Document:

Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

      This Stock Purchase Agreement (the "Agreement") is made as of the 7th day
of October, 2003 between ULTRALIFE BATTERIES, INC., a Delaware corporation (the
"Company") and ______________, a _____________________ (the "Purchaser").

                                    Recitals

      The Company desires to issue and sell, and the Purchaser desires to buy,
shares of the Common Stock, $0.10 par value (the "Common Stock") of the Company
on the terms and conditions set forth in this Agreement. The Company has
authorized the sale of 200,000 shares of its Common Stock in a private placement
at a price of $12.50 per share to raise $2,500,000 of working capital, the net
proceeds of which the Company intends to use to fund a purchase of securities
issued by Ultralife Taiwan, Inc., and anticipates closing the sale of the Common
Stock upon the execution and delivery of this Agreement.

      The Company and the Purchaser acknowledge that, in addition to the
Purchaser, there will be others who will be subscribing for shares of the
Company's Common Stock and that there will be a simultaneous closing of all
subscriptions.

      In consideration of the covenants and conditions set forth in this
Agreement, the parties agree as follows:

      1. Sale of Shares. The Company agrees to sell, transfer and assign to the
Purchaser and, subject to and in reliance upon the representations, warranties,
terms and conditions of this Agreement, the Purchaser agrees to purchase _______
newly issued shares of Common Stock or shares issued from the Company's treasury
(the "Shares") at a purchase price of $12.50 per share for an aggregate purchase
price of $_______ (the "Purchase Price").

      2. Closing. The closing of the purchase and sale of the Shares (the
"Closing") shall be held concurrently with the execution and delivery of this
Agreement at the offices of the Company, or at such other time and place or in
such other manner as the Company and the Purchaser may agree. At the Closing,
upon receipt of the Purchase Price for the Shares by wire transfer to the
Company's account, the Company shall authorize its transfer agent to issue to
the Purchaser a certificate representing the Shares bearing the legend required
by Section 7 of this Agreement. Within ten (10) business days of the Closing,
the Company will cause to be delivered to the Purchaser a certificate
representing the Shares.

      3. Representations of the Company. The Company represents, warrants and
agrees as follows:

            (a) Neither the execution nor delivery by the Company of this
Agreement will conflict with or violate any provision of the Articles of
Incorporation, Bylaws or any agreement to which the Company is a party.

            (b) The Shares, when issued, sold, delivered and paid for in
accordance with the terms hereof, will be duly and validly issued, fully paid
and nonassessable.

            (c) The sale and issuance of the Shares in accordance with the terms
of and on the basis of the representations and warranties set forth in this
Agreement, will be exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act").

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            (d) This Agreement has been duly executed and delivered by the
Company and is enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, fraudulent transfer, marshalling or similar
laws affecting creditors' rights and remedies generally, and general principles
of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Except for
any notice of issuance to or listing of additional shares with NASDAQ, if
required, all consents, approvals, orders or authorizations of, or
registrations, qualifications, designations or filings with any federal or state
governmental authority on the part of the Company required in connection with
the consummation of the transactions contemplated herein have been obtained and
are effective.

      4. Representations of the Purchaser. The Purchaser represents, warrants
and agrees as follows:

            (a) It is the Purchaser's present intention to acquire the Shares
hereunder for the Purchaser's own account as principal and the Shares are being
and will be acquired for the purpose of investment and not with a view to
distribution or resale except in accordance with the provisions of a
registration statement declared effective by the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended (the "Act").

            (b) The Purchaser has such knowledge and experience in business and
financial matters that the Purchaser is capable of evaluating the merits and
risks of the investment contemplated hereby.

            (c) The Purchaser has full power and authority to execute, deliver
and perform this Agreement and to make this Agreement the valid and enforceable
obligation of the Purchaser.

            (d) The Purchaser understands that the Shares will be "restricted
securities" as that term is defined in Rule 144 under the Act and that the
Shares may only be resold in compliance with applicable federal and state
securities laws.

