ULTRALIFE CORPORATION (NASDAQ:ULBI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into Material Definitive Agreement

On May 31, 2017, Ultralife Corporation entered into a Credit and
Security Agreement (the Credit Agreement) and related security
agreements with KeyBank National Association (KeyBank or the
Bank) to establish a $30 million senior secured, cash flow-based,
revolving credit facility that includes a $1.5 million letter of
credit subfacility (the Credit Facility). The Credit Agreement
provides that the Credit Facility may be increased with the Banks
concurrence to $50 million prior to the last six months of the
term and is scheduled to expire on May 30, 2020. The Credit
Facility replaces the Companys asset-based revolving credit
facility with PNC Bank National Association which expired in
accordance with its terms on May 24, 2017 (the Prior Credit
Agreement).

The Credit Facility provides the Company with an aggregate of up
to $30 million of loan and letter of credit availability
determined based on a borrowing base formula equal to the sum of
85% of eligible accounts receivable plus the lesser of (a) up to
50% of the cost or market value (whichever is lower) of eligible
inventory and (b) $12.75 million, reduced by the amount, if any,
of reserves required by the Bank.

The Company may use advances under the Credit Facility for
general working capital purposes, to reimburse drawings under
letters of credit and to fund capital expenditures and
acquisitions, all subject to the terms of the Credit Agreement.
The Company had no amounts drawn under the Prior Credit Agreement
at the time of its expiration and has not borrowed under the
Credit Facility.

Interest will accrue on outstanding indebtedness under the Credit
Agreement at the Overnight LIBOR Rate plus the applicable margin,
or at the Base Rate plus the applicable margin, as selected by
the Company. During the period beginning May 31, 2017 and ending
April 1, 2018, the applicable margin for Overnight LIBOR Loans is
185 basis points, the applicable margin for Base Rate Loans is
negative 50 basis points and applicable margin for the Unused Fee
is 20 basis points. Beginning April 2, 2018 and thereafter, the
applicable margins will be determined based on the chart below.

The Company must pay a fee on its unused availability equal to
the applicable margin for the Unused Fee and customary letter of
credit fees.

In addition to the customary affirmative and negative covenants,
the Company must maintain a fixed charge coverage ratio of 1.15
to 1.0, tested each fiscal quarter for the trailing four fiscal
quarters, and a minimum tangible net worth of $40 million, tested
as of the end of each calendar year. The Credit Facility is
secured by substantially all the assets of the Company.

Any outstanding advances must be repaid upon expiration of the
term of the Credit Facility. Payments must be made during the
term to the extent outstanding advances exceed the maximum amount
then permitted to be drawn as advances under the Credit Facility
and from the proceeds of certain transactions. Upon the
occurrence of an event of default, the outstanding obligations
may be accelerated and the Bank will have other customary
remedies.

The foregoing description of the Credit Agreement does not
purport to be complete, and is qualified in its entirety by
reference to the full text of the Credit Agreement, a copy of
which is filed as Exhibit10.1 hereto and is incorporated herein
by reference.

The Credit Agreement has been filed to provide investors and
security holders with information regarding its terms,
provisions, conditions, and covenants and is not intended to
provide any other factual information respecting the Company or
its subsidiaries. In particular the Credit Agreement contains
representations and warranties made to and solely for the benefit
of the parties thereto, allocating among themselves various risks
of the transaction. The assertions embodied in those
representations and warranties may be qualified or modified by
information in disclosure schedules that the parties have
exchanged in connection with executing the Credit Agreement.
Moreover, information concerning the subject matter of the
representations and warranties may change after the date of this
document, which subsequent information may or may not be fully
reflected in the Companys public disclosures. Accordingly,
investors and security holders should not rely on the
representations and warranties in these documents as
characterizations of the actual state of any fact or facts.

Item8.01 Other Events

A copy of the Companys May 31, 2017 press release announcing the
execution of the Credit Agreement is furnished herewith as
Exhibit99.1 and is incorporated herein by reference.

The information in this Form 8-K under the caption Item 8.01,
including the Release attached as Exhibit 99.1, shall not be
deemed filed for purposes of Section18 of the Securities Exchange
Act of 1934 (the Exchange Act) or otherwise subject to
liabilities under that Section and shall not be deemed to be
incorporated by reference into any filing of the Company under
the Securities Act of 1933 (the Securities Act) or the Exchange
Act, unless the Company specifically incorporates it by reference
in a document filed under the Securities Act or the Exchange Act.

Item 9.01Financial Statementsand
Exhibits

(d) Exhibits

About ULTRALIFE CORPORATION (NASDAQ:ULBI)

Ultralife Corporation offers products and services ranging from power solutions to communications, and electronics systems. The Company designs and manufactures power and communications systems, including rechargeable and non-rechargeable batteries, charging systems, communications and electronics systems. It operates through two segments: Battery & Energy Products and Communications Systems. The Battery & Energy Products segment includes lithium 9-volt, cylindrical and various other non-rechargeable batteries, in addition to rechargeable batteries, uninterruptable power supplies, charging systems and accessories, such as cables. The Communications Systems segment includes radio frequency (RF) amplifiers, power supplies, amplified speakers, equipment mounts, case equipment, man-portable systems, communication systems for fixed or vehicle applications, and communications and electronics systems design. Its brands are Ultralife Batteries, Lithium Power, McDowell Research, AMTI and ABLE.