ex10-1.htm


    EXHIBIT 10.1

     

     

    
      
AMENDMENT NO. 2

      TO

      LOAN
AND SECURITY AGREEMENT

      AND OTHER LOAN
DOCUMENTS

      


       

      This
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT AND OTHER
LOAN DOCUMENTS (this “Amendment”) is entered into as
of the 30th day
of March, 2010, by and among VALENCE TECHNOLOGY, INC., a
Delaware corporation, having an address at 12303 Technology Boulevard, Suite
950, Austin, Texas 78727 (“Borrower”), CARL E. BERG, an individual,
having an address at 10050 Bandley Drive, Cupertino, California 95014 (“Guarantor”)  and iSTAR TARA LLC, a Delaware
limited liability company and successor in interest to SFT I, INC., a Delaware
corporation, having an address at 1114 Avenue of the Americas,  New
York, New York 10036 (the “Lender”).

       

      RECITALS:

       

      A.           Borrower,
Lender and Guarantor have previously executed a Loan and Security Agreement
dated as of July 13, 2005 (as the same has been amended from time to time,
“Loan Agreement”) under
which Lender agreed to advance Twenty Million and No/100 Dollars
($20,000,000.00) (the “Loan”) for working capital and
other general corporate purposes.

       

      B.           Repayment
of the Loan was secured by that certain Unconditional Secured Guaranty dated as
of July 13, 2005, and executed and delivered by Guarantor to Lender (the “Guaranty”). Repayment of the
obligations evidenced by the Guaranty was collateralized pursuant to the certain
Security Agreement, Pledge and Assignment dated as of July 13, 2005, and
executed and delivered by Guarantor to Lender (the “Pledge
Agreement”).

       

      C.           The
Loan is scheduled to mature on July 13, 2010 and Borrower wishes such maturity
to be extended.

       

      D.           All
capitalized terms, unless defined herein, shall have the same meanings as are
set forth in the Loan Agreement.

       

      AGREEMENT:

       

      NOW,
THEREFORE, in consideration of their mutual agreements and covenants and other
valuable consideration, the parties agree as follows:

       

      1.           Section
1.1 of the Loan Agreement is amended by deleting the defined terms “Maturity
Date” and “Warrant” in their entirety, and substituting the following defined
terms in their place and stead:

       

      “Maturity Date” means February
13, 2011, or such earlier date that the Loan is prepaid in full or
accelerated.

       

      “Warrant” means, collectively,
(i) that certain Warrant to Purchase Common Stock dated as of July 13, 2005 and
issued by Borrower to Lender with respect to 600,000 shares of Common Stock in
Borrower, and (ii) that certain Warrant to Purchase Common Stock dated as of
March 30, 2010, and issued by Borrower to Lender with respect to 115,000 shares
of Common Stock in Borrower (the “2010 Warrants”).

       

      
        
           


        

        
          1

          
            

          

        

        
           


        

      

      2.           Section
2.3 of the Loan Agreement is hereby deleted in its entirety, and the following
is substituted in its place and stead:

       

      Payments.

       

      Commencing
with the Payment Date occurring on August 10, 2005, Borrower shall pay to Lender
interest on the outstanding principal amount of the Loan accrued from and
including the Closing or immediately preceding Payment Date, as the case may be,
to, but not including, the Payment Date on which such interest payment is to be
made.  Further, commencing on the Payment Date in July 2010 and on
each Payment Date through and including the Payment Date in January 2011,
Borrower shall make a principal payment equal to $1,000,000.  A
balloon payment sufficient to pay all Obligations in full shall be payable on
the Maturity Date.

       

      3.           Section
2.4(B) of the Loan Agreement is hereby deleted in its entirety, and the
following is substituted in its place and stead:

       

      (B)           Maturity.  The outstanding
principal balance of the Loan, all accrued and unpaid interest thereon and all
other sums owing to Lender pursuant to the Loan Documents shall be due and
payable on the Maturity Date.

       

      4.           Schedule 11.5 of the
Loan Agreement is hereby deleted in its entirety and Schedule 11.5
attached hereto is substituted in its place and stead.

       

      5.           With
a view to making available to the Lender the benefits of Rule 144(b)(1)(i)
promulgated under the Securities Act of 1933, as amended (the “1933 Act”), or any other
similar rule or regulation of the Securities and Exchange Commission (“SEC”) that may at any time
permit the Lender to sell the shares of Common Stock of the Borrower issuable
upon exercise of the 2010 Warrants (the “Warrant Shares”) to the public
without registration no later than six months after the date hereof (Rule 144,
together with any similar rule or regulation, “Rule 144”), the Borrower
agrees to:

       

      (a)           so
long as the Lender owns 2010 Warrants or Warrant Shares remain subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 Act, as amended (the “1934
Act”);

       

      (b)           so
long as the Warrant Shares have been held by the Lender for less than one year
for purposes of Rule 144(d), (x) file with the SEC all reports required of the
Borrower under Section 13 or 15(d) of the 1934 Act and (y) submit electronically
and post on its corporate website every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T; and

       

      (c)           so
long as the Lender owns 2010 Warrants or Warrant Shares, furnish to the Lender,
promptly upon request, (i) a written statement by the Borrower certifying that
the Borrower has complied with the requirements of clauses (a) and (b) of this
Section and (ii) such other information as may be reasonably requested to permit
the Lender to sell the Warrant Shares pursuant to Rule 144 without
registration.

