Dated 22nd December 2004







                              VALENCE TECHNOLOGY BV

                                      -AND-

                                   JOHN MCCANN





                    AGREEMENT FOR SALE OF FACTORY PREMISES AT
                  52 MALLUSK ROAD, NEWTOWNABBEY, COUNTY ANTRIM


                                   ARTHUR COX
                                NORTHERN IRELAND
                                  Capital House
                              3 Upper Queen Street
                                 Belfast BT1 6PU






                                       1
<PAGE>




INDEX TO CLAUSES

1      Definitions and interpretation

2      Agreement for sale and purchase

3      Price

4      Deposit

5      Completion arrangements

6      Title

7      Vacant possession

8      Specific matters subject to which the Property is sold

9      General matters subject to which the Property is sold

10     Insurance

11     Conditions of sale

12     Misrepresentation

13     Continuation of this Agreement after completion

14     Value added tax

15     Notices

16     Contracts (Rights of Third Parties) Act 1999

17     Incorporation of Schedules and Appendices

Schedule 1    The Property

Schedule 2    Contracts for the supply of services


                                       2
<PAGE>




Date: 22nd December 2004

        Parties:

     1 `The Seller': VALENCE TECHNOLOGY BV (a private liability company
incorporated under the laws of the Netherlands and registered in Northern
Ireland as a foreign company under registration number FC3149) of Hydepark
Industrial Estate, 52 Mallusk Road, Newtownabbey, County Antrim

     2 `The Buyer': JOHN MCCANN of Roden House, Roden Place, Dundalk, County
Louth

     Operative provisions:

1.   DEFINITIONS AND INTERPRETATION

     1.1  In this Agreement if the context so allows:

          `BUYER'S SOLICITORS' means Catherine Allison & Co., 6 Roden Place,
          Dundalk, County Louth

          `COMPLETION DATE' means 22nd December 2004 or such other date as may
          be agreed between the Seller and the Buyer

          `CONTRACT RATE:' means an interest rate equal to three per cent over
          the base rate of Ulster Bank Limited from time to time as well after
          judgment as before

          `FULLY INDEMNIFIED' means fully and effectively indemnified against
          all costs, claims, demands, expenses and proceedings in respect of the
          matter concerned

          `GENERAL CONDITIONS' means the Law Society of Northern Ireland General
          Conditions of Sale (third edition, second revision), and "General
          Condition" is to be construed accordingly

          `PLANT AND EQUIPMENT' means the moveable plant, equipment and
          machinery and other items set out in Appendix A

          `PROPERTY' means the freehold land described in Schedule 1

          `SELLER'S SOLICITORS' means Arthur Cox Northern Ireland of Capital
          House, Upper Queen Street, Belfast BT1 6PU

          `VAT' means Value Added Tax

     1.2  References to numbered Clauses and Schedules are references to the
          relevant Clause or Schedule in this Agreement, unless the context
          otherwise requires.

                                       3
<PAGE>


     1.3  References in any Schedule to numbered paragraphs are references to
          the relevant paragraph in that Schedule, unless the context otherwise
          requires.

     1.4  The Clause Schedule and paragraph headings in this Agreement are for
          ease of reference only, and are not to be taken into account in the
          construction or interpretation of the Clause Schedule or paragraph to
          which they refer.

     1.5  Words importing the singular meaning include, where the context so
          admits, the plural meaning, and vice versa.

     1.6  Words of one gender include both other genders, and words denoting
          natural persons include corporations and firms.

     1.7  Words denoting an obligation on a party to do any act, matter or thing
          include an obligation to procure that it be done, and words placing a
          party under a restriction include an obligation not to permit
          infringement of the restriction.

     1.8  Where the Buyer comprises two or more parties, the obligations of the
          Buyer are in relation to each such party joint and several.

     1.9  References to `liability,' include where the context so allows,
          claims, demands, proceedings, damages, costs and expenses.

2.   AGREEMENT FOR SALE AND PURCHASE

     2.1  The Seller will sell, and the Buyer will buy, the Property.

     2.2  The interest to be sold is freehold.

          The sale includes the Plant and Equipment, the property in which is to
          pass by delivery at the time of actual completion. The Seller warrants
          that the Plant and Equipment is sold free from all encumbrances, hire
          purchase, charges and/or leasing agreements and the Seller will keep
          the Buyer Fully Indemnified in respect of any such matters.

