AMENDMENTS
To the Joint Venture Agreement dated October 10, 1998
between Ultralife Batteries, Inc. and PGT Energy Corporation
THESE AMENDMENTS of the Preamble, Sub-section 4.2, Section 7, Section 9
(including 9.1, 9.2 and 9.3), Section 11, and Sub-section 12.6 of the Joint
Venture Agreement dated October 10, 1998 regarding the establishment of a joint
venture company in Taiwan, ROC to be named Ultralife Taiwan, Inc., which shall
manufacture, distribute, sell and conduct Research and Development (R&D) of
lithium-ion solid polymer rechargeable batteries is made jointly by Ultralife
Batteries, Inc. (UBI) and PGT Energy Corporation (PGT) as UBI and PGT mutually
agree and consent to the Amendments below to the Joint Venture Agreement dated
October 10, 1998.
It is further agreed by UBI and PGT that the following Amendments shall
supersede, replace, add to, and prevail over the Preamble, Sub-section 4.2,
Section 7, Section 9, Section 11, and Sub-section 12.6 of the Joint Venture
Agreement dated October 10, 1998 between UBI and PGT and that these Amendments
shall be attached to and incorporated into and become a part of the Joint
Venture Agreement dated October 10, 1998 between UBI and PGT.
UBI and PGT may be collectively referred to in these Amendments as "the Parties"
where appropriate.
WHEREAS, UBI and PGT hereby agree to amend and revise the Preamble of the Joint
Venture Agreement so that it shall read as follows:
This Agreement is entered into on the 10th day of October, 1998 by and between:
Ultralife Batteries, Inc., a corporation incorporated under the laws of the
State of Delaware, United States of America, having its principal office of
business at 0000 Xxxxx 00 X., Xxxxxx, Xxx Xxxx 00000 (hereinafter referred to as
"UBI"); and
PGT Energy Corporation, currently a preparatory office for a corporation to be
incorporated under the laws of the Republic of China (hereinafter referred to as
"ROC") with its principal office of business located at 7F-1, Xx. 00, Xxx-Xxx
Xxxx, Xxxxxxx, Xxxxxx, Xxxxxxxx of China (hereinafter referred to as "PGT"),
together with a group of investors (as shown in Appendix I hereto). Xx. X.X. Xxx
is the Chairman to be of the PGT; after PGT is legally incorporated, all rights
and obligations provided in this Agreement shall be immediately assigned to and
assumed by PGT; except for the obligations as provided in Sections 9.1 and 11
below.
The Parties shall undertake to cause UTI to invest US$ 8.75 million to UBI for
0.7 million UBI's unregistered shares at a price of US$ 12.5 per share. UBI
shall warrant to permit UTI to acquire additional shares for a maximum of 0.7
million shares at the base price of US$ 25 per share within four years
commencing from the execution date of this Agreement. UBI shall remit US$ 8.75
million to UTI for the share subscription of UTI. The US$ 10 million, the
remaining portion of the
-1-
capital contribution by UBI, shall be in the form of UBI's current polymer
rechargeable battery technology, patent, manufacturing know-how, reasonable
technical assistance, marketing assistance, and reasonable personnel training
including dispatching UBI's technicians to UTI. Furthermore, the capital
contribution by parties shall be guided by the Parties in accordance with Equity
Structure annexed hereto and marked "Appendix II."
The technology granted by UBI to UTI shall be UBI's current technology for the
purpose of this Agreement. Any technology directly related to the lithium-ion
solid polymer rechargeable batteries and developed by UTI shall belong to UTI,
however, UBI shall have free access to and be entitled to use such technology.
Any technology subsequently developed by UBI shall be made available to UTI in a
manner to be defined in the Technology Transfer Agreement defined in Paragraph
4.2.
WHEREAS, UBI and PGT hereby further agree to amend and revise Sub-section 4.2 of
the Joint Venture Agreement so that it shall read as follows:
4.2 Technology Transfer Agreement to be executed by Parties
Within sixty (60) days after the execution of this Agreement, PGT shall enter
into a Technology Transfer Agreement (hereinafter referred to as "Technology
Transfer Agreement") with UBI otherwise either Party shall be entitled to
terminate this Joint Venture Agreement. The Technology Transfer Agreement shall
specify the technology granted by UBI to UTI as its capital contribution in UTI,
the disclosure of the technology granted to UTI by UBI including, but not
limited to, the lithium-ion polymer rechargeable battery technology, patent,
technical information, data, and know-how currently in possession by UBI, and
the cooperation between the Parties for technical assistance, problem solving,
and personnel training. UTI will pay to UBI a bonus in the amount of US$2.5
Million in installment payments in the amount to be decided by the board of
directors of UTI after UTI becomes profitable and before any dividends are paid
out. The force and effect of the above Technology Transfer Agreement shall be
canceled by either party if UTI cannot be incorporated.
