sales ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to those of MedSource. The estimated initial public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors.

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LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed upon for MedSource by Jenkens & Gilchrist Parker Chapin LLP, New York, New York. A member of that firm is the trustee of various trusts that own an aggregate of 951,730 shares of our common stock and, as a result, has the power to vote and dispose of those shares. Ropes & Gray, Boston, Massachusetts, will pass upon legal matters relating to this offering for the underwriters.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our consolidated financial statements and schedule at July 1, 2000 and June 30, 2001, and for the three-month period from March 30, 1999 (Inception) through July 3, 1999 and the years ended July 1, 2000 and June 30, 2001, as set forth in their report. We included our consolidated financial statements and schedule in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

The financial statements of ACT Medical, Inc. as of December 29, 2000 and for the period from January 1, 2000 to December 29, 2000, appearing in this prospectus and elsewhere in the registration statement have been audited by Grant Thornton LLP, independent auditors, as stated in their report appearing herein and are included in reliance upon the report of such firm, given upon their authority as experts in accounting and auditing.

Bertram, Vallez, Kaplan & Talbot, Ltd., independent auditors, have audited the financial statements and schedule of Kelco Industries, Inc. at March 30, 1999, and for the period from May 1, 1998 through March 30, 1999, as set forth in their report. We included the Kelco Industries, Inc. financial statements and schedule in the prospectus and elsewhere in the registration statement in reliance on Bertram, Vallez, Kaplan & Talbot, Ltd.’s report, given on their authority as experts in accounting and auditing.

James F. Yochum, CPA, independent auditor, has audited the financial statements of W.N. Rushwood, Inc. (d/b/a Hayden Precision Industries) at December 31, 1998 and March 30, 1999, and for the year ended December 31, 1998 and the three-month period ended March 30, 1999, as set forth in his report. We included the W.N. Rushwood, Inc. (d/b/a Hayden Precision Industries) financial statements in the prospectus and elsewhere in the registration statement in reliance on James F. Yochum’s report, given on his authority as an expert in accounting and auditing.

Ernst & Young LLP, independent auditors, have audited the financial statements of National Wire and Stamping, Inc. at December 31, 1998 and March 30, 1999, and for the year ended December 31, 1998 and the three-month period ended March 30, 1999, as set forth in their report. We included the National Wire and Stamping, Inc. financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

Ernst & Young LLP, independent auditors, have audited the financial statements and schedule of The MicroSpring Company, Inc. at March 30, 1999, and for the three-month period ended March 30, 1999, as set forth in their report. We included The MicroSpring Company, Inc. financial statements and schedule in the prospectus and elsewhere in the registration statement in r.eliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

The financial statements and schedule of The MicroSpring Company, Inc as of December 31, 1998, and for the year then ended included in this prospectus of MedSource Technologies, Inc., have been so included in reliance on the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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          Ernst & Young LLP, independent auditors, have audited the financial statements of Portlyn Corporation at December 31, 1998 and March 30, 1999, and for the year ended December 31, 1998 and for the three-month period ended March 30, 1999, as set forth in their report. We included the Portlyn Corporation financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

          Ernst & Young LLP, independent auditors, have audited the financial statements and schedule of Texcel, Inc. at December 31, 1998 and March 30, 1999, and for the year ended December 31, 1998 and the three-month period ended March 30, 1999, as set forth in their report. We included the Texcel, Inc. financial statements and schedule in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

          We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares sold in this offering. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to us and our common stock, reference is made to the Registration Statement and the exhibits and schedules filed as a part thereof. You should read the documents filed with the SEC as exhibits to the registration statement for a more complete description of the matter involved.

          We will be filing quarterly and annual reports, proxy statements and other information with the SEC. You may read and copy any document that we file at the public reference facilities of the SEC at Room 1300, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.

79

MEDSOURCE TECHNOLOGIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND PREDECESSOR COMPANY FINANCIAL STATEMENTS

Consolidated Financial Statements of MedSource
Report of Independent Auditors	F-3
Consolidated Balance Sheets as of July 1, 2000 and June 30, 2001 and Unaudited Balance
Sheet as of September 30, 2001	F-4
Consolidated Statements of Operations for the Period from March 30, 1999 (Inception) through
July 3, 1999, the Year Ended July 1, 2000 and the Year Ended June 30, 2001 and Unaudited	F-5
Consolidated Statements of Operations for the Three-Month Periods Ended September 30,
2000 and 2001	F-5
Consolidated Statement of Changes in Mandatory Redeemable Convertible Stock and
Stockholders’ Equity (Deficit) for the Period from March 30, 1999 (Inception) through July 3,
1999, the Year Ended July 1, 2000 and the Year Ended June 30, 2001 and Unaudited
Statement of Changes in Mandatory Redeemable Convertible Stock and
Stockholders’ Equity (Deficit) for the Three-Month Period Ended September 30, 2001	F-6
Consolidated Statements of Cash Flows for the Period from March 30, 1999 (Inception) through
July 3, 1999, the Year Ended July 1, 2000 and the Year Ended June 30, 2001 and Unaudited
Statements of Cash Flows for the Three-Month Periods Ended September 30, 2000 and 2001	F-8
Notes to Consolidated Financial Statements	F-9
ACT Medical, Inc. Financial Statements
Report of Independent Certified Public Accountants	F-29
Balance Sheet as of December 29, 2000	F-30
Statement of Operations for the Period from January 1, 2000 to December 29, 2000	F-31
Statement of Stockholders’ Equity for the Period from January 1, 2000 to December 29, 2000	F-32
Statement of Cash Flows for the Period from January 1, 2000 to December 29, 2000	F-33
Notes to Financial Statements	F-34
Financial Statements of Predecessor Companies:
Kelco Industries, Inc. Financial Statements
Report of Independent Accountants	F-41
Balance Sheet as of March 30, 1999	F-42
Statement of Income for the Period from May 1, 1998 through March 30, 1999	F-43
Statement of Changes in Stockholders’ Equity for the Period from May 1, 1998 through
March 30, 1999	F-44
Statement of Cash Flows for the Period from May 1, 1998 through March 30, 1999	F-45
Notes to Financial Statements	F-46
W.N. Rushwood, Inc. (d/b/a Hayden Precision Industries) Financial Statements
Report of Independent Auditors	F-49
Balance Sheets as of December 31, 1998 and March 30, 1999	F-50
Statements of Income and Retained Earnings for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-51
Statement of Cash Flows for the Year Ended December 31, 1998 and the Three-Month
Period Ended March 30, 1999	F-52
Notes to Financial Statements	F-53

F-1

National Wire and Stamping, Inc. Financial Statements
Report of Independent Auditors	F-56
Balance Sheets as of December 31, 1998 and March 30, 1999	F-57
Statements of Operations for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-58
Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 1998      and the Three-Month Period Ended March 30, 1999	F-59
Statements of Cash Flows for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-60
Notes to Financial Statements	F-61
The MicroSpring Company, Inc. Financial Statements
Report of Independent Auditors	F-66
Report of Independent Accountants	F-67
Balance Sheets as of December 31, 1998 and March 30, 1999	F-68
Statements of Operations for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-69
Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 1998      and the Three-Month Period Ended March 30, 1999	F-70
Statements of Cash Flows for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-71
Notes to Financial Statements	F-72
Portlyn Corporation Financial Statements
Report of Independent Auditors	F-77
Balance Sheets as of December 31, 1998 and March 30, 1999	F-78
Statements of Operations for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-79
Statements of Changes in Stockholders’ Equity for the Year Ended December 31, 1998      and the Three-Month Period Ended March 30, 1999	F-80
Statements of Cash Flows for the Year Ended December 31, 1998 and
the Three-Month Period Ended March 30, 1999	F-81
Notes to Financial Statements	F-82
Texcel, Inc. Financial Statements
Report of Independent Auditors	F-85
Balance Sheets as of December 31, 1998 and March 30, 1999	F-86
Statements of Operations for the Year Ended December 31, 1998      and the Three-Month Period Ended March 30, 1999	F-87
Statements of Changes in Stockholders’ Equity for the Year Ended December 31, 1998      and the Three-Month Period Ended March 30, 1999	F-88
Statements of Cash Flows for the Year Ended December 31, 1998      and for the Three-Month Period Ended March 30, 1999	F-89
Notes to Financial Statements	F-90

F-2

REPORT OF INDEPENDENT AUDITORS

The Board of Directors

MedSource Technologies, Inc.

          We have audited the accompanying consolidated balance sheets of MedSource Technologies, Inc. and subsidiaries as of July 1, 2000 and June 30, 2001 and the related consolidated statements of operations, changes in mandatory redeemable convertible stock and stockholders’ equity (deficit), and cash flows for the period from March 30, 1999 (inception) through July 3, 1999 and for the years ended July 1, 2000 and June 30, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

          We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of MedSource Technologies, Inc. and subsidiaries at July 1, 2000 and June 30, 2001, and the consolidated results of their operations and their cash flows for the period from March 30, 1999 (inception) through July 3, 1999 and for the years ended July 1, 2000 and June 30, 2001, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Minneapolis, Minnesota

August 3, 2001

F-3

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)

	July 1, 2000			June 30, 2001			September 30, 2001
							(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,210		$	20,289		$	14,254
Accounts and notes receivable (net of allowances of $427 at 2000 and $596 at 2001)		14,227			21,504			20,288
Inventories		10,953			13,350			14,242
Prepaid expenses and other current assets		892			3,099			3,165
Deferred income taxes		621			1,335			1,335
Total current assets		28,903			59,577			53,284
Property, plant, and equipment, net		34,956			38,873			38,631
Goodwill, net		42,961			62,210			96,813
Other identifiable intangible assets, net		35,508			39,035			4,342
Deferred financing costs		4,028			3,386			3,209
Interest escrow fund		4,349			1,849			1,224
Other assets		1,017			370			426
Total assets	$	151,722		$	205,300		$	197,929
Liabilities, mandatory redeemable convertible stock, and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	3,665		$	8,691		$	6,538
Accrued expenses		10,966			12,125			9,163
Reserve for restructuring		—			5,928			5,879
Current portion of long-term debt		9,545			7,215			7,649
Total current liabilities		24,176			33,959			29,229
Long-term debt, less unamortized discount and current portion		89,108			82,329			80,844
Deferred income taxes		621			1,335			1,335
Other long-term liabilities		452			2,071			3,274
Mandatory redeemable convertible stock:
6% Series B preferred stock, par value $.01 per share:  Authorized shares—400,000  Issued and outstanding shares—332,728 at 2000, 2001 and September 30, 2001		22,293			26,289			26,770
6% Series C preferred stock, par value $.01 per share:  Authorized shares—52,029  Issued and outstanding shares— -0- at 2000 and 40,300 at 2001 and September 30, 2001		—			39,190			40,054
6% Series D preferred stock, par value $.01 per share:  Authorized shares—43,000  Issued and outstanding shares— -0- shares at 2000, 35,165 at June 30, 2001 and 35,332 at September 30, 2001		—			33,388			34,148
Stockholders’ equity (deficit):
Series A convertible preferred stock, par value $.01 per share:  Authorized shares—100,000  Issued and outstanding shares—38,370 at 2000, 2001 and September 30, 2001		—			—			—
Series Z convertible preferred stock, par value $.01 per share:  Authorized shares—65,000  Issued and outstanding shares—65,000 at 2000, 2001 and September 30, 2001		1			1			1
Common stock, par value $.01 per share:  Authorized shares—40,000,000  Issued and outstanding shares—5,235,450 at 2000, 5,255,758 at June 30, 2001 and 5,256,158 at September 30, 2001		52			52			53
Additional paid-in capital		33,591			33,875			33,880
Accumulated other comprehensive loss		—			(1,560	)		(2,771	)
Accumulated deficit		(18,572	)		(45,415	)		(48,709	)
Unearned compensation		—			(214	)		(179	)
Total stockholders’ equity (deficit)		15,072			(13,261	)		(17,725	)
Total liabilities, mandatory redeemable convertible stock, and stockholders’ equity (deficit)	$	151,722		$	205,300		$	197,929

See accompanying notes.

F-4

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

`(In Thousands, Except Share and Per Share Amounts)

	Period From March 30, 1999 (Inception) Through July 3, 1999			Year Ended						Three Months Ended September 30
				July 1, 2000			June 30, 2001			2000			2001
										(Unaudited)
Revenues	$	21,968		$	89,352		$	128,462		$	27,611		$	33,865
Cost and expenses:
Cost of products sold		13,437			59,811			94,386			20,793			26,106
Selling, general, and administrative expense		4,458			21,167			26,199			5,621			6,402
Amortization of goodwill and other intangibles		4,135			4,255			5,640			1,125			90
Organization and start-up costs		4,981			—			—			—			—
Restructuring charge		—			—			11,464			—			—
		27,011			85,233			137,689			27,539			32,598
Operating (loss) income		(5,043	)		4,119			(9,227	)		72			1,267
Interest expense, net		(2,658	)		(10,682	)		(10,213	)		(2,994	)		(2,468	)
Other income (expense)		(289	)		(7	)		53			63			(21	)
Loss before income taxes		(7,990	)		(6,570	)		(19,387	)		(2,859	)		(1,222	)
Income tax benefit (expense)		2,975			535			(70	)		—			—
Net loss		(5,015	)		(6,035	)		(19,457	)		(2,859	)		(1,222	)
Preferred stock dividends and accretion of discount on preferred stock		(2,078	)		(8,345	)		(9,688	)		(2,104	)		(2,648	)
Net loss attributed to common stockholders	$	(7,093	)	$	(14,380	)	$	(29,145	)	$	(4,963	)	$	(3,870	)
Net loss per share attributed to common stockholders—basic and diluted	$	(1.60	)	$	(3.10	)	$	(5.55	)	$	(0.95	)	$	(0.74	)
Weighted average common shares outstanding—basic and diluted		4,448,000			4,633,571			5,252,749			5,248,341			5,255,958

See accompanying notes.

F-5

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN MANDATORY REDEEMABLE

CONVERTIBLE STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In Thousands)

	Mandatory Redeemable Convertible Stock
	Series B Preferred Stock	Series C Preferred Stock	Series D Preferred Stock
Sale of Series B preferred stock, net of costs	$14,771	$      —	$      —
Sale of Series Z preferred stock, net of costs	—	—	—
Stock issued for acquired businesses	—	—	—
Sale and issuance of Series A preferred stock	—	—	—
Sale of common stock	—	—	—
Accretion of discounts on mandatory redeemable convertible preferred stock	1,130	—	—
Accrued dividends on mandatory redeemable convertible preferred stock	349	—	—
Net loss and comprehensive net loss for the period from March 30, 1999      (inception) through July 3, 1999	—	—	—
Balance at July 3, 1999	16,250	—	—
Stock issued for acquired businesses	—	—	—
Accretion of discounts on mandatory redeemable convertible preferred stock	4,522	—	—
Accrued dividends on mandatory redeemable convertible preferred stock	1,521	—	—
Net loss and comprehensive net loss for the year	—	—	—
Balance at July 1, 2000	22,293	—	—
Cumulative effect change due to implementation of SFAS No. 133	—	—	—
Change in fair value of interest rate swaps	—	—	—
Net loss for the year	—	—	—
Comprehensive loss for the year
Sale and issuance of Series C preferred stock, net of costs	—	37,239	—
Issuance of Series D preferred stock and options for acquired business	—	—	31,575
Issuance of stock pursuant to option exercises	—	—	374
Accretion of discounts on mandatory redeemable convertible preferred stock	2,379	275	391
Accrued dividends on mandatory redeemable convertible preferred stock	1,617	1,676	1,048
Amortization of unearned compensation	—	—	—
Balance at July 1, 2001	26,289	39,190	33,388
Change in fair value of interest rate swaps	—	—	—
Net loss for period	—	—	—
Comprehensive loss for the period	—	—	—
Issuance of stock pursuant to option exercises	—	—	33
Accretion of discounts on mandatory redeemable convertible preferred stock	59	103	199
Accrued dividends on mandatory redeemable convertible preferred stock	422	761	528
Amortization of unearned compensation	—	—	—
Balance at September 30, 2001 (Unaudited)	$26,770	$40,054	$34,148

See accompanying notes.

F-6

Stockholders’ Equity (Deficit)
Series A Convertible Preferred Stock		Series Z Convertible Preferred Stock		Common Shares		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Unearned Compensation			Total Stockholders’ Equity (Deficit)
	$—		$—		—		$—		$  7,500		$     —			$       —			$  —			$  7,500
	—		1		—		—		3,262		—			—			—			3,263
	—		—		425		—		14,667		—			—			—			14,667
	—		—		—		—		312		—			—			—			312
	—		—		4,023		44		1,956		—			—			—			2,000
	—		—		—		—		—		—			(1,130	)		—			(1,130	)
	—		—		—		—		—		—			(349	)		—			(349	)
	—		—		—		—		—		—			(5,015	)		—			(5,015	)
	—		1		4,448		44		27,697		—			(6,494	)		—			21,248
	—		—		787		8		5,894		—			—			—			5,902
	—		—		—		—		—		—			(4,522	)		—			(4,522	)
	—		—		—		—		—		—			(1,521	)		—			(1,521	)
	—		—		—		—		—		—			(6,035	)		—			(6,035	)
	—		1		5,235		52		33,591		—			(18,572	)		—			15,072
	—		—		—		—		—		1,097			—			—			1,097
	—		—		—		—		—		(2,657	)		—			—			(2,657	)
	—		—		—		—		—		—			(19,457	)		—			(19,457	)
																				(22,114	)
	—		—		—		—		—		—			—			—			—
	—		—		—		—		—		—			—			(286	)		(286	)
	—		—		21		—		284		—			—			—			284
	—		—		—		—		—		—			(3,045	)		—			(3,045	)
	—		—		—		—		—		—			(4,341	)		—			(4,341	)
	—		—		—		—		—		—			—			72			72
	—		1		5,256		52		33,875		(1,560	)		(45,415	)		(214	)		(13,261	)
	—		—		—		—		—		(1,211	)		—			—			(1,211	)
	—		—		—		—		—		—			(1,222	)		—			(1,222	)
	—		—		—		—		—		—			—			—			(2,433	)
	—		—		—		1		5		—			—			—			6
	—		—		—		—		—		—			(361	)		—			(361	)
	—		—		—		—		—		—			(1,711	)		—			(1,711	)
	—		—		—		—		—		—			—			35			35
	$—		$  1		5,256		$53		$33,880		$(2,771	)		$(48,709	)		$(179	)		$(17,725	)

F-7

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	Period From March 30, 1999 (Inception) Through July 3, 1999			Year Ended				Three Months Ended September 30
				July 1, 2000		June 30, 2001		2000		2001
								(Unaudited)
Operating activities
Net loss		$   (5,015	)	$   (6,035	)	$(19,457	)	$(2,859	)	$   (1,222	)
Adjustments to reconcile net loss to net cash (used in) provided by     operating activities:
Depreciation		868		4,500		6,555		1,504		1,861
Amortization of goodwill and other intangibles		4,135		4,255		5,640		1,125		90
Amortization of deferred financing costs and discount on long-term         debt		365		1,295		1,122		308		291
Amortization of unearned compensation		—		—		72		—		35
Restructuring charges		—		—		11,464		—		—
Deferred taxes		(2,975	)	(685	)	—		—		—
Gain on sale of equipment		—		—		(29	)	(18	)	—
Changes in operating assets and liabilities, net of effect of businesses         acquired:
Accounts and notes receivable		(776	)	(3,168	)	(4,296	)	(280	)	1,216
Inventories		2,186		(1,915	)	(1,775	)	(509	)	(892	)
Prepaid expenses and other current assets		(305	)	65		(836	)	(220	)	(66	)
Interest escrow fund		651		2,500		2,500		625		625
Accounts payable, accrued expenses, and other		490		5,493		476		(1,744	)	(5,164	)
Other		132		(15	)	(183	)	(6	)	(79	)
Net cash (used in) provided by operating activities		(244	)	6,290		1,253		(2,074	)	(3,305	)
Investing activities
Acquisition of businesses, net of cash acquired		(91,560	)	(15,458	)	(378	)	—		—
Other additions to plant and equipment, net		(2,184	)	(6,786	)	(11,491	)	(1,146	)	(1,609	)
Proceeds from sale of equipment		—		—		242		146		(10	)
Net cash used in investing activities		(93,744	)	(22,244	)	(11,627	)	(1,000	)	(1,619	)
Financing activities
Proceeds from issuance of long-term debt, net of financing costs, and     interest escrow fund		68,646		19,506		105		—		—
Payments of long-term debt		(696	)	(3,150	)	(5,549	)	(1,287	)	(1,150	)
Proceeds from sale of Series C and D preferred stock, net of costs		—		—		37,897		—		33
Proceeds from sale of Series A, B, and Z preferred stock and common     stock, net of costs		27,846		—		—		218		6
Net payments on lines of credit		—		—		(4,000	)	2,000		—
Net cash provided by (used in) financing activities		95,796		16,356		28,453		931		(1,111	)
Increase (decrease) in cash and cash equivalents		1,808		402		18,079		(2,143	)	(6,035	)
Cash and cash equivalents at beginning of period		—		1,808		2,210		2,210		20,289
Cash and cash equivalents at end of period		$   1,808		$   2,210		$20,289		$      67		$14,254
Supplemental disclosure of cash flow information
Cash paid for interest		$   2,089		$   9,616		$   9,319		$2,802		$   2,408
Cash paid for income taxes		$       —		$      179		$      150		$      85		$       —

See accompanying notes.

F-8

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Organization and Description of Business

MedSource Technologies, Inc. (the Company) was formed as a Delaware corporation on April 14, 1998. For the period from April 14, 1998 through March 30, 1999 (inception of operations), the Company had no employees or other operations. On March 30, 1999, the Company acquired seven businesses (see Note 3—Acquisitions).

The Company and its subsidiaries operate in one business segment and provide product development and design services, precision metal and plastic part manufacturing, product assembly services and supply chain management primarily for the medical device industry. The Company’s operations and customer base are located primarily in North America.

2.    Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Unaudited Quarterly Information

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-months ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ending June 30, 2002.

Stock Split

In January 2000, the Company’s common stock was split 10-for-1 and all share references to common stock have been adjusted to give effect to the split and the balance sheet and statement of changes in mandatory redeemable preferred stock and stockholders’ equity include adjustments to amounts for the prior period to give effect to the split.

Fiscal Year End

The Company’s fiscal year historically ended on the Saturday closest to June 30. Effective July 1, 2001, the Company’s fiscal year end was changed to June 30.

Cash Equivalents

Cash equivalents include money market mutual funds and other highly liquid investments purchased with maturities of three months or less. The cash equivalents are carried at cost, which approximates market.

Inventories

Inventories are stated at the lower of cost, using the FIFO (first-in, first-out) method, or market.

F-9

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Amortization of capital leases and leasehold improvements is provided on a straight-line basis over the lives of the related assets or the life of the lease, whichever is shorter, and is included with depreciation expense.

Goodwill and Other Intangible Assets

Goodwill represents the cost in excess of the fair value of the tangible and identified intangible assets of the businesses acquired and, prior to July 1, 2001, was being amortized on a straight-line basis over 20 years based on the operating histories and market niches of these businesses. The identified intangible assets acquired in connection with the acquisition of businesses prior to July 1, 2001, consist mainly of customer bases, amortized over 20 years; the value of the acquired work forces, amortized over five years; patents, amortized over the life of the patents; and covenants not to compete, amortized over the life of the agreements. Included in amortization for the period ended July 3, 1999 is a $3.1 million charge representing the intangible value, recorded at acquisition, of a customer contract terminated in the period subsequent to the acquisition (see Significant Customers).

See Note 6—Goodwill and Other Intangible Assets for effects of adoption of Statements of Financial Accounting Standards 141 and 142 in fiscal year 2002.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying amount, a write-down would be recorded to reduce the related asset to the amount of discounted estimated future cash flows, for assets in use, or to estimated fair value for assets held for sale.

In conjunction with the restructuring charges recorded in fiscal 2001 (see Note 13—Restructuring Charges), the Company recognized impairment to goodwill and other intangibles of $3.6 million and impairment to property, plant, and equipment of $1.9 million.

Deferred Financing Costs

Costs incurred in connection with arranging the Company’s long-term debt agreements are capitalized and amortized over the life of the related debt issue using the effective interest method. Accumulated amortization was $1.1 million at July 1, 2000, $1.9 million at June 30, 2001, and $2.1 million at September 30, 2001 (unaudited).

Organization and Start-Up Costs

Organization and start-up costs are expensed as incurred.

Deferred Income Taxes

Deferred income taxes are determined using the liability method, which gives consideration to the future tax consequences associated with differences between the financial accounting and tax basis of assets and liabilities. This method also gives immediate effect to changes in income tax laws.

F-10

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Mandatory Redeemable Securities

Mandatory redeemable preferred stock is recorded at fair value at date of issuance, net of related costs. Fair value of the Series B preferred stock at date of issuance is based on the net proceeds received reduced by the intrinsic value of the contingent additional consideration which may be received pursuant to the Share Transfer Agreement described in Note 10—Mandatory Redeemable Convertible Stock and Stockholders’ Equity. The mandatory redeemable preferred stock is redeemable on the redemption date at its face amount plus accrued dividends as described in Note 10.

The discount to the face amount of the mandatory redeemable preferred stock representing the intrinsic value of the contingent additional consideration related to Series B preferred stock was amortized as an additional preferred return over 21 months, which was management’s estimate of the period before the contingency would be resolved. The additional reduction from the face amount of the mandatory redeemable preferred stock representing issuance costs is being amortized as an additional preferred return over the period from date of issuance until the mandatory redemption date.

Preferred Stock Dividends

The Company accrues dividends on mandatory redeemable preferred stock. Dividends on other series of preferred stock do not accrue until declared by the Board of Directors.

Revenue Recognition

The Company recognizes revenue at the time products are shipped or services are rendered. Product shipments are supported by purchase orders from customers that indicate the price for each product. In the case of services, we recognize revenues primarily on a time and materials basis. Service revenues are supported by customer orders or contracts that indicate the price for the services being rendered. For fiscal 2001, service revenues were less than 10% of total revenues. Revenues for product shipments and services rendered must also have reasonable assurance of collectibility from the customer. Reserves for returns and allowances are recorded against revenues based on management’s estimates and historical experience.

Shipping and Handling Costs

The Company includes shipping and handling costs in the cost of products sold.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, in the primary financial statements and to provide the supplemental disclosures required by Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123) (see Note 10—Mandatory Redeemable Convertible Stock and Stockholders’ Equity).

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable. The Company performs ongoing credit evaluations of its customers, does not generally require collateral or other security, and maintains an allowance for potential credit losses.

F-11

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant Customers

Customers that accounted for more than 10% of consolidated revenues are as follows:

	Period From March 30, 1999 (Inception) Through July 3, 1999		Year Ended
			July 1, 2000		June 30, 2001		Three Months Ended September 30, 2001
							(unaudited)
Customer A	—		14	%	18	%	21	%
Customer B	28	%	16		12		12

At July 1, 2000 and June 30, 2001, receivables from these customers represented 13% and 11%, respectively, of total accounts receivable.

For the period ended July 3, 1999, $3.1 million of revenues from Customer B represent the settlement received from the termination of a contract.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash equivalents, accounts receivable, accounts payable, and debt instruments. The carrying amounts of financial instruments other than the debt instruments are representative of their fair values due to their short maturities. The Company’s principal long-term debt agreements bear interest at market rates; thus, management believes their carrying amounts approximate fair value. Management believes the carrying amount of the remaining loans is not materially different from estimated fair value.

Net Loss Per Common Share

Net loss per common share attributed to common stockholders is based on the net loss for the period adjusted for dividend requirements on all preferred stocks and accretion during the period of discounts on mandatory redeemable preferred stock. The resulting net loss attributed to common stockholders is divided by the weighted average number of shares of common stock outstanding during the period to arrive at the basic net loss per share attributed to common stockholders. For all periods presented, the impact of the inclusion of potentially dilutive securities related to the assumed exercise or conversion of options and convertible securities was anti-dilutive.

Hedging Activities

The Company adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133), in its fiscal year beginning July 2, 2000. The statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through earnings. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. (See Note 7—Long-Term Debt.)

F-12

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reclassification

Certain prior year amounts have been reclassified to conform with the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3.    Acquisitions

On March 30, 1999, the Company completed the following acquisitions:

	Purchase Price				Location of Operations
Company	Cash		Shares of Series A Preferred (p) or Common (c) Stock
	(In Thousands)
Kelco Industries, Inc.	$	49,595	12,000	(p)	Minnesota
W.N. Rushwood, Inc., d/b/a Hayden Precision Industries		11,644	7,270	(p)	New York
National Wire and Stamping, Inc.		5,600	9,170	(p)	Colorado
The Microspring Company, Inc.		5,050	425,000	(c)	Massachusetts
Portlyn Corporation		5,354	3,000	(p)	New Hampshire
Texcel, Inc.		5,286	6,000	(p)	Massachusetts
Brimfield Precision, Inc.		6,157	—		Massachusetts
	$	88,686

The cash amounts reflected above include payments to the former owners and the payoff of certain debt at acquisition.

The Series A preferred and common stock issued in conjunction with the acquisitions were valued at amounts determined by an independent appraisal. Costs incurred in connection with the acquisitions made on March 30, 1999 totaled approximately $3.9 million and the Company recorded a deferred tax liability of $3.7 million for the differences in book and tax basis of assets acquired.

A summary of the combined purchase price allocation for the acquisitions made on March 30, 1999 is as follows (in thousands):

Fair value of tangible assets acquired, net of liabilities assumed and deferred taxes	$	31,289
Identified intangible assets, net of deferred taxes		37,120
Goodwill		38,896
	$	107,305

F-13

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During fiscal year ended July 1, 2000, the Company completed the following acquisitions:

Company	Cash		Shares of Common Stock	Location of Operations
	(In Thousands)
Tenax	$	7,700	50,000	Connecticut
Apex Engineering, Inc.		1,954	236,950	Massachusetts
Thermat Precision Technology, Inc.		4,045	500,000	Pennsylvania
	$	13,699

The cash amounts reflected above include payments to the former owners and the payoff of certain debt at acquisition. The common stock issued in conjunction with the acquisitions was valued based on the independent appraisal that had been obtained in conjunction with the original acquisitions and formation of the Company in 1999. Costs incurred with the acquisitions totaled approximately $1.8 million.

The total purchase consideration does not reflect contingent consideration related to earn-out arrangements included in the Apex Engineering, Inc. (Apex) Purchase Agreement. The Apex Purchase Agreement provides for a post-closing adjustment whereby additional contingent consideration would be payable to Apex (as defined in the Apex Purchase Agreement). The Company has determined that there is no additional earn-out consideration to be paid.

A summary of the combined purchase price allocations for the acquisitions in fiscal 2000 is as follows (in thousands):

Fair value of tangible assets acquired, net of liabilities assumed and deferred taxes	$	13,724
Identified intangible assets, net of deferred taxes		1,222
Goodwill		6,484
	$	21,430

During fiscal 2001, the Company finalized its purchase price allocations related to the acquisitions made in 2000. In conjunction with the final allocations, approximately $4.5 million was reclassified from goodwill to identified intangibles.

During fiscal year ended June 30, 2001, the Company completed the acquisition of ACT Medical, Inc., a Massachusetts company with additional facilities in Santa Clara, California and a contract for production and assembly services in Navojoa, Mexico. The acquisition was completed by the issuance of 33,423 shares of 6% Series D Cumulative Convertible Redeemable Preferred Stock, rollover of options for an additional 6,920 shares of Series D preferred stock, and cash payments of $1.0 million to stockholders electing to receive cash instead of stock. The acquisition was recorded using the purchase method of accounting, and the operating results are included in the Company’s consolidated statements of operations since the date of acquisition (December 30, 2000). The total purchase price was allocated as follows pending any changes as final asset values are determined (in thousands):

Fair value of tangible assets acquired, net of liabilities assumed, and deferred taxes	$	2,014
Identifiable intangible assets, net of deferred taxes		3,648
Goodwill		28,075
	$	33,737

F-14

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

          The following unaudited pro forma summary presents the consolidated results of operations as if the acquisition had occurred at the beginning of the fiscal period (in thousands, except per share):

	Year Ended
	July 1, 2000		June 30, 2001
Net revenues	$116,298		$141,248
Loss before taxes	(5,395	)	(20,750	)
Net loss	(5,408	)	(20,820	)
Net loss attributed to common stockholders	(16,385	)	(31,825	)
Net loss per share attributed to common stockholders	$      (3.54	)	$      (6.06	)

4.    Inventories

          Inventories consist of the following (in thousands):

	July 1, 2000	June 30, 2001	September 30, 2001
			(Unaudited)
Raw materials	$  4,207	$  6,287		$  7,435
Work in progress	3,936	5,051		4,918
Finished goods	2,810	2,012		1,889
Total	$10,953	$13,350		$14,242

          The fair value of tangible assets acquired on March 30, 1999 included $1.7 million related to the excess of the fair value of inventories over their historical cost on the acquired companies’ financial statements. This excess fair value was charged to the cost of products sold in the period ended July 3, 1999 when the inventories were sold.

          The fair value of tangible assets acquired in the acquisitions during the year ended July 1, 2000 included $0.1 million related to the excess of the fair value of inventories over their historical cost on the acquired company’s financial statements. This excess fair value was charged to the cost of products sold in the year ended July 1, 2000 when the inventories were sold.

          The fair value of tangible assets acquired in the acquisition during the current year did not result in any excess of fair value of inventories over their historical cost.

F-15

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5.    Property, Plant, and Equipment

          Property, plant, and equipment consists of the following (in thousands):

	Estimated Useful Lives (Years)		July 1, 2000		June 30, 2001		September 30, 2001
							(Unaudited)
Land			$     198		$     198			$     198
Buildings and improvements		1 to 20	1,987		1,987			1,987
Leasehold improvements		2 to 20	2,654		3,173			3,198
Machinery and equipment		3 to 15	30,870		35,530			37,291
Furniture and fixtures		1 to 7	3,211		4,613			3,700
Automobiles		2 to 3	107		86			92
Construction in progress			1,276		5,176			5,915
Total			40,303		50,763			52,381
Less accumulated depreciation and amortization			(5,347	)	(11,890	)		(13,750	)
Net property, plant, and equipment			$34,956		$38,873			$38,631

6.    Goodwill and Other Identifiable Intangible Assets

          In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001 with early adoption permitted for companies with fiscal years beginning after March 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the statements. Other intangible assets will continue to be amortized over their useful lives.

          The Company adopted the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of fiscal 2002. Amounts previously recorded as separately identifiable intangibles for acquired work force and customer base have been subsumed to goodwill in accordance with FAS 141, increasing goodwill by $34.6 million as of the date of adoption. Effective with the July 1, 2002 adoption of FAS 142, goodwill is no longer amortized but is instead subject to an annual impairment test. The transitional impairment test conducted in connection with the adoption of FAS 142 resulted in no impairment being required.

F-16

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

          Goodwill and other identifiable intangible assets resulting from acquisitions of businesses and the formation of the Company consist of the following (in thousands):

	July 1, 2000		June 30, 2001		September 30, 2001
					(Unaudited)
Goodwill	$45,462		$67,268			$109,860
Less accumulated amortization	(2,501	)	(5,058	)		(13,047	)
	$42,961		$62,210			$  96,813
Other identifiable intangibles:
Customer base	$37,553		$39,155			$         —
Acquired workforce	2,747		3,437			—
Patents and intellectual properties	622		4,383			4,383
Covenants not to compete	476		476			476
	41,398		47,451			4,859
Less accumulated amortization	(5,890	)	(8,416	)		(517	)
	$35,508		$39,035			$    4,342

          The increase in goodwill and decrease in customer base and acquired workforce at September 30, 2001, results from the adjustment to subsume those intangibles into goodwill in accordance with FAS 142.

          With the adoption of FAS 142, the Company ceased amortization of goodwill as of July 1, 2001. The following table presents the results of the Company for all periods presented on a comparable basis (in thousands, except per share data):

	Period From March 30, 1999 (Inception) Through July 3, 1999			Fiscal Year Ended				Three Months Ended September 30,
				July 1, 2000		June 30, 2001		2000		2001
								(Unaudited)
Net loss attributed to common stockholders,      as reported		$(7,093	)	$(14,380	)	$(29,145	)	$(4,963	)	$(3,870	)
Add back goodwill, workforce, and customer      base amortization (net of tax)		4,125		4,211		5,268		1,028		—
Adjusted net loss attributed to common      stockholders		$(2,968	)	$(10,169	)	$(23,877	)	$(3,935	)	$(3,870	)
Basic and diluted net loss per share:
Net loss attributed to common                stockholders, as reported		$  (1.60	)	$    (3.10	)	$    (5.55	)	$  (0.95	)	$  (0.74	)
Goodwill, workforce, and customer base                amortization (net of tax)		.93		.91		1.00		.20		—
Adjusted net loss attributed to common      stockholders		$  (0.67	)	$    (2.19	)	$    (4.55	)	$  (0.75	)	$  (0.74	)

          The estimated amortization expense for the intangible assets for each of the five fiscal years subsequent to June 30, 2001 is $0.4 million per year.

F-17

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7.    Long-Term Debt

          Long-term debt consists of the following (in thousands):

	July 1, 2000		June 30, 2001		September 30, 2001
					(Unaudited)
A Term Loan	$   22,250		$19,000			$18,000
B Term Loan	39,600		39,200			39,100
Senior Subordinated Notes	20,000		20,000			20,000
Acquisition Loans	15,118		13,413			13,413
Revolving Loans	4,000		—			—
Other	701		612			562
	101,669		92,225			91,075
Less:
Unamortized discount on Senior Subordinated Notes	(3,016	)	(2,681	)		(2,582	)
Current portion	(9,545	)	(7,215	)		(7,649	)
	$   89,108		$82,329			$80,844

          Credit Agreement

          The Company entered into a Credit Agreement (Agreement) dated March 30, 1999 with various banks. The Company received $25 million pursuant to an A Term Loan, $40 million pursuant to a B Term Loan, and commitments for $30 million of Acquisition Loans and $25 million of Revolving Loans.

          The A Term Loan, Acquisition Loans, and Revolving Loans bear interest at either (1) a base rate (defined as the higher of  ¹/2 of 1% in excess of the Federal Funds Note Rate and 1% in excess of the Adjusted Certificate of Deposit Rate) plus an applicable margin ranging from 1.25% to 2.50% depending on the Company’s adjusted leverage ratio, as defined, or (2) LIBOR plus an applicable margin ranging from 2.25% to 3.50% depending on the Company’s adjusted leverage ratio, as defined. The B Term Loan bears interest at either (1) the base rate (defined above) plus 2.75% or (2) LIBOR plus 3.75%. The choice of the interest rate is at the Company’s election. At June 30, 2001, the interest rates on the A Term and B Term Loans were based on LIBOR and were 7.4375% and 7.6875%, respectively. Interest is payable quarterly.

          The A Term Loan requires quarterly principal payments of $1.0 million from September 15, 2001 to March 15, 2002; $1.25 million from June 15, 2002 to March 15, 2004; and $1.5 million from June 15, 2004 to March 15, 2005. The B Term Loan requires quarterly principal repayments of $0.1 million from September 15, 2001 to December 15, 2006 with a final payment of $37.0 million on March 15, 2007. The Acquisition and Revolving Loans have maturity dates of March 15, 2005; however, Acquisition Loans have repayment requirements on a quarterly basis based on a percentage (ranging from 2.50% to 8.00%) of the total outstanding balance that began on June 15, 2000. In addition to these payment requirements, the Company is also required to apply some or all of the cash proceeds from specified types of future transactions to repay borrowings under the Agreement.

          The Agreement also requires the Company to pay fees equal to 0.375% to 0.750% (depending on the Company’s adjusted leverage ratio) on the aggregate unutilized commitments.

F-18

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

          The assets of the Company and its subsidiaries are pledged as collateral under the Agreement. In addition, the Agreement prohibits the payment of cash dividends and limits the amount of capital expenditures. The Agreement also requires the Company to be in compliance with various financial covenants. The Company was in compliance with the covenants at June 30, 2001 and believes it will be in compliance with the covenants in the future.

          Effective as of July 6, 1999, the Company entered into two interest rate swap transactions with a bank, designed to be interest rate hedges for the A and B Term Loans. The A and B Term Loan hedges are for original notional amounts of $24.5 million and $40 million, respectively, and reflect reductions to mirror the required principal payments on the related loans through March 15, 2001 and then reductions exceeding the required principal payments through their expiration dates of December 15, 2003 and June 15, 2005, respectively. Pursuant to the A and B Term Loan hedges, the Company pays to the bank on a quarterly basis an amount equal to a fixed rate (6.245% for the Term A Loan hedge and 6.395% for the B Term Loan hedge) on the notional amount and receives from the bank an amount equal to the three-month USD-LIBOR-BBA rate on the notional amounts on the same dates. These derivative instruments are considered cash flow hedges and are valued and accounted for pursuant to SFAS No. 133. (See Note 2—Significant Accounting Policies.)

          In conjunction with the adoption of SFAS No. 133, the Company recognized the fair value of the interest rate swaps and recorded a cumulative effect adjustment of $1.1 million to other comprehensive income. During the year, the Company recognized the change in the fair value of the interest rate swaps by recording another comprehensive loss of $2.7 million. An additional other comprehensive loss of $1.2 million (unaudited) was recorded at September 30, 2001 to recognize the change in fair value.

          Senior Subordinated Notes

          On March 30, 1999, the Company received $20 million in exchange for $20 million face amount of Senior Subordinated Promissory Notes (the Notes) and 65,000 shares of Series Z preferred stock (see Note 10—Mandatory Redeemable Convertible Stock and Stockholders’ Equity). The deemed value of the Series Z preferred stock of $3.6 million was recorded as a discount on the Notes and is being amortized to interest expense using the effective interest method over the life of the Notes. The Notes bear interest on the face amount at 12.5% and are due March 29, 2008. Interest is payable quarterly beginning June 30, 1999, and $7.5 million of the proceeds from the Notes was placed in an escrow fund from which scheduled interest payments through March 31, 2002 will be made.

          The Notes have mandatory prepayment and early redemption provisions. Subject to the subordination provisions of the Notes, upon the consummation of an initial public offering, unless the holders of the Notes have waived their rights, the Company is required to use 30% of the net cash proceeds to ratably prepay the Notes at the early redemption price. The Notes must also be prepaid upon a change in control, as defined. The early redemption price is 104% in 2001 and decreases 1% per year until 2005 when it becomes 100%. The Company may prepay the Notes at any time at the applicable early redemption price.

F-19

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Maturities of long-term debt outstanding at June 30, 2001, are summarized by fiscal year as follows (in thousands):

2002	$	7,215
2003		8,763
2004		9,961
2005		8,663
2006		423
Thereafter		57,200
	$	92,225

8.    Related-Party Transactions

Closing Fees and Management Fees

In the period ended July 3, 1999, the Company paid fees and expenses of approximately $4.7 million to entities associated with certain of the Company’s directors and stockholders. These payments were for services rendered and reimbursement of expenses incurred in connection with assisting the Company in its organization, establishing its strategy, identifying sources of financing (debt and equity), identifying target acquisitions, and closing the financings and acquisitions.

The Company also has entered into management services agreements (MSAs) with these entities whereby the Company pays fees plus reimbursement of out-of-pocket expenses for management services rendered. Fees incurred for the period ended July 3, 1999 and for the years ended July 1, 2000 and June 30, 2001 totaled $0.4 million, $1.5 million, and $1.7 million, respectively. In addition, pursuant to the MSAs, the Company will pay fees based on a percentage of the aggregate consideration of each future business acquisition, plus reimbursement of out-of-pocket expenses. Such fees and expenses totaled $0.5 million and $0.6 million relating to the acquisitions made in the years ended July 31, 2000 and June 30, 2001, respectively. The MSAs have a seven-year term with annual one-year renewals unless terminated by either party. Under certain conditions, including successful completion of an initial public offering, the Company has a right to eliminate the MSAs.

Real Estate Leases

Certain of the Company’s subsidiaries lease their facilities from related parties. Total rent expense under these leases for the period ended July 3, 1999 and for the years ended July 1, 2000 and June 30, 2001 was approximately $0.3 million, $1.1 million, and $0.7 million, respectively. Future minimum lease commitments at June 30, 2001 in connection with these related-party leases are approximately $0.8 million per year with a total future commitment of $6.7 million.

F-20

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.    Income Taxes

          The income tax benefit (expense) consists of the following (in thousands):

	Period From March 30, 1999 (Inception) Through July 3, 1999		Year Ended
			July 1, 2000			June 30, 2001
Current:
Federal		$      —		$   —			$—
State		—		(150	)		(70	)
		—		(150	)		(70	)
Deferred:
Federal		2,603		599			—
State		372		86			—
		2,975		685			—
		$2,975		$535			$(70	)

          Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities are as follows (in thousands):

	July 1, 2000		June 30, 2001
Deferred tax assets:
Organization costs	$2,337		$1,798
Nondeductible reserves and current liabilities	621		1,335
Restructuring reserve	—		3,704
Net operating loss carryforwards	4,145		8,708
Valuation reserve	(1,853	)	(6,147	)
Total deferred tax assets	5,250		9,398
Deferred tax liabilities:
Identified intangible assets	(3,275	)	(6,187	)
Property, plant, and equipment	(433	)	(1,530	)
Goodwill	(1,542	)	(1,662	)
Other	—		(19	)
Total deferred tax liabilities	(5,250	)	(9,398	)
Net deferred tax liabilities	$      —		$      —

          Deferred tax assets and liabilities are reflected in the balance sheet as follows (in thousands):

	July 1, 2000			June 30, 2001
Net current deferred assets		$621		$1,335
Net noncurrent deferred liabilities		(621	)	(1,335	)
Net deferred tax assets/liabilities		$  —		$      —

F-21

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

          The Company has U.S. net operating loss carryforwards of approximately $21.8 million which expire at different times beginning in 2019 and extending through 2021.

          A reconciliation between the income tax benefit computed at the federal statutory rate and the recorded income tax benefit (expense) is as follows (in thousands):

	Period From March 30, 1999 (Inception) Through July 3, 1999			Year Ended
				July 1, 2000		June 30, 2001
Income tax benefit computed at the federal statutory rate		$2,796		$2,300		$6,785
State income taxes, net of federal benefit		399		178		899
Restructuring reserve, portion not deductible for tax      purposes		—		—		(882	)
Amortization of goodwill, not deductible for tax purposes		(32	)	(153	)	(401	)
Valuation reserve		—		(1,853	)	(6,462	)
Other		(188	)	63		(9	)
Income tax benefit (expense)		$2,975		$   535		$     (70	)

10.    Mandatory Redeemable Convertible Stock and Stockholders’ Equity

          Mandatory Redeemable Convertible Stock

          Series B

          On March 30, 1999, the Company sold 300,000 shares of 6% Series B Cumulative Convertible Redeemable Preferred Stock (the Series B preferred stock), $.01 par value per share, for cash in a private placement. On May 14, 1999, the Company sold an additional 32,728 shares for cash in a private placement.

          Cumulative dividends accrue at an annual rate of 6% compounded quarterly. Dividends are payable in cash upon the occurrence of (a) a change in control of the Company, as defined, (b) the sale or disposition of substantially all of the Company’s assets, or (c) the conversion of the Series B preferred into common stock. However, in no event shall the Company be required to pay any dividends if such payment is prohibited under the terms of its senior credit facility.

          The Series B preferred stock may be converted to common stock at any time. The initial conversion rate is one share of Series B preferred stock for 10 shares of common stock, subject to anti-dilution provisions. The Series B preferred stock is automatically converted into common stock at the closing of a qualified initial public offering, as defined, at a price that, together with the shares issued to the holders of the Series B preferred stock pursuant to the Share Transfer Agreement described below in the second paragraph under the caption “Stockholder Agreements,” would result in the holders of the Series B preferred stock realizing at least a 30% internal rate of return, as defined.

          The holders of the Series B preferred stock are entitled to vote on all matters with the holders of common stock on an as-if-converted basis. In addition, the approval of at least two-thirds of all issued and outstanding Series B preferred stock is required for various matters including the payment of dividends and the purchase or redemption of capital stock.

F-22

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On March 29, 2008, any outstanding shares of Series B preferred stock are subject to mandatory redemption at the greater of their original issue price plus accrued dividends or the amount to which the holders of the Series B preferred stock would have been entitled if the Company were liquidated and the Series B preferred stock had been converted to common stock immediately prior to redemption.

Prior to the occurrence of a change of control, as defined, that occurs prior to October 25, 2001, the Company must offer to purchase all outstanding Series B preferred stock that is issued and outstanding at a purchase price per share equal to the original issue price plus accrued dividends.

See Stockholder Agreements below for additional contingent consideration which may be received by the holders of the Series B preferred stock.

Series C

On October 24, 2000, the Company sold 40,000 shares of 6% Series C Cumulative Convertible Redeemable Preferred Stock (the Series C preferred stock), $.01 par value per share, for cash in a private placement. On April 18, 2001, the Company sold an additional 300 shares for cash in a private placement. In addition to the shares purchased at a price of $1,000 per share, each purchaser also received an option to purchase an additional .2857 shares at a price of $1,000 per share for each share acquired. The option is exercisable prior to or coincident with the earlier to occur of (i) a qualified public offering (as defined) and (ii) October 24, 2001. The options were not exercised and expired on October 24, 2001.

Cumulative compounding dividends accrue at an annual rate of 6% until October 25, 2001 and 8% thereafter. Dividends are payable in cash, but in no event shall the Company be required to pay any dividends if such payment is prohibited under the terms of its senior credit facility.

The Series C preferred stock may be converted to common stock at any time. The initial rate is one share of Series C preferred stock for 50 shares of common stock, subject to anti-dilution provisions and other adjustments. The Series C preferred stock is automatically converted into common stock upon the occurrence of a qualified public offering, as defined, at a price that would, subject to certain limitations, guarantee a minimum return on the investment in the Series C preferred stock.

The holders of the Series C preferred stock are entitled to vote on all matters with the holders of common stock on an as-if-converted basis. In addition, the approval of at least two-thirds of all issued and outstanding shares of the Series C preferred stock is required for various matters including issuance of senior stock, payment of dividends, and the purchase or redemption of capital stock.

Subject to adjustments for stock splits, stock dividends, and similar transactions and events, each share of Series C preferred stock is redeemable after October 20, 2005, at the option of the Company, for a price per share equal to $1,000 plus accrued and unpaid dividends. In addition, the Series C preferred stock shall be redeemed on the earlier of (i) any date on which there is a mandatory redemption of any class of preferred stock and (ii) October 20, 2009.

Prior to the occurrence of a change of control, as defined, that occurs prior to October 25, 2001, the Company must offer to purchase all outstanding Series C preferred stock that is issued and outstanding at a purchase price per share equal to $1,000 plus accrued dividends.

The Company also gave the agent on the private placement of the Series C preferred stock warrants to acquire 525 shares of the Series C preferred stock at a price of $1,000 per share. The warrants are exercisable for up to five years from the date of issuance.

F-23

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Series D

In conjunction with the acquisition of ACT Medical, Inc. (see Note 3), the Company issued 33,423 shares of 6% Series D Cumulative Convertible Redeemable Preferred Stock (the Series D preferred stock), $.01 par value per share, and rolled over options for an additional 6,920 shares of Series D preferred stock.

Cumulative dividends accrue at an annual rate of 6% until the first anniversary of the original issue date and 8% thereafter. Dividends are payable in cash only in connection with a redemption of the shares or upon liquidation of the Company. Upon conversion of any shares of Series D preferred stock, all accumulated but unpaid dividends thereon shall be extinguished. However, in no event shall the Company be required to pay any dividends prior to liquidation or upon redemption if such payment is prohibited under the terms of its senior credit facility or any senior preferred stock.

The Series D preferred stock may be converted to common stock at any time. The initial rate is one share of Series D preferred stock for 50 shares of common stock, subject to anti-dilution provisions. The Series D preferred stock is automatically converted into common stock upon the occurrence of an IPO, as defined.

The holders of the Series D preferred stock are entitled to vote on all matters, other than the election of directors, with the holders of common stock on an as-if-converted basis.

Each share of Series D preferred stock is redeemable after the fifth anniversary of the effective time of the merger, at the option of the Company, for a price per share equal to $1,000 plus accrued and unpaid dividends. In addition, the Series D preferred stock shall be redeemed on the earlier of (i) any date on which the then outstanding senior preferred stock is redeemed and (ii) the twentieth anniversary of the effective time of the merger.

Other Preferred and Common Stock

Series A

On March 30, 1999, the Company issued 37,440 shares of Series A Preferred Stock (the Series A preferred stock), $.01 par value per share, in connection with the acquisition of businesses (see Note 3—Acquisitions). In addition, the Company also issued 600 shares of Series A preferred stock to key employees of an acquired company in conjunction with the acquisition. Subsequent to March 30, 1999, the Company sold an additional 330 shares of Series A preferred stock to key employees for cash at fair value as determined by an independent appraisal at March 30, 1999.

The Series A preferred stock is entitled to receive cumulative dividends on each share at the annual rate of $60. Except in connection with any redemption of the Series A preferred stock or upon liquidation of the Company, dividends on the Series A preferred stock are not paid in cash. Each share of Series A preferred stock is convertible at the option of the holder into 50 shares of common stock, subject to anti-dilution provisions. Upon conversion, all accumulated unpaid dividends are extinguished.

The Company may, at its option, redeem the Series A preferred stock on a pro rata basis among the holders, at an amount equal to its liquidation preference. The liquidation preference for the Series A preferred stock is $1,000 per share plus accumulated unpaid dividends.

F-24

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Series Z

On March 30, 1999, the Company sold 65,000 shares of Series Z Convertible Nominal Value Redeemable Preferred Stock (the Series Z preferred stock), $.01 par value per share, for cash in a private placement (see Note 7—Long-Term Debt). The Series Z preferred stock has no dividend rights and is senior only to the common stock with respect to rights on liquidation. The Series Z preferred stock can be converted at the option of the holder into common stock at any time. The initial conversion rate is one share of Series Z preferred stock for 10 shares of common stock, subject to anti-dilution provisions.

On March 29, 2009, the Company, at its option, may redeem outstanding shares of Series Z preferred stock at its liquidation preference of $.001 per share.

Common Stock

On April 14, 1998, the Company was incorporated with the sale of 100 shares of common stock at $1 per share. In February 1999, an additional 65 shares were sold to individuals at $1,000 per share. On March 30, 1999, in conjunction with the acquisitions and the commencement of business operations, the stock was split 2,209-for-1 (adjusting the pre-split shares to 363,594 shares) and an additional 38,706 shares were sold for cash to existing stockholders. The amount paid for the common stock was based on an independent appraisal. Also on March 30, 1999, 42,500 shares of common stock were issued in connection with the acquisition of a business (see Note 3—Acquisitions). In January 2000, the Company’s common stock was split 10-for-1 and all share references to common stock have been adjusted to give effect to the split and the balance sheet and statement of changes in mandatory redeemable preferred stock and stockholders’ equity include adjustments to amounts for the prior period to give effect to the split. The adjusted post-split outstanding common shares was 4,448,000. Subsequent to the stock split, 786,950 shares of common stock were issued in connection with new acquisitions.

As of June 30, 2001, the Company had 339,971 shares of authorized but undesignated and unissued preferred stock, par value $.01 per share.

Stockholder Agreements

Agreements executed on March 30, 1999 between all holders of Series B preferred stock and Series Z preferred stock and holders of 90% of the common stock provide for restrictions on the sale or transfer of shares, drag-along and tag-along rights in connection with sales of shares, registration rights, rights of certain stockholders or groups of stockholders to elect or designate members of the Board of Directors, and rights of the principal holders of Series B and Z preferred stock to sell the Company in the event that a liquidity event, as defined, has not occurred by March 30, 2005.

Also on March 30, 1999, the holders of the Series B preferred stock and certain holders of the common stock entered into a Share Transfer Agreement and Escrow Agreement. Pursuant to these agreements, the holders of common stock placed 1,500,000 shares into escrow. The escrowed shares will be released, either fully or partially, back to the common stockholders or to the holders of the Series B preferred stock based on rates of return to the holders of the Series B preferred stock as of the earliest valuation transaction, as defined.

The fair value of the contingent additional consideration which may be given to the holders of the Series B preferred stock pursuant to the Share Transfer Agreement, based on the intrinsic value of the underlying contingent shares at the inception of the agreement, was reflected as an additional discount on the Series B preferred stock with the offsetting credit to additional paid-in capital.

F-25

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accumulated Unpaid Dividends

Dividends accumulated and unpaid on the Series A, Series B, Series C, and Series D preferred stock through June 30, 2001 are $5.2 million, $3.5 million, $1.7 million, and $1.0 million, respectively. No dividends may be paid on the common stock until accumulated unpaid dividends are paid on the preferred stock. The accumulated and unpaid dividends of the Series B, Series C, and Series D preferred stock are accrued and have been added to the carrying value of the stock with an offsetting charge to accumulated deficit. Dividends are only required to be paid on the Series A preferred stock upon a liquidation or redemption. The Company’s debt agreements prohibit the Company from paying any dividends in cash.

Stock Options

The Company has reserved 4,430,000 shares of its common stock for issuance to directors, officers, employees, and consultants under the 1999 Stock Plan (the Plan). The table below shows the activity in the Plan:

	Options Outstanding		Shares  Reserved		Weighted Average Initial  Exercise Price
At inception of Plan	—		1,750,000
Granted	945,720		(945,720	)	$	12.00
Balance at July 3, 1999	945,720		804,280
Granted	840,459		(840,459	)		14.57
Canceled	(345,109	)	345,109			12.07
Balance at July 1, 2000	1,441,070		308,930
Reserved	—		1,680,000
Granted	1,555,660		(1,555,660	)		17.13
Exercised	(20,308	)	—			13.99
Canceled	(401,038	)	401,038			14.40
Balance at June 30, 2001	2,575,384		834,308			15.54
Reserved	—		1,000,000
Granted	45,500		(45,500	)		20.00
Exercised	(400	)	—			12.00
Canceled	(108,720	)	108,720			16.16
Balance at September 30, 2001 (Unaudited)	2,511,764		1,897,528		$	15.59

The options outstanding at June 30, 2001 include 542,086 options with an initial exercise price of $12.00 per share, 380,692 options with an initial exercise price of $14.00 per share, 757,126 options with an exercise price of $16.24 per share, 674,980 options with an exercise price of $17.00 per share, and 220,500 options with an exercise price of $20.00 per share. Options granted through June 30, 2001 are exercisable for 10 years from date of grant and vest 25% a year. The initial exercise price of the options applies to the options vesting at the first anniversary date. Options vesting at the second, third, and fourth anniversary dates have exercise prices equal to 110%, 121%, and 133.1%, respectively, of the initial exercise price of the options except for the options granted during the year ended June 30, 2001 and options granted in year ended July 1, 2000 at $16.24 for which the exercise price remains fixed. There are 271,043 options outstanding with an initial exercise price of $12.00 per share and 95,173 options outstanding with an initial exercise price of $14.00 that are fully vested and exercisable at June 30, 2001.

As permitted under SFAS No. 123, the Company has not recognized compensation expense for the theoretical value of its options at the grant date. In determining the fair value of options granted, the Company

F-26

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

used the minimum value option-pricing model with the following weighted average assumptions: risk–free interest rate of 5.5%; dividend yield of zero; and an expected option life of four years. Had compensation cost for the Company’s stock option plan been based on the fair value of options at the grant date amortized over the vesting period, the Company’s pro forma net loss attributed to common stockholders and net loss per share attributed to common stockholders would have been:

	2000		2001
Pro forma net loss attributed to common stockholders	$(14,384	)	$(29,627	)
Pro forma net loss per share attributed to common stockholders	$    (3.10	)	$    (5.64	)

          Reserved Shares of Common Stock

          The Company has reserved the following shares of common stock as of June 30, 2001:

Conversion of Series A preferred	1,918,500
Conversion of Series B preferred	3,327,280
Conversion of Series C preferred (including options and warrants)	2,617,000
Conversion of Series D preferred (including options)	2,017,142
Conversion of Series Z preferred	650,000
1999 Stock Plan	3,409,692
Total	13,939,614

11.    Employee Benefits

          401(k) Plans

          Certain of the Company’s subsidiaries offer their qualified employees the opportunity to participate in defined contribution retirement plans qualifying under the provisions of Section 401(k) of the Internal Revenue Code. During the year ended July 1, 2000, the Company implemented a company-wide plan and, during the current year, all plans were consolidated into it.

