Document:

Exhibit 10.1

                                December 15,2000

Ultralife Batteries, Inc.
2000 Technology Parkway
Newark, NY 14513

Ultralife Batteries (UK) Ltd.
18 Nuffield Way
Abingdon, Oxfordshire, OX 14
1TG England

      Re: Second Amendment to Financing Agreements ("Amendment")

Gentlemen:

      Reference is made to the Loan and Security Agreement dated June 15, 2000,
between you and the undersigned (the "Loan Agreement"). All capitalized terms
not otherwise defined herein shall have the meanings given such terms in the
Loan Agreement.

      Borrowers have requested that Lender agree to certain modifications to the
Loan Agreement. Subject to the terms and conditions hereof, the Lender agrees
with the Borrowers as follows:

      (1) Section 9.15 of the Loan  Agreement  is deleted and replaced  with the
following:

          "9.15 Adjusted Net Worth. Borrowers shall, at all times, maintain an
          Adjusted Net Worth of not less than $40,000,000.00."

      (2) In  connection  with the  execution  and  delivery of this  Amendment,
Borrowers  shall  pay to  Lender a fee of  $7,500.00,  which  fee shall be fully
earned and non-refundable on the date hereof.

      (3) In connection with the execution and delivery of this  Amendment,  the
Borrowers  shall  furnish  to the  Lender  certified  copies  of  all  requisite
corporate  action and  proceedings  of the  Borrowers  in  connection  with this
Amendment.

      (4) Each  Borrower  confirms and agrees that (a) all  representations  and
warranties contained in the Loan Agreement and in the other Financing Agreements
are on the date  hereof true and correct in all  material  respects  (except for
changes that have  occurred as  permitted  by the  covenants in Section 9 of the
Loan Agreement),  and (b) it is unconditionally liable for the punctual and full
payment of all Obligations,  including,  without limitation,  all charges, fees,
expenses and costs (including  attorneys' fees and expenses) under the Financing
Agreements, and that Borrowers

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
December 15, 2000
Page 2

have no defenses, counterclaims or setoffs with respect to full, complete and
timely payment of all Obligations.

      (5) Borrowers hereby agree to pay to Lender all reasonable attorney's fees
and costs which have been incurred or may in the future be incurred by Lender in
connection  with the negotiation and preparation of this Amendment and any other
documents  and  agreements  prepared  in  connection  with this  Amendment.  The
undersigned  confirm  that the  Financing  Agreements  remain in full  force and
effect without  amendment or modification of any kind, except for the amendments
explicitly set forth herein.  The undersigned  further confirm that after giving
effect to this Amendment, no Event of Default or events which with notice or the
passage of time or both would  constitute  an Event of Default have occurred and
are continuing. Except as explicitly provided herein, the execution and delivery
of this  Amendment by Lender shall not be construed as a waiver by Lender of any
Event of Default under the Financing Agreements.  This Amendment shall be deemed
to be a Financing  Agreement and, together with the other Financing  Agreements,
constitute the entire agreement  between the parties with respect to the subject
matter hereof and supersedes all prior dealings,  correspondence,  conversations
or communications between the parties with respect to the subject matter hereof.

                  [Remainder of Page Left Intentionally Blank]

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
December 15, 2000
Page 3

      If you accept and agree to the foregoing please sign and return the
enclosed copy of this letter. Thank you.

                                    Very truly yours,

                                    CONGRESS FINANCIAL CORPORATION
                                    (NEW ENGLAND)

                                    By: /s/ Brian Essex
                                        --------------------------------
                                        Name:  Brian Essex
                                        Title: Assistant Vice President

                                    AGREED:

                                    ULTRALIFE BATTERIES, INC.

                                    By: /s/ Robert W. Fishback
                                        --------------------------------
                                        Name:  Robert W. Fishback
                                        Title: VP-Finance & CFO

                                    ULTRALIFE BATTERIES (UK) Ltd.