     2.3  The Buyer is deemed to purchase knowing the actual physical state and
          condition of the Property and the Plant and Equipment and takes the
          Property and the Plant and Equipment as they now are.

     2.4  The solvent recovery tower and associated plant, machinery and
          equipment listed in Appendix B and all fixtures, fittings, plant,
          machinery and equipment other than the Plant and Equipment are
          specifically excluded from the sale and the Seller shall be at liberty
          to remove them from the Property before giving vacant possession to
          the Buyer in accordance with clause 7.

3.   PRICE

     3.1  The price for the Property is Five Million Pounds sterling, (STG
          5,000,000)


                                       4
<PAGE>


     3.2  One Million Two Hundred Thousand Pounds sterling (STG 1,200,000 ) of
          the purchase price is apportioned to the Plant and Equipment

     3.3  The following provisions apply in respect of the capital expenditure
          on the provision of the Plant and Equipment in Appendix A under
          Chapter 14, Part 2, Capital Allowances Act 2001:

     3.4  The Seller shall provide to the Buyer and/or their professional
          advisers such information as they may reasonably require in relation
          to any claim that the Seller has made for capital allowances in
          respect of the value and nature of the Plant and Equipment and the
          Seller shall facilitate any such reasonable request by the Buyer on
          the provision of such information.

4.   DEPOSIT

     4.1  The Buyer is to pay a deposit of Five Hundred Thousand Pounds sterling
          (STG 500,000) to the Seller's Solicitors no later than the signing of
          this Agreement and the same shall be held by the Seller's solicitors
          as stakeholders pending actual completion.

     4.2  The deposit is to be paid by direct credit to a bank account nominated
          by the Seller's Solicitors.

     4.3  Interest accruing on the deposit for the period ending on the date of
          actual completion is to be accounted for to the Seller on completion.

5.   COMPLETION ARRANGEMENTS

     5.1  Completion is to take place on the Completion Date at the offices of
          the Seller's Solicitors, or elsewhere as they may direct.

     5.2  The means of payment of the price and other money due from the Buyer
          on completion is to be by a direct credit to a bank account nominated
          by the Seller's Solicitors.

     5.3  If the money due on completion is received after 2.00 pm, completion
          is to be treated for the purposes of the General Conditions as taking
          place on the next working day.

6.   TITLE

     6.1  Title to the Property has been deduced by the Seller to the Buyer and
          the Buyer is not entitled to raise any objection to the title to the
          extent that it has been deduced.

     6.2  The Seller sells as beneficial owner free from encumbrances and from
          all financial charges.


                                       5
<PAGE>


7.   VACANT POSSESSION

     7.1  Subject to clauses 7.2, and 7.3 the sale is with vacant possession of
          the Property save that the Plant and Equipment will be left on the
          Property at the time of completion.

     7.2  Following completion the Seller shall be entitled to remain in
          occupation of the entirety of the Property until 31st January 2005
          (the "First Lease Period"), at a rent of (pound)500 on the following
          terms and conditions:

          7.2.1 the Seller shall occupy as tenant and it is hereby declared that
               the parties intend to create the relationship of landlord and
               tenant

          7.2.2 the Seller shall pay the cost of electricity, gas, water and
               telecommunications and other utilities consumed on the Property
               throught the First Lease Period

          7.2.3 the Seller will reimburse the Buyer for the cost of insuring the
               Property in respect of the First Lease Period and will maintain
               employer's and public liability insurance at its own expense

          7.2.4 the Seller shall be responsible for general maintenance, shall
               leave the Property in no worse condition than at the date of
               actual completion and shall remove all chemicals and hazardous
               waste which the Seller may have stored at the Property and keep
               the Buyer Fully Indemnified in respect of such removal thereof

          7.2.5 the Seller will maintain the same level of security for the
               Property throughout the First Lease Period as is in place at the
               date of this Agreement