          Expenses recorded by the Company with respect to 401(k) plans for the period ended July 3, 1999 were less than $0.1 million and for the years ended July 1, 2000 and June 30, 2001 were $0.9 million and $0.6 million, respectively.

12.    Leases

          The Company has operating leases relating principally to its buildings. Total rent expense for the period ended July 3, 1999 and for the years ended July 1, 2000 and June 30, 2001 (including amounts to related parties—see Note 8—Related-Party Transactions) was approximately $0.4 million, $2.0 million and $3.5 million, respectively. Future minimum lease commitments at June 30, 2001, for leases with initial or remaining terms of more than one year, including amounts due to related parties, are summarized by fiscal year as follows (in thousands):

2002	$  3,682
2003	3,455
2004	2,372
2005	1,468
2006	1,321
Thereafter	3,754
	$16,052

F-27

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13.    Restructuring Charge

In June 2001, the Company completed a strategic review of its manufacturing operations and support functions. Based on this review and with approval of the Board of Directors, management began actions to eliminate redundant facilities. These actions resulted in pre-tax charges of $11.5 million.

Information relating to the restructuring charges is as follows (in millions):

	Initial Accrual		Incurred through September 30, 2001		Balance at September 30, 2001
Impairment of goodwill and other intangibles	$	3.6	$	3.6	$	—
Impairment of property, plant and equipment		1.9		1.9		—
Employee termination benefits		3.8		0.1		3.7
Other direct costs		2.2		—		2.2
	$	11.5	$	5.6	$	5.9

14.    Subsequent Events (Unaudited)

On January 4, 2002, the Company acquired HV Technologies, Inc. (HV Technologies), a company that manufactures polymide and composite micro-tubing used in interventional and minimally invasive catheters, delivery systems and instruments. The Company paid cash and issued 4,000 shares of its 6% Series F preferred stock, par value $.01 per share (Series F preferred stock), and issued shares of its Common Stock to the holders of securities of HV Technologies and a third party.

To finance the acquisition, the Company issued 6,000 shares of its 6% Series E preferred stock (the Series E preferred stock) and warrants to purchase an aggregate of 200,000 shares of its Common Stock (the total number of shares issuable upon exercise of the warrants will increase on each of the first five anniversaries of the date of issuance of the Series E Preferred Stock by an aggregate of 45,000 shares per year for each year that the Series E preferrred stock remains outstanding and, as a result, if the Series E Preferred Stock remains outstanding for five or more years, the warrants will be exercisable for an aggregate of up to 425,000 shares).

The Series E preferred stock and the Series F preferred stock accrue dividends at $60 per year during the first year from issuance, payable at the discretion of the Board of Directors, and at the rate of $160 per year on a retroactive basis after the first anniversary of issuance. The Company may, at any time, redeem the Series E preferred stock and the Series F preferred stock at a price equal to $1,000 per share plus accrued and unpaid dividends.

At the same time that the Company issued the Series E preferred stock, the Company obtained the consent of the holders of its $20.0 million of Senior Subordinated Promissory Notes (Notes) to complete the acquisition of HV Technologies and changed some of the covenants to which the Company is subject under an agreement between the Company and those holders, affiliates. At the same time, the Company agreed to increase by $1.0 million the amount payable by the Company upon redemption of the Notes.

Upon consummation of the Company’s initial public offering (IPO), (i) all shares of the Series A, Series B, Series C, Series D and Series Z preferred stock will convert into the Company’s common stock; (ii) the Company intends to enter into a new $85.0 million senior credit facility and repay all of its obligations under the existing Credit Agreement and under the Notes; and (iii) the MSAs will be terminated. The Company expects to make a one-time payment of an aggregate of $2.8 million to terminate the MSAs. The Company intends to redeem the Series E preferred stock prior to December 31, 2002 and will redeem the Series F preferred stock within 45 days after consummation of the IPO.

F-28

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors

ACT Medical, Inc.

We have audited the accompanying balance sheet of ACT Medical, Inc. (the Company) as of December 29, 2000, and the related statements of operations, stockholders’ equity, and cash flows for the period January 1, 2000 to December 29, 2000. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ACT Medical, Inc. as of December 29, 2000, and the results of its operations and its cash flows for the period January 1, 2000 to December 29, 2000 in conformity with accounting principles generally accepted in the United States of America.

/s/    Grant Thornton LLP

Boston, Massachusetts

February 9, 2001

F-29

ACT MEDICAL, INC.

BALANCE SHEET

December 29, 2000

Assets
Current assets:
Cash and cash equivalents	$	1,305,841
Accounts receivable, net of allowance for doubtful accounts of $294,774		3,009,324
Inventory		622,497
Prepaid expenses		200,063
Prepaid taxes		320,500
Deferred tax asset		345,904
Total current assets		5,804,129
Fixed assets, at cost:
Machinery and equipment		1,776,040
Office equipment		837,999
		2,614,039
Less accumulated depreciation		1,530,956
Net fixed assets		1,083,083
Other assets:
Goodwill, net of accumulated amortization of $192,733		1,541,868
Investment		129,430
Total other assets		1,671,298
Total assets	$	8,558,510
Liabilities and stockholders’ equity
Current liabilities:
Redeemable common stock, no par value; 300,000 shares issued and outstanding	$	2,160,000
Accounts payable		664,833
Accrued payroll and related expenses		1,173,410
Accrued profit sharing		204,924
Accrued expenses		126,027
Deferred income		1,661,300
Other current liabilities		25,886
Total current liabilities		6,016,380
Long-term liabilities		97,073
Stockholders’ equity:
Common stock, no par value; 6,000,000 shares authorized; 3,404,000 shares issued		746,178
Retained earnings		1,702,985
		2,449,163
Less cost of treasury stock, 15,625 shares		4,106
Total stockholders’ equity		2,445,057
Total liabilities and stockholders’ equity	$	8,558,510

The accompanying notes are an integral part of the financial statements.

F-30

ACT MEDICAL, INC.

STATEMENT OF OPERATIONS

For the Period January 1, 2000 to December 29, 2000

Net sales	$	24,944,933
Cost of goods sold		19,272,720
Gross profit		5,672,213
Operating expenses:
Research and development		463,218
Selling, general, and administrative		5,501,789
		5,965,007
Loss from operations		(292,794	)
Other income (expense):
Interest income		127,051
Interest expense		(1,252,920	)
Gain on sale of development stage product		500,000
		(625,869	)
Loss before income taxes		(918,663	)
Income taxes		91,200
Net loss	$	(1,009,863	)

The accompanying notes are an integral part of the financial statements.

F-31

ACT MEDICAL, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

For the Period January 1, 2000 to December 29, 2000

	Common Stock			Retained Earnings			Treasury Stock			Total
	Shares	Amount
Balance at December 31, 1999	3,368,750	$	667,578	$	2,712,848		$	(4,106	)	$	3,376,320
Exercise of stock options	35,250		78,600		—			—			78,600
Net loss	—		—		(1,009,863	)		—			(1,009,863	)
Balance at December 29, 2000	3,404,000	$	746,178	$	1,702,985		$	(4,106	)	$	2,445,057

The accompanying notes are an integral part of the financial statements.

F-32

ACT MEDICAL, INC.

STATEMENT OF CASH FLOWS

For the Period January 1, 2000 to December 29, 2000

Cash flows from operating activities
Net loss	$	(1,009,863	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		359,613
Amortization		115,640
Non-cash interest cost associated with accretion of redeemable common stock		1,092,400
Deferred taxes		(168,904	)
Gain on sale of development stage product		(500,000	)
Changes in assets and liabilities, excluding effects of acquisition:
(Increase) decrease in assets:
Accounts receivable		(563,355	)
Inventory		487,009
Prepaid expenses		(51,723	)
Prepaid taxes		(320,500	)
Other		(6,471	)
Increase (decrease) in liabilities:
Accounts payable		(358,909	)
Accrued payroll and related expenses		280,796
Accrued profit sharing		(67,117	)
Accrued expenses		(271,725	)
Accrued taxes		(11,500	)
Deferred income		1,033,644
Net cash provided by operating activities		39,035
Cash flows from investing activities
Purchase of fixed assets		(646,144	)
Proceeds from sale of development stage product		500,000
Net cash used in investing activities		(146,144	)
Cash flows from financing activities
Exercise of stock options		78,600
Payments on long-term debt		(714,200	)
Payments on demand notes due to stockholders		(1,529,000	)
Net cash used in financing activities		(2,164,600	)
Net decrease in cash and cash equivalents		(2,271,709	)
Cash and cash equivalents at beginning of year		3,577,550
Cash and cash equivalents at end of year	$	1,305,841
Supplemental Information
Cash paid for interest	$	181,693
Cash paid for income taxes	$	569,079

The accompanying notes are an integral part of the financial statements.

F-33

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS

December 29, 2000

Note A—Summary of Significant Accounting Policies

ACT Medical, Inc. (the Company) is a Massachusetts corporation engaged in contract design and manufacturing of medical devices. The Company conducts business with customers throughout the United States. For the period January 1, 2000 to December 29, 2000, approximately 58% and 42% of the Company’s net sales were generated from manufacturing and engineering activities, respectively.

At the close of business on December 29, 2000, the Company merged with MedSource Technologies, Newton, Inc. (MedSource), in which MedSource acquired all of the outstanding common shares of the Company. These financial statements include all activity through the close of business on December 29, 2000 prior to the consummation of this transaction.

A summary of significant accounting policies consistently applied in the presentation of the accompanying financial statements follows:

Financial Statement Presentation

The financial statements of the Company have been prepared on the accrual basis of accounting.

In 1999, the Company acquired 100% of the outstanding capital stock of Danforth Biomedical, Inc. (“Danforth”), located in Santa Clara, California. In March 2000 this subsidiary was officially merged into the Company. All intercompany transactions have been eliminated.

Revenue Recognition

The Company recognizes revenue from product sales at the time of shipment. Engineering contracts are based on time and materials and, as such, revenue is recognized as costs are incurred. Deferred income represents customer prepayments on engineering contracts.

Allowances for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts for the period January 1, 2000 to December 29, 2000 is as follows:

Balance at beginning of year	$	229,252
Provision		300,000
Charge-offs		(234,478	)
Balance at end of year	$	294,774

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable, which is somewhat mitigated due to the Company’s diversity of customers. However, approximately 38% of the Company’s sales in 2000 were made to one major customer. Accounts receivable from this customer amounted to approximately $1,058,000 as of December 29, 2000. The Company

F-34

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

establishes an allowance for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends and other information.

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity at the date of purchase of three months or less to be cash equivalents. Included in cash and cash equivalents are money market accounts totaling approximately $1,263,000 at December 29, 2000.

Inventory

Inventory is valued at the lower of cost or market on the first-in, first-out (FIFO) method.

Fixed Assets

Fixed assets are stated at cost. Expenditures for maintenance, repairs, and renewals are charged to expense as incurred. Depreciation expense is computed under straight line and accelerated methods to allocate the cost over its estimated useful life. The estimated useful lives of fixed assets are three to seven years.

Goodwill

The Company has classified as goodwill the cost in excess of fair value of the net assets of a company acquired in 1999 in a purchase transaction. Goodwill is being amortized on a straight-line basis over fifteen years. Amortization charged to operations amounted to $115,640 in 2000. On an annual basis, the Company reviews the recoverability of goodwill by evaluating certain factors such as the occurrence of a significant adverse event or change in the environment in which the business operates or the expected future cash flows.

Investment

The Company has recorded an investment in Seedling Enterprises, LLC (Seedling) on a cost basis. A shareholder of Seedling is also an officer of the Company. In exchange for the investment the Company is providing certain office space of its facilities along with additional office related services. The investment and liability to provide services were recorded at the present value of the fair value of lease space and services to be provided. The liability is relieved as the above described services are utilized.

Gain on Sale of Development Stage Product

In April 2000, the Company sold their development stage product, Flex Needle, to one of their customers for cash in the amount of $500,000.

Income Taxes

Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred taxes results from changes in deferred tax assets and liabilities.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employee stock options. Under APB 25, compensation expense only occurs if options are granted to employees at prices lower than the fair market value of the company’s stock. The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (Statement No. 123).

F-35

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

Fair Value of Financial Instruments

As of December 29, 2000, the carrying amounts for accounts receivable and accounts payable approximate their fair value due to the short-term maturity of these instruments. As of December 29, 2000, the carrying amount of redeemable common stock approximates its fair value as it equals the maximum redemption price as stated in the Stock Restriction and Put Agreement. (see Note I).

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note B—Inventory

Inventory consists of the following at December 29, 2000:

Raw materials	$	476,751
Work-in-process		103,900
Finished goods		41,846
	$	622,497

Note C—Income Taxes

The components of income tax expense are as follows at December 29, 2000:

Current:
Federal	$	237,446
State		22,658
Total current expense		260,104
Deferred:
Federal		(133,074	)
State		(35,830	)
Total deferred expense (benefit)		(168,904	)
Total income tax expense	$	91,200

Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that give rise to the net deferred tax asset are as follows at December 29, 2000:

Deferred tax assets:
Inventory	$	76,730
Allowance for doubtful accounts		118,064
Recall adjustments		200,500
Total deferred tax asset		395,294
Deferred tax liabilities:
Fixed assets		49,390
Total deferred tax liability		49,390
Net deferred tax asset	$	345,904

F-36

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

Tax at federal statutory rate	$	(312,345	)
State taxes		(9,816	)
Interest cost associated with accretion of redeemable common stock		371,416
Non-deductible goodwill amortization		37,367
Non-deductible meals and entertainment		4,578
Tax at effective rate	$	91,200

Note D—Line of Credit

The Company had available a revolving line of credit with a private banking institution allowing for borrowings up to $1,000,000 at the bank’s prime rate. The Company had no outstanding balance under this arrangement at December 29, 2000.

Note E—Long-Term Debt

In conjunction with a business acquisition in 1999, the Company entered into a loan agreement with a private banking institution. The loan bore interest at LIBOR plus 2.5% with quarterly principal payments of $28,600 and final payment of $228,000 due March 31, 2004. This debt was paid off during the current period.

Note F—Demand Notes Due to Stockholders

Three officers/stockholders of the Company loaned the Company $1,529,000. These notes, were due on demand and bore interest 6.5% per annum. These notes were paid off during the current period.

Note G—Commitments and Contingencies

Lease Commitments

The Company conducts its operations in leased facilities in Newton, Massachusetts and Santa Clara, California. These leases are classified as operating leases and expire in 2005, with certain renewal options at expiration.

Future minimum lease payments are as follows:

Year Ending
2001	$	925,500
2002		938,000
2003		952,000
2004		968,000
2005		129,000
	$	3,912,500

Rent expense was approximately $880,000 for the period January 1, 2000 to December 29, 2000.

F-37

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

Contingencies

In February, 2001 the Company was notified by its major customer of a recall relating to a product manufactured by the Company. The Company recorded the known effects of the recall as of December 29, 2000. A pre-tax summary of the impact of this event is as follows:

Net reduction in sales	$	500,000
Inventory write-off		225,000
Reduction in income (loss) from operations	$	725,000

As a result of the above, the Company recognized deferred income in the amount of $500,000 for funds received in excess of the settlement amounts.

The Company believes there is a reasonable possibility that other claims could be made in connection with this matter. As a result of the uncertainty related to these other potential claims, an estimate cannot be made as to the amount of possible loss.

Note H—Retirement Plan

The Company maintains a qualified profit sharing and 401(k) plan (the Plan) which covers substantially all full-time employees of the Company. Employees of the Company are eligible to participate in the Plan upon attaining age 21. The Plan allows participants to contribute between 2% and 15% of their compensation. Participant contributions vest immediately. The Company contributes an amount equal to 25% of the participants’ contribution up to a maximum of 1.5% of their compensation. The Company’s 2000 contributions to the Plan were approximately $105,000.

Company contributions to the profit sharing portion of the Plan are discretionary and are determined by the Board of Directors of the Company. In no event will the Company’s contribution exceed Internal Revenue Code limitations. The Company’s 2000 contributions to the plan were approximately $231,000.

Note I—Redeemable Common Stock

In connection with the 1999 acquisition of Danforth, the Company issued 400,000 shares of its common stock to shareholders of Danforth and entered into a Stock Restriction and Put Agreement (the “Agreement’’). Of the shares issued, a maximum of 300,000 shares may be redeemed by the holders at certain dates and prices. Pursuant to this agreement, 300,000 shares may be redeemed by the holders of the stock upon a change in control of the Company. As a result, these shares may be redeemed on the date of the merger of the Company with Medsource as described in Note L.

The Company has recorded the value of these shares as redeemable common stock. The value of these shares at December 31, 1999 was $1,067,600. During 2000, the Company recorded accretion of $1,092,400, which is included in interest expense, to adjust the value to be equal to the change in control redemption value as stipulated in the agreement.

Note J—Equity Transactions

At the June, 2000 shareholder’s meeting, it was voted that the Company would split its shares 2.5:1. This vote increased the authorized shares from 2,000,000 to 5,000,000 and the outstanding shares from 1,347,500 to

F-38

ACT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

3,368,750 as of June 22, 2000. The stated par value of each share was adjusted proportionally to reflect this stock split. All share and per share amounts in these financial statements, including options, have been given retroactive effect to reflect the stock split as if it had occurred at the beginning of the period.

At the same June, 2000 shareholder’s meeting, it was voted that the Company would increase the number of authorized shares from 5,000,000 to 6,000,000.

All shares of common stock of the Company held by employees and consultants have certain restrictions. The Company has the right to repurchase the shares from the employee or consultant in the event employment or the consulting arrangement is terminated.

Note K—Stock Option Plan

The Company has two incentive stock option plans which permit the issuance of options to selected employees at a price determined by the Board of Directors to be not less than fair market value at the date of grant. The Company has authorized a total of 1,125,000 options to be granted under the plans. The options become exercisable, subject to continued employment, over a four year period and have a term of ten years.

The Company applies APB 25 and related interpretations in accounting for its stock option plan. Had compensation costs for the Company’s stock option plan been determined based on the fair value of such awards at the grant date, consistent with the methods of Statement No. 123, the Company’s total net loss would have been as follows:

	2000
Net loss:
As reported	$	(1,009,863	)
Pro forma		(1,101,131	)
Weighted-average fair value of options granted during the year	$	1.52

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model assuming a risk-free interest rate of 5.85%–6.39%, an expected life of ten years and a volatility and dividend rate of 0%. For purposes of pro forma disclosure, the estimated fair value of the options are amortized to expense over the options’ vesting period.

The following summarizes the transactions of the Company’s stock option plan:

	Shares Under Option		Exercise Price
Outstanding at December 31, 1999	637,000		$	$1.60-$20
Granted in 2000	335,625		$	2.40-3.20
Forfeited in 2000	(46,875	)	$	1.60-2.40
Exercised in 2000	(35,250	)	$	1.60-2.40
Outstanding at December 29, 2000	890,500		$	$1.60-$20

F-39

ACT MEDICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following summarizes information about stock options exercisable and outstanding:

Exercise Price	Number of Shares Exercisable at December 29, 2000	Number of Shares Outstanding at December 29, 2000	Weighted Average Remaining Contractual Life
$1.60	84,000	231,875	8.1
$2.40	74,800	330,750	9.3
$3.20	3,075	15,375	9.7
$4.00	25,000	62,500	7.7
$8.00	25,000	62,500	7.7
$12.00	25,000	62,500	7.7
$16.00	25,000	62,500	7.7
$20.00	25,000	62,500	7.7
	286,875	890,500

Note L—Subsequent Event

After the close of business on December 29, 2000, pursuant to a merger agreement, all of the company’s outstanding shares of common stock and redeemable common stock were acquired by MedSource in exchange for 33,423 shares of MedSource Series D 6% Cumulative Preferred Stock, par value $.01 per share (preferred stock) and cash payments of approximately $1.0 million to shareholders electing to receive cash instead of stock. Pursuant to the Merger Agreement, an escrow account containing 12,675 of the shares indicated above was created for the purpose of applying, if necessary, amounts relating to indemnified claims, as defined. The escrow account will exist for two years. Dividend payments are made upon action of the Board. Upon the occurrence of a qualified initial public offering, each outstanding share of Preferred Stock shall be automatically converted into a number of shares of common stock as determined by the Merger Agreement.

In addition, at the date of merger certain outstanding options to purchase the Company’s common stock, whether vested or unvested, were deemed to constitute an option to acquire, on substantially the same terms and conditions as were applicable under the Company’s 1998 Omnibus Stock Plan, shares of MedSource preferred stock. Certain other options that had an exercise price above the per share deal price were forfeited and replaced with options for MedSource common stock.

F-40

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors

Kelco Industries, Inc.

We have audited the accompanying balance sheet of Kelco Industries, Inc. as of March 30, 1999, and the related statements of income, changes in stockholders’ equity, and cash flows for the period from May 1, 1998 through March 30, 1999. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kelco Industries, Inc. as of March 30, 1999, and the results of their operations and their cash flows for the period from May 1, 1998 through March 30, 1999, in conformity with generally accepted accounting principles.

As discussed in Note 8 to the financial statements, at March 30, 1999, the company changed its method of accounting for inventory overruns and supplies to more appropriately match costs and expenses.

/s/    Bertram, Vallez, Kaplan & Talbot, Ltd.

Brooklyn Park, Minnesota

August 31, 1999

F-41

KELCO INDUSTRIES, INC.

BALANCE SHEET

March 30, 1999

Assets
Current assets:
Cash (Note 1)	$   3,918,464
Marketable securities (Notes 1 and 3)	2,865,000
Accounts receivable (less allowance for doubtful accounts of $61,172) (Notes 1 and 3)	1,709,298
Sales tax refund receivable	266,129
Inventory (Notes 1, 3, and 8)
Raw materials	1,615,690
Work-in-process	1,313,935
Finished goods	240,000
Prepaid expenses	27,983
Other current assets	12,826
Total current assets	11,969,325
Property and equipment (Notes 1 and 3)	13,006,783
Less accumulated depreciation	7,880,288
	5,126,495
Other assets:
Tax deposit (Note 1)	1,416,210
Split dollar life insurance receivable	450,181
	1,866,391
Total assets	$18,962,211
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$       622,020
Accrued liabilities:
Profit sharing contribution (Note 4)	1,140,267
Real estate taxes	24,018
Wages and vacation	437,067
Bonus	514,503
Commissions	7,516
Other current liabilities	1,764
Total current liabilities	2,747,155
Stockholders’ equity:
Class A—voting common stock, $.01 par value:
Authorized—100,000 shares; Issued and outstanding—4,476 shares	45
Class B—nonvoting common stock, $.01 par value:
Authorized—900,000 shares; Issued and outstanding—101,994 shares	1,020
Capital paid in excess of par value	399,895
Retained earnings	15,814,096
	16,215,056
Total liabilities and stockholders’ equity	$18,962,211

The accompanying notes are an integral part of these statements.

F-42

KELCO INDUSTRIES, INC.

STATEMENT OF INCOME

For the Period From May 1, 1998 through March 30, 1999

Sales (Note 6)	$22,877,031
Cost of sales	12,926,031
Gross margin	9,951,000
Selling, general, and administrative expenses	2,784,220
Income from operations	7,166,780
Other income (expense):
Interest income	183,697
Interest expense	(165	)
Rent income	5,557
Scrap sales	2,781
Loss on sale of property and equipment	(7,995	)
Other professional fees related to sale of assets	(107,246	)
	76,629
Net income before cumulative effect of accounting change	7,243,409
Cumulative effect of accounting change in inventories (Note 8)	431,078
Net income	$   7,674,487

The accompanying notes are an integral part of these statements.

F-43

KELCO INDUSTRIES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Period From May 1, 1998 through March 30, 1999

	Class A Common Stock				Class B Common Stock			Additional Paid-In Capital	Retained Earnings		Total Stockholders’ Equity
	Shares Issued and Outstanding		Amount		Shares Issued and Outstanding		Amount
Balance at April 30, 1998		4,476		$45		101,994	$1,020	$399,895	$10,827,882		$11,228,842
Distributions		—		—		—	—	—	(2,688,273	)	(2,688,273	)
Net income for the                period from May 1,                1998 through                March 30, 1999		—		—		—	—	—	7,674,487		7,674,487
Balance at March 30, 1999		4,476		$45		101,994	$1,020	$399,895	$15,814,096		$16,215,056

The accompanying notes are an integral part of these statements.

F-44

KELCO INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

For the Period From May 1, 1998

through March 30, 1999

Operating activities
Net income	$7,674,487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,149,050
Loss on sale of property and equipment	7,995
Changes in operating assets and liabilities that increase or (decrease) cash:
Accounts receivable	84,677
Sales tax refund receivable	(116,511	)
Inventory	(837,306	)
Prepaid expenses	77,757
Other current assets	(4,364	)
Accounts payable	183,777
Accrued liabilities	307,779
Net cash provided by operating activities	8,527,341
Investing activities
Fiscal year required payment	(73,185	)
Purchase of marketable securities	(550,000	)
Payments for split dollar life insurance	(87,292	)
Proceeds from sale of equipment	7,400
Purchase of property and equipment	(2,350,140	)
Net cash used in investing activities	(3,053,217	)
Financing activities
Distributions paid	(2,688,273	)
Net cash used in financing activities	(2,688,273	)
Net increase in cash	2,785,851
Cash at beginning of period	1,132,613
Cash at end of period	$3,918,464

The accompanying notes are an integral part of these statements.

F-45

KELCO INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

1.    Summary of Significant Accounting Policies

Nature of Business

Kelco Industries, Inc. (the Company) is a manufacturer of precision metal parts sold to customers primarily in the Minneapolis/St. Paul area. The Company also has sales throughout the United States and Europe. The Company extends unsecured credit to its customers.

On March 30, 1999, selected assets of the Company were sold to MedSource Technologies, Inc. (MedSource). MedSource acquired the trade receivables, inventories, prepaid expenses, other current assets and the property and equipment and assumed all current liabilities of the Company as well as the Company name. These financial statements have not been adjusted to reflect changes resulting from the sale of the above assets and liabilities. Subsequent to the sale, the Company changed its name to Oclek, Inc. and was liquidated.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions.

Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Cash Concentration

The Company maintains cash balances at two financial institutions located in Minneapolis. Accounts are insured by the Federal Deposit Insurance Corporation up to $100,000. At March 30, 1999, the Company’s uninsured cash balance (before outstanding items) was $4,016,511.

Marketable Securities

The Company considers its investments in marketable securities to be “trading securities”. Therefore, marketable securities are recorded at fair market value, and unrealized gains and losses are currently recognized.

Inventory

Inventory is valued at the lower of cost (first-in, first-out method) or market. Work-in-process inventory includes production costs. As discussed in Note 8, finished goods inventory is valued at an agreed upon cost between the seller and buyer of Kelco Industries, Inc.

Property and Equipment

Property and equipment is recorded at cost and depreciated on the straight-line and declining-balance methods over the estimated useful lives of the assets.

F-46

KELCO INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

          Income Taxes

          The Company, with the consent of its stockholders, has elected under the Internal Revenue Code to be an S Corporation. In lieu of corporate income taxes, the stockholders of an S corporation are taxed on their proportionate share of the company’s taxable income. Therefore, no provision or liability for income taxes has been included in these financial statements. The Company has deposited a required payment with the Internal Revenue Service to maintain their fiscal year of April 30th.

          Advertising

          Advertising costs are charged to operations when incurred. Total advertising expense was $52,863 for the period from May 1, 1998 through March 30, 1999.

2.    Property and Equipment

          Property and equipment is comprised of the following as of March 30, 1999:

	Cost	Accumulated Depreciation	Book Value
Machinery and equipment	$11,009,391	$7,336,335	$3,673,056
Vehicles	209,690	68,585	141,105
Furniture and fixtures	514,152	348,734	165,418
Leasehold improvements	1,212,389	107,764	1,104,625
Land improvements	61,161	18,870	42,291
	$13,006,783	$7,880,288	$5,126,495

3.    Available Credit Facility

          The Company has available credit with Norwest Bank, National Association, on a $1,000,000 line of credit (secured by accounts receivable, inventory, property and equipment and general intangibles and is personally guaranteed by the majority stockholder) with interest payable monthly at the bank’s base rate of interest minus .25%. The base rate of interest at March 30, 1999 was 7.5%. As part of the credit facility, the Company is required to maintain a ratio of total liabilities to tangible net worth of less than 1.0 to 1.0 as well as achieve a positive net income each fiscal year. The Company is in compliance with these covenants at March 30, 1999. There were no borrowings on the credit facility at March 30, 1999. The credit facility was terminated at March 30, 1999.

4.    Profit Sharing Plan

          The Company maintains a non-contributory profit sharing plan for all employees who are not covered by a collective bargaining agreement and who provided a year of service (1,000 hours). The plan allows the Company to contribute up to fifteen percent of the participants annual compensation, which includes bonuses, overtime and commissions, if any, subject to Internal Revenue Service limitations. Contributions are determined annually by the board of directors, and are currently funded. The contributions to the plan for the period from May 1, 1998 to March 30, 1999 was $1,140,267.

F-47

KELCO INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

5.    Related-Party Transactions and Building Lease Agreements

          The Company leased its office and production space on an informal month-to-month basis at $30,089 per month plus real estate taxes, from Paul Kelly, the 88.3% stockholder of Kelco Industries, Inc. Rent expense for the period from May 1, 1998 to March 30, 1999 was $429,109.

          The Company leased additional office space on an informal month-to-month basis at $1,763 per month plus real estate taxes from a partnership owned by the stockholders of Kelco Industries, Inc. Rent expense for the period from May 1, 1998 to March 30, 1999 was $32,842.

          Commencing with the sale of selected assets to MedSource on March 30, 1999, a formal lease for all office and production space was negotiated. The leases will terminate on February 28, 2009 with three options to extend the leases for five year intervals. The leases call for, among other items, combined monthly base rent payments as follows:

Years 1–3	$32,589
Years 4–6	$36,200
Years 7–10	$40,244

6.    Major Customers

          The Company had one major customer providing approximately 47% of the Company’s revenue for the period from May 1, 1998 to March 30, 1999.

          At March 30, 1999, that customer comprised $568,965 of the accounts receivable balance.

7.    Lease Commitments

          The Company is leasing various vehicles under operating-type leases. The agreements call for, among other items, future minimum lease payments as follows for the periods ending March 30,

2000	$  69,378
2001	47,799
2002	12,229
	$129,406

8.    Cumulative Effect of a Change in Accounting Principle

          To more appropriately match costs and expenses, the Company changed its method of accounting for inventory overruns and supplies used in the machining process. Previously, inventory overruns were not valued and were expensed when purchased. Under the new method, supplies will be recorded as inventory and charged to operations when used. The inventory overruns have been valued at an agreed-upon purchase price between the buyer and seller of Kelco Industries, Inc. The cumulative effect of this accounting change at March 30, 1999 was to increase net income by $431,078.

F-48

To the Board of Directors and Stockholders of

W. N. Rushwood, Inc., d.b.a.

Hayden Precision Industries

(A Subchapter S Corporation)

Orchard Park, New York

We have audited the accompanying balance sheets of W. N. Rushwood, Inc., d.b.a. Hayden Precision Industries as of December 31, 1998 and March 30, 1999, and the related statements of income and retained earnings, and cash flow for the year ended December 31, 1998 and for the three-month period ended March 30, 1999. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of W. N. Rushwood, Inc., d.b.a. Hayden Precision Industries at December 31, 1998 and March 30, 1999 (prior to sale of assets and liabilities), and the results of its operations and its cash flows for the year ended December 31, 1998 and for the three-month period ended March 30, 1999, in conformity with general accepted accounting principles.

/s/    James F. Yochum

West Seneca, New York

June 30, 1999

F-49

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

Balance Sheets

	December 31, 1998		March 30 , 1999
Assets
Current assets:
Cash	$	86,061	$	165,219
Accounts receivable		857,372		776,432
Inventory		1,315,050		1,185,929
Total current assets		2,258,483		2,127,580
Property and equipment, less accumulated depreciation		4,522,287		5,071,119
Other assets—deposits and prepayments		285,414		6,978
	$	7,066,184	$	7,205,677
Liabilities
Current liabilities:
Trade accounts payable	$	368,663	$	450,657
Due on equipment purchases		149,520		—
Accrued payroll, bonuses, and taxes		248,260		257,197
Accrued shareholder distribution—taxes		300,000		—
Accrued franchise tax payable		11,062		—
Short-term debt—fleet line of credit		500,000		1,000,000
Current maturities of long-term debt		629,297		—
Total current liabilities		2,206,802		1,707,854
Long-term debt, less current maturities:
Bank		2,174,220		2,744,476
Shareholder		1,000,000		1,000,000
Total long-term debt		3,174,220		3,744,476
Total liabilities		5,381,022		5,452,330
Stockholders’ equity:
Capital stock, no par—shares authorized 200; issued and outstanding 100 in 1998 and 1999		50,000		50,000
Retained earnings		1,635,162		1,703,347
Total stockholder’s equity		1,685,162		1,753,347
	$	7,066,184	$	7,205,677

See accompanying notes and accountant’s report.

F-50

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

Statements of Income and Retained Earnings

	Year Ended December 31, 1998			Three-Month Period Ended March 30, 1999
Sales	$	9,777,414		$	2,226,920
Cost of sales		6,990,514			1,779,383
Gross profit		2,786,900			447,537
General and administrative expenses		1,072,023			194,599
Income from operations		1,714,877			252,938
Other income (expenses)—net, including interest expense of $106,497		(241,018	)		(99,753	)
Net income		1,473,859			153,185
Distribution of Sub-S earnings		(528,000	)		(85,000	)
Retained earnings—beginning		689,303			1,635,162
Retained earnings—ending	$	1,635,162		$	1,703,347

See accompanying notes and accountant’s report.

F-51

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

Statements of Cash Flows

	Year Ended December 31, 1998			Three-Month Period Ended March 30, 1999
Operating activities
Net income	$	1,473,859		$	153,185
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		794,491			213,684
Changes in assets and liabilities:
Accounts receivable		(156,162	)		80,940
Inventory		(924,265	)		129,121
Prepaid expenses		—			(6,978	)
Trade accounts payable		174,972			81,994
Accrued expenses		115,095			(2,125	)
Net cash provided by operating activities		1,477,990			649,821
Investing activities
Deposits and prepayments		(285,414	)		—
Capital expenditures		(3,168,314	)		(626,622	)
Net cash used in investing activities		(3,453,728	)		(626,622	)
Financing activities
Net borrowings—short term (equip and LOC)		509,520			500,000
Net borrowings—long term		1,610,854			(59,041	)
Distribution of Sub-S earnings		(228,000	)		(385,000	)
Net cash provided by financing activities		1,892,374			55,959
(Decrease) increase in cash		(83,364	)		79,158
Cash—beginning of year		169,425			86,061
Cash—end of year	$	86,061		$	165,219

See accompanying notes and accountant’s report.

F-52

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

Note 1—Summary of Significant Accounting Policies

Nature of Business

Hayden Precision Industries (the Company) manufactures precision parts for the medical and aerospace industries.

Inventory

Material inventory is valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method.

Work in progress is computed by discounting the sales value of jobs in progress. At December 31, 1998 and March 30, 1999, the work in progress inventory was valued at 15.3% of the sales value.

Finished goods is computed by discounting the sales value of jobs in progress. At December 31, 1998 and March 30, 1999, the finished goods inventory was valued at 36.45% of the sales value.

Property, Equipment, and Depreciation

Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets.

Taxes on Income

The absence of a provision for income taxes is due to the election of the corporation and consent by its stockholders to include the taxable income or loss of the corporation in the stockholder’s individual tax return. As a result, no federal income tax is imposed on the corporation. State income taxes are provided for as required by state law.

Note 2—Inventory

Inventory consists of the following:

	December 31, 1998		March 30, 1999
Raw materials	$	934,050	$	666,313
Work in progress		264,460		264,432
Finished goods		116,540		255,184
	$	1,315,050	$	1,185,929

F-53

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

NOTES TO FINANCIAL STATEMENTS—(Continued)

Note 3—Property and Equipment

Major classes of property and equipment consist of the following:

	December 31, 1998			March 30, 1999
Machinery, equipment, and tools	$	7,790,993		$	8,509,961
Computer system		478,523			514,160
Furniture and fixtures		23,177			31,191
Leasehold improvements		28,200			28,200
		8,320,893			9,083,512
Less accumulated depreciation		(3,798,606	)		(4,012,393	)
Net property and equipment	$	4,522,287		$	5,071,119

Note 4—Long-Term Debt

Long-term debt consists of the following:

	December 31, 1998			March 30, 1999
Fleet Bank
Term loan payable—bank maturing $7,691.67 monthly through May 1, 2000 plus interest at 9.42%	$	130,767		$	107,692
Term loan payable—bank maturing $11,416.67 monthly through May 1, 2001 plus interest at .75% above prime or LIBOR + 2.75%		331,083			296,833
Term loan payable—bank maturing $8,333.33 monthly through May 1, 2002 plus interest at .75% above prime or LIBOR + 2.75%		341,667			316,667
Equipment line of credit. This loan will be converted to a term loan on 4/1/99		2,000,000			2,000,000
Shareholder Loans
Note dated December 15, 1996 payable to Nancy Heywood. Monthly interest is payable at 7% until August 2000. Principal and interest (7%) payments of $6,233.20 begin September 15, 2000 with the note maturing in August 2010		536,842			536,842
Note dated December 15, 1996 payable to William H. Heywood. Monthly interest is payable at 7% until August 2000. Principal and interest (7%) payments of $5,377.66 begin September 15, 2000 with the note maturing in August 2010		463,158			463,158
Accrued interest on above		—			23,284
		3,803,517			3,744,476
Less current maturities		(629,297	)		—
Total long-term debt	$	3,174,220		$	3,744,476

The loan obligations to banks were secured by the Company equipment, accounts receivable, and inventory. William H. and Nancy Heywood (51% owners of the Company) and William B. Heywood (27% owners of the Company) had also signed for the loans. All loans were satisfied in April 1999.

F-54

W. N. RUSHWOOD, INC., DBA

HAYDEN PRECISION INDUSTRIES

NOTES TO FINANCIAL STATEMENTS—(Continued)

Note 5—Leases

The Company leases the land and building from William and Nancy Heywood who own 51% of the capital stock. The 1998 lease called for monthly payments of $16,500 through October 1998 and $35,000 thereafter.

The Company leases a building on 3886 California Road, Orchard Park from Windom Development Company. The 1998 and 1999 leases call for monthly payments of $2,885.

Note 6—Major Customers

For the year ended December 31, 1998, three customers generated sales in excess of 10% of the Company’s sales. Sales to these three customers totaled $7,528,600 or 77% of sales of total revenue.

Note 7—Distributions of Sub S Earnings to Shareholders

During 1998, the Company distributed Sub S earnings of $228,000 and accrued a distribution of $300,000 to be paid in 1999. During 1999, the Company distributed Sub S earnings of $385,000. This included distribution of $300,000 to be paid in 1999.

Note 8—Sale of Company Assets and Liabilities

On March 30, 1999, the Company assets were sold and all obligations of the Company were satisfied.

F-55

REPORT OF INDEPENDENT AUDITORS

Board of Directors

MedSource Technologies, Inc.

We have audited the accompanying balance sheets of National Wire & Stamping, Inc. as of December 31, 1998 and March 30, 1999 and the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 1998 and the three-month period ended March 30, 1999. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of National Wire & Stamping, Inc. at December 31, 1998 and March 30, 1999, and the results of its operations and its cash flows for the year ended December 31, 1998 and the three-month period ended March 30, 1999, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Minneapolis, Minnesota

April 14, 2000

F-56

NATIONAL WIRE & STAMPING, INC.

BALANCE SHEETS

	December 31, 1998	March 30, 1999
Assets
Current assets:
Cash	$    319,662	$    236,575
Marketable securities	599,964	—
Accounts receivable	966,776	620,244
Due from stockholder	2,194	165,463
Inventories	555,585	697,699
Prepaid expenses and other current assets	31,748	25,857
Income taxes recoverable	115,452	349,722
Current deferred tax assets	57,057	60,235
Total current assets	2,648,438	2,155,795
Property and equipment, net	998,818	818,092
Other assets:
Cash surrender value—life insurance	446,886	268,617
Deferred tax assets	253,193	—
Miscellaneous	25,375	7,918
Total other assets	725,454	276,535
Total assets	$4,372,710	$3,250,422
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$    371,242	$    330,728
Current maturities of long-term debt	10,377	—
Accrued compensation	167,878	220,667
Other accrued expenses	68,549	35,460
Total current liabilities	618,046	586,855
Long-term debt, less current maturities	106,844	—
Deferred compensation	890,709	—
Total liabilities	1,615,599	586,855
Stockholders’ equity:
Common stock, $.86 par value:
Authorized shares—200,000; Issued and outstanding shares—64,250	55,480	55,480
Paid-in capital	8,770	8,770
Retained earnings	2,650,622	2,599,317
Accumulated other comprehensive income	42,239	—
Total stockholders’ equity	2,757,111	2,663,567
Total liabilities and stockholders’ equity	$4,372,710	$3,250,422

See accompanying notes.

F-57

NATIONAL WIRE & STAMPING, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Net sales	$8,618,755			$1,636,420
Cost of sales	5,000,713			967,648
Gross profit	3,618,042			668,772
Operating expenses:
Selling, general and administrative	2,917,944			770,214
Research and development	139,105			30,179
	3,057,049			800,393
Operating income (loss)	560,993			(131,621	)
Other income (expense):
Investment income	37,472			81,713
Interest expense	(17,165	)		(3,562	)
Other income	105,566			47,258
Income (loss) before taxes	686,866			(6,212	)
Income taxes	264,325			45,093
Net income (loss)	$    422,541			$      (51,305	)

See accompanying notes.

F-58

NATIONAL WIRE & STAMPING, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock			Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Totals
	Shares	Amount
Balance at December 27, 1997	64,250	$	55,480	$	8,770	$	2,228,081		$	(1,974	)	$	2,290,357
Unrealized gain on marketable securities available for sale, net of tax	—		—		—		—			44,213			44,213
Net income for year	—		—		—		422,541			—			422,541
Balance at December 31, 1998	64,250		55,480		8,770		2,650,622			42,239			2,757,111
Unrealized loss on marketable securities available for sale, net of tax	—		—		—		—			(42,239	)		(42,239	)
Net loss for period	—		—		—		(51,305	)		—			(51,305	)
Balance at March 30, 1999	64,250	$	55,480	$	8,770	$	2,599,317		$	—		$	2,663,567

See accompanying notes.

F-59

NATIONAL WIRE & STAMPING, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31, 1998			Three Months Ended March 30, 1999
Operating activities
Net income (loss)		$422,541			$   (51,305	)
Adjustments to reconcile net income (loss) to net cash provided by (used in)      operating activities:
Depreciation		260,334			65,493
Gain on sale of property and equipment		(94,807	)		(46,038	)
Deferred income taxes		(24,573	)		277,021
Changes in operating assets and liabilities:
Accounts receivable		153,103			346,532
Due from stockholder		—			(163,269	)
Inventories		118,792			(142,114	)
Prepaid expenses and other current assets		(19,698	)		5,891
Other assets		20,989			(7,543	)
Accounts payable		173,553			(40,514	)
Accrued income taxes		(193,517	)		(234,270	)
Accrued compensation		(154,229	)		52,789
Other accrued expenses		(28,754	)		(33,089	)
Deferred compensation		108,868			(890,709	)
Net cash provided by (used in) operating activities		742,602			(861,125	)
Investing activities
(Increase) decrease in marketable securities, net		(150,487	)		530,719
Purchases of property and equipment		(421,977	)		(91,160	)
(Increase) decrease in cash surrender value—life insurance		(85,907	)		178,269
Proceeds from sale of property and equipment		177,150			277,431
Net cash (used in) provided by investing activities		(481,221	)		895,259
Financing activities
Principal payments on long-term debt		(9,505	)		(117,221	)
Net cash used in financing activities		(9,505	)		(117,221	)
Net increase (decrease) in cash		251,876			(83,087	)
Cash at beginning of period		67,786			319,662
Cash at end of period		$319,662			$236,575
Supplemental disclosures:
Interest paid		$   28,688			$      3,562
Income taxes paid		$482,415			$            —

          Noncash investing activity:

          In accordance with FAS 115, the investment in marketable securities has been adjusted to fair market value, net of taxes, with an offset to accumulated other comprehensive income in the amounts of $44,213 and $(42,239), respectively, for the periods noted above.

See accompanying notes.

F-60

NATIONAL WIRE & STAMPING, INC.

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

1.    Nature of Operations

          National Wire & Stamping, Inc. (the Company) was organized as a Colorado corporation and is principally engaged in the manufacturing of wire products, precision metal forming, surgical instruments, gaskets and assembly production for customers throughout the United States. The Company grants credit to customers throughout the nation.

2.    Summary of Significant Accounting Policies

          Cash and Cash Equivalents

          For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.

          Fiscal Year

          For 1998, the Company’s fiscal year ended on December 31 and was a period of 53 weeks.

          Inventories

          Inventories, consisting of material, labor and overhead, are valued at the lower of cost, determined by the first-in, first-out method or market.

          Property and Equipment

          Property and equipment are stated at cost. Company policy provides for capitalization of all major expenditures for improvement and for current charges to income for repair and maintenance. Depreciation and amortization are provided over the following estimated lives:

Building	31.5 years
Leasehold improvements	5 to 31.5 years
Machinery and equipment	7 years
Motor vehicles	5 years
Furniture and fixtures	5 to 7 years

          Depreciation and amortization are provided on straight-line and accelerated methods for financial statements and tax purposes.

          Income Taxes

          Income tax expense is based on pre-tax financial accounting income and includes deferred taxes for the effects of temporary differences between financial and tax accounting. The temporary difference is principally the result of accruing for the present value of deferred compensation arrangements and vacation.

          Research and Development

          Research and development costs are expensed as incurred.

F-61

NATIONAL WIRE & STAMPING, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

          Advertising

          The Company expenses non-direct response advertising as costs are incurred. The Company incurred $98,925 for the year ended December 31, 1998 and $54,496 for the three-month period ended March 30, 1999.

          Use of Estimates

          The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

          Revenue Recognition

          Revenue from sales of products are recorded upon shipment.

3.    Sale to MedSource Technologies, Inc.

          At the close of business on March 30, 1999, the stockholders of the Company sold all of their shares to MedSource Technologies, Inc. Prior to the sale, the Company sold its ownership interest in land and building to one of its stockholders, sold an automobile to the same stockholder, had the same stockholder assume (or pay off) any debt associated with the land and building and automobile, liquidated its marketable securities, cashed in certain life insurance policies and settled any deferred compensation obligations. The net balance due from the one stockholder who had acquired the land and building and automobile was collected in conjunction with payments from MedSource Technologies, Inc. to acquire the Company’s stock.

4.    Concentrations of Credit Risk

          Concentrations of credit risk with respect to trade receivables are limited due to the wide variety of customers and markets into which the Company’s products are sold. As a result, at March 30, 1999, the Company does not consider itself to have any significant concentrations of credit risk.

          The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

F-62

NATIONAL WIRE & STAMPING, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

5.    Marketable Securities

          Marketable equity securities have been categorized as available for sale and, as a result, are stated at fair value based on quoted market prices. Unrealized holding gains and losses, net of taxes, are included as a component of stockholders’ equity until realized. Realized gains and losses are computed as the difference between amortized cost and selling price. All marketable securities were liquidated in conjunction with the sale of the Company (see Note 3), and the proceeds were used to pay deferred compensation. Investment income includes a loss of $11,660 on sale of investments for the year ended December 31, 1998 and a gain of $81,713 on the sale of investment for the three-month period ended March 30, 1999. The tables below show information on the marketable securities as of December 31, 1998:

	Amortized Cost	Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 1998
Available for sale:
Common stocks	$250,301		$74,189	$          —		$324,490
Mutual fund	29,990		—	(11,946	)	18,044
Colorado Municipal Bonds	250,428		7,002	—		257,430
Total	$530,719		$81,191	$(11,946	)	$599,964

6.    Inventories

          Inventories consist of the following:

	December 31, 1998		March 30, 1999
Raw materials		$127,856	$115,171
Work in process		123,558	193,652
Finished goods		304,171	388,876
		$555,585	$697,699

7.    Property and Equipment

          Property and equipment consist of the following:

	December 31, 1998		March 30, 1999
Land	$       12,275		$                —
Building	265,440		—
Machinery and equipment	2,473,829		2,495,743
Office furniture	317,386		318,955
Autos	64,685		47,628
Leasehold improvements	206,090		258,938
	3,339,705		3,121,264
Accumulated depreciation	(2,340,887	)	(2,303,172	)
	$    998,818		$    818,092

F-63

NATIONAL WIRE & STAMPING, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

8.    Long-Term Debt

          Balances were as follows:

	December 31, 1998			March 30, 1999
Note payable to bank collateralized by a vehicle. Monthly payments of $778,      including interest at 8%		$   21,101			$—
11.5% mortgage note payable in monthly installments of $1,113.75 including      principal and interest, collateralized by land and building		96,120			—
		117,221			—
Less current maturities		(10,377	)		—
		$106,844			$—

          All debt was paid in full in conjunction with the transactions related to the sale of the Company to MedSource Technologies, Inc. (see Note 3).

9.    Line of Credit

          At March 30, 1999, the Company has a revolving line of credit from a bank in the amount of $600,000. The arrangement provides for advances on the line to the extent of 80% of accounts receivable plus 50% of raw materials and finished goods and 30% of work in process. The loan carries an interest rate at prime. There are no amounts outstanding on the line at March 30, 1999. The loan covenants require that the Company maintain a minimum net worth of $1,350,000.

10.    Deferred Compensation Plan

          During 1991, the Company implemented a deferred compensation plan for its officers and selected key employees. The plan provided for deferred bonuses based on the attainment of certain gross revenues. The plan provided for making annual payments over a ten-year period which began in 1995. The plan also provided for payments upon death or retirement. The principal cost of such plan was accrued over the period of active employment from the contract date. The expense charged to operations for such obligations amounted to $288,308 for the year ended December 31, 1998 and $191,346 for the three-month period ended March 30, 1999. Included in this plan, the Company provided a benefit consisting of annual payments of $15,000 beginning July 1, 1992 and scheduled to continue through 2017 for a past key employee. All deferred compensation obligations were settled as of March 30, 1999.

11.    Retirement Plans

          The Company’s non-contributory profit sharing plan covers substantially all employees of the Company. Contributions are made at the discretion of the Board of Directors. No contribution was made for the year ended December 31, 1998 or for the three-month period ended March 30, 1999.

          The Company implemented a 401(k) plan effective September 1, 1991. The plan provides that employees may make contributions to the plan up to a maximum of 20% of gross wages. The Company will make matching contributions to a maximum of 5% gross pay. Contributions were $35,510 for the year ended December 31, 1998 and $10,229 for the three-month period ended March 30, 1999.

F-64

NATIONAL WIRE & STAMPING, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

12.    Leased Properties

          The Company leases land and building from an entity owned by the President and former principal shareholder of the Company. The Company entered into a 14-year lease on March 30, 1999. The lease provides for the payment of taxes, insurance and maintenance by the Company. Rent charged to operations was $104,340 for the year ended December 31, 1998 and $38,993 for the three-month period ended March 30, 1999.

          Future minimum payments, by year and in the aggregate, under the noncancelable operating leases with initial or remaining terms of one year or more, consisted of the following at March 30, 1999:

	Operating Leases
1999-2013	$180,000 per year

13.    Income Taxes

          The provision for income taxes consists of the following:

	Year Ended December 31, 1998			Three Months Ended March 30, 1999
Current:
Federal income tax (benefit)		$263,918			$(228,945	)
State income tax (benefit)		24,980			(2,983	)
		288,898			(231,928	)
Deferred expense (benefit)		(24,573	)		277,021
		$264,325			$   45,093

          The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax asset and their approximate tax effect are as follows:

	December 31, 1998			March 30, 1999
Future taxable income (deductions):
Increase in marketable securities		$   27,006		$          —
Depreciation		3,274		3,414
Accrued vacation pay		(57,057	)	(56,691	)
Deferred compensation payable		(278,927	)	—
Capital losses on sale of investments		(4,546	)	—
Other		—		(6,958	)
Net deferred tax asset		$(310,250	)	$(60,235	)

14.    Major Customers

          The largest customer in the year ended December 31, 1998 accounted for 30% of sales, and its next two largest accounted for 15% and 13% of sales, respectively. The largest customer in the three months ended March 30, 1999 accounted for 31% of sales, and the next largest accounted for 11%.

F-65

REPORT OF INDEPENDENT AUDITORS

Board of Directors

MedSource Technologies, Inc.

          We have audited the accompanying balance sheet of The MicroSpring Company, Inc., as of March 30, 1999 and the related statements of operations, stockholders’ equity and cash flows for the three-month period then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

          We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The MicroSpring Company, Inc. at March 30, 1999, and the results of its operations and its cash flows for the three-month period then ended, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Minneapolis, Minnesota

October 27, 1999

F-66

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of

The MicroSpring Company, Inc.:

In our opinion, the accompanying balance sheet and the related statements of operations, stockholders’ equity and cash flows present fairly, in all material respects, the financial position of The MicroSpring Company, Inc. (the “Company”) at December 31, 1998, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above.

As discussed in Note 13, effective March 30, 1999, substantially all of the net assets of the Company were sold to MedSource Technologies, Inc.

/s/    PricewaterhouseCoopers LLP

Boston, Massachusetts

April 2, 1999

F-67

THE MICROSPRING COMPANY, INC.

BALANCE SHEETS

	December 31, 1998		March 30, 1999
Assets
Current assets:
Cash and cash equivalents	$    137,533		$    298,680
Accounts receivable, trade (net of allowance for bad debts of $20,400 in 1998                and 1999)	494,082		404,116
Inventories	898,038		1,024,339
Receivable from stockholders	126,785		201,850
Current portion of notes receivable from stockholders	2,814		—
Prepaid expenses and other current assets	51,735		55,870
Total current assets	1,710,987		1,984,855
Property and equipment, net	1,985,022		1,909,935
Notes receivable from stockholders, long-term	288,331		—
Total assets	$3,984,340		$3,894,790
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$    180,686		$    305,758
Accrued compensation	148,159		211,928
Accrued liabilities	141,669		77,449
Accrued state taxes payable	99,893		63,000
Deferred revenue	112,500		160,606
Total current liabilities	682,907		818,741
Deferred revenue	61,651		—
Convertible notes payable to stockholders	250,000		—
Stockholders’ equity:
Common stock, par value $.01 per share, 9,000,000 shares authorized, 6,677,661                issued and 6,656,221 outstanding at December 31, 1998, 8,341,342 issued and                8,319,902 outstanding at March 30, 1999	66,777		83,413
Paid-in capital	904,048		1,750,734
Retained earnings	2,164,309		1,242,116
Treasury stock, at par, 21,440 shares	(214	)	(214	)
Unearned compensation	(145,138	)	—
Total stockholders’ equity	2,989,782		3,076,049
Total liabilities and stockholders’ equity	$3,984,340		$3,894,790

See accompanying notes.

F-68

THE MICROSPRING COMPANY, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Net sales	$10,176,175			$1,791,597
Cost of sales	7,280,290			1,397,990
Gross profit	2,895,885			393,607
Operating expenses:
Sales and marketing	422,591			115,180
Research and development	1,841,172			464,121
General and administrative	1,078,889			734,151
Total operating expenses	3,342,652			1,313,452
Operating loss	(446,767	)		(919,845	)
Interest income	22,460			5,490
Interest expense	(54,433	)		(4,838	)
Loss before state taxes	(478,740	)		(919,193	)
State taxes	7,500			3,000
Net loss	$      (486,240	)		$    (922,193	)

See accompanying notes.

F-69

THE MICROSPRING COMPANY, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

	Common Stock			Paid-in Capital		Retained Earnings		Treasury Stock			Unearned Compensation			Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 1997	6,466,650		$64,881	$    761,536		$2,692,171			$(214	)		$(141,355	)		$3,377,019
Stock options exercised	40,000		400	—		—			—			—			400
Issuance of stock	122,445		1,224	59,998		—			—			—			61,222
Common stock issued in lieu of cash         payment of interest on convertible         notes	27,126		272	22,679		—			—			—			22,951
Stock options granted	—		—	59,835		—			—			(59,835	)		—
Amortization of unearned         compensation	—		—	—		—			—			56,052			56,052
Dividend distributions	—		—	—		(41,622	)		—			—			(41,622	)
Net loss	—		—	—		(486,240	)		—			—			(486,240	)
Balance at December 31, 1998	6,656,221		66,777	904,048		2,164,309			(214	)		(145,138	)		2,989,782
Stock options granted	—		—	696,102		—			—			(696,102	)		—
Stock options exercised	1,239,229		12,392	—		—			—			—			12,392
Stock options forfeited	—		—	(99,843	)	—			—			99,843			—
Common stock issued upon         conversion of convertible notes	416,666		4,166	245,834		—			—			—			250,000
Common stock issued in lieu of cash         payment of interest on convertible         notes	7,786		78	4,593		—			—			—			4,671
Amortization of unearned         compensation	—		—	—		—			—			741,397			741,397
Net loss	—		—	—		(922,193	)		—			—			(922,193	)
Balance at March 30, 1999	8,319,902		$83,413	$1,750,734		$1,242,116			$(214	)		$         —			$3,076,049

See accompanying notes.

F-70

THE MICROSPRING COMPANY, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Operating activities
Net loss	$    (486,240	)		$(922,193	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	512,309			112,079
Interest expense	20,884			4,671
Amortization of unearned compensation	56,052			741,397
Changes in operating assets and liabilities:
Accounts receivable, trade	523,102			89,966
Inventories	175,306			(126,301	)
Notes and other receivables from stockholders	1,088,098			216,080
Prepaid expenses and other current assets	26,159			(4,135	)
Accounts payable	(884,804	)		125,072
Accrued compensation	25,327			63,769
Accrued liabilities	35,067			(64,220	)
Accrued state taxes payable	73,854			(36,893	)
Deferred revenue	(6,849	)		(13,545	)
Net cash provided by operating activities	1,158,265			185,747
Investing activities
Acquisition of property and equipment	(192,907	)		(36,992	)
Net cash used in investing activities	(192,907	)		(36,992	)
Financing activities
Advances under credit agreement	5,179,882			200,000
Repayments under credit agreement	(6,172,579	)		(200,000	)
Issuance of stock	400			12,392
Net cash (used in) provided by financing activities	(992,297	)		12,392
Net (decrease) increase in cash	(26,939	)		161,147
Cash at beginning of period	164,472			137,533
Cash at end of period	$    137,533			$298,680
Supplemental disclosures:
Interest paid	$       31,906			$          167
Taxes paid	$          5,843			$            —

See accompanying notes.

F-71

THE MICROSPRING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

1.    Nature of Business

          The MicroSpring Company, Inc. (the “Company”) was incorporated on December 10, 1984. The Company develops, manufactures and distributes medical components and devices which service the cardiology market in the United States and Europe. The Company’s products are sold to major medical device manufacturers directly or through distributors.

          The Company is subject to a number of risks similar to other companies in the industry, including rapid technological change, uncertainty of market acceptance of products, uncertainty of regulatory approval, competition from substitute products and larger companies, compliance with government regulations, protection of proprietary technology, dependence on third-party manufacturers, distributors and key suppliers, product liability and dependence on key individuals.

          The Company attempts to limit its concentration of credit risk by securing financially secure customers. Management believes a loss of certain significant clients would have a material adverse effect on the Company’s business, financial condition and results of operations. During 1998, two customers accounted for approximately $6,619,000 or 65% of total sales. One customer accounted for $4,583,000 or 45% and the other for $2,036,000 or 20% of sales, respectively. During the three-month period ended March 30, 1999, two customers accounted for approximately $824,000 or 46% of total sales. One customer accounted for $573,000 or 32% and the other for $251,000 or 14% of sales, respectively.

2.    Summary of Significant Accounting Policies

          Cash and Cash Equivalents

          The Company considers all short-term investments purchased with an original maturity of three months or less at the date of acquisition to be cash equivalents.

          Inventories

          Inventories are valued using standard costs which approximate the lower of cost or market, using the first-in, first-out (FIFO) method.

          Revenue Recognition

          Sales and related cost of sales are recognized upon shipment of products.