                                    By: /s/ J. Barrella
                                        --------------------------------
                                        Name:  J. Barrella
                                        Title: DirectorExhibit 4(a)

                          INVESTMENT ADVISORY AGREEMENT

      AGREEMENT  made  as of  April  30,  1999  by  and  between  MERCURY  ASSET
MANAGEMENT V.I. FUNDS, INC., a Maryland corporation  (hereinafter referred to as
the "Corporation") on behalf of its series MERCURY V.I. U.S. LARGE CAP FUND (the
"Fund") and MERCURY ASSET MANAGEMENT INTERNATIONAL LTD., a corporation organized
under the laws of England and Wales (hereinafter  referred to as the "Investment
Adviser").

                              W I T N E S S E T H:

      WHEREAS,  the Corporation is engaged in business as an open-end management
investment  company  registered  under the  Investment  Company Act of 1940,  as
amended (hereinafter referred to as the "Investment Company Act"); and

      WHEREAS, the Directors of the Corporation (the "Directors") are authorized
to establish separate series relating to separate portfolios of securities, each
of which may offer separate classes of shares; and

      WHEREAS,  the Directors  have  established  and  designated  the Fund as a
series of the Corporation; and

      WHEREAS,  the  Investment  Adviser is  engaged  principally  in  rendering
management and investment  advisory  services and is registered as an investment
adviser  under  the  Investment  Advisers  Act  of  1940  and  regulated  by the
Investment Management  Regulatory  Organization,  a selfregulating  organization
recognized  under  the  Financial  Services  Act of 1986 of the  United  Kingdom
(hereinafter  referred to as "IMRO"), and the conduct of its investment business
is regulated by IMRO; and

<PAGE>

      WHEREAS,  the  Corporation  desires  to retain the  Investment  Adviser to
provide  management and investment  advisory  services to the Fund in the manner
and on the terms hereinafter set forth; and

      WHEREAS,  the  Investment  Adviser is willing  to provide  management  and
investment  advisory services to the Fund on the terms and conditions  hereafter
set forth;

      NOW,  THEREFORE,  in  consideration  of the  premises  and  the  covenants
hereinafter  contained,  the Corporation and the Investment Adviser hereby agree
as follows:

                                    ARTICLE I

                        Duties of the Investment Adviser

      The Corporation  hereby employs the Investment Adviser to act as a manager
and investment adviser of the Fund and to furnish,  or arrange for affiliates to
furnish,  the management  and  investment  advisory  services  described  below,
subject to the policies of, review by and overall control of the Directors,  for
the  period and on the terms and  conditions  set forth in this  Agreement.  The
Investment Adviser hereby accepts such employment and agrees during such period,
at its own expense,  to render,  or arrange for the  rendering of, such services
and to assume the obligations herein set forth for the compensation provided for
herein.  The Investment Adviser and its affiliates shall for all purposes herein
be deemed to be independent  contractors and shall,  unless otherwise  expressly
provided  or  authorized,  have  no  authority  to  act  for  or  represent  the
Corporation  or the  Fund  in any  way or  otherwise  be  deemed  agents  of the
Corporation or the Fund.

      (a) Management Services.  The Investment Adviser shall perform (or arrange
for the performance by affiliates of) the management and administrative services
necessary  for the operation of the  Corporation  and the Fund.  The  Investment
Adviser shall provide the Corporation and the

                                        2

<PAGE>

Fund with office space,  facilities,  equipment and necessary personnel and such
other  services as the Investment  Adviser,  subject to review by the Directors,
shall from time to time  determine  to be  necessary  or useful to  perform  its
obligations under this Agreement.  The Investment  Adviser shall also, on behalf
of  the  Corporation   and  the  Fund,   conduct   relations  with   custodians,
depositories,  transfer agents,  dividend  disbursing agents,  other shareholder
servicing agents,  accountants,  attorneys,  underwriters,  insurance companies,
brokers  and  dealers,  corporate  fiduciaries,  insurers,  banks and such other
persons in any such other  capacity  deemed to be  necessary or  desirable.  The
Investment  Adviser shall  generally  monitor the  Corporation's  and the Fund's
compliance  with  investment  policies  and  restrictions  as set  forth  in the
Registration  Statement  of the Fund  filed  with the  Securities  and  Exchange
Commission  under the Investment  Company Act, as amended from time to time (the
"Registration  Statement").  The  Investment  Adviser  shall make reports to the
Directors of its  performance  of  obligations  hereunder and furnish advice and
recommendations  with respect to such other  aspects of the business and affairs
of the Fund as it shall determine to be desirable.

