Valence Technology Inc. (Austin, TX) announced that it has entered into a loan agreement with SFT I Inc. providing for a $20 million loan to the company. Valence has also received an extension of the maturity date for two outstanding loans from Berg & Berg Enterprises. Under the terms of the loan, which closed and funded on July 13, 2005, interest is payable monthly and the entire principal balance is payable on July 12, 2010. The loan is guaranteed by Carl Berg, a director and principal stockholder of Valence Technology.
In exchange for the loan and the guarantee of the loan, SFT and Berg each received three-year warrants to purchase 600,000 shares of the company's common stock, for an aggregate of 1,200,000 shares, at a price equal to $2.74, the closing price of the company's common stock on July 12, 2005. Valence has entered into a registration rights agreement with SFT providing for registration rights covering the shares underlying the warrants issued as part of the transaction.
In addition, Berg & Berg Enterprises, an affiliate of Berg, has agreed to extend the maturity date of two outstanding loans in the principal amount of $35 million plus accrued interest from September 30, 2006, to September 30, 2008. In exchange for the extension of the maturity of the loan, Valence has extended from August 30, 2005, to September 30, 2008, the expiration date of warrants previously granted to Berg & Berg Enterprises.
