ULTRALIFE BATTERIES INC
TERM PROMISSORY NOTE
<DOCUMENT>
<TYPE>EX-10.34
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>TERM PROMISSORY NOTE
<TEXT>


                                                                   Exhibit 10.34

                              TERM PROMISSORY NOTE

                                                           Boston, Massachusetts

$3,000,000                                                         June 15, 2000

      FOR VALUE RECEIVED, ULTRALIFE BATTERIES, INC., a Delaware corporation (the
"Debtor"), hereby unconditionally promises to pay the order of CONGRESS
FINANCIAL CORPORATION (NEW ENGLAND), a Massachusetts corporation (the "Payee"),
at the offices of Payee at One Post Office Square, Suite 3600, Boston,
Massachusetts 02109, or at such other place as the Payee or any holder hereof
may from time to time designate, the principal sum of THREE MILLION DOLLARS
($3,000,000) in lawful money of the United States of America and in immediately
available funds, in sixty (60) consecutive monthly installments (or earlier as
hereinafter provided) on the first day of each month commencing August 1, 2000
of which the first fifty-nine (59) installments shall each be in the amount of
FIFTY THOUSAND DOLLARS ($50,000.00), and the last installment shall be in the
amount of the entire unpaid balance of this Note.

      Debtor hereby further promises to pay interest to the order of Payee on
the unpaid principal balance hereof at the Interest Rate. Such interest shall be
paid in like money at said office or place from the date hereof, commencing July
1, 2000 and on the first day of each month thereafter until the indebtedness
evidenced by this Note is paid in full. Interest payable upon and after an Event
of Default or termination or non-renewal of the Loan Agreement shall be payable
upon demand.

For purposes hereof,

      (a) the term "Interest Rate" shall mean, as to Prime Rate Loans, a rate of
three quarters of one (.75%) percent per annum in excess of the Prime Rate, and
as to the Eurodollar Rate Loans, a rate of two and three quarters (2.75%)
percent per annum in excess of the Adjusted Eurodollar Rate; provided, that, at
Payee's option, the Interest Rate shall mean a rate of three and three quarters
(3.75%) percent per annum in excess of the Prime Rate as to Prime Rate Loans and
a rate of five and three quarters (5.75%) percent per annum in excess of the
Adjusted Eurodollar Rate as to Eurodollar Rate Loans upon and after an Event of
Default or termination or non-renewal of the Loan Agreement and the Interest
Rate shall be subject to further adjustment as provided in Section 3.1(e) of the
Loan Agreement.

      (b) the term "Prime Rate" shall mean the rate from time to time publicly
announced by First Union National Bank, or its successors, as its prime rate,
whether or not such announced rate is the best rate available at such bank.

      (c) the term "Event of Default" shall mean an Event of Default as such
term is defined in the Loan Agreement, and

      (d) the term "Loan Agreement" shall mean the Loan and Security Agreement,
dated of even date herewith, between Debtor and Payee, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.


<PAGE>

      Unless otherwise defined herein, all capitalized terms used herein shall
have the meaning assigned thereto in the Loan Agreement.

      The Interest Rate applicable to Prime Rate Loans payable hereunder shall
increase or decrease by an amount equal to each increase or decrease,
respectively, in the Prime Rate, effective on the first day of the month after
any change in the Prime Rate is announced. The increase or decrease shall be
based on the Prime Rate in effect on the last day of the month in which any such
change occurs. Interest shall be calculated on the basis of a three hundred
sixty (360) day year and actual days elapsed. In no event shall the interest
charged hereunder exceed the maximum permitted under the laws of the
Commonwealth of Massachusetts or other applicable law.

      This Note is issued pursuant to the terms and provisions of the Loan
Agreement to evidence the Term Loan by Payee to Debtor. This Note is secured by
the Collateral described in the Loan Agreement and all notes, guarantees,
security agreements and other agreements, documents and instrument now or at any
time hereafter executed and/or delivered by Debtor or any other party in
connection therewith (all of the foregoing, together with the Loan Agreement, as
the same now exist or may hereafter be amended, modified, supplemented, renewed,
extended, restated or replaced, being collectively referred to herein as the
"Financing Agreements"), and is entitled to all of the benefits and rights
thereof and of the other Financing Agreements. At the time any payment is due
hereunder, at its option, Payee may charge the amount thereof to any account of
Debtor maintained by Payee.