          Property and Equipment

          Property and equipment are stated at cost. Company policy provides for capitalization of all major expenditures for improvements and for current charges to income for repair and maintenance. Depreciation has been calculated using the straight-line method over the estimated economic lives of related assets which are as follows:

Machinery and equipment	5 to 10 years
Furniture and fixtures	5 years
Computer equipment	3 years
Leasehold improvements	Remaining life of lease

F-72

THE MICROSPRING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any gain or loss is reflected in income.

Research and Development Costs

Research and development costs are expensed as incurred.

Income Taxes

The Company has elected under S Corporation rules of the Internal Revenue Code not to be taxed as a corporation. Under this election, the Company passes through to its shareholders as individual taxpayers each item of income, loss, deduction or credit. Accordingly, no federal income tax provisions have been recorded. The Company incurs corporate and composite income taxes in Massachusetts which are included in the provision for state taxes. Temporary differences between income for financial reporting and tax reporting purposes are immaterial.

Stock Option Plans

The Company continues to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employee stock options. Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS 123), requires the Company to disclose the pro forma net income or loss if the Company recognized compensation expense for options granted using a fair value method of accounting.

Pro forma information regarding net income has been determined to have no material impact on the net income of the Company for the year ended December 31, 1998 and for the three-month period ended March 30, 1999.

Management’s Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

3.    Inventories

Inventories consist of the following:

	December 31, 1998		March 30, 1999
Raw materials	$	215,609	$	162,523
Work in progress		362,351		469,173
Finished goods		320,078		392,643
	$	898,038	$	1,024,339

F-73

THE MICROSPRING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

4.    Receivables from Stockholders

          During 1997, the Company made distributions to stockholders in anticipation of those stockholders’ own individual tax liabilities which were subsequently determined to be excess payments. Accordingly, the stockholders signed notes to repay $1,076,354 of these monies to the Company. During 1998, the stockholders paid $910,761 in cash to the Company. In 1998, $41,622 of the original notes were forgiven as the stockholders were determined to have had a higher tax liability than previously estimated and this reduction in notes receivable was therefore included as a dividend distribution to those stockholders in the statement of stockholders’ equity. During the three-month period ended March 30, 1999, the balance of the receivables was received. The receivables from stockholders at March 30, 1999 includes the balances of the notes (see Note 5).

5.    Notes Receivable from Stockholders

          In 1996, the Company and a stockholder of the Company entered into a ten-year promissory note in exchange for the Company loaning the stockholder $150,000. During 1997, the amount of the note was increased to $422,048. Interest on the note accrues at 7.01% and is payable weekly. The principal is receivable in two components: $400,000 due in November 2007 and $22,048 due in weekly payments over the life of the note. The note balance outstanding was $167,185 and $241,145 at March 30, 1999 and December 31, 1998, respectively.

          In 1997, the Company and another stockholder of the Company entered into a ten-year promissory note due in March 2007 in exchange for the Company loaning the stockholder $50,000. The promissory note accrues interest at 7.01% and interest on the note is payable annually. The note balance outstanding was $34,665 and $50,000 at March 30, 1999 and December 31, 1998, respectively.

          The total balances of the notes of $201,850 was classified as receivables from stockholders at March 30, 1999. Payments of balances were received on March 31, 1999 (see Note 13).

6.    Property and Equipment

          Property and equipment consist of the following:

	December 31, 1998		March 30, 1999
Machinery and equipment	$2,178,057		$2,194,331
Furniture and fixtures	214,442		214,442
Computer equipment and software	278,414		290,047
Leasehold improvements	617,141		619,982
Construction in progress	97,822		104,066
	3,385,876		3,422,868
Less accumulated depreciation and amortization	(1,400,854	)	(1,512,933	)
Net property and equipment	$1,985,022		$1,909,935

7.    Revolving Credit Agreement

          During 1997, the Company entered into a revolving credit agreement with a bank to borrow up to $2,500,000 due September 1999. The agreement required the Company to maintain a minimum level of tangible net worth, current ratio and other financial measures. Interest is payable monthly at prime minus .5% and a quarterly commitment fee equal to .375% of the average unused commitment during the preceding quarter.

F-74

THE MICROSPRING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

          On May 8, 1998, the Company signed an amended and restated loan agreement with the bank. The amended agreement decreases the credit limit from $2,500,000 to $1,600,000 and changed the borrowing base to an asset-based formula consisting of 80% of qualified accounts receivable, up to $200,000 against eligible equipment, and the lesser of $250,000 or up to 50% of the cost or market of eligible inventory. Interest is payable monthly at prime plus .25% per annum and the note was changed to a demand note. All financial covenants were eliminated in the amended agreement.

          At March 30, 1999, the Company had no outstanding borrowings.

8.    Convertible Notes Payable to Stockholders

          During 1997, two stockholders of the Company loaned an aggregate of $250,000 to the Company with an interest rate at the prime rate based upon the Wall Street Journal. In early 1998, the notes were converted into collateralized notes due January 2000 with interest payable quarterly at the prime rate in cash or common stock. The notes were also convertible into common stock at a conversion price of $0.60 per share.

          In March 1999, the note holders converted the balance of the notes into common stock and received 416,666 shares.

9.    Lease Commitments

          The Company leases office space under noncancelable operating leases that expire through July 31, 2001. The future minimum rental payments under these leases are as follows:

Year ending March 30:
2000	$282,000
2001	268,000
2002	90,000
Total minimum future rental payments	$640,000

          Rent expense for leased facilities for the three months ended March 30, 1999 was $65,570 and for the year ended December 31, 1998 was $249,430.

10.    Stockholders’ Equity

          Capital Stock

          At December 31, 1998 and March 30, 1999, the authorized capital stock of the Company consisted of 9,000,000 shares of common stock. There were 606,292 shares of common stock reserved for issuance to key employees and consultants at December 31, 1998 and none at March 30, 1999.

          Stock Option Plans

          The Company established a new stock option plan (the “Plan”) in 1997, into which the previous plan was combined. The Plan allows for the granting of shares of common stock as either “non-qualified options” or “incentive stock options” within the meaning of Section 422A of the Internal Revenue Code. Options are granted at a price set by the Board of Directors, but in the case of an incentive stock option, shall not be less than the fair

F-75

THE MICROSPRING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

market value of the shares of stock on the date the option is granted. The vesting period of an option is at the discretion of the Board. Options expire ten years after the grant date.

          Stock option activity for the year ended December 31, 1998 and for the three-month period ended March 30, 1999 was as follows:

Option Summary	Number of Shares		Option Price Per Share
Options outstanding at December 31, 1997	492,916			$.01
Granted	101,416			.01
Exercised	(40,000	)		.01
Forfeited	(6,250	)		.01
Options outstanding at December 31, 1998	548,082			.01
Granted	869,211			.01
Exercised	(1,239,229	)		.01
Forfeited	(178,064	)		.01
Options outstanding at March 30, 1999	—			$ —

11.    Employee Savings Plan

          The Company has a noncontributory Employee Savings Plan (the “Plan”), which is administered in accordance with the provisions of Section 401k of the Internal Revenue Code. The Plan is a voluntary program in which employees who meet certain requirements elect to reduce their annual salary by up to the lesser of $10,000 or 15% and have this amount contributed to the Plan on their behalf. The Company matches 25% up to the first 6% of annual salary up to a maximum of $61,000. The Company’s contribution expense was $27,679 for the year ended 1998 and $5,917 for the three-month period ended March 30, 1999.

12.    Supplemental Cash Flow Information

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Noncash transactions:
Conversion of interest expense and accrued interest to                common stock		$22,951		$     4,671
Dividend distributions		41,622		—
Satisfaction of short-term liability by issuing common stock		61,222		—
Conversion of notes payable to common stock		—		250,000

13.    Subsequent Events

          As of the close of business on March 30, 1999, the stockholders of MicroSpring sold substantially all of the net assets of the Company to MedSource Technologies, Inc. Immediately prior to the sale, payments were received on the receivable from stockholders and notes receivable from stockholders, 458,018 of the stock options outstanding at December 31, 1998 were fully vested and exercised, an additional 781,211 of options that were granted in February and March 1999 became fully vested and were exercised, the convertible notes payable were converted to common stock, and the bank credit agreement was paid down in full and canceled. On March 31, 1999, the balances due on the notes receivable from stockholders were received in cash.

F-76

REPORT OF INDEPENDENT AUDITORS

Board of Directors

Portlyn Corporation

We have audited the accompanying balance sheets of Portlyn Corporation as of December 31, 1998 and March 30, 1999 and the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 1998 and the three-month period ended March 30, 1999. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Portlyn Corporation at December 31, 1998 and March 30, 1999, and the results of its operations and its cash flows for the year ended December 31, 1998 and the three-month period ended March 30, 1999, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Minneapolis, Minnesota

July 25, 2000

F-77

PORTLYN CORPORATION

BALANCE SHEETS

	December 31, 1998	March 30, 1999
Assets
Current assets:
Cash	$    132,168	$    187,731
Accounts receivable	608,513	433,242
Inventories	631,697	734,959
Prepaid expenses	38,742	26,426
Total current assets	1,411,120	1,382,358
Property and equipment, net	448,402	408,715
Other assets	26,082	26,676
Total assets	$1,885,604	$1,817,749
Liabilities and stockholders’ equity
Current liabilities:
Line of credit	$    350,000	$    285,000
Notes payable to officer	576,275	576,275
Obligations under capital leases	30,229	30,926
Accounts payable	112,696	177,831
Accrued compensation	108,107	129,429
Accrued liabilities	48,180	29,053
Total current liabilities	1,225,487	1,228,514
Obligations under capital leases, less current portion	82,386	74,783
Total liabilities	1,307,873	1,303,297
Stockholders’ equity:
Common stock, no par value:
Authorized shares—300; Issued and outstanding shares—262	16,910	16,910
Retained earnings	560,821	497,542
Total stockholders’ equity	577,731	514,452
Total liabilities and stockholders’ equity	$1,885,604	$1,817,749

See accompanying notes.

F-78

PORTLYN CORPORATION

STATEMENTS OF OPERATIONS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Net sales	$5,772,765			$1,179,926
Cost of sales	3,200,066			706,797
Gross profit	2,572,699			473,129
Operating expenses	2,571,587			522,410
Operating income (loss)	1,112			(49,281	)
Other income (expense):
Interest income	9,284			1,686
Interest expense	(75,226	)		(15,684	)
Other	(8,443	)		—
Net (loss)	$      (73,273	)		$      (63,279	)

See accompanying notes.

F-79

PORTLYN CORPORATION

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock			Retained Earnings		Total
	Shares		Amount
Balance at December 31, 1997		262	$16,910	$634,094		$651,004
Net loss		—	—	(73,273	)	(73,273	)
Balance at December 31, 1998		262	16,910	560,821		577,731
Net loss		—	—	(63,279	)	(63,279	)
Balance at March 30, 1999		262	$16,910	$497,542		$514,452

See accompanying notes.

F-80

PORTLYN CORPORATION

STATEMENTS OF CASH FLOWS

	Year Ended December 31, 1998			Three Months Ended March 30, 1999
Operating activities
Net loss		$   (73,273	)		$   (63,279	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		105,813			40,937
Changes in operating assets and liabilities:
Accounts receivable		577,995			175,271
Inventories		259,985			(103,262	)
Prepaid expenses		(9,079	)		12,316
Other assets		(20,557	)		(594	)
Accounts payable		(3,177	)		65,135
Accrued compensation		46,504			21,322
Accrued liabilities		705			(19,127	)
Net cash provided by operating activities		884,916			128,719
Investing activities
Purchases of property and equipment		(50,378	)		(1,250	)
Net cash used in investing activities		(50,378	)		(1,250	)
Financing activities
Line of credit (net)		50,000			(65,000	)
Note payable—officers (net)		(818,658	)		—
Payments on obligations under capital leases		(26,581	)		(6,906	)
Net cash used in financing activities		(795,239	)		(71,906	)
Net increase in cash		39,299			55,563
Cash at beginning of period		92,869			132,168
Cash at end of period		$132,168			$187,731

See accompanying notes.

F-81

PORTLYN CORPORATION

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

1.    Nature of Business

          Portlyn Corporation is engaged in the design, manufacture and marketing of medical devices and instruments on a national and international basis, through distributors as well as directly to end users.

2.    Summary of Significant Accounting Policies

          Cash and Cash Equivalents

          For purposes of the statement of cash flows, the Company considers all short-term debt instruments purchased with a maturity of three months or less to be cash equivalents.

          Inventories

          Inventories of raw materials and work-in-process are carried at the lower of cost or market on the first-in, first-out method.

          Revenue Recognition

          Sales and related cost of sales are recognized upon shipment of products.

          Property and Equipment

          Property and equipment are stated at cost. Company policy provides for capitalization of all major expenditures for improvements and for current changes to income for repair and maintenance. Depreciation is computed using accelerated methods based on the following estimated useful lives:

Transportation and equipment	5 years
Machinery and equipment	5-7 years
Office equipment	5-7 years
Improvements	15-39 years

          Use of Estimates

          The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

          Income Taxes

          The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code for the fiscal year beginning January 1, 1989. Under those provisions, the Company does not pay federal corporate income taxes on its taxable income. Instead, the shareholders are liable for individual federal income taxes on their respective shares of the Company’s taxable income.

F-82

PORTLYN CORPORATION

NOTES TO FINANCIAL STATEMENTS—(Continued)

3.    Property and Equipment

          Property and equipment consist of the following:

	December 31, 1998		March 30, 1999
Land	$       28,800		$       28,800
Building and improvements	438,291		438,291
Machinery and equipment	771,394		771,394
Office equipment	262,194		263,444
Transportation equipment	17,629		17,629
Leasehold improvements	65,000		65,000
	1,583,308		1,584,558
Accumulated depreciation	(1,134,906	)	(1,175,843	)
	$    448,402		$    408,715

4.    Line of Credit

          The Company has a $750,000 working line of credit with a variable interest rate equal to the prime rate plus one-half percent, as set by BankBoston adjusted monthly. This loan is secured by all machinery and equipment, (excluding vehicles), furniture and fixtures, now owned and hereafter acquired and the proceeds thereof, all inventory now owned and hereafter acquired and the proceeds thereof, and all accounts receivable, customer lists, general intangibles, and the contract rights arising therefrom and the proceeds thereof, now owned and hereafter acquired, and the right to use of the business trade name as indicated in the security agreement dated September 22, 1997. The Company had outstanding borrowings of $350,000 and $285,000 at December 31, 1998 and March 30, 1999, respectively.

5.    Note Payable to Officer

          The note payable to officer is an unsecured demand loan bearing interest at the rate of 5%. No payments were made after October 29, 1998 due to terms being negotiated in the transaction with MedSource Technologies (see Note 9).

6.    Obligations Under Capital Leases

          The Company has entered into three- and five-year leases for certain equipment and software with lease terms through November 1999, January 2001, January 2002 and July 2002. These obligations have been recorded in the accompanying financial statements at the present value of the future minimum lease payments, discounted at interest rates of 16.3%, 14.1%, 16.7% and 12.5%. The total capitalized cost of $156,556 less accumulated depreciation of $80,200 is included in property and equipment at March 30, 1999.

F-83

PORTLYN CORPORATION

NOTES TO FINANCIAL STATEMENTS—(Continued)

          Future minimum lease payments under these capital leases and the net present value of the future minimum lease payments as of March 30, 1999 are as follow:

Period ending December 31:
1999	$    32,289
2000	42,194
2001	35,788
2002	18,900
Total future minimum lease payments	129,171
Less amount representing interest	(23,462	)
Present value of future minimum lease payments	105,709
Less current portion	(30,926	)
	$    74,783

7.    Lease Commitments

          The Company is (or was) a party to various leases for manufacturing space, office space, equipment and vehicles. The following is a schedule of minimum future rental expenses on leases in effect as of March 30, 1999, including the lease on the new building which began in July 2000:

Period ending December 31:
1999	$       21,664
2000	181,503
2001	396,006
2002	396,006
2003	396,006
Thereafter	5,035,357

          Total rent expenses charged to operations were $75,775 for the year ended December 31, 1998 and $19,435 for the three-month period ended March 30, 1999.

8.    Retirement Plan

          As of January 1995, the Company implemented a 401(k) Salary Deferral Plan whereby eligible employees—those who have attained the age of 21 and have been employed by the Company for at least one year—may elect to defer from 1% to 15% of their salary. The Company elected to make a discretionary match of 50% of up to 6% of each employee’s deferral and the amount charged to operations was $34,860 for the year ended December 31, 1998 and $11,297 for the three-month period ended March 30, 1999.

9.    Subsequent Event

          As of the close of business on March 30, 1999, the stockholders of Portlyn Corporation sold substantially all of the assets of the Company to MedSource Technologies, Inc. MedSource Technologies, Inc. also assumed all liabilities on the balance sheet except for the $576,275 balance of notes payable to officer and $150,000 of the balance borrowed on the line of credit. The entire balance of the borrowings outstanding on the line of credit was paid in full in the acquisition transaction but the $150,000 (balance in excess of $135,000) was offset against the proceeds received by the stockholders.

F-84

REPORT OF INDEPENDENT AUDITORS

Board of Directors

Texcel, Inc.

          We have audited the accompanying balance sheets of Texcel, Inc. as of December 31, 1998 and March 30, 1999, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 1998 and the three-month period ended March 30, 1999. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

          We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Texcel, Inc. at December 31, 1998 and March 30, 1999, and the results of its operations and its cash flows for the year ended December 31, 1998, and the three-month period ended March 30, 1999, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Minneapolis, Minnesota

June 13, 2000

F-85

TEXCEL, INC.

BALANCE SHEETS

	December 31, 1998	March 30, 1999
Assets
Current assets:
Cash	$       1,247	$   189,943
Accounts receivable, net	1,325,135	1,211,068
Loan receivable from related party	48,941	—
Inventories	233,529	149,233
Recoverable income taxes	3,923	6,384
Prepaid expenses	27,106	21,723
Total current assets	1,639,881	1,578,351
Property and equipment, net	1,572,239	1,715,304
Deposits	66,156	69,653
Total assets	$3,278,276	$3,363,308
Liabilities and stockholders’ equity
Current liabilities:
Line of credit	$   128,695	$   440,000
Note payable—officer	103,789	—
Notes payable, current portion	70,356	127,499
Obligations under capital leases, current portion	23,989	24,778
Accounts payable	457,691	487,284
Accrued compensation	27,588	45,020
Dividends payable	—	189,942
Accrued liabilities	6,141	14,181
Total current liabilities	818,249	1,328,704
Notes payable, less current portion	386,391	711,660
Obligations under capital leases, less current portion	64,515	58,017
Total liabilities	1,269,155	2,098,381
Stockholders’ equity:
Common stock, Class A	7,500	7,500
Common stock, Class B	67,500	67,500
Retained earnings	1,934,121	1,189,927
Total stockholders’ equity	2,009,121	1,264,927
Total liabilities and stockholders’ equity	$3,278,276	$3,363,308

See accompanying notes.

F-86

TEXCEL, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Net sales	$6,184,002			$2,044,662
Cost of sales	3,888,727			1,103,881
Gross profit	2,295,275			940,781
Operating expenses:
Selling	208,836			61,114
Research and development	27,544			55,378
General and administrative	715,699			153,777
	952,079			270,269
Operating income	1,343,196			670,512
Other income (expense):
Interest expense	(75,138	)		(14,751	)
Interest income	8,219			4,029
Other	(833	)		—
Income before taxes	1,275,444			659,790
Taxes	15,774			14,042
Net income	$1,259,670			$   645,748

See accompanying notes.

F-87

TEXCEL, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

	Class A Common Stock				Class B Common Stock			Retained Earnings			Total Stockholders’ Equity
	Shares	Amount			Shares	Amount
Balance at December 31, 1997	1,000	$	75,000		—	$	—	$	674,451		$	749,451
Issuance of Class B common stock	—		(67,500	)	9,000		67,500		—			—
Net income	—		—		—		—		1,259,670			1,259,670
Balance at December 31, 1998	1,000		7,500		9,000		67,500		1,934,121			2,009,121
Dividends	—		—		—		—		(1,389,942	)		(1,389,942	)
Net income	—		—		—		—		645,748			645,748
Balance at March 30, 1999	1,000	$	7,500		9,000	$	67,500	$	1,189,927		$	1,264,927

See accompanying notes.

F-88

TEXCEL, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Operating activities
Net income	$1,259,670		$645,748
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	213,601		69,803
Changes in operating assets and liabilities:
Accounts receivable	(420,424	)	114,067
Loan receivable	16,585		—
Inventories	(67,238	)	84,296
Recoverable income taxes	(3,923	)	(2,461	)
Prepaid expenses	(7,021	)	5,383
Accounts payable	32,716		29,593
Accrued compensation	10,483		17,432
Accrued liabilities	(216,392	)	8,040
Net cash provided by operating activities	818,057		971,901
Investing activities
Acquisition of property and equipment	(695,299	)	(212,868	)
Deposits	(50,237	)	(3,497	)
Net cash used in investing activities	(745,536	)	(216,365	)
Financing activities
Line of credit (net)	88,695		311,305
Note payable to officer (net)	(164,379	)	(54,848	)
Proceeds from notes payable	—		400,000
Payments on notes payable	(70,355	)	(17,588	)
Payments on obligations under capital leases	(30,096	)	(5,709	)
Payment of dividends	—		(1,200,000)
Net cash used in financing activities	(176,135	)	(566,840	)
Net (decrease) increase in cash	(103,614	)	188,696
Cash at beginning of period	104,861		1,247
Cash at end of period	$       1,247		$189,943

See accompanying notes.

F-89

TEXCEL, INC.

NOTES TO FINANCIAL STATEMENTS

March 30, 1999

1.    Nature of Business

          The Company provides laser-based manufacturing services from its facility in East Longmeadow, Massachusetts. These services include globe-box hermetic sealing (primarily in the biomedical market) as well as laser marking and fiber-based low power laser welding. The Company’s services are sold on a made-to-order job basis. In March 1997, the Company achieved and has continued to maintain ISO9002 certification.

2.    Summary of Significant Accounting Policies

          Inventories

          Inventories are valued at the lower of cost or market value. Cost is determined by specific identification of raw material job costs and standard costing of labor and overhead for work in process.

          Revenue Recognition

          Sales and related cost of sales are recognized upon shipment of products.

          Property and Equipment

          Property and equipment are stated at cost. Company policy provides for capitalization of all major expenditures for improvements and for current charges to income for repair and maintenance.

          Depreciation

          Depreciation, including amortization of assets recorded under capital leases, is computed by using the straight-line method for financial reporting purposes and accelerated cost recovery method for federal and state income tax purposes over the estimated economic lives of related assets which are as follows:

Machinery and equipment	4 to 7 years
Tools and fixtures	5 to 7 years
Furniture and equipment	5 to 7 years
Automotive equipment	5 years
Leasehold improvements	Remaining life of lease

          Income Taxes

          Effective January 1, 1998, the Company qualified as an S corporation. In anticipation of this acceptance, all remaining deferred tax assets were written off and included in the current tax expense for the year ended December 31, 1997. For the year ended December 31, 1998 and the three-month period ended March 30, 1999, the tax expense represents state taxes only.

          Management’s Use of Estimates

          The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-90

TEXCEL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

3.    Property and Equipment

          Property and equipment are summarized by major classifications as follows:

	December 31, 1998		March 30, 1999
Machinery and equipment	$1,906,934		$2,019,522
Tools and fixtures	87,044		90,075
Furniture and equipment	300,735		333,183
Automotive equipment	22,085		22,085
Leasehold improvements	58,164		110,739
	2,374,962		2,575,604
Less accumulated depreciation and amortization	(925,325	)	(991,643	)
	1,449,637		1,583,961
Construction in process	122,602		131,343
	$1,572,239		$1,715,304

          In 1994, the Company was acquired in a transaction qualifying as a purchase under APB 16. Fixed assets were accordingly written down from cost by $566,270 to properly record the stock purchase price less than book value at that time. This amount has been allocated across the various fixed asset classifications and is being amortized by an adjustment to book depreciation over a period of seven years.

4.    Line of Credit

          The Company has a line of credit agreement dated June 1996 with a bank providing $250,000 of funds due on demand and bearing interest at the prime rate. The line is secured by a first priority security interest in all business assets.

          On March 25, 1999, the Company obtained an additional $500,000 credit line with the same bank. This extended line is due on demand and bears interest at a rate of 7.75%.

          The balances outstanding of $440,000 at March 30, 1999 were paid in full in conjunction with the sale of the Company’s stock to MedSource Technologies (see Note 12).

F-91

TEXCEL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

5.    Long-Term Debt

          Long-term notes payable consists of the following:

	December 31, 1998			March 30, 1999
Note payable to Springfield Institute for Savings (SIS) dated March 12,      1999 in the original amount of $400,000 with a fixed interest rate of      8.20% due in 84 equal monthly principal payments plus interest. Due      March 12, 2006, secured by substantially all assets of the Company		$         —		$400,000
Note payable to SIS dated June 26, 1996 in the original amount of $500,000      with a fixed interest rate at 9.00%. Note bears interest only until      December 26, 1996; thereafter, 114 equal monthly principal installments      plus interest. Due July 26, 2006, secured by substantially all assets of the      Company		394,737		381,580
Note payable to SIS dated June 6, 1996 in the original amount of $88,596      with a fixed interest rate at 9.10% due June 6, 2002, secured by laser      marking equipment		62,010		57,579
		456,747		839,159
Less current maturities		(70,356	)	(127,499	)
		$386,391		$711,660

          The notes payable were paid in full in conjunction with the sale of the Company to MedSource Technologies, Inc. (see Note 12).

6.    Leases

          Operating Lease

          The Company leases its manufacturing facility under a 20-year operating lease expiring June 19, 2017. Future minimum lease payments under this operating lease are $154,000 per year.

          Capital Leases

          The Company leases various equipment and software under capital leases. Future payments under the capital leases are as follows:

Year ending March 30:
2000	$  33,794
2001	32,494
2002	20,078
2003	11,873
2004	4,947
	103,186
Less amount representing interest	(20,391	)
	82,795
Less current portion	(24,778	)
Long-term capital lease obligations	$  58,017

F-92

TEXCEL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

7.    Income Taxes

          The provision for income taxes consists of the following:

	Year Ended December 31, 1998		Three Months Ended March 30, 1999
Current taxes		$15,774		$14,042

          The Company has historically conformed to the requirements of the Financial Accounting Standards Board and has recorded deferred tax assets and liabilities as appropriate. With the election of S corporation status effective January 1, 1998, no deferred tax assets or liabilities are recognized.

8.    Stockholders’ Equity

          On February 3, 1998, the number of issued shares of common stock was increased from 1,000 to 10,000 shares, and 1,000 shares of Class A Common stock and 9,000 shares of Class B Common stock were issued to replace the existing shares outstanding. The total authorized shares include 1,500 Class A and 15,000 Class B. Dividend and liquidation rights of both stock classes are identical. Class B shareholders are not entitled to voting rights by virtue of their ownership. Stock transfer restrictions are such that first the Corporation, and then the remaining shareholders shall have the right of first refusal on such proposed transfer.

          The Company declared dividends totaling $1,389,942 during the three-month period ended March 30, 1999, of which $1,200,000 was paid by March 30, 1999.

9.    Related Party Transactions

          Balances to/from related parties are as follows:

	December 31, 1998		March 30, 1999
Loan receivable—BMD Real Estate, LLC		$  48,941		$—
Note payable to officer		103,789		—

          Interest expense is charged on the note payable to officer at the Applicable Federal Rate, as published by the Treasury Department. Interest related to this note was $10,931 for the year ended December 31, 1998 and $1,373 for the three-month period ended March 30, 1999.

          On June 19, 1997, the Company moved to a newly constructed 17,400-square-foot facility, which it leases from a related party, BMD Real Estate, LLC. The note receivable from BMD arose from various construction period expenses paid for by Texcel, Inc. At March 30, 1999, the balance of the loan receivable from BMD Real Estate, LLC was assumed by the officer/shareholder of the Company in partial payment of the note payable balance. The remaining note payable balance was paid in cash.

10.    Other

          A material part of the Company’s business is dependent upon a few customers, the loss of any one of whom would have a materially adverse effect on the Company. One customer accounted for 42% and 73% of the Company’s revenues for the year ended December 31, 1998 and for the three-month period ended March 30,

F-93

TEXCEL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

1999, respectively. Another customer accounted for 20% of the Company’s revenues for the years ended December 31, 1998.

11.    Defined Contribution Plan

          The Company sponsors a 401(k) retirement plan. All employees are eligible subject to minimum age and service requirements. The Company makes a matching contribution equal to 25% of the first 4% of compensation contributed by an employee. Employer contributions are vested over a three-year schedule. The Company contributed $6,432 to the plan for the year ended December 31, 1998 and $1,880 for the three-month period ended March 30, 1999

12.    Subsequent Event

          As of the close of business on March 30, 1999, the stockholders of Texcel, Inc. sold all of their shares to MedSource Technologies, Inc. In conjunction with the sale of stock to MedSource, MedSource paid off the balances outstanding on the line of credit (see Note 4) and notes payable (see Note 5).

F-94

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 13.    Other Expenses of Issuance and Distribution.

The following table sets forth the expenses, other than underwriting discounts and commissions, in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the registrant.

Securities and Exchange Commission registration fee	$	32,982
NASD filing fee		14,300
Nasdaq listing fees		95,000
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent fees		*
Printing and engraving expenses		*
Miscellaneous		*
Total	$

* To be supplied by amendment.

Item 14.    Indemnification of Directors, Officers, Employees and Agents.

Section 145 of the General Corporation Law of Delaware provides that directors, officers, employees or agents of Delaware corporations are entitled, under certain circumstances, to be indemnified against expenses (including attorneys’ fees) and other liabilities actually and reasonably incurred by them in connection with any suit brought against them in their capacity as a director, officer, employee or agent, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. Section 145 also provides that directors, officers, employees and agents may also be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with a derivative suit bought against them in their capacity as a director, officer, employee or agent, as the case may be, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation.

Article 6 of the registrant’s certificate of incorporation (Exhibit 3.1) provides that the registrant shall indemnify any and all persons whom it shall have power to indemnify to the fullest extent permitted by the General Corporation Law of Delaware.

Article V of the registrant’s amended and restated bylaws (Exhibit 3.2) provides that any person who was or is made a party or is threatened to be made a party to or is involved in any pending, threatened, or completed civil, criminal, or administrative action, suit, or proceeding and any appeal therein and any inquiry or investigation in connection therewith or which could lead thereto to the fullest extent permitted by the laws of the state of Delaware, as the same exist or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the registrant to provide broader indemnification rights than said laws permitted prior to such amendment).

II-1

Section 8  of the Underwriting Agreement (Exhibit 1.1) provides for indemnification by the underwriters of directors, officers and controlling persons of the registrant for certain liabilities, including certain liabilities under the Securities Act of 1933, under certain circumstances.

The registrant maintains a directors and officers liability insurance policy with             . The policy insures the directors and officers of the registrant against loss arising from certain claims made against such directors or officers by reason of certain wrongful acts. The policy provides combined limit of liability of $           per policy year for both directors’ and officers’ liability coverage at an annual premium of $           .

Item 15.    Recent Sales of Unregistered Securities.

The following is a description of the sale of unregistered securities for the last three years (all share and per share amounts of common stock have been adjusted to reflect a 10-for-1 common stock split effected on January 17, 2000):

(a) In connection with the formation of the registrant in March 1999, the registrant issued for cash an aggregate of 4,023,000 shares of common stock to, resulting in aggregate gross proceeds to the registrant of $2.0 million. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(b) On March 30, 1999, the registrant paid cash and issued an aggregate of 425,000 shares of common stock and an aggregate of 37,440 shares of Series A preferred stock in connection with the acquisition by the registrant of the businesses of Hayden Precision Industries, Inc., Kelco Industries, Inc., The MicroSpring Company, Inc., National Wire & Stamping, Inc., Portlyn Corp. and Texcel, Inc. The registrant received assets valued at approximately $107.3 million in the aggregate in connection with the acquisition of these businesses. Each share of Series A preferred stock is presently convertible into 50 shares of the registrant’s common stock. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(c) On March 30, 1999, the registrant issued for cash an aggregate of 300,000 shares of Series B preferred stock, resulting in aggregate gross proceeds to the registrant $22.0 million. Each share of Series B preferred stock is presently convertible into 10 shares of its common stock. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(d) On March 30, 1999, MedSource Technologies, LLC, a wholly-owned subsidiary of the registrant, issued for cash an aggregate of $20.0 million of its senior subordinated notes and the registrant issued for cash an aggregate of 65,000 shares of its Series Z preferred stock, resulting in aggregate gross proceeds to the registrant and its subsidiary of $20.0 million. Each share of Series Z preferred stock is convertible into 10 shares of its common stock. The registrant and its subsidiary issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(e) On March 30, 1999, the registrant issued for cash an aggregate of 930 shares of Series A preferred stock to four of its employees, resulting in aggregate gross proceeds to the registrant $0.9 million. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(f) On May 14, 1999, the registrant issued for cash an aggregate of 32,728 shares of Series B preferred stock to one accredited investor, resulting in aggregate gross proceeds to the registrant $2.4 million. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

II-2

(g) On January 11, 2000, the registrant paid cash and issued an aggregate of 50,000 shares of common stock to one accredited investor in connection with the acquisition by the registrant of the business of Tenax Corporation. The registrant received assets valued at approximately $8.8 million in connection with the acquisition of this business. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(h) On February 1, 2000, the registrant paid cash and issued an aggregate of 236,950 shares of common stock to two accredited investors in connection with the acquisition by the registrant of the business of Apex Engineering, Inc. The registrant received assets valued at approximately $4.1 million in connection with the acquisition of this business. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(i) On May 1, 2000, the registrant paid cash and issued an aggregate of 500,000 shares of common stock to two accredited investors in connection with the acquisition by the registrant of the business of Thermat Precision Technology, Inc. The registrant received assets valued at approximately $8.5 million in connection with the acquisition of this business. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(j) On June 20, 2000, the registrant issued an aggregate of 500 shares of common stock to a consultant in exchange for services previously rendered. The registrant issued these securities in reliance on the exemption from registration provided by Rule 701 as transactions pursuant to compensatory benefit plans or contracts relating to compensation.

(k) On October 25, 2000, the registrant issued an aggregate of 40,000 shares of Series C preferred stock to eight accredited investors, resulting in aggregate gross proceeds to the registrant $40.0 million. In the transaction, the registrant paid to a placement agent a cash fee of $2.1 million and issued the placement agent the warrant referred to in item (o) below. Each share of Series C preferred stock converts in the manner described in the second paragraph after the table under the caption “Summary—The Offering” on page of the prospectus included as part of this registration statement. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(l) On December 29, 2000, in connection with the acquisition by the registrant of the business of ACT Medical, Inc., the registrant paid cash and issued an aggregate of 33,423  shares of Series D preferred stock. The registrant received assets valued at approximately $33.7 million in connection with the acquisition of this business. Each share of Series D preferred stock is presently convertible into 50 shares of the registrant’s common stock. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(m) On December 29, 2000, the registrant granted rollover options to purchase an aggregate of 6,920 shares of its Series D preferred stock to certain individuals who became employees of the registrant following its acquisition of ACT Medical at exercise prices ranging from $169.70 to $1,000.00 per share. The registrant granted each of these options pursuant to the ACT Medical stock plan, which was assumed by the registrant in connection with the acquisition of Act Medical. The registrant received no proceeds from these issuances. The registrant issued these securities in reliance on the exemption from registration provided by Rule 701 as transactions pursuant to compensatory benefit plans or contracts relating to compensation.

(n) On February 27, 2001, the registrant issued a warrant to purchase an aggregate of 525 shares of Series C preferred stock for services previously rendered as a placement agent (referred to in item (k) above). The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

II-3

(o) On June 22, 2001, the registrant issued an aggregate of 300 shares of Series C preferred stock to one accredited investor, resulting in aggregate gross proceeds to the registrant $0.3 million. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(p) On December 31, 2001, the registrant issued for cash an aggregate of 6,000 Series E preferred stock and warrants to purchase an aggregate of 200,000 shares of common stock, resulting in aggregate gross proceeds to the registrant of $6.0 million. The registrant used the proceeds of the issuance to finance the acquisition of HV Technologies. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(q) On January 4, 2002, the registrant paid cash and issued an aggregate of 824,222 shares of common stock and 4,000 shares of Series F preferred stock in connection with the acquisition by the registrant of the business of HV Technologies, Inc. The registrant received assets valued at approximately $24.3 million in connection with the acquisition of this business. The registrant issued these securities in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933 as transactions not involving a public offering and Rule 506 thereunder.

(r) Since March 30, 1999, the registrant has granted options to purchase an aggregate of 3,705,050 shares of its common stock to its employees and directors at exercise prices ranging from $12 to $20 per share. The registrant granted each of these options pursuant to its 1999 stock plan. The registrant received no proceeds from these issuances. The registrant issued these securities in reliance on the exemption from registration provided by Rule 701 as transactions pursuant to compensatory benefit plans or contracts relating to compensation.

(s) Since August 21, 2000, the registrant has issued 20,708 shares of common stock upon exercise of options granted under its 1999 stock plan for total proceeds of approximately $288,992. The registrant issued these securities in reliance on the exemption from registration provided by Rule 701 as transactions pursuant to compensatory benefit plans or contracts relating to compensation.

Item 16.    Exhibits and Financial Statement Schedules.

(a) Exhibits

	Exhibit Number	Description
*	1.1	Form of Underwriting Agreement
*	3.1	Form of registrant’s restated certificate of incorporation
*	3.2	Form of registrant’s amended and restated bylaws
*	5.1	Opinion of Jenkens & Gilchrist Parker Chapin LLP as to the legality of the securities being offered
	10.1	Registration Rights Agreement dated as of March 30, 1999 among the registrant, William J. Kidd, Carla G. Kidd, Edward R. Mandell, as Trustee under the Catherine M. Kidd Trust, Edward R. Mandell, as Trustee under the Cara E. Kidd Trust, Edward R. Mandell, as Trustee under the Thomas C. Kidd Trust, Clarice E. Webb, John P. Neafsey, Richard J. Effress, Andrew D. Lipman, Adam D. Lehrhoff, John C. Hertig, William Altieri, Portlyn Corporation, Kelco Industries, Inc., The MicroSpring Company, Inc., Laurence S. Derose Trust, BMD Irrevocable Trust of 1998, Jeffrey L. Derose Irrevocable Trust, Kevin L. Derose Irrevocable Trust, W.N. Rushwood, Inc. d/b/a Hayden Precision Industries, Peter J. Neidecker, Peter J. Neidecker Limited Partnership, Peter C. Neidecker Irrevocable Trust, Sally N. Morris and Sylvia N. Coors
	10.2	Registration Rights Agreement dated as of March 30, 1999 among the registrant, William J. Kidd, Carla G. Kidd, Edward R. Mandell, as Trustee under the Catherine M. Kidd Trust, Edward R. Mandell, as Trustee under the Cara E. Kidd Trust, Edward R. Mandell, as Trustee under the Thomas C. Kidd Trust, Clarice E. Webb, John P. Neafsey, Richard J. Effress, Andrew D. Lipman, Adam D. Lehrhoff, John C. Hertig, William Altieri, J.H. Whitney Mezzanine Fund, L.P., Whitney Strategic Partners, III, L.P., J.H. Whitney III, L.P. and German American Capital Corporation

II-4

Exhibit Number	Description
10.3	Registration Rights Agreement dated as of May 14, 1999 between the registrant and IndoSuez MST Partners
10.4	Registration Rights Agreement dated as of May 15, 2000 among the registrant, Karl F. Hens and Thomas J. Roche
10.5	Registration Rights Agreement dated as of January 31, 2000 among the registrant, Donald R. Rochelo and Donna L. Rochelo
10.6	Registration Rights Agreement dated as of October 25, 2000 among the registrant, The 1818 Fund III, L.P., William J. Kidd, Carla G. Kidd, Edward R. Mandell, as trustee under the William J. Kidd Grantor Trust, Richard J. Effress, Andrew D. Lipman, John W. Galiardo and Manire Limited Partnership
10.7	Registration Rights Agreement dated as of December 29, 2000 among the registrant and each of the former stockholders of ACT Medical, Inc.
10.8	Registration Rights Agreement dated as of February 27, 2001 between the registrant and Thomas Weisel Partners LLC
10.9	Registration Rights Agreement dated as of December 31, 2001 among the registrant and each of the investors in its Series E Preferred Stock
10.10	Registration Rights Agreement dated as of January 4, 2002 among the registrant and each of the former stockholders of HV Technologies, Inc.
10.11	Form of 1999 Stock Plan of the registrant (as amended and restated through December 14, 2001)
*10.12	Form of option contract between the registrant and its officers
10.13	Form of option contract between the registrant and its directors
10.14	Omnibus Stock Plan of ACT Medical, Inc. (as amended and restated through April 4, 2000)
10.15	2001 Employee Stock Purchase Plan of the registrant
*10.16	Employment agreement dated as of August 8, 2000 between the registrant and Richard J. Effress.
*10.17	Employment agreement dated as of April 1, 1999 between the registrant and James Drill
*10.18	Employment agreement between the registrant and William Ellerkamp.
*10.19	Employment agreement dated as of April 1, 1999 between the registrant and Ralph Polumbo
*10.20	Employment agreement between the registrant and Joseph J. Caffarelli
*10.21	Employment agreement between the registrant and Rick McWhorter
*21.1	List of Subsidiaries
23.1	Consent of Ernst & Young LLP
23.2	Consent of Bertram, Vallez, Kaplan & Talbot, Ltd.
23.3	Consent of James F. Yochum, CPA
23.4	Consent of PricewaterhouseCoopers LLP
23.5	Consent of Grant Thornton, LLP
*23.6	Consent of Jenkens & Gilchrist Parker Chapin LLP (included in their opinion filed as Exhibit 5.1)
24.1	Power of Attorney (see page II-7) )

* To be filed by amendment.

(b)    Financial Statement Schedules

Schedule II — Valuation and Qualifying Accounts — MedSource Technologies, Inc.

Schedule II — Valuation and Qualifying Accounts — Kelco Industries, Inc.

Schedule II — Valuation and Qualifying Accounts — The MicroSpring Company, Inc.

Schedule II — Valuation and Qualifying Accounts — Texcel, Inc.

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and are therefore omitted.

Item 17.    Undertakings.

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as requested by the underwriters to permit prompt delivery to each purchaser.

II-5

          The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

          Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 16th day of January, 2002.

MEDSOURCE TECHNOLOGIES, INC.

By:                     /s/    Richard J. Effress

Richard J. Effress

Chairman

POWER OF ATTORNEY

The undersigned directors and officers of MedSource Technologies, Inc. hereby constitute and appoint Richard J. Effress and Joseph J. Caffarelli and each of them, with full power to act without the other and with full power of substitution and resubstitution, our true and lawful attorneys-in-fact with full power to execute in our name and behalf in the capacities indicated below any and all amendments (including post-effective amendments and amendments thereto) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933) and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission and hereby ratify and confirm each and every act and thing that such attorneys-in-fact, or any of them, or their substitutes, shall lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.

Signatures	Title	Date
/s/    Richard J. Effress Richard J. Effress	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)	January 16, 2002
/s/    Joseph J. Caffarelli Joseph J. Caffarelli	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	January 16, 2002
/s/    Joseph Ciffolillo Joseph Ciffolillo	Director	January 16, 2002
/s/    John Galiardo John Galiardo	Director	January 16, 2002
/s/    Wayne Kelly Wayne Kelly	Director	January 16, 2002
/s/    William J. Kidd William J. Kidd	Director	January 16, 2002
/s/    T. Michael Long T. Michael Long	Director	January 16, 2002
/s/    Ross Manire Ross Manire	Director	January 16, 2002

II-7

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

MEDSOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES

(In 000’s)

COL. A	COL. B		COL. C			COL. D			COL. E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts—Describe	Deductions—Describe			Balance at End of Period
Allowance for doubtful accounts:
Three-months ended July 3, 1999	$	0	$	58	191				$	249
Year ended July 1, 2000		249		62	116					427
Year ended June 30, 2001		427		101	295	$	(227	)		596

Charged to Other Accounts represents allowances from acquired companies.

Deductions were for write-offs against the allowance.

S-1

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

KELCO INDUSTRIES, INC.

(In 000’s)

COL. A	COL. B		COL. C			COL. D			COL. E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts—Describe	Deductions—Describe			Balance at End of Period
Allowance for doubtful accounts:
Period ended March 30, 1999	$	0	$	63		$	(2	)	$	61

Deductions were for write-offs against the allowance.

S-2

Report of Independent Accounts on

Financial Statement Schedule

To the Board of Directors and Stockholders of

The MicroSpring Company, Inc.

Our audit of the financial statements of The MicroSpring Company, Inc. referred to in our report dated April 2, 1999 appearing in the Registration Statement on Form S-1 of MedSource Technologies, Inc. also included an audit of the financial statement schedule listed in Item 16(b) of this Registration Statement. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related financial statements.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

April 2, 1999

S-3

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

THE MICROSPRING COMPANY, INC.

(In 000’s)

COL. A	COL. B		COL. C			COL. D			COL. E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts—Describe	Deductions—Describe			Balance at End of Period
Allowance for doubtful accounts:
Year ended December 31, 1998	$	27				$	(7	)	$	20
Three-months ended March 30, 1999		20								20
Allowance for sales returns:
Year ended December 31, 1998		136	$	164						300
Three-months ended March 30, 1999	$	300				$	(250	)	$	50

Deductions were for write-offs against the allowances.

S-4

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

TEXCEL, INC.

(In 000’s)

COL. A	COL. B		COL. C			COL. D			COL. E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts—Describe	Deductions—Describe			Balance at End of Period
Allowance for doubtful accounts:
Year ended December 31, 1998	$	41	$	43		$	(24	)	$	60
Three-months ended March 30, 1999	$	60							$	60

Deductions were for write-offs against the allowance.

S-5

EXHIBIT INDEX

	Exhibit Number	Description
*	1.1	Form of Underwriting Agreement
*	3.1	Form of registrant’s restated certificate of incorporation
*	3.2	Form of registrant’s amended and restated bylaws
*	5.1	Opinion of Jenkens & Gilchrist Parker Chapin LLP as to the legality of the securities being offered
	10.1	Registration Rights Agreement dated as of March 30, 1999 among the registrant, William J. Kidd, Carla G. Kidd, Edward R. Mandell, as Trustee under the Catherine M. Kidd Trust, Edward R. Mandell, as Trustee under the Cara E. Kidd Trust, Edward R. Mandell, as Trustee under the Thomas C. Kidd Trust, Clarice E. Webb, John P. Neafsey, Richard J. Effress, Andrew D. Lipman, Adam D. Lehrhoff, John C. Hertig, William Altieri, Portlyn Corporation, Kelco Industries, Inc., The MicroSpring Company, Inc., Laurence S. Derose Trust, BMD Irrevocable Trust of 1998, Jeffrey L. Derose Irrevocable Trust, Kevin L. Derose Irrevocable Trust, W.N. Rushwood, Inc. d/b/a Hayden Precision Industries, Peter J. Neidecker, Peter J. Neidecker Limited Partnership, Peter C. Neidecker Irrevocable Trust, Sally N. Morris and Sylvia N. Coors
	10.2	Registration Rights Agreement dated as of March 30, 1999 among the registrant, William J. Kidd, Carla G. Kidd, Edward R. Mandell, as Trustee under the Catherine M. Kidd Trust, Edward R. Mandell, as Trustee under the Cara E. Kidd Trust, Edward R. Mandell, as Trustee under the Thomas C. Kidd Trust, Clarice E. Webb, John P. Neafsey, Richard J. Effress, Andrew D. Lipman, Adam D. Lehrhoff, John C. Hertig, William Altieri, J.H. Whitney Mezzanine Fund, L.P., Whitney Strategic Partners, III, L.P., J.H. Whitney III, L.P. and German American Capital Corporation

10.3	Registration Rights Agreement dated as of May 14, 1999 between the registrant and IndoSuez MST Partners
10.4	Registration Rights Agreement dated as of May 15, 2000 among the registrant, Karl F. Hens and Thomas J. Roche
10.5	Registration Rights Agreement dated as of January 31, 2000 among the registrant, Donald R. Rochelo and Donna L. Rochelo
10.6	Registration Rights Agreement dated as of October 25, 2000 among the registrant, The 1818 Fund III, L.P., William J. Kidd, Carla G. Kidd, Edward R. Mandell, as trustee under the William J. Kidd Grantor Trust, Richard J. Effress, Andrew D. Lipman, John W. Galiardo and Manire Limited Partnership
10.7	Registration Rights Agreement dated as of December 29, 2000 among the registrant and each of the former stockholders of ACT Medical, Inc.
10.8	Registration Rights Agreement dated as of February 27, 2001 between the registrant and Thomas Weisel Partners LLC
10.9	Registration Rights Agreement dated as of December 31, 2001 among the registrant and each of the investors in its Series E Preferred Stock
10.10	Registration Rights Agreement dated as of January 4, 2002 among the registrant and each of the former stockholders of HV Technologies, Inc.
10.11	Form of 1999 Stock Plan of the registrant (as amended and restated through December 14, 2001)
*10.12	Form of option contract between the registrant and its officers
10.13	Form of option contract between the registrant and its directors
10.14	Omnibus Stock Plan of ACT Medical, Inc. (as amended and restated through April 4, 2000)
10.15	2001 Employee Stock Purchase Plan of the registrant
*10.16	Employment agreement dated as of August 8, 2000 between the registrant and Richard J. Effress.
*10.17	Employment agreement dated as of April 1, 1999 between the registrant and James Drill
*10.18	Employment agreement between the registrant and William Ellerkamp.
*10.19	Employment agreement dated as of April 1, 1999 between the registrant and Ralph Polumbo
*10.20	Employment agreement between the registrant and Joseph J. Caffarelli
*10.21	Employment agreement between the registrant and Rick McWhorter
*21.1	List of Subsidiaries
23.1	Consent of Ernst & Young LLP
23.2	Consent of Bertram, Vallez, Kaplan & Talbot, Ltd.
23.3	Consent of James F. Yochum, CPA
23.4	Consent of PricewaterhouseCoopers LLP
23.5	Consent of Grant Thornton, LLP
*23.6	Consent of Jenkens & Gilchrist Parker Chapin LLP (included in their opinion filed as Exhibit 5.1)
24.1	Power of Attorney (see page II-7) )

* To be filed by amendment.

EX-10.1

                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

                                 March 30, 1999
                                 --------------

     The parties to this agreement are MedSource Technologies, Inc. a Delaware
corporation (the "Company"), and each of the other individuals or entities
executing a signature page to this agreement (collectively, the "Stockholders").

     Simultaneously with the execution and delivery of this agreement, the
Stockholders are acquiring shares of the Company's common stock, par value $.01
per share (the "Common Stock"), and/or shares of the Company's series A
preferred stock, par value $.01 per share ("Series A Preferred Stock"), which is
convertible into shares of the Company's Common Stock. All of the shares of
Common Stock that any Stockholder may now own or may acquire by conversion of
his, her or its shares of Series A Preferred Stock, as applicable, are the only
shares of capital stock of the Company entitled to the rights and benefits, and
subject to the terms and conditions, of this agreement, and are collectively
referred to herein as the "Shares."

     Subject to the terms and conditions set forth in that certain stockholders
agreement dated this date between the parties (the "Stockholders Agreement"),
the Company desires to provide to the Stockholders certain rights regarding the
registration of the Shares, all upon the terms and conditions set forth below.

     It is therefore agreed as follows:

     1.    Piggyback Registration.
           ----------------------

     1.1   Right to Include Registrable Securities.
           ---------------------------------------

     (a)   Subject to section 1.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations of securities in connection
with (i) an employee benefit plan or dividend reinvestment plan or a merger,
consolidation or other business combination, (ii) debt securities that are not
convertible into Common Stock, or (iii) the Company's initial public offering),
whether or not for sale for its own account, it shall, each such time, give
written notice to the Holders (as defined below) of its intention to do so and
of the Holders' rights under this section 1 at least 20 days prior to the filing
of a registration statement with respect to such registration with the
Commission (as defined below). Upon the written request of any Holder made
within 10 days after the receipt of that notice, which request shall specify the
Registrable Securities (as defined below) intended to be registered and disposed
of by such Holder, the Company shall, subject to the provisions hereof, use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities that the Company has been so requested to register by
such Holder.

     (b)   If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay

                                       -1-



registration of such securities, the Company may, at its election, give written
notice of such determination to each Holder and upon giving that notice (i) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the Registration
Expenses (as defined below) in connection therewith), without prejudice; and
(ii) in the case of a determination to delay registering, the Company shall be
permitted to delay registering any Registrable Securities for the same period as
the delay in registering such other securities.

     (c) The Company shall pay all Registration Expenses (as defined below) in
connection with registration of Registrable Securities requested pursuant to
this section 1.

     (d) As used in this agreement (i) "Registrable Securities" means the
Registrable Shares and any other securities issuable by way of a dividend,
distribution, recapitalization, exchange, merger, consolidation, reorganization
or other transaction, (ii) "Registrable Shares" includes the Shares held by the
Stockholders, and their permitted transferees under the Stockholders Agreement;
provided that any such Share shall cease to be a Registrable Share when (A) it
shall have been sold or otherwise disposed of pursuant to an effective
registration statement or as permitted by, and in compliance with, Rule 144 (or
successor provision) promulgated under the Securities Act, (B) it may be
disposed of as permitted by, and in compliance with, subsection (k) of such Rule
144 (or successor provision) or (C) it shall have ceased to be outstanding,
(iii) "Holder" means the Stockholders and their permitted transferees under the
Stockholders Agreement, and (iv) "Securities Act" shall mean the Securities Act
of 1933, or any subsequent similar federal statute, and the rules and
regulations of the United States Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act (the "Commission").

     (e) As used in this agreement, "Registration Expenses" means all expenses
incident to the Company's performance of or compliance with the provisions of
sections 1, 2 and 3 including, without limitation, all registration, filing and
National Association of Securities Dealers, Inc. fees, all listing fees, all
fees and expenses of complying with securities or blue sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), all printing expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants, including the expenses of
"comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; provided, however, that Registration Expenses shall
                       --------  -------
exclude, and the Holders shall pay, underwriters fees and underwriting discounts
and commissions and transfer taxes in respect of the Registrable Securities
being registered as well as any fees and expenses of counsel or other advisors
to the Holders of the Registrable Securities.

     1.2 Priority in Piggyback Registrations. Anything in section 1.1 to the
         -----------------------------------
contrary notwithstanding, if the managing underwriter or underwriters of any
underwritten offering shall inform the Company in writing of its belief that the
number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the
Company shall include in such registration, to the extent of the number and type
that the Company is so advised can be sold in (or during the time of) such
offering:

                                       -2-



          (i)   first, all securities proposed by the Company to be sold for its
     own account;

          (ii)  then, Registrable Securities to be sold by the holders of Common
     Stock that constitute "Registrable Securities" that were (A) converted or
     exchanged from shares of the Company's preferred stock ranking senior to
     the Series A Preferred Stock, (B) held by the Company's institutional
     lenders or investors (which shall not include William J. Kidd, Richard J.
     Effress or any other party to this agreement) or (C) were received upon
     exercise of warrants held by holders of any preferred stock or warrants
     issued to the Company's institutional lenders or investors;

          (iii) then, Registrable Securities to be sold by the Holders and all
     other shares of Common Stock outstanding on the date hereof or subsequently
     acquired by the holders thereof or that constitute "Registrable Securities"
     under and as defined in registration rights agreements containing piggyback
     registration rights intended to be the same priority as those provided in
     this section 1.2 to be sold by the holders thereof (the "Other Holders") in
     proportion to the respective numbers of their Registrable Securities that
     are proposed to be sold in such offering by the Holders and the Other
     Holders, as the case may be; and

          (iv)  finally, other securities to be sold by other holders of
     securities in proportion to the respective numbers of securities proposed
     to be sold in such offering by such holders.

     2.   Registration Procedures. In connection with the registration of any
          -----------------------
Registrable Securities under the Securities Act as provided in section 1, the
Company shall as expeditiously as possible:

          (i)   prepare and file with the Commission the requisite registration
     statement to effect such registration and thereafter use its best efforts
     to cause such registration statement to become and remain effective
     (subject to clause (ii) below); provided, however, that the Company may
     discontinue any registration of its securities that are not Registrable
     Securities at any time prior to the effective date of the registration
     statement relating thereto;

          (ii)  prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities covered by
     such registration statement for such period as shall be required for the
     disposition of all of such Registrable Securities; provided, that such
     period need not exceed 90 days; and provided, further, that any period of
     discontinuance period pursuant to the last paragraph of this section 2
     shall not be counted toward such 90 days;

                                       -3-



          (iii) furnish to the Holders such number of conformed copies of such
     registration statement and of each such amendment and supplement thereto
     (in each case including all exhibits), such number of copies of the
     prospectus contained in such registration statement (including each
     preliminary prospectus and any summary prospectus) and any other prospectus
     filed under Rule 424 under the Securities Act, in conformity with the
     requirements of the Securities Act, and such other documents, as the
     Holders may reasonably request;

          (iv)  use its best efforts (x) to register or qualify all Registrable
     Securities and other securities covered by such registration statement
     under such other securities or Blue Sky laws of such states of the United
     States of America where an exemption is not available and as the Holders
     shall reasonably request, (y) to keep such registration or qualification in
     effect for so long as such registration statement remains in effect, and
     (z) to take any other action that may reasonably be necessary or advisable
     to enable the Holders to consummate the disposition in such jurisdictions
     of the securities to be sold by the Holders, except that the Company shall
     not for any such purpose be required to qualify generally to do business as
     a foreign corporation in any jurisdiction wherein it would not, but for the
     requirements of this paragraph (iv), be obligated to be so qualified or to
     consent to general service of process in any such jurisdiction;

          (v)   use its best efforts to cause all Registrable Securities covered
     by such registration statement to be registered with or approved by such
     other federal or state governmental agencies or authorities as may be
     necessary in the opinion of counsel to the Company to consummate the
     disposition of such Registrable Securities in accordance with their
     intended method of disposition;

          (vi)  furnish to the Holders' underwriters, if any, (x) an opinion of
     counsel for the Company, and (y) a "comfort" letter signed by the
     independent public accountants who have certified the Company's financial
     statements included or incorporated by reference in such registration
     statement, each covering substantially the same matters with respect to
     such registration statement (and the prospectus included therein) and, in
     the case of the accountant's comfort letter, with respect to events
     subsequent to the date of such financial statements, as are customarily
     covered in opinions of issuer's counsel and in accountant's comfort letters
     delivered to the underwriters in underwritten public offerings of
     securities (and dated the dates such opinions and comfort letters are
     customarily dated);

          (vii) notify the Holders when a prospectus relating thereto is
     required to be delivered under the Securities Act, upon discovery that, or
     upon the happening of any event as a result of which, the prospectus
     included in such registration statement, as then in effect, includes an
     untrue statement of a material fact or omits to state any material fact
     required to be stated therein or necessary to make the statements therein
     not misleading, in the light of the circumstances under which they were
     made, and at the request of the Holders promptly prepare and furnish to
     them a reasonable number of copies of a supplement to or an

                                       -4-



     amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the purchasers of such securities, such prospectus shall not
     include an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading in the light of the circumstances under which they
     were made;

          (viii) otherwise use its best efforts to comply with all applicable
     rules and regulations of the Commission, and make available to its security
     holders, as soon as reasonably practicable, an earnings statement covering
     the period of at least 12 months, but not more than 18 months, beginning
     with the first full calendar month after the effective date of such
     registration statement, which earnings statement shall satisfy the
     provisions of section 11(a) of the Securities Act and Rule 158 promulgated
     thereunder, and promptly furnish the same to the Holders;

          (ix)   provide and cause to be maintained a transfer agent and
     registrar (which, in each case, may be the Company) for all Registrable
     Securities covered by such registration statement from and after a date not
     later than the effective date of such registration; and

          (x)    pay the reasonable fees and expenses of one counsel on behalf
     of the Holders whose Registrable Securities are included in the
     registration statement, with such counsel selected by a
     majority-in-interest (according to the number of shares of Common Stock
     each such Holder is directly or indirectly registering for sale in such
     registration statement) of such Holders.

     The Company may require the Holders to furnish the Company such information
regarding the Holders and the distribution of the Holders' Registrable
Securities as the Company may from time to time reasonably request in writing.

