VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Zeev Hed who wrote (5338)	11/19/1998 4:39:00 PM
From: Larry Brubaker	Read Replies (1) of 27311

Zeev: I think you may be misreading the filing. The discussion about OEM testing and qualifying relates to the necessary condition for the 2nd Closing. In order to close the second tranche of $2.5 million, VLNC must have a letter from an OEM stating batteries have been tested and meet OEM standards. The language relating to whether the conversion is a variable or fixed rate says that the conversion is at the fixed rate (of $6.03) until 1/27. If there is not a "material" contract for purchase of batteries by 1/27, the conversion is at the lower of the fixed or variable rate. If there is a material contract by 1/27, the conversion continues to be at the fixed rate until 7/27/99, when it again reverts to the lower of the fixed or variable rate. The dictionary definition of material is "important, essential." The inclusion of the word material suggests something more than a minor order, whatever that may be. I cannot imagine that "material" is not further defined in the actual contract between VLNC and Castle Creek. Otherwise, one lawyer's perception of material could be completely different from another's.

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