<SEC-DOCUMENT>0000950123-11-055990.txt : 20110602
<SEC-HEADER>0000950123-11-055990.hdr.sgml : 20110602
<ACCEPTANCE-DATETIME>20110602133548
ACCESSION NUMBER:		0000950123-11-055990
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20110601
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110602
DATE AS OF CHANGE:		20110602

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ULTRALIFE CORP
		CENTRAL INDEX KEY:			0000875657
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				161387013
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-20852
		FILM NUMBER:		11887848

	BUSINESS ADDRESS:	
		STREET 1:		2000 TECHNOLOGY PARKWAY
		CITY:			NEWARK
		STATE:			NY
		ZIP:			14513
		BUSINESS PHONE:		3153327100

	MAIL ADDRESS:	
		STREET 1:		2000 TECHNOLOGY PARKWAY
		CITY:			NEWARK
		STATE:			NY
		ZIP:			14513

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ULTRALIFE BATTERIES INC
		DATE OF NAME CHANGE:	19940224
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>l42834e8vk.htm
<DESCRIPTION>FORM 8-K
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<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>United States<BR>
Securities and Exchange Commission</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Current Report Pursuant to<BR>
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</B>
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>June&nbsp;1, 2011<BR>
(Date of Report)</B></DIV>
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<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>ULTRALIFE CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>000-20852</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>16-1387013</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer Identification No.)</TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR></TR>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>2000 Technology Parkway, Newark, New York</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>14513</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(315)&nbsp;332-7100</B><BR>
(Registrant&#146;s telephone number, including area code)</DIV>


<div style="border-bottom: 1px solid #000000; width: 100%">&nbsp;</div>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions (see General Instruction A.2. below):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

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    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





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<!-- link1 "Item&nbsp;1.01 Entry into a Material Definitive Agreement" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As disclosed in our Form 8-K dated April&nbsp;29, 2011, Ultralife Corporation (the &#147;Company&#148;)
had received a proposed settlement from the U.S. Attorney&#146;s office with respect to ongoing
discussions it had regarding three exigent, non-bid contracts with the U.S. government that have
been subject to an audit and final price adjustment. In September&nbsp;2005, the Defense Contracting
Audit Agency (&#147;DCAA&#148;) presented its findings related to its audits of the three exigent contracts
and suggested a potential pricing adjustment of $1.4&nbsp;million related to reductions in the cost of
materials that occurred prior to the final negotiation of these contracts. The Company fully
cooperated with these audits and furnished the government with requested information and documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under applicable federal law, the Company may have been subject to treble damages and
penalties associated with the potential pricing adjustment. In light of the uncertainty, the
Company decided to enter into discussions with the U.S. Attorney&#146;s office in April&nbsp;2011 to
negotiate a settlement. On April&nbsp;21, 2011, the Company was advised by the U.S. Attorney&#146;s Office
that there was a $2.7&nbsp;million settlement-in-principle to resolve all claims related to the
contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;1, 2011, the Company entered into a Settlement Agreement with the United
States of America, acting through the United States Department of Justice and on behalf of the
Department of Defense which provides that the Company shall pay the United States the amount of
$2.7&nbsp;million (the &#147;Settlement Amount&#148;) plus interest accrued thereon at the rate of 2.625% per
annum from May&nbsp;6, 2011, with principal payments of $1&nbsp;million, $566,667.00, $566,667.00 and
$566,666.00 being due on June&nbsp;8, 2011, December&nbsp;1, 2011, June&nbsp;1, 2012 and December&nbsp;1, 2012,
respectively. Each principal payment will be accompanied by a payment of accrued interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of and subject to the Company&#146;s full payment of the Settlement Amount and
subject to certain exceptions enumerated in the agreement, the United States released the Company,
together with its current and former parent corporations, direct and indirect subsidiaries, brother
or sister corporations, divisions, current or former owners, officers, directors and affiliates,
and the successors and assigns of any of them, from any civil or administrative monetary claim the
United States has for the Company&#146;s conduct that gave rise to the potential pricing adjustment
arising out of the three exigent contracts that were subject to the DCAA audit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By entering into the agreement, the Company did not admit to any impropriety, wrongdoing or
liability of any sort.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The summary of the Settlement Agreement set forth above is qualified in its entirety by
reference to the full text of the Settlement Agreement attached hereto as Exhibit&nbsp;10.1 and
incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Forward-Looking Statements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This report on Form 8-K may contain forward-looking statements based on current expectations
that involve a number of risks and uncertainties. The potential risks and uncertainties that could
cause actual results to differ materially include: worsening global economic conditions, increased
competitive environment and pricing pressures, and disruptions
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">related to restructuring actions and delays. The Company cautions investors not to place undue
reliance on forward-looking statements, which reflect our analysis only as of the date of this
filing. We undertake no obligation to publicly update forward-looking statements to reflect
subsequent events or circumstances. Further information on these factors and other factors that
could affect the Company&#146;s financial results is included in our filings with the United States
Securities &#038; Exchange Commission, including our latest Annual Report on Form 10-K.
</DIV>