            (e) The Purchaser's domicile is located at the Purchaser's address
set forth on the signature page hereto.

            (f) The Purchaser is an "Accredited Investor" as defined in Rule
501(a) of the Act, a copy of which is set forth on Exhibit A to this Agreement,
and the Purchaser has certified to the Company the basis for that Purchaser's
Accredited Investor status by checking the appropriate category on Exhibit A and
signing and dating that Exhibit.

            (g) The Purchaser has no contract, understanding, agreement or
arrangement with any person to sell, transfer or pledge to such person or anyone
else any of the Shares the Purchaser hereby purchases (in whole or in part) and
that the Purchaser has no present plans to enter into any such contract,
undertaking, agreement or arrangement.

            (h) The Purchaser will provide, if requested, any additional
information that may be requested or required to determine the Purchaser's
eligibility to purchase the Shares.

            (i) The Purchaser acknowledges that the Purchaser's representations,
warranties, acknowledgements and agreements in this Agreement will be relied
upon by the Company in determining the Purchaser's suitability as a purchaser of
the Shares.

            (j) The Purchaser has not retained a broker or finder in connection
with the Purchaser's purchase of the Shares and to the Purchaser's knowledge
there are no other brokers or finders entitled to compensation in connection
with the sale of the Shares to the Purchaser other than Richard Hansen and
William Gomez, who shall share in the fee to be paid by the Company to Richard
Hansen.

      5. Company Information. The Purchaser and the Company agree that each is
capable of evaluating the merits and risks of the purchase and sale,
respectively, of the Shares hereunder. The Purchaser acknowledges that it has
reviewed the Company's (i) Annual Report on Form 10-K for the transition period
ended December 31, 2002 (the "Transition Report"), as filed with the SEC
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); (ii) Proxy Statement for its 2003 Annual Meeting of Shareholders; (iii)
Quarterly Reports on Form 10-Q, as amended, for the fiscal quarters ended March
29, 2003 and June 28, 2003 as filed with the SEC pursuant to the Exchange Act;
and (iv) all other reports filed with the SEC since June 28, 2003. Since June
28,

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2003, the Company has filed with the SEC all reports, documents, definitive
proxy statements and all other filings required to be filed with the SEC. The
Purchaser further acknowledges that it has reviewed the Risk Factors of the
Company set forth in the Transition Report and the additional Risk Factors set
forth on Exhibit B to this Agreement. The Purchaser further acknowledges that it
has been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Shares that have been requested by the Purchaser. The Purchaser further
acknowledges that it has been afforded the opportunity to meet with and ask
questions of senior officers of the Company concerning the Company's business,
finance and operations, including in particular the Company's business, finances
and operations since June 28, 2003.

      6. Registration Rights. Within thirty (30) days of the date of Closing,
the Company shall use its best efforts to prepare and file with the SEC a resale
registration statement (the "Registration Statement") on Form S-3 covering the
Shares (including any shares of the Company's Common Stock issued as, or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as, a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Shares), provided that Form S-3 is
available to the Company for such purpose. The Company shall take all actions
necessary or desirable to qualify to use Form S-3 for the registration of the
resale of the Shares. The Company shall be required to file only one
Registration Statement. The Purchaser and the Company agree that promptly after
the Closing, they shall enter into a separate Registration Rights Agreement
consistent with the provisions of this Section 6, which Registration Rights
Agreement shall contain customary representations and warranties and provisions
regarding indemnification and contribution.

      7. Legend. The Purchaser understands and acknowledges that the
certificates evidencing the Shares will bear the following legend: "THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED SECURITIES"
AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD
OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT; (II) IN COMPLIANCE WITH
RULE 144; OR (III) AFTER RECEIPT OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ULTRALIFE BATTERIES, INC. THAT SUCH REGISTRATION OR COMPLIANCE
IS NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION."

