Valence Technology (VLNC)

Item 8.01               Other Events.

On September 30, 2008, Berg & Berg Enterprises, LLC (“Berg & Berg”) exercised its right to purchase 1,402,743 shares of Valence Technology, Inc. (the “Company”) common stock at a price per share of $3.208 for an aggregate purchase price of $4.5 million, pursuant to the terms of that certain Warrant to Purchase Common Stock of the Company issued to Berg & Berg on January 4, 2002 (the “Warrant”), as subsequently amended.

As payment of the $4.5 million exercise price of the Warrant, Berg & Berg surrendered certain promissory notes issued on September 26 ($1.0 million in principal and $1,095 in accrued interest), September 18 ($1.0 million in principal and $2,849.32 in accrued interest), and July 23, 2008 ($2,458,337.83 in principal and $37,716.96 in accrued interest).  Because the total amount of the $3.0 million promissory note issued to Berg & Berg on July 23, 2008 was not paid in full, a new promissory will be issued to Berg & Berg in the principal amount of $541,662.17, which will continue to bear interest at a rate of 8.0% per annum (of which, $8,310.44 in interest has accrued as of September 30, 2008) and which will continue to be payable on November 15, 2008.  The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company’s Board of Directors and the principal stockholder of the Company.

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Item 8.01         Other Events.

On September 26, 2008, Berg & Berg Enterprises, LLC (“Berg & Berg”) advanced to the Company $1,000,000 as a loan to be used to cover working capital requirements.  This loan was made pursuant to a previously announced agreement between the Company and Berg & Berg whereby Berg & Berg agreed to provide up to $10,000,000 in interim working capital loans from time to time in order to supplement the Company’s working capital and other financial needs.  This is the third working capital loan installment made pursuant to this agreement.  Currently, the Company has up to $2,500,000 in principal amount of working capital loans remaining under the agreement.

In connection with the advance made on September 26, 2008, the Company executed a promissory note (the “Promissory Note”) in the aggregate principal amount of $1,000,000 in favor of Berg & Berg.  The Promissory Note

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Item 8.01               Other Events.

On September 18, 2008, Berg & Berg Enterprises, LLC (“Berg & Berg”) advanced to the Company $1,000,000 as a loan to be used to cover working capital requirements.  This loan was made pursuant to a previously announced agreement between the Company and Berg & Berg whereby Berg & Berg agreed to provide up to $10,000,000 in interim working capital loans from time to time in order to supplement the Company’s working capital and other financial needs.  This is the third working capital loan installment made pursuant to this agreement.  Currently, the Company has up to $3,500,000 in principal amount of working capital loans remaining under the agreement.

In connection with the advance made on September 18, 2008, the Company executed a promissory note (the “Promissory Note”) in the aggregate principal amount of $1,000,000 in favor of Berg & Berg.  The Promissory Note is payable on November 15, 2008 and bears interest at a rate of 8.0% per annum.  The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company’s Board of Directors and the principal stockholder of the Company.

This summary of the terms of the Promissory Note is qualified in its entirety by the text of the Promissory Note, a copy of which is attached to this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

On September 5, 2008, Valence Technology, Inc. (the “Company”) and Berg & Berg Enterprises, LLC (“Berg & Berg”) agreed to amend two promissory notes (the “Note Amendment”) originally issued by the Company to Berg & Berg on June 26, 2008 and July 23, 2008 (the June 26, 2008 and July 23, 2008 promissory notes are collectively referred to herein as the “Original Notes”).  The Note Amendment extends the maturity date of each of the Original Notes to November 15, 2008 and deletes the fourth paragraph of each of the Original Notes with respect to the purchase of equity securities at a future date by Berg & Berg to clarify that there is not and has not been any prior agreement regarding any purchase of the Company’s equity securities with the principal amount of the Original Notes.  Any decision by the Company and Berg & Berg to surrender the notes in exchange for the purchase price of shares of the Company’s common stock, in lieu of the repayment of the notes in accordance with their terms, would be made at a future date, if at all.