      (b) Investment Advisory Services. The Investment Adviser shall provide (or
arrange  for  affiliates  to  provide)  the  Corporation  with  such  investment
research,  advice and  supervision  as the latter may from time to time consider
necessary for the proper  supervision  of the assets of the Fund,  shall furnish
continuously an investment program for the Fund and shall determine from time to
time which securities shall be purchased,  sold or exchanged and what portion of
the  assets  of the  Fund  shall be held in the  various  securities  and  other
financial  instruments in which the Fund invests or cash,  subject always to the
restrictions of the Articles of Incorporation and By-Laws of the Corporation, as
amended from time to time, the provisions of the Investment  Company Act and the
statements relating to the Fund's investment objectives, investment policies and
investment

                                        3

<PAGE>

restrictions  as the  same  are set  forth in the  Fund's  current  Registration
Statement. The Investment Adviser shall make decisions for the Corporation as to
the manner in which voting rights, rights to consent to corporate action and any
other rights  pertaining to the Fund's portfolio  securities shall be exercised.
Should the Directors at any time, however, make any definite determination as to
investment  policy and notify the  Investment  Adviser  thereof in writing,  the
Investment  Adviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.  The  Investment  Adviser  shall take, on behalf of the Fund,  all
actions which it deems necessary to implement the investment policies determined
as provided  above,  and in  particular  to place all orders for the purchase or
sale of the Fund's  portfolio  securities for the Fund's account with brokers or
dealers selected by it, and to that end, the Investment Adviser is authorized as
the agent of the  Corporation to give  instructions to the custodian of the Fund
as to deliveries of securities and payments of cash for the account of the Fund.
In  connection  with the selection of such brokers or dealers and the placing of
such  orders  with  respect  to assets of the Fund,  the  Investment  Adviser is
directed at all times to seek to obtain  execution  and price  within the policy
guidelines  determined  by the  Directors  and set  forth  in the  then  current
Registration  Statement.  Subject to this  requirement and the provisions of the
Investment  Company Act, the  Securities  Exchange Act of 1934, as amended,  and
other applicable provisions of law, the Investment Adviser may select brokers or
dealers with which it or the Corporation is affiliated.

      (c)  Affiliated   Sub-Advisers.   In  carrying  out  its  responsibilities
hereunder,  the Investment Adviser may employ,  retain or otherwise avail itself
of the  services of other  persons or  entities  including  without  limitation,
affiliates of the Investment  Adviser,  on such terms as the Investment  Adviser
shall  determine to be  necessary,  desirable or  appropriate.  However,  if the
Investment

                                        4

<PAGE>

Adviser  chooses to retain or avail itself of the services of another  person or
entity to manage assets of the Fund,  such other person or entity must be (i) an
affiliate of the Investment Adviser,  (ii) retained at the Investment  Adviser's
own cost and expense,  and (iii) retained subject to the requirements of Section
15  of  the  Investment  Company  Act.  Retention  of  one  or  more  affiliated
subadvisers,  or the  employment  or retention  of other  persons or entities to
perform services,  shall in no way reduce the responsibilities or obligations of
the Investment  Adviser under this Agreement and the Investment Adviser shall be
responsible for all acts and omissions of such affiliated sub-advisers, or other
persons or  entities,  in  connection  with the  performance  of the  Investment
Adviser's duties hereunder.

                                   ARTICLE II

                       Allocation of Charges and Expenses

      (a) The Investment Adviser.  The Investment Adviser assumes and shall pay,
or cause its affiliate to pay, for maintaining the staff and personnel necessary
to perform its obligations under this Agreement,  and shall, at its own expense,
provide  the  office  space,  facilities  and  necessary  personnel  which it is
obligated to provide under Article I hereof.  The Investment  Adviser shall pay,
or cause its affiliate to pay,  compensation  of all Officers of the Corporation
and  all  Directors  of  the  Corporation  who  are  affiliated  persons  of the
Investment  Adviser or any  sub-adviser,  or of an affiliate  of the  Investment
Adviser or any sub-adviser.