     Upon receipt of any notice from the Company of the happening of an event of
the kind described in item (vii) of this section 2, the Holders will forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders will
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

     3.   Underwritten Offerings.
          ----------------------

     3.1  Piggyback Underwritten Offerings. If the Company proposes to register
          --------------------------------
any of its securities under the Securities Act as contemplated by section 1 and
such securities are to be distributed by or through one or more underwriters,
the Company will, subject to section 1 (including, without limitation, the
provisions of section 1.2 hereof), if requested by the Holders, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Holders with and among the securities of the Company to be distributed by
such

                                       -5-



underwriters. The Holders shall become a party to the underwriting agreement
negotiated between the Company. Except as specifically contemplated herein, the
Holders shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties and agreements regarding each such Holder, each such Holder's
Registrable Securities and each such Holder's intended method of distribution or
as may be required by law or customarily given by selling shareholders in an
underwritten public offering.

     3.2  Holdback Agreements.
          -------------------

     (a)  If the Company at any time shall register shares of Common Stock under
the Securities Act for sale to the public (other than on Forms S-4 or S-8 or a
shelf registration), the Holders shall not sell pursuant to an effective
registration statement, publicly make any short sale of, publicly grant any
option for the purchase of, or otherwise publicly dispose of any Shares (other
than those Shares included in such registration pursuant to section 1) without
the prior written consent of the managing underwriter for a period required by
the underwriters and designated by the Company, which period shall not begin
more than thirty (30) days prior to the effectiveness of the registration
statement pursuant to which such public offering shall be made and shall not
last more than one hundred eighty (180) days after the effective date of such
registration statement in the case of the Company's initial public offering, or
ninety (90) days after the effective date of such registration statement in the
case of any such other offering. The Company may legend and impose stop transfer
instructions on any certificate evidencing Registrable Securities relating to
the restrictions provided in this Section 3.2.

     (b)  During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

     3.3  Preparation; Reasonable Investigation. In connection with the
          -------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

     4.   Indemnification.
          ---------------

     4.1  Indemnification by the Company. In the event of any registration
          ------------------------------
statement filed pursuant to section 1, the Company shall, and hereby does,
indemnify and hold harmless each of the Holders and each of their directors,
officers, partners, agents, attorneys,

                                       -6-



representatives and affiliates and each other individual, group, partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of whatever nature ("Person") who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls any Holder or any such underwriter
within the meaning of the Securities Act (each of the foregoing, a "Holder
Indemnitee"), insofar as losses, claims, damages, or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement, any preliminary
prospectus, final prospectus, or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading or other violation of the Securities Act or other laws in connection
with such registration or disposition other than directly resulting from
voluntary actions by the Stockholder (other than in accordance with Company
advice, request or instruction), and the Company shall reimburse each Holder
Indemnitee for any legal or any other fees, costs and expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable to a Holder or an underwriter in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder or such underwriter, as the case may be,
expressly for use in the preparation thereof; and provided, further, that the
Company shall not be liable to any Holder Indemnitee in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus so long as such final prospectus, and any
amendments or supplements thereto, have been furnished to such underwriter or
any Holder, as applicable.

     4.2 Indemnification by the Holders. If any Registrable Securities are
         ------------------------------
included in any registration statement, each Holder shall, and hereby does,
indemnify and hold harmless the Company, and each director and officer of the
Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to any statement contained in, or
omission from, such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, in
no event shall the indemnity provided for in this section 4.2 exceed the gross
proceeds from the offering received by the Holder.

     4.3 Notice of Claims, Etc. Promptly after receipt by an indemnified party
         ---------------------
of notice of the commencement of any action or proceeding involving a claim
referred to in sections 4.1 or 4.2, such indemnified party will, if a claim in
respect thereof is to be made against

                                       -7-



an indemnifying party, immediately give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its indemnity obligations, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs related to the indemnified party's
cooperation with the indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defense thereof. No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

     4.4 Contribution. If indemnification shall for any reason be held by a
         ------------
court to be unavailable to an indemnified party under section 4.1 or section 4.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 4.1 or
section 4.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other. No Person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld. In no event shall the indemnity provided for in this section 4.4
exceed the gross proceeds from the offering received by such Holder.

     4.5 Other Indemnification. Indemnification and contribution similar to that
         ---------------------
specified in the preceding provisions of this section 4 (with appropriate
modifications) shall be given by the Company and the Holders with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority other than the Securities
Act.

                                       -8-



     5.  Rule 144. With a view to making available the benefits of certain rules
         --------
and regulations of the Commission that may at any time permit the sale of the
Registrable Securities to the public without registration, after such time as a
public market exists for its Common Stock, the Company shall:

     (a) use its best efforts to facilitate the sale of the Registrable
Securities to the public, without registration under the Securities Act,
pursuant to Rule 144 promulgated under the Securities Act, provided that this
shall not require the Company to file reports under the Securities Act and the
Securities Exchange Act of 1934, or any similar federal statute, and the rules
and regulations of the Commission thereunder ("Exchange Act"), at any time prior
to the Company's being otherwise required to file such reports;

     (b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;

     (c) use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

     (d) deliver a written statement as to whether it has complied with such
requirements of this section, to the Holders upon any Holder's request.

     6.  Modification by Majority of Equivalent Holders. The holders of a
         ----------------------------------------------
majority in interest of the Equivalent Security Holders may amend any provision
of this agreement. For this purpose:


         (i) "Equivalent Security Holders" means the Stockholders and all other
     persons who acquired shares of either Series A Preferred Stock or Common
     Stock in connection with the sale of a business or asset to the Company or
     any of its subsidiaries at the closing of the transaction pursuant to which
     the shares of Series A Preferred Stock were issued to the Stockholders and
     who is a party to a registration rights agreement with the Company pursuant
     to which such person has substantially similar rights as the Stockholders
     have under this agreement; and

         (ii) a "majority in interest" shall mean Equivalent Security Holders
     holding a majority of the shares of Common Stock held by all Equivalent
     Security Holders (including shares issuable upon conversion of shares of
     Series A Preferred Stock); for the avoidance of doubt, each Stockholder
     party to this agreement shall be entitled to a number of votes for purposes
     of this section 6 equal to the sum of (A) the number of shares of Common
     Stock, if any, the Stockholder holds at the time of the vote and (B) the
     number of shares of Common Stock into which the shares of Series A
     Preferred Stock, if any, the Stockholder holds at the time of the vote are
     convertible.

                                       -9-



     7.  Miscellaneous.
         --------------

     (a) Notices. All notices, instructions and other communications in
         -------
connection with this agreement shall be in writing and may be given by personal
delivery or mailed, certified mail, return receipt requested, postage prepaid or
by a nationally recognized overnight courier to the parties at the address of
the Company as follows, and at the address of the Holders as set forth on the
signature page to this agreement (or at such other address as the Company or the
Holders may specify in a notice to the Company):

   If to the Company:

                     MedSource Technologies, Inc.
                     c/o Kidd & Company LLC
                     Three Pickwick Plaza
                     Greenwich, CT 06830
                     Attention: Richard J. Effress

   With a copy to:   Edward R. Mandell
                     Parker Chapin Flattau & Klimpl, LLP
                     1211 Avenue of the Americas
                     New York, New York 10036-8735

   If to a Stockholder:

                     To the address set forth on the signature
                     page below.

     (b) No Waiver. No course of dealing and no delay on the part of any party
         ---------
hereto in exercising any right, power or remedy conferred by this agreement
shall operate as a waiver thereof or otherwise prejudice such party's rights,
powers and remedies conferred by this agreement or shall preclude any other or
further exercise thereof or the exercise of any other right, power and remedy.

     (c) Binding Effect; Assignability. This agreement shall be binding upon
         -----------------------------
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns, including any
successors pursuant to any transfer contemplated in section 1(a) of the
stockholders agreement dated this date between the Company and the parties to
this agreement. This agreement shall not be assignable except as otherwise
provided herein.

     (d) Severability. Any provision of this agreement that is prohibited or
         ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable

                                      -10-



law, the parties hereby waive any provision of law which renders any provisions
hereof prohibited or unenforceable in any respect.

     (e) Modification. No term or provision of this agreement may be amended,
         ------------
altered, modified, rescinded or terminated except upon the express written
consent of the party against whom the same is sought to be enforced.

     (f) Legal Fees. If any action at law or in equity is necessary to enforce
         ----------
the terms of this agreement, the prevailing party shall be entitled to receive
from the other party or parties to such action all reasonable attorneys' fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.

     (g) Law Governing. This agreement shall be governed by and construed in
         -------------
accordance with the law of the state of Delaware applicable to agreements made
and to be performed entirely in Delaware.

     (h) Headings. All headings and captions in this agreement are for purposes
         --------
of reference only and shall not be construed to limit or affect the substance of
this agreement.

     (i) Entire Agreement. This agreement contains, and is intended as, a
         ----------------
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.

                                           MEDSOURCE TECHNOLOGIES, INC.


                                           By: /s/ RICHARD J. EFFRESS
                                               ---------------------------------
                                               Name: Richard J. Effress
                                               Title: Chairman

                                      -11-



                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page

                                     PORTLYN CORPORATION

                                     By: /s/ DAVID E. PORTER
                                         ---------------------------------------
                                         Name: David E. Porter
                                         Title: President


                         Address:    RFD 1, Route 25, Box 451
                                     Moultonboro, New Hampshire 03254
                                     Fax No.: (603) 476-5019
                                     Attention: David E. Porter

                                       -12-



                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page


               Name of Stockholder:           KELCO INDUSTRIES, INC.



                                              By: /s/ PAUL D. KELLY
                                                  ------------------------------
                                                   Name: Paul D. Kelly
                                                   Title: President

               Address of Stockholder:        6420 Zane Avenue N.
                                              Minneapolis, Minnesota 55429
                                              Attention: President
                                              Telecopier No.: (612) 535-2049

                                              With a copy to:

                                              Messerli & Kramer
                                              1800 Fifth Street Towers
                                              150 South Fifth Street
                                              Minneapolis, Minnesota 55402
                                              Attention: Jerome J. Simons, Jr.
                                              Telecopier No.: (612) 672-3777

                                       -13-




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page


                               /s/ WILLIAM J. KIDD
                               -----------------------------------
                               William J. Kidd
                               Address:
                               51 Clapboard Ridge Road
                               Greenwich, Connecticut 06830
                               Telecopier: (203) 625-2632




                               /s/ CARLA G. KIDD
                               -----------------------------------
                               Carla G. Kidd
                               Address:
                               51 Clapboard Ridge Road
                               Greenwich, Connecticut 06830
                               Telecopier: (203) 625-2632




                               /s/ EDWARD R. MANDELL
                               ----------------------------
                               Edward R. Mandell, as Trustee under
                                  the Catherine M. Kidd Trust
                               Address:
                               c/o Kidd & Company, LLC
                               Three Pickwick Plaza
                               Greenwich, Connecticut 06830
                               Telecopier: (203) 661-1839




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page


                                  /s/ EDWARD R. MANDELL
                                  ----------------------------
                                  Edward R. Mandell, as Trustee under
                                     the Cara E. Kidd Trust
                                  Address:
                                  c/o Kidd & Company, LLC
                                  Three Pickwick Plaza
                                  Greenwich, Connecticut 06830
                                  Telecopier: (203) 661-1839




                                  /s/ EDWARD R. MANDELL
                                  ----------------------------
                                  Edward R. Mandell, as Trustee under
                                     the Thomas C. Kidd Trust
                                  Address:
                                  c/o Kidd & Company, LLC
                                  Three Pickwick Plaza
                                  Greenwich, Connecticut 06830
                                  Telecopier: (203) 661-1839




                                  /s/ CLARICE E. WEBB
                                  ----------------------------
                                  Clarice E. Webb
                                  Address:
                                  217 Bridge Street
                                  Stamford, Connecticut 06905
                                  Telecopier:




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page



                             /s/ JOHN P. NEAFSEY
                             -----------------------------------
                             John P. Neafsey
                             Address:
                             13 Valley Road
                             Wilson Pt.
                             South Norwich, Connecticut 06854
                             Telecopier: (203) 831-8455




                             /s/ RICHARD J. EFFRESS
                             -----------------------------------
                             Richard J. Effress
                             Address:
                             c/o Kidd & Company, LLC
                             Three Pickwick Plaza
                             Greenwich, Connecticut 06830
                             Telecopier: (203) 661-1839




                             /s/ ANDREW D. LIPMAN
                             ----------------------------
                             Andrew D. Lipman
                             Address:
                             c/o Kidd & Company, LLC
                             Three Pickwick Plaza
                             Greenwich, Connecticut 06830
                             Telecopier: (203) 661-1839




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page


                                   /s/ ADAM D. LEHRHOFF
                                   ----------------------------
                                   Adam D. Lehrhoff
                                   Address:
                                   c/o Kidd & Company, LLC
                                   Three Pickwick Plaza
                                   Greenwich, Connecticut 06830
                                   Telecopier: (203) 661-1839




                                   /s/ JOHN C. HERTIG
                                   -----------------------------------
                                   John C. Hertig
                                   Address:
                                   124 Lamberts Lane
                                   Cohasset, Massachusetts 02025
                                   Telecopier: (781) 682-0308




                                   /s/ WILLIAM ALTIERI
                                   ----------------------------
                                   William Altieri
                                   Address:
                                   c/o Thayer Advisory Group
                                   115 Broad Street
                                   Boston, Massachusetts 02110
                                   Telecopier: (617) 350-5595




                                                 MedSource Technologies, Inc.
                                                 Registration Rights Agreement
                                                    Stockholder Signature Page
                                                 -----------------------------



Name of Stockholder:                    THE MICROSPRING CO., INC.

                                        By: /s/ (Illegible)
                                            ----------------------------------
                                            Name:
                                            Title:


Address of Stockholder:                 77 Accord Park
                                        Norwell, Massachusetts 02061
                                        Attention: Robert F. Coughlin
                                        Telecopier No.: (781) 871-6657

                                        With a copy to:

                                        Palmer & Dodge LLP
                                        One Beacon Street
                                        Boston, Massachusetts 02108
                                        Attention: Michael Lytton
                                        Telecopier No.: (617) 227-4420




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page
                                                   -----------------------------


Name of Stockholder:                    KELCO INDUSTRIES, INC.

                                        By: /s/ (Illegible)
                                            ----------------------------------
                                            Name:
                                            Title: President


Address of Stockholder:                 6420 Zane Avenue N.
                                        Minneapolis, Minnesota 55429
                                        Attention: President
                                        Telecopier No.: (612) 535-2049

                                        With a copy to:

                                        Messerli & Kramer
                                        1800 Fifth Street Towers
                                        150 South Fifth Street
                                        Minneapolis, Minnesota 55402
                                        Attention: Jerome J. Simons, Jr.
                                        Telecopier No.: (612) 672-3777



                                                    MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page
                                                   -----------------------------


Names of Stockholders:             LAURENCE S. DEROSE TRUST

                                   By: /s/ Laurence S. Derose
                                       -----------------------------------------
                                       Laurence S. Derose, Special Trustee

                                   BMD IRREVOCABLE TRUST OF 1998

                                   By: /s/ Barbara M. Derose
                                       -----------------------------------------
                                       Barbara M. Derose, Trustee


                                   JEFFREY L. DEROSE IRREVOCABLE TRUST

                                   By: /s/ Jeffrey L. Derose
                                       -----------------------------------------
                                       Jeffrey L. Derose, Trustee


                                   KEVIN L. DEROSE IRREVOCABLE TRUST

                                   By: /s/ Kevin L. Derose
                                       -----------------------------------------
                                       Kevin L. Derose, Trustee


Address of all Stockholders:       2099 Allen Street
                                   Springfield, MA 01118

                                   With a copy to:

                                   Shatz, Schwartz and Fentin, P.C.
                                   1441 Main Street, Suite 1100
                                   Springfield, MA 01103
                                   Attention: Steven J. Schwartz, Esq.
                                   Telecopier No. (413) 736-0375




                                                   MedSource Technologies, Inc.
                                                   Registration Rights Agreement
                                                      Stockholder Signature Page
                                                   -----------------------------


Name of Stockholder:               W.N. RUSHWOOD, INC. d/b/a
                                   Hayden Precision Industries

                                   By: /s/ (Illegible)
                                       -----------------------------------------
                                       Name:  (Illegible)
                                       Title: President


Address of Stockholder:            Hayden Precision Industries
                                   3902 California Road
                                   Orchard Park, New York 14127
                                   Attention William H. Heywood
                                   Telecopier No.: (716) 662-5772



                                                    MedSource Technologies, Inc.
                                                          Stockholders Agreement
                                                      Stockholder Signature Page
                                                    ----------------------------


Name of Stockholder:                    /s/ Peter J. Neidecker
                                        -----------------------------
                                        Peter J. Neidecker


Address of Stockholder:                 3101 East Orchard Road
                                        Greenwood Village, CO 80121
                                        Fax No.: 303-741-5589




                                                    MedSource Technologies, Inc.
                                                          Stockholders Agreement
                                                      Stockholder Signature Page
                                                    ----------------------------


Name of Stockholder:                    Peter J. Neidecker Limited Partnership

                                        By: /s/ Peter J. Neidecker
                                            -----------------------------------
                                            Name:  Peter J. Neidecker
                                            Title: General Partner


Address of Stockholder:                 3101 East Orchard Road
                                        Greenwood Village, CO 80121
                                        Fax No.: 303-741-5589


                                                    MedSource Technologies, Inc.
                                                          Stockholders Agreement
                                                     Stockholders Signature Page
                                                     ---------------------------


Name of Stockholder:                        Peter C. Neidecker Irrevocable Trust

                                            By: /s/ Peter J. Neidecker
                                                ------------------------
                                                Name: Peter J. Neidecker
                                                Title: Trustee


Address of Stockholder:                     3101 East Orchard Road
                                            Greenwood Village, CO 80121
                                            Fax No.: 303-741-5589


                                                    MedSource Technologies, Inc.
                                                          Stockholders Agreement
                                                      Stockholder Signature Page
                                                      --------------------------


Name of Stockholder:                                Sally N. Morris

                                                    /s/ Sally N. Morris
                                                    -------------------


Address of Stockholder:                             26391 Clearview Drive
                                                    Golden, CO 80401
                                                    Fax No.: 303-526-7208


                                                    MedSource Technologies, Inc.
                                                          Stockholders Agreement
                                                      Stockholder Signature Page
                                                      --------------------------


Name of Stockholder:                          Sylvia N. Coors

                                              /s/ Sylvia N. Coors
                                              --------------------


Address of Stockholder:                       109 Lookout Mountain Circle S.N.C.
                                              Golden, CO 80401
                                              Fax No.: 303-526-2169

EX-10.2

                                                                    Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT

                                 March 30, 1999

     The parties to this agreement are MedSource Technologies, Inc. a Delaware
corporation (the "Company") and each of the stockholders listed on Schedule A to
this agreement and executing a signature page to this agreement (the
"Stockholders").

     The Stockholders own or are acquiring shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), shares of the Company's 6% Series
B Cumulative Convertible Redeemable Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"), and shares of the Company's Series Z
Convertible Nominal Value Redeemable Preferred Stock, par value $.01 per share
(the "Series Z Preferred Stock"). The shares of Series B Preferred Stock and the
Shares of Series Z Preferred Stock are convertible into shares of Common Stock.
The shares of Common Stock currently held by the Stockholders, the shares of
Common Stock underlying the shares of Series B Preferred Stock currently held by
the Stockholders and the shares of Common Stock underlying the shares of Series
Z Preferred Stock currently held by the Stockholders are the only shares of
capital stock of the Company entitled to the rights and benefits, and subject to
the terms and conditions, of this agreement, and are hereinafter collectively
referred to as, the "Shares."

     The Company desires to provide to the Stockholders certain rights regarding
the registration of the Shares, all upon the terms and conditions set forth
below.

     It is therefore agreed as follows:

     1. Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:

          (a) "Commission" means the United States Securities and Exchange
     Commission or any other federal agency at the time administering the
     Securities Act.

          (b) "Demand Notice" means either an Investor Demand Notice or a
     Founders Demand Notice.

          (c) "Founders" means the Stockholders other than the Investors.

          (d) "Founders Demand Notice" means a written request from Founders
     holding at least 50% of the shares of Common Stock held by Founders on the
     date hereof as shown on Schedule A to register at least 25% of the
     Registrable Securities held by the Founders on the date hereof.

          (e) "Holders" means the Stockholders and their respective permitted
     transferees who hold Shares.



          (f) "Investor Common Shares" means all of the shares of Common Stock
     issued or issuable upon conversion of the 300,000 shares of Series B
     Preferred Stock and upon conversion of the 65,000 shares of Series Z
     Preferred Stock (regardless of whether any or all of such shares remain
     outstanding) issued on or substantially contemporaneous with this agreement
     (after giving effect to all adjustments made through the time of any such
     determination pursuant to the Certificate of Designation with respect to
     the Series B Preferred Stock and the Series Z Preferred Stock and, without
     duplication, as a result of stock splits, stock combinations, stock
     dividends and other similar events affecting Common Stock effective through
     the relevant date).

          (g) "Investor Demand Notice" means a written request from holders of
     at least 50% of the Investor Common Shares to register at least 25% of the
     Registrable Securities held by the Investors on the date hereof; except
     that every request by Investors to register at least $1,000,000 in value
     (based on the then current market price) on Form S-3 or a successor form,
     if the use of such form is available to the Company, shall qualify as an
     "Investor Demand Notice."

          (h) "Investors" means: J. H. Whitney, III, L.P.; Whitney Strategic
     Partners III, L.P.; J. H. Whitney Mezzanine Fund, L.P.; and their permitted
     successors and assigns.

          (i) "Other Securities" means, at any time, those shares of Common
     Stock, and of any other class or series of capital stock of the Company or
     other securities of the Company representing the right to acquire Common
     Stock, that the Company is required to, or has determined to, register
     pursuant to a registration statement filed by the Company with the
     Commission pursuant to this or any other agreement.

          (j) "Person" shall mean any individual, partnership, joint venture,
     firm, corporation, association, trust or other enterprise or any government
     or political subdivision or any agency, department or instrumentality
     thereof.

          (k) "Registrable Securities" means the Shares and any other securities
     issuable in replacement thereof by way of a recapitalization, exchange,
     merger, consolidation, reorganization or other transaction; provided,
     however, that any share shall cease to be a Registrable Security under this
     agreement when (A) a registration statement with respect to such share's
     public sale shall have become effective under the Securities Act, (B) it
     has been disposed of as permitted by, and in compliance with, Rule 144 (or
     successor provision) promulgated under the Securities Act or (C) it shall
     have ceased to be outstanding.

          (l) "Registration Expenses" means all expenses incident to the
     Company's performance of or compliance with the provisions of sections 2
     and 3 including, without limitation, all registration, filing and National
     Association of Securities Dealers, Inc. fees, all listing fees, all fees
     and expenses of complying with securities or blue sky laws (including,
     without limitation, reasonable fees and disbursements of counsel for the
     underwriters in connection with blue sky qualifications of the Registrable
     Securities hereunder), all word processing, duplicating and printing
     expenses, messenger and delivery expenses, the fees and disbursements of
     counsel for the Company, and the reasonable fees and expenses of one
     counsel on behalf of the Holders whose Registrable Securities are included
     in the registration statement, with such counsel selected by a
     majority-in-interest of the Holders participating in the offering
     (according to the number of shares of Common Stock each such Holder is
     directly or indirectly


                                       -2-



     registering for sale in such registration statement), and the fees and
     disbursements of its independent public accountants, including the expenses
     of "comfort" letters required by or incident to such performance and
     compliance, and any fees and disbursements of underwriters customarily paid
     by issuers or sellers of securities; provided, however, that Registration
     Expenses shall exclude, and the Holders shall pay, underwriters fees and
     underwriting discounts and commissions in respect of the Registrable
     Securities being registered hereunder as well as any fees and expenses of
     counsel to the Holders of the Registrable Securities hereunder (other than
     those of the one counsel referred to above).

          (m) "Securities Act" means the Securities Act of 1933, and any
     subsequent similar federal statute, and the rules and regulations
     promulgated thereunder.

     2. Demand Registration.

     2.1 Rights to Demand Registration. If, at any time (and from time to time)
after the 180th day following the date on which any registration statement
pursuant to which the Company shall have initially registered (a) shares of
Common Stock, or (b) securities providing the holder thereof the right to
acquire shares of Common Stock, under the Securities Act for sale to the public
shall have been declared effective, the Company shall receive a Demand Notice,
the Company shall promptly give written notice of such proposed registration to
all other Stockholders and shall offer to include in such proposed registration
any Registrable Securities requested to be included in such proposed
registration by the Stockholders who shall respond in writing to the Company's
notice within 10 days after receipt by the Stockholders in question of such
notice (which response shall specify the number of Registrable Securities
proposed to be included in such registration). Subject to section 2.2, the
Company shall promptly use its best efforts to effect such registration under
the Securities Act of the Registrable Securities that the Company has been so
requested to register on such appropriate registration form of the Commission as
shall be selected by the Company.

     2.2 Limits on Demand Rights.

          (a) The Company shall not be obligated to file and cause to become
     effective (i) more than two registration statements pursuant to Investor
     Demand Notices; provided, however, that in addition thereto, the Investors
     may require the Company to file registration statements on Form S-3 from
     time to time, if the use of such Form is available to the Company; (ii)
     more than two registration statements pursuant to Founder Demand Notices;
     and (iii) any registration statement during the period beginning 30 days
     prior to the filing and ending 90 days following the effective date of a
     registration statement filed by the Company and relating to an underwritten
     offering in which a majority of the shares are being sold by the Company
     for its own account.

          (b) Unless the Company shall have delayed the commencement of a
     registration statement pursuant to section 2.2(a)(ii) above or section
     2.2(c) below, the Company may delay the filing or effectiveness of any
     registration statement for a period of up to 60 days after the date of
     delivery of the Demand Notice pursuant to this section 2 if at the time of
     such request the Company is engaged in a firm commitment underwritten
     public offering of Company Shares in which the Stockholders may include
     Registrable Securities pursuant to section 3,


                                       -3-



     provided, however, that, in the event the Company exercises its rights
     under this section 2.2(b), the registration shall not be counted as a
     demand for registration by any Stockholder for purposes of section
     2.2(a)(i) hereof.

          (c) If, while a registration request is pending pursuant to this
     section 2, the Company has been advised by legal counsel (i) that the
     filing of a registration statement would require the disclosure of a
     material transaction or other factor that the Company reasonably determines
     in good faith would have a material adverse effect on the Company or (ii)
     the Company then is unable to comply with Commission requirements
     applicable to the requested registration, the Company shall not be required
     to effect a registration pursuant to this section 2 until the earlier of
     (A) the date upon which such material information is otherwise disclosed to
     the public or ceases to be material or the Company is able to so comply
     with applicable Commission requirements, as the case may be, and (B) 60
     days after the Company makes such good faith determination, provided that
     in the event the Company exercises its rights under this section 2.2(c),
     the registration shall not be counted as a demand for registration by any
     Stockholder for purposes of section 2.2(a)(i) hereof, and provided further
     that the Company may not exercise its right under this section 2.2(c) more
     than once in any 12-month period.

          (d) A requested registration under this section 2 may be rescinded by
     written notice to the Company by the Holder or Holders initiating such
     request. Such rescinded registration shall not count as a registration
     statement initiated pursuant to this section 2 for purposes of section 2.2
     above if such request is rescinded by such Holder or Holders not later than
     five business days prior to the filing of a registration statement with the
     Commission.

     2.3 Underwriter "Cutbacks" in Demand Registrations. With respect to any
registration pursuant to this section 2 that is being effected by one or more
underwriters such underwriters shall be designated by the Company and approved
by a majority in interest or the Holders selling Registrable Securities and
Other Securities (which approval shall not be unreasonably withheld), and the
Company may include in such registration any Other Securities; provided,
however, that, anything to the contrary in section 2.1 notwithstanding, if any
managing underwriter for the public offering contemplated by such registration
advises the Company in writing that, in such firm's good faith opinion, the
inclusion of all Registrable Securities and Other Securities proposed to be
included in such registration would adversely affect the offering and sale of
all such securities, then the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
and its affiliates (or that each such Person and its affiliates have the right
to acquire) at the time of such registration.

     3. Piggyback Registration.

     3.1 Right to Include Registrable Securities.


          (a) Subject to section 3.1(b), if the Company at any time proposes to
     register any of its securities under the Securities Act (as defined below)
     by registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or
     any successor or similar form(s) (except registrations on such or similar
     forms for registration of securities in connection with (i) an employee
     benefit


                                       -4-



     plan or dividend reinvestment plan or a merger, consolidation or other
     business combination, (ii) debt securities that are not convertible into
     Common Stock, or (iii) the Company's initial public offering), whether or
     not for sale for its own account, it shall, each such time, give written
     notice to the Holders of its intention to do so and of the Holders' rights
     under this section 3 at least 30 days prior to the filing of a registration
     statement with respect to such registration with the Commission. Upon the
     written request of any Holder made within 20 days after the receipt of that
     notice, which request shall specify the Registrable Securities intended to
     be registered and disposed of by such Holder, the Company shall, subject to
     the provisions hereof, use its best efforts to include in such registration
     statement all Registrable Securities that the Company has been so requested
     to register by such Holder.

          (b) If, at any time after giving written notice of its intention to
     register any securities and prior to the effective date of the registration
     statement filed in connection with such registration, the Company shall
     determine for any reason not to register or to delay registration of such
     securities, the Company may, at its election, give written notice of such
     determination to each Holder and upon giving that notice (i) in the case of
     a determination not to register, the Company shall be relieved of its
     obligation to register any Registrable Securities in connection with such
     registration (but not from any obligation of the Company to pay the
     Registration Expenses (as defined below) in connection therewith), without
     prejudice; and (ii) in the case of a determination to delay registering,
     the Company shall be permitted to delay registering any Registrable
     Securities for the same period as the delay in registering such other
     securities.

          (c) The Company shall pay all Registration Expenses in connection with
     registration of Registrable Securities requested pursuant to this section
     3.1.

     3.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in section
3.1 to the contrary notwithstanding, with respect to any registration pursuant
to which shares are registered pursuant to this section 3 that is being effected
by one or more underwriters, such underwriters shall be designated by the
Company and approved by a majority in interest of the Holders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

     4. Registration Procedures. In connection with the registration of any
Registrable Securities under the Securities Act as provided in sections 2 and 3,
the Company shall as expeditiously as possible:

          (i) prepare and file with the Commission the requisite registration
     statement to effect such registration and thereafter use its best efforts
     to cause such


                                       -5-



     registration statement to become and remain effective (subject to clause
     (ii) below); provided, however, that the Company may discontinue any
     registration of its securities that are not Registrable Securities at any
     time prior to the effective date of the registration statement relating
     thereto;

          (ii) prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities covered by
     such registration statement for such period as shall be required for the
     disposition of all of such Registrable Securities; provided, however, that,
     the foregoing notwithstanding, the Company shall not be required under this
     item (ii) to maintain the effectiveness of any such registration statement
     for longer than 180 days, or such longer period beyond such 180 days (up to
     an aggregate of 270 days) as may be available without requiring the Company
     to file any financial statements as of a later date and for a later period
     than the financial statements that may have been required to maintain the
     effectiveness of the registration statement for the 180-day period;

          (iii) furnish to the Holders such number of conformed copies of such
     registration statement and of each such amendment and supplement thereto
     (in each case including all exhibits), such number of copies of the
     prospectus contained in such registration statement (including each
     preliminary prospectus and any summary prospectus) and any other prospectus
     filed under Rule 424 under the Securities Act, in conformity with the
     requirements of the Securities Act, and such other documents, as the
     Holders may reasonably request from time to time;

          (iv) use its best efforts (x) to register or qualify all Registrable
     Securities and other securities covered by such registration statement
     under such other securities or blue sky laws of such states of the United
     States of America where an exemption is not available and as the Holders
     shall reasonably request, (y) to keep such registration or qualification in
     effect for so long as such registration statement remains in effect, and
     (z) to take any other action that may reasonably be necessary or advisable
     to enable the Holders to consummate the disposition in such jurisdictions
     of the securities to be sold by the Holders, except that the Company shall
     not for any such purpose be required to qualify generally to do business as
     a foreign corporation in any jurisdiction wherein it would not, but for the
     requirements of this paragraph (iv), be obligated to be so qualified or to
     consent to general service of process in any such jurisdiction;

          (v) use its best efforts to cause all Registrable Securities covered
     by such registration statement to be registered with or approved by such
     other federal or state governmental agencies or authorities as may be
     necessary in the opinion of counsel to the Company to consummate the
     disposition of such Registrable Securities in accordance with their
     intended method of disposition;

          (vi)furnish to the Holders' underwriters, if any, (x) an opinion of
     counsel for the Company, and (y) a "comfort" letter signed by the
     independent public accountants who have certified the Company's financial
     statements included or


                                       -6-



     incorporated by reference in such registration statement, each covering
     substantially the same matters with respect to such registration statement
     (and the prospectus included therein) and, in the case of the accountant's
     comfort letter, with respect to events subsequent to the date of such
     financial statements, as are customarily covered in opinions of issuer's
     counsel and in accountant's comfort letters delivered to the underwriters
     in underwritten public offerings of securities (and dated the dates such
     opinions and comfort letters are customarily dated);

          (vii) immediately notify the Holders when a prospectus relating
     thereto is required to be delivered under the Securities Act, upon
     discovery that, or upon the happening of any event as a result of which,
     the prospectus included in such registration statement, as then in effect,
     includes an untrue statement of a material fact or omits to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, in the light of the circumstances under
     which they were made, and at the request of the Holders promptly prepare
     and furnish to them a reasonable number of copies of a supplement to or an
     amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the purchasers of such securities, such prospectus shall not
     include an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading in the light of the circumstances under which they
     were made;

          (viii) otherwise use its best efforts to comply with all applicable
     rules and regulations of the Commission, and make available to its security
     holders, as soon as reasonably practicable, an earnings statement covering
     the period of at least 12 months, but not more than 18 months, beginning
     with the first full calendar month after the effective date of such
     registration statement, which earnings statement shall satisfy the
     provisions of section 11(a) of the Securities Act and Rule 158 promulgated
     thereunder, and promptly furnish the same to the Holders; and

          (ix) provide and cause to be maintained a transfer agent and registrar
     (which, in each case, may be the Company) for all Registrable Securities
     covered by such registration statement from and after a date not later than
     the effective date of such registration.

     The Company may require the Holders to furnish the Company such information
regarding the Holders and the distribution of the Holders' Registrable
Securities as the Company may from time to time reasonably request in writing,
based on its reasonable belief that such information is required to be disclosed
in the Registration Statement pursuant to the Securities Act and applicable
State securities laws.

     Upon receipt of any notice from the Company of the happening of an event of
the kind described in item (vii) of this section 4, the Holders shall forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders'


                                       -7-



possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice.

     5. Underwritten Offerings.

     5.1 Piggyback Underwritten Offerings. If the Company proposes to register
any of its securities under the Securities Act as contemplated by section 2 or
section 3 and such securities are to be distributed by or through one or more
underwriters, the Company shall, subject to the provisions of section 2 and
section 3 (including, without limitation, the provisions of sections 2.3 and
3.2), if requested by the Holders, arrange for such underwriters to include all
the Registrable Securities to be offered and sold by the Holders with and among
the securities of the Company to be distributed by such underwriters. The
Holders shall become a party to the underwriting agreement negotiated between
the Company and such underwriters and shall make all representations and
warranties to and shall enter into all agreements with the Company or the
underwriters as shall be reasonably requested of them including all
representations and warranties required by law, customarily given or reasonably
requested of selling shareholders by an underwriter in an underwritten public
offering.

     5.2 Holdback Agreements.

          (a) If the Company, in connection with an underwritten offering of
     securities for its own account, at any time shall register shares of Common
     Stock under the Securities Act for sale to the public (other than on Forms
     S-4 or S-8 or a shelf registration), the Holders shall not sell pursuant to
     an effective registration statement, publicly make any short sale of,
     publicly grant any option for the purchase of, or otherwise publicly
     dispose of any Shares (other than those Shares included in such
     registration pursuant to section 2 or section 3) without the prior written
     consent of the managing underwriter for a period required by the
     underwriters and designated by the Company, which period shall begin not
     more than thirty (30) days prior to the effectiveness of the registration
     statement pursuant to which such public offering shall be made and shall
     last not more than one hundred eighty (180) days after the effective date
     of such registration statement in the case of the Company's initial public
     offering, or ninety (90) days after the effective date of such registration
     statement in the case of any such other offering. The Company may legend
     and impose stop transfer instructions on any certificate evidencing
     Registrable Securities relating to the restrictions provided in this
     section 5.2.

          (b) During the 15-day period prior to the effective date of any
     registration statement of Registrable Securities pursuant to an
     underwritten public offering and during the 90-day period beginning on that
     effective date, the Company shall not (except as part of such registration)
     effect any public sale or distribution of any of its equity securities or
     of any security convertible into or exchangeable or exercisable for any
     equity security of the Company (other than in connection with any employee
     stock option or other benefit plan).

     5.3 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or


                                       -8-



supplement thereto, and give each of them such access to its books and records,
such opportunities to discuss the business of the Company with officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.

     6. Indemnification.

     6.1 Indemnification by the Company. In the event of any registration
statement filed pursuant to section 2 or section 3, the Company shall, and
hereby does, indemnify and hold harmless each of the Holders and each of their
directors, officers, partners, agents, attorneys, representatives and affiliates
and each other individual, group, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture or other
entity of whatever nature ("Person") who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
any Holder or any such underwriter within the meaning of the Securities Act
(each of the foregoing, a "Holder Indemnitee"), insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company shall
reimburse each Holder Indemnitee for any legal or any other fees, costs and
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or omission made in
reliance upon and in conformity with information furnished to the Company by or
on behalf of a Holder or such underwriter, as the case may be, for use in the
preparation thereof; and provided, further, that the Company shall not be liable
to any Holder Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Holder, as
applicable.

     6.2 Indemnification by the Holders. If any Registrable Securities are
included in any registration statement, the Holders of such Registrable
Securities so registered shall, and hereby do, severally and not jointly,
indemnify and hold harmless (in the same manner and to the same extent as set
forth in section 6.1 above) the Company, and each director and officer of the
Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a


                                       -9-



material fact contained in such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or an omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by
such Holder for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, provided, however, that no Holder shall have any liability under
this section 6.2 for any amount in excess of the net proceeds actually received
by such Holder from the sale of the Registrable Securities included in such
registration statement.

     6.3 Notice of Claims, Etc.

          (a) Promptly after receipt by an indemnified party of notice of the
     commencement of any action or proceeding involving a claim referred to in
     sections 6.1 or 6.2, such indemnified party will, if a claim in respect
     thereof is to be made against an indemnifying party, immediately give
     written notice to the latter of the commencement of such action; provided,
     however, that the failure of any indemnified party to give notice as
     provided herein shall not relieve the indemnifying party of its indemnity
     obligations, except to the extent that the indemnifying party is actually
     prejudiced by such failure to give notice. In case any such action is
     brought against an indemnified party, unless in the reasonable judgment of
     counsel for such indemnified party, a conflict of interest between such
     indemnified and indemnifying parties may exist in respect of such claim (in
     which case the indemnified party shall be entitled to retain separate
     counsel as provided below), the indemnifying party shall be entitled to
     participate in and to assume the defense thereof, jointly with any other
     indemnifying party similarly notified to the extent that it may wish and at
     any time, with counsel [reasonably] satisfactory to such indemnified party,
     and after notice from the indemnifying party to such indemnified party of
     its election so to assume the defense thereof, the indemnifying party shall
     not be liable to such indemnified party for any legal or other expenses
     subsequently incurred by the indemnified party in connection with the
     defense thereof other than reasonable costs related to the indemnified
     party's cooperation with the indemnifying party provided, however, that (i)
     if the indemnifying party fails to assume the defense of such claim after a
     reasonable time the indemnified party may retain counsel to defend such
     claim and the reasonable fees and expenses of such counsel shall be paid by
     the indemnifying party, (ii) the indemnified party may, at its own expense,
     retain separate counsel to participate in such defense, (iii) the
     indemnified party shall have the right to employ separate counsel at the
     expense of the indemnifying party and to control its own defense of such
     action, claim or proceeding if, in the reasonable opinion of counsel to
     such indemnified party, a material conflict or potential material conflict
     exists between the indemnified party and the indemnifying party that would
     make such separate representation advisable, except that in no event shall
     the indemnifying party be required to pay fees and expenses under this
     section 6 for more than one separate firm of attorneys in any one legal
     action or group of related legal actions.

          (b) No indemnifying party shall be liable for any settlement of any
     action or proceeding effected without its written consent, which consent
     shall not be unreasonably withheld. No indemnifying party shall, without
     the consent of the indemnified party, consent to entry of any judgment or
     enter into any settlement that does not include as an unconditional term
     thereof the giving by the claimant or plaintiff to such indemnified party
     of a release from all liability in respect to such claim or litigation.


                                       -10-



     6.4 Contribution. If indemnification shall for any reason be held by a
court to be unavailable to an indemnified party under section 6.1 or section 6.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 6.1 or
section 6.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 6.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld.

     6.5 Rule 144. With a view to making available the benefits of certain rules
and regulations of the Commission that may at any time permit the sale of the
Registrable Securities to the public without registration, at all times from and
after 90 days following the effective date of the first registration of the
Company under the Securities Act of an offering of its securities to the public,
the Company shall:

          (a) use its best efforts to facilitate the sale of the Registrable
     Securities to the public, without registration under the Securities Act,
     pursuant to Rule 144 promulgated under the Securities Act, provided that
     this shall not require the Company to file reports under the Securities Act
     and the Securities Exchange Act of 1934, or any similar federal statute,
     and the rules and regulations of the Commission thereunder ("Exchange
     Act"), at any time prior to the Company's being otherwise required to file
     such reports;

          (b) make and keep public information available, as those terms are
     understood and defined in Rule 144 promulgated under the Securities Act at
     all times after 90 days after the effective date of the first registration
     under the Securities Act filed by the Company for an offering of its
     securities to the general public;

          (c) use its best efforts to then file with the Commission in a timely
     manner all reports and other documents required of the Company under the
     Securities Act and the Exchange Act; and

          (d) deliver to the Holders, upon any Holder's request, a written
     statement as to whether it has complied with the requirements of this
     section 6, a copy of the most recent annual


                                       -11-



     or quarterly report of the Company filed with the Commission or any stock
     exchange or self regulatory organization [registered under the Securities
     Exchange Act of 1934], and such other reports and documents so filed as a
     Holder may reasonably request to avail itself of any rule or regulation of
     the Commission allowing it to sell its Registrable Securities without
     registration.

     7. Representations and Warranties of the Company and the Stockholders. Each
of the Company, on the one hand, and the Stockholders, on the other hand, hereby
severally (and not jointly) represent and warrant to the Company and to each of
the Stockholders as set forth below (all of such representations and warranties
to survive the execution and delivery of this agreement):

          (a) Binding Effect. This agreement has been duly executed and
     delivered by the Company or the Stockholder, as applicable, and constitutes
     the legal, valid and binding obligation of such party enforceable against
     such party in accordance with its terms, except as enforceability may be
     limited by applicable bankruptcy, insolvency or other similar laws
     affecting the enforcement of creditors' rights generally and by general
     principles of equity relating to enforceability.

          (b) Power; Authorization; Non-Contravention. Each of the Company and
     the Stockholder, as applicable, has all power and authority to execute,
     deliver and perform his, her or its obligations under this agreement. The
     execution, delivery and performance by each of the Company or the
     Stockholder, as applicable, of this agreement and the consummation of the
     transactions contemplated hereby, (i) has been duly authorized by all
     necessary corporate or limited liability company, and if required,
     stockholder action, as applicable, on the part of or on behalf of such
     party and (ii) does not violate, contravene the terms of, or exceed the
     authority grant under, any agreement, document or instrument of or
     applicable to such party.

     8. Miscellaneous.

          (a) Notices. All notices, instructions and other communications in
     connection with this agreement shall be in writing and may be given by
     personal delivery or mailed, certified mail, return receipt requested,
     postage prepaid or by a nationally recognized overnight courier to the
     parties at the address of the Company as follows, and at the address of the
     Holders as set forth on the signature page to this agreement (or at such
     other address as the Company or the Holders may specify in a notice to each
     other):

                     If to the Company:

                                    MedSource Technologies, Inc.
                                    Two Carlson Parkway
                                    Minneapolis, Minnesota 55447
                                    Attention:  Chief Executive Officer

                           and

                                    Kidd & Company, LLC
                                    Three Pickwick Plaza
                                    Greenwich, CT 06830
                                    Attention:  Richard J. Effress


                                       -12-



                        With a copy to:

                                    Edward R. Mandell
                                    Parker Chapin Flattau & Klimpl, LP
                                    1211 Avenue of the Americas
                                    New York, New York 10036-8735

     If to a Stockholder, to the address set forth on the signature page below.

          (b) No Waiver. No course of dealing and no delay on the part of any
     party hereto in exercising any right, power or remedy conferred by this
     agreement shall operate as a waiver thereof or otherwise prejudice such
     party's rights, powers and remedies conferred by this agreement or shall
     preclude any other or further exercise thereof or the exercise of any other
     right, power and remedy.

          (c) Binding Effect; Assignability. This agreement shall be binding
     upon and, except as otherwise provided herein, shall inure to the benefit
     of the respective parties and their permitted successors and assigns. This
     agreement shall not be assignable except as otherwise provided herein;
     provided, however, that the Holders of the Series B Preferred Stock and the
     Series Z Preferred Stock shall have the right to assign and transfer all or
     any portion of their rights under this agreement to a purchaser of the
     Shares in accordance with the terms of the Purchase Agreement dated as of
     the date hereof between the Company, such Holders and the other parties
     thereto.

          (d) Severability. Any provision of this agreement that is prohibited
     or unenforceable in any jurisdiction shall, as to such jurisdiction, be
     ineffective to the extent of such prohibition or unenforceability without
     invalidating the remaining provisions hereof, and any such prohibition or
     unenforceability in any jurisdiction shall not invalidate or render
     unenforceable such provision in any other jurisdiction. To the extent
     permitted by applicable law, the parties hereby waive any provision of law
     which renders any provisions hereof prohibited or unenforceable in any
     respect.

          (e) Modification. No term or provision of this agreement may be
     amended, altered, modified, rescinded or terminated except upon the express
     written consent of the party against whom the same is sought to be
     enforced.

          (f) Law Governing. This agreement shall be governed by and construed
     in accordance with the law of the state of New York, applicable to
     agreements made and to be performed entirely in New York, without regard to
     the principals of conflicts of law of such state.

          (g) Amendment to Securities Laws. The Company (on the one hand) and
     the Stockholders (on the other hand) agree that any amendment to federal
     securities laws (and regulations promulgated thereunder (and related
     registration forms) and related state securities laws) shall not affect the
     substantive registration requirements (and other obligations of the
     Company) set forth in this agreement; and, following any such amendment,
     the Company shall


                                       -13-



     continue to be required to cause the registration of the Registrable
     Securities (and pay all Registration Expenses and provide indemnification
     pursuant to section 6.1) under the federal securities laws, as amended, in
     a manner consistent with carrying out the intent and purposes of (and on
     terms as similar as practicable as the terms set forth in) this agreement.

          (h) Headings. All headings and captions in this agreement are for
     purposes of reference only and shall not be construed to limit or affect
     the substance of this agreement.


          (i) Entire Agreement. This agreement contains, and is intended as, a
     complete statement of all the terms of the arrangements between the parties
     with respect to the matters provided for, supersedes any previous
     agreements and understandings between the parties with respect to those
     matters and cannot be changed or terminated orally.

                                                MEDSOURCE TECHNOLOGIES, INC.


                                                By: /s/ RICHARD J. EFFRESS
                                                   ---------------------------
                                                   Name:  Richard J. Effress
                                                   Title: Chairman

                                       -14-




                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                           /s/ WILLIAM J. KIDD
                                           -----------------------------------
                                           William J. Kidd
                                           Address: 51 Clapboard Ridge Road
                                                    Greenwich, CT 06830
                                                    Fax No.: 203-625-2632

                                           /s/ CARLA G. KIDD
                                           -----------------------------------
                                           Carla G. Kidd
                                           Address: 51 Clapboard Ridge Road
                                                    Greenwich, CT 06830
                                                    Fax No.: 203-625-2632

                                           /s/ EDWARD R. MANDELL
                                           ----------------------------
                                           Edward R. Mandell, as Trustee under
                                              the Catherine M. Kidd Trust
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.


                                           /s/ EDWARD R. MANDELL
                                           ----------------------------
                                           Edward R. Mandell, as Trustee under
                                              the Cara E. Kidd Trust
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839

                                           /s/ EDWARD R. MANDELL
                                           ----------------------------
                                           Edward R. Mandell, as Trustee under
                                              the Thomas C. Kidd Trust
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839

                                           /s/ CLARICE E. WEBB
                                           ----------------------------
                                           Clarice E. Webb
                                           Address: 217 Bridge Street
                                                    Stamford, Connecticut 06905
                                                    Fax no.:



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                           /s/ JOHN P. NEAFSEY
                                           -----------------------------------
                                           John P. Neafsey
                                           Address: John P. Neafsey
                                                    13 Valley Road
                                                    Wilson Pt.
                                                    South Norwich, CT 06854
                                                    Fax no.: 203-831-8455

                                           /s/ RICHARD J. EFFRESS
                                           -----------------------------------
                                           Richard J. Effress
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839

                                           /s/ ANDREW D. LIPMAN
                                           ----------------------------
                                           Andrew D. Lipman
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                           /s/ ADAM D. LEHRHOFF
                                           ----------------------------
                                           Adam D. Lehrhoff
                                           Address: c/o Kidd & Company, LLC
                                                    Three Pickwick Plaza
                                                    Greenwich, Connecticut 06830
                                                    Fax no.: 203-661-1839

                                           /s/ JOHN C. HERTIG
                                           -----------------------------------
                                           John C. Hertig
                                           Address: 124 Lamberts Lane
                                                    Cohasset, MA 02025
                                                    Fax No.: 781-682-0308

                                           /s/ WILLIAM ALTIERI
                                           ----------------------------
                                           William Altieri
                                           Address: c/o Thayer Advisory Group
                                                    115 Broad Street
                                                    Boston, Massachusetts 02110
                                                    Fax No.: 617-350-5595



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                          J. H. WHITNEY III, L.P.
                                          By: J. H. Whitney Equity
                                               Partners III, LLC,
                                               its General Partner

                                          By: /s/ MICHAEL R. STONE
                                              --------------------------------
                                              Name: Michael R. Stone
                                              Title:   A Managing Member

                                          Address:
                                          c/o J. H. Whitney & Co.
                                          177 Broad Street
                                          Stamford, Connecticut 06901
                                          Attention: Mr. Daniel J. O'Brien
                                          Fax no.: (203) 973-1422

                                          With a copy to
                                          Morrison Cohen Singer & Weinstein, LLP
                                          750 Lexington Avenue
                                          New York, New York 10022
                                          Attention: David A. Scherl, Esq.
                                          Fax no.: 212-735-8708



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                          WHITNEY STRATEGIC PARTNERS III, L.P.
                                          By: J. H. Whitney Equity
                                                Partners III, LLC,
                                                its General Partner

                                          By: /s/ MICHAEL R. STONE
                                              --------------------------------
                                              Name: Michael R. Stone
                                              Title:   A Managing Member

                                          Address:
                                          c/o J. H. Whitney & Co.
                                          177 Broad Street
                                          Stamford, Connecticut 06901
                                          Attention: Mr. Daniel J. O'Brien
                                          Fax no.: (203) 973-1422

                                          With a copy to
                                          Morrison Cohen Singer & Weinstein, LLP
                                          750 Lexington Avenue
                                          New York, New York 10022
                                          Attention: David A. Scherl, Esq.
                                          Fax no.: 212-735-8708



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                          J. H. WHITNEY MEZZANINE FUND, L.P.
                                          By: Whitney GP, L.L.C.

                                          By: /s/ MICHAEL R. STONE
                                              --------------------------------
                                              Name: Michael R. Stone
                                              Title:   A Managing Member

                                          Address:
                                          c/o J. H. Whitney & Co.
                                          177 Broad Street
                                          Stamford, Connecticut 06901
                                          Attention: Mr. Daniel J. O'Brien
                                          Fax no.: (203) 973-1422

                                          With a copy to
                                          Morrison Cohen Singer & Weinstein, LLP
                                          750 Lexington Avenue
                                          New York, New York 10022
                                          Attention: David A. Scherl, Esq.
                                          Fax no.: 212-735-8708



                                                   Stockholder Signature Page To
                                                Registration Rights Agreement of
                                                    MedSource Technologies, Inc.

                                          GERMAN AMERICAN CAPITAL CORPORATION

                                          By: /s/ JOHN SHANE
                                              --------------------------------
                                              Name: John Shane
                                              Title: Vice President

                                          By: /s/
                                              --------------------------------
                                              Name:
                                              Title: Vice President

                                          Address:
                                          31 West 52nd Street
                                          New York, New York 10019
                                          Attention: Mr. W. Jefferson Stuart
                                          Telecopier: 212-469-7048

                                          With a copy to
                                          White & Case, LLP
                                          1155 Avenue of the Americas
                                          New York, New York 10036
                                          Attention: David N. Koschik, Esq.
                                          Fax no.: 212-354-8113





                                                                      SCHEDULE A

                                              [To Registration Rights Agreement]

                     STOCKHOLDERS AND SHARES CURRENTLY OWNED

                                            Number of  Common Stock
Name of Stockholder                          Shares     Equivalents
- -------------------                         ---------  ------------
Common Stockholders:

William J. Kidd                               81,475       81,475
Carla G. Kidd                                 81,475       81,475
Edward R. Mandell, as Trustee under the
   Catherine M. Kidd Grantor Trust            27,159       27,159
Edward R. Mandell, as Trustee under the
   Cara E. Kidd Trust                         27,159       27,159
Edward R. Mandell, as Trustee under the
   Thomas C. Kidd Trust                       27,159       27,159
Clarice Webb                                   3,621        3,621
John P. Neafsey                                3,621        3,621
Richard J. Effress                            45,265       45,265
Andrew D. Lipman                              45,265       45,265
Adam D. Lehrhoff                              19,916       19,916
John C. Hertig                                32,184       32,184
William Altieri                                8,000        8,000
                                             -------      -------
        Subtotal                             402,300      402,300


Series B Preferred Stockholders:

J. H. Whitney III, L.P.                    292,941.18  292,941.18
Whitney Strategic Partners III, L.P.         7,058.82    7,058.82
                                           ----------  ----------
        Subtotal                              300,000     300,000


Series Z Preferred Stockholders:

J. H. Whitney Mezzanine Fund, L.P.             48,750      48,750
Deutsche Bank Securities Inc.                  16,250      16,250
                                              -------     -------
               Subtotal                        65,000      65,000

               Total Shares                   767,300     767,300
                                              =======     =======

EX-10.3

                                                                    EXHIBIT 10.3

                          REGISTRATION RIGHTS AGREEMENT

                                  May 14, 1999
                                  ------------

          The parties to this agreement are MedSource Technologies, Inc. a
Delaware corporation (the "Company"), and the stockholder listed on Schedule A
to this agreement and executing a signature page to this agreement (the
"Stockholder").

          The Stockholder owns or is acquiring shares of the Company's 6% Series
B Cumulative Convertible Redeemable Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"). The shares of Series B Preferred Stock are
convertible into shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"). The shares of Common Stock underlying the shares of Series
B Preferred Stock currently held by the Stockholder are the only shares of
capital stock of the Company entitled to the rights and benefits, and subject to
the terms and conditions, of this agreement, and are hereinafter collectively
referred to as, the "Shares."

          The Company desires to provide to the Stockholder certain rights
regarding the registration of the Shares, all upon the terms and conditions set
forth below.

          It is therefore agreed as follows:

          1.  Certain Definitions. As used in this agreement, the following
              -------------------
terms shall have the meanings provided below:

          (a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

          (b) "Demand Notice" means a written request from Holders to register
at least 25% of the Registrable Securities.

          (c) "Holders" means the Stockholder and its permitted transferees who
hold Shares.

          (d) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

          (e) "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

          (f) "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a recapitalization, exchange, merger,
consolidation, reorganization or other transaction; provided, however, that any
share shall cease to be a Registrable Security under this agreement when (A) a
registration statement with respect to such

                                        1



share's public sale shall have become effective under the Securities Act, (B) it
has been disposed of as permitted by, and in compliance with, Rule 144 (or
successor provision) promulgated under the Securities Act or (C) it shall have
ceased to be outstanding.

          (g) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of sections 2 and 3
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company, and the reasonable fees
and expenses of one counsel on behalf of the Holders whose Registrable
Securities are included in the registration statement, which counsel shall
either be (i) the same as the counsel representing the holders under the Whitney
Registration Rights Agreement or (ii) if that counsel declines to also represent
the Holders hereunder, counsel selected by a majority-in-interest of the Holders
hereunder participating in the offering (according to the number of shares of
Common Stock each such Holder is directly or indirectly registering for sale in
such registration statement), and the fees and disbursements of its independent
public accountants, including the expenses of "comfort" letters required by or
incident to such performance and compliance, and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities; provided,
however, that Registration Expenses shall exclude, and the Holders shall pay,
underwriters fees and underwriting discounts and commissions in respect of the
Registrable Securities being registered hereunder as well as any fees and
expenses of counsel to the Holders of the Registrable Securities hereunder
(other than those of the one counsel referred to above).

          (h) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.

          (i) "Whitney Initial Demand Date" means the first date on which the
stockholders under the Whitney Registration Rights Agreement shall be entitled
to demand the registration of securities pursuant to a "Demand Notice" under
section 2.1 of the Whitney Registration Rights Agreement.

          (j) "Whitney Registration Rights Agreement" means that certain
registration rights agreement dated as of March 30, 1999 between the Company, J.
H. Whitney III, L.P., Whitney Strategic Partners III, L.P., J. H. Whitney
Mezzanine Fund, L.P., German American Capital Corporation ("GACC") and certain
other stockholders party thereto.

          2.  Demand Registration.
              -------------------

          2.1 Rights to Demand Registration. If on the first anniversary of the
              -----------------------------
Whitney Initial Demand Date the stockholders party to the Whitney Registration
Rights Agreement have not delivered a Demand Notice to cause a demand
registration, pursuant to section 2.1 of the Whitney Registration Rights
Agreement, in which the Holders pursuant to this agreement shall have piggyback
registration rights as contemplated in section 3 of this agreement, then, at any
time after such first anniversary on which the Company shall receive a Demand
Notice under

                                        2



this agreement, the Company shall promptly give written notice of such proposed
registration to all other Holders and shall offer to include in such proposed
registration any Registrable Securities requested to be included in such
proposed registration by the Holders who shall respond in writing to the
Company's notice within 10 days after receipt by the Holders in question of such
notice (which response shall specify the number of Registrable Securities
proposed to be included in such registration). Subject to section 2.2, the
Company shall promptly use its best efforts to effect such registration under
the Securities Act of the Registrable Securities that the Company has been so
requested to register on such appropriate registration form of the Commission as
shall be selected by the Company.

          2.2  Limits on Demand Rights.
               -----------------------

          (a)  The Company shall not be obligated to file and cause to become
effective (i) more than one registration statement pursuant to section 2.1; and
(ii) any registration statement during the period beginning 30 days prior to the
filing and ending 90 days following the effective date of a registration
statement filed by the Company and relating to an underwritten offering in which
a majority of the shares are being sold by the Company for its own account.

          (b)  Unless the Company shall have delayed the commencement of a
registration statement pursuant to section 2.2(a)(ii) above or section 2.2(c)
below, the Company may delay the filing or effectiveness of any registration
statement for a period of up to 60 days after the date of delivery of the Demand
Notice pursuant to this section 2 if at the time of such request the Company is
engaged in a firm commitment underwritten public offering of Company Shares in
which the Holders may include Registrable Securities pursuant to section 3,
provided, however, that, in the event the Company exercises its rights under
this section 2.2(b), the registration shall not be counted as a demand for
registration by any Holder for purposes of section 2.2(a)(i) hereof.