<!-- link1 "Item&nbsp;9.01 Financial Statements and Exhibits" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01 Financial Statements and Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Exhibits. The following exhibit is being furnished as part of this Report.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement, dated June&nbsp;1, 2011, among the United States of America, acting through
the United States Department of Justice and on behalf of the Department of Defense and
Ultralife Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">Date:  June 2, 2011               &nbsp;</TD>
    <TD colspan="3" align="left">ULTRALIFE CORPORATION<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Peter F. Comerford
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Peter F. Comerford&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Vice President of Administration, General
Counsel and Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>
<!-- link1 "EXHIBIT INDEX" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement, dated June&nbsp;1, 2011, among the United States of America, acting through
the United States Department of Justice and on behalf of the Department of Defense and
Ultralife Corporation</TD>
</TR>
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</TABLE>
</DIV>



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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>l42834exv10w1.htm
<DESCRIPTION>EX-10.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>SETTLEMENT AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Settlement Agreement (Agreement) is entered into among the United States of
America, acting through the United States Department of Justice and on behalf of Department of
Defense (collectively the &#147;United States&#148;) and Ultralife Corporation, formerly known as Ultralife
Batteries, Inc. (hereafter collectively referred to as &#147;the Parties&#148;), through their authorized
representatives.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>RECITALS</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Ultralife Corporation (&#147;Ultralife&#148;) is a Delaware corporation headquartered in
Newark, New York that develops, manufactures and markets high-energy power and
communication systems including, among other things, a variety of non-rechargeable and
rechargeable batteries, charging systems and accessories for use in military products and
applications. At all relevant times herein, Ultralife has sold its BA5390 lithium-manganese
dioxide non-rechargeable battery to the United States, including sales pursuant to Contract Nos.
DAAB07-03-C-A214; DAAB07-03-C-A220; and W15P7T-04-C-C002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
The United States contends that it has certain civil claims against Ultralife arising
from Ultralife&#146;s failure to furnish accurate, complete, and current cost or pricing data to the
United States pursuant 10 U.S.C. &#167; 2306a for Contract Nos. DAAB07-03-C-A214; DAAB07-03-
C-A220; and W15P7T-04-C-C002. As a result, the United States contends that Ultralife
overstated material costs for several direct material items, and the United States was overcharged
under Contract Nos. DAAB07-03-C-A214; DAAB07-03-C-A220; and W15P7T-04-C-C002
during the period from May&nbsp;15, 2003 through March&nbsp;14, 2005. That conduct is referred to below
as the Covered Conduct.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
This Settlement Agreement is neither an admission of liability by Ultralife nor a
concession by the United States that its claims are not well founded. By entering into
this Agreement, Ultralife does not admit to any impropriety, wrongdoing or liability of any sort.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the
above claims, and in consideration of the mutual promises and obligations of this Settlement
Agreement, the Parties agree and covenant as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>TERMS AND CONDITIONS</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
Ultralife shall pay to the United States the sum of two million, seven hundred
thousand ($2,700,000) (the &#147;Settlement Amount&#148;), plus interest accrued thereon at the rate of
2.625% per annum from May&nbsp;6, 2011, and continuing until and including the day before the final
payment is made under this Agreement. On the Effective Date of this Agreement, this sum shall
constitute a debt due and immediately owing to the United States. The Settlement Amount shall
be paid as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.
Ultralife shall pay to the United States the Settlement Amount plus interest
accrued thereon at the rate of 2.625% per annum, in accordance with the payment schedule
attached hereto as Exhibit&nbsp;A (&#147;Payment Schedule&#148;). Within 7 business days after the Effective
Date of this Agreement, Ultralife shall pay the United States the initial fixed payment in the
amount of $1,000,000 and thereafter make principal payments with interest according to the
schedule in Exhibit&nbsp;A.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.
All payments set forth in Paragraph 1(a) shall be made to the United States
by electronic funds transfer pursuant to written instructions to be provided by the Office of the
United States Attorney for the Western District of New York to Peter F. Comerford, Esq.,
counsel for Ultralife. The entire balance of the Settlement Amount, or any portion thereof, plus
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">any interest accrued on the principal as of the date of any prepayment, may be prepaid without
penalty.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
If Ultralife fails to make any of the payments described in Paragraph 1(a) above at
