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").
1
(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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇, who shall share in the fee to be paid by the Company to ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
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,
2
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.
3
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]
4
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: ____________
5
EXHIBIT A
Section 501(a) of the Securities Act of 1933, as amended:
"As used in Regulation D (17 CFR ▇▇.▇▇. 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
6
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.
7