This summary of the terms of the Note Amendment is qualified in its entirety by the text of the Amendment to Promissory Notes, a copy of which is attached to this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

Item 8.01               Other Events.

On July 23, 2008, Berg & Berg Enterprises, LLC (“Berg & Berg”) advanced to the Company $3,000,000 as a loan to be used to cover working capital requirements.  This loan was made pursuant to a previously announced agreement between the Company and Berg & Berg whereby Berg & Berg agreed to provide up to $10,000,000 in interim working capital loans from time to time in order to supplement the Company’s working capital and other financial needs.  This is the second working capital loan installment made pursuant to this agreement.  Currently, the Company has up to $4,500,000 in principal amount of working capital loans remaining under the agreement.

In connection with the advance made on July 23, 2008, the Company executed a promissory note (the “Promissory Note”) in the aggregate principal amount of $3,000,000 in favor of Berg & Berg.  The Promissory Note is payable on September 15, 2008 and bears interest at a rate of 8.0% per annum.  At the election of Berg & Berg, all principal and accrued but unpaid interest then outstanding under the Promissory Note may be used as full or partial, as the case may be, satisfaction of the purchase price of the Company’s equity securities in the event Berg & Berg purchases any of the Company’s equity securities after the date of the Promissory Note. The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company’s Board of Directors and the principal stockholder of the Company.

It is the intention of the Company to either repay this Promissory Note on or before its maturity date or, subject to its cash flow requirements, issue equity securities to Berg & Berg in exchange for the cancellation of all or part of its then-outstanding obligations under the Promissory Note.  Unless the obligations thereunder are first repaid, Berg & Berg has expressed its current intention to use the outstanding obligations under the Promissory Note as payment of the purchase price for the Company’s equity securities.  The price of any such shares is anticipated to be the closing bid price on the date on which any such purchase occurs.  The terms of any notes subsequently issued pursuant to the interim funding arrangement described above are anticipated to be similar.

This summary of the terms of the Promissory Note is qualified in its entirety by the text of the Promissory Note, a copy of which is attached to this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

Item 8.01               Other Events.

On June 26, 2008, Berg & Berg Enterprises, LLC (“Berg & Berg”) advanced to the Company two million five hundred thousand dollars ($2,500,000) as a loan to be used to cover working capital requirements.  Subsequently, the Company and Berg & Berg agreed to provide for up to ten million dollars ($10,000,000) in such interim working capital loans from time to time in order for Berg & Berg and/or certain of its affiliates to supplement the Company’s working capital and other financial needs.  In connection therewith, on July 2, 2008, the Company executed a promissory note (the “Promissory Note”) in aggregate principal amount of two million five hundred thousand dollars ($2,500,000) in favor of Berg & Berg for the initial advance.  The Promissory Note is payable on August 15, 2008 and bears interest at a rate of 8.0% per annum.  At the election of Berg & Berg, all principal and accrued but unpaid interest then outstanding under the Promissory Note may be used as full or partial, as the case may be, satisfaction of the purchase price of the Company’s equity securities in the event Berg & Berg purchases any of the Company’s equity securities after the date of the Promissory Note.  The managing member of Berg & Berg is Carl E. Berg, who is the Chairman of the Company’s Board of Directors and the principal stockholder of the Company.

It is the intention of the Company to either repay this Promissory Note on or before its maturity date or, subject to its cash flow requirements, issue equity securities to Berg & Berg in exchange for the cancellation of all or part of its then-outstanding obligations under the Promissory Note.  Unless the obligations thereunder are first repaid, Berg & Berg has expressed its current intention to use the outstanding obligations under the Promissory Note as payment of the purchase price for the Company’s equity securities.  The price of any such shares is anticipated to be the closing bid price on the date on which any such purchase occurs.  The terms of any notes subsequently issued pursuant to the interim funding arrangement described above are anticipated to be similar.

This summary of the terms of the Promissory Note is qualified in its entirety by the text of the Promissory Note, a copy of which is attached to this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.