the specified time, upon written notice to Ultralife of this default, Ultralife shall have ten (10)
calendar days to cure the default. If the default is not cured within the ten-day period: (a)&nbsp;the
remaining unpaid principal portion of the Settlement Amount shall become accelerated and
immediately due and payable, with interest at a simple rate of 2.625% from the Effective Date of
this Agreement to the date of default, and at a simple rate of 12% per annum from the date of
default until the date of payment; (b)&nbsp;the United States may pursue any and all actions for
collection as it may choose, including, without limitation, filing an action for specific
performance of this Agreement; and (c)&nbsp;the United States may offset the remaining unpaid
balance of the Settlement Amount (inclusive of interest) from any amounts due and owing to
Ultralife by any department, agency, or agent of the United States. Ultralife agrees not to
contest
any collection action undertaken by the United States pursuant to this Paragraph&nbsp;2, and to pay the
United States all reasonable costs incurred in any such collection action, including attorney&#146;s
fees and expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
Subject to the exceptions in Paragraph&nbsp;4 (concerning excluded claims) below, and
conditioned upon Ultralife&#146;s full payment of the Settlement Amount, the United States releases
Ultralife, together with its current and former parent corporations; direct and indirect
subsidiaries; brother or sister corporations; divisions; current or former owners,officers,
directors, and affiliates; and the successors and assigns of any of them, from any civil or
administrative monetary claim the United States has for the Covered Conduct under the False
Claims Act, 31 U.S.C. &#167;&#167; 3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. &#167;&#167;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3801-3812; the Truth in Negotiations Act, 10 U.S.C. &#167; 2306a; the anti-fraud section of the
Contract Disputes Act, as amended, 41 U.S.C. &#167; 7101(c); or the common law theories of breach
of contract, payment by mistake, unjust enrichment, and fraud.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.
Notwithstanding the release given in paragraph 3 of this Agreement, or any other
term of this Agreement, the following claims of the United States are specifically reserved and
are not released:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability arising under Title 26, U.S. Code (Internal Revenue Code);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any criminal liability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any administrative liability, including the suspension and debarment
rights of any federal agency;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability based upon obligations created by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability for express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability for failure to deliver goods or services due; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any liability for personal injury or property damage or for other
consequential damages arising from the Covered Conduct.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.
Ultralife waives and shall not assert any defenses Ultralife may have to any
criminal prosecution or administrative action relating to the Covered Conduct that may be based
in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth
Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or
administrative action. Nothing in this paragraph or any other provision of this Agreement
constitutes an agreement by the United States concerning the characterization of the Settlement
Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.
Ultralife fully and finally releases the United States, its agencies, officers, agents,
employees, and servants, from any claims (including attorney&#146;s fees, costs, and expenses of
every kind and however denominated) that Ultralife has asserted, could have asserted, or may
assert in the future against the United States, its agencies, officers, agents, employees, and
servants, related to the Covered Conduct and the United States&#146; investigation and prosecution
thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.
Ultralife agrees to the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.
Unallowable Costs Defined: All costs (as defined in the Federal Acquisition
Regulation, 48 C.F.R. &#167; 31.205-47) incurred by or on behalf of Ultralife, and its present or
former officers, directors, employees, shareholders, and agents in connection with:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the matters covered by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the United States&#146; audit(s) and civil and criminal investigations of
the matters covered by this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ultralife&#146;s investigation, defense, and corrective actions
undertaken in response to the United States&#146; audit(s) and civil and
any criminal investigations in connection with the matters covered
by this Agreement (including attorney&#146;s fees);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the negotiation and performance of this Agreement;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the payment Ultralife makes to the United States pursuant to this
Agreement,
are unallowable costs for government contracting purposes (hereinafter referred to as
Unallowable Costs).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.
Future Treatment of Unallowable Costs: Unallowable Costs will be separately
determined and accounted for by Ultralife, and Ultralife shall not charge such Unallowable Costs