      8. Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original but all of which will be deemed one instrument.

      9. Expenses and Taxes. The Company shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution,
delivery and performance of this Agreement and any other instruments and
documents to be delivered hereunder and agrees to save the Purchaser harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and filing fees.

      10. Survival of Representations and Warranties. All representations and
warranties made in this Agreement or any other instrument or document delivered
in connection herewith shall survive the execution and delivery hereof.

      11. Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior or contemporaneous understandings
or agreements concerning the subject matter hereof.

      12. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.

      13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York. The rights of the parties
under this Agreement are unique and, accordingly, the parties shall, in addition
to such other remedies as may be available to any of them at law or in equity,
have the right to enforce their rights hereunder by actions of specific
performance to the extent permitted by law.

      14. Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of the Agreement for any other purpose.

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      15. Amendments and Waivers. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
both parties that specifically refers to this Agreement. Either party hereto
may, only by an instrument in writing, waive compliance by the other party
hereto with any term or provision of this Agreement on the part of such other
party to be performed or complied with. The waiver by a party hereto of a breach
of any term or provision of this Agreement shall not be construed as a waiver of
any subsequent breach. Any amended or waiver effected in accordance with this
Section 15 shall be binding upon each party and its permitted assigns.

              [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

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      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

ULTRALIFE BATTERIES, INC.

By:___________________________________________

Name:
Title:

THE PURCHASER: _______________________________
                         Print Name

______________________________________________
                  Signature

Address: _____________________________________

______________________________________________

______________________________________________

Social Security Number or
Employment Identification Number: ____________

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                                    EXHIBIT A

            Section 501(a) of the Securities Act of 1933, as amended:

"As used in Regulation D (17 CFR ss.ss. 230.501-230.508), the following terms
shall have the meaning indicated:

      (a)   Accredited investor. "Accredited investor" shall mean any person who
            comes within any of the following categories, or who the issuer
            reasonably believes comes within any of the following categories, at
            the time of the sale of the securities to that person:

            (1)   Any bank as defined in section 3(a)(2) of the [Securities Act
                  of 1933, as amended (the "Act")], or any savings and loan
                  association or other institution as defined in section
                  3(a)(5)(A) of the Act whether acting in its individual or
                  fiduciary capacity; any broker or dealer registered pursuant
                  to section 15 of the Securities Exchange Act of 1934; any
                  insurance company as defined in section 2(13) of the Act; any
                  investment company registered under the Investment Company Act
                  of 1940 or a business development company as defined in
                  section 2(a)(48) of that Act; any Small Business Investment
                  Company licensed by the U.S. Small Business Administration
                  under section 301(c) or (d) of the Small Business Investment
                  Act of 1958; any plan established and maintained by a state,
                  its political subdivisions, or any agency or instrumentality
                  of a state or its political subdivisions, for the benefit of
                  its employees, if such plan has total assets in excess of
                  $5,000,000; any employee benefit plan within the meaning of
                  the Employee Retirement Income Security Act of 1974 if the
                  investment decision is made by a plan fiduciary, as defined in
                  section 3(21) of such Act, which is either a bank, savings and
                  loan association, insurance company, or registered adviser, or
                  if the employee benefit plan has total assets in excess of
                  $5,000,000 or, if a self-directed plan, with investment
                  decisions made solely by persons that are accredited
                  investors;

            (2)   Any private business development company as defined in section
                  202(a)(22) of the Investment Advisers Act of 1940;

            (3)   Any organization described in section 501(c)(3) of the
                  Internal Revenue Code, corporation, Massachusetts or similar
                  business trust, or partnership, not formed for the specific
                  purpose of acquiring the securities offered, with total assets
                  in excess of $5,000,000;

            (4)   Any director, executive officer, or general partner of the
                  issuer of the securities being offered or sold, or any
                  director, executive officer, or general partner of a general
                  partner of that issuer;

