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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Rich Wolf who wrote (25621)	10/14/2002 7:08:06 PM
From: Jacques Tenzel	Read Replies (1) \| Respond to of 27311

Rich: The SC13D filed on behalf of Carl Berg on Sept 30th has some interesting clauses. These are the conditions that Valence must comply with if it is to obtain additional funding from this source. It does lay out a timetable for the power of both Generation one and Generation two Saphion products as well as a time limit for a manufactuing licensee. Listed below are some of the salient points: Your thoughts would be appreciated. .............Jacques o Stephan B. Godevais remains our Chief Executive Officer; o With respect to any funding date after September 30, 2002: o We improve our first generation SaphionTM chemistry to achieve a minimum output of 265 watt-hours per liter in polymer construction; and o We produce at least 30 research and development samples of a second generation SaphionTM chemistry in cylindrical construction; o With respect to any funding date after December 31, 2003, we enter into a license agreement with an unaffiliated party to manufacture and/or distribute SaphionTM chemistry batteries; o With respect to any funding date after March 31, 2003, we transfer from research and development to manufacturing a second generation -------------------------------------------------------------------------------- SaphionTM chemistry in cylindrical construction with a minimum output of 420 watt-hours per liter; o The amount of cash raised through the financing commitment in the following quarters may not exceed the following percentages of total cash used in operations by us in those quarters, as set forth below: PERCENTAGE OF FISCAL QUARTER 2003 CASH USED IN OPERATIONS 1st Fiscal Quarter 100% 2nd Fiscal Quarter 100% 3rd Fiscal Quarter 75% 4th Fiscal Quarter and Thereafter 50% o No material adverse change in our business, operations or financial condition shall occur since March 12, 2002.