     7.3  The Seller shall be entitled to remain in occupation of the following
          parts of the Property:

          (a)  not more than 15,000 square feet of warehousing (the "Warehouse
               Facility") on the lands in Folio AN 89052 Co. Antrim, and

          (b)  office accommodation for not more than 10 people

          throughout the period commencing on 1st February 2005 and ending on
          31st March 2005 (the "Second Lease Period"), at a rent of (pound)500
          per month, on the following terms and conditions:

          7.3.1 the Buyer, acting reasonably, may require the Seller to relocate
               to some other suitable part of the Property if the Buyer agrees
               to let the Warehouse Facility or the Office Accommodation to a
               tenant who wishes to take possession of the Warehouse Facility
               and/or the Office Accommodation during the Second Lease Period.
               If no


                                       6
<PAGE>


               other suitable part of the Property is available, the Buyer shall
               provide suitable alternative accommodation within his industrial
               complex at Trench Road, Mallusk, Co. Antrim on the same terms as
               are set out in this clause 7.3

          7.3.2 the Seller shall not be required to pay for electricity, gas,
               water, or other utilities consumed during the Second Lease Period
               but shall discharge all telephone charges which the Seller may
               incur

          7.3.3 the Seller shall not be required to insure the Warehouse
               Facility or the Office Accommodation or to reimburse the Buyer
               for the cost of insuring the same but shall maintain employer's
               liability and public liability insurance at its own expense

          7.3.4 in consideration of the Seller being permitted to remain in
               occupation of the Warehouse Facility and the Office Accommodation
               during the Second Lease Period the Seller will at the expiration
               of the Second Lease Period deliver ownership of the following
               items to the Buyer at the expiration of the Second Lease Period:

               (i)  two portacabins, two containers and one small chemical
                    container

               (ii) all racking in the warehouse and maintenance areas located
                    on the Property

               (iii) such office furniture and equipment as the Seller may
                    decide is surplus to its own requirements.

          7.3.5 the Seller will procure that the Contamination Investigation
               Report No. 394/04 dated 7th September 2004 and prepared by
               Whiteford Geoservices Ltd. is updated at the expiration of the
               Second Lease Period and that the benefit of such updated report
               will extend to the Buyer and to Northern Bank Ltd. (as funder of
               the Buyer's acquisition of the Property).

          7.3.6 The Seller shall be responsible for general maintenance of the
               Warehouse Facility and the Office Accommodation, shall leave the
               same in no worse condition than at the date of actual completion
               and shall remove all chemicals and hazardous wastes which the
               Seller may have stored in the Warehouse Facility and/or the
               Office Accommodation and keep the Buyer Fully Indemnified in
               respect of such removal thereof

     7.4  Throughout the First Lease Period and the Second Lease Period the
          Buyer shall be entitled to have access to the Property or, in the case
          of the Second Lease Period the relevant parts of the Property proper
          use and occupation of the


                                       7
<PAGE>


          Property to a material extent or, including, without limitation, for
          the purpose of showing prospective tenants around the Property. The
          Buyer shall not interfere with or seek to relocate any property of the
          Seller (but without prejudice to the Buyer's rights under clause
          7.3.1)

8.   SPECIFIC MATTERS SUBJECT TO WHICH THE PROPERTY IS SOLD

     8.1  The Property is affected by and sold subject to the matters noted upon
          the Register of Freeholders for Folios AN 41266 and AN 89052 County
          Antrim save in respect of all financial charges thereon, which the
          Seller shall discharge on completion and produce evidence thereof to
          the Buyer's solicitors.

     8.2  The Buyer or its solicitors have been supplied with office copy
          entries relating to the Seller's title and the Buyer is to be treated
          as entering into this Agreement knowing and accepting their terms, and
          may not raise any requisitions or objections about them or about the
          title.