            (5)   Any natural person whose individual net worth, or joint net
                  worth with that person's spouse, at the time of his purchase
                  exceeds $1,000,000;

            (6)   Any natural person who had an individual income in excess of
                  $200,000 in each of the two most recent years or joint income
                  with that person's spouse in excess of $300,000 in each of
                  those years and has a reasonable expectation of reaching the
                  same income level in the current year;

            (7)   Any trust, with total assets in excess of $5,000,000, not
                  formed for the specific purpose of acquiring the securities
                  offered, whose purchase is directed by a sophisticated person
                  as described in ss. 230.506(b)(2)(ii); and

            (8)   Any entity in which all of the equity owners are accredited
                  investors."

The undersigned Purchaser hereby certifies to the Company that the Purchaser is
an "Accredited Investor" on the basis of the box checked above.

                                               PURCHASER

Date: __________________________               _________________________________
                                                          Print Name

                                               _________________________________
                                                          Signature

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                                                                       EXHIBIT B

                                  RISK FACTORS

Please carefully consider all information provided by the Company. In
particular, the Risk Factors set forth in the Company's Transition Report and
the following factors could cause actual results to differ materially from the
matters described in the forward-looking statements, with material and adverse
effects on the Company's business, operating results, financial condition and
the value of Ultralife Batteries, Inc. stock.

Risks Related to Company's Ability to Finance Ongoing Operations and Projected
Growth

      While the Company believes that its revenue growth projections and its
ongoing cost controls will allow it to continue to generate cash and achieve
profitability, there is no assurance that the Company will be able to be
successful. The Company's future cash flows from operations, combined with its
accessibility to cash and credit, may not be sufficient to allow the Company to
finance ongoing operations or to make required investments for future growth.
The Company may need to seek additional credit or access capital markets for
additional funds. There is no assurance that the Company would be successful in
this regard.

Risks Related to Ability to Staff Adequately

      As the Company has added equipment to increase production capacity, so has
it increased its number of employees. The ability of the Company to continue
increased production levels depends on its ability to attract, hire and retain a
sufficient number of employees at its Newark, New York production facility.
While the Company has retained the services of an employment agency to assist in
this endeavor, there is no assurance that the Company will be able to adequately
staff its Newark production facility. The inability to staff adequately would
have a material adverse effect on the Company's business, financial condition
and results of operations.

Dependence on Timely Delivery of Quality Products from Suppliers

      The Company relies upon its suppliers and vendors to provide quality
materials, components and equipment for its use in production. The Company's
ability to meet demand for its product and to maintain adequate production
schedules for the manufacture of cells and batteries is vital for its continued
success. In the event one or more of these suppliers or vendors is significantly
late in meeting its delivery schedule to the Company, or if one or more
demonstrates a serious inability to consistently supply quality goods, the
Company may fall behind in its production schedule which could, in turn, result
in late deliveries to its customers. Continued or habitual late deliveries to
customers could lead to the cancellation of orders and/or loss of customers,
either of which could have a material adverse effect on the Company's business.

Risks Related to Investment in Ultralife Taiwan, Inc.

      The Company intends to use the net proceeds of the private placement
contemplated by the Stock Purchase Agreement to which this Exhibit B is attached
to fund a short-term loan and ultimate purchase of securities issued by
Ultralife Taiwan, Inc. The terms and conditions of that transaction have not yet
been finalized. Because of the precarious financial condition of Ultralife
Taiwan, the Company may not be able to recover or realize any gain on its
investment which could adversely affect the financial condition of the Company
and the market value of its Common Stock.

                                       7Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT

      This Registration Rights Agreement (the "Agreement") is made as of the 7th
day of October, 2003 between ULTRALIFE BATTERIES, INC., a Delaware corporation
(the "Company") and _________________________, a ______________________________
(the "Purchaser").