          (c)  If, while a registration request is pending pursuant to this
section 2, the Company has been advised by legal counsel (i) that the filing of
a registration statement would require the disclosure of a material transaction
or other factor that the Company reasonably determines in good faith would have
a material adverse effect on the Company or (ii) the Company then is unable to
comply with Commission requirements applicable to the requested registration,
the Company shall not be required to effect a registration pursuant to this
section 2 until the earlier of (A) the date upon which such material information
is otherwise disclosed to the public or ceases to be material or the Company is
able to so comply with applicable Commission requirements, as the case may be,
and (B) 60 days after the Company makes such good faith determination, provided
that in the event the Company exercises its rights under this section 2.2(c),
the registration shall not be counted as a demand for registration by any Holder
for purposes of section 2.2(a)(i) hereof, and provided further that the Company
may not exercise its right under this section 2.2(c) more than once in any
12-month period.

          (d)  A requested registration under this section 2 may be rescinded by
written notice to the Company by the Holder or Holders initiating such request.
Such rescinded registration shall not count as a registration statement
initiated pursuant to this section 2 for

                                        3



purposes of section 2.2 above if such request is rescinded by such Holder or
Holders not later than five business days prior to the filing of a registration
statement with the Commission.

          2.3 Underwriter "Cutbacks" in Demand Registrations. With respect to
              ----------------------------------------------
any registration pursuant to this section 2 that is being effected by one or
more underwriters, such underwriters shall be designated by the Company and
approved by a majority in interest of the stockholders selling Registrable
Securities and Other Securities (which approval shall not be unreasonably
withheld), and the Company may include in such registration any Other
Securities; provided, however, that, anything to the contrary in section 2.1
notwithstanding, if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then the number of Registrable
Securities and Other Securities proposed to be included in such registration
shall be reduced pro rata based upon the number of shares of Common Stock owned
by each such Person and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

          3.  Piggyback Registration.
              ----------------------

          3.1 Right to Include Registrable Securities.
              ---------------------------------------

          (a) Subject to section 3.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders of its
intention to do so and of the Holders' rights under this section 3 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Commission. Upon the written request of any Holder made
within 20 days after the receipt of that notice, which request shall specify the
Registrable Securities intended to be registered and disposed of by such Holder,
the Company shall, subject to the provisions hereof, use its best efforts to
include in such registration statement all Registrable Securities that the
Company has been so requested to register by such Holder.

          (b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses (as
defined below) in connection therewith), without prejudice; and (ii) in the case
of a determination to delay registering, the Company shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.

                                       4



          (c)  The Company shall pay all Registration Expenses in connection
with registration of Registrable Securities requested pursuant to this section
3.1.

          3.2  Underwriter "Cutbacks" in Piggyback Registrations. Anything in
               -------------------------------------------------
section 3.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 3 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the stockholders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

          4.   Registration Procedures. In connection with the registration of
               -----------------------
any Registrable Securities under the Securities Act as provided in sections 2
and 3, the Company shall as expeditiously as possible:

               (i)   prepare and file with the Commission the requisite
     registration statement to effect such registration and thereafter use its
     best efforts to cause such registration statement to become and remain
     effective (subject to clause (ii) below); provided, however, that the
     Company may discontinue any registration of its securities that are not
     Registrable Securities at any time prior to the effective date of the
     registration statement relating thereto;

               (ii)  prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities covered by
     such registration statement for such period as shall be required for the
     disposition of all of such Registrable Securities; provided, however, that,
     the foregoing notwithstanding, the Company shall not be required under this
     item (ii) to maintain the effectiveness of any such registration statement
     for longer than 180 days, or such longer period beyond such 180 days (up to
     an aggregate of 270 days) as may be available without requiring the Company
     to file any financial statements as of a later date and for a later period
     than the financial statements that may have been required to maintain the
     effectiveness of the registration statement for the 180-day period;

               (iii) furnish to the Holders such number of conformed copies of
     such registration statement and of each such amendment and supplement
     thereto (in each case including all exhibits), such number of copies of the
     prospectus contained in such registration statement (including each
     preliminary prospectus and any summary prospectus) and any other prospectus
     filed under Rule 424 under the Securities Act, in

                                        5



     conformity with the requirements of the Securities Act, and such other
     documents, as the Holders may reasonably request from time to time;

          (iv)   use its best efforts (x) to register or qualify all Registrable
     Securities and other securities covered by such registration statement
     under such other securities or blue sky laws of such states of the United
     States of America where an exemption is not available and as the Holders
     shall reasonably request, (y) to keep such registration or qualification in
     effect for so long as such registration statement remains in effect, and
     (z) to take any other action that may reasonably be necessary or advisable
     to enable the Holders to consummate the disposition in such jurisdictions
     of the securities to be sold by the Holders, except that the Company shall
     not for any such purpose be required to qualify generally to do business as
     a foreign corporation in any jurisdiction wherein it would not, but for the
     requirements of this paragraph (iv), be obligated to be so qualified or to
     consent to general service of process in any such jurisdiction;

          (v)    use its best efforts to cause all Registrable Securities
     covered by such registration statement to be registered with or approved by
     such other federal or state governmental agencies or authorities as may be
     necessary in the opinion of counsel to the Company to consummate the
     disposition of such Registrable Securities in accordance with their
     intended method of disposition;

          (vi)   furnish to the Holders' underwriters, if any, (x) an opinion of
     counsel for the Company, and (y) a "comfort" letter signed by the
     independent public accountants who have certified the Company's financial
     statements included or incorporated by reference in such registration
     statement, each covering substantially the same matters with respect to
     such registration statement (and the prospectus included therein) and, in
     the case of the accountant's comfort letter, with respect to events
     subsequent to the date of such financial statements, as are customarily
     covered in opinions of issuer's counsel and in accountant's comfort letters
     delivered to the underwriters in underwritten public offerings of
     securities (and dated the dates such opinions and comfort letters are
     customarily dated);

          (vii)  immediately notify the Holders when a prospectus relating
     thereto is required to be delivered under the Securities Act, upon
     discovery that, or upon the happening of any event as a result of which,
     the prospectus included in such registration statement, as then in effect,
     includes an untrue statement of a material fact or omits to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, in the light of the circumstances under
     which they were made, and at the request of the Holders promptly prepare
     and furnish to them a reasonable number of copies of a supplement to or an
     amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the purchasers of such securities, such prospectus shall not
     include an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading in the light of the circumstances under which they
     were made;

          (viii) otherwise use its best efforts to comply with all applicable
     rules and regulations of the Commission, and make available to its security
     holders, as soon as

                                        6



     reasonably practicable, an earnings statement covering the period of at
     least 12 months, but not more than 18 months, beginning with the first full
     calendar month after the effective date of such registration statement,
     which earnings statement shall satisfy the provisions of section 11(a) of
     the Securities Act and Rule 158 promulgated thereunder, and promptly
     furnish the same to the Holders; and

               (ix) provide and cause to be maintained a transfer agent and
     registrar (which, in each case, may be the Company) for all Registrable
     Securities covered by such registration statement from and after a date not
     later than the effective date of such registration.

          The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.

          Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 4, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

          5.   Underwritten Offerings.
               ----------------------

          5.1  Piggyback Underwritten Offerings. If the Company proposes to
               --------------------------------
register any of its securities under the Securities Act as contemplated by
section 2 or section 3 and such securities are to be distributed by or through
one or more underwriters, the Company shall, subject to the provisions of
section 2 and section 3 (including, without limitation, the provisions of
sections 2.3 and 3.2), if requested by the Holders, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Holders with and among the securities of the Company to be distributed by
such underwriters. The Holders shall become a party to the underwriting
agreement negotiated between the Company and such underwriters and shall make
all representations and warranties to and shall enter into all agreements with
the Company or the underwriters as shall be reasonably requested of them
including all representations and warranties required by law, customarily given
or reasonably requested of selling shareholders by an underwriter in an
underwritten public offering.

          5.2  Holdback Agreements.
               -------------------

          (a)  If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly

                                        7



grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such registration pursuant to
section 2 or section 3) without the prior written consent of the managing
underwriter for a period required by the underwriters and designated by the
Company, which period shall begin not more than thirty (30) days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall last not more than one hundred eighty (180)
days after the effective date of such registration statement in the case of the
Company's initial public offering, or ninety (90) days after the effective date
of such registration statement in the case of any such other offering. The
Company may legend and impose stop transfer instructions on any certificate
evidencing Registrable Securities relating to the restrictions provided in this
section 5.2.

               (b)  During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

               5.3  Preparation; Reasonable Investigation. In connection with
                    -------------------------------------
the preparation and filing of each registration statement under the Securities
Act pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

               6.   Indemnification.
                    ---------------

               6.1  Indemnification by the Company. In the event of any
                    ------------------------------
registration statement filed pursuant to section 2 or section 3, the Company
shall, and hereby does, indemnify and hold harmless each of the Holders and each
of their directors, officers, partners, agents, attorneys, representatives and
affiliates and each other individual, group, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture or
other entity of whatever nature ("Person") who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls any Holder or any such underwriter within the meaning of the Securities
Act (each of the foregoing, a "Holder Indemnitee"), insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company shall
reimburse each Holder Indemnitee for any legal or any other fees, costs and
expenses reasonably

                                       8



incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by or on behalf of a Holder
or such underwriter, as the case may be, for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Holder Indemnitee
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus so long as such
final prospectus, and any amendments or supplements thereto, have been furnished
to such underwriter or any Holder, as applicable.

               6.2  Indemnification by the Holders. If any Registrable
                    ------------------------------
Securities are included in any registration statement, the Holders of such
Registrable Securities so registered shall, and hereby do, severally and not
jointly, indemnify and hold harmless (in the same manner and to the same extent
as set forth in section 6.1 above) the Company, and each director and officer of
the Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by such
Holder for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
provided, however, that no Holder shall have any liability under this section
6.2 for any amount in excess of the net proceeds actually received by such
Holder from the sale of the Registrable Securities included in such registration
statement.

               6.3  Notice of Claims, Etc.
                    ---------------------

               (a)  Promptly after receipt by an indemnified party of notice of
the commencement of any action or proceeding involving a claim referred to in
sections 6.1 or 6.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and

                                       9



to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish and at any time, with counsel
[reasonably] satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs related
to the indemnified party's cooperation with the indemnifying party provided,
however, that (i) if the indemnifying party fails to assume the defense of such
claim after a reasonable time the indemnified party may retain counsel to defend
such claim and the reasonable fees and expenses of such counsel shall be paid by
the indemnifying party, (ii) the indemnified party may, at its own expense,
retain separate counsel to participate in such defense, (iii) the indemnified
party shall have the right to employ separate counsel at the expense of the
indemnifying party and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such indemnified party, a
material conflict or potential material conflict exists between the indemnified
party and the indemnifying party that would make such separate representation
advisable, except that in no event shall the indemnifying party be required to
pay fees and expenses under this section 6 for more than one separate firm of
attorneys in any one legal action or group of related legal actions.

               (b)  No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

               6.4  Contribution. If indemnification shall for any reason be
                    ------------
held by a court to be unavailable to an indemnified party under section 6.1 or
section 6.2 in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under section 6.1
or section 6.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 6.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld.

                                       10



               6.5  Rule 144. With a view to making available the benefits of
                    --------
certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Securities to the public without registration, at all
times from and after 90 days following the effective date of the first
registration of the Company under the Securities Act of an offering of its
securities to the public, the Company shall:

               (a)  use its best efforts to facilitate the sale of the
Registrable Securities to the public, without registration under the Securities
Act, pursuant to Rule 144 promulgated under the Securities Act, provided that
this shall not require the Company to file reports under the Securities Act and
the Securities Exchange Act of 1934, or any similar federal statute, and the
rules and regulations of the Commission thereunder ("Exchange Act"), at any time
prior to the Company's being otherwise required to file such reports;

               (b)  make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated under the Securities Act at
all times after 90 days after the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to the
general public;

               (c)  use its best efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

               (d)  deliver to the Holders, upon any Holder's request, a written
statement as to whether it has complied with the requirements of this section 6,
a copy of the most recent annual or quarterly report of the Company filed with
the Commission or any stock exchange or self regulatory organization [registered
under the Securities Exchange Act of 1934], and such other reports and documents
so filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing it to sell its Registrable Securities
without registration.

               7.   Representations and Warranties of the Company and the
                    -----------------------------------------------------
Stockholders. Each of the Company, on the one hand, and the Stockholders, on the
- ------------
other hand, hereby severally (and not jointly) represent and warrant to the
Company and to each of the Stockholders as set forth below (all of such
representations and warranties to survive the execution and delivery of this
agreement):

               (a)  Binding Effect. This agreement has been duly executed and
delivered by the Company or the Stockholder, as applicable, and constitutes the
legal, valid and binding obligation of such party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability.

               (b)  Power; Authorization; Non-Contravention. Each of the Company
and the Stockholder, as applicable, has all power and authority to execute,
deliver and perform his, her or its obligations under this agreement. The
execution, delivery and performance by each of the Company or the Stockholder,
as applicable, of this agreement and the consummation of the

                                       11



transactions contemplated hereby, (i) has been duly authorized by all necessary
corporate or limited liability company, and if required, stockholder action, as
applicable, on the part of or on behalf of such party and (ii) does not violate,
contravene the terms of, or exceed the authority grant under, any agreement,
document or instrument of or applicable to such party.

               8.   Miscellaneous.
                    --------------

               (a)  Notices. All notices, instructions and other communications
                    -------
in connection with this agreement shall be in writing and may be given by
personal delivery or mailed, certified mail, return receipt requested, postage
prepaid or by a nationally recognized overnight courier to the parties at the
address of the Company as follows, and at the address of the Holders as set
forth on the signature page to this agreement (or at such other address as the
Company or the Holders may specify in a notice to each other):

               If to the Company:

                              MedSource Technologies, Inc.
                              Two Carlson Parkway
                              Minneapolis, Minnesota 55447
                              Attention: Chief Executive Officer

                     and

                              Kidd & Company, LLC
                              Three Pickwick Plaza
                              Greenwich, CT 06830
                              Attention: Richard J. Effress

               With a copy to:

                              Edward R. Mandell
                              Parker Chapin Flattau & Klimpl, LP
                              1211 Avenue of the Americas
                              New York, New York 10036-8735

               If to a Stockholder, to the address set forth on the signature
page below.

               (b)  No Waiver. No course of dealing and no delay on the part of
                    ---------
any party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

               (c)  Binding Effect; Assignability. This agreement shall be
                    -----------------------------
binding upon and, except as otherwise provided herein, shall inure to the
benefit of the respective parties and their permitted successors and assigns.
This agreement shall not be assignable except as otherwise provided herein;
provided, however, that the Holders of the Series B Preferred Stock shall have
- --------  -------

                                       12



the right to assign and transfer all or any portion of their rights under this
agreement to a purchaser of the Shares in accordance with the terms of the
Purchase Agreement dated as of the date hereof between the Company, such Holders
and the other parties thereto.

               (d)  Severability. Any provision of this agreement that is
                    ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.

               (e)  Modification. No term or provision of this agreement may be
                    ------------
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

               (f)  Law Governing. This agreement shall be governed by and
                    -------------
construed in accordance with the law of the state of New York, applicable to
agreements made and to be performed entirely in New York, without regard to the
principals of conflicts of law of such state.

               (g)  Amendment to Securities Laws. The Company (on the one hand)
                    ----------------------------
and the Stockholders (on the other hand) agree that any amendment to federal
securities laws (and regulations promulgated thereunder (and related
registration forms) and related state securities laws) shall not affect the
substantive registration requirements (and other obligations of the Company) set
forth in this agreement; and, following any such amendment, the Company shall
continue to be required to cause the registration of the Registrable Securities
(and pay all Registration Expenses and provide indemnification pursuant to
section 6.1) under the federal securities laws, as amended, in a manner
consistent with carrying out the intent and purposes of (and on terms as similar
as practicable as the terms set forth in) this agreement.

               (h)  Headings. All headings and captions in this agreement are
                    --------
for purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.

                                       13



               (i)  Entire Agreement. This agreement contains, and is intended
                    ----------------
as, a complete statement of all the terms of the arrangements between the
parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.


                                        MEDSOURCE TECHNOLOGIES, INC.


                                        By: /s/ RICHARD J. EFFRESS
                                            --------------------------------
                                            Name: Richard J. Effress
                                            Title: Chairman



                                        INDOSUEZ MST PARTNERS
                                        By: Indosuez CM II, Inc.
                                            as general partner


                                        By: /s/ MICHAEL F. WALSH
                                            --------------------------------
                                            Name:  Michael F. Walsh
                                            Title:  Vice President


                                        Address:
                                        1211 Avenue of the Americas
                                        New York, New York 10036
                                        Attention: Michael F. Walsh
                                        Telecopier: (212) 278-2287

                                       14

EX-10.4

                                                                    Exhibit 10.4

                          REGISTRATION RIGHTS AGREEMENT

                                  May 15, 2000
                                  ------------

                  The parties to this agreement (this "Agreement") are MedSource
                                                       ---------
Technologies, Inc., a Delaware corporation (the "Company"), and each of the
                                                 -------
other individuals or entities that has executed a signature page to this
Agreement (each, a "Stockholder").
                    -----------

                  Simultaneously with the execution and delivery of this
Agreement, each Stockholder is acquiring shares of the Company's common stock,
par value $.01 per share ("Common Stock"). All of the shares of Common Stock
                           ------------
acquired by the Stockholders are entitled to the rights and benefits, and
subject to the terms and conditions, of this Agreement, and are collectively
referred to herein as the "Shares".
                           ------

                  Subject to the terms and conditions set forth in that certain
Stockholders Agreement, dated March 30, 1999, among the parties hereto entered
into by the Stockholders on the date hereof (the "Stockholders Agreement"), the
                                                  ----------------------
Company desires to provide to the Stockholders certain rights regarding the
registration of the Shares, all upon the terms and conditions set forth below.

                  It is therefore agreed as follows:

                  1.    Piggyback Registration.
                        ----------------------

                  1.1   Right to Include Registrable Securities.
                        ---------------------------------------

                        (a)  Subject to section 1.1(b) and section 6 of this
Agreement, if the Company at any time proposes to register any of its securities
under the Securities Act (as defined below) by registration on Forms SB-2, S-1,
S-2, S-3 (but not Forms S-4 or S-8) or any successor or similar form(s) (except
registrations of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders (as
defined below) of its intention to do so and of the Holders' rights under this
section 1 at least 20 days prior to the filing of a registration statement with
respect to such registration with the Commission (as defined below). Upon the
written request of any Holder made within 10 days after the receipt of such
notice, which request shall specify the Registrable Securities (as defined
below) intended to be registered and disposed of by such Holder, the Company
shall, subject to the provisions hereof, use its best efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by the Holder.

                        (b)  If, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such

                                       -1-



determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses (as
defined below) in connection therewith), without prejudice; and (ii) in the case
of a determination to delay registration, the Company shall be permitted to
delay the registration of any Registrable Securities for a period equal to the
period of delay in the registration of such other securities.

                  (c)   The Company shall pay all Registration Expenses in
connection with the registration of Registrable Securities requested pursuant to
this section 1.

                  (d)   As used in this Agreement, (i) "Registrable Securities"
                                                        ----------------------
means the Registrable Shares and any other securities issuable by way of a
dividend, distribution, recapitalization, exchange, merger, consolidation,
reorganization or other transaction, (ii) "Registrable Shares" includes the
                                           ------------------
Shares held by the Stockholders and their permitted transferees under the
Stockholders Agreement; provided that any such Share shall cease to be a
                        --------
Registrable Share when (A) a registration statement with respect to its public
sale shall have become effective under the Securities Act, (B) it has been
disposed of as permitted by, and in compliance with, Rule 144 (or any successor
provision) promulgated under the Securities Act, (C) it may be disposed of as
permitted by, and in compliance with, subsection (k) of such Rule 144 (or any
successor provision) or (D) it shall have ceased to be outstanding, (iii)
"Holders" means the Stockholders and their permitted transferees under the
 -------
Stockholders Agreement, and (iv) "Securities Act" shall mean the Securities Act
                                  --------------
of 1933, as amended, or any subsequent similar federal statute, and the rules
and regulations of the United States Securities and Exchange Commission or any
other federal agency administering the Securities Act (the "Commission").
                                                            ----------

                  (e)   As used in this Agreement, "Registration Expenses" means
                                                    ---------------------
all expenses incident to the Company's performance of or compliance with the
provisions of sections 1, 2 and 3 including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all printing expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of "comfort" letters required by or incident to such performance and
compliance, and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities; provided, however, that Registration Expenses
                                  --------  -------
shall exclude, and the Holders shall be responsible for the payment of, all
underwriters' fees and underwriting discounts and commissions and transfer taxes
in respect of the Registrable Securities being registered as well as any fees
and expenses of counsel or other advisors to the Holders of the Registrable
Securities.

             1.2  Priority in Piggyback Registrations. Anything in section 1.1
                  -----------------------------------
to the contrary notwithstanding, and subject to section 6, if the managing
underwriter or underwriters of any underwritten public offering of the Company's
securities shall inform the Company in writing of its or their belief that the
number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the

                                       -2-



Company shall include in such registration, only those securities which the
Company is advised by the managing underwriter or underwriters can be sold in
(or during the time of) such offering:

                  (a)   first, all securities proposed by the Company to be sold
for its own account;

                  (b)   then, Registrable Securities to be sold by the holders
of Common Stock that constitute "Registrable Securities" that were (i) converted
or exchanged from shares of the Company's preferred stock ranking senior to the
Common Stock, (ii) held by the Company's institutional lenders or investors or
(iii) received upon exercise of warrants held by holders of any preferred stock
or warrants issued to the Company's institutional lenders or investors; and

                  (c)   then, Registrable Securities to be sold by the Holders
and all other shares of Common Stock outstanding on the date hereof or
subsequently acquired by the holders thereof or that constitute "Registrable
Securities" under and as defined in registration rights agreements containing
piggyback registration rights intended to have the same priority as those
provided in this section 1.2 to be sold by the holders thereof (the "Other
                                                                     -----
Holders") in proportion to the respective numbers of their Registrable
- -------
Securities that are proposed to be sold in such offering by the Holders and the
Other Holders, as the case may be.

              2.  Registration Procedures.  In connection with the registration
                  -----------------------
of any Registrable Securities under the Securities Act as provided in section 1,
the Company shall as expeditiously as possible:

                  (a)   prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its best
efforts to cause such registration statement to become and remain effective
(subject to clause (b) below); provided, however, that the Company may
                               --------  -------
discontinue any registration of its securities that are not Registrable
Securities at any time prior to the effective date of the registration statement
relating thereto;

                  (b)   prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities; provided, that such period need not exceed 60 days;
                        --------

                  (c)   furnish to the Holders such number of conformed copies
of such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Holders may reasonably request;

                  (d)   use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such states of the
United States of America where an exemption is not available and as the Holders
shall reasonably request, (ii) to keep such registration or

                                       -3-



qualification in effect for so long as such registration statement remains in
effect, and (iii) to take any other action that may reasonably be necessary or
advisable to enable the Holders to consummate the disposition in such
jurisdictions of the securities to be sold by the Holders, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not, but
for the requirements of this paragraph (d), be obligated to be so qualified or
to consent to general service of process in any such jurisdiction;

                  (e)   use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other federal or state governmental agencies or authorities as may be necessary
in the opinion of counsel to the Company to consummate the disposition of such
Registrable Securities in accordance with their intended method of disposition;

                  (f)   furnish to the Holders' underwriters, if any, (i) an
opinion of counsel for the Company, and (ii) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
each covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountant's comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);

                  (g)   notify the Holders when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of the Holders
promptly prepare and furnish to them a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;

                  (h)   otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and
promptly furnish the same to the Holders; and

                                       -4-



                  (i)   provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration.

             The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing.

             Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (g) of this section 2, the Holders will
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (g) and, if so directed by the Company, the Holders will
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

                  3.    Underwritten Offerings.
                        ----------------------

                  3.1   Piggyback Underwritten Offerings. If the Company
                        --------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by section 1 and such securities are to be distributed by or
through one or more underwriters, the Company may, at its sole discretion and
subject to section 1 (including, without limitation, the provisions of section
1.2 hereof), arrange for such underwriters to include all or any part of the
Registrable Securities to be offered and sold by the Holders with and among the
securities of the Company to be distributed by such underwriters. The Holders
shall become a party to the underwriting agreement negotiated between the
Company and such underwriters and shall make all representations and warranties
to and shall enter into all agreements with the Company or the underwriters as
shall be reasonably requested of them, including all representations and
warranties required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.

                  3.2   Holdback Agreements.
                        -------------------

                        (a)  If the Company at any time shall register shares of
Common Stock under the Securities Act for sale to the public (other than on
Forms S-4 or S-8 or a shelf registration), the Holders shall not sell pursuant
to an effective registration statement, publicly make any short sale of,
publicly grant any option for the purchase of, or otherwise publicly dispose of
any Shares (other than those Shares included in such registration pursuant to
section 1) without the prior written consent of the managing underwriter for a
period required by the underwriters and designated by the Company, which period
shall not begin more than thirty (30) days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made and
shall not last more than one hundred eighty (180) days after the effective date
of such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any other offering. The Company may legend and impose
stop transfer instructions on any certificate evidencing Registrable Securities
relating to the restrictions provided in this Section 3.2.

                                       -5-



     (b) During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) affect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

     4.  Indemnification.
         ---------------

     4.1 Indemnification by the Company. In the event of any registration
         ------------------------------
statement filed pursuant to section 1, the Company shall indemnify and hold
harmless each of the Holders and each of their directors, officers, partners,
agents, attorneys, representatives and affiliates and each other individual,
group, partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of whatever nature
("Person") who participates as an underwriter in the offering or sale of such
  ------
securities and each other Person, if any, who controls any Holder or any such
underwriter within the meaning of the Securities Act (each of the foregoing, a
"Holder Indemnitee"), insofar as losses, claims, damages, or liabilities (or
 -----------------
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, final
prospectus, or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading or
other violation of the Securities Act or other laws in connection with such
registration or disposition other than directly resulting from voluntary actions
by the Stockholder, and the Company shall reimburse each Holder Indemnitee for
any legal or any other fees, costs and expenses reasonably incurred by such
Holder Indemnitee in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
                                        --------
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
a Holder or such underwriter, as the case may be, expressly for use in the
preparation thereof; and provided, further, that the Company shall not be liable
                         --------  -------
to any Holder Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Holder, as
applicable.

     4.2 Indemnification by the Holders. If any Registrable Securities are
         ------------------------------
included in any registration statement, the Holders shall indemnify and hold
harmless the Company, and each of the Company's directors, officers, agents,
attorneys, representatives and affiliates, and each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls the Company within the meaning of the
Securities Act (each of the foregoing, a "Company Indemnitee"), insofar as
                                          ------------------
losses, claims, damages or liabilities


                                       -6-



(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or with respect to any statement contained in, or omission from,
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, if
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by the Holders expressly for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, and the Holders shall reimburse each Company Indemnitee
for any legal or any other fees, costs and expenses reasonably incurred by such
Company Indemnitee in connection with investigating or defending any such loss,
claim, liability, action or proceeding.

     4.3 Notice of Claims, Etc. Promptly after receipt by an indemnified party
         ---------------------
of notice of the commencement of any action or proceeding involving a claim
referred to in sections 4.1 or 4.2, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, immediately give
written notice to the latter of the commencement of such action; provided,
                                                                 --------
however, that the failure of any indemnified party to give notice as provided
- -------
herein shall not relieve the indemnifying party of its indemnity obligations,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs
related to the indemnified party's cooperation with the indemnifying party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties arises in respect of such
claim after the assumption of the defense thereof. No indemnifying party shall
be liable for any settlement of any action or proceeding affected without its
written consent, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.

     4.4 Contribution. If indemnification shall for any reason be held by a
         ------------
court to be unavailable to an indemnified party under section 4.1 or section 4.2
with respect to any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 4.1 or
section 4.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable

                                       -7-



law, in such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Holders on the other. No Person
guilty of fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim, affected without such Person's consent, which consent shall not be
unreasonably withheld. In no event shall the indemnity provided for in this
section 4.4 exceed the gross proceeds from the offering received by such Holder.

          4.5  Other Indemnification. Indemnification and contribution similar
               ---------------------
to that specified in the preceding provisions of this section 4 (with
appropriate modifications) shall be given by the Company and the Holders with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act.

         5.    Rule 144. With a view to making available the benefits of certain
               --------
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, after such time
as a public market exists for its Common Stock, the Company shall:

               (a)  use its best efforts to facilitate the sale of the

egistrable Securities to the public, without registration under the Securities
Act, pursuant to Rule 144 promulgated under the Securities Act, provided that
this shall not require the Company to file reports under the Securities Act and
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Exchange Act"), at any time
                                                 ------------
prior to the Company's being otherwise required to file such reports;

               (b)  make and keep "public information" available, as those terms
are understood and defined in Rule 144 promulgated under the Securities Act at
all times after 90 days after the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to the
general public; and

               (c)  use reasonable efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.

        6.     Modification by Majority of Equivalent Holders. Anything to the
               ----------------------------------------------
contrary contained in this Agreement (including but not limited to section 1)
notwithstanding, the Stockholders hereby consent in advance to any modification
of the rights provided in this Agreement (including but not limited to any
waiver of the rights provided in section 1.1 or section 2 or any rearrangement
of the registration rights priorities in section 1.2) to which a majority in
interest of the Equivalent Holders (as defined below) agree, and, upon written
notice to the Stockholders of any such agreement of the Equivalent Holders and
subject to Section 7(e) herein, this Agreement shall be deemed to be modified in
accordance with such agreement of the Equivalent Holders without any further
action on the part of the Stockholders. For purposes of the foregoing sentence,
(i) "Equivalent Holders" shall be deemed to mean the Stockholders and any and
all other holders of shares of capital stock of the Company who acquired such
shares

                                       -8-



from the Company as consideration, in whole or in part, for the sale of a
business (whether in stock purchase, asset purchase or other transactions) to
the Company (a "Business Acquisition") and (ii) a "majority in interest" shall
refer to the agreement of Equivalent Holders holding a majority of the shares of
Common Stock held by all Equivalent Holders (whether such shares are actually
issued to the Equivalent Holders or issuable upon conversion of shares of other
securities of the Company obtained in connection with the Business Acquisitions
or upon the exercise of other securities so obtained).

     7. Miscellaneous.
        -------------

        (a)  Notices. All notices, instructions and other communications in
             -------
connection with this Agreement shall be in writing and may be given by personal
delivery or mailed, certified mail, return receipt requested, postage prepaid or
by a nationally recognized overnight courier to the parties at the address of
the Company as follows, and at the address of the Holders as set forth on the
signature page to this Agreement (or at such other address as a party hereto may
specify in a notice to the other party):

     If to the Company:


             MedSource Technologies, Inc.
             110 Cheshire Lane, Suite 100
             Minneapolis, MN 55305
             Attention: Richard J. Effress

     With a copy to:

             Parker Chapin LLP
             405 Lexington Avenue
             New York, New York 10174
             Attention: Edward R. Mandell

     If to a Stockholder:

             To the address set forth on the signature
             page below.

        (b)  No Waiver. No course of dealing and no delay on the part of any
             ---------
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this Agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

                                       -9-



     (c) Binding Effect; Assignability. This Agreement shall be binding upon
         -----------------------------
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns. This Agreement
shall not be assignable except as otherwise provided herein.

     (d) Severability. Any provision of this Agreement that is prohibited or
         ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which renders any provisions hereof prohibited
or unenforceable in any respect.

     (e) Modification. No term or provision of this Agreement may be amended,
         ------------
altered, modified, rescinded or terminated except upon the express written
consent of the party against whom the same is sought to be enforced.

     (f) Law Governing. This Agreement shall be governed by and construed in
         -------------
accordance with the law of the state of Delaware applicable to agreements made
and to be performed entirely in Delaware.

     (g) Headings. All headings and captions in this Agreement are for purposes
         --------
of reference only and shall not be construed to limit or affect the substance of
this Agreement.

     (h) Entire Agreement. This Agreement contains, and is intended as, a
         ----------------
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.

[The remainder of this page is intentionally left blank; the next succeeding
page is a signature page.]

                                      -10-



                                 MEDSOURCE TECHNOLOGIES, INC.


                                 By: /s/ RICHARD J. EFFRESS
                                     --------------------------------
                                         Richard J. Effress
                                         Chairman

                                 /s/ KARL F. HENS
                                 ------------------------------------
                                       Karl F. Hens

                                 34 West Smith Street
                                 Corry, PA 16407

                                 with a copy to:

                                 MacDonald Illig Jones & Britton LLP
                                 100 State Street, Suite 700
                                 Erie, PA 16507-1498
                                 Attention: James E. Spoden


                                 /s/ THOMAS J. ROCHE
                                 ------------------------------------
                                       Thomas J. Roche

                                 714 North Center Street
                                 Corry, PA 16407

                                 with a copy to:

                                 MacDonald Illig Jones & Britton LLP
                                 100 State Street, Suite 700
                                 Erie, PA 16507-1498
                                 Attention: James E. Spoden

                                      -11-

EX-10.5

                                                                    Exhibit 10.5

                          REGISTRATION RIGHTS AGREEMENT

                                January 31, 2000
                                ----------------

                  The parties to this agreement (this "Agreement") are MedSource
                                                       ---------
Technologies, Inc., a Delaware corporation (the "Company"), and each of the
                                                 -------
other individuals or entities that has executed a signature page to this
Agreement (each, a "Stockholder").
                    -----------

                  Simultaneously with the execution and delivery of this
Agreement, each Stockholder is acquiring shares of the Company's common stock,
par value $.01 per share ("Common Stock"). All of the shares of Common Stock
                           ------------
acquired by the Stockholders are entitled to the rights and benefits, and
subject to the terms and conditions, of this Agreement, and are collectively
referred to herein as the "Shares".
                           ------

                  Subject to the terms and conditions set forth in that certain
stockholders Agreement, dated of even date hereof between the parties hereto
(the "Stockholders Agreement"), the Company desires to provide to the
      ----------------------
Stockholders certain rights regarding the registration of the Shares, all upon
the terms and conditions set forth below.

                  It is therefore agreed as follows:

                  1.     Piggyback Registration.
                         ----------------------

                  1.1    Right to Include Registrable Securities.
                         ---------------------------------------

                         (a) Subject to section 1.1(b) and section 6 of this
Agreement, if the Company at any time proposes to register any of its securities
under the Securities Act (as defined below) by registration on Forms SB-2, S-1,
S-2, S-3 (but not Forms S-4 or S-8) or any successor or similar form(s) (except
registrations of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders (as
defined below) of its intention to do so and of the Holders' rights under this
section 1 at least 20 days prior to the filing of a registration statement with
respect to such registration with the Commission (as defined below). Upon the
written request of any Holder made within 10 days after the receipt of such
notice, which request shall specify the Registrable Securities (as defined
below) intended to be registered and disposed of by such Holder, the Company
shall, subject to the provisions hereof, use its best efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by the Holders.

                         (b) If, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in

                                       -1-



connection with such registration (but not from any obligation of the Company to
pay the Registration Expenses (as defined below) in connection therewith),
without prejudice; and (ii) in the case of a determination to delay
registration, the Company shall be permitted to delay the registration of any
Registrable Securities for a period equal to the period of delay in the
registration of such other securities.

               (c) The Company shall pay all Registration Expenses in connection
       with the registration of Registrable Securities requested pursuant to
this section 1.

               (d) As used in this Agreement, (i) "Registrable Securities" means
                                                   ----------------------
the Registrable Shares and any other securities issuable by way of a dividend,
distribution, recapitalization, exchange, merger, consolidation, reorganization
or other transaction, (ii) "Registrable Shares" includes the Shares held by the
                            ------------------
Stockholders and their permitted transferees under the Stockholders Agreement;
provided that any such Share shall cease to be a Registrable Share when (A) a
- --------
registration statement with respect to its public sale shall have become
effective under the Securities Act, (B) it has been disposed of as permitted by,
and in compliance with, Rule 144 (or any successor provision) promulgated under
the Securities Act, (C) it may be disposed of as permitted by, and in compliance
with, subsection (k) of such Rule 144 (or any successor provision) or (D) it
shall have ceased to be outstanding, (iii) "Holders" means the Stockholders and
                                            -------
their permitted transferees under the Stockholders Agreement, and (iv)
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
 --------------
subsequent similar federal statute, and the rules and regulations of the United
States Securities and Exchange Commission or any other federal agency
administering the Securities Act (the "Commission").
                                       ----------

               (e) As used in this Agreement, "Registration Expenses" means all
                                               ---------------------
expenses incident to the Company's performance of or compliance with the
provisions of sections 1, 2 and 3 including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all printing expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of "comfort" letters required by or incident to such performance and
compliance, and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities; provided, however, that Registration Expenses
                                  --------  -------
shall exclude, and the Holders shall be responsible for the payment of, all
underwriters' fees and underwriting discounts and commissions and transfer taxes
in respect of the Registrable Securities being registered as well as any fees
and expenses of counsel or other advisors to the Holders of the Registrable
Securities.

         1.2   Priority in Piggyback Registrations. Anything in section 1.1 to
               -----------------------------------
the contrary notwithstanding, and subject to section 6, if the managing
underwriter or underwriters of any underwritten public offering of the Company's
securities shall inform the Company in writing of its or their belief that the
number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the
Company shall include in such registration, only those securities which the
Company is advised by the managing underwriter or underwriters can be sold in
(or during the time of) such offering:

                                       -2-



               (a) first, all securities proposed by the Company to be sold for
its own account;

               (b) then, Registrable Securities to be sold by the holders of
Common Stock that constitute "Registrable Securities" that were (i) converted or
exchanged from shares of the Company's preferred stock ranking senior to the
Common Stock, (ii) held by the Company's institutional lenders or investors or
(iii) received upon exercise of warrants held by holders of any preferred stock
or warrants issued to the Company's institutional lenders or investors; and

               (c) then, Registrable Securities to be sold by the Holders and
all other shares of Common Stock outstanding on the date hereof or subsequently
acquired by the holders thereof or that constitute "Registrable Securities"
under and as defined in registration rights agreements containing piggyback
registration rights intended to have the same priority as those provided in this
section 1.2 to be sold by the holders thereof (the "Other Holders") in
                                                    -------------
proportion to the respective numbers of their Registrable Securities that are
proposed to be sold in such offering by the Holders and the Other Holders, as
the case may be.

          2.   Registration Procedures. In connection with the registration of
               -----------------------
any Registrable Securities under the Securities Act as provided in section 1,
the Company shall as expeditiously as possible:

               (a) prepare and file with the Commission the requisite
registration statement to affect such registration and thereafter use its best
efforts to cause such registration statement to become and remain effective
(subject to clause (b) below); provided, however, that the Company may
                               --------  -------
discontinue any registration of its securities that are not Registrable
Securities at any time prior to the effective date of the registration statement
relating thereto;

               (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities; provided, that such period need not exceed 60 days;
                        --------

               (c) furnish to the Holders such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Holders may reasonably request;

               (d) use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such states of the
United States of America where an exemption is not available and as the Holders
shall reasonably request, (ii) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and (iii)
to take any other action that may reasonably be necessary or advisable to enable
the Holders to

                                       -3-



consummate the disposition in such jurisdictions of the securities to be sold by
the Holders, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not, but for the requirements of this paragraph (d), be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;

               (e) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other federal or state governmental agencies or authorities as may be necessary
in the opinion of counsel to the Company to consummate the disposition of such
Registrable Securities in accordance with their intended method of disposition;

               (f) furnish to the Holders' underwriters, if any, (i) an opinion
of counsel for the Company, and (ii) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
each covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountant's comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);

               (g) notify the Holders when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of the Holders
promptly prepare and furnish to them a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;

               (h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of section
11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly
furnish the same to the Holders; and

               (i) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration.

                                       -4-



                  The Company may require the Holders to furnish the Company
such information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing.

                  Upon receipt of any notice from the Company of the happening
of an event of the kind described in item (g) of this section 2, the Holders
will forthwith discontinue their disposition of Registrable Securities pursuant
to the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (g) and, if so directed by the Company, the Holders will
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

                  3.       Underwritten Offerings.
                           ----------------------

                  3.1      Piggyback Underwritten Offerings. If the Company
                           --------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by section 1 and such securities are to be distributed by or
through one or more underwriters, the Company may, at its sole discretion and
subject to section 1 (including, without limitation, the provisions of section
1.2 hereof), arrange for such underwriters to include all or any part of the
Registrable Securities to be offered and sold by the Holders with and among the
securities of the Company to be distributed by such underwriters. The Holders
shall become a party to the underwriting agreement negotiated between the
Company and such underwriters and shall make all representations and warranties
to and shall enter into all agreements with the Company or the underwriters as
shall be reasonably requested of them, including all representations and
warranties required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.

                  3.2      Holdback Agreements.
                           -------------------

                           (a) If the Company at any time shall register shares
of Common Stock under the Securities Act for sale to the public (other than on
Forms S-4 or S-8 or a shelf registration), the Holders shall not sell pursuant
to an effective registration statement, publicly make any short sale of,
publicly grant any option for the purchase of, or otherwise publicly dispose of
any Shares (other than those Shares included in such registration pursuant to
section 1) without the prior written consent of the managing underwriter for a
period required by the underwriters and designated by the Company, which period
shall not begin more than thirty (30) days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made and
shall not last more than one hundred eighty (180) days after the effective date
of such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any other offering. The Company may legend and impose
stop transfer instructions on any certificate evidencing Registrable Securities
relating to the restrictions provided in this Section 3.2.

                           (b) During the 15-day period prior to the effective
date of any registration statement of Registrable Securities pursuant to an
underwritten public offering and during the 90-day period beginning on that
effective date, the Company shall not (except as part of such registration)
affect any public sale or distribution of any of its equity securities or of any

                                       -5-



security convertible into or exchangeable or exercisable for any equity security
of the Company (other than in connection with any employee stock option or other
benefit plan).

                  4.    Indemnification.
                        ---------------

                  4.1   Indemnification by the Company. In the event of any
                        ------------------------------
registration statement filed pursuant to section 1, the Company shall indemnify
and hold harmless each of the Holders and each of their directors, officers,
partners, agents, attorneys, representatives and affiliates and each other
individual, group, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture or other entity of
whatever nature ("Person") who participates as an underwriter in the offering or
                  ------
sale of such securities and each other Person, if any, who controls any Holder
or any such underwriter within the meaning of the Securities Act (each of the
foregoing, a "Holder Indemnitee"), insofar as losses, claims, damages, or
              -----------------
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, final prospectus, or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading or other violation of the Securities Act or other laws in connection
with such registration or disposition other than directly resulting from
voluntary actions by the Stockholder, and the Company shall reimburse each
Holder Indemnitee for any legal or any other fees, costs and expenses reasonably
incurred by such Holder Indemnitee in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, that the
                                                       --------
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of a Holder or such underwriter, as the case may be, expressly for use
in the preparation thereof; and provided, further, that the Company shall not be
                                --------  -------
liable to any Holder Indemnitee in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Holder, as
applicable.

                  4.2   Indemnification by the Holders. If any Registrable
                        ------------------------------
Securities are included in any registration statement, the Holders shall
indemnify and hold harmless the Company, and each of the Company's directors,
officers, agents, attorneys, representatives and affiliates, and each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls the Company within the
meaning of the Securities Act (each of the foregoing, a "Company Indemnitee"),
                                                         ------------------
insofar as losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or with
respect to any statement contained in, or omission from, such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged

                                       -6-



omission was made in reliance upon and in conformity with written information
furnished to the Company by the Holders expressly for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement, and the Holders shall reimburse each
Company Indemnitee for any legal or any other fees, costs and expenses
reasonably incurred by such Company Indemnitee in connection with investigating
or defending any such loss, claim, liability, action or proceeding.

                  4.3   Notice of Claims, Etc. Promptly after receipt by an
                        ---------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in sections 4.1 or 4.2, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
immediately give written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
        --------  -------
notice as provided herein shall not relieve the indemnifying party of its
indemnity obligations, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
related to the indemnified party's cooperation with the indemnifying party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties arises in respect of such
claim after the assumption of the defense thereof. No indemnifying party shall
be liable for any settlement of any action or proceeding affected without its
written consent, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.

                  4.4   Contribution. If indemnification shall for any reason be
                        ------------
held by a court to be unavailable to an indemnified party under section 4.1 or
section 4.2 with respect to any loss, claim, damage or liability, or any action
in respect thereof, then, in lieu of the amount paid or payable under section
4.1 or section 4.2, as applicable, the indemnified party and the indemnifying
party shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other. No Person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person

                                       -7-



shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim, affected without such Person's consent, which
consent shall not be unreasonably withheld. In no event shall the indemnity
provided for in this section 4.4 exceed the gross proceeds from the offering
received by such Holder.

                  4.5   Other Indemnification. Indemnification and contribution
                        ---------------------
similar to that specified in the preceding provisions of this section 4 (with
appropriate modifications) shall be given by the Company and the Holders with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act.

                  5.    Rule 144. With a view to making available the benefits
                        --------
of certain rules and regulations of the Commission that may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for its Common Stock, the Company shall:

                        (a)  use its best efforts to facilitate the sale of the
Registrable Securities to the public, without registration under the Securities
Act, pursuant to Rule 144 promulgated under the Securities Act, provided that
this shall not require the Company to file reports under the Securities Act and
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Exchange Act"), at any time
                                                 ------------
prior to the Company's being otherwise required to file such reports;

                        (b)  make and keep "public information" available, as
those terms are understood and defined in Rule 144 promulgated under the
Securities Act at all times after 90 days after the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public;

                        (c)  use reasonable efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act.

                  6.    Modification by Majority of Equivalent Holders. Anything
                        ----------------------------------------------
to the contrary contained in this Agreement (including but not limited to
section 1) notwithstanding, the Stockholders hereby consent in advance to any
modification of the rights provided in this Agreement (including but not limited
to any waiver of the rights provided in section 1.1 or section 2 or any
rearrangement of the registration rights priorities in section 1.2) to which a
majority in interest of the Equivalent Holders (as defined below) agree, and,
upon written notice to the Stockholders of any such agreement of the Equivalent
Holders and subject to Section 7(e) herein, this Agreement shall be deemed to be
modified in accordance with such agreement of the Equivalent Holders without any
further action on the part of the Stockholders. For purposes of the foregoing
sentence, (i) "Equivalent Holders" shall be deemed to mean the Stockholders and
               ------------------
any and all other holders of shares of capital stock of the Company who acquired
such shares from the Company as consideration, in whole or in part, for the sale
of a business (whether in stock purchase, asset purchase or other transactions)
to the Company (a "Business Acquisition") and (ii) a "majority in interest"
                   --------------------
shall refer to the agreement of Equivalent Holders holding a majority of the
shares of Common Stock held by all Equivalent Holders (whether such shares are

                                       -8-



actually issued to the Equivalent Holders or issuable upon conversion of shares
of other securities of the Company obtained in connection with the Business
Acquisitions or upon the exercise of other securities so obtained).

                  7.    Miscellaneous.
                        -------------

                        (a)  Notices. All notices, instructions and other
                             -------
communications in connection with this Agreement shall be in writing and may be
given by personal delivery or mailed, certified mail, return receipt requested,
postage prepaid or by a nationally recognized overnight courier to the parties
at the address of the Company as follows, and at the address of the Holders as
set forth on the signature page to this Agreement (or at such other address as a
party hereto may specify in a notice to the other party):

                  If to the Company:

                             MedSource Technologies, Inc.
                             110 Cheshire Lane, Suite 100
                             Minneapolis, MN 55305
                             Attention: Richard J. Effress

                  With a copy to:

                             Edward R. Mandell
                             Parker Chapin Flattau & Klimpl, LLP
                             1211 Avenue of the Americas
                             New York, New York 10036-8735

                  If to a Stockholder:

                             To the address set forth on the signature
                             page below.

                        (b)  No Waiver. No course of dealing and no delay on the
                             ---------
part of any party hereto in exercising any right, power or remedy conferred by
this Agreement shall operate as a waiver thereof or otherwise prejudice such
party's rights, powers and remedies conferred by this Agreement or shall
preclude any other or further exercise thereof or the exercise of any other
right, power and remedy.

                        (c)  Binding Effect; Assignability. This Agreement shall
                             -----------------------------
be binding upon and, except as otherwise provided herein, shall inure to the
benefit of the respective parties and their permitted successors and assigns.
This Agreement shall not be assignable except as otherwise provided herein.

                        (d)  Severability. Any provision of this Agreement that
                             ------------
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render

                                       -9-



unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.

                  (e)   Modification. No term or provision of this Agreement may
                        ------------
be amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

                  (f)   Law Governing.  This Agreement shall be governed by and
                        -------------
construed in accordance with the law of the state of Delaware applicable to
agreements made and to be performed entirely in Delaware.

                  (g)   Headings.  All headings and captions in this Agreement
                        --------
are for purposes of reference only and shall not be construed to limit or affect
the substance of this Agreement.

                  (h)   Entire Agreement. This Agreement contains, and is
                        ----------------
intended as, a complete statement of all the terms of the arrangements between
the parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.





[The remainder of this page is intentionally left blank; the next succeeding
page is a signature page.]

                                      -10-



                                         MEDSOURCE TECHNOLOGIES, INC.


                                         By: /s/ RICHARD J. EFFRESS
                                             --------------------------------
                                             Name: Richard J. Effress
                                                   Title: Chairman



                                             /s/ DONALD R. ROCHELO
                                             --------------------------------
                                                 Donald R. Rochelo

                                      -11-



                                         MEDSOURCE TECHNOLOGIES, INC.


                                         By: /s/ RICHARD J. EFFRESS
                                             ------------------------------
                                             Name: Richard J. Effress
                                                   Title: Chairman



                                             /s/ DONNA L. ROCHELO
                                             -------------------------------
                                                 Donna L. Rochelo

                                      -12-

EX-10.6

                                                                    EXHIBIT 10.6

                          REGISTRATION RIGHTS AGREEMENT

                                October 25, 2000

         The parties to this agreement are MedSource Technologies, Inc. a
Delaware corporation (the "Company"), and each of the stockholders listed on
Schedule A to this agreement and executing a signature page to this agreement
(the "Stockholders").

         The Stockholders own or are acquiring shares of the Company's 6.0%
Cumulative Convertible Redeemable Preferred Stock, Series C, par value $.01 per
share (the "Series C Preferred Stock"). The shares of Series C Preferred Stock
are convertible into shares of the Company's common stock, par value $.01 per
share ("Common Stock"). The shares of Series C Preferred Stock and the shares of
Common Stock underlying the shares of Series C Preferred Stock currently held by
the Stockholders are the only shares of capital stock of the company entitled to
the rights and benefits, and subject to the terms and conditions, of this
agreement, and are hereinafter collectively referred to as, the "Shares".

         The Company desires to provide to the Stockholders certain rights
regarding the registration of the Shares, all upon the terms and conditions set
forth below.

         It is therefore agreed as follows:

         1. Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:

         (a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

         (b) "Demand Notice" means a written request from Holders to register at
least 25% of the Registrable Securities;

         (c) "Holders" means the Stockholders and their respective permitted
transferees who hold Shares.

         (d) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

(e) "Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.



         (f) "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a dividend, stock split,
recapitalization, exchange, merger, consolidation, reorganization or other
transaction; provided, however, that any share shall cease to be a Registrable
Security under this agreement when (i) a registration statement with respect to
such share's public sale shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) it has been disposed of as permitted by, and in
compliance with, Rule 144 (or successor provision) promulgated under the
Securities Act or (C) it shall have ceased to be outstanding.

         (g) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of sections 2 and 3
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company, and the reasonable fees
and expenses of one counsel on behalf of the Holders whose Registrable
Securities are included in the registration statement, with such counsel
selected by a majority-in-interest of the Holders participating in the offering
(according to the number of shares of Common Stock each such Holder is directly
or indirectly registering for sale in such registration statement), and the fees
and disbursements of its independent public accountants, including the expenses
of "comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; provided, however, that Registration Expenses shall
exclude, and the Holders shall pay, underwriters fees and underwriting discounts
and commissions in respect of the Registrable Securities being registered
hereunder as well as any fees and expenses of counsel to the Holders of the
Registrable Securities hereunder (other than those of the one counsel referred
to above).

         (h) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.

         2.  Demand Registration and Shelf Registration.

         2.1 Rights to Demand Registration.

         (a) If, at any time (and from time to time) after the 180th day
following the date on which any registration statement pursuant to which the
Company shall have initially registered (i) shares of Common Stock, or (ii)
securities providing the holder thereof the right to acquire shares of Common
Stock, under the Securities Act for sale to the public shall have been declared
effective, the Company shall receive a Demand Notice, the Company shall promptly
give written notice of such proposed registration to all other Holders and shall
offer to include in such proposed registration any Registrable Securities
requested to be included in such proposed registration by the Holders who shall
respond in writing to the Company's notice within 10 days after receipt



                                       -2-



by the Holders in question of such notice (which response shall specify the
number of Registrable Securities proposed to be included in such registration).
Subject to section 2.2, the Company shall promptly use its best efforts to
effect such registration under the Securities Act of the Registrable Securities
that the Company has been so requested to register on such appropriate
registration form of the Commission as shall be selected by the Company. The
Company shall pay all Registration Expenses incurred in connection with a
registration of Registrable Securities pursuant to this section 2.1.

         (b) A registration requested pursuant to this section 2.1 shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective and remained effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement until the earlier
of (x) such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (y) 180 days after the
effective date of such registration statement, except with respect to any
registration statement filed pursuant to Rule 415 under the Securities Act, in
which case the Company shall use its commercially reasonable efforts to keep
such registration statement effective until such time as all of the Registrable
Securities cease to be Registrable Securities, (ii) if, after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason not attributable to the Holders and has not thereafter
become effective, or (iii) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than by reason of a failure on
the part of the Holders.

         2.2 Limits on Demand Rights.

         (a) The Company shall not be obligated to file and cause to become
effective (i) more than four registration statements pursuant to Demand Notices;
provided, however, that in addition thereto, the Stockholders may require the
Company to file registration statements on Form S-3 from time to time (in the
manner contemplated by section 2.4 below), if the use of such Form is available
to the Company; and (ii) during the period beginning 30 days prior to the filing
and ending 90 days following the effective date, of a registration statement
filed by the Company and relating to an underwritten offering in which a
majority of the shares are being sold by the Company for its own account.

         (b) Unless the Company shall have delayed the commencement of a
registration statement pursuant to section 2.2(a)(ii) above or section 2.2(c)
below, the Company may delay the filing or effectiveness of any registration
statement for a period of up to 60 days after the date of delivery of the Demand
Notice pursuant to this section 2 if at the time of such request the Company is
engaged in a firm commitment underwritten public offering of Company Shares in
which the Stockholders may include Registrable Securities pursuant to section 3,
provided, however, that, in the event the Company exercises its rights under
this section 2.2(b), the registration shall not be counted as a demand for
registration by any Stockholder for purposes of section 2.2(a)(i) hereof.



                                       -3-



         (c) If, while a registration request is pending pursuant to section
2.1, the Company has been advised by legal counsel that (i) the filing of a
registration statement would require the disclosure of a material transaction or
other factor that the Company reasonably determines in good faith would have a
material adverse effect on the Company or (ii) the Company then is unable to
comply with Commission requirements applicable to the requested registration,
then in each instance the Company shall not be required to effect a registration
pursuant to this section 2 until the earlier of (A) the date upon which such
material information is otherwise disclosed to the public or ceases to be
material or the Company is able to so comply with applicable Commission
requirements, as the case may be, and (B) 60 days after the Company has been so
advised by legal counsel, provided that in the event the Company exercises its
rights under this section 2.2(c), the registration shall not be counted as a
demand for registration by any Stockholder for purposes of section 2.2(a)(i)
hereof, and provided further that the Company may not exercise its right under
this section 2.2(c) more than once in any 12-month period or for more than 60
days in the aggregate during such period.

         (d) A requested registration under this section 2 may be rescinded by
written notice to the Company by the Holder or Holders initiating such request.
Such rescinded registration shall not count as a registration statement
initiated pursuant to this section 2 for purposes of section 2.2 above if such
request is rescinded by such Holder or Holders not later than five business days
prior to the filing of a registration statement with the Commission. If such
rescission is in connection with a delay of a registration by the Company or a
cutback in the number of Registrable Securities that may be sold by a Holder, or
as a result of any other postponement of such filing (other than as a result of
the fault of such Holder), the Company shall pay all Registration Expenses.

         2.3 Underwriter "Cutbacks" in Demand Registrations. With respect to any
registration pursuant to this section 2 that is being effected by one or more
underwriters, such underwriters shall be designated by the Company and approved
by a majority in interest of the Holders selling Registrable Securities and the
other stockholders of the Company selling Other Securities in such registration
(voting together as a single class) (which approval shall not be unreasonably
withheld), and the Company may include in such registration any Other
Securities; provided, however, that, anything to the contrary in section 2.1
notwithstanding, if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then the number of Registrable
Securities and Other Securities proposed to be included in such registration
shall be reduced pro rata based upon the number of shares of Common Stock owned
by each such Person and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

         2.4 Shelf Registration.

         (a) When (and for so long as) the Company is eligible to use Form S-3
(or a successor form), the Company shall file an "evergreen" shelf registration
statement



                                       -4-



with respect to the Registrable Securities and pursuant to Rule 415 under the
Securities Act (the "Shelf Registration") on Form S-3 (or such successor form).
The Company shall use its commercially reasonable efforts to have the Shelf
Registration declared effective as soon as practicable after such filing, and
shall use its commercially reasonable efforts to keep the Shelf Registration
effective and updated, from the date such Shelf Registration is declared
effective until such time as all of the Registrable Securities shall cease to be
Registrable Securities, but in no event longer than 36 months. Notwithstanding
the foregoing, if the Company makes a good faith determination that a filing of
the Shelf Registration or the sale of any Registrable Securities under an
effective Shelf Registration would interfere with any material financing or
material investment transaction, business combination or material acquisition
then under consideration, involving the Company or any of its affiliates, and
the Company provides notice (the "Shelf Notice") to the Holders containing a
general statement of the reasons for such determination (which shall be kept
confidential by such Holders), the Company may postpone the filing of the Shelf
Registration for the period indicated in the Shelf Notice (which shall be kept
confidential by such holders), which period shall in no event exceed 90 days.

         (b) The Company shall supplement or amend, if necessary, the Shelf
Registration, as required by the instructions applicable to such registration
form or by the Securities Act or as reasonably required by the holders of (or
any underwriter for) more than 50% of the Registrable Securities and the Company
shall furnish to the holders of the Registrable Securities to which the Shelf
Registration relates copies of any such supplement or amendment prior to its
being used and/or filed with the Commission. The Company shall pay all
Registration Expenses in connection with the Shelf Registration, whether or not
it becomes effective, and whether all, none or some of the Registrable
Securities are sold pursuant to the Shelf Registration.

         (c) A Shelf Registration pursuant to this section 2.5 shall not be
deemed to have been effected (i) unless a Shelf Registration has become
effective and remained effective in compliance with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities and
until such time as all of such Registrable Securities have been disposed of
under the Shelf Registration, but in no event longer than 36 months or (ii) if
after it has become effective, the Shelf Registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court and has not thereafter become effective.

         3.  Piggyback Registration.

         3.1 Right to Include Registrable Securities.

         (a) Subject to section 3.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible



                                       -5-



into Common Stock, or (iii) the Company's initial public offering), whether or
not for sale for its own account, it shall, each such time, give written notice
to the Holders of its intention to do so and of the Holders' rights under this
section 3 at least 30 days prior to the filing of a registration statement with
respect to such registration with the Commission. Upon the written request of
any Holder made within 20 days after the receipt of that notice, which request
shall specify the Registrable Securities intended to be registered and disposed
of by such Holder, the Company shall, subject to the provisions hereof, use its
best efforts to include in such registration statement all Registrable
Securities that the Company has been so requested to register by such Holder.

         (b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses in
connection therewith), without prejudice; and (ii) in the case of a
determination to delay registering, the Company shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities. No registration effected pursuant under this
section 3.1 shall relieve the Company of its obligations to effect any
registration under section 2.

         (c) The Company shall pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this section 3.1.