9.   GENERAL MATTERS SUBJECT TO WHICH THE PROPERTY IS SOLD

     9.1  The Property is sold subject to:

          9.1.1 all statutory charges whether or not registered before the date
               of this Agreement, and all matters capable of registration as
               statutory charges whether or not actually registered;

          9.1.2 all notices served and orders, demands, proposals or
               requirements made by any local or any public authority after the
               date of this Agreement;

          9.1.3 all actual or proposed orders, directions, notices, charges,
               restrictions, conditions, agreements and other matters arising
               under any statute affecting the Property; and

          9.1.4 all rights of way, drainage, watercourses, light or other
               casements, or quasi or reputed easements, and rights of adjoining
               owners affecting the Property, and all liability to repair or
               covenants to repair roads, pavements, paths, ways, passages,
               sewers, drains, gutters, fences and other like matters, without
               obligation on the Seller to provide evidence of the creation of
               or to define or apportion any such liability and the Seller
               warrants that it has provided the Buyer with evidence of all such
               matters of which it is aware.

10.  INSURANCE

     10.1 The Seller will maintain the insurance of the Property until actual
          completion, unless it is maintained by a tenant mortgagee or other
          third party, and the risk in the Property will remain with the Seller
          pending actual completion.


                                       8
<PAGE>


     10.2 The Seller is not to be responsible to the Buyer for any deficiency in
          the amount insured, or inadequacy of the risks covered, and the Buyer
          is to satisfy itself in these respects, but the Seller will at the
          request and cost of the Buyer increase the amount insured or (if cover
          can be obtained) the risks covered.

     10.3 The Seller will, if so requested, supply to the Buyer sufficient
          details of the insurance of the Property, but the Buyer may make
          enquiries direct with the insurers.

     10.4 The Seller will at the request and cost of the Buyer obtain or consent
          to an endorsement of a notice of the Buyer's interest in the Property
          on the policy, or otherwise noted by the insurer.

     10.5 Where money becomes payable under the insurance on the Property before
          actual completion, the Seller is to apply the money to the
          reinstatement of the Property if there is a contractual or statutory
          obligation, or the Buyer directs the Seller to do so, but, if not, the
          Seller is to account to the Buyer for the money, or so much as has not
          been expended, at actual completion.

11.  CONDITIONS OF SALE

     11.1 The General Conditions apply to this Agreement with the variations set
          out in this clause, but the terms of this Agreement are to prevail in
          case, and to the extent, of inconsistency.

     11.2 In General Condition 2.1 (a) the words "or ought to have" shall be
          deleted and in General Condition 2.1 (b) the words "or ought to have"
          in line 1 and the words "or which a prudent purchaser ought to have"
          in the fourth line shall be deleted.

     11.3 With reference to the General Condition 2.2 the Buyer shall be deemed
          to be satisfied with the searches and property certificates already
          furnished and the right to rescind referred to therein shall not apply
          save that the Seller will supply Completion Certificates in respect of
          Building Control applications NA/0990/0290 and NA/2001/0004 prior to
          actual Completion.

     11.4 General Conditions 2.3, 2.4 and 2.6 are deleted, the Buyer accepting
          the searches and certificates already furnished, and in the first line
          of General Condition 2.5 the words "Without prejudice to the
          provisions of Condition 2.2" are also deleted.

     11.5 In General Condition 4.1 after the words "inspection of the Property"
          there shall be added the words "or the title".

     11.6 The words from "provided always" in the eighth line from the bottom of
          General Condition 8.2 to the word "Lease" on the last line shall be
          deleted.

     11.7 General Conditions 12.3, 15.5, 15.6, 16.3, 16.4, 20, 21 , 23 shall be
          deleted.


                                       9
<PAGE>


     11.8 In General Condition 15.7 (a) the words "other than undertakings
          contained in the completion letter recommended under the Home Charter
          Scheme" shall be deleted, as shall the words "save so far as the
          undertakings contained in the completion letter recommended under the
          Home Charter Scheme are concerned" in General Condition 15.7(d).

     11.10 The rate of interest payable under General Condition 16.1 shall be
          the Contract Rate from the date on which payment was due to the date
          of actual payment.

12.  STATUTORY DECLARATION

          The Seller will on completion provide a Statutory Declaration
          confirming that it has, since acquiring the lands in Folio AN 89052
          Co. Antrim, made use of the piece of land comprised in Folio 1951L Co.
          Antrim situated between Folio AN 890452 Co. Antrim and the McKinney
          Road for the purpose of gaining access to the lands in Folio AN 89052
          Co. Antrim without objection or interruption from any person or body
          and that no notices or objections have been received from any person
          in relation thereto.

