**4.** **Release by Selling Shareholders.**Subject to and conditioned upon timely payment of the FinalPayment, and subject to the other terms and conditions of this Agreement, Selling Shareholdershereby individually, jointly and severally, completely release and forever discharge Ultralife(including any of its parents, subsidiaries, divisions, successors, affiliates, agents,officers, directors, insurers, reinsurers, employees and attorneys — hereafter the “UltralifeAffiliates”) from any and all past and present claims, demands, obligations, actions, suits,causes of action, rights, damages, costs, expenses, interest, attorney’s fees, compensationand liabilities of any nature whatever based on a tort, contract, statute, regulatory schemeor other theory of recovery, in law or in equity and whether for compensatory, liquidatedand/or punitive damages, whether matured or unmatured, whether at law or in equity, whetherknown or unknown as of the Effective Date, and whether liquidated or unliquidated, thatSelling Shareholders have, have had, or claim to have or have had relating to payment of thePurchase Price pursuant to or required by Section 2.6 of the APA.**5.** **Amendment of the APA.**Subject to and conditioned upon timely payment in full of the FinalPayment, and subject to the other terms and conditions of this Agreement, the Parties dohereby agree as follows: **5.1.** Section 3 of this Agreement shall constitute a written amendment of the APA, asrequired by Section 9.2 of the APA.**6.** **No Modification of Other Agreements or Arrangements**. Notwithstanding anything to thecontrary in this Agreement, this Agreement shall not affect any closed or finalizedtransaction under the APA, such as tax elections and prior payments, and nothing in thisAgreement shall affect, limit or otherwise alter or amend the terms of those certainConfidentiality, Non-Disclosure, Non-Compete, Non-Disparagement and Assignment Agreements byand between Ultralife and each of the Selling Shareholders, dated November 10, 2008, or alteror amend any agreement or arrangement by and between Ultralife and Jacobs.**7.** **The Shares**. Each Selling Shareholder and Jacobs acknowledge that the Shares have not beenregistered under the Securities Act and accordingly may not be transferred by sale, gift,pledge or otherwise unless: (i) a registration statement with respect to the transfer of theShares shall be in effect under the Securities Act; or (ii) the transferor shall have obtainedan opinion of counsel and/or other documentation related to such transfer, in form and contentsatisfactory to Ultralife and its counsel, evidencing that the transfer is exempt from theregistration requirements of the Securities Act, is in compliance with applicable statesecurities law, and will not result in any violation of the Securities Act or any otherapplicable law. The Shares are being acquired by each Selling Shareholder and Jacobs withouta view to resale in connection with any distribution thereof within the meaning of theSecurities Act and each Selling Shareholder and Jacobs acknowledge and represent and warrantthat the Shares will not thereafter be transferred except in accordance with the provisions ofthis Section 7.
 
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**8.** **Attorneys’ Fees.**The Parties shall bear their own attorneys’ fees and costs in connection with this Agreementand any dispute between them giving rise thereto. However, if either party brings anyaction alleging breach of this Agreement or seeking the specific enforcement thereof, theprevailing party in any such action shall be entitled to recover its reasonable attorneys’fees, expenses and costs from the party that does not prevail.**9.** **Warranty of Capacity to Execute Agreement.**The Parties represent to each other that the person executing this Agreement on each Party’sbehalf has full authority to bind that Party to the terms of this Agreement.**10.** **Entire Agreement and Successors in Interest.**This Agreement contains the entire agreement between the Parties with regard to the mattersset forth in it and shall be binding upon and inure to the benefit of the representatives,successors and assigns of each.**11.** **Construction by New York Law.**This Agreement shall be governed by and construed in accordance with the domestic laws ofthe State of New York without giving effect to any choice or conflict of law provision orrule (whether of the State of New York or any other jurisdiction) that would cause theapplication of the laws of any jurisdiction other than the State of New York. The languageof all parts of this Agreement shall in all cases be construed as a whole, according totheir fair meaning, and not strictly for or against any of the Parties.**12.** **Waiver of Provisions.**Neither one nor more waivers by either of the Parties of any rights under any of theprovisions of this Agreement, nor one or more failures of either of the Parties to enforceany of the provisions of this Agreement shall thereafter be construed as a waiver of anyprovisions, rights, or privileges under this Agreement.
 
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**13.** **Enforcement of Breach; Submission to Jurisdiction.**All actions arising under this Agreement shall be brought in the United States DistrictCourt for the Western District of New York (the “Federal Court”), and the parties herebysubmit to personal jurisdiction in that Federal Court. If such Federal Court does notpossess subject matter jurisdiction over any dispute related to this Agreement, then suchdispute shall be brought in any state court located in Wayne County, New York.**14.** **Modification and Severability.**No change or waiver of any provision of this Agreement shall be valid unless the same is inwriting and signed by all Parties to this Agreement. The invalidity, illegality orunenforceability of any provision or any part of any provision of this Agreement shall notaffect or impair the validity, legality or enforceability of any other provisions or part ofany other provision hereof. This Agreement is the entire Agreement between the Parties onthe subject matter hereof.***[SIGNATURES ON NEXT PAGE]***
 
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*IN WITNESS WHEREOF*, the Parties hereto have caused this Agreement to be duly executed anddelivered.     **Ultralife Corporation**     By: /s/ John D. Kavazanjian Date: 04/27/10       Title: President and Chief Executive Officer       **Selling Shareholders:**     /s/ Ken Cotton Date: 04/20/10   Ken Cotton, Individually       /s/ Shawn O’Connell Date: 04/19/10   Shawn O’ Connell, Individually       /s/ Simon Baitler Date: 04/19/10   Simon Baitler, Individually       **Jacobs, solely for the purposes of Sections 6 through 14, inclusive:**     /s/ Tim Jacobs Date: 04/20/10   Tim Jacobs  
 
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