         3.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in
section 3.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 3 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the Persons selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

         4. Registration Procedures. In connection with the registration of any
Registrable Securities under the Securities Act as provided in sections 2 and 3,
the Company shall as expeditiously as possible:


                                       -6-



         (i) prepare and file with the Commission the requisite registration
statement to effect such registration and thereafter use its best efforts to
cause such registration statement to become and remain effective (subject to
clause (ii) below); provided, however, that the Company may discontinue any
registration of its securities that are not Registrable Securities at any time
prior to the effective date of the registration statement relating thereto;

         (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities; provided, however, that, the foregoing notwithstanding,
the Company shall not be required under this item (ii) to maintain the
effectiveness of any such registration statement for longer than 180 days, or
such longer period beyond such 180 days (up to an aggregate of 270 days) as may
be available without requiring the Company to file any financial statements as
of a later date and for a later period than the financial statements that may
have been required to maintain the effectiveness of the registration statement
for the 180-day period, except with respect to any registration statement filed
pursuant to Rule 415 under the Securities Act if the Company is eligible to file
a registration statement on Form S-3, in which case the Company shall use its
commercially reasonable efforts to keep the registration statement effective and
updated, from the date such registration statement is declared effective until
such time as all of the Registrable Securities cease to be Registrable
Securities;

         (iii) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Holders may reasonably request from time to
time;

         (iv) use its best efforts (x) to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities or blue sky laws of such states of the United States of
America where an exemption is not available and as the Holders shall reasonably
request, (y) to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and (z) to take any other action
that may reasonably be necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of the securities to be sold by
the Holders, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not,



                                       -7-



but for the requirements of this paragraph (iv), be obligated to be so qualified
or to consent to general service of process in any such jurisdiction;

         (v) use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company to consummate the disposition of such
Registrable Securities in accordance with their intended method of disposition;

         (vi) furnish to each seller of Registrable Securities and the Holders'
underwriters, if any, at the effective date of such registration statement, (x)
an opinion of counsel for the Company, and (y) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
each covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountant's comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);

         (vii) immediately notify the Holders when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in the light
of the circumstances under which they were made, and at the request of the
Holders promptly prepare and furnish to them a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;

         (viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of section
11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly
furnish the same to the Holders;

         (ix) provide and cause to be maintained a transfer agent and registrar
(which, in each case, may be the Company) for all Registrable Securities




                                       -8-



covered by such registration statement from and after a date not later than the
effective date of such registration;

         (x) cause representatives of the Company to participate in any "road
show" or "road shows" reasonably requested by any underwriter of an underwritten
or "best efforts" offering of any Registrable Securities;

         (xi) use its commercially reasonable efforts to list all Registrable
Securities covered by such registration statement on the National Market System
of the Nasdaq Stock Market or any national securities exchange on which
Registrable Securities of the same class covered by such registration statement
are then listed and, if no such Registrable Securities are so listed, on the
National Market System of the Nasdaq Stock Market or any national securities
exchange on which the Common Stock is then listed; and

         (xii) In the case of Registrable Securities that are not Common Stock,
upon the request of holders of a majority of all such Registrable Securities to
be covered by such registration or if advised by the managing underwriter of
such offering, the Company shall reissue the Registrable Securities in
denominations suitable for public trading (by depositary share arrangement or
otherwise).

         The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws; provided, that any such information or
questionnaires shall be given or made by a seller of Registrable Securities
without representation or warranty of any kind whatsoever except representations
with respect to the identity of such seller, such seller's Registrable
Securities and such seller's intended method of distribution or any other
representations required by applicable law.

         Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 4, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.



                                       -9-



         5. Underwritten Offerings.

         5.1 Requested Underwritten Offerings. If requested by the underwriters
for any underwritten offering by holders of Registrable Securities pursuant to a
registration requested under section 2, the Company will use its commercially
reasonable efforts to enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company and each Holder and the underwriters and to
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of that type, including, without
limitation, indemnities to the effect and to the extent provided in section 6.
The Holders will reasonably cooperate with the Company in the negotiation of the
underwriting agreement. Such Holders shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holders. No Holder shall be required to make any
representations or warranties to, or agreements with, the Company other than
representations, warranties or agreements regarding the identity of such Holder,
such Holder's Registrable Securities and such Holder's intended method of
distribution or any other representations required by applicable law.

         5.2 Piggyback Underwritten Offerings. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
section 2 or section 3 and such securities are to be distributed by or through
one or more underwriters, the Company shall, subject to the provisions of
section 2 and section 3 (including, without limitation, the provisions of
sections 2.3 and 3.2), if requested by the Holders, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Holders with and among the securities of the Company to be distributed by
such underwriters. The Holders shall be parties to the underwriting agreement
between the Company and such underwriters and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holders. No Holder shall be required to
make any representations or warranties to, or agreements with, the Company or
the underwriters other than representations, warranties or agreements regarding
the identity of such Holder, such Holder's and such Holder's intended method of
distribution or any other representations required by applicable law.

         5.3 Holdback Agreements.

         (a) If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly
grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such



                                       -10-



registration pursuant to section 2 or section 3) without the prior written
consent of the managing underwriter for a period required by the underwriters
and designated by the Company, which period shall begin not more than 30 days
prior to the effectiveness of the registration statement pursuant to which such
public offering shall be made and shall last not more than 120 days after the
effective date of such registration statement in the case of the Company's
initial public offering, or 90 days after the effective date of such
registration statement in the case of any such other offering; provided, that
the restrictions set forth in this section 5.2(a) shall only apply if the
officers, directors and holders of at least 5% of the issued and outstanding
shares of Common Stock are restricted in the same manner. The Company may legend
and impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided in this section 5.2.

         (b) During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

         5.4 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

         6. Indemnification.

         6.1 Indemnification by the Company. In the event of any registration
statement filed pursuant to section 2 or section 3, the Company shall, and
hereby does, indemnify and hold harmless each of the Holders and each of their
directors, officers, members, partners, agents, attorneys, representatives and
affiliates and each other individual, group, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, limited liability
company, joint venture or other entity of whatever nature ("Person") who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls any Holder or any such underwriter
within the meaning of the Securities Act (each of the foregoing, a "Holder
Indemnitee"), insofar as losses, claims, damages, or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such



                                       -11-



registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company shall
reimburse each Holder Indemnitee for any legal or any other fees, costs and
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or omission made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of a Holder (pursuant to the penultimate paragraph of
section 4) or such underwriter, as the case may be, for use in the preparation
thereof; and provided, further, that the Company shall not be liable to any
Holder Indemnitee in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus so
long as such final prospectus, and any amendments or supplements thereto, have
been furnished to such underwriter or any Holder, as applicable.

         6.2 Indemnification by the Holders. If any Registrable Securities are
included in any registration statement, the Holders of such Registrable
Securities so registered shall, and hereby do, severally and not jointly,
indemnify and hold harmless (in the same manner and to the same extent as set
forth in section 6.1 above) the Company, and each director and officer of the
Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by such
Holder for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement
(pursuant to the penultimate paragraph of section 4), provided, however, that no
Holder shall have any liability under this section 6.2 for any amount in excess
of the net proceeds actually received by such Holder from the sale of the
Registrable Securities included in such registration statement.

         6.3 Notice of Claims, Etc.



                                       -12-



         (a) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
sections 6.1 or 6.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish and
at any time, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs related to the indemnified party's cooperation with the
indemnifying party provided, however, that (i) if the indemnifying party fails
to assume the defense of such claim after a reasonable time the indemnified
party may retain counsel to defend such claim and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party, (ii) the
indemnified party may, at its own expense, retain separate counsel to
participate in such defense, (iii) the indemnified party shall have the right to
employ separate counsel at the expense of the indemnifying party and to control
its own defense of such action, claim or proceeding if, in the reasonable
opinion of counsel to such indemnified party, a material conflict or potential
material conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable, except that in no
event shall the indemnifying party be required to pay fees and expenses under
this section 6 for more than one separate firm of attorneys in any one legal
action or group of related legal actions.

         (b) No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

         6.4 Contribution. If indemnification shall for any reason be held by a
court to be unavailable to an indemnified party under section 6.1 or section 6.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 6.1 or
section 6.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such



                                       -13-



loss, claim, damage or liability, or action in respect thereof, with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by item (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Holders on the other provided, however, that no Holder shall have any liability
under this section 6.4 for any amount in excess of the net proceeds actually
received by such Holder from the sale of the Registrable Securities included in
such registration statement. No Person guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation. Such
prospective sellers' obligations to contribute as provided in this section 6.4
are several in proportion to the relative value of their respective Registrable
Securities covered by such registration statement and not joint. In addition, no
Person shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim, effected without such Person's consent, which
consent shall not be unreasonably withheld.

         6.5 Other Indemnification Provisions.

         (a) Indemnification and contribution provisions similar to those
specified in the preceding subdivisions of this section 6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act.

         (b) The indemnification and contribution required by this section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expenses, loss,
damage or liability is incurred.

         6.6 Rule 144. With a view to making available the benefits of certain
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, at all times from
and after 90 days following the effective date of the first registration of the
Company under the Securities Act of an offering of its securities to the public,
the Company shall:

         (a) use its best efforts to facilitate the sale of the Registrable
Securities to the public, without registration under the Securities Act,
pursuant to Rule 144 promulgated under the Securities Act, provided that this
shall not require the Company to file reports under the Securities Act and the
Securities Exchange Act of 1934, or any similar federal statute, and the rules
and regulations of the Commission thereunder ("Exchange Act"), at any time prior
to the Company's being otherwise required to file such reports;

         (b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times



                                       -14-



after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;

         (c) use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

         (d) deliver to the Holders, upon any Holder's request, a written
statement as to whether it has complied with the requirements of this section 6,
a copy of the most recent annual or quarterly report of the Company filed with
the Commission or any stock exchange or self regulatory organization registered
under the Securities Exchange Act of 1934, and such other reports and documents
so filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing it to sell its Registrable Securities
without registration.

         7. Representations and Warranties of the Company and the Stockholders.
Each of the Company, on the one hand, and the Stockholder, on the other hand,
hereby represents and warrants to the other as set forth below in this section
7; and all of such representations and warranties shall survive the execution
and delivery of this agreement.

         (a) Binding Effect. This agreement has been duly executed and delivered
by the Company or the Stockholder, as applicable, and constitutes the legal,
valid and binding obligation of such party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability.

         (b) Power; Authorization; Non-Contravention. The Company and the
Stockholder, as applicable, have all power and authority to execute, deliver and
perform his, her or its obligations under this agreement. The execution,
delivery and performance by the Company or the Stockholder, as applicable, of
this agreement and the consummation of the transactions contemplated hereby, (a)
has been duly authorized by all necessary corporate or limited liability
company, and if required, stockholder action, as applicable, on the part of or
on behalf of such party; or (b) does not violate, contravene the terms of, or
exceed the authority grant under, any agreement, document or instrument of or
applicable to such party.

         8. Miscellaneous.

         (a) Notices. All notices, instructions and other communications in
connection with this agreement shall be in writing and may be given by personal
delivery or mailed, certified mail, return receipt requested, postage prepaid or
by a nationally recognized overnight courier to the parties at the address of
the Company as follows, and at the address of the Holders as set forth on the
signature page to this agreement (or at such other address as the Company or the
Holders may specify in a notice to each other):

         If to the Company:



                                       -15-



         MedSource Technologies, Inc.
         110 Cheshire Lane, Suite 1010
         Minneapolis, Minnesota 55305
         Attention:  Chief Executive Officer

         With a copy to:

         Edward R. Mandell
         Parker Chapin LLP
         The Chrysler Building
         405 Lexington Avenue
         New York, New York 10174

         If to a Stockholder, to the address of such Stockholder set forth on a
signature page below.

         (b) No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

         (c) Binding Effect; Assignability. This agreement shall be binding upon
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns. This agreement
shall not be assignable except as otherwise provided herein; provided, however,
that the Stockholder shall have the right to assign and transfer all or any
portion of its rights under this agreement to a purchaser of Shares in
accordance with the terms of the Stock Purchase Agreement dated as of October
24, 2000 among the Company, the Stockholder and the other parties named therein.

         (d) Severability. Any provision of this agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which renders any provisions hereof prohibited
or unenforceable in any respect.

         (e) Modification. No term or provision of this agreement may be
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

         (f) Law Governing. This agreement shall be governed by and construed in
accordance with the law of the state of New York, applicable to agreements made
and to be performed entirely in New York, without regard to the principals of
conflicts of law of such state.



                                       -16-



         (g) Amendment to Securities Laws. The Company (on the one hand) and the
Stockholder (on the other hand) agree that any amendment to federal securities
laws (and regulations promulgated thereunder (and related registration forms)
and related state securities laws) shall not affect the substantive registration
requirements (and other obligations of the Company) set forth in this agreement;
and, following any such amendment, the Company shall continue to be required to
cause the registration of the Registrable Securities (and pay all Registration
Expenses and provide indemnification pursuant to section 6.1) under the federal
securities laws, as amended, in a manner consistent with carrying out the intent
and purposes of (and on terms as similar as practicable as the terms set forth
in) this agreement.

         (h) Headings. All headings and captions in this agreement are for
purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.

         (i) Entire Agreement. This agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.

         (j) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement.
Without limiting the generality of the foregoing, the Company will not hereafter
enter into any agreement with respect to its securities that grants, or modify
any existing agreement with respect to its securities to grant, to the holder of
its securities in connection with an incidental registration of such securities
higher priority to the rights granted to the Purchasers under section 3.2.

                      [The next page is the signature page]



                                       -17-



         The parties have executed and delivered this Registration Rights
Agreement as of the date first written above.

                                     MEDSOURCE TECHNOLOGIES, INC.


                                     By: /s/ FREDERIC BURDITT
                                         --------------------------------
                                         Name:  Frederic Burditt
                                         Title: Chief Financial Officer,
                                                  Secretary and Treasurer

                                     THE 1818 FUND III, L.P.
                                     By:      Brown Brothers Harriman & Co.,
                                              General Partner

                                     By: /s/
                                         --------------------------------
                                         Name:
                                         Title:  General Partner



                                     Address:

                                     The 1818 Fund III, L.P.
                                     c/o Brown Brothers Harriman & Co.
                                     59 Wall Street
                                     New York, New York 10005
                                     Attention: T. Michael Long

                                     with a copy to:

                                     Paul, Weiss, Rifkind, Wharton & Garrison
                                     1285 Avenue of the Americas
                                     New York, New York 10019-6064
                                     Attention: Marilyn Sobel, Esq.

                       [Signatures continued on next page]


                                       -18-



                                           MedSource Technologies, Inc.
                                           Registration Rights Agreement
                                           Stockholder Signature Page


                                     /s/ WILLIAM J. KIDD
                                     -----------------------------------
                                     William J. Kidd

                                     Address:

                                     c/o Kidd & Company, LLC
                                     Three Pickwick Plaza
                                     Greenwich, Connecticut  06830
                                     Telecopier No.:  (203) 661-1839


                                     /s/ CARLA G. KIDD
                                     -----------------------------------
                                     Carla G. Kidd

                                     Address:
                                     c/o Kidd & Company, LLC
                                     Three Pickwick Plaza
                                     Greenwich, Connecticut  06830
                                     Telecopier No.:  (203) 661-1839



                                     /s/ EDWARD R. MANDELL
                                     -----------------------------------
                                     Edward R. Mandell, not individually
                                      but as Trustee under the William
                                      J. Kidd Grantor Trust

                                     Address:
                                     c/o Kidd & Company, LLC
                                     Three Pickwick Plaza
                                     Greenwich, Connecticut  06830
                                     Attention:  William J. Kidd
                                     Telecopier No.:  (203) 661-1839


                                       -19-



                                           MedSource Technologies, Inc.
                                           Registration Rights Agreement
                                           Stockholder Signature Page

                                     /s/ ANDREW D. LIPMAN
                                     -----------------------------------
                                     Andrew D. Lipman

                                     Address:
                                     c/o Kidd & Company, LLC
                                     Three Pickwick Plaza
                                     Greenwich, Connecticut  06830
                                     Telecopier No.:  (203) 661-1839


                                     /s/ RICHARD J. EFFRESS
                                     -----------------------------------
                                     Richard J. Effress

                                     Address:

                                      c/o Kidd & Company, LLC
                                      Three Pickwick Plaza
                                      Greenwich, Connecticut  06830
                                      Telecopier No.:  (203) 661-1839


                                       -20-



                                           MedSource Technologies, Inc.
                                           Registration Rights Agreement
                                           Stockholder Signature Page

                                     /s/ JOHN W. GALIARDO
                                     -----------------------------------
                                     John W. Galiardo

                                     Address:

                                     56 Crooked Tree Lane
                                     Princeton, New Jersey  08540
                                     Telecopier No.:

                                     MANIRE LIMITED PARTNERSHIP
                                     By:  Odyssey Corp., its general partner

                                     By: /s/ ROSS MANIRE
                                         --------------------------------
                                         Name: Ross Manire
                                         Title:  President

                                     Address:

                                     150 Carleton Avenue
                                     Glen Ellyn, Illinois  60137
                                     Telecopier No.:  (630) 858-0568


                                       -21-

EX-10.7

                                                                    EXHIBIT 10.7

                         REGISTRATION RIGHTS AGREEMENT

                                December 29, 2000

         The parties to this agreement are MedSource Technologies, Inc. a
Delaware corporation (the "Company"), and each of the other individuals or
entities executing a signature page to this agreement (collectively, the
"Stockholders").

         Simultaneously with the execution and delivery of this Agreement, the
Stockholders are acquiring shares of the Company's series D 6% cumulative
convertible preferred stock, par value $.0l per share ("Series D Preferred
Stock"), which is convertible into shares of the Company's common stock, par
value $.0l per share (the "Common Stock"). All of the shares of Common Stock
that any Stockholder may acquire by conversion of his, her or its shares of
Series D Preferred Stock, as applicable, are the only shares of capital stock of
the Company entitled to the rights and benefits, and subject to the terms and
conditions, of this Agreement, and are collectively referred to herein as the
"Shares."

         Subject to the terms and conditions set forth in that certain
stockholders agreement dated this date between the parties hereto (the
"Stockholders Agreement"), the Company desires to provide to the Stockholders
certain rights regarding the registration of the Shares, all upon the terms and
conditions set forth below.

         It is therefore agreed as follows:

         1.    Piggyback Registration.
               -----------------------

         1.1   Right to Include Registrable Securities.
               ----------------------------------------

         (a) Subject to Section 1.1(b) hereof, if the Company at any time
proposes to register any of its securities under the Securities Act (as defined
below) by registration on Forms SB-2, S-l, S-2, S-3 (but not Forms S-4 or S-8)
or any successor or similar form(s) (except registrations of securities in
connection with (i) an employee benefit plan or dividend reinvestment plan or a
merger, consolidation or other business combination, (ii) debt securities that
are not convertible into Common Stock, or (iii) the Company's initial public
offering), whether or not for sale for its own account, it shall, each such
time, give written notice to the Holders (as defined below) of its intention to
do so and of the Holders' rights under this Section 1 at least 30 days prior to
the filing of a registration statement with respect to such registration with
the Commission (as defined below). Upon the written request of any Holder made
within 20 days after the receipt of that notice; which request shall specify the
Registrable Securities (as defined below) intended to be registered and disposed
of by such Holder, the Company shall, subject to the provisions hereof, use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities that the Company has been so requested to register by
such Holder.



         (b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses (as
defined below) in connection therewith), without prejudice; and (ii) in the case
of a determination to delay registering, the Company shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.

         (c) The Company shall pay all Registration Expenses (as defined below)
in connection with registration of Registrable Securities requested pursuant to
this Section 1.

         (d) As used in this Agreement (i) "Registrable Securities" means the
Registrable Shares and any other securities issuable or issued with respect
thereto by way of a dividend, distribution, recapitalization, exchange, merger,
consolidation, reorganization or other similar transaction, (ii) "Registrable
Shares" includes the Shares held by the Stockholders, and their permitted
transferees under the Stockholders Agreement; provided that any such Share shall
cease to be a Registrable Share when (A) it shall have been sold or otherwise
disposed of pursuant to an effective registration statement or as permitted by,
and in compliance with, Rule 144 (or successor provision) promulgated under the
Securities Act, (B) the Holder thereof (other than any Holder that owns Shares
(on an as converted basis) that represent at least 1% of the total number of
then outstanding Shares held by all stockholders of the Company (on an as
converted basis)) may dispose of all Shares then held by the Holder as permitted
by, and in compliance with, Rule 144k (or successor provision) or (C) it shall
have ceased to be outstanding; (iii) "Holder" means the Stockholders and their
permitted transferees who hold shares; and (iv) "Securities Act" shall mean the
Securities Act of 1933, as amended, or any subsequent similar federal statute,
and the rules and regulations of the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act (the "Commission").

         (e) As used in this Agreement, "Registration Expenses" means all
expenses incident to the Company's performance of or compliance with the
provisions of Sections 1, 2 and 3 hereof including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all printing expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of "comfort" letters required by or incident to such performance and
compliance, and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities; provided, however that Registration Expenses
shall exclude, and the Holders shall pay, underwriters fees and underwriting
discounts and commissions and transfer taxes in respect


                                       -2-



of the Registrable Securities being registered as well as any fees and expenses
of counsel or other advisors to the Holders of the Registrable Securities other
than as provided in Section 2(x) hereof.

         1.2 Priority in Piggyback Registrations. Anything in Section 1.1 hereof
             ------------------------------------
to the contrary notwithstanding, if the managing underwriter or underwriters of
any underwritten offering shall inform the Company in writing of its belief that
the number of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the
Company shall include in such registration, to the extent of the number that the
Company is so advised can be sold in (or during the time of) such offering:

                  (i) first, all securities proposed by the Company to be sold
         for its own account;

                  (ii) then, shares of Common Stock being sold in the
         underwritten offering by stockholders exercising any demand
         registration rights they may have with respect to such offering; and

                  (iii) then, the number of Registrable Securities to be sold by
         the Holders and Other Securities (as defined below) to be sold by other
         stockholders of the Company proposed to be included in such
         underwritten offering in proportion to the respective number of shares
         of Common Stock owned by each such person and its affiliates
         (determined on an as converted basis) at the time of such registration.

         "Other Securities" means, at any time, those shares of Common Stock,
and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

         2. Registration Procedures. In connection with the registration of any
            ------------------------
Registrable Securities under the Securities Act as provided in Section 1 hereof,
the Company shall as expeditiously as possible:

                  (i) prepare and file with the Commission the requisite
         registration statement to effect such registration and thereafter use
         its best efforts to cause such registration statement to become and
         remain effective (subject to clause (ii) below); provided, however,
         that the Company may discontinue any registration of its securities
         that are not Registrable Securities at any time prior to the effective
         date of the registration statement relating thereto;

                  (ii) prepare and file with the Commission such amendments and
         supplements to such registration statement and the prospectus used


                                       -3-



         in connection therewith as may be necessary to keep such registration
         statement effective and to comply with the provisions of the Securities
         Act with respect to the disposition of all Registrable Securities
         covered by such registration statement for such period as shall be
         required for the disposition of all of such Registrable Securities;
         provided, that such period need not exceed 90 days; and provided,
         further, that any period of discontinuance period pursuant to the last
         paragraph of this Section 2 shall not be counted toward such 90 days;

                  (iii) furnish to the Holders such number of conformed copies
         of such registration statement and of each such amendment and
         supplement thereto (in each case including all exhibits), such number
         of copies of the prospectus contained in such registration statement
         (including each preliminary prospectus and any summary prospectus) and
         any other prospectus filed under Rule 424 under the Securities Act, in
         conformity with the requirements of the Securities Act, and such other
         documents, as the Holders may reasonably request;

                  (iv) use its best efforts (x) to register or qualify all
         Registrable Securities and other securities covered by such
         registration statement under such other securities or blue sky laws of
         such states of the United States of America where an exemption is not
         available and as the Holders shall reasonably request, (y) to keep such
         registration or qualification in effect for so long as such
         registration statement remains in effect, and (z) to take any other
         action that may reasonably be necessary or advisable to enable the
         Holders to consummate the disposition in such jurisdictions of the
         securities to be sold by the Holders, except that the Company shall not
         for any such purpose be required to qualify generally to do business as
         a foreign corporation in any jurisdiction wherein it would not, but for
         the requirements of this paragraph (iv), be obligated to be so
         qualified or to consent to general service of process in any such
         jurisdiction;

                  (v) use its best efforts to cause all Registrable Securities
         covered by such registration statement to be registered with or
         approved by such other federal or state governmental agencies or
         authorities as may be necessary in the opinion of counsel to the
         Company to consummate the disposition of such Registrable Securities in
         accordance with their intended method of disposition;

                  (vi) furnish to each seller of Registrable Securities and the
         Holders' underwriters, if any, (x) an opinion of counsel for the
         Company, and (y) a "comfort" letter signed by the independent public
         accountants who have certified the Company's financial statements
         included or incorporated by reference in such registration statement,


                                       -4-



         each covering substantially the same matters with respect to such
         registration statement (and the prospectus included therein) and, in
         the case of the accountant's comfort letter, with respect to events
         subsequent to the date of such financial statements, as are customarily
         covered in opinions of issuer's counsel and in accountant's comfort
         letters delivered to the underwriters in underwritten public offerings
         of securities (and dated the dates such opinions and comfort letters
         are customarily dated);

                  (vii) notify the Holders when a prospectus relating thereto is
         required to be delivered under the Securities Act, upon discovery that,
         or upon the happening of any event as a result of which, the prospectus
         included in such registration statement, as then in effect, includes an
         untrue statement of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, in the light of the circumstances under which
         they were made, and at the request of the Holders promptly prepare and
         furnish to them a reasonable number of copies of a supplement to or an
         amendment of such prospectus as may be necessary so that, as thereafter
         delivered to the purchasers of such securities, such prospectus shall
         not include an untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading in the light of the circumstances
         under which they were made;

                  (viii) otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders, as soon as reasonably practicable, an earnings
         statement covering the period of at least 12 months, but not more than
         18 months, beginning with the first full calendar month after the
         effective date of such registration statement, which earnings statement
         shall satisfy the provisions of section 11(a) of the Securities Act and
         Rule 158 promulgated thereunder, and promptly furnish the same to the
         Holders;

                  (ix) provide and cause to be maintained a transfer agent and
         registrar (which, in each case, may be the Company) for all Registrable
         Securities covered by such registration statement from and after a date
         not later than the effective date of such registration;

                  (x) pay the reasonable fees and expenses of one counsel on
         behalf of the Holders whose Registrable Securities are included in the
         registration statement, together with any other selling security
         holders, with such counsel selected by a majority-in-interest
         (according to the number of shares of Common Stock each such Holder and
         other selling


                                       -5-



         security holder is registering for sale in such registration statement)
         of such Holders and other selling security holders; and

                  (xi) use its commercially reasonable efforts to list all
         Registrable Securities covered by such registration statement on the
         Nasdaq National Market or any national securities exchange in which the
         Common Stock of the Company is then listed.

         The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing.

         Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this Section 2, the Holders will
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders will
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

         3. Underwritten Offerings.
            -----------------------

         3.1 Piggyback Underwritten Offering. If the Company proposes to
             --------------------------------
register any of its securities under the Securities Act as contemplated by
Section 1 and such securities are to be distributed by or through one or more
underwriters, the Company will, subject to Section 1 hereof (including, without
limitation, the provisions of Section 1.2 hereof), if requested by the Holders,
arrange for such underwriters to include all the Registrable Securities to be
offered and sold by the Holders with and among the securities of the Company to
be distributed by such underwriters. The Holders shall become a party to the
underwriting agreement negotiated between the Company and such underwriters and
shall make all representations and warranties to and shall enter into all
agreements with the Company and/or the underwriters as shall be reasonably
requested of them, including all representations, warranties and agreements
required by law or customarily given by selling shareholders in an underwritten
public offering.

         3.2 Holdback Agreements. If the Company at any time shall register
             --------------------
shares of Common Stock under the Securities Act for sale to the public (other
than on Forms S-4 or S-8 or a shelf registration), the Holders shall not sell
pursuant to an effective registration `statement, publicly make any short sale
of, publicly grant any option for the purchase of, or otherwise publicly dispose
of any Shares (other than those Shares included in such registration pursuant to
Section 1 hereof) or other securities of the Company exercisable for or
convertible into shares of Common Stock without the prior written consent of the
managing underwriter for a period required by the underwriters and designated by
the Company, which period shall not begin more than thirty (30) days prior to
the effectiveness of the registration statement pursuant to which such public
offering shall be made and shall


                                       -6-



not last more than one hundred eighty (180) days after the effective date of
such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any such other offering; provided, that the
restrictions set forth in this Section 3.2 shall only apply if the officers,
directors and any holders of at least 5% of the issued and outstanding shares of
Common Stock are restricted in the same manner. The Company may legend and
impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided in this Section 3.2.

         3.3 Preparation; Reasonable Investigation. In connection with the
             --------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

         4. Indemnification.
            ----------------

         4.1 Indemnification by the Company. In the event of any registration
             -------------------------------
statement filed pursuant to Section 1 hereof, the Company shall, and hereby
does, indemnify and hold harmless each of the Holders and each of their
directors, officers, partners, agents, attorneys, representatives and affiliates
and each other individual, group, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture or other
entity of whatever nature ("Person") who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
any Holder or any such underwriter within the meaning of the Securities Act
(each of the foregoing, a "Holder Indemnitee") insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading or other violation of the
Securities Act or other laws in connection with such registration or disposition
other than directly resulting from voluntary actions by the Stockholder (other
than in accordance with Company advice, request or instruction), and the Company
shall reimburse each Holder Indemnitee for any legal or any other fees, costs
and expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
the Company shall not be liable to a Holder or an underwriter in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is


                                       -7-



based upon an untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder or such underwriter, as the case may be, expressly for use in the
preparation thereof; and provided, further, that the Company shall not be liable
to any Holder Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Holder, as
applicable.

         4.2 Indemnification by the Holders. If any Registrable Securities are
             -------------------------------
included in any registration statement, each Holder selling Shares thereunder
shall, and hereby does, severally and not jointly, indemnify and hold harmless
the Company, and each director, officer, agent, attorney, representative and
affiliate of the Company, each other Person, if any, who controls the Company
within the meaning of the Securities Act, and each Person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any; who controls any such underwriter within the meaning of the Securities Act
with respect to all losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof ("Losses") to
which the Company or such other indemnified party becomes subject under the
Securities Act, insofar as such Losses arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by such Holder expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, in
no event shall the indemnity provided for in this Section 4.2 exceed the net
proceeds actually received by the Holder from the sale of the Registrable
Securities included in such registration statement.

         4.3 Notice of Claims, Etc. Promptly after receipt by an indemnified
             ----------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 4.1 or 4.2 hereof, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party,
immediately give written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
indemnity obligations, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such


                                       -8-



indemnified and indemnifying parties may exist in respect of such claim (in
which case the indemnified party shall be entitled to retain separate counsel as
provided below), the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs related to the
indemnified party's cooperation with the indemnifying party; provided, however,
that (i) if the indemnifying party fails to assume the defense of such claim
after a reasonable time the indemnified party may retain counsel to defend such
claim and the reasonable fees and expenses of such counsel shall be paid by the
indemnifying party, (ii) the indemnified party may, at its own expense, retain
separate counsel to participate in such defense, (iii) the indemnified party
shall have the right to employ separate counsel at the expense of the
indemnifying party and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such indemnified party, a
material conflict or potential material conflict exists between the indemnified
party and the indemnifying party that would make such separate representation
advisable, except that in no event shall the indemnifying party be required to
pay fees and expenses under this Section 4 for more than one separate firm of
attorneys in any one legal action or group of related legal actions. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.

         4.4 Contribution. If indemnification shall for any reason be held by a
             -------------
court to be unavailable to an indemnified party under Section 4.1 or Section 4.2
hereof in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under Section 4.1
or Section 4.2 hereof, as applicable, the indemnified party and the indemnifying
party shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other. No Person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld. In no event shall the


                                       -9-



contribution provided for in this Section 4.4 exceed the net proceeds actually
received by such Holder from the sale of the Registrable Securities included in
such registration statement. In addition, any Holder's obligation to contribute
as provided in this Section 4.4 shall be several in proportion to the number of
Registrable Securities covered by such registration statement and not joint.

         4.5 Other Indemnification. Indemnification and contribution similar to
             ----------------------
that specified in the preceding provisions of this Section 4 (with appropriate
modifications) shall be given by the Company and the Holders with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority other than the Securities
Act.

         5. Rule 144. With a view to making available the benefits of certain
            ---------
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, after such time
as a public market exists for its Common Stock, the Company shall:

         (a) use its best efforts to facilitate the sale of the Registrable
Securities to the public, without registration under the Securities Act,
pursuant to Rule 144 promulgated under the Securities Act, provided that this
shall not require the Company to file reports under the Securities Act and the
Securities Exchange Act of 1934 as amended, or any similar federal statute, and
the rules and regulations of the Commission thereunder (" Exchange Act"), at any
time prior to the Company's being otherwise required to file such reports;

         (b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;

         (c) use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

         (d) deliver a written statement as to whether it has complied with such
requirements of this section, to the Holders upon any Holder's request.

         6. Miscellaneous.
            --------------

         (a) Notices. All notices, instructions and other communications in
             --------
connection with this Agreement shall be in writing and may be given by personal
delivery or mailed,certified mail, return receipt requested, postage prepaid or
by a nationally recognized overnight courier to the parties at the address of
the Company as follows, and at the address of the Holders as set forth on the
signature page to this Agreement (or at such other address as the Company or the
Holders may specify in a notice to the Company):


                                       -10-



                  If to the Company:
                                            MedSource Technologies, Inc.
                                            110 Cheshire Lane, Suite 100
                                            Minneapolis, Minnesota 55305
                                            Attention: Richard J. Effress
                                            Facsimile: (612) 807-1235

                  With a copy to:

                                            Faegre & Benson LLP
                                            90 South Seventh Street
                                            Minneapolis, Minnesota 55402
                                            Attn: David B. Miller
                                            Facsimile: (612) 336-3026

                  If to a Stockholder:

                                            to the address specified below such
                                            Stockholder's signature

                                            with a copy to:

                                            Choate, Hall & Stewart
                                            52 State Street
                                            Boston, MA 02109
                                            Attn: Roslyn G. Daum, Esq.
                                            Facsimile: (6 17) 248-4000

         (b) No Waiver. No course of dealing and no delay on the part of any
             ----------
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this Agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

         (c) Binding Effect; Assignability. This Agreement shall be binding upon
             ------------------------------
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns. This Agreement
shall not be assignable by a Holder except with respect to transfers permitted
by the Stockholders Agreement and provided that the transferee owns at least
15,000 Registrable Shares (on an as converted basis) after such transfer.

         (d) Severability. Any provision of this Agreement that is prohibited or
             -------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable


                                       -11-



law, the parties hereby waive any provision of law which renders any provisions
hereof prohibited or unenforceable in any respect.

         (e) Modification. This Agreement may be amended upon the express
             -------------
written consent of the Company and Stockholders holding in the aggregate at
least 66 2/3% of the then outstanding Registrable Securities (computed on an as
converted basis).

         (f) Legal Fees. If any action at law or in equity is necessary to
             -----------
enforce the terms of this Agreement, the prevailing party shall be entitled to
receive from the other party or parties to such action all reasonable attorneys'
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.

         (g) Law Governing. This agreement shall be governed by and construed in
             --------------
accordance with the law of the State of Delaware applicable to agreements made
and to be performed entirely in Delaware.

         (h) Headings. All headings and captions in this Agreement are for
             ---------
purposes of reference only and shall not be construed to limit or affect the
substance of this Agreement.

         (i) Confidentiality. Each Stockholder agrees to hold all information
             ----------------
provided to the Stockholder pursuant to Section 1 of this Agreement in
confidence, and to refrain from trading in any securities of the Company prior
to the Company making any such information publicly available.

         (j) Entire Agreement. This Agreement contains, and is intended as, a
             -----------------
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.


                                       -12-





                           COMPANY:
                           MEDSOURCE TECHNOLOGIES, INC.

                           By: /s/ RICHARD J. EFFRESS
                              ------------------------------------------------
                               Richard J. Effress
                               Chairman of the Board and
                               Chief Executive Officer



                                                   Registration Rights Agreement


Stockholder:               1995 KRAUS MARITAL TRUST
                           DATED SEPTEMBER 18, 1995


                           /s/ JEFF L. KRAUS
                           ---------------------------------------------------
                           By:  Jeff L. Kraus
                           Its: Trustee

Address:                   14716 Golf Links Road
                           Los Galos, CA 95030
                           Facsimile:_________________________________________






                                                   Registration Rights Agreement


Stockholder:               1995 MATANI MARITAL TRUST
                           DATED SEPTEMBER 18, 1995


                           /s/ Tricia P. Matani
                           ---------------------------------------------------
                           By:
                           Its: Trustee

Address:                   6473 Pfeiffer Ranch Ct.
                           San Jose, CA 95120
                           Facsimile:_________________________________________






                                                   Registration Rights Agreement


Stockholder:



                           /s/ ROBERT C. ALLMAN
                           ---------------------------------------------------
                           Robert C. Allman


Address:                   62 Ski Bowl Road
                           Bellows Falls, VT 05101
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:


                           /s/ FERNANDO ALVAREZ DE TOLEDO
                           ---------------------------------------------------
                           Fernando Alvarez de Toledo


Address:                   229 Fairhaven Hill
                           Concord, MA 01742
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:



                           /s/ FREDRIC ALVAREZ DE TOLEDO
                           ---------------------------------------------------
                           Fredric Alvarez de Toledo


Address:                   139 West 72nd St.
                           Apt. 5 RW
                           New York, NY 10023
                           Facsimile: on request
                                      Phone: (212) 787-3531






                                                   Registration Rights Agreement


Stockholder:



                           /s/ LIVIA ALVAREZ DE TOLEDO
                           ---------------------------------------------------
                           Livia Alvarez de Toledo


Address:                   229 Fairhaven Hill
                           Concord, MA 01742
                           Facsimile:_________________________________________






                                                   Registration Rights Agreement


Stockholder:               BANTAM GROUP


                           /s/ JOSEPH J. CARUSO
                           ---------------------------------------------------
                           By:  Joseph J. Caruso
                           Its: President

Address:                   50 Bay Colony Drive
                           Westwood, MA 02090
                           Facsimile: 781-329-2238





                                                   Registration Rights Agreement


Stockholder:



                           /s/ RAHUL BHAGAT
                           ---------------------------------------------------
                           Rahul Bhagat


Address:                   642 Cree Drive
                           San Jose, CA 95123
                           Facsimile:_________________________________________







                                                   Registration Rights Agreement


Stockholder:



                           /s/ JOSEPH J. CARUSO
                           ---------------------------------------------------
                           Joseph J. Caruso


Address:                   50 Bay Colony Drive
                           Westwood, MA 02090
                           Facsimile: 781-329-2238






                                                   Registration Rights Agreement


Stockholder:



                           /s/ CAROL L. CEKALA
                           ---------------------------------------------------
                           Carol L. Cekala


Address:                   338 South Ave.
                           Weston, MA 02193
                           Facsimile: 781-891-6731





                                                   Registration Rights Agreement


Stockholder:



                           /s/ RICHARD C. FORTIER
                           ---------------------------------------------------
                           Richard C. Fortier


Address:                   150 Old Pickard Road
                           Concord, MA 01742
                           Facsimile: 617-964-2660





                                                   Registration Rights Agreement


Stockholder:


                           /s/ GAIL M. FREEL
                           ---------------------------------------------------
                           Gail M. Freel


Address:                   153 Darrow Street
                           Quincy, MA 02169
                           Facsimile: 617-773-6081





                                                   Registration Rights Agreement


Stockholder:



                           /s/ WILLIAM F. GASKO
                           ---------------------------------------------------
                           William F. Gasko


Address:                   CTC, Mass. Technology Park
                           1400 Computer Drive
                           Westborough, MA 01581
                           Facsimile: 508-366-0101





                                                   Registration Rights Agreement


Stockholder:



                           /s/ ALAN L. HERSHEY
                           ---------------------------------------------------
                           Alan L. Hershey


Address:                   91 Three Corners Road
                           Guilford, CT 06437
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:



                           /s/ MIKE HORZEWSKI
                           ---------------------------------------------------
                           Mike Horzewski


Address:                   6032 Running Springs Street
                           San Jose, CA 95135
                           Facsimile: 408-528-7181





                                                   Registration Rights Agreement


Stockholder:               HORZEWSKI 1997 LIVING TRUST
                           DATED OCTOBER 10, 1997



                           /s/ MICHAEL J. HORZEWSKI
                           ---------------------------------------------------
                           By:  Michael J. Horzewski
                           Its: Trustee

Address:                   6032 Running Springs Street
                           San Jose, CA 95135
                           Facsimile: 408-528-7181





                                                   Registration Rights Agreement


Stockholder:



                           /s/ JACOB L. JACOBSON
                           ---------------------------------------------------
                           Jacob L. Jacobson


Address:                   91 Exeter Street
                           Newton, MA 02165
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:



                           /s/ JONATHAN R. LEAVY
                           ---------------------------------------------------
                           Jonathan R. Leavy


Address:                   4 Eden Avenue
                           Newton, MA 02465
                           Facsimile: 617-964-0858





                                                   Registration Rights Agreement


Stockholder:



                           /s/ ZBIGNIEW MASLANKA
                           ---------------------------------------------------
                           Zbigniew Maslanka


Address:                   3101 Erin Lane
                           Santa Cruz, CA 95065
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:



                           /s/ PAUL G. MILDE
                           ---------------------------------------------------
                           Paul G. Milde


Address:                   18 Church Street
                           PO Box 1211
                           Mattapoisett, MA 02739
                           Facsimile: 508-758-3020





                                                   Registration Rights Agreement


Stockholder:



                           /s/ STUART A. RANDLE
                           ---------------------------------------------------
                           Stuart A. Randle


Address:                   359 Pope Road
                           Concord, MA 01742
                           Facsimile:_________________________________________






                                                   Registration Rights Agreement


Stockholder:



                           /s/ CAROL RAYMOND
                           ---------------------------------------------------
                           Carol Raymond


Address:                   6 Richard Road
                           Wayland, MA 01778
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:



                           /s/ CHARLES W. SCHELLHORN
                           ---------------------------------------------------
                           Charles W. Schellhorn


Address:                   Argus Health Systems
                           715 Hereford Drive
                           Kansas City, MO 64015
                           Facsimile:_________________________________________





                                                   Registration Rights Agreement


Stockholder:               THE TOLKOFF FAMILY LIMITED
                           PARTNERSHIP


                           /s/ M. JOSHUA TOLKOFF
                           ---------------------------------------------------
                           By:  M. Joshua Tolkoff
                           Its: General Partner

Address:                   39 Jordan Road
                           Brookline, MA 02446
                           Facsimile: 617-566-3037





                                                   Registration Rights Agreement


Stockholder:



                           /s/ ROBERT ZOLLARS
                           ---------------------------------------------------
                           Robert Zollars


Address:                   Neoforma
                           3061 Zanker Road
                           San Jose, CA 95134-2127
                           Facsimile: 408-468-4050

EX-10.8

                                                                    EXHIBIT 10.8

                         REGISTRATION RIGHTS AGREEMENT

                                February 27, 2001

         The parties to this agreement are MedSource Technologies, Inc. a
Delaware corporation (the "Company") and Thomas Weisel Partners LLC, a Delaware
limited liability company (the "Stockholder").

         The Stockholder owns a warrant (the "Warrant") to purchase 525 shares
of the Company's 6.0% Cumulative Convertible Redeemable Preferred Stock, Series
C, par value $.01 per share ("Series C Preferred Stock"). The shares of Series C
Preferred Stock are convertible into shares of the Company's common stock, par
value $.01 per share ("Common Stock"). The shares of Common Stock issuable upon
conversion of the Series C Preferred Stock issuable upon exercise of the Warrant
are the only shares of capital stock of the Company entitled to the rights and
benefits, and subject to the terms and conditions, of this agreement, and are
hereinafter collectively referred to as, the "Shares."

         The Company desires to provide to the Stockholders certain rights
regarding the registration of the Shares, all upon the terms and conditions set
forth below.

         It is therefore agreed as follows:

         1. Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:

         (a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

         (b) "Holders" means the Stockholders and their respective permitted
transferees who hold Shares.

         (c) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

         (d) "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

         (e) "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a recapitalization, exchange, merger,
consolidation, reorganization or other transaction; provided, however, that any
share shall cease to be a



Registrable Security under this agreement when (A) a registration statement with
respect to such share's public sale shall have become effective under the
Securities Act, (B) it has been disposed of as permitted by, and in compliance
with, Rule 144 (or successor provision) promulgated under the Securities Act or
(C) it shall have ceased to be a outstanding.

         (f) Registration Expenses" means all expenses incident to the Company's
performance of or compliance with the provisions of section 2 including, without
limitation, all registration, filing and National Association of Securities
Dealers, Inc. fees, all listing fees, all fees and expenses of complying with
securities or blue sky laws (including, without limitation, reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities hereunder), all word processing,
duplicating and printing expenses, messenger and delivery expenses, the fees and
disbursements of counsel for the Company, and the reasonable fees and expenses
of one counsel on behalf holders (including the Holders) whose whose shares of
Common Stock are included in the registration statement, with such counsel
selected by a majority-in-interest of such holders (according to the number of
shares of Common Stock each such holder is directly or indirectly registering
for sale in such registration statement), and the fees and disbursements of its
independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; provided, however, that Registration Expenses shall exclude, and the
Holders shall pay, underwriters fees and underwriting discounts and commissions
in respect of the Registrable Securities being registered hereunder as well as
any fees and expenses of counsel to the Holders of the Registrable Securities
hereunder (other than those of the one counsel referred to above).

         (g) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.

         2. Piggyback Registration.

         2.1 Right to Include Registrable Securities.

         (a) Subject to section 2.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders of its
intention to do so and of the Holders' rights under this section 2 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Commission. Upon the written request of any Holder made
within 20 days after the receipt of that notice, which request shall specify the
Registrable Securities intended to be registered and disposed of by such Holder,
the Company shall, subject to the provisions hereof, use its best


                                       -2-



efforts to include in such registration statement all Registrable Securities
that the Company has been so requested to register by such Holder.

         (b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses (as
defined below) in connection therewith), without prejudice; and (ii) in the case
of a determination to delay registering, the Company shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.

         (c) The Company shall pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this section 2.1.

         2.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in
section 2.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 2 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the Holders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

         3. Registration Procedures. In connection with the registration of any
Registrable Securities under the Securities Act as provided in section 2, the
Company shall as expeditiously as possible:

         (i) prepare and file with the Commission the requisite registration
statement to effect such registration and thereafter use its best efforts to
cause such registration statement to become and remain effective (subject to
clause (ii) below); provided, however, that the Company may discontinue any
registration of its securities that are not Registrable Securities at any time
prior to the effective date of the registration statement relating thereto;


                                       -3-



         (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
for such period as shall be required for the disposition of all of such
Registrable Securities; provided, however, that, the foregoing notwithstanding,
the Company shall not be required under this item (ii) to maintain the
effectiveness of any such registration statement for longer than 180 days, or
such longer period beyond such 180 days (up to an aggregate of 270 days) as may
be available without requiring the Company to file any financial statements as
of a later date and for a later period than the financial statements that may
have been required to maintain the effectiveness of the registration statement
for the 180-day period;

         (iii) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Holders may reasonably request from time to
time;

         (iv) use its best efforts (x) to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities or blue sky laws of such states of the United States of
America where an exemption is not available and as the Holders shall reasonably
request, (y) to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and (z) to take any other action
that may reasonably be necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of the securities to be sold by
the Holders, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not, but for the requirements of this paragraph (iv), be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;

         (v) use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company to consummate the disposition of such
Registrable Securities in accordance with their intended method of disposition;

         (vi) furnish to the Holders' underwriters, if any, (x) an opinion of
counsel for the Company, and (y) a "comfort" letter signed by the independent
public accountants who have certified the Company's financial statements
included or incorporated by reference in such registration statement, each
covering substantially the same matters with respect to such registration
statement (and the prospectus included


                                       -4-



therein) and, in the case of the accountant's comfort letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountant's comfort letters
delivered to the underwriters in underwritten public offerings of securities
(and dated the dates such opinions and comfort letters are customarily dated);

         (vii) immediately notify the Holders when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in the light
of the circumstances under which they were made, and at the request of the
Holders promptly prepare and furnish to them a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;

         (viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of section
11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly
furnish the same to the Holders; and

         (ix) provide and cause to be maintained a transfer agent and registrar
(which, in each case, may be the Company) for all Registrable Securities covered
by such registration statement from and after a date not later than the
effective date of such registration.

         The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.

         Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 3, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders'


                                       -5-



possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice.

         4. Underwritten Offerings.

         4.1 Piggyback Underwritten Offerings. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
section 2 and such securities are to be distributed by or through one or more
underwriters, the Company shall, subject to the provisions of section 2
(including, without limitation, the provisions of sections 2.2), if requested by
the Holders, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by the Holders with and among the securities
of the Company to be distributed by such underwriters. The Holders shall become
a party to the underwriting agreement negotiated between the Company and such
underwriters and shall make all representations and warranties to and shall
enter into all agreements with the Company or the underwriters as shall be
reasonably requested of them including all representations and warranties
required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.

         4.2 Holdback Agreements.

         (a) If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly
grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such registration pursuant to
section 2) without the prior written consent of the managing underwriter for a
period required by the underwriters and designated by the Company, which period
shall begin not more than thirty (30) days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made and
shall last not more than one hundred eighty (180) days after the effective date
of such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any such other offering. The Company may legend and
impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided in this section 4.2.

         (b) During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

         4.3 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the


                                       -6-



Company shall give the Holders, their underwriters, if any, and their respective
counsel and accountants the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and give each of
them such access to its books and records, such opportunities to discuss the
business of the Company with officers and the independent public accountants who
have certified its financial statements as shall be necessary, in the opinion of
the Holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.

         5. Indemnification.

         5.1 Indemnification by the Company. In the event of any registration
statement filed pursuant to section 2, the Company shall, and hereby does,
indemnify and hold harmless each of the Holders and each of their directors,
officers, partners, agents, attorneys, representatives and affiliates and each
other individual, group, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture or other entity of
whatever nature ("Person") who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls any Holder
or any such underwriter within the meaning of the Securities Act (each of the
foregoing, a "Holder Indemnitee"), insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, any preliminary prospectus, final prospectus, or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made not misleading, and the Company shall reimburse each Holder
Indemnitee for any legal or any other fees, costs and expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by or on behalf of a Holder
or such underwriter, as the case may be, for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Holder Indemnitee
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus so long as such
final prospectus, and any amendments or supplements thereto, have been furnished
to such underwriter or any Holder, as applicable.

         5.2 Indemnification by the Holders. If any Registrable Securities are
included in any registration statement, the Holders of such Registrable
Securities so registered shall, and


                                       -7-



hereby do, severally and not jointly, indemnify and hold harmless (in the same
manner and to the same extent as set forth in section 5.1 above) the Company,
and each director and officer of the Company, and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
all losses, claims, damages, expenses or liabilities ("Losses") to which the
Company or such control person becomes subject under the Securities Act, insofar
as such Losses arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information pertaining to such Holder and furnished
to the Company by such Holder for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, provided, however, that no Holder shall have any
liability under this section 6.2 for any amount in excess of the net proceeds
actually received by such Holder from the sale of the Registrable Securities
included in such registration statement.

         5.3 Notice of Claims, Etc.

         (a) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
sections 5.1 or 5.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish and
at any time, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs related to the indemnified party's cooperation with the
indemnifying party provided, however, that (i) if the indemnifying party fails
to assume the defense of such claim after a reasonable time the indemnified
party may retain counsel to defend such claim and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party, (ii) the
indemnified party may, at its own expense, retain separate counsel to
participate in such defense, (iii) the indemnified party shall have the right to
employ separate counsel at the expense of the indemnifying party and to control
its own defense of such action, claim or proceeding if, in the reasonable
opinion of counsel to such indemnified party, a material conflict or potential
material conflict exists between the indemnified party and


                                       -8-



the indemnifying party that would make such separate representation advisable,
except that in no event shall the indemnifying party be required to pay fees and
expenses under this section 6 for more than one separate firm of attorneys in
any one legal action or group of related legal actions.

         (b) No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

         5.4 Contribution. If indemnification shall for any reason be held by a
court to be unavailable to an indemnified party under section 5.1 or section 5.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 5.1 or
section 5.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 5.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld.

         5.5 Rule 144. With a view to making available the benefits of certain
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, at all times from
and after 90 days following the effective date of the first registration of the
Company under the Securities Act of an offering of its securities to the public,
the Company shall:

         (a) use its best efforts to facilitate the sale of the Registrable
Securities to the public, without registration under the Securities Act,
pursuant to Rule 144 promulgated under the Securities Act, provided that this
shall not require the Company to file reports under the Securities Act and the
Securities Exchange Act of 1934, or any similar federal statute, and the rules
and regulations of the Commission thereunder ("Exchange Act"), at any time prior
to the Company's being otherwise required to file such reports;


                                       -9-



         (b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;

         (c) use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

         (d) deliver to the Holders, upon any Holder's request, a written
statement as to whether it has complied with the requirements of this section 5,
a copy of the most recent annual or quarterly report of the Company filed with
the Commission or any stock exchange or self regulatory organization [registered
under the Securities Exchange Act of 1934], and such other reports and documents
so filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing it to sell its Registrable Securities
without registration.

         6. Representations and Warranties of the Company and the Stockholder.
The Company and the Stockholder hereby represent and warrant to the other as set
forth below (all of such representations and warranties to survive the execution
and delivery of this agreement):

         (a) Binding Effect. This agreement has been duly executed and delivered
by the Company or the Stockholder, as applicable, and constitutes the legal,
valid and binding obligation of such party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability.

         (b) Power; Authorization; Non-Contravention. Each of the Company and
the Stockholder, as applicable, has all power and authority to execute, deliver
and perform his, her or its obligations under this agreement. The execution,
delivery and performance by each of the Company or the Stockholder, as
applicable, of this agreement and the consummation of the transactions
contemplated hereby, (i) has been duly authorized by all necessary corporate or
limited liability company, and if required, stockholder action, as applicable,
on the part of or on behalf of such party and (ii) does not violate, contravene
the terms of, or exceed the authority grant under, any agreement, document or
instrument of or applicable to such party.

         7. Miscellaneous.

         (a) Notices. All notices, instructions and other communications in
connection with this agreement shall be in writing and may be given by (i) fax
(with evidence of receipt) followed by letter or other delivery, (ii) personal
delivery or (iii) by a nationally recognized overnight courier in each case to
the parties at the address of the Company as follows, and at the address of the
Stockholders as set forth on the signature page to this agreement (or at such
other address as the Company or the Stockholders may specify):


                                       -10-



                  If to the Company:

                  MedSource Technologies, Inc.
                  110 Cheshire Lane, Suite 100
                  Minneapolis, Minnesota 55447
                  Telecopier No.:  (612) 807-1235
                  Attention:  Chief Executive Officer

                  With a copy to:

                  Parker Chapin LLP
                  The Chrysler Building
                  405 Lexington Avenue
                  New York, New York  10174
                  Telecopier No.:  (212) 704-6288




         If to the Stockholder, to the address set forth on the signature page
below.

         (b) No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

         (c) Binding Effect; Assignability. This agreement shall be binding upon
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns.

         (d) Severability. Any provision of this agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which renders any provisions hereof prohibited
or unenforceable in any respect.

         (e) Modification. No term or provision of this agreement may be
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

         (f) Law Governing. This agreement shall be governed by and construed in
accordance with the law of the state of New York, applicable to agreements made
and to be


                                       -11-



performed entirely in New York, without regard to the principals of conflicts of
law of such state.

         (g) Amendment to Securities Laws. The Company (on the one hand) and the
Stockholders (on the other hand) agree that any amendment to federal securities
laws (and regulations promulgated thereunder (and related registration forms)
and related state securities laws) shall not affect the substantive registration
requirements (and other obligations of the Company) set forth in this agreement;
and, following any such amendment, the Company shall continue to be required to
cause the registration of the Registrable Securities (and pay all Registration
Expenses and provide indemnification pursuant to section 5.1) under the federal
securities laws, as amended, in a manner consistent with carrying out the intent
and purposes of (and on terms as similar as practicable as the terms set forth
in) this agreement.

         (h) Headings. All headings and captions in this agreement are for
purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.

         (i) Entire Agreement. This agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.


                  [The next page is the signature page]


                                       -12-



         The parties have executed and delivered this Registration Rights
Agreement as of the date first written above.

                                      MEDSOURCE TECHNOLOGIES, INC.


                                      By: /s/ RICHARD EFFRESS
                                         --------------------------------
                                            Name:  Richard J. Effress
                                            Title:    Chief Executive Officer

                                      THOMAS WEISEL PARTNERS LLC


                                      By: /s/
                                         --------------------------------
                                         Name:
                                         Title:

                                      Address:

                                      390 Park Avenue, 16th Floor
                                      New York, New York 10022
                                      Telecopier No.:  (212) 271-3720
                                      Attention:  Thomas L. Elzner


                                       -13-

EX-10.9

                                                                    EXHIBIT 10.9

                          REGISTRATION RIGHTS AGREEMENT

                                December 31, 2001
                                 ---------------

     The parties to this agreement are MedSource Technologies, Inc. a Delaware
corporation (the "Company"), and each of the other individuals or entities
executing a signature page to this agreement (collectively, the "Stockholders").

     Simultaneously with the execution and delivery of this agreement, the
Stockholders are acquiring the Company's Series E Preferred Stock, par value
$.01 per share ("Series E Preferred Stock"), and Warrants to purchase the
Company's common stock, par value $.01 per share ("Common Stock"), pursuant to a
Stock Purchase Agreement dated as of the date hereof among the Company and the
Stockholders. The shares of Common Stock issuable upon exercise of the Warrants
and upon conversion of the Series E Preferred Stock are the only shares of
capital stock of the Company entitled to the rights and benefits, and subject to
the terms and conditions, of this agreement, and are hereinafter collectively
referred to as, the "Shares."

     The Company desires to provide to the Stockholders certain rights regarding
the registration of the Shares, all upon the terms and conditions set forth
below.

     It is therefore agreed as follows:

     1.   Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:

          (a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

          (b) "Holders" means the Stockholders and their respective permitted
transferees who hold Shares.

          (c) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

          (d) "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

          (e) "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a recapitalization, exchange, merger,
consolidation, reorganization or other transaction; provided, however, that any
share shall cease to be a Registrable Security under this agreement when (A) a
registration statement with respect to such share's public sale shall have
become effective under the Securities Act, (B) it has been disposed



of as permitted by, and in compliance with, Rule 144 (or successor provision)
promulgated under the Securities Act or (C) it shall have ceased to be
outstanding.

          (f) Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of section 2
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company, and the reasonable fees
and expenses of one counsel on behalf holders (including the Holders) whose
shares of Common Stock are included in the registration statement, with such
counsel selected by a majority-in-interest of such holders (according to the
number of shares of Common Stock each such holder is directly or indirectly
registering for sale in such registration statement), and the fees and
disbursements of its independent public accountants, including the expenses of
"comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; provided, however, that Registration Expenses shall
exclude, and the Holders shall pay, underwriters fees and underwriting discounts
and commissions in respect of the Registrable Securities being registered
hereunder as well as any fees and expenses of counsel to the Holders of the
Registrable Securities hereunder (other than those of the one counsel referred
to above).

          (g) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.

     2.   Piggyback Registration.
          ----------------------

          2.1 Right to Include Registrable Securities.
              ---------------------------------------

          (a) Subject to section 2.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders of its
intention to do so and of the Holders' rights under this section 2 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Commission. Upon the written request of any Holder made
within 20 days after the receipt of that notice, which request shall specify the
Registrable Securities intended to be registered and disposed of by such Holder,
the Company shall, subject to the provisions hereof, use its commercially
reasonable efforts to include in such registration statement all Registrable
Securities that the Company has been so requested to register by such Holder.

          (b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay

                                       -2-



registration of such securities, the Company may, at its election, give written
notice of such determination to each Holder and upon giving that notice (i) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the Registration
Expenses (as defined below) in connection therewith), without prejudice; and
(ii) in the case of a determination to delay registering, the Company shall be
permitted to delay registering any Registrable Securities for the same period as
the delay in registering such other securities.

          (c) The Company shall pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this section 2.1.