13.  MISREPRESENTATION

     13.1 The Buyer acknowledges that no statement or representation, whether
          oral or written, which may previously have been made to it or any
          person concerned on its behalf, by or for the Seller, its agents or
          solicitors, has induced it to enter into this Agreement, apart from
          the written replies of the Seller's Solicitors to written enquiries
          raised by the Buyer's solicitors or other written information supplied
          by the Seller's solicitors to the Buyer's solicitors.

     13.2 Any liability of the Seller and remedy of the Buyer at law, in equity
          or under statute in respect of such a statement or representation or
          for implied warranty (apart from the written replies of the Seller's
          Solicitors to written enquiries raised by the Buyer's solicitors) is
          excluded or other written information supplied by the Seller's
          solicitors to the Buyer's solicitors.

14.  CONTINUATION OF THIS AGREEMENT AFTER COMPLETION

          Completion does not discharge liability to perform any outstanding
          obligation tinder (sic) this Agreement.

15.  VALUE ADDED TAX

     15.1 Sums payable under this Agreement for the supply of goods and services
          are exclusive of VAT chargeable on the payment. If VAT is chargeable
          the Buyer shall on demand keep the Seller Fully Indemnified in respect
          of any such VAT subject to the Seller supplying any appropriate VAT
          invoice.


                                       10
<PAGE>



16.  NOTICES

     16.1 Any notice required under this Agreement is to be in writing signed by
          or on behalf of the party giving it. The notice may be served by
          leaving it at or sending it by telex or facsimile transmission
          pre-paid recorded delivery or registered post to the other party's
          registered office and addressed to the Secretary for the time being.

     16.2 Any notice so served is deemed to have been received:-

          16.2.1 in the case of personal service upon delivery;

          16.2.2 in the case of facsimile transmission upon tangible
                 acknowledgment of receipt; 16.2.3 in the case of recorded
                 delivery or registered post 48 hours from the date of posting

     16.3 For notices sent by post it will be sufficient in proving service to
          establish the envelope containing the notice was properly addressed
          and posted.

17.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

          None of the provisions of this Agreement are intended to or will
          operate to confer any benefit (pursuant to the Contracts (Rights of
          Third Parties) Act 1999 on a person who is not named as a party to
          this Agreement.

18.  INCORPORATION OF SCHEDULES

          The provisions of the Schedules and of the Appendices are to apply.

          SIGNED by or on behalf of the parties on the date which appears at the
          head of this Agreement.


                                       11
<PAGE>




                                   SCHEDULE 1

                           Description of the property



       The lands comprised in Folios AN 41266 and AN 89052 County Antrim.



                                       12
<PAGE>




                                   SCHEDULE 2

                      Contracts for the supply of services

1    SCOPE OF THIS SCHEDULE

     This Schedule applies to contracts for the supply of services to the
     Property maintained by the Seller.

2    CANCELLATION UNLESS OTHERWISE REQUIRED

     2.1  The Seller will cancel the contracts with effect from the date of
          actual completion, unless the Buyer has notified the Seller not less
          than five working days before that date that it wishes to maintain
          them, or some of them, after completion.

     2.2  Where the Buyer so notifies the Seller of its wish to maintain a
          contract, the following provisions of this Schedule are to apply.

3    CONTRACTS CAPABLE OF ASSIGNMENT

     3.1  In the case of a contract capable of assignment, the Seller will
          assign the benefit of the contract to the Buyer.

     3.2  The Buyer will undertake with the Seller to:

          3.2.1 assume the obligations of the Seller under the contract;

          3.2.2 give notice of the assignment of the contract to the supplier of
               the services; and

          3.2.3 keep the Seller indemnified against liability for future breach
               of the obligations to the supplier under the contract.