      The Company and the Purchaser have entered into that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Purchaser purchased _______ newly-issued shares of the Company's Common Stock or
shares issued from the Company's treasury (the "Shares") at a purchase price of
$12.50 per share and also pursuant to which the Company agreed to register the
Shares for the benefit of the Purchaser.

      Capitalized terms not defined in this Agreement shall have the meanings
given them in the Stock Purchase Agreement.

      In consideration of the covenants and conditions set forth in this
Agreement, the parties agree as follows:

A.    REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT; COVENANTS

      a.1   Registration of Shares

            a.1.1 Registration Statement; Expenses

The Company shall:

      (a) use its best efforts to prepare and file with the Securities and
Exchange Commission (the "Commission") within thirty (30) days of the date of
Closing a Registration Statement on Form S-3 (or, if the Company is ineligible
to use Form S-3, then on Form S-1) relating to the sale of the Shares by the
Purchaser from time to time on the Nasdaq National Market (or the facilities of
any national securities exchange on which the Company's Common Stock is then
traded) or in privately negotiated transactions (the "Registration Statement");

      (b) provide to the Purchaser any information required to permit the sale
of the Shares under Rule 144A of the Securities Act;

      (c) subject to receipt of necessary information from the Purchaser, use
its reasonable best efforts to cause the Commission to declare the Registration
Statement effective as soon as practicable after the Registration Statement is
filed with the Commission;

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      (d) notify Purchaser promptly upon the Registration Statement, and any
post-effective amendment thereto, being declared effective by the Commission;

      (e) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the Prospectus (as defined in Section 1.3.1
below) and take such other action, if any, as may be necessary to keep the
Registration Statement effective until the earlier of (i) the date on which the
Shares may be resold by the Purchaser without registration and without regard to
any volume limitations by reason of Rule 144(k) under the Securities Act or any
other rule of similar effect or (ii) all of the Shares have been sold pursuant
to the Registration Statement or Rule 144 under the Securities Act or any other
rule of similar effect;

      (f) promptly furnish to the Purchaser with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Prospectus, including any supplements to or amendments of the Prospectus, in
order to facilitate the public sale or other disposition of all or any of the
Shares by the Purchaser;

      (g) during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations promulgated thereunder;

      (h) file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance; provided, however, that
the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;

      (i) advise the Purchaser, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the Commission delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at the
earliest practicable moment if such stop order should be issued; and

      (j) bear all expenses in connection with the procedures in paragraphs (a)
through (i) of this Section 1.1.1 and the registration of the Shares pursuant to
the Registration Statement.

      a.2   Transfer of Shares After Registration

Purchaser agrees that the Purchaser will not effect any disposition of the
Shares or right to purchase the Shares that would constitute a sale within the
meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 1.1 or as otherwise permitted by law, and that
the Purchaser will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Purchaser or the
Purchaser's plan of distribution.

      a.3   Indemnification

For the purpose of this Section 1.3, the term "Registration Statement" shall
include any preliminary or final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement referred to in Section
1.1.

            a.3.1 Indemnification by the Company

The Company agrees to indemnify and hold harmless the Purchaser and each person,
if any, who controls the Purchaser within the meaning of the Securities Act,
against any losses, claims, damages, liabilities or expenses, joint or several,
to which the Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the Prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the

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Registration Statement, including any information deemed to be a part thereof as
of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant
to Rule 434, of the Rules and Regulations, or the Prospectus, in the form first
filed with the Commission pursuant to Rule 424(b) of the Regulations, or filed
as part of the Registration Statement at the time of effectiveness if no Rule
424(b) filing is required (the "Prospectus"), or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state in any of them a material fact required to be stated therein or necessary
to make the statements in any of them, in light of the circumstances under which
they were made, not misleading, or arise out of or are based in whole or in part
on any inaccuracy in the representations and warranties of the Company contained
in this Agreement, or any failure of the Company to perform its obligations
under this Agreement or under applicable law, and will reimburse the Purchaser
and each such controlling person for any legal and other expenses as such
expenses are reasonably incurred by the Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon (i) an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Prospectus or any amendment or
supplement of the Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Purchaser expressly for use in the Registration Statement or the Prospectus,
or (ii) the failure of the Purchaser to comply with the covenants and agreements
contained in the Stock Purchase Agreement or in Section 1.2 of this Agreement
respecting resale of the Shares, or (iii) the inaccuracy of any representations
made by the Purchaser in this Agreement or (iv) any untrue statement or omission
of a material fact required to make such statement not misleading in any
Prospectus that is corrected in any subsequent Prospectus that was delivered to
the Purchaser before the pertinent sale or sales by the Purchaser.