      (b) The Corporation.  The Corporation assumes and shall pay or cause to be
paid all other expenses of the Corporation and the Fund (except for the expenses
paid by certain insurance  companies (the "Participating  Insurance  Companies")
including, without limitation:  taxes, expenses for legal and auditing services,
costs of printing proxies, shareholder reports, copies of the

                                        5

<PAGE>

Registration Statement, charges of the custodian, any sub-custodian and transfer
agent,  expenses of portfolio  transactions,  expenses of  redemption of shares,
Securities and Exchange  Commission  fees,  expenses of  registering  the shares
under Federal, state and foreign laws, fees and actual out-of-pocket expenses of
Directors  who are not  affiliated  persons  of the  Investment  Adviser  or any
sub-adviser,  or of an affiliate of the Investment  Adviser or any  sub-adviser,
accounting and pricing costs  (including the daily  calculation of the net asset
value), insurance, interest, brokerage costs, litigation and other extraordinary
or  non-recurring   expenses,   and  other  expenses  properly  payable  by  the
Corporation  or the  Fund.  It is also  understood  that the  Corporation  shall
reimburse the Investment  Adviser or an affiliate of the Investment  Adviser for
its costs in providing accounting services to the Corporation and the Fund. Each
Participating  Insurance  Company  will pay certain of the  expenses of the Fund
incurred in  connection  with the  continuous  offering of shares of  beneficial
interest of the Fund.

                                   ARTICLE III

                     Compensation of the Investment Adviser

      Management and  Investment  Advisory Fee. For the services  rendered,  the
facilities  furnished and expenses assumed by the Investment  Adviser,  the Fund
shall pay to the  Investment  Adviser  at the end of each  calendar  month a fee
based upon the average  daily value of the net assets of the Fund, as determined
and computed in accordance  with the  description  of the  determination  of net
asset value contained in the Registration Statement, at the annual rate of 0.65%
of the average  daily net assets of the Fund,  commencing  on the day  following
effectiveness  hereof.  If this Agreement  becomes  effective  subsequent to the
first  day of a month  or  shall  terminate  before  the  last  day of a  month,
compensation  for that part of the month this  Agreement  is in effect  shall be
prorated in a

                                        6

<PAGE>

manner consistent with the calculation of the fee as set forth above. Payment of
the Investment  Adviser's  compensation for the preceding month shall be made as
promptly as possible after  completion of the computations  contemplated  above.
During any period when the  determination of net asset value is suspended by the
Directors,  the net asset value of a share as of the last  business day prior to
such  suspension  shall for this  purpose be deemed to be the net asset value at
the close of each succeeding business day until it is again determined.

                                   ARTICLE IV

                Limitation of Liability of the Investment Adviser

      The  Investment  Adviser  shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any  investment  or for any act or
omission in the management of the Corporation  and the Fund,  except for willful
misfeasance,  bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder. As used
in this Article IV, the term  "Investment  Adviser" shall include any affiliates
of the Investment  Adviser  performing  services for the Corporation or the Fund
contemplated  hereby and  partners,  directors,  officers  and  employees of the
Investment Adviser and such affiliates.

                                    ARTICLE V

                      Activities of the Investment Adviser

      The services of the Investment Adviser to the Corporation and the Fund are
not to be deemed to be exclusive,  and the Investment Adviser and each affiliate
is free to render services to others. It is understood that Directors, officers,
employees and  shareholders  of the  Corporation  and the Fund are or may become
interested in the Investment Adviser and its affiliates, as directors, officers,
employees,  partners and  shareholders  or  otherwise,  and that the  Investment
Adviser and directors,

                                        7

<PAGE>

officers, employees, partners and shareholders of the Investment Adviser and its
affiliates are or may become similarly interested in the Corporation or the Fund
as shareholders or otherwise.