       

      
        
           


        

        
          2

          
            

          

        

        
           


        

      

      6.           The
Pledge Agreement is hereby amended by adding the following sentence to the end
of Section 8(e) thereof:

       

      Notwithstanding
anything to the contrary which may be contained herein, no Pledged Stock
previously or hereafter delivered to Lender shall be released to the Grantor
until the Obligations have been paid in full.

       

      7.           This
Amendment may be executed in any number of counter­parts, each of which
shall constitute an original, but all of which, taken together, shall constitute
one and the same Amendment.

       

      8.           Except
as otherwise set forth herein to the contrary, the Loan Documents remain
unmodified and continue in full force and effect.  Borrower and
Guarantor each hereby reaffirms, confirms and ratifies each and every covenant,
condition, obligation and provi­sion set forth in the Loan Agreement, the
Note, the Guaranty, the Pledge Agreement, the Financing Statements and the other
Loan Documents applicable to each such party, each as modified hereby, and such
obligations continue in full force and effect.  Other than as
expressly set forth herein, by entering into this Amendment, Lender does not
waive any condition or obligation in the Loan Documents.

       

      IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date written
above.

       

      BORROWER:

       

      VALENCE
TECHNOLOGY, INC.,

      a
Delaware corporation

       

      


       

      By:      
/s/ Robert L.
Kanode

      Name:  Robert
L. Kanode

      Title:   
President and Chief Executive Officer

       

      
        
           


        

        
          3

          
            

          

        

        
           


        

      

      GUARANTOR:

      


       

      /s/ Carl E.
Berg

      CARL E. BERG,
individually

       

       

      LENDER:

       

      iSTAR TARA LLC, a Delaware
limited liability company

      and
successor in interest to SFT I,
INC.,

      a
Delaware corporation

       

      


       

      By:      
/s/ Samantha Garbus

      Name: 
Samantha Garbus

      Title:   
Senior Vice President

       

      
        
           


        

        
          4

          
            

          

        

        
           


        

      

      Schedule
11.5

       

      Addresses
for Notice

      If to
Borrower:

      Valence
Technology, Inc.

      12303
Technology Boulevard, Suite 905

      Austin,
Texas  78727

      Attn:  Ross
Goolsby, CFO

      Attn:  General
Counsel

      Telephone:  (512)
527-2900

      Facsimile:  (512)
527-2910

      and

      Roger
Williams, Esq., General Counsel

      1889 East
Maule Avenue

      Suite
A

      Las
Vegas, Nevada  89119

      Telephone:  (702)
558-1073

      Facsimile:  (702)
558-1310

      


      With a
copy (which shall not constitute notice to Borrower) to:

       

      Andrews
Kurth LLP

      111
Congress, Suite 1700

      Austin,
Texas 78701

      Attn:  J.
Matthew Lyons, Esq.

      Telephone:  (512)
320-9284

      Facsimile:  (512)
320-9292

       

      If to
Lender:

       

      iStar
Tara LLC

      1114
Avenue of the Americas, 27th
Floor

      New York,
New York 10036

      Attn:  Chief
Operating Officer

      Reference
:  Loan No. M001234:1

      Telephone:
212-930-9400

      Facsimile:
212-930-9494

       

      With a
copy to:

       

      iStar
Tara LLC

      1114
Avenue of the Americas, 27th
Floor

      New York,
New York 10036

      Attn:  Nina
B. Matis, Esq./General Counsel

      Reference
:  Loan No. M001234:1

      Telephone:
212-930-9406

      Facsimile:
212-930-9492

       

      
        
           


        

        
          5

          
            

          

        

        
           


        

      

      
        	
                With
      a copy to:

              	
                Katten
      Muchin Rosenman LLP

              


      

      
        	
                 
      

              	
                525
      West Monroe Street

              


      

      
        	
                 
      

              	
                Chicago,
      Illinois 60661-3693

              


      

      
        	
                 
      

              	
                Attn:
      Ann Marie Sink, Esq.

              


      

      
        	
                 
      

              	
                Reference:  Loan
      No. M001234:1

              


      

      
        	
                 
      

              	
                Katten
      Reference:  208972-00426

              


      

      
        	
                 
      

              	
                Telephone:
      312-902-5233

              


      

      
        	
                 
      

              	
                Facsimile:
      312-902-1061

              


      

      


       

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