Exhibit 10.1

 
AMENDMENT No. 3 TO AT MARKET ISSUANCE SALES AGREEMENT
 
THIS AMENDMENT No. 3 TO AT MARKET ISSUANCE SALES AGREEMENT (the “Amendment”) is
entered into effective as of the 22nd day of January, 2011 (the “Amendment
Effective Date”), by and between Valence Technology, Inc., a Delaware
corporation (the “Company”), and Wm Smith & Co., a Colorado corporation (“Wm
Smith”).  Capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the At Market Sales Issuance Agreement dated
February 22, 2008 by and between the Company and Wm Smith, as amended by
Amendment No. 1 effective July 2, 2009 and Amendment No. 2 effective December
30, 2010 (as amended, the “Sales Agreement”).
 
RECITALS:
 
WHEREAS, the Company’s registration statement on Form S-3 (File No. 333-148632)
will no longer be used following January 22, 2011, the third anniversary of the
initial effective date of such registration statement;
 
WHEREAS, the Company has filed (and the Commission has declared effective) a new
registration statement on Form S-3 (File No. 333-171663) (the “New Registration
Statement”), which will serve as the means by which the Shares that remain
available to be sold under the Sales Agreement are registered with the
Commission;
 
WHEREAS, the Company and Wm Smith desire to amend the Sales Agreement to, among
other things, clarify that references therein to the “Registration Statement”
shall be deemed to include the New Registration Statement; and
 
WHEREAS, pursuant to Section 16 thereof, the Sales Agreement may be amended
pursuant to a written instrument executed by the Company and Wm Smith.
 
AGREEMENT:
 
NOW, THEREFORE, the parties hereby agree as follows:
 
(a)   References to Registration Statement in the Sales Agreement.  The Sales
Agreement is hereby amended such that any reference therein to “Registration
Statement” in the context of Shares that remain available to be sold as of the
Amendment Effective Date shall mean the New Registration Statement and the
reference to Form S-3 (File No. 333-148632) in Section 1 of the Sales Agreement
is hereby amended to refer to Form S-3 (File No. 333-171663) in the context of
Shares that remain available to be sold as of the Amendment Effective Date.
 
(b)   Prospectus Supplement.  The Company agrees to file a prospectus supplement
to the base prospectus included as part of the New Registration Statement
relating to the Shares that remain available to be sold as of the Amendment
Effective Date (the “New Prospectus Supplement”).  The Company will furnish to
Wm Smith, for use by Wm Smith, copies of such New Prospectus Supplement.  The
Sales Agreement is hereby amended such that any reference therein to “Prospectus
Supplement” in the context of Shares that remain available to be sold as of the
Amendment Effective Date shall mean the New Prospectus Supplement.
 
 
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(c)   Deliveries of the Company.  No later than five business days following
execution of this Amendment, the Company shall cause Company Counsel to furnish
to Wm Smith a legal opinion in form and substance satisfactory to Wm Smith.
 
(d)   No Other Amendments.  Except as set forth in this Amendment, all the terms
and provisions of the Sales Agreement shall continue in full force and effect.
 
(e)   Governing Law.  This Amendment shall be governed by and construed under
the laws of the State of New York, without giving effect to conflicts of laws
principles.
 
(f)   Counterparts.  This Amendment may be executed in two counterparts
(including, without limitation, facsimile counterparts), each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.

 
[Signature pages follow]
 
 
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IN WITNESS WHEREOF, the respective parties have executed this Amendment No. 3 to
At Market Issuance Sales Agreement effective as of the date first set forth
above.
 

    VALENCE TECHNOLOGY, INC.
 
By:   /s/ Ross A. Goolsby________________
               Ross A. Goolsby
               Chief Financial Officer

 
WM SMITH & CO.
 
By:   /s/ William S. Smith________________
               William S. Smith
                President