directly or indirectly to any contract with the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;Treatment of Unallowable Costs Previously Submitted for Payment: Within 90&nbsp;days of the
Effective Date of this Agreement, Ultralife shall identify and repay by adjustment to future
claims for payment or otherwise any Unallowable Costs included in payments previously sought by
Ultralife or any of its subsidiaries or affiliates from the United States. Ultralife agrees that the United States,
at a minimum, shall be entitled to recoup from Ultralife any overpayment plus applicable interest and penalties as a result of
the inclusion of such Unallowable Costs on previously-submitted requests for payment. The United States, including the Department
of Justice and/or the affected agencies, reserves its rights to audit, examine, or re-examine Ultralife&#146;s books and records and
to disagree with any calculations submitted by Ultralife or any of its subsidiaries or affiliates regarding any Unallowable
Costs included in payments previously sought by Ultralife, or the effect of any such Unallowable Costs on the amount of such payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.
Ultralife warrants that it has reviewed its financial situation and that it currently is
solvent within the meaning of 11 U.S.C. &#167;&#167; 547(b)(3) and 548(a)(1)(B)(ii)(I), and shall remain
solvent following payment to the United States of the Settlement Amount. Further, the Parties
warrant that, in evaluating whether to execute this Agreement, they (a)&nbsp;have intended that the
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange
for
new value given to Ultralife, within the meaning of 11 U.S.C. &#167; 547(c)(1); and (b)&nbsp;conclude that
these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous
exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set
forth herein are intended to and do, in fact, represent a reasonably equivalent exchange of value
that is not intended to hinder, delay, or defraud any entity to which Ultralife was or became
indebted to on or after the date of this transfer, within the meaning of 11 U.S.C. &#167; 548(a)(1).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.
If within 91&nbsp;days of the Effective Date of this Agreement or of any payment made
under this Agreement, Ultralife commences, or a third party commences, any case, proceeding,
or other action under any law relating to bankruptcy, insolvency, reorganization, or relief of
debtors (a)&nbsp;seeking to have any order for relief of Ultralife&#146;s debts, or seeking to adjudicate
Ultralife as bankrupt or insolvent; or (b)&nbsp;seeking appointment of a receiver, trustee, custodian,
or
other similar official for Ultralife or for all or any substantial part of Ultralife&#146;s assets,
Ultralife
agrees as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.
Ultralife&#146;s obligations under this Agreement may not be avoided pursuant to 11
U.S.C. &#167; 547, and Ultralife shall not argue or otherwise take the position in any such case,
proceeding, or action that: (i)&nbsp;Ultralife&#146;s obligations under this Agreement may be avoided
under 11 U.S.C. &#167; 547; (ii)&nbsp;Ultralife was insolvent at the time this Agreement was entered into,
or became insolvent as a result of the payment made to the United States; or (iii)&nbsp;the mutual
promises, covenants, and obligations set forth in this Agreement do not constitute a
contemporaneous exchange for new value given to Ultralife.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.
If Ultralife&#146;s obligations under this Agreement are avoided for any reason,
including, but not limited to, through the exercise of a trustee&#146;s avoidance powers under the
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bankruptcy Code, the United States, at its sole option,
may rescind the releases in this Agreement and bring any civil and/or administrative claim, action, or
proceeding against Ultralife for the claims that would otherwise be covered by the releases provided
in Paragraph&nbsp;3, above. Ultralife agrees that (i)&nbsp;any such claims, actions, or proceedings
brought by the United States (including any proceedings to exclude Ultralife
from participation in) are not subject to an &#147;automatic stay&#148; pursuant to 11 U.S.C. &#167; 362(a) as a
result of the action, case, or proceedings described in the first clause of this Paragraph, and
Ultralife shall not argue or otherwise contend that the United States&#146; claims, actions,
or proceedings are subject to an automatic stay; (ii)&nbsp;Ultralife shall not plead, argue,
or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or
similar theories, to any such civil or administrative claims, actions, or proceeding that are
brought by the United States within 60 calendar days of written notification to Ultralife that
the releases have been rescinded pursuant to this Paragraph, except to the extent such defenses
were available on April&nbsp;16, 2010; and (iii)&nbsp;the United States has a valid claim against
Ultralife in an amount not less than $2,700,000, and the United States may pursue its claim in the case,
action, or proceeding referenced in the first clause of this Paragraph, as well as in any other case, action, or proceeding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.
Ultralife acknowledges that its agreements in this Paragraph are provided in
exchange for valuable consideration provided in this Agreement.
This Agreement is intended to be for the benefit of the Parties only.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.
Each Party shall bear its own legal and other costs incurred in connection with