          2.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in
              -------------------------------------------------
section 2.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 2 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the Holders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

     3.   Registration Procedures. In connection with the registration of any
          -----------------------
Registrable Securities under the Securities Act as provided in section 2, the
Company shall as expeditiously as possible:

              (i)  prepare and file with the Commission the requisite
     registration statement to effect such registration and thereafter use its
     commercially reasonable efforts to cause such registration statement to
     become and remain effective (subject to clause (ii) below); provided,
     however, that the Company may discontinue any registration of its
     securities that are not Registrable Securities at any time prior to the
     effective date of the registration statement relating thereto;

              (ii) prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities covered by
     such registration statement for such period as shall be required for the
     disposition of all of such Registrable Securities; provided, however, that,
     the foregoing notwithstanding, the Company shall not be required under this
     item (ii) to maintain the effectiveness of any such registration statement
     for longer than 180 days, or such longer period beyond such 180 days (up to
     an aggregate of 270 days) as may be available without requiring the Company
     to file any financial statements as of a later date

                                      -3-



     and for a later period than the financial statements that may have been
     required to maintain the effectiveness of the registration statement for
     the 180-day period;

              (iii) furnish to the Holders such number of conformed copies of
     such registration statement and of each such amendment and supplement
     thereto (in each case including all exhibits), such number of copies of the
     prospectus contained in such registration statement (including each
     preliminary prospectus and any summary prospectus) and any other prospectus
     filed under Rule 424 under the Securities Act, in conformity with the
     requirements of the Securities Act, and such other documents, as the
     Holders may reasonably request from time to time;

              (iv)  use its commercially reasonable efforts (x) to register or
     qualify all Registrable Securities and other securities covered by such
     registration statement under such other securities or blue sky laws of such
     states of the United States of America where an exemption is not available
     and as the Holders shall reasonably request, (y) to keep such registration
     or qualification in effect for so long as such registration statement
     remains in effect, and (z) to take any other action that may reasonably be
     necessary or advisable to enable the Holders to consummate the disposition
     in such jurisdictions of the securities to be sold by the Holders, except
     that the Company shall not for any such purpose be required to qualify
     generally to do business as a foreign corporation in any jurisdiction
     wherein it would not, but for the requirements of this paragraph (iv), be
     obligated to be so qualified or to consent to general service of process in
     any such jurisdiction;

              (v)   use its commercially reasonable efforts to cause all
     Registrable Securities covered by such registration statement to be
     registered with or approved by such other federal or state governmental
     agencies or authorities as may be necessary in the opinion of counsel to
     the Company to consummate the disposition of such Registrable Securities in
     accordance with their intended method of disposition;

              (vi)  furnish to the Holders' underwriters, if any, (x) an opinion
     of counsel for the Company, and (y) a "comfort" letter signed by the
     independent public accountants who have certified the Company's financial
     statements included or incorporated by reference in such registration
     statement, each covering substantially the same matters with respect to
     such registration statement (and the prospectus included therein) and, in
     the case of the accountant's comfort letter, with respect to events
     subsequent to the date of such financial statements, as are customarily
     covered in opinions of issuer's counsel and in accountant's comfort letters
     delivered to the underwriters in underwritten public offerings of
     securities (and dated the dates such opinions and comfort letters are
     customarily dated);

              (vii) immediately notify the Holders when a prospectus relating
     thereto is required to be delivered under the Securities Act, upon
     discovery that, or upon the happening of any event as a result of which,
     the prospectus included in such registration statement, as then in effect,
     includes an untrue statement of a material fact or omits to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, in the light of the circumstances under
     which they were made, and at the request of the Holders promptly prepare
     and furnish to them a reasonable number

                                       -4-



     of copies of a supplement to or an amendment of such prospectus as may be
     necessary so that, as thereafter delivered to the purchasers of such
     securities, such prospectus shall not include an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in the
     light of the circumstances under which they were made;

               (viii) otherwise use its commercially reasonable efforts to
     comply with all applicable rules and regulations of the Commission, and
     make available to its security holders, as soon as reasonably practicable,
     an earnings statement covering the period of at least 12 months, but not
     more than 18 months, beginning with the first full calendar month after the
     effective date of such registration statement, which earnings statement
     shall satisfy the provisions of section 11(a) of the Securities Act and
     Rule 158 promulgated thereunder, and promptly furnish the same to the
     Holders; and

               (ix)   provide and cause to be maintained a transfer agent and
     registrar (which, in each case, may be the Company) for all Registrable
     Securities covered by such registration statement from and after a date not
     later than the effective date of such registration.

          The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.

          Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 3, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

     4.   Underwritten Offerings.
          ----------------------

          4.1  Piggyback Underwritten Offerings. If the Company proposes to
               --------------------------------
register any of its securities under the Securities Act as contemplated by
section 2 and such securities are to be distributed by or through one or more
underwriters, the Company shall, subject to the provisions of section 2
(including, without limitation, the provisions of sections 2.2), if requested by
the Holders, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by the Holders with and among the securities
of the Company to be distributed by such underwriters. The Holders shall become
a party to the underwriting agreement negotiated between the Company and such
underwriters and shall make all representations and warranties to and shall
enter into all agreements with the Company or the underwriters as shall be
reasonably requested of them including all representations and warranties
required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.

                                       -5-



          4.2  Holdback Agreements.
               -------------------

          (a)  If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly
grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such registration pursuant to
section 2) without the prior written consent of the managing underwriter for a
period required by the underwriters and designated by the Company, which period
shall begin not more than thirty (30) days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made and
shall last not more than one hundred eighty (180) days after the effective date
of such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any such other offering. The Company may legend and
impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided in this section 4.2.

          (b)  During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

          4.3  Preparation; Reasonable Investigation. In connection with the
               -------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

    5.    Indemnification.
          ---------------

          5.1  Indemnification by the Company. In the event of any registration
               ------------------------------
statement filed pursuant to section 2, the Company shall, and hereby does,
indemnify and hold harmless each of the Holders and each of their directors,
officers, partners, agents, attorneys, representatives and affiliates and each
other individual, group, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture or other entity of
whatever nature ("Person") who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls any Holder
or any such underwriter within the meaning of the Securities Act (each of the
foregoing, a "Holder Indemnitee"), insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, any

                                      -6-



preliminary prospectus, final prospectus, or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, and the Company shall reimburse each Holder
Indemnitee for any legal or any other fees, costs and expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by or on behalf of a Holder
or such underwriter, as the case may be, for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Holder Indemnitee
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus so long as such
final prospectus, and any amendments or supplements thereto, have been furnished
to such underwriter or any Holder, as applicable.

          5.2 Indemnification by the Holders. If any Registrable Securities are
              ------------------------------
included in any registration statement, the Holders of such Registrable
Securities so registered shall, and hereby do, severally and not jointly,
indemnify and hold harmless (in the same manner and to the same extent as set
forth in section 5.1 above) the Company, and each director and officer of the
Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by such
Holder for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
provided, however, that no Holder shall have any liability under this section
6.2 for any amount in excess of the net proceeds actually received by such
Holder from the sale of the Registrable Securities included in such registration
statement.

          5.3 Notice of Claims, Etc.
              ---------------------

          (a) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
sections 5.1 or 5.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the

                                       -7-



indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in the
reasonable judgment of counsel for such indemnified party, a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim (in which case the indemnified party shall be entitled to retain
separate counsel as provided below), the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish and at any
time, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs related to the indemnified party's cooperation with the
indemnifying party provided, however, that (i) if the indemnifying party fails
to assume the defense of such claim after a reasonable time the indemnified
party may retain counsel to defend such claim and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party, (ii) the
indemnified party may, at its own expense, retain separate counsel to
participate in such defense, (iii) the indemnified party shall have the right to
employ separate counsel at the expense of the indemnifying party and to control
its own defense of such action, claim or proceeding if, in the reasonable
opinion of counsel to such indemnified party, a material conflict or potential
material conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable, except that in no
event shall the indemnifying party be required to pay fees and expenses under
this section 6 for more than one separate firm of attorneys in any one legal
action or group of related legal actions.

          (b) No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

          5.4 Contribution. If indemnification shall for any reason be held by a
              ------------
court to be unavailable to an indemnified party under section 5.1 or section 5.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under section 5.1 or
section 5.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 5.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such

                                       -8-



fraudulent misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim, effected without such Person's consent, which consent shall not be
unreasonably withheld.

          5.5 Rule 144. With a view to making available the benefits of certain
              --------
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, at all times from
and after 90 days following the effective date of the first registration of the
Company under the Securities Act of an offering of its securities to the public,
the Company shall:

          (a) use its commercially reasonable efforts to facilitate the sale of
the Registrable Securities to the public, without registration under the
Securities Act, pursuant to Rule 144 promulgated under the Securities Act,
provided that this shall not require the Company to file reports under the
Securities Act and the Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder ("Exchange
Act"), at any time prior to the Company's being otherwise required to file such
reports;

          (b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times after 90 days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;

          (c) use its commercially reasonable efforts to then file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

          (d) deliver to the Holders, upon any Holder's request, a written
statement as to whether it has complied with the requirements of this section 5,
a copy of the most recent annual or quarterly report of the Company filed with
the Commission or any stock exchange or self regulatory organization registered
under the Securities Exchange Act of 1934, and such other reports and documents
so filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing it to sell its Registrable Securities
without registration.

     6.   Representations and Warranties of the Company and the Stockholder. The
          -----------------------------------------------------------------
Company, on the one hand, and each of the Stockholders, on the other hand,
hereby represent and warrant to the other as set forth below (all of such
representations and warranties to survive the execution and delivery of this
agreement):

          (a) Binding Effect. This agreement has been duly executed and
delivered by the Company or such Stockholder, as applicable, and constitutes the
legal, valid and binding obligation of such party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability.

          (b) Power; Authorization; Non-Contravention. Each of the Company and
such Stockholder, as applicable, has all power and authority to execute, deliver
and perform his, her or its obligations under this agreement. The execution,
delivery and performance by each of

                                       -9-



the Company or such Stockholder, as applicable, of this agreement and the
consummation of the transactions contemplated hereby, (i) has been duly
authorized by all necessary corporate or limited liability company, and if
required, stockholder action, as applicable, on the part of or on behalf of such
party and (ii) does not violate, contravene the terms of, or exceed the
authority grant under, any agreement, document or instrument of or applicable to
such party.

     7.  Miscellaneous.
         -------------

         (a) Notices. All notices, instructions and other communications in
             -------
connection with this agreement shall be in writing and may be given by (i) fax
(with evidence of receipt) followed by letter or other delivery, (ii) personal
delivery or (iii) by a nationally recognized overnight courier in each case to
the parties at the address of the Company as follows, and at the address of the
Stockholders as set forth on the signature page to this agreement (or at such
other address as the Company or the Stockholders may specify):

         If to the Company:

         MedSource Technologies, Inc.
         110 Cheshire Lane, Suite 100
         Minneapolis, Minnesota 55447
         Telecopier No.: (612) 807-1235
         Attention:  Chief Executive Officer

         With a copy to:

         Jenkens & Gilchrist Parker Chapin LLP
         The Chrysler Building
         405 Lexington Avenue
         New York, New York  10174
         Telecopier No.: (212) 704-6288
         Attention:  Edward R. Mandell

         If to a Stockholder, to the address of such Stockholder set forth on
[a] signature page below.

         (b) No Waiver. No course of dealing and no delay on the part of any
             ---------
party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

         (c) Binding Effect; Assignability. This agreement shall be binding
             -----------------------------
upon and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns.

         (d) Severability. Any provision of this agreement that is prohibited
             ------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such

                                      -10-



prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereby waive any
provision of law which renders any provisions hereof prohibited or unenforceable
in any respect.

          (e) Modification. No term or provision of this agreement may be
              ------------
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

          (f) Law Governing. This agreement shall be governed by and construed
              -------------
in accordance with the law of the state of Delaware, applicable to agreements
made and to be performed entirely in Delaware, without regard to the principals
of conflicts of law of such state.

          (g) Amendment to Securities Laws. The Company (on the one hand) and
              ----------------------------
the Stockholders (on the other hand) agree that any amendment to federal
securities laws (and regulations promulgated thereunder (and related
registration forms) and related state securities laws) shall not affect the
substantive registration requirements (and other obligations of the Company) set
forth in this agreement; and, following any such amendment, the Company shall
continue to be required to cause the registration of the Registrable Securities
(and pay all Registration Expenses and provide indemnification pursuant to
section 5.1) under the federal securities laws, as amended, in a manner
consistent with carrying out the intent and purposes of (and on terms as similar
as practicable as the terms set forth in) this agreement.

          (h) Headings. All headings and captions in this agreement are for
              --------
purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.

          (i) Entire Agreement. This agreement contains, and is intended as, a
              ----------------
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters and cannot be
changed or terminated orally.

                      [The next page is the signature page]

                                      -11-



          The parties have executed and delivered this Registration Rights
Agreement as of the date first written above.

                                                MEDSOURCE TECHNOLOGIES, INC.


                                                By:_____________________________
                                                   Name:
                                                   Title:

                 [Stockholder signatures begin on the next page]

                                      S-1




                          /s/
                          -----------------------------------------------------
                          J. Adam Abram
                          c/o Omega Management Inc.
                          Headquarters Park
                          Beta Building, Suite 420
                          222 Chapel Hill-Nelson Highway
                          Durham, NC 27709

                          Roger Anderson Deferred Benefit Plan
                          c/o Hamilton Capital Partners
                          200 Business Park Drive
                          Armonk, New York 10504

                          By: /s/
                             --------------------------------------------------

                          /s/
                          -----------------------------------------------------
                          B. William Bonnivier
                          2637 East Lake Road
                          Skaneateles, New York 13152

                          Broe Growth Capital, LLC
                          c/o Brian McNamara
                          252 Clayton Street, 4th Floor
                          Denver, Colorado  80206

                          By: /s/
                             --------------------------------------------------

                          /s/
                          -----------------------------------------------------
                          Alan N. Colner
                          26 Meadow Road
                          Scarsdale, New York  10583

                          /s/
                          -----------------------------------------------------
                          Nick D'Antona
                          1102 Cedar View Lane
                          Franklin, Tennessee  37067

                          DeBiasi Family Limited Partnership
                          12 Hillside Avenue
                          Darien, Connecticut  06820

                          By: /s/
                             --------------------------------------------------


                                      S-2




                          /s/
                          -----------------------------------------------------
                          Jeff Dickson
                          20 Maple Seed Drive
                          Dallas, Pennsylvania  18612

                          /s/
                          -----------------------------------------------------
                          Paul J. Dobson
                          374 Silver Street
                          Hanover, Massachusetts  02339

                          /s/
                          -----------------------------------------------------
                          Bruce Fleisher
                          7367 Sarimento Place
                          Delray Beach, Florida  33446

                          /s/
                          -----------------------------------------------------
                          George D. Fowle
                          3023 Sea Marsh Road
                          Amelia Island, Florida  32034

                          /s/
                          -----------------------------------------------------
                          Larry Hotaling
                          3322 Cerrito Court
                          Naples, Florida  34109

                          /s/
                          -----------------------------------------------------
                          Jacob L. Jacobson
                          91 Exeter Street
                          Newton, Massachusetts  02465

                          /s/
                          -----------------------------------------------------
                          Jon Lauck
                          5105 Forest Grove Lane
                          Plano, Texas  75093

                          /s/
                          -----------------------------------------------------
                          Eric Lekacz
                          c/o Flextronics Encl. Systems
                          Knyvett House, The Causeway
                          Staines, Middlesex TW 18 3BA
                          United Kingdom


                                      S-3




                          /s/
                          -----------------------------------------------------
                          Andrew D. Lipman
                          4 Ledge Meadow Lane
                          Westport, Connecticut  06880

                          /s/
                          -----------------------------------------------------
                          Roger D.A. Lipman
                          31 Carey Court
                          Bexleyheath, Kent DA6 7NT
                          United Kingdom

                          /s/
                          -----------------------------------------------------
                          Ross Manire
                          150 Carelton Aenue
                          Glen Ellyn, Illinois  60137

                          Mastec Trading AB
                          PO Box 4
                          568 21 Killingaryd
                          Sweden

                          By: /s/
                             --------------------------------------------------

                          /s/
                          -----------------------------------------------------
                          Peter J. Neidecker
                          c/o National Wire & Stamping
                          2801 South Vallejo Street
                          Englewood, CO  80110-1298

                          Marisa A. Timm Revocable Trust
                          U/A/D May 20, 1997
                          5561 Churchill Lane
                          Libertyville, Illinois  60048

                          By: /s/
                             --------------------------------------------------

                          The Tolkoff Family Limited Partnership I
                          c/o Seedling Enterprises, LLC
                          150 California Street
                          Newton, Massachusetts  02458

                          By: /s/
                             --------------------------------------------------


                                      S-4




                          /s/
                          -----------------------------------------------------
                          Clarice E. Webb
                          217 Bridge Street, #E-3
                          Stamford, Connecticut  06905

                          /s/
                          -----------------------------------------------------
                          William J. Kidd
                          51 Clapboard Ridge Road
                          Greenwich, Connecticut  06830

                          /s/
                          -----------------------------------------------------
                          Carla G. Kidd
                          51 Clapboard Ridge Road
                          Greenwich, Connecticut  06830

                          Catherine M. Kidd Grantor Trust
                          51 Clapboard Ridge Road
                          Greenwich, Connecticut  06830

                          By: /s/
                             --------------------------------------------------

                          Cara E. Kidd Trust
                          51 Clapboard Ridge Road
                          Greenwich, Connecticut  06830

                          By: /s/
                             --------------------------------------------------

                          Thomas C. Kidd Trust
                          51 Clapboard Ridge Road
                          Greenwich, Connecticut  06830

                          By: /s/
                             --------------------------------------------------


                                      S-5

EX-10.10

                                                                   EXHIBIT 10.10
                                                                   -------------

                          REGISTRATION RIGHTS AGREEMENT

                                 January 4, 2002

     The parties to this agreement are MedSource Technologies, Inc., a Delaware
corporation (the "Company"), and each of the other individuals or entities
executing a signature page to this agreement (collectively, the "Stockholders").

     Simultaneously with the execution and delivery of this agreement, the
Stockholders are acquiring shares of the Company's common stock, par value $.01
per share ("Common Stock"), pursuant to an Agreement and Plan of Merger dated as
of December 31, 2001 among the Company, MedSource Trenton, Inc., HV
Technologies, Inc. ("HV") and Rudolph E. Carlson, as the representative of HV's
shareholders. Such shares of Common Stock are the only shares of capital stock
of the Company entitled to the rights and benefits, and subject to the terms and
conditions, of this agreement, and are hereinafter collectively referred to as,
the "Shares."

     The Company desires to provide to the Stockholders certain rights regarding
the registration of the Shares, all upon the terms and conditions set forth
below.

     It is therefore agreed as follows:

     1.  Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:

         (a)  "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

         (b)  "Holders" means the Stockholders and their respective permitted
transferees who hold Shares.

         (c)  "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.

         (d)  "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

         (e)  "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a recapitalization, exchange, merger,
consolidation, reorganization or other transaction; provided, however, that any
share shall cease to be a Registrable Security under this agreement when (A) a
registration statement with respect to such share's public sale shall have
become effective under the Securities Act, (B) it has been disposed of as
permitted by, and in compliance with, Rule 144 (or successor provision)
promulgated under the Securities Act or (C) it shall have ceased to be
outstanding.



         (f)  "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of section 2
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company, and the reasonable fees
and expenses of one counsel on behalf of the Stockholders (including the
Holders) whose shares of Common Stock are included in the registration
statement, with such counsel selected by a majority-in-interest of such holders
(according to the number of shares of Common Stock each such holder is directly
or indirectly registering for sale in such registration statement), and the fees
and disbursements of its independent public accountants, including the expenses
of "comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; provided, however, that Registration Expenses shall
exclude, and the Holders shall pay, underwriters fees and underwriting discounts
and commissions in respect of the Registrable Securities being registered
hereunder as well as any fees and expenses of counsel to the Holders of the
Registrable Securities hereunder (other than those of the one counsel referred
to above).

         (g)  "Securities Act" means the Securities Act of 1933, as amended, and
any subsequent similar federal statute, and the rules and regulations
promulgated thereunder.

     2.  Piggyback Registration.
         ----------------------

         2.1  Right to Include Registrable Securities.
              ---------------------------------------

         (a)  Subject to section 2.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders of its
intention to do so and of the Holders' rights under this section 2 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Commission. Upon the written request of any Holder made
within 20 days after the receipt of that notice, which request shall specify the
Registrable Securities intended to be registered and disposed of by such Holder,
the Company shall, subject to the provisions hereof, use its commercially
reasonable efforts to include in such registration statement all Registrable
Securities that the Company has been so requested to register by such Holder.

         (b)  If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the

                                       -2-



Registration Expenses (as defined below) in connection therewith), without
prejudice; and (ii) in the case of a determination to delay registering, the
Company shall be permitted to delay registering any Registrable Securities for
the same period as the delay in registering such other securities.

         (c)  The Company shall pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this section 2.1.

         2.2  Underwriter "Cutbacks" in Piggyback Registrations. Anything in
              -------------------------------------------------
section 2.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 2 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the Holders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.

     3.  Registration Procedures. In connection with the registration of any
         -----------------------
Registrable Securities under the Securities Act as provided in section 2, the
Company shall as expeditiously as possible:

              (i)    prepare and file with the Commission the requisite
     registration statement to effect such registration and thereafter use its
     commercially reasonable efforts to cause such registration statement to
     become and remain effective (subject to clause (ii) below); provided,
     however, that the Company may discontinue any registration of its
     securities that are not Registrable Securities at any time prior to the
     effective date of the registration statement relating thereto;

              (ii)   prepare and file with the Commission such amendments and
     supplements to such registration statement and the prospectus used in
     connection therewith as may be necessary to keep such registration
     statement effective and to comply with the provisions of the Securities Act
     with respect to the disposition of all Registrable Securities covered by
     such registration statement for such period as shall be required for the
     disposition of all of such Registrable Securities; provided, however, that,
     the foregoing notwithstanding, the Company shall not be required under this
     item (ii) to maintain the effectiveness of any such registration statement
     for longer than 180 days, or such longer period beyond such 180 days (up to
     an aggregate of 270 days) as may be available without requiring the Company
     to file any financial statements as of a later date and for a later period
     than the financial statements that may have been required to maintain the
     effectiveness of the registration statement for the 180-day period;

              (iii)  furnish to the Holders such number of conformed copies
     of such registration statement and of each such amendment and supplement
     thereto (in each case

                                       -3-



     including all exhibits), such number of copies of the prospectus contained
     in such registration statement (including each preliminary prospectus and
     any summary prospectus) and any other prospectus filed under Rule 424 under
     the Securities Act, in conformity with the requirements of the Securities
     Act, and such other documents, as the Holders may reasonably request from
     time to time;

              (iv)   use its commercially reasonable efforts (x) to register or
     qualify all Registrable Securities and other securities covered by such
     registration statement under such other securities or blue sky laws of such
     states of the United States of America where an exemption is not available
     and as the Holders shall reasonably request, (y) to keep such registration
     or qualification in effect for so long as such registration statement
     remains in effect, and (z) to take any other action that may reasonably be
     necessary or advisable to enable the Holders to consummate the disposition
     in such jurisdictions of the securities to be sold by the Holders, except
     that the Company shall not for any such purpose be required to qualify
     generally to do business as a foreign corporation in any jurisdiction
     wherein it would not, but for the requirements of this paragraph (iv), be
     obligated to be so qualified or to consent to general service of process in
     any such jurisdiction;

              (v)    use its commercially reasonable efforts to cause all
     Registrable Securities covered by such registration statement to be
     registered with or approved by such other federal or state governmental
     agencies or authorities as may be necessary in the opinion of counsel to
     the Company to consummate the disposition of such Registrable Securities in
     accordance with their intended method of disposition;

              (vi)   furnish to the Holders' underwriters, if any, (x) an
     opinion of counsel for the Company, and (y) a "comfort" letter signed by
     the independent public accountants who have certified the Company's
     financial statements included or incorporated by reference in such
     registration statement, each covering substantially the same matters with
     respect to such registration statement (and the prospectus included
     therein) and, in the case of the accountant's comfort letter, with respect
     to events subsequent to the date of such financial statements, as are
     customarily covered in opinions of issuer's counsel and in accountant's
     comfort letters delivered to the underwriters in underwritten public
     offerings of securities (and dated the dates such opinions and comfort
     letters are customarily dated);

              (vii)  immediately notify the Holders when a prospectus relating
     thereto is required to be delivered under the Securities Act, upon
     discovery that, or upon the happening of any event as a result of which,
     the prospectus included in such registration statement, as then in effect,
     includes an untrue statement of a material fact or omits to state any
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, in the light of the circumstances under
     which they were made, and at the request of the Holders promptly prepare
     and furnish to them a reasonable number of copies of a supplement to or an
     amendment of such prospectus as may be necessary so that, as thereafter
     delivered to the purchasers of such securities, such prospectus shall not
     include an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading in the light of the circumstances under which they
     were made;

                                       -4-



              (viii)  otherwise use its commercially reasonable efforts to
     comply with all applicable rules and regulations of the Commission, and
     make available to its security holders, as soon as reasonably practicable,
     an earnings statement covering the period of at least 12 months, but not
     more than 18 months, beginning with the first full calendar month after the
     effective date of such registration statement, which earnings statement
     shall satisfy the provisions of section 11(a) of the Securities Act and
     Rule 158 promulgated thereunder, and promptly furnish the same to the
     Holders; and

              (ix)    provide and cause to be maintained a transfer agent and
     registrar (which, in each case, may be the Company) for all Registrable
     Securities covered by such registration statement from and after a date not
     later than the effective date of such registration.

         The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.

         Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 3, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

     4.  Underwritten Offerings.
         ----------------------

         4.1  Piggyback Underwritten Offerings. If the Company proposes to
              --------------------------------
register any of its securities under the Securities Act as contemplated by
section 2 and such securities are to be distributed by or through one or more
underwriters, the Company shall, subject to the provisions of section 2
(including, without limitation, the provisions of sections 2.2), if requested by
the Holders, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by the Holders with and among the securities
of the Company to be distributed by such underwriters. The Holders shall become
a party to the underwriting agreement negotiated between the Company and such
underwriters and shall make all representations and warranties to and shall
enter into all agreements with the Company or the underwriters as shall be
reasonably requested of them including all representations and warranties
required by law, customarily given or reasonably requested of selling
shareholders by an underwriter in an underwritten public offering.

         4.2  Holdback Agreements.
              -------------------

         (a)  If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly

                                       -5-



grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such registration pursuant to
section 2) without the prior written consent of the managing underwriter for a
period required by the underwriters and designated by the Company, which period
shall begin not more than thirty (30) days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made and
shall last not more than one hundred eighty (180) days after the effective date
of such registration statement in the case of the Company's initial public
offering, or ninety (90) days after the effective date of such registration
statement in the case of any such other offering. The Company may legend and
impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided in this section 4.2.

         (b)  During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).

         4.3  Preparation; Reasonable Investigation. In connection with the
              -------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.

     5.  Indemnification.
         ---------------

         5.1  Indemnification by the Company. In the event of any registration
              ------------------------------
statement filed pursuant to section 2, the Company shall, and hereby does,
indemnify and hold harmless each of the Holders and each of their directors,
officers, partners, agents, attorneys, representatives and affiliates and each
other individual, group, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture or other entity of
whatever nature ("Person") who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls any Holder
or any such underwriter within the meaning of the Securities Act (each of the
foregoing, a "Holder Indemnitee"), insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, any preliminary prospectus, final prospectus, or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made not misleading, and the Company shall reimburse each Holder
Indemnitee for any legal or any other fees, costs and expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable in any such case to the extent that any

                                       -6-



such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission made
in reliance upon and in conformity with information furnished to the Company by
or on behalf of a Holder or such underwriter, as the case may be, for use in the
preparation thereof; and provided, further, that the Company shall not be liable
to any Holder Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Holder, as
applicable.

               5.2  Indemnification by the Holders. If any Registrable
                    ------------------------------
Securities are included in any registration statement, the Holders of such
Registrable Securities so registered shall, and hereby do, severally and not
jointly, indemnify and hold harmless (in the same manner and to the same extent
as set forth in section 5.1 above) the Company, and each director and officer of
the Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by such
Holder for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
provided, however, that no Holder shall have any liability under this section
6.2 for any amount in excess of the net proceeds actually received by such
Holder from the sale of the Registrable Securities included in such registration
statement.

               5.3  Notice of Claims, Etc.
                    ---------------------

               (a) Promptly after receipt by an indemnified party of notice of
the commencement of any action or proceeding involving a claim referred to in
sections 5.1 or 5.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish and
at any time, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to

                                       -7-



assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs related to the indemnified party's cooperation with the
indemnifying party provided, however, that (i) if the indemnifying party fails
to assume the defense of such claim after a reasonable time the indemnified
party may retain counsel to defend such claim and the reasonable fees and
expenses of such counsel shall be paid by the indemnifying party, (ii) the
indemnified party may, at its own expense, retain separate counsel to
participate in such defense, (iii) the indemnified party shall have the right to
employ separate counsel at the expense of the indemnifying party and to control
its own defense of such action, claim or proceeding if, in the reasonable
opinion of counsel to such indemnified party, a material conflict or potential
material conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable, except that in no
event shall the indemnifying party be required to pay fees and expenses under
this section 6 for more than one separate firm of attorneys in any one legal
action or group of related legal actions.

               (b)  No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

               5.4  Contribution. If indemnification shall for any reason be
                    ------------
held by a court to be unavailable to an indemnified party under section 5.1 or
section 5.2 in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under section 5.1
or section 5.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 5.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such

fraudulent misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim, effected without such Person's consent, which consent shall not be
unreasonably withheld.

               5.5  Rule 144. With a view to making available the benefits of
                    --------
certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Securities to the public without registration, at all
times from and after 90 days following the effective date of the first
registration of the Company under the Securities Act of an offering of its
securities to the public, the Company shall:

                                       -8-



               (a)  use its commercially reasonable efforts to facilitate the
sale of the Registrable Securities to the public, without registration under the
Securities Act, pursuant to Rule 144 promulgated under the Securities Act,
provided that this shall not require the Company to file reports under the
Securities Act and the Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder ("Exchange
Act"), at any time prior to the Company's being otherwise required to file such
reports;

               (b)  make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated under the Securities Act at
all times after 90 days after the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to the
general public;

               (c)  use its commercially reasonable efforts to then file with
the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and

               (d)  deliver to the Holders, upon any Holder's request, a written
statement as to whe ther it has complied with the requirements of this section
5, a copy of the most recent annual or quarterly report of the Company filed
with the Commission or any stock exchange or self regulatory organization
registered under the Securities Exchange Act of 1934, and such other reports and
documents so filed as a Holder may reasonably request to avail itself of any
rule or regulation of the Commission allowing it to sell its Registrable
Securities without registration.

          6.   Representations and Warranties of the Company and the
               -----------------------------------------------------
Stockholder. The Company, on the one hand, and each of the Stockholders, on the
- -----------
other hand, hereby represent and warrant to the other as set forth below (all of
such representations and warranties to survive the execution and delivery of
this agreement):

               (a)  Binding Effect. This agreement has been duly executed and
delivered by the Company or such Stockholder, as applicable, and constitutes the
legal, valid and binding obligation of such party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability.

               (b)  Power; Authorization; Non-Contravention. Each of the Company
and such Stockholder, as applicable, has all power and authority to execute,
deliver and perform his, her or its obligations under this agreement. The
execution, delivery and performance by each of the Company or such Stockholder,
as applicable, of this agreement and the consummation of the transactions
contemplated hereby, (i) has been duly authorized by all necessary corporate or
limited liability company, and if required, stockholder action, as applicable,
on the part of or on behalf of such party and (ii) does not violate, contravene
the terms of, or exceed the authority grant under, any agreement, document or
instrument of or applicable to such party.

          7.   Miscellaneous.
               -------------

               (a)  Notices. All notices, instructions and other communications
                    -------
in connection with this agreement shall be in writing and may be given by (i)
fax (with evidence of receipt) followed by letter or other delivery, (ii)
personal delivery or (iii) by a nationally recognized

                                       -9-



overnight courier in each case to the parties at the address of the Company as
follows, and at the address of the Stockholders as set forth on the signature
page to this agreement (or at such other address as the Company or the
Stockholders may specify):

               If to the Company:

               MedSource Technologies, Inc.
               110 Cheshire Lane, Suite 100
               Minneapolis, Minnesota 55447
               Telecopier No.: (612) 807-1235
               Attention: Chairman

               With a copy to:

               Jenkens & Gilchrist Parker Chapin LLP
               The Chrysler Building
               405 Lexington Avenue
               New York, New York  10174
               Telecopier No.: (212) 704-6288
               Attention: Edward R. Mandell

               If to a Stockholder, to the address of such Stockholder set forth
on a signature page below.

               (b)  No Waiver. No course of dealing and no delay on the part of
                    ---------
any party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.

               (c)  Binding Effect; Assignability. This agreement shall be
                    -----------------------------
binding upon and, except as otherwise provided herein, shall inure to the
benefit of the respective parties and their permitted successors and assigns.

               (d)  Severability. Any provision of this agreement that is
                    ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.

               (e)  Modification. No term or provision of this agreement may be
                    ------------
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.

               (f)  Law Governing. This agreement shall be governed by and
                    -------------
construed in accordance with the law of the state of Delaware, applicable to
agreements made and to be performed entirely in Delaware, without regard to the
principals of conflicts of law of such state.

                                       -10-



               (g)  Amendment to Securities Laws. The Company (on the one hand)
                    ----------------------------
and the Stockholders (on the other hand) agree that any amendment to federal
securities laws (and regulations promulgated thereunder (and related
registration forms) and related state securities laws) shall not affect the
substantive registration requirements (and other obligations of the Company) set
forth in this agreement; and, following any such amendment, the Company shall
continue to be required to cause the registration of the Registrable Securities
(and pay all Registration Expenses and provide indemnification pursuant to
section 5.1) under the federal securities laws, as amended, in a manner
consistent with carrying out the intent and purposes of (and on terms as similar
as practicable as the terms set forth in) this agreement.

               (h)  Headings. All headings and captions in this agreement are
                    --------
for purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.

               (i)  Entire Agreement. This agreement contains, and is intended
                    ----------------
as, a complete statement of all the terms of the arrangements between the
parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.

                      [The next page is the signature page]

                                       -11-



          The parties have executed and delivered this Registration Rights
Agreement as of the date first written above.


                                  MEDSOURCE TECHNOLOGIES, INC.



                                  By: /s/ DANIEL CROTEAU
                                      ------------------------------------------
                                  Name: Daniel Croteau
                                  Title: Vice President - Corporate Development

                 [Stockholder signatures begin on the next page]

                                       -12-




                                   /s/
                                   --------------------------------------------
                                            Name: Richard Gerrish

                                   Address:

                                   7 Paddock Circle
                                   Tequesta, FL 33469
                                   Telecopier No.: (561) 746-0238




                                   /s/
                                   --------------------------------------------
                                            Name: Meredith Gerrish

                                   Address:

                                   7 Paddock Circle
                                   Tequesta, FL 33469
                                   Telecopier No.: (561) 746-0238


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Rodney Peifer

                                   Address:

                                   7073 Buttercup Lane
                                   Doltewah, TN 37363
                                   Telecopier No.: (423) 344-2268


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Bruce A. Nichols

                                   Address:

                                   9314 Ancient Oaks Drive
                                   Doltewah, TN 37363
                                   Telecopier No.: (423) 899-9220


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Stanley L. Porter

                                   Address:

                                   1679 Co. Rd. 147
                                   Henagar, AL 35978
                                   Telecopier No.: (256) 657-5340


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Jiles L. Dean, Jr.

                                   Address:

                                   852 Cave Springs Road
                                   Rising Fawn, GA 30738
                                   Telecopier No.: (706) 462-2618


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Jay W. Brown

                                   Address:

                                   38 Autumn Drive
                                   Ringgold, GA 30736
                                   Telecopier No.: (706) 935-5531


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Rodney D. Laney

                                   Address:





                                   Telecopier No.: (___) ___-_____


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: John T. Riddle

                                   Address:

                                   1351 Highway 301
                                   Trenton, GA 30752
                                   Telecopier No.: (___) ___-____


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Ronald B. Roth

                                   Address:

                                   9 Northfield Road
                                   Signal Mountain, TN 37377
                                   Telecopier No.: (423) 886-6711


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]



                                   /s/
                                   --------------------------------------------
                                            Name: Lane Keith

                                   Address:

                                   8011 Rosemere Way
                                   Chattanooga, TN 37421
                                   Telecopier No.: (423) 892-3019


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Lance Monroe

                                   Address:

                                   8903 Grey Mountain Drive
                                   Doltewah, TN 37363
                                   Telecopier No.: (423) 396-2817


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Rudolph E. Carlson

                                   Address:





                                   Telecopier No.: (___) ___-____


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]



                                   /s/
                                   --------------------------------------------
                                            Name: Roy Johnson

                                   Address:

                                   14 Hobby Drive
                                   Ridgefield, CT 06877
                                   Telecopier No.: (203) 438-6667


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Gary Messangale

                                   Address:

                                   185 Slygo Road
                                   Trenton, GA 30752
                                   Telecopier No.: (706) 657-4602


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Shannon Prince

                                   Address:

                                   454 Creek Rd.
                                   Wildwood, GA 30757
                                   Telecopier No.: (706) 657-5157


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   /s/
                                   --------------------------------------------
                                            Name: Brenda Neimand

                                   Address:

                                   777 15th Street
                                   Boulder, CO 80302
                                   Telecopier No.: (303) 448-9559


                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]




                                   THE GENEVA COMPANIES, INC.


                                   By:
                                      -----------------------------------------
                                            Name: David Troob
                                            Title: Chairman and CEO

                                   Address:





                                   Telecopier No.: (___) ___-____

                                      S-2

         [MedSource Technologies, Inc. - Registration Rights Agreement
                         - Stockholder Signature Page]

EX-10.11

                                                                   EXHIBIT 10.11
                                                                   -------------

                                 1999 STOCK PLAN
                                       of
                          MEDSOURCE TECHNOLOGIES, INC.
               (As Amended and Restated Through December 14, 2001)

          1.  Purposes of the Plan. This stock plan (the "Plan") is intended to
              --------------------
provide an incentive to employees (including directors and officers who are
employees) and to consultants and directors who are not employees of MedSource
Technologies, Inc., a Delaware corporation (the "Company"), or any of its
Subsidiaries (as defined in paragraph 18), and to offer an additional inducement
in obtaining the services of such persons. The Plan provides for the grant of
"nonqualified stock options," which do not qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and shares of stock of the Company that may be subject to
contingencies or restrictions (collectively with the options, "Awards").

          2.  Stock Subject to the Plan. Subject to the provisions of paragraph
              -------------------------
11, the aggregate number of shares of Common Stock (as defined in paragraph 18)
that may be granted under the Plan shall not exceed 4,430,000. Such shares of
Common Stock may, in the discretion of the Board of Directors of the Company
(the "Board of Directors"), consist either in whole or in part of authorized but
unissued shares of Common Stock or shares of Common Stock held in the treasury
of the Company. Subject to the provisions of paragraph 12, any shares of Common
Stock subject to an option that for any reason expires, is cancelled or is
terminated unexercised or that ceases for any reason to be exercisable or a
restricted stock Award that for any reason is forfeited, shall again become
available for the granting of Awards under the Plan. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan.

          3.  Administration of the Plan. The Plan shall be administered by the
              --------------------------
Board of Directors or a committee (the "Committee") of the Board of Directors.
Those administrating the Plan are referred to herein as the "Administrators." At
any time, and for so long as, the Common Stock is registered pursuant to section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Administrators shall not include any person that would prevent an Award from
being exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3
thereunder. Except as otherwise provided by the Board of Directors, the bylaws
of the Company or applicable law, a majority of the members of the Committee
shall constitute a quorum, and the acts of a majority of the members present at
any meeting at which a quorum is present, and any acts approved in writing by
all members without a meeting, shall be the acts of the Committee.

          Subject to the express provisions of the Plan, the Administrators
shall have the authority, in their sole discretion, to determine: who shall be
granted Awards; the type of Award to be granted, the times when an Award shall
be granted; the number of shares of Common Stock to be subject to each Award;
the term of each option; the date each option shall vest or become



exercisable; whether an option shall vest or be exercisable in whole, in part or
in installments and, if in installments, the number of shares of Common Stock to
be subject to each installment; whether the installments shall be cumulative,
the date each installment shall become exercisable and the term of each
installment; whether shares of Common Stock may be issued upon the exercise of
an option as partly paid and, if so, the dates when future installments of the
price shall become due and the amounts of such installments; the exercise price
of an option and the price, if any, to be paid for a stock Award; the form of
payment of the exercise price; the restrictions, if any, imposed with respect to
a stock Award and whether and under what conditions to waive any such
restriction; whether to restrict the sale or other disposition of the shares of
Common Stock acquired upon the exercise of an option and, if so, whether and
under what conditions to waive any such restriction; whether and under what
conditions to subject all or a portion of the grant or exercise of an option,
the vesting of a stock Award or the shares acquired pursuant to the exercise of
an option to the fulfillment of certain restrictions or contingencies as
specified in the contract referred to in paragraph 10 hereof (the "Contract"),
including without limitation, restrictions or contingencies relating to entering
into a covenant not to compete with the Company, any of its Subsidiaries or a
Parent (as defined in paragraph 18), to financial objectives for the Company,
any of its Subsidiaries or a Parent, a division of any of the foregoing, a
product line or other category, and/or to the period of continued employment of
the Award holder with the Company, any of its Subsidiaries or a Parent, and to
maintain the confidentiality of information provided to, or learned by, the
Award holder, and to determine whether such restrictions or contingencies have
been met; whether to accelerate the date on which an option may vest or be
exercised or to waive any restriction or limitation with respect to any Award;
whether an Award holder is Disabled (as defined in paragraph 18); the amount, if
any, necessary to satisfy the obligation of the Company, a Subsidiary or Parent
to withhold taxes or other amounts with respect to the grant; the Fair Market
Value (as defined in paragraph 18) of a share of Common Stock; to construe the
respective Contracts and the Plan; with the consent of the Award holder, to
cancel or modify an Award, provided, that the modified provision is permitted to
                           --------
be included in an Award granted under the Plan on the date of the modification,
to prescribe, amend and rescind rules and regulations relating to the Plan; and
to make all other determinations necessary or advisable for administering the
Plan. Any controversy or claim arising out of or relating to the Plan, any Award
granted under the Plan or any Contract shall be determined unilaterally by the
Administrators in their sole discretion. The determinations of the
Administrators on the matters referred to in this paragraph 3 shall be
conclusive and binding on the parties. No member or former member of the
Administrators shall be liable for any action, failure to act or determination
made in good faith with respect to the Plan or Contract or Award hereunder.

          4.  Eligibility. The Administrators may from time to time, in their
              -----------
sole discretion, consistent with the purposes of the Plan, grant Awards to (a)
employees (including officers and directors who are employees) of the Company or
any of its Subsidiaries, (b) consultants to the Company or any of its
Subsidiaries and (c) non-employee directors of the Company. Such Awards granted
shall cover such number of shares of Common Stock as the Administrators may
determine, in their sole discretion, as set forth in the applicable Contract;
provided, however, if, on the date of grant, the Common Stock or any other class
- --------  -------
of common

                                       -2-



equity securities of the Company is required to be registered pursuant to
section 12 of the Exchange Act, the maximum number of shares subject to options
that may be granted to any employee during any calendar year under the Plan (the
"162(m) Maximum") shall be 100,000 shares.

          5.   Options.
               -------

          (a)  Grant. The Administrators may from time to time, in their sole
               -----
discretion, consistent with the purposes of the Plan, grant options to persons
eligible for such grant pursuant to paragraph 4.

          (b)  Exercise Price. The exercise price of the shares of Common Stock
               --------------
under each option shall be determined by the Administrators, in their sole
discretion, as set forth in the applicable Contract.

          (c)  Term. The term of each option granted pursuant to the Plan shall
               ----
be such term as is established by the Administrators, in their sole discretion,
as set forth in the applicable Contract. Options shall be subject to earlier
termination as hereinafter provided.

          (d)  Exercise. An option (or any part or installment thereof), to the
               --------
extent then vested and exercisable, shall be exercised (to the extent the holder
elects) by giving written notice to the Company at its principal office stating
which option is being exercised, specifying the number of shares of Common Stock
as to which such option is being exercised and accompanied by payment in full of
the aggregate exercise price therefor (or the amount due on exercise if the
applicable Contract permits installment payments) (a) in cash or by certified
check or (b) if the applicable Contract permits, with previously acquired shares
of Common Stock that are fully paid, vested, transferrable and have been held
for the requisite period to avoid a charge to the Company's earnings for
financial accounting purposes and that have an aggregate Fair Market Value on
the date of exercise equal to the aggregate exercise price of all options being
exercised, or with any combination of cash, certified check or shares of Common
Stock having such value. The Company shall not be required to issue any shares
of Common Stock pursuant to any such option until all required payments,
including any required withholding, have been made.

          A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate for such shares
or in the case of uncertificated shares, an entry is made on the books of the
Company's transfer agent representing such shares; provided, however, that until
                                                   --------  -------
such stock certificate is issued or book entry is made, any optionee using
previously acquired shares of Common Stock in payment of an option exercise
price shall continue to have the rights of a stockholder with respect to such
previously acquired shares.

          6.   Restricted Stock. The Administrators, in their sole discretion,
               ----------------
may from time to time, consistent with the purposes of the Plan, grant shares of
Common Stock to persons

                                       -3-



eligible for such grant pursuant to paragraph 4. The grant may require the Award
holder to pay such price per share therefor, if any, as the Administrators may
determine, in their sole discretion. Such shares may be subject to such
contingencies and restrictions as the Administrators may determine, as set forth
in the Contract. Upon the issuance of the stock certificate for a stock Award,
or in the case of uncertificated shares, the entry on the books of the Company's
transfer agent representing such shares, notwithstanding any contingencies or
restrictions to which the shares are subject, the Award holder shall be
considered to be the record owner of the shares, and subject to the
contingencies and restrictions set forth in the Award, shall have all rights of
a shareholder of record with respect to such shares, including the right to vote
and to receive distributions. Upon the occurrence of any such contingency or
restriction, the Award holder may be required to forfeit all or a portion of
such shares back to the Company. The shares shall vest in the Award holder when
all of the restrictions and contingencies lapse. Until such time, the
Administrators may require that such shares be held by the Company, together
with a stock power duly endorsed in blank by the Award holder.

          7.   Termination of Relationship. Except as may otherwise be expressly
               ---------------------------
provided in the applicable Contract, an optionee whose relationship with the
Company as a director, or with the Company or any of its Subsidiaries or a
Parent as an employee or a consultant, has terminated for any reason (other than
as a result of the death or Disability of the optionee) may exercise his
options, to the extent exercisable on the date of such termination, at any time
within three months after the date of termination, but not thereafter and in no
event after the date the option would otherwise have expired; provided, however,
                                                              --------  -------
that if such relationship is terminated either (a) for Cause (as defined in
paragraph 18), or (b) without the consent of the Company, such option shall
terminate immediately.

          For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and the Company, any of its Subsidiaries
or a Parent if, at the time of the determination, the individual would be
treated as an employee of such entity for purposes of Section 422(a) of the Code
assuming such section applied. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company, any of its Subsidiaries or a Parent is guaranteed
either by statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of such leave.

          Except as may otherwise be expressly provided in the Contract, upon
the termination of the relationship of a holder of a stock Award as a director
of the Company, or as an employee of, or consultant to, the Company, or any of
its Subsidiaries or a Parent, for any reason (including his death or
Disability), such stock Award shall cease any further vesting and the unvested
portion of such Award as of the date of such termination shall be forfeited to
the Company for no consideration.

                                       -4-



          Except as may otherwise be expressly provided in the applicable
Contract, Awards granted under the Plan to a director, employee or consultant
shall not be affected by any change in the status of the Award holder so long as
such Award holder continues to be a director of the Company, or an employee of,
or a consultant to, the Company or any of its Subsidiaries or a Parent
(regardless of having changed from one to the other or having been transferred
from one entity to another).

          Nothing in the Plan or in any option granted under the Plan shall
confer on any Award holder any right to continue in the employ of, or as a
consultant to, the Company, any of its Subsidiaries or a Parent, or as a
director of the Company, or interfere in any way with any right of the Company,
any of its Subsidiaries or a Parent to terminate the Award holder's relationship
at any time for any reason whatsoever without liability to the Company, any of
its Subsidiaries or a Parent.

          8.   Death or Disability of an Optionee. Except as may otherwise be
               ----------------------------------
expressly provided in the applicable Contract, if an optionee dies (a) while he
is a director of the Company, or an employee of, or consultant to, the Company,
any of its Subsidiaries or a Parent, (b) within three months after the
termination of such relationship (unless such termination was for Cause or
without the consent of the Company) or (c) within one year following the
termination of such relationship by reason of his Disability, the options that
were granted to him as a director, employee or consultant may be exercised, to
the extent exercisable on the date of his death, by the personal representative
of his estate at any time within one year after death, but not thereafter and in
no event after the date the option would otherwise have expired.

          Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose relationship as a director of the Company, or an
employee of, or consultant to, the Company, its Parent and Subsidiaries has
terminated by reason of such optionee's Disability may exercise the options that
were granted to him as a director, employee or consultant, to the extent
exercisable upon the effective date of such termination, at any time within one
year after such date (except as provided in clause (c) of the preceding
paragraph), but not thereafter and in no event after the date the option would
otherwise have expired.

          9.   Compliance with Securities Laws. Notwithstanding anything herein
               -------------------------------
to the contrary, the Administrators may require, in their sole discretion, as a
condition to the receipt of any Award or the exercise of any option that either
(a) a Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock to be issued upon
such receipt or exercise shall be effective and current at the time of exercise,
or (b) there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock upon such receipt or exercise. Nothing
herein shall be construed as requiring the Company to register shares subject to
any Award under the Securities Act or to keep any Registration Statement
effective or current.

          The Administrators may require, in their sole discretion, as a
condition to the receipt of an Award or the exercise of any option that the
Award holder execute and deliver to

                                       -5-



the Company his representations and warranties, in form, substance and scope
satisfactory to the Administrators, which the Administrators determine are
necessary or convenient to facilitate the perfection of an exemption from the
registration requirements of the Securities Act, applicable state securities
laws or other legal requirement, including without limitation that (a) the
shares of Common Stock to be issued upon the receipt of the Award or the
exercise of the option are being acquired by the Award holder for his own
account, for investment only and not with a view to the resale or distribution
thereof, and (b) any subsequent resale or distribution of shares of Common Stock
by such Award holder will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to the
shares of Common Stock being sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the Award holder shall, prior to any offer of sale or sale of such shares of
Common Stock, provide the Company with a favorable written opinion of counsel
satisfactory to the Company, in form, substance and scope satisfactory to the
Company, as to the applicability of such exemption to the proposed sale or
distribution.

          In addition, if at any time the Administrators shall determine, in
their sole discretion, that the listing or qualification of the shares of Common
Stock subject to any Award on any securities exchange, Nasdaq or under any
applicable law or self-regulating agency rule, or the consent or approval of any
governmental agency or regulatory body, is necessary or desirable as a condition
to, or in connection with, the granting of an Award or the issuing of shares of
Common Stock upon exercise of an option, such Award may not be granted and such
option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Administrators.

          10.  Contracts. Each Award shall be evidenced by an appropriate
               ---------
Contract which shall be duly executed by the Company and the Award holder, and
shall contain such terms, provisions and conditions not inconsistent herewith as
may be determined by the Administrators. The terms of each Award and Contract
need not be identical.

          11.  Adjustments Upon Changes in Common Stock.
               ----------------------------------------

          (a)  Notwithstanding any other provision of the Plan, in the event of
a stock dividend, stock split, combination, recapitalization, merger or
consolidation in which the Company is the surviving corporation, spin-off,
split-up, combination or exchange of shares or the like which results in a
change in the number or kind of shares of Common Stock which is outstanding
immediately prior to such event, the aggregate number and kind of shares subject
to the Plan, the aggregate number and kind of shares subject to each outstanding
option and the exercise price thereof, and the 162(m) Maximum shall be
appropriately adjusted by the Board of Directors to convert the unexercised
portion of the option into an option to acquire such number and kind of shares
or other consideration that the optionee would have been entitled to receive if
he had owned the shares underlying such portion of the option prior to such
event, and to apportion the remaining aggregate exercise price of the option
among such consideration to be received upon exercise. In making such
adjustments, the Board of Directors may provide for the elimination of
fractional shares which might otherwise be subject to options without payment

                                       -6-



therefor. The determination of the Board of Directors with respect to any matter
under this subparagraph (a) shall be conclusive and binding on all parties
thereto.

          (b)  Notwithstanding any other provision of the Plan, in the event of
(i) the liquidation or dissolution of the Company, or (ii) a transaction (or
series of related transactions), other than the initial public offering of
Common Stock, that is approved by a majority of those who were members of the
Board of Directors prior to the first of such transaction or series (including,
without limitation, a merger, consolidation, sale of stock by the Company or its
stockholders, tender offer or sale of assets) and in which either (A) the voting
power (in the election of directors generally) of the Company's voting
securities outstanding immediately prior to such transaction(s) cease to
represent at least 50% of the combined voting power (in the election of
directors generally) of the Company or such surviving entity outstanding
immediately after such transaction(s), (B) all or substantially all of the
Company's assets are sold to an unaffiliated third party, or (C) the
registration of the Common Stock under the Exchange Act is terminated (if such
registration was in effect immediately prior to such transaction(s)), then,
unless otherwise provided in the applicable Contract or other provision is made
therefor in such transaction, (x) the Company (or its designee) may, at its
option purchase, and the holder shall sell, the vested portion of each option,
for an amount equal to the excess, if any, of the aggregate amount that would
have been received in the transaction by the optionee with respect to the shares
of Common Stock subject to the vested portion of such option, determined as if
he had exercised such vested portion immediately prior to the transaction, over
the aggregate exercise price therefor, which excess may be paid in cash or the
property to be received by owners of Common Stock in the transaction, and (y)
the unvested portion of each Award shall be cancelled without further action
and, in the case of a stock Award, the Company shall return to the Award holder
an amount equal to the lesser of (1) the consideration that would have been
received in the transaction by the Award holder with respect to such unvested
shares determined as if the such unvested portion had vested immediately prior
to the transaction or (2) the consideration, if any, paid by the Award holder to
the Company for such unvested shares.

          12.  Amendments and Termination of the Plan. The Plan was adopted by
               --------------------------------------
the Board of Directors on March 4, 1999. The Board of Directors, without further
approval of the Company's stockholders, may at any time suspend or terminate the
Plan, in whole or in part, or amend it from time to time in such respects as it
may deem advisable, including, without limitation, to comply with the provisions
of Rule 16b-3, Section 162(m) of the Code or any change in applicable law,
regulations, rulings or interpretations of administrative agencies; provided,
                                                                    --------
however, that no amendment shall be effective without the requisite prior or
- -------
subsequent stockholder approval which would (a) except as contemplated in
paragraph 11, increase the maximum number of shares of Common Stock for which
Awards may be granted under the Plan or the 162(m) Maximum, (b) change the
eligibility requirements to receive Awards hereunder or (c) make any other
change for which applicable law requires stockholder approval. No termination,
suspension or amendment of the Plan shall, without the consent of the Award
holder, adversely affect his rights under any Award granted under the Plan. The
power of the Administrators to construe and administer any Award granted under
the Plan prior to the

                                       -7-



termination or suspension of the Plan nevertheless shall continue after such
termination or during such suspension.

          13.  Transferability. Except as may otherwise be expressly provided in
               ---------------
the Contract, no option granted under the Plan shall be transferable and options
may be exercised (a) during the lifetime of the optionee, only by the optionee
and (b) after the death of the optionee, only by the personal representative of
his estate. Except as may otherwise be expressly provided in the Contract, a
stock Award, to the extent not vested, shall not be transferable. Except to the
extent provided above, Awards may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and any such attempted assignment, transfer, pledge, hypothecation or
disposition shall be null and void ab initio and of no force or effect.
                                   -- ------

          14.  Withholding Taxes. The Company, a Subsidiary or Parent may
               -----------------
withhold (a) cash, (b) shares of Common Stock to be issued under a stock Award
or upon exercise of an option having an aggregate Fair Market Value on the
relevant date, or (c) any combination thereof, in an amount equal to the amount
which the Administrators determine is necessary to satisfy the obligation of the
Company, a Subsidiary or Parent to withhold Federal, state and local income
taxes or other amounts incurred by reason of the grant, vesting, exercise or
disposition of an Award, or the disposition of the underlying shares of Common
Stock. Alternatively, the Company may require the holder to pay to the Company
such amount, in cash, promptly upon demand.

          15.  Legends; Payment of Expenses. The Company may endorse such legend
               ----------------------------
or legends upon the certificates for shares of Common Stock issued under a stock
Award or upon exercise of an option under the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such shares as it
determines, in its discretion, to be necessary or appropriate to (a) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act or any applicable state securities laws, or (b) implement the
provisions of the Plan or any agreement between the Company and the Award holder
with respect to such shares of Common Stock.

          The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock under a stock Award or upon the exercise of an option
granted under the Plan, as well as all fees and expenses incurred by the Company
in connection with such issuance.

          16.  Use of Proceeds. The cash proceeds received upon the exercise of
               ---------------
an option or grant of a stock Award under the Plan shall be added to the general
funds of the Company and used for such corporate purposes as the Board of
Directors may determine.

          17.  Substitutions and Assumptions of Options of Certain Constituent
               ---------------------------------------------------------------
Corporations. Anything in this Plan to the contrary notwithstanding, the Board
- ------------
of Directors may, without further approval by the stockholders, substitute new
Awards for prior options or



                                       -8-



restricted stock of a Constituent Corporation (as defined in paragraph 18) or
assume the prior options of such Constituent Corporation.

          18.  Definitions. For purposes of the Plan, the following terms shall
               -----------
be defined as set forth below:

          (a)  "Cause" shall mean (i) in the case of an employee or consultant,
if there is a written employment or consulting agreement between the Award
holder and the Company, any of its Subsidiaries or a Parent which defines
termination of such relationship for cause, cause as defined in such agreement,
(ii) if there is no such agreement, cause as defined in the Contract, or (iii)
in the absence of both of the foregoing, (A) the commission of fraud or
embezzlement on the part of the Award holder, (B) the conviction of such Award
holder of, or the pleading by such Award holder of guilty or no contest to, (x)
any felony or (y) any crime involving moral turpitude, or (C) a material failure
by such Award holder to discharge his duties, responsibilities and obligations
to the Company, any of its Subsidiaries or a Parent that is not promptly cured
after notice thereof from the Company.

          (b)  "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company, or such other class of stock of the Company into which
such stock is converted in a transaction or series of transactions described in
paragraph 11(a).

          (c)  "Constituent Corporation" shall mean any corporation which
engages with the Company, any of its Subsidiaries or a Parent in a transaction
described in Section 424(a) of the Code, or any Parent or any Subsidiary of such
corporation.

          (d)  "Disability" shall mean a permanent and total disability within
the meaning of Section 22(e)(3) of the Code.

          (e)  "Fair Market Value" of a share of Common Stock on any day shall
mean (i) if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of Common
Stock on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (ii) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on The
Nasdaq Stock Market ("Nasdaq"), and (A) if actual sales price information is
available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of Common Stock on such day on Nasdaq, or (B) if
such information is not available, the average of the highest bid and lowest
asked prices per share of Common Stock on such day on Nasdaq, or (iii) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is not quoted on Nasdaq, the average of the highest bid and
lowest asked prices per share of Common Stock on such day as reported on the OTC
Bulletin Board Service or by National Quotation Bureau, Incorporated or a
comparable service; provided, however, that if clauses (i), (ii) and (iii) of
                    --------  -------
this paragraph are all inapplicable, or if no trades have been made or no quotes
are available for such day, the fair market value of the Common Stock

                                       -9-



shall be determined by the Board of Directors by any method consistent with
applicable regulations adopted by the Treasury Department relating to stock
options.

          (f)  "Parent" shall mean a "parent corporation" within the meaning of
Section 424(e) of the Code.

          (g)  "Subsidiary" shall mean a "subsidiary corporation" within the
meaning of Section 424(f) of the Code, or an unincorporated entity (including
without limitation a limited liability company) in which the Company owns
directly or indirectly through other Subsidiaries at least 50% of the capital or
profits interests in the entity.