            a.3.2 Indemnification by the Purchaser

The Purchaser will indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Purchaser, which consent
shall not be unreasonably withheld) insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any failure on the part of the Purchaser to
comply with the covenants and agreements contained in the Stock Purchase
Agreement or Section 1.2 of this Agreement respecting the sale of the Shares or
(ii) the inaccuracy of any representation made by the Purchaser in this
Agreement or (iii) any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement to the Registration Statement or Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Purchaser expressly for use therein;
provided, however, that the Purchaser shall not be liable for any such untrue or
alleged untrue statement or omission or alleged omission of which the Purchaser
has delivered to the Company in writing a correction before the occurrence of
the transaction from which such loss was incurred, and the Purchaser will
reimburse the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.

            a.3.3 Indemnification Procedure

      (a) Promptly after receipt by an indemnified party under this Section 1.3
of notice of the threat or commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 1.3, promptly notify the indemnifying party in writing of the
claim; but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any

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indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 1.3 or to the extent it is not prejudiced as a result
of such failure.

      (b) In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless:

            (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party representing all of the indemnified parties
who are parties to such action) or

            (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party. Notwithstanding the provisions of this
Section 1.3, the Purchaser shall not be liable for any indemnification
obligation under this Agreement in excess of the amount of net proceeds received
by the Purchaser from the sale of the Shares.

            a.3.4 Contribution

If the indemnification provided for in this Section 1.3 is required by its terms
but is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party under this Section 1.3 in respect to any
losses, claims, damages, liabilities or expenses referred to in this Agreement,
then each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to in this Agreement

      (a) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of Common Stock or

      (b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations.

The respective relative benefits received by the Company on the one hand and the
Purchaser on the other shall be deemed to be in the same proportion as the
amount paid by the Purchaser to the Company pursuant to this Agreement for the
Shares purchased by the Purchaser that were sold pursuant to the Registration
Statement bears to the difference (the "Difference") between the amount the
Purchaser paid for the Shares that were sold pursuant to the Registration
Statement and the amount received by the Purchaser from such sale. The relative
fault of the Company and the Purchaser shall be determined by reference to,
among other things, whether the untrue or alleged statement of a material fact
or the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation or warranty relates to information
supplied by the Company or by the Purchaser

                                       4
<PAGE>

and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 1.3.3, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in Section 1.3.3 with respect to
the notice of the threat or commencement of any threat or action shall apply if
a claim for contribution is to be made under this Section 1.3.4; provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under Section 1.3 for purposes of
indemnification. The Company and each Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 1.3 were determined
solely by pro rata allocation (even if the Purchaser were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 1.3, the Purchaser shall not be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that the Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

      a.4   Termination of Conditions and Obligations

The restrictions imposed by the Stock Purchase Agreement or this Agreement upon
the transferability of the Shares shall cease and terminate as to any particular
number of the Shares upon the passage of two years from the Closing Date or at
such time as an opinion of counsel satisfactory in form and substance to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.

      a.5   Information Available

From the date of this Agreement through the date the Registration Statement
covering the resale of Shares owned by the Purchaser is no longer effective, the
Company will furnish to the Purchaser:

      (a) as soon as practicable after available (but in the case of the
Company's Annual Report to Shareholders, within 90 days after the end of each
fiscal year of the Company), one copy of

            (i) its Annual Report to Stockholders (which Annual Report shall
contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants);

            (ii) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K;

            (iii) if not included in substance in its Quarterly Reports to
Stockholders, its quarterly reports on Form 10-Q; and

            (iv) a full copy of the particular Registration Statement covering
the Shares (the foregoing, in each case, excluding exhibits);

      (b) upon the request of the Purchaser, a reasonable number of copies of
the Prospectus to supply to any other party requiring the Prospectus.

      a.6   Rule 144 Information

Until the earlier of (i) the date on which the Shares may be resold by the
Purchaser without registration and without regard to any volume limitations by
reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the Shares have been sold pursuant to the Registration
Statement or Rule 144 under the Securities Act or any other rule of similar
effect, the Company shall file all reports required to be filed by it under the
Securities Act, the Rules and Regulations and the Exchange Act and shall take
such further action to the extent required to enable the Purchasers to sell the
Shares pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time).

                                       5
<PAGE>

B.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER

      b.1   Securities Law Representations and Warranties

      The Purchaser represents, warrants and covenants to the Company as
follows:

      (a) The Purchaser has acquired the Shares for the Purchaser's own account
for investment only, and has no present intention of distributing any of the
Shares, nor any arrangement or understanding with any other persons regarding
the distribution of the Shares within the meaning of Section 2(11) of the
Securities Act, other than as contemplated in Section 1 of this Agreement.

      (b) The Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act and rules and regulations promulgated thereunder the
"Rules and Regulations").

      (c) The Purchaser has completed or caused to be completed the Registration
Statement Questionnaire, attached to this Agreement as Appendix I, for use in
preparation of the Registration Statement, and the answers to the Questionnaire
are true and correct as of the date of this Agreement and will be true and
correct as of the effective date of the Registration Statement; provided,
however, that the Purchaser shall be entitled to update such information by
providing notice thereof to the Company before the effective date of the
Registration Statement.

      b.2   Resales of Shares

      (a) The Purchaser hereby covenants with the Company not to make any sale
of the Shares without satisfying the requirements of the Securities Act and the
Rules and Regulations, including, in the event of any resale under the
Registration Statement, the prospectus delivery requirements under the
Securities Act, and the Purchaser acknowledges and agrees that such Shares are
not transferable on the books of the Company pursuant to a resale under the
Registration statement unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate certificate

            (i) in the form of Appendix II to this Agreement;

            (ii) executed by the Purchaser individually, or if the Purchaser is
an entity, by an officer of, or other authorized person designated by, the
Purchaser; and

            (iii) to the effect that (a) the Shares have been sold in accordance
with the Registration Statement and (b) the requirement of delivering a current
prospectus has been satisfied.

      (b) The Purchaser acknowledges that there may occasionally be times when
the Company determines, in good faith following consultation with its Board of
Directors or a committee thereof, the use of the Prospectus forming a part of
the Registration Statement should be suspended until such time as an amendment
or supplement to the Registration Statement or the Prospectus has been filed by
the Company with the Commission and any such amendment to the Registration
Statement is declared effective by the Commission, or until such time as the
Company has filed an appropriate report with the Commission pursuant to the
Exchange Act. The Purchaser hereby covenants that the Purchaser will not sell
any Shares pursuant to the Prospectus during the period commencing at the time
at which the Company gives the Purchaser written notice of the suspension of the
use of the Prospectus and ending at the time the Company gives the Purchaser
written notice that the Purchaser may thereafter effect sales pursuant to the
Prospectus. The Company may, upon written notice to the Purchaser, suspend the
use of the Prospectus for up to thirty (30) days in any 365-day period based on
the reasonable determination of the Company's Board of Directors that there is a
significant business purpose for such determination, such as pending corporate
developments, public filings with the Commission or similar events. The Company
shall in no event be required to disclose the business purpose for which it has
suspended the use of the Prospectus if the Company determines in its good faith
judgment that the business purpose should remain confidential. In addition, the
Company shall notify each Purchaser (i) of any request by the Commission for an
amendment or any supplement to such Registration Statement or the Prospectus, or
any other information request by any other governmental agency directly relating
to

                                       6
<PAGE>

the sale of Shares, and (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Prospectus or the initiation or threat
of any proceeding for that purpose.

