EXHIBIT 10.1
LETTER AGREEMENT AND RELEASE
This Letter Agreement and Release (this "Agreement") is made and entered into
effective March 31, 2002 by and between Xxxx & Xxxx Enterprises, LLC, ("Xxxx") a
California limited liability company and Valence Technology, Inc. ("Valence"), a
Delaware corporation.
RECITALS:
Whereas, Valence owns mortgage notes receivable in the principal amount of
$17,533,226.80 and accrued and unpaid interest of $951,754.93 (the "Notes") as
set forth on attached Exhibit A;
Whereas, the Notes have been pledged as collateral to Xxxx to secure borrowings
under the Loan Agreement (the "Loan Agreement") entered into between Xxxx and
Valence, dated February 24, 2001 which currently has an outstanding balance in
the principal amount of $17,500,000 and accrued and unpaid interest of
$1,140,370.41 (the "Loan");
Whereas, Valence desires to assign all of its right, title and interest in the
Notes to Xxxx, together with the other consideration set forth herein, to pay
the Loan in full;
Whereas, Xxxx has agreed to accept Valence's assignment of the Notes and other
consideration set forth herein as payment in full of the Loan;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties hereto agree as follows:
1. Valence hereby assigns to Xxxx all of Valence's right, title, and interest
in and to the Notes (including all amounts of unpaid interest thereon) and
agrees to pay to Xxxx $155,388.68 in immediately available funds by wire
transfer pursuant to the written instructions attached hereto as Exhibit B
(collectively, the "Valence Consideration").
2. In exchange for the Valence Consideration, Xxxx acknowledges and agrees
that the Loan is fully paid and discharged. The Loan Agreement is hereby
terminated.
3. Xxxx hereby assumes any and all obligations and duties of Valence under the
Notes.
4. Any security interest of Xxxx that may exist in any assets of Valence
securing or purporting to secure Valence's obligations under the Loan or
the Loan Agreement is hereby extinguished. The parties agree to file any
and all financing statements and take any other steps necessary or
desirable to extinguish any security interest that may exist in Valence's
assets, which arose out of the Loan or the Loan Agreement.
5. Xxxx hereby represents and warrants to Valence that:
(a) there are no evidences of indebtedness with respect to the Loan other
than the Loan Agreement; and
(b) Xxxx is the sole lawful owner, beneficially and of record, of the
Loan, free and clear of any security interest, claim, lien, pledge,
option, encumbrance or restriction of any kind or nature. Xxxx has not
assigned the Loan, in whole or in part to any individual or entity.
Xxxx has the power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
6. Xxxx hereby releases all claims, liabilities and damages known and unknown,
which Xxxx may have against Valence or its affiliates relating to the Loan
or the Loan Agreement. Xxxx further acknowledges that it has been advised
of and is familiar with and hereby specifically waives any rights it may
have pursuant to the provisions of the California Civil Code Section 1542
which provides as follows: "A general release does not extend to claims
which a creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have materially
affected his settlement with the debtor."
7. This Agreement shall be binding upon and shall inure to the benefit of the
heirs, executors, administrators, successors, and assigns of the parties
hereto.
8. Xxxx and Valence agree to execute any further instruments or documents
consistent herewith and to take all actions as may be required or advisable
in order to consummate the transactions contemplated herein.
9. Time is of the essence of each and every term, condition, obligation, and
provision hereof.
10. This Agreement is made in the State of California and its validity,
construction, and rights under this Agreement shall be governed by
California law, without regard to its conflicts of laws, rules or
principles.
11. Any modification to this Agreement shall be in writing and signed by all
parties to this Agreement.
12. This is the complete agreement of the parties on the subject matter heeof.
This Agreement supersedes any prior or contemporaneous oral or written
understandings on the subject. No party is relying on any representations,
oral or written, on the subject of the effect, enforceability or meaning of
this Agreement, except as specifically set forth in this Agreement.
13. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which, together, shall constitute one and
the same instrument. This Agreement may be executed by facsimile, which
shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Xxxx" "Valence"
Xxxx & Xxxx Enterprises, LLC Valence Technology, Inc.
By: /S/ XXXX X. XXXX By: /S/ XXXXX X. XXXXXXXXX
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Xxxx X. Xxxx, Managing Member Xxxxx X. Xxxxxxxxx, VP of Finance