          19.  Governing Law; Construction. The Plan, the Awards and Contracts
               ---------------------------
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
of law provisions that would defer to the substantive laws of another
jurisdiction.

          Neither the Plan nor any Contract shall be construed or interpreted
with any presumption against the Company by reason of the Company causing the
Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.

          20.  Partial Invalidity. The invalidity, illegality or
               ------------------
unenforceability of any provision in the Plan, any Award or Contract shall not
affect the validity, legality or enforceability of any other provision, all of
which shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.

                                       -10-

EX-10.13

                                                                   Exhibit 10.13
                                                                   -------------

                                1999 STOCK PLAN                        #____
                       NON-QUALIFIED STOCK OPTION CONTRACT
                       -----------------------------------
                  (Time Vesting Option for Board of Directors)


                                ________________


     The parties to this Non-Qualified Stock Option Contract are MedSource
Technologies, Inc., a Delaware corporation (the "Company"), and ____________
(the "Optionee"). Each capitalized term used but not defined herein shall have
the meaning assigned to it in the Company's 1999 Stock Plan (the "Plan").

     The parties agree as follows:

     1.   The Company, in accordance with the allotment made by the
Administrators and subject to the terms and conditions of the Plan, hereby
grants to the Optionee an option to purchase an aggregate of _____ shares of
Common Stock at an exercise price of $_____ per share, such exercise price being
at least equal to the fair market value of such shares of Common Stock on the
date hereof.

     2.   (a)  The term of this option shall be 10 years from the date hereof,
subject to earlier termination as provided in this Contract and the Plan. This
option shall vest as to 25% of the total number of shares of Common Stock
subject hereto on the first anniversary of the date hereof and as to an
additional 25% of such total number of shares on each of the next three
anniversaries of the date hereof.

          (b)  If the termination of the Optionee's directorship with the
Company occurs by reason of the Optionee's death or Disability (i) less than six
months before the first anniversary of the date hereof, then this option shall
vest as to one-half of the total number of shares of Common Stock (rounded up to
the nearest whole share) that would otherwise have vested on the first
anniversary of the date hereof if the Optionee had continued to be a director of
the Company, (ii) less than six months before the second anniversary of the date
hereof, then, in addition to the number of shares of Common Stock as to which
this option is then otherwise vested, this option shall vest as to one-half of
the total number of shares of Common Stock (rounded up to the nearest whole
share) that would otherwise have vested on the second anniversary of the date
hereof if the Optionee had continued to be a director of the Company, (iii) less
than six months before the third anniversary of the date hereof, then, in
addition to the number of shares of Common Stock as to which this option is then
otherwise vested, this option shall vest as to one-half of the total number of
shares of Common Stock (rounded up to the nearest whole share) that would
otherwise have vested on the third anniversary of the date hereof if the
Optionee had continued to be a director of the Company, or (iv) less than six
months before the fourth anniversary of the date hereof, then, in addition to
the number of shares of Common Stock as to which this option is then otherwise
vested, this option shall vest as to one-half of the total number of shares of
Common Stock (rounded up to the nearest whole share) that would



otherwise have vested on the fourth anniversary of the date hereof if the
Optionee had continued to be a director of the Company.

          (c)  Immediately prior to the consummation of a Transaction (as
defined herein) in which the holders of shares of Common Stock would receive as
consideration in exchange for their shares of Common Stock, either (x)
securities of an unaffiliated entity that are listed on the New York Stock
Exchange, Inc., the American Stock Exchange LLC or The Nasdaq Stock Market's
National Market that represent more than 50% of the total consideration to be
received by the holders of shares of Common Stock in such Transaction (as
determined by the Administrators) or (y) cash that represents more than 50% of
the total consideration to be received by the holders of shares of Common Stock
in such Transaction (as determined by the Administrators), then this option
shall vest as to all of the shares of Common Stock subject hereto.

          (d)  The right to purchase shares of Common Stock under this option
shall be cumulative, so that if the full number of shares purchasable in a
period shall not be purchased, the balance may be purchased at any time or from
time to time thereafter, but not after the expiration of the term of this option
as herein provided and as provided in the Plan.

     3.   This option shall be exercised by giving written notice to the Company
at its then principal office, currently 110 Cheshire Lane, Suite 100,
Minneapolis, Minnesota 55305 Attention: Chief Financial Officer, stating that
the Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor (a) in cash or by certified check, (b) with the consent of the
Company, with previously acquired shares of Common Stock that are fully paid,
vested, transferable and have been held by the Optionee for the requisite period
to avoid a charge to the Company's earnings for financial accounting purposes,
or (c) with the consent of the Company, with a combination of the foregoing.

     4.   The Company may withhold cash and/or shares of Common Stock to be
issued to the Optionee in the amount that the Company determines is necessary to
satisfy its obligation to withhold taxes or other amounts incurred by reason of
the grant, exercise or disposition of this option or the disposition of the
underlying shares of Common Stock. Alternatively, the Company may require the
Optionee to pay the Company such amount and the Optionee agrees to pay such
amount to the Company in cash, promptly upon demand.

     5.   (a)  The Optionee represents and warrants that any and all shares of
Common Stock purchased by the Optionee pursuant to the exercise of this option
will be acquired for the Optionee's own account and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act and such shares may not be disposed of except
in compliance with all federal and state securities laws. Notwithstanding any
other provisions of this agreement to the contrary, the Company shall not be
required to sell or

                                       -2-



issue any shares of Common Stock pursuant to this option if the sale or issuance
of such shares would constitute a violation of any provision of any law or
regulation of any governmental authority, including without limitation any
federal or state securities laws or regulations. The Company may require that
the Optionee deliver at the time of each exercise of the option and as a
condition to exercise of the option, a further written representation that the
shares of Common Stock being acquired upon exercise shall be acquired by the
Optionee solely for investment and will not be sold or transferred without
registration or an exemption from registration under the Securities Act and
applicable state securities laws and regulations, including compliance with all
requirements for such exemption. The Company may also require that the Optionee
deliver other written representations that will permit the Company to comply
with federal and applicable state securities laws in connection with the
issuance of the shares, including representations as to the knowledge and
experience in financial and business matters of the Optionee and the Optionee's
ability to bear the economic risk of the Optionee's investment. The Company may
require that the Optionee obtain a "purchaser representative" as that term is
defined in applicable federal and state securities laws, prior to the sale or
issuance of such shares.

     The Optionee shall have no right to require the Company, and the Company
shall have no obligation, to register the issuance or sale of any security
acquired pursuant to the exercise of the Option granted by this agreement under
the Securities Act or under any other law or regulation.

          (b)  The Optionee acknowledges and agrees that in any event or series
of events set forth in Section 11(b) of the Plan (a "Transaction"), unless other
provision is made therefor in such Transaction, (x) the Company (or its
designee) shall have the right (but not the obligation) to purchase all options
that are vested prior to the closing of such Transaction for an amount equal to
the excess, if any, of the aggregate amount that would have been received in
such Transaction by the Optionee with respect to the shares of Common Stock
subject to the vested portion of this option, determined as if the Optionee had
exercised such vested portion immediately prior to such Transaction, over the
aggregate exercise price therefor, which excess may be paid in cash or the
property to be received by owners of Common Stock in such Transaction and (y)
the rights of the Optionee with respect to the unvested portion of this option
shall be cancelled. Prior to a Transaction, the Company may, in its discretion,
notify the Optionee of such proposed purchase by sending to the Optionee written
notice of such proposed Transaction. The notice may set forth a date by which
the Company shall close such purchase and shall contain such other information
as the Company, in its discretion, believes is necessary to close such purchase
at or prior to consummation of such Transaction.

     6.   (a)  Upon any termination of the Optionee's directorship with the
Company by reason of the Optionee's death or Disability or by the Company
without Cause, then the Optionee may exercise the option to the extent vested
(whether or not otherwise exercisable) during the period beginning on the
effective date of such termination and ending 90 days after such date.

                                       -3-



          (b)  The right to purchase shares under this option shall terminate
immediately upon the termination of the Optionee's directorship with the Company
for any reason not previously specified in this paragraph 6 (including, without
limitation, (i) for Cause or (ii) without the consent of the Company), but the
option granted hereunder shall not be affected by a change in status of the
Optionee so long as the Optionee continues to be a consultant or advisor to the
Company, any of its Subsidiaries or a Parent (regardless of having changed from
one to the other or having been transferred from one entity to the other).

     7.   The Optionee hereby represents and warrants to the Company that,
unless a registration statement under the Securities Act with respect to the
shares of Common Stock to be received upon an exercise of this option is
effective and current at the time of exercise of this option, the shares of
Common Stock to be issued upon the exercise of this option will be acquired by
the Optionee for the Optionee's own account, for investment only and not with a
view to the resale or distribution thereof. In any event, the Optionee shall
notify the Company of any proposed resale of the shares of Common Stock issued
to him upon exercise of this option. Any subsequent resale or distribution of
shares of Common Stock by the Optionee shall be made only pursuant to (a) a
registration statement under the Securities Act which is effective and current
with respect to the sale of shares of Common Stock being sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the Optionee shall, prior to any offer of sale or sale
of such shares of Common Stock, provide the Company (unless waived by the
Company) with a favorable written opinion of counsel satisfactory to the
Company, in form, substance and scope satisfactory to the Company, as to the
applicability of such exemption to the proposed sale or distribution. Such
representations and warranties shall also be deemed to be made by the Optionee
upon each exercise of this option. Nothing herein shall be construed as
requiring the Company to register the shares subject to this option under the
Securities Act or to keep any registration statement effective or current.

     8.   Notwithstanding anything herein to the contrary, if at any time the
Administrators determine, in their sole discretion, that the listing or
qualification of the shares of Common Stock subject to this option on any
securities exchange, Nasdaq or under any applicable law, or the consent or
approval, or filing with, of any governmental agency or regulatory body, is
necessary or desirable as a condition to, or in connection with, the granting of
an option or the issue of shares of Common Stock hereunder, this option may not
be exercised in whole or in part unless such filing, listing, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Administrators.

     9.   The Company may endorse such legend or legends upon the certificates
for shares of Common Stock issued upon exercise of this option and may issue
such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines, in its discretion, to be necessary or appropriate to
(a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act or any applicable state securities law, or
(b)

                                       -4-



implement the provisions of the Plan or this Contract or any other agreement
between the Company and the Optionee with respect to such shares of Common
Stock.

     10.  Nothing in the Plan or herein shall confer upon the Optionee any right
to continue as a director of the Company or in the employ, or as a consultant
to, of the Company, any Parent or any of its Subsidiaries, or interfere in any
way with any right of the Company, any Parent or its Subsidiaries to terminate
any such relationship at any time for any reason whatsoever without liability to
the Company, any Parent or any of its Subsidiaries.

     11.  Prior to or simultaneously with the grant of this option, the Optionee
has executed the Stockholders Agreement in the form annexed hereto as Exhibit A.
The Optionee hereby agrees to execute any "lock-up" or similar agreement that an
underwriter of any public offering of the Company's securities might request to
restrict the transfer by the Optionee of shares of Common Stock owned or which
may become owned by the Optionee for a period of time not to exceed 30 days
prior to, nor 270 days following, the effective date of such public offering.
The Optionee agrees to maintain the confidentiality of any information provided
to him or learned by him by reason of, as result of, or in connection with,
holding an option or owing shares in the Company.

     12.  The Company and the Optionee are subject to and bound by all of the
terms and conditions of the Plan, a copy of which is attached hereto and made a
part hereof. In the event of a conflict between the terms of this Contract and
the terms of the Plan, the terms of the Plan shall govern.

     13.  The Optionee represents and agrees that he will comply with all
applicable laws relating to the Plan and the grant and exercise of this option
and the disposition of the shares of Common Stock acquired upon exercise of the
option, including without limitation, federal and state securities and "blue
sky" laws.

     14.  This option is not transferable by the Optionee and may be exercised
(a) during the lifetime of the Optionee, only by the Optionee and (b) after the
death of the Optionee, only by the personal representative of the Optionee's
estate.

     15.  This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to the personal representative of the
Optionee's estate.

     16.  This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflict of law that would defer to the substantive laws of another
jurisdiction.

     17.  The invalidity, illegality or unenforceability of any term or
provision herein shall not affect the validity, legality or enforceability of
any other term or provision, all of which shall

                                       -5-



be valid, legal and enforceable to the fullest extent permitted by applicable
law. This Contract shall not be construed or interpreted with any presumption
against the Company by reason of the Company causing this Contract to be
drafted.

     18. This Contract (together with the Plan) constitutes the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersedes any prior and/or contemporaneous agreements or understandings
with respect thereto (whether written or oral), all of which are merged herein.
This Contract may not be amended or modified except by an instrument in writing
signed by the parties hereto, and no term or provision hereof may be waived by
any party except by an instrument in writing signed by such party.
Notwithstanding the foregoing, the Optionee agrees that the Company may amend
the Plan and the options granted to the Optionee under the Plan, subject to the
limitations contained in the Plan.

                      [The next page is the signature page]

                                       -6-



     The parties have executed and delivered this Non-Qualified Stock Option
Contract as of the date first written above.


                                             MEDSOURCE TECHNOLOGIES, INC.


                                             By:________________________________
                                             Name:   Richard J. Effress
                                             Title:  Chairman of the Board



                                             ___________________________________
                                             Name:

                                       -7-

EX-10.14

                                                                   Exhibit 10.14

                                ACT MEDICAL, INC.
                             1998 OMNIBUS STOCK PLAN
                         (As Amended and Restated As Of
                                 APRIL 4, 2000)

          1.   Purpose. This ACT Medical, Inc. 1998 Omnibus Stock Plan (the
               -------
"Plan") is intended to provide incentives (a) to the officers and other
employees of ACT Medical, Inc. (the "Company"), its parent (if any) and any
present or future subsidiaries of the Company (collectively, "Related
Corporations") by providing them with opportunities to purchase stock in the
Company pursuant to options which qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
granted hereunder ("ISO" or "ISOs"); (b) to directors, officers, employees and
consultants of the Company and Related Corporations by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs ("Non-Qualified Option" or "`Non
Qualified Options"); and (c) to directors, officers, employees and consultants
of the Company and Related Corporations by providing them with opportunities to
make direct purchases of restricted stock in the Company ("Restricted Stock").
Both ISOs and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code.

          2.   Administration of the Plan. (a) The Plan shall be administered by
               --------------------------
the Board of Directors of the Company (the "Board"). The Board may appoint a
Compensation Committee of two or more of its members to administer the Plan (the
Board and the Committee hereinafter variously referred to as the "Committee").
In the event the Company registers any class of any equity security pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), each member of the Committee shall be a non-employee director as defined
in Rule 16b-3 under the Exchange Act and each shall be an "outside director"
within the meaning of Section 162(m) of the Code. Subject to ratification of the
grant of each Option or Restricted Stock by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the Committee, if
so appointed, shall have the authority to (i) determine the employees of the
Company and Related Corporations (from among the class of employees eligible
under paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Restricted Stock) to whom Non-Qualified
Options or Restricted Stock may be granted; (ii) determine the time or times at
which Options or Restricted Stock may be granted; (iii) determine the option
price of shares subject to each Option, which price with respect to ISOs shall
not be less than the minimum specified in paragraph 6, and the purchase price of
Restricted Stock; (iv) determine whether each Option granted shall be an ISO or
a Non-Qualified Option; (v) determine (subject to paragraph 7) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (vi) determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options and to Restricted Stock, and the nature of
such restrictions, if any; and (vii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. If the Committee determines to
issue a Non-Qualified Option, it shall take whatever actions it deems necessary,
under Section 422 of the Code and the regulations promulgated thereunder, to
ensure that such Option is not treated as an ISO. The



interpretation and construction by the Committee of any provisions of the Plan
or of any Option or authorization or agreement for Restricted Stock granted
under it shall be final unless otherwise determined by the Board. The Committee
may from time to time adopt such rules and regulations for carrying out the Plan
as it may deem best. No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option or Restricted Stock granted under it.

               (b)  The Committee may select one of its members as its chairman,
and shall hold meetings at such time and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. All references in the Plan to the Committee shall mean the Board if
there is no Committee so appointed. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members of the Committee and thereafter
directly administer the Plan.

          3.   Eligible Employees and Others. ISOs may be granted to any officer
               -----------------------------
or other employee of the Company or any Related Corporation. Those directors of
the Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options and Restricted Stock may be granted to any director
(whether or not an employee), officer, employee or consultant of the Company or
any Related Corporation. The Committee may take into consideration an Optionee's
individual circumstances in determining whether to grant an ISO or a
Non-Qualified Option or Restricted Stock. Granting of any Option or Restricted
Stock to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Options
or Restricted Stock.

          4.   Stock. The stock subject to Options and Restricted Stock shall be
               -----
authorized but unissued shares of Common Stock of the Company, no par value per
share (the "Common Stock"), or shares of Common Stock re-acquired by the Company
in any manner. The aggregate number of shares which may be issued pursuant to
the Plan is 300,000 (pre-split), subject to adjustment as provided in paragraph
13. Any such shares may be issued as ISOs, Non-Qualified Options or Restricted
Stock so long as the aggregate number of shares so issued does not exceed such
number, as adjusted. If any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, or if any Restricted Stock
shall be reacquired by the Company by exercise of its repurchase option, the
shares subject to such expired or terminated Option and reacquired shares of
Restricted Stock shall again be available for grants of Options or Restricted
Stock under the Plan.

          5.   Grants Under the Plan. Options or Restricted Stock may be granted
               ----------------------
under the Plan at any time on or after December __, 1998 and prior to December
2008. Any such grants of ISOs shall be subject to the receipt, within 12 months
of December __, 1998, of the approval of Stockholders as provided in paragraph
17. The date of grant of an Option under the Plan will be the date specified by
the Committee at the time it awards the Option; provided, however, that such
date shall not be prior to the date of award. The Committee shall have the

                                       -2-



right, with the consent of the Optionee, to convert an ISO granted under the
Plan to a Non-Qualified Option pursuant to paragraph 15.

          6.   Minimum Option Price. (a) The price per share specified in the
               --------------------
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than 110 percent of the fair
market value of Common Stock on the date of grant.

               (b)  In no event shall the aggregate fair market value
(determined at the time the option is granted) of Common Stock for which ISOs
granted to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the Company and any
Related Corporation) exceed $100,000.

               (c)  If at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if such stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on the
NASDAQ National Market System, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market System or on a national securities exchange. However, if the
Common Stock is not publicly traded at the time an Option is granted under the
Plan, "fair market value" shall be deemed to be the fair value of the Common
Stock as determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm's length.

          7.   Option Duration. Subject to earlier termination as provided in
               ---------------
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than ten years from the date of grant or, in the case of
ISOs granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation, not more than five years from date of grant. Subject to
earlier termination as provided in paragraphs 9 and 10, the term of each ISO
shall be the term set forth in the original instrument granting such ISO, except
with respect to any part of such ISO that is converted into a Non-Qualified
Option pursuant to paragraph 15.

          8.   Exercise of Option. Subject to the provisions of paragraphs 9
               ------------------
through 12, each Option granted under the Plan shall be exercisable as follows:

               (a)  The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.

                                       -3-



               (b)  Once an installment becomes exercisable it shall remain
exercisable until expiration or termination of the Option, unless otherwise
specified by the Committee.

               (c)  Each Option or installment may be exercised at any time or
from time to time, in whole or in part, for up to the total number of shares
with respect to which it is then exercisable.

               (d)  The Committee shall have the right to accelerate the date of
exercise of any installment; provided that the Committee shall not accelerate
the exercise date of any installment of any Option granted to any employee as an
ISO (and not previously converted into a Non-Qualified Option pursuant to
paragraph 15) if such acceleration (i) would violate the annual vesting
limitation contained in Section 422(d) of the Code which provides generally that
the aggregate fair market value (determined at the time the option is granted)
of the stock with respect to which ISOs granted to any employee are exercisable
for the first time by such employee during any calendar year (under all plans of
the Company and any Related Corporation) shall not exceed $100,000 or (ii) would
cause an adverse tax impact to the employee or the Company pursuant to Section
280G of the Code.

         9.    Termination of Employment. If an ISO Optionee ceases to be
               -------------------------
employed by the Company or any Related Corporation other than by reason of death
or disability as provided in paragraph 10, no further installments of his ISOs
shall become exercisable, and his ISOs shall terminate after the passage of 60
days from the date of termination of his employment, but in no event later than
on their specified expiration dates except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 15. Leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the employee after the
approved period of absence. Employment shall also be considered as continuing
uninterrupted during any other bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such Optionee's right to reemployment is guaranteed by statute.
Nothing in the Plan shall be deemed to give any grantee of any Option or
Restricted Stock the right to be retained in employment or other service by the
Company or any Related Corporation for any period of time. ISOs granted under
the Plan shall not be affected by any change of employment within or among the
Company and Related Corporations, so long as the Optionee continues to be an
employee of the Company or any Related Corporation. In granting any
Non-Qualified Option, the Committee may specify that such Non-Qualified Option
shall be subject to the restrictions set forth herein with respect to ISOs, or
to such other termination or cancellation provisions as the Committee may
determine.

          10.  Death; Disability; Dissolution. If an Optionee ceases to be
               ------------------------------
employed by the Company and all Related Corporations by reason of his death, any
Option of his may be exercised, to the extent of the number of shares with
respect to which he could have exercised it on the date of his death, by his
estate, personal representative or beneficiary who has acquired the Option by
will or by the laws of descent and distribution, at any time prior to the
earlier of the Option's specified expiration date or one year from the date of
the Optionee's death.

                                       -4-



          If an Optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any Option held by him on the date of termination of employment, to the extent
of the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the Option's specified expiration date
or one year from the date of the termination of the Optionee's employment. For
the purposes of the Plan, the term "disability" shall have the meaning assigned
to it in Section 22(e)(3) of the Code or any successor statute.

          In the case of a partnership, corporation or other entity holding a
Non-Qualified Option, if such entity is dissolved, liquidated, becomes insolvent
or enters into a merger or acquisition with respect to which such Optionee is
not the surviving entity, such Option shall terminate immediately.

          11.  Assignability. Unless otherwise approved by the Board of
               -------------
Directors, no Non-Qualified Option shall be assignable or transferable by the
Optionee except by will or by the laws of descent and distribution, and while
held by the Optionee, shall be exercisable only by him. No ISO shall be
assignable or transferable by the Optionee except by will or by the laws of
descent and distribution, and during the lifetime of the Optionee each ISO shall
be exercisable only by him.

          12.  Terms and Conditions of Options. Options shall be evidenced by
               -------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including transfer and repurchase restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The Committee may from
time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.

          13.  Adjustments. Upon the happening of any of the following described
               -----------
events, an Optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided:

               (a)  In the event shares of Common Stock shall be sub-divided or
combined into a greater or smaller number of shares or if, upon a merger,
consolidation, reorganization, split-up, liquidation, combination,
recapitalization or the like of the Company, the shares of Common Stock shall be
exchanged for other securities of the Company or of another corporation, each
Optionee shall be entitled, subject to the conditions herein stated, to purchase
such number of shares of common stock or amount of other securities of the
Company or such other corporation as were exchangeable for the number of shares
of Common Stock which such Optionee would have been entitled to purchase except
for such action, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination, or exchange.

                                       -5-



           (b) In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall at
the time be subject to option hereunder, each Optionee upon exercising an Option
shall be entitled to receive (for the purchase price paid upon such exercise)
the shares as to which he is exercising his Option and, in addition thereto (at
no additional cost), such number of shares of the class or classes in which such
stock dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as he would have received if he had been the holder
of the shares as to which he is exercising his Option at all times between the
date of grant of such Option and the date of its exercise.

           (c) Notwithstanding the foregoing, any adjustments made pursuant to
subparagraph (a) or (b) shall be made only after the Committee, after consulting
with counsel for the Company, determines whether such adjustments with respect
to ISOs will constitute a "modification" of such ISOs as that term is defined in
Section 424 of the Code, or cause any adverse tax consequences for the holders
of such ISOs. No adjustments shall be made for dividends paid in cash or in
property other than securities of the Company.

           (d) No fractional shares shall actually be issued under the Plan. Any
fractional shares which, but for this subparagraph (d), would have been issued
to an Optionee pursuant to an Option, shall be deemed to have been issued and
immediately sold to the Company for their fair market value, and the Optionee
shall receive from the Company cash in lieu of such fractional shares.

           (e) Upon the happening of any of the foregoing events described in
subparagraphs (a) or (b) above, the class and aggregate number of shares set
forth in paragraph 4 hereof which are subject to Options which previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events specified in such subparagraphs. The Committee
shall determine the specific adjustments to be made under this paragraph 13, and
subject to paragraph 2, its determination shall be conclusive.

     14.   Means of Exercising Options. An Option (or any part or installment
           ---------------------------
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either (i) in United
States dollars in cash or by check, or (ii) at the discretion of the Committee,
through delivery of shares of Common Stock having fair market value equal as of
the date of the exercise to the cash exercise price of the Option, or (iii) at
the discretion of the Committee, by delivery of the Optionee's personal recourse
note bearing interest payable not less than annually at no less than 100% of the
lowest applicable Federal rate, as defined in Section 1274(d) of the Code, or
(iv)at the discretion of the Committee, by any combination of (i), (ii) and
(iii) above. If the Committee exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in clauses (ii) or
(iii) of the preceding sentence, such discretion shall be exercised in writing
at the time of the grant of the ISO in question. The holder of an Option shall
not have the rights of a shareholder with respect to the shares covered by his
Option until the date of issuance of a stock certificate to him for such shares.
Except as expressly provided above in paragraph 13 with respect to change in
capitalization and stock dividends, no

                                      -6-



adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificates is issued.

     15.   Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
           ------------------------------------------------------------------
The Committee, at the written request of any Optionee, may in its discretion
take such actions as may be necessary to convert such Optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with the Plan. Nothing in the Plan shall be
deemed to give any Optionee the right to have such Optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
Optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.

     16.   Restricted Stock. Each grant of Restricted Stock under the Plan shall
           ----------------
be evidenced by an instrument (a "Restricted Stock Agreement") in such form as
the Committee shall prescribe from time to time in accordance with the Plan and
shall comply with the following terms and conditions, and with such other terms
and conditions as the Committee, in its discretion, shall establish:

           (a) The Committee shall determine the number of shares of Common
Stock to be issued to an eligible person pursuant to the grant of Restricted
Stock, and the extent, if any, to which they shall be issued in exchange for
cash, other consideration, or both.

           (b) Shares issued pursuant to a grant of Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise disposed of, except by will or
the laws of descent and distribution, or as otherwise determined by the
Committee in the Restricted Stock Agreement, for such period as the Committee
shall determine, from the date on which the Restricted Stock is granted (the
"Restricted Period"). The Company will have the option to repurchase the Common
Stock at such price as the Committee shall have fixed in the Restricted Stock
Agreement which option will be exercisable (i) if the participant's continuous
employment or performance of services for the Company and the Related
Corporations shall terminate prior to the expiration of the Restricted Period,
(ii) if, on or prior to the expiration of the Restricted Period or the earlier
lapse of such repurchase option, the participant has not paid to the Company an
amount equal to any federal, state, local or foreign income or other taxes which
the Company determines is required to be withheld in respect of such Restricted
Stock, or (iii) under such other circumstances as determined by the Committee in
its discretion. Such repurchase option shall be exercisable on such terms, in
such manner and during such period as shall be determined by the Committee in
the Restricted Stock Agreement. Each certificate for shares issued as Restricted
Stock shall bear an appropriate legend referring to the foregoing repurchase
option and other restrictions; shall be deposited by the stockholder with the
Company, together with a stock power endorsed in blank; or shall be evidenced in
such other manner permitted by applicable law as

                                       -7-



determined by the Committee in its discretion. Any attempt to dispose of any
such shares in contravention of the foregoing repurchase option and other
restrictions shall be null and void and without effect. If shares issued as
Restricted Stock shall be repurchased pursuant to the repurchase option
described above, the stockholder, or in the event of his death, his estate,
personal representative, or beneficiary who has acquired the Option by will or
by the laws of descent and distribution, shall forthwith deliver to the
Secretary of the Company the certificates for the shares, accompanied by such
instrument of transfer, if any, as may reasonably be required by the Secretary
of the Company. If the repurchase option described above is not exercised by the
Company, such repurchase option and the restrictions imposed pursuant to the
first sentence of this subparagraph (b) shall terminate and be of no further
force and effect.

         (c) If a person who has been in continuous employment or performance of
services for the Company or a Related Corporation since the date on which
Restricted Stock was granted to him shall, while in such employment or
performance of services, die, or terminate such employment or performance of
services by reason of disability or by reason of early, normal or deferred
retirement under an approved retirement program of the Company or a Related
Corporation (or such other plan or arrangement as may be approved by the
Committee in its discretion, for this purpose) and any of such events shall
occur after the date on which the Restricted Stock was granted to him and prior
to the end of the Restricted Period, the Committee may determine to cancel the
repurchase option (and any and all other restrictions) on any or all of the
shares of Restricted Stock; and the repurchase option shall become exercisable
at such time as to the remaining shares, if any.

     17. Term and Amendment of Plan. This Plan was adopted by the Board on
         --------------------------
December __, 1998 and approved by the holders of a majority of the outstanding
voting stock of the Company on December __, 1998. The Plan shall expire on
December __, 2008 (except as to Options and Restricted Stock outstanding on that
date). Subject to the provisions of paragraph 5 above, Options and Restricted
Stock may be granted under the Plan by the Committee. The Board may terminate or
amend the Plan in any respect at any time, except that, any amendment that (a)
increases the total number of shares that may be issued under the Plan (except
by adjustment pursuant to paragraph 13), (b) changes the class of persons
eligible to participate in the Plan, or (c) materially increases the benefits to
participants under the Plan, shall be subject to approval by stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the foregoing amendments, and shall be null and void if such
approval is not obtained. Except as provided in the fourth sentence of this
paragraph 17, in no event may action of the Board or stockholders alter or
impair the rights of an Optionee or purchaser of Restricted Stock without his
consent, under any Option or Restricted Stock previously granted to him.

     18. Application of Funds. The proceeds received by the Company from the
         --------------------
sale of shares pursuant to Options and Restricted Stock authorized under the
Plan shall be used for general corporate purposes.

     19. Governmental Regulation. The Company's obligation to sell and deliver
         -----------------------
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

                                       -8-



     20. Withholding of Additional Income Taxes. The Company, in accordance with
         --------------------------------------
the Code, may, upon exercise of a Non-Qualified Option or the purchase of Common
Stock for less than its fair market value or the lapse of restrictions on
Restricted Stock or the making of a Disqualifying Disposition (as defined in
paragraph 21) require the employee to pay additional withholding taxes in
respect of the amount that is considered compensation includible in such
person's gross income.

     21. Notice to Company of Disqualifying Disposition. Each employee who
         ----------------------------------------------
receives ISOs shall agree to notify the Company in writing immediately after the
employee makes a disqualifying disposition of any Common Stock received pursuant
to the exercise of an ISO (a "Disqualifying Disposition"). Disqualifying
Disposition means any disposition (including any sale) of such stock before the
later of (a) two years after the employee was granted the ISO under which he
acquired such stock, or (b) one year after the employee acquired such stock by
exercising such ISO. If the employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition will
thereafter occur.

     22. Governing Laws; Construction. The validity and construction of the Plan
         ----------------------------
and the instruments evidencing Options and Restricted Stock shall be governed by
the laws of the State of Delaware. In construing this Plan, the singular shall
include the plural and the masculine gender shall include the feminine and
neuter, unless the context otherwise requires.

                                       -9-

EX-10.15

                                                                   Exhibit 10.15
                                                                   -------------


                          MEDSOURCE TECHNOLOGIES, INC.
                        2001 EMPLOYEE STOCK PURCHASE PLAN


                        ARTICLE I - ESTABLISHMENT OF PLAN

1.01           Adoption by Board of Directors. By action of the Board of
               Directors of Medsource Technologies, Inc. (the "Corporation") on
               December 1, 2001, subject to approval by its shareholders, the
               Corporation has adopted an employee stock purchase plan pursuant
               to which eligible employees of the Corporation and certain of its
               Subsidiaries may be offered the opportunity to purchase shares of
               Stock of the Corporation. The terms and conditions of this Plan
               are set forth in this plan document, as amended from time to time
               as provided herein. The Corporation intends that the Plan shall
               qualify as an "employee stock purchase plan" under Section 423 of
               the Internal Revenue Code of 1986, as amended from time to time,
               (the "Code") and shall be construed in a manner consistent with
               the requirements of Code Section 423 and the regulations
               thereunder.

1.02           Shareholder Approval and Term. This Plan shall become effective
               upon its adoption by the Board of Directors and shall terminate
               November 30, 2011; provided, however, that the Plan shall be
               subject to approval by the shareholders of the Corporation within
               twelve (12) months after the Plan is adopted by the Board in the
               manner provided under Code Section 423 and the regulations
               thereunder; and provided, further that the Board of Directors may
               extend the term of the Plan for such period as the Board, in its
               sole discretion, deems advisable. In the event the shareholders
               fail to approve the Plan within twelve (12) months after the Plan
               is adopted by the Board, this Plan shall not become effective and
               shall have no force and effect, participation in the Plan shall
               immediately cease, all outstanding options shall immediately be
               canceled and all payroll deductions shall be returned to the
               Participants without interest. No shares of stock shall be issued
               to any Participant for any Phase unless and until the
               shareholders approve the Plan within such twelve-month period.


                              ARTICLE II - PURPOSE

2.01           Purpose. The primary purpose of the Plan is to provide an
               opportunity for Eligible Employees of the Corporation to become
               shareholders of the Corporation, thereby providing them with an
               incentive to remain in the Corporation's employ, to improve
               operations, to increase profits and to contribute more
               significantly to the Corporation's success.

                                       -1-



                            ARTICLE III - DEFINITIONS


3.01           "Administrator" means the Board of Directors or such Committee
               appointed by the Board of Directors to administer the Plan. The
               Board or the Committee may, in its sole discretion, authorize the
               officers of the Corporation to carry out the day-to-day operation
               of the Plan. In its sole discretion, the Board may take such
               actions as may be taken by the Administrator, in addition to
               those powers expressly reserved to the Board under this Plan.

3.02           "Board of Directors" or "Board" means the Board of Directors of
               Medsource Technologies, Inc.

3.03           "Compensation" means the Participant's base compensation,
               excluding bonuses, overtime and commissions.

3.04           "Corporation" means Medsource Technologies, Inc., a Delaware
               corporation.

3.05           "Eligible Employee" means any employee who is a full-time or
               part-time employee of the Corporation or one of its Subsidiaries
               and, as determined on or immediately prior to an Enrollment
               Period, is customarily employed for more than twenty (20) hours
               per week.

3.06           "Enrollment Period" means the period determined by the
               Administrator for purposes of accepting elections to participate
               during a Phase from Eligible Employees.

3.07           "Fiscal Year" means the fiscal year of the Corporation, which is
               the twelve-month period beginning July 1 and ending June 30 each
               year.

3.08           "Participant" means an Eligible Employee who has been granted an
               option and is participating during a Phase through payroll
               deductions, but shall exclude those employees subject to the
               limitations described in Section 9.03 below.

3.09           "Phase" means the period beginning on the date that the option
               was granted, otherwise referred to as the commencement date of
               the Phase, and ending on the date that the option was exercised,
               otherwise referred to as the termination date of the Phase.

3.10           "Plan" means the Medsource Technologies, Inc. 2001 Employee Stock
               Purchase Plan.

3.11           "Stock" means the voting common stock of the Corporation.

                                       -2-



3.12           "Subsidiary" means any corporation defined as a subsidiary of the
               Corporation in Code Section 424(f) as of the effective date of
               the Plan, and such other corporations that qualify as
               subsidiaries of the Corporation under Code Section 424(f) as the
               Board approves to participate in this Plan from time to time.


                           ARTICLE IV - ADMINISTRATION

4.01           Administration. Except for those matters expressly reserved to
               the Board pursuant to any provision of the Plan, the
               Administrator shall have full responsibility for administration
               of the Plan, which responsibility shall include, but shall not be
               limited to, the following:

                    (a)  The Administrator shall, subject to the provisions of
                         the Plan, establish, adopt and revise such rules and
                         procedures for administering the Plan, and shall make
                         all other determinations as it may deem necessary or
                         advisable for the administration of the Plan;

                    (b)  The Administrator shall, subject to the provisions of
                         the Plan, determine all terms and conditions that shall
                         apply to the grant and exercise of options under this
                         Plan, including, but not limited to, the number of
                         shares of Stock that may be granted, the date of grant,
                         the exercise price and the manner of exercise of an
                         option. The Administrator may, in its discretion,
                         consider the recommendations of the management of the
                         Corporation when determining such terms and conditions;

                    (c)  The Administrator shall have the exclusive authority to
                         interpret the provisions of the Plan, and each such
                         interpretation or determination shall be conclusive and
                         binding for all purposes and on all persons, including,
                         but not limited to, the Corporation and its
                         Subsidiaries, the shareholders of the Corporation and
                         its Subsidiaries, the Administrator, the directors,
                         officers and employees of the Corporation and its
                         Subsidiaries, and the Participants and the respective
                         successors-in-interest of all of the foregoing; and

                    (d)  The Administrator shall keep minutes of its meetings or
                         other written records of its decisions regarding the
                         Plan and shall, upon requests, provide copies to the
                         Board.

                         ARTICLE V - PHASES OF THE PLAN

5.01           Phases. The Plan shall be carried out in one or more Phases of
               six (6) months each. Unless otherwise determined by the
               Administrator, in its discretion, Phases shall commence on August
               15 and February 15 of each fiscal year during the term of

                                       -3-



               the Plan; provided, however, that the first phase shall commence
               on the effective date of the Corporation's initial public
               offering and end on the next following August 14/th/. No two
               Phases shall run concurrently.

5.02           Limitations. The Administrator may, in its discretion, limit the
               number of shares available for option grants during any Phase as
               it deems appropriate. Without limiting the foregoing, in the
               event all of the shares of Stock reserved for the grant of
               options under Section 12.01 is issued pursuant to the terms
               hereof prior to the commencement of one or more Phases or the
               number of shares of Stock remaining is so small, in the opinion
               of the Administrator, as to render administration of any
               succeeding Phase impracticable, such Phase or Phases may be
               canceled or the number of shares of Stock limited as provided
               herein. In addition, if, based on the payroll deductions
               authorized by Participants at the beginning of a Phase, the
               Administrator determines that the number of shares of Stock which
               would be purchased at the end of a Phase exceeds the number of
               shares of Stock remaining reserved under Section 12.01 hereof for
               issuance under the Plan, or if the number of shares of Stock for
               which options are to be granted exceeds the number of shares
               designated for option grants by the Administrator for such Phase,
               then the Administrator shall make a pro rata allocation of the
               shares of Stock remaining available in as nearly uniform and
               equitable a manner as the Administrator shall consider
               practicable as of the commencement date of the Phase or, if the
               Administrator so elects, as of the termination date of the Phase.
               In the event such allocation is made as of the commencement date
               of a Phase, the payroll deductions which otherwise would have
               been made on behalf of Participants shall be reduced accordingly.


                            ARTICLE VI - ELIGIBILITY

6.01           Eligibility. Subject to the limitations described in Section
               9.03, each employee who is an Eligible Employee on or immediately
               prior to the commencement of a Phase shall be eligible to
               participate in such Phase. If, in the discretion of the
               Administrator, any Phase commences on a date other than May 1 or
               November 1, whether an employee is an Eligible Employee shall be
               determined on a date selected by the Administrator, which date
               shall be prior to the commencement date of the Phase.


                           ARTICLE VII - PARTICIPATION

7.01           Participation. Participation in the Plan is voluntary. An
               Eligible Employee who desires to participate in any Phase of the
               Plan must complete the enrollment form provided by the
               Administrator and deliver such form to the Administrator or its
               designated representative during the Enrollment Period
               established by the Administrator prior to the commencement date
               of the Phase.

                                       -4-



7.02           Subsequent Phases. An Eligible Employee who elects to participate
               in a Phase shall be deemed to have elected to participate in each
               subsequent Phase unless such Participant elects to discontinue
               payroll deductions during a Phase or exercises his or her right
               to withdraw amounts previously withheld, as provided under
               Article X hereof. In such event, such Participant must complete a
               new enrollment form and file such form with the Administrator
               during the Enrollment Period prior to the next Phase with respect
               to which the Eligible Employee wishes to participate.


                   ARTICLE VIII - PAYMENT; PAYROLL DEDUCTIONS

8.01           Enrollment. Each Eligible Employee electing to participate shall
               indicate such election on the enrollment form and designate
               therein a percentage of such Participant's Compensation to be
               deducted during the Phase. Subject to the Participant's right to
               discontinue payroll deductions as provided in Section 10.02, such
               percentage shall be at least one percent (1%) but not more than
               ten percent (10%) of such Participant's Compensation to be paid
               during such Phase, or such other maximum percentage as the
               Administrator may establish from time to time. In order to be
               effective, such enrollment form must be properly completed and
               received by the Administrator by the due date indicated on such
               form, or by such other date established by the Administrator.

8.02           Payroll Deductions. Payroll deductions for a Participant shall
               commence with the paycheck issued immediately after the
               commencement date of the Phase and shall terminate with the
               paycheck issued immediately prior to the termination date of the
               Phase, unless the Participant elects to discontinue payroll
               deductions or exercises his or her right to withdraw all
               accumulated payroll deductions previously withheld during the
               Phase as provided in Article X hereof. The authorized payroll
               deductions shall be made over the pay periods of such Phase by
               deducting from the Participant's Compensation for each such pay
               period that percentage specified by the Participant in the
               enrollment form.

               Unless the Participant has elected to discontinue payroll
               deductions or exercised his or her right to withdraw all
               accumulated payroll deductions previously withheld during the
               preceding Phase (in which event the Participant must complete a
               new enrollment form to participate in any subsequent Phase), the
               Corporation shall continue to withhold from such Participant's
               Compensation the same percentage specified by the Participant in
               the most recent enrollment form previously completed by the
               Participant in all subsequent Phases; provided, however, that the
               Participant may, if he or she so chooses, increase, decrease or
               discontinue payroll deductions for any or all such subsequent
               Phases by properly completing a new enrollment form during the
               Enrollment Period for such subsequent Phase and delivering such
               form to the Administrator by the due date indicated on such form.

                                       -5-



8.03           Change in Compensation During a Phase. In the event that the
               Participant's Compensation is, for any reason, increased or
               decreased during a Phase, so that the amount actually withheld on
               behalf of the Participant as of the termination date of the Phase
               is different from the amount anticipated to be withheld as
               determined on the commencement date of the Phase, then the extent
               to which the Participant may exercise his or her option shall be
               based on the amounts actually withheld on his or her behalf,
               subject to the limitations in Article IX. In the event of a
               change in the pay period of any Participant, such as from
               biweekly to monthly, an appropriate adjustment shall be made to
               the deduction in each new pay period so as to ensure the
               deduction of the proper amount authorized by the Participant.

8.04           Increases or Decreases During a Phase. In addition to the right
               to discontinue or withdraw payroll deductions during a Phase as
               provided in Article X, a Participant may increase or decrease the
               percentage of Compensation designated to be deducted as payroll
               deductions during a Phase (but not below 1% nor above 10%) by
               completing a new enrollment form and filing such form with the
               Administrator. Such increase or decrease shall be effective with
               the next payroll period beginning after the date that the
               Administrator receives such form and shall apply to all remaining
               Compensation paid during the Phase. The Participant may exercise
               the right to increase or decrease his or her payroll deductions
               only once during each Phase.


                              ARTICLE IX - OPTIONS


9.01           Grant of Option. Subject to Article X, a Participant who has
               elected to participate in the manner described in Article VIII
               and who is employed by the Corporation or a Subsidiary as of the
               commencement date of a Phase shall be granted an option as of
               such date to purchase that number of whole shares of Stock
               determined by dividing the total amount to be credited to the
               Participant's account by the option price per share set forth in
               Section 9.02(a) below. The option price per share for such Stock
               shall be determined under Section 9.02 hereof, and the number of
               shares exercisable shall be determined under Section 9.03 hereof.

9.02           Option Price. Subject to the limitations hereinbelow, the option
               price for such Stock shall be the lower of the amounts determined
               under paragraphs (a) and (b) below:

                    (a)  Eighty-five percent (85%) of the closing price for a
                    share of the Corporation's Stock as reported on the Nasdaq
                    National Market, Nasdaq SmallCap Market or on an established
                    securities exchange as of the commencement date of the
                    Phase; or

                    (b)  Eighty-five percent (85%) of the closing price for a
                    share of the Corporation's Stock as reported on the Nasdaq
                    National Market, Nasdaq

                                       -6-



               SmallCap Market or on an established securities exchange as of
               the termination date of the Phase.

          In the event that the commencement or termination date of a Phase is a
          Saturday, Sunday or holiday, the amounts determined under the
          foregoing subsections shall be determined using the price as of the
          last preceding trading day.

          If the Corporation's Stock is not listed on the Nasdaq National
          Market, Nasdaq SmallCap Market or on an established securities
          exchange, then the option price shall equal the lesser of (i)
          eighty-five percent (85%) of the fair market value of a share of the
          Corporation's Stock as of the commencement date of the Phase; or (ii)
          eighty-five percent (85%) of the fair market value of such stock as of
          the termination date of the Phase. Such "fair market value" shall be
          determined by the Board.

9.03      Limitations. No employee shall be granted an option hereunder:

               (a) Which permits his or her rights to purchase Stock under all
               employee stock purchase plans of the Corporation or its
               Subsidiaries to accrue at a rate which exceeds Twenty-Five
               Thousand Dollars ($25,000) of fair market value of such Stock
               (determined at the time such option is granted) for each calendar
               year in which such option is outstanding at any time;

               (b) If such employee would own and/or hold, immediately after the
               grant of the option, Stock possessing five percent (5%) or more
               of the total combined voting power or value of all classes of
               stock of the Corporation or of any Subsidiary. For purposes of
               determining stock ownership under this paragraph, the rules of
               Section 424(d) of the Code and the regulations thereunder shall
               apply.

               (c) Which, if exercised, would cause the limits established by
               the Administrator under Section 5.02 to be exceeded.

9.04      Exercise of Option. Subject to a Participant's right to withdraw in
          the manner provided in Section 10.01, a Participant's option for the
          purchase of shares of Stock will be exercised automatically on the
          termination date of that Phase. In no event, however, shall a
          Participant be allowed to exercise an option for more shares of Stock
          than can be purchased with the payroll deductions accumulated by the
          Participant in his or her bookkeeping account during such Phase.

9.05      Delivery of Shares. As promptly as practicable after the termination
          of any Phase, the Corporation's transfer agent or other authorized
          representative shall deliver to each Participant herein certificates
          for that number of whole shares of Stock purchased upon the exercise
          of the Participant's option. The Corporation may, in its sole
          discretion, arrange with the Corporation's transfer agent or other
          authorized

                                       -7-



          representative to establish, at the direction of the Participant,
          individual securities accounts to which will be credited that number
          of whole shares of Stock that are purchased upon such exercise, such
          securities account to be subject to such terms and conditions as may
          be imposed by the transfer agent or authorized representative.

          The shares of the Corporation's common stock to be delivered to a
          Participant pursuant to the exercise of an option under Section 9.04
          of the Plan will be registered in the name of the Participant or, if
          the Participant so directs by written notice to the Administrator
          prior to the termination date of the Phase, in the names of the
          Participant and one other person the Participant may designate as his
          joint tenant with rights of survivorship, to the extent permitted by
          law.

          Any accumulated payroll deductions remaining after the exercise of the
          Participant's option shall be returned to the Participant, without
          interest, on the first paycheck issued for the payroll period which
          begins on or immediately after the commencement date of the next
          Phase; provided, however, that the Corporation may, under rules of
          uniform application, retain such remaining amount in the Participant's
          bookkeeping account and apply it toward the purchase of shares of
          Stock in the next succeeding Phase, unless the Participant requests a
          withdrawal of such amount pursuant to Section 10.01.

                            ARTICLE X - WITHDRAWAL OR
                     DISCONTINUATION OF PAYROLL WITHHOLDINGS

10.01     Withdrawal. Once during the Phase, a Participant may request a
          withdrawal of all accumulated payroll deductions then credited to the
          Participant's bookkeeping account by completing a withdrawal form and
          filing such form with the Administrator. The Participant's request
          shall be effective as of the beginning of the next payroll period
          immediately following the date that the Administrator receives the
          Participant's properly completed withdrawal form. As soon as
          administratively feasible after the end of the Phase, all payroll
          deductions credited to a bookkeeping account for the Participant will
          be paid to such Participant, without interest, and no further payroll
          deductions will be made during that Phase or any future Phase unless
          the Participant completes a new enrollment form as provided in Section
          8.02 above. If the Participant requests a withdrawal, the option
          granted to the Participant under that Phase of the Plan shall
          immediately lapse and shall not be exercisable. Partial withdrawals of
          payroll deductions are not permitted.

          Notwithstanding the foregoing, in order to be effective for a
          particular Phase, the Participant's request for withdrawal must be
          properly completed and received by the Administrator on or before such
          date immediately preceding the termination date of the Phase
          established by the Administrator. Requests for withdrawal that are
          received after that due date shall not be effective and no withdrawal
          shall be made, unless otherwise determined by the Administrator.

                                       -8-



10.02     Discontinuation. At any time during the Phase, a Participant may also
          request that the Administrator discontinue any further payroll
          deductions that would otherwise be made during the remainder of the
          Phase by completing a new enrollment form and filing such form with
          the Administrator on or before such date immediately preceding the
          termination date of the Phase established by the Administrator. The
          Participant's request shall be effective as of the beginning of the
          next payroll period immediately following the date that the
          Administrator receives the Participant's properly completed enrollment
          form. Upon the effective date of the Participant's request, the
          Corporation will discontinue making payroll deductions for such
          Participant for that Phase, and all future Phases, unless the
          Participant completes a new enrollment form as provided in Section
          8.02 above.

                     ARTICLE XI - TERMINATION OF EMPLOYMENT

11.01     Termination. If, on or before the termination date of any Phase, a
          Participant's employment terminates with the Corporation for any
          reason, voluntarily or involuntarily, including by reason of
          retirement or death, the payroll deductions credited to such
          Participant's bookkeeping account for such Phase, if any, will be
          returned to the Participant, without interest, and any options granted
          to such Participant under the Plan shall immediately lapse and shall
          not be exercisable. The return of such payroll deductions shall be
          made to the Participant as soon as administratively practicable
          following the end of the Phase in which the Participant terminates
          employment. In the event that such termination occurs near the end of
          a Phase and the Corporation is unable to discontinue payroll
          deductions for such Participant for his or her final paycheck(s), such
          deductions shall still be made but shall be returned to the
          Participant as provided herein. In no event shall the accumulated
          payroll deductions be used to purchase any shares of Stock.

          If the option lapses as a result of the Participant's death, any
          accumulated payroll deductions credited to the Participant's
          bookkeeping account will be paid to the Participant's estate, without
          interest. In the event a Participant dies after exercise of the
          Participant's option but prior to delivery of the Stock to be
          transferred pursuant to the exercise of the option under Section 9.04
          above, any such Stock and/or accumulated payroll deductions remaining
          after such exercise shall be paid by the Corporation to the
          Participant's estate.

          The Corporation will not be responsible for or be required to give
          effect to the disposition of any cash or Stock or the exercise of any
          option in accordance with any will or other testamentary disposition
          made by such Participant or in accordance with the provisions of any
          law concerning intestacy, or otherwise. No person shall, prior to the
          death of a Participant, acquire any interest in any Stock, in any
          option or in the cash credited to the Participant's bookkeeping
          account during any Phase of the Plan.

                                       -9-



11.02     Subsidiaries. In the event that any Subsidiary ceases to be a
          Subsidiary of the Corporation, the employees of such Subsidiary shall
          be considered to have terminated their employment for purposes of
          Section 11.01 hereof as of the date the Subsidiary ceased to be a
          Subsidiary of the Corporation.

                    ARTICLE XII - STOCK RESERVED FOR OPTIONS

12.01     Shares Reserved. Subject to adjustment as provided in Section 14.01
          hereof, the maximum number of shares of Stock that shall be made
          available for sale under the Plan shall be five hundred thousand
          (500,000) shares, plus an annual increase to be added on the first day
          of each Fiscal Year beginning in 2002 equal to the lesser of (i) seven
          hundred and fifty thousand (750,000) shares, (ii) 2.5% of the issued
          and outstanding Stock on such date and (iii) a lesser amount
          determined by the Board. Shares subject to the unexercised portion of
          any lapsed or expired option may again be subject to option under the
          Plan.

12.02     Rights as Shareholder. The Participant shall have no rights as a
          shareholder with respect to any shares of Stock subject to the
          Participant's option until the date of the issuance of a stock
          certificate evidencing such shares as provided in Section 9.05. No
          adjustment shall be made for dividends (ordinary or extraordinary,
          whether in cash, securities or other property), distributions or other
          rights for which the record date is prior to the date such stock
          certificate is actually issued, except as otherwise provided in
          Section 14.01 hereof.

                   ARTICLE XIII - ACCOUNTING AND USE OF FUNDS

13.01     Bookkeeping Account. Payroll deductions for Participants shall be
          credited to bookkeeping accounts, established by the Corporation for
          each such Participant under the Plan. A Participant may not make any
          cash payments into such account. Such account shall be solely for
          bookkeeping purposes and shall not require the Corporation to
          establish any separate fund or trust hereunder. All funds from payroll
          deductions received or held by the Corporation under the Plan may be
          used, without limitation, for any corporate purpose by the
          Corporation, which shall not be obligated to segregate such funds from
          its other funds. In no event shall Participants be entitled to
          interest on the amounts credited to such bookkeeping accounts.

                       ARTICLE XIV - ADJUSTMENT PROVISION

14.01     General. Subject to any required action by the shareholders of the
          Corporation, in the event of an increase or decrease in the number of
          outstanding shares of Stock or in the event the Stock is changed into
          or exchanged for a different number or kind of

                                      -10-



          shares of stock or other securities of the Corporation or another
          corporation by reason of a reorganization, merger, consolidation,
          divestiture (including a spin-off), liquidation, recapitalization,
          reclassification, stock dividend, stock split, combination of shares,
          rights offering or any other change in the corporate structure or
          shares of the Corporation, the Board (or, if the Corporation is not
          the surviving corporation in any such transaction, the board of
          directors of the surviving corporation), in its sole discretion, shall
          adjust the number and kind of securities subject to and reserved under
          the Plan and, to prevent the dilution or enlargement of rights of
          those Eligible Employees to whom options have been granted, shall
          adjust the number and kind of securities subject to such outstanding
          options and, where applicable, the exercise price per share for such
          securities.

          In the event of the sale by the Corporation of substantially all of
          its assets and the consequent discontinuance of its business, or in
          the event of a merger, exchange, consolidation, reorganization,
          divestiture (including a spin-off), liquidation, reclassification or
          extraordinary dividend (collectively referred to as a "transaction"),
          after which the Corporation is not the surviving corporation, the
          Board may, in its sole discretion, at the time of adoption of the plan
          for such transaction, provide for one or more of the following:

               (a)  The acceleration of the exercisability of outstanding
                    options granted at the commencement of the Phase then in
                    effect, to the extent of the accumulated payroll deductions
                    made as of the date of such acceleration pursuant to Article
                    VIII hereof;

               (b)  The complete termination of this Plan and a refund of
                    amounts credited to the Participants' bookkeeping accounts
                    hereunder; or

               (c)  The continuance of the Plan only with respect to completion
                    of the then current Phase and the exercise of options
                    thereunder. In the event of such continuance, Participants
                    shall have the right to exercise their options as to an
                    equivalent number of shares of stock of the corporation
                    succeeding the Corporation by reason of such transaction.

          In the event of a transaction where the Corporation survives, then the
          Plan shall continue in effect, unless the Board takes one or more of
          the actions set forth above. The grant of an option pursuant to the
          Plan shall not limit in any way the right or power of the Corporation
          to make adjustments, reclassifications, reorganizations or changes in
          its capital or business structure or to merge, exchange or consolidate
          or to dissolve, liquidate, sell or transfer all or any part of its
          business or assets.

                                      -11-



                   ARTICLE XV - NONTRANSFERABILITY OF OPTIONS

15.01     Nontransferability. Options granted under any Phase of the Plan shall
          not be transferable and shall be exercisable only by the Participant
          during the Participant's lifetime.

15.02     Nonalienation. Neither payroll deductions granted to a Participant's
          account, nor any rights with regard to the exercise of an option or to
          receive Stock under any Phase of the Plan may be assigned,
          transferred, pledged or otherwise disposed of in any way by the
          Participant. Any such attempted assignment, transfer, pledge or other
          disposition shall be null and void and without effect, except that the
          Corporation may, at its option, treat such act as an election to
          withdraw in accordance with Section 10.01.

                     ARTICLE XVI - AMENDMENT AND TERMINATION

16.01     General. The Plan may be terminated at any time by the Board of
          Directors, provided that, except as permitted in Section 14.01 hereof,
          no such termination shall take effect with respect to any options then
          outstanding. The Board may, from time to time, amend the Plan as it
          may deem proper and in the best interests of the Corporation or as may
          be necessary to comply with Code Section 423, as amended, and the
          regulations thereunder, or other applicable laws or regulations;
          provided, however, no such amendment shall, without the consent of a
          Participant, materially adversely affect or impair the right of a
          Participant with respect to any outstanding option; and provided,
          further, that no such amendment shall:

               (a)  increase the total number of shares for which options may be
                    granted under the Plan (except as provided in Section 14.01
                    herein);

               (b)  modify the group of Subsidiaries whose employees may be
                    eligible to participate in the Plan or materially modify any
                    other requirements as to eligibility for participation in
                    the Plan; or

               (c)  materially increase the benefits accruing to Participants
                    under the Plan;

          without the approval of the Corporation's shareholders, if such
          approval is required for compliance with Code Section 423, as amended,
          and the regulations thereunder, or other applicable laws or
          regulations.

                                      -12-



                             ARTICLE XVII - NOTICES

17.01     General. All notices, forms, elections or other communications in
          connection with the Plan or any Phase thereof shall be in such form as
          specified by the Corporation or the Administrator from time to time,
          and shall be deemed to have been duly given when received by the
          Participant or his or her personal representative or by the
          Corporation or its designated representative, as the case may be.

                                      -13-

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption “Experts” and to the use of our reports dated August 3, 2001 on MedSource Technologies, Inc. and subsidiaries, October 27, 1999 on The MicroSpring Company, Inc., April 14, 2000 on National Wire and Stamping, Inc., June 13, 2000 on Texcel, Inc., and July 25, 2000 on Portlyn Corporation in the Registration Statement (Form S-1) and related Prospectus of MedSource Technologies, Inc. for the registration of its common stock.

Our audits also included the financial statement schedules of MedSource Technologies, Inc., The MicroSpring Company, Inc. and Texcel, Inc. listed in Part II. These schedules are the responsibility of the applicable company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

January 14, 2002

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1, of our report dated August 31, 1999 relating to the financial statements of Kelco Industries, Inc. which appears in such Registration Statement of MedSource Technologies, Inc. We also consent to the references to us under the heading “Experts” in such Registration Statement of MedSource Technologies, Inc.

Our audit also included the financial statement schedule of Kelco Industries, Inc. listed in Part II. This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Bertram, Vallez, Kaplan & Talbot, Ltd.

Brooklyn Park, Minnesota

January 14, 2002

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT AUDITOR

I consent to the reference to my firm under the caption “Experts” and to the use of my report dated June 30, 1999 on W. N. Rushwood, Inc., d.b.a. Hayden Precision Industries in the Registration Statement (Form S-1) and related Prospectus of MedSource Technologies, Inc. for the registration of its common stock.

/s/ James E. Yochum, CPA

West Seneca, New York

January 14, 2002

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the use in this Registration Statement on Form S-1 of our reports dated April 2, 1999 relating to the financial statements and financial statement schedule of The MicroSpring Company, Inc., which appear in such Registration Statement of MedSource Technologies, Inc. We also consent to the references to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

January 16, 2002

EX-23.5

Exhibit 23.5

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated February 9, 2001, accompanying the financial statements of ACT Medical, Inc. contained in the Registration Statement and Prospectus of MedSource Technologies, Inc. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ Grant Thornton LLP

Boston, Massachusetts

January 14, 2002