      (c) The Purchaser further covenants to notify the Company promptly of the
sale of any of the Shares, other than sales pursuant to the Registration
Statement or sales upon termination of the transfer restrictions pursuant to
Section 1.4 of this Agreement.

      3.    MISCELLANEOUS

            3.1   Counterparts

      This Agreement may be executed in counterparts, each of which will be
deemed an original but all of which will be deemed one instrument.

            3.2   Survival of Representations and Warranties

      All representations and warranties made in this Agreement or any other
instrument or document delivered in connection herewith shall survive the
execution and delivery hereof.

            3.3   Prior Agreements

      This Agreement constitutes the entire agreement between the parties and
supersedes any prior or contemporaneous understandings or agreements concerning
the subject matter hereof.

            3.4   Severability

      The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.

            3.5   Governing Law

      This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The rights of the parties under this Agreement
are unique and, accordingly, the parties shall, in addition to such other
remedies as may be available to any of them at law or in equity, have the right
to enforce their rights hereunder by actions of specific performance to the
extend permitted by law.

            3.6   Headings

      Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of the Agreement
for any other purpose.

            3.7   Amendments and Waivers

      This Agreement may not be amended, supplemented or otherwise modified
except by an instrument in writing signed by both parties that specifically
refers to this Agreement. Either party hereto may, only by an instrument in
writing, waive compliance by the other party hereto with any term or provision
of this Agreement on the part of such other party to be performed or complied
with. The waiver by a party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach. Any
amendment or waiver effected in accordance with this Section 2.7 shall be
binding upon each party and its permitted assigns.

                                       7
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

ULTRALIFE BATTERIES, INC.

By: ___________________________________

Name: _________________________________

Title: ________________________________

_______________________________________

_______________________________________
Print Name:

_______________________________________
Signature

                                       8
<PAGE>

                                   APPENDIX I

                            ULTRALIFE BATTERIES, INC.

                      REGISTRATION STATEMENT QUESTIONNAIRE

In connection with the preparation of the Registration Statement, please provide
us with the following information:

A.    Pursuant to the "Selling Stockholder" section of the Registration
      Statement, please state your or your organization's name exactly as it
      should appear in the Registration Statement:

         _________________________________________

B.    Please provide the number of shares that you or your organization will own
      immediately after Closing, including those Shares purchased by you or your
      organization pursuant to this Purchase Agreement and those shares
      purchased by you or your organization through other transactions:

         _________________________________________

C.    Have you or your organization had any position, office or other material
      relationship within the past three years with the Company or its
      affiliates?

      _____ Yes         _____ No

If yes, please indicate the nature of any such relationships below:

__________________________________________________

__________________________________________________

__________________________________________________

__________________________________________________

                                       9
<PAGE>

                                   APPENDIX II

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

The undersigned, an officer of, or other person duly authorized by

________________________________________________________________________________
              [fill in official name of individual or institution]

hereby certifies that he/she/it is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on ________________, 200__
in accordance with Registration Statement number 333-________________, and
complied with the requirement of delivering a current prospectus in connection
with such sale.

Print or Type:
Name of Purchaser (Individual or Institution):

________________________________________________________________________________

Name of Individual representing Purchaser (if an Institution)

________________________________________________________________________________

Title of Individual representing Purchaser (if an Institution):

________________________________________________________________________________

Signature:
Individual Purchaser or Individual representing Purchaser:

________________________________________________________________________________

                                       10

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