this matter, including the preparation and performance of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.
Each party and signatory to this Agreement represents that it freely and
voluntarily enters in to this Agreement without any degree of duress or compulsion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.
This Agreement is governed by the laws of the United States. The exclusive
jurisdiction and venue for any dispute relating to this Agreement is the United States District
Court for the Western District of New York. For purposes of construing this Agreement, this
Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not,
therefore, be construed against any Party for that reason in any subsequent dispute.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.
This Agreement constitutes the complete agreement between the Parties. This
Agreement may not be amended except by written consent of the Parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.
The undersigned counsel represent and warrant that they are fully authorized to
execute this Agreement on behalf of the persons and entities indicated below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.
This Agreement may be executed in counterparts, each of which constitutes an
original and all of which constitute one and the same Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.
This Agreement is binding on Ultralife&#146;s successors, transferees, heirs, and
assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.
All parties consent to the United States&#146; disclosure of this Agreement, and
information about this Agreement, to the public.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.
This Agreement is effective on the date of signature of the last signatory to the
Agreement (Effective Date of this Agreement). Facsimiles of signatures shall constitute
acceptable, binding signatures for purposes of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Execution Copy</I>
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>THE UNITED STATES OF AMERICA</B></U>
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">DATED:  June 1, 2011&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Robert G. Trusiak
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Robert G. Trusiak&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Assistant U.S. Attorney<br>
Western District of New York&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">and<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">DATED: June 1, 2011&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Colin M. Huntley
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Colin M. Huntley&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Trial Attorney<br>
Commercial Litigation Branch<br>
Civil Division<br>
United States Department of Justice&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Execution Copy</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Page 10 of 12
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>ULTRALIFE CORPORATION</B></U><BR>
<U><B>Formerly Known As Ultralife Batteries, Inc.</B></U>
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">DATED: 1 June 2011&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Peter F. Comerford
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Peter F. Comerford</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Vice President of Administration &#038; General Counsel<br>
Ultralife Corporation&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">DATED: 6/1/2011&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Thomas A. DeSimon
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Thomas A. DeSimon&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Harris Beach PLLC<br>
<Br>Counsel to Ultralife Corporation&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Execution Copy</I>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Page 11 of 12
</DIV>












<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>EXHIBIT A</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>SETTLEMENT PAYMENT SCHEDULE</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Payment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Interest (2.625%)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Balance</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">06-08-2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,005,048.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,048.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,700,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">12-01-2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">588,979.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,312.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">566,667.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,133,333.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">06-01-2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">581,542.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,875.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">566,667.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">566,666.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">12-01-2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">574,103.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,437.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">566,666.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,749,673.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">49,673.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,700,000.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Execution Copy</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Page 12 of 12
</DIV>



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