      If any payment of principal or interest is not made when due hereunder, or
if any other Event of Default shall occur for any reason, or if the Loan
Agreement shall be terminated or not renewed for any reason whatsoever, then and
in any such event, in addition to all rights and remedies of Payee under the
Financing Agreements, applicable law or otherwise, all such rights and remedies
being cumulative, not exclusive and enforceable alternatively, successively and
concurrently, Payee may, at its option, declare any or all of Debtor's
obligations, liabilities and indebtedness owing to Payee under the Loan
Agreement and the other Financing Agreements (the "Obligations"), including,
without limitation, all amounts owing under this Note, to be due and payable,
whereupon the then unpaid balance hereof, together with all interest accrued
thereon, shall forthwith become due and payable, together with interest accruing
thereafter at the then applicable Interest Rate stated above until the
indebtedness evidenced by this Note is paid in full, plus the costs and expenses
of collection hereof, including, but not limited to, attorneys' fees and legal
expenses.

      Debtor (i) waives diligence, demand, presentment, protest and notice of
any kind, (ii) agrees that it will not be necessary for Payee to first institute
suit in order to enforce payment of this Note and (iii) consents to any one or
more extensions or postponements of time of payment, release, surrender or
substitution of collateral security, or forbearance or other indulgence, without
notice or consent. The pleading of any statute of limitations as a defense to
any demand against Debtor is expressly hereby waived by Debtor. Upon any Event
of Default or termination or non-renewal of the Loan Agreement, Payee shall have
the right, but not the obligation to setoff against this Note all money owed by
Payee to Debtor.


<PAGE>

      Payee shall not be required to resort to any Collateral for payment, but
may proceed against Debtor and any guarantors or endorsers hereof in such order
and manner as Payee may choose. None of the rights of Payee shall be waived or
diminished by any failure or delay in the exercise thereof.

      The validity, interpretation and enforcement of this Note and the other
Financing Agreements and any dispute arising in connection herewith or therewith
shall be governed by the internal laws of the Commonwealth of Massachusetts
(without giving effect to principles of conflicts of law).

      Debtor irrevocably consents and submits to the non-exclusive jurisdiction
of the Superior Court of Suffolk County of the Commonwealth of Massachusetts and
the United States District Court for the District of Massachusetts and waives
any objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Note or any of the other Financing
Agreements or in any way connection with or related or incidental to the
dealings of Debtor and Payee in respect of this Note or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agrees that any dispute arising out of the relationship
between Debtor and Payee or the conduct of such persons in connection with this
Note or otherwise shall be heard only in the courts described above (except that
Payee shall have the right to bring any action or proceeding against Debtor or
its property in the courts of any other jurisdiction which Payee deems necessary
or appropriate in order to realize on the Collateral or to otherwise enforce its
rights against Debtor or its property).

      Debtor hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by certified mail (return
receipt requested) directed to it and service so made shall be deemed to be
completed five (5) days after the same shall have been so deposited in the U.S.
mails, or, at Payee's option, by service upon Debtor in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, Debtor shall appear in answer to such process, failing which Debtor
shall be deemed in default and judgment may be entered by Payee against Debtor
for the amount of the claim and other relief requested.

      EACH DEBTOR WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS NOTE OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS BETWEEN DEBTOR AND PAYEE IN RESPECT OF
THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY.

      The execution and delivery of this Note has been authorized by the Board
of Directors and by any necessary vote or consent of the stockholders of Debtor.
Debtor hereby authorizes Payee to complete this Note in any particulars
according to the terms of the loan evidenced hereby.


<PAGE>

         This Note shall be binding upon the successors and assigns of Debtor
and inure to the benefit of Payee and its successors, endorsees and assigns.
Whenever used herein, the term "Debtor" shall be deemed to include its
successors and assigns and the term "Payee" shall be deemed to include its
successors, endorsees and assigns. If any term or provision of this Note shall
be held invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.

ATTEST:                                    ULTRALIFE BATTERIES, INC.

/s/ Peter F. Comerford                     By: /s/ Robert W. Fishback
----------------------                     --------------------------
Peter F. Comerford                         Robert W. Fishback
Secretary/Assistant Secretary              Title: Vice President - Finance & CFO
[Corporate Seal]

STATE OF          )
                  ) ss
COUNTY OF         )                                          June 15, 2000

      Then appeared before me the above-named Robert W. Fishback and stated that
he is the Vice President of Finance and CFO of Ultralife Batteries, Inc. and
stated that he is fully authorized to execute this Term Promissory Note for and
on behalf of the said corporation as his free act and deed and the free act and
deed of said corporation.

                                                /s/ Deborah K. Carpenter
                                                --------------------------------
                                                Notary Public
                                                My Commission Expires:
       Deborah K. Carpenter
Notary Public, State of New York
           No. 4966451
   Qualified in Monroe County
  My Commission Expires: May 7

</TEXT>
</DOCUMENT>