                                   ARTICLE VI

              Investment Adviser Statements Pursuant to IMRO Rules

      Any  complaints  concerning  the  Investment  Adviser should be in writing
addressed to the attention of the Managing  Director of the Investment  Adviser.
The  Corporation  has the right to obtain from the Investment  Adviser a copy of
the IMRO complaints  procedure and to approach IMRO and the Investment Ombudsman
directly.

      The Investment Adviser may make recommendations, subject to the investment
restrictions referred to in Article I herein,  regarding Investments Not Readily
Realisable (as that term is used in the IMRO Rules) or  investments  denominated
in a currency other than British pound sterling.  There can be no certainty that
market makers will be prepared to deal in unlisted or thinly  traded  securities
and an  accurate  valuation  may be hard to  obtain.  The  value of  investments
recommended  by  the  Investment   Adviser  may  be  subject  to  exchange  rate
fluctuations which may have favorable or unfavorable effects on investments.

      The Investment Adviser may make recommendations, subject to the investment
restrictions  referred  to in Article I herein,  regarding  options,  futures or
contracts for  differences.  Markets can be highly volatile and such investments
carry a high degree of risk of loss  exceeding the original  investment  and any
margin on deposit.

                                   ARTICLE VII

                   Duration and Termination of this Agreement

      This Agreement shall become  effective as of the date first above written,
and shall remain in force for two years  thereafter and thereafter,  but only so
long as such continuance is specifically

                                        8

<PAGE>

approved at least annually by (i) the Directors, or by the vote of a majority of
the  outstanding  voting  securities  of the Fund,  and (ii) a majority of those
Directors  who are not parties to this  Agreement or  interested  persons of any
such party cast in person at a meeting  called for the purpose of voting on such
approval.

      This  Agreement may be terminated at any time,  without the payment of any
penalty, by the Directors or by the vote of a majority of the outstanding voting
securities of the Fund,  or by the  Investment  Adviser,  on sixty days' written
notice to the other party. This Agreement shall  automatically  terminate in the
event of its assignment.

                                  ARTICLE VIII

                          Amendments of this Agreement

      This  Agreement  may be amended by the parties  only if such  amendment is
specifically  approved  by (i) the  vote of a  majority  of  outstanding  voting
securities  of the Fund,  and (ii) a  majority  of those  Directors  who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.

                                   ARTICLE IX

                          Definitions of Certain Terms

      The  terms  "vote  of  majority  of the  outstanding  voting  securities,"
"assignment,"  "affiliated  person" and  "interested  person," when used in this
Agreement,  shall  have the  respective  meanings  specified  in the  Investment
Company Act and the Rules and Regulations thereunder,  subject, however, to such
exemptions as may be granted by the  Securities  and Exchange  Commission  under
said Act.

                                        9

<PAGE>

                                    ARTICLE X

                                  Governing Law

      This Agreement  shall be construed in accordance with laws of the State of
New York and the  applicable  provisions of the  Investment  Company Act. To the
extent  that  the  applicable  laws  of the  State  of New  York,  or any of the
provisions  herein,  conflict with the  applicable  provisions of the Investment
Company Act, the latter shall control.

                                   ARTICLE XI

                      Limitation of Obligations of the Fund

      The  obligations  of the Fund  shall be limited to the assets of the Fund,
shall be separate from the  obligations of any other series of the  Corporation,
and the Fund shall not be liable for the  obligations of any other series of the
Corporation.

                                       10

<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have executed and delivered this
Agreement as of the date first above written.  This Agreement may be executed by
the parties  hereto on any number of  counterparts,  all of which together shall
constitute one and the same instrument.

                               MERCURY ASSET MANAGEMENT V.I.
                               FUNDS, INC. on behalf of its series,
                               MERCURY V.I. U.S. LARGE CAP FUND

                               By: /s/ Donald C. Burke
                                   ------------------------------
                                     Name: Donald C. Burke
                                     Title: Treasurer

                               MERCURY ASSET MANAGEMENT
                               INTERNATIONAL LTD.

                               By: /s/ Peter Gibbs        /s/  David M.F. Scott
                                   --------------------------------------------
                                     Name: Peter Gibbs    David M.F. Scott
                                     Title: Chairman      Director

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}]]