4    CONTRACTS NOT CAPABLE OF ASSIGNMENT

     4.1  In the case of a contract not capable of assignment, or only
          assignable with the permission of the supplier:

          4.1.1 the Seller will maintain the contract for the benefit of the
               Buyer for so long as is necessary to ascertain whether the
               supplier is prepared to permit assignment, or novate the
               contract;

          4.1.2 the Seller will use all reasonable endeavours to obtain
               permission to assign the contract, or procure a novation for the
               Buyer;

          4.1.3 if assignment is permitted by the supplier, paragraph 3 is to
               apply;


                                       13
<PAGE>


          4.1.4 if a novation is obtainable, the Buyer will take up the new
               contract with the supplier, or permit the Seller to obtain a
               cancellation of the original contract;

          4.1.5 the Buyer will reimburse to the Seller the cost of maintaining
               the contract for any period mentioned in paragraph 4. 1. 1; and

          4.1.6 The Seller will bear the costs of cancellation of any contract
               and the Buyer will bear the cost of any novation; but

          4.1.7 the Seller may cancel a contract where it is not capable of
               assignment and the supplier is unwilling to permit an assignment
               or agree a novation.



     SIGNED by and on behalf of the Seller in the presence of:-

               /s/ Rowan White              /s/ John O'Neill
               -----------------------      ------------------------
               Rowan White
               Solicitor, Belfast

               SIGNED by the Buyer in the presence of:-

               /s/ Catherine Allison        /s/ John Mccann
               -----------------------      ------------------------
               Solicitor



                                       14
<PAGE>


                                   APPENDIX A

<TABLE>
<CAPTION>

                            (THE PLANT AND EQUIPMENT)

<S>         <C>             <C>                        <C>              <C>
            QTY             ITEM DESCRIPTION           CONTRACTOR       CURRENT CONTRACT

              2             Cradley oil fired steam       GW Monson          PO Basis
                            boilers

              1             Ygnis gas fired steam boiler  GW Monson          PO Basis

              1             Satchwell BMS (heat           Satchwell Grant    PO Basis
                            management system)

              1             Oil Storage tank              N/A

              1             Puma Diesel generator set &   Edina              PO Basis
                            associated equipment

              1             Sprinkler System including    Wormald            Contract thru
                            pumps, tanks & pipework                          12-31-04

              1             Hitachi water chiller         Carrier            PO Basis

              2             Gardner Denver Air            Team Industries    PO Basis
                            Compressors & ancillaries

              1             Various air handlers          Bel Air            PO Basis

              1             Fire Alarm System             Fire Security      PO Basis

              1             Lab air conditioning system                      PO Basis
                                                          MGA

              1             Security Camera System        Communication      PO Basis

              1             Chubb card access system      Chubb              PO Basis

              1             Back Factory heating system   Ellison - Pettis   PO Basis


</TABLE>

                                       15
<PAGE>



<TABLE>
<CAPTION>

<S>                        <C>                <C>            <C>                <C>
     DESCRIPTION           COMMENTS            TAG#             IN SERV:             COST
Control Panel for                        671                1/1/99             5,707.00
Etch Tank

Etch Line#1                              673                1/1/97             195,145.72

Etch Line #2                             674                1/1/97             211,204.07

Control Panel for                        675                1/1/99             5,707.00
Etch Tank

Radiant Energy Dryer                     677

Radiant Energy Dryer 2                   678

Drying Station Shell                     796

Rewind station for                       968
coater

Kahn Solvent                                               1/4/98             155,742.42

Recovery System

MO-120                 Incomplete        814                1/11/97            25,095.73
                       unit/used for
                       parts

Mo-120                 Incomplete        815                1/11/97            25,095.73
                       unit/used for
                       parts

Pulsing Station                          992

Web Cleaning Machine                                        1/12/99             28,500.00

Storage Cabinet 3                        723

Storage Cabinet 8                        728

Storage Cabinet 9                        729


                                       16
<PAGE>




Storage Cabinet 10                       730

Storage Cabinet 12                       731

Storage Cabinet 11                       742

Degas/Reseal                             712                1/1/97             48,568.92
Equipment 4x4

Degas/Reseal                             733                1/1/97             86,907.27
Equipment imp

Final Test Machine     Incomplete        804                1/1/97             197,328.30
4x4                    unit/used for
                       parts

Final Test Machine     Incomplete        805                1/1/97             138,467.60
Imp                    unit/used for
                       parts

30" Slurry Box                                              1/1/99             2,858.00

30" Slurry Box                                              1/