WHEREAS, UBI and PGT hereby further agree to amend and revise Section 7 of the
Joint Venture Agreement so that it shall read as follows:
7. Confidentiality
UBI and PGT hereby expressly agree to be bound that except to the extent
legitimately required for the business operation of UTI, they shall not disclose
or deliver to any third party and confidential document and technical
information of UTI and UBI, provided that this paragraph shall not be applicable
in the case of the following:
1) Information which is, at the time of disclosure, already known to
the party receiving the same without obligation to keep it
confidential;
2) Information which is publicly known; and
3) Disclosure as required by law.
-2-
WHEREAS, UBI and PGT hereby further agree to amend and revise Section 9
(including 9.1, 9.2 and 9.3) of the Joint Venture Agreement so that these
Sections shall read as follows:
9.1 UTI may need to borrow loans from financial institutions in the event
additional capitalization is required. The parties acknowledge that UBI
may be requested to provide guarantees or collateral for such loans.
During the first two (2) years of UTI's incorporation, PGT shall
indemnify, and hold harmless, UBI against any such guarantees or
collateral liability for the life of the loans incurred up to and
including US $10,000,000. After two (2) years of incorporation, any
liability shall be shared between UBI and PGT. In the event PGT is no
longer in existence, or is unable to satisfy its indemnification
responsibility hereunder, then the individual investors, collectively
referred to as PGT and as set forth in Appendix I, shall be jointly and
severally liable to indemnify UBI against such guarantee or collateral
liability.
9.2 If UTI increases its paid-in capital, UBI and PGT shall act jointly either
to subscribe for new shares or to waive the subscription right, and in the
latter case,UTI shall find a proper third party agreeable to UBI and PGT,
to subscribe for such new shares.
9.3 Taxes related to this Agreement which occur in Taiwan shall be the
responsibility of UTI.
WHEREAS, UBI and PGT hereby further agree to amend and revise Section 11 of the
Joint Venture Agreement so that it shall read as follows:
PGT and the individual investors collectively referred to as PGT shall not,
directly or indirectly, invest in, operate, license, participate in or otherwise
support a company or any other business entity which engages in any business
that competes against any business engaged in by UTI and UBI during the term of
this Agreement and for ten (10) years after the termination thereof.
WHEREAS, UBI and PGT hereby further agree to amend and revise Sub-section 12.6
of the Joint Venture Agreement so that it shall read as follows:
12.6 a) Either party, UBI or PGT, shall be entitled to terminate this
Agreement by giving proper written notice to the other party BEFORE the
occurrence of either of the following:
1. UTI orders production equipment of a value greater than US
$50,000; or
2. The passage of one (1) year's time from the date of the
incorporation of UTI.
b) It is the parties' intention that neither party may exercise its right
if either (1) or (2) above has occurred.
c) In the event UBI or PGT terminates this Agreement:
1. The 700,000 UBI shares owned by UTI shall be returned to UBI without
any consideration and free of charge, regardless of their then
present value; and
2. The technology transferred to UTI shall be returned to UBI, and UTI
shall cease from using such technology; and
3. All UTI shares owned by UBI shall be transferred to PGT without any
consideration and free of charge, regardless of their then present
value.
-3-
d) In the event PGT terminates this Agreement, then in addition to the
provisions contained in 12.6 (c) 1, 2 and 3 above, PGT shall pay US
$1.0 million to UBI.
NOW THEREFORE, the Parties hereto, having carefully reviewed and agreed to the
above Amendments, have each caused their duly authorized representatives to
execute these Amendments in duplicate counterparts as of the respective dates
indicated below. The effective date of these Amendments shall be that date on
which the signatures of both UBI's and PGT's duly authorized representatives
appear below.
BY: /s/ Xxxxx Xxxxx BY: /s/ X.X. Xxx
--------------- ------------
Xxxxx Xxxxx X.X. Xxx
FOR : Ultralife Batteries, Inc. FOR: PGT Energy Corporation
DATE: 12/4/98 DATE: 12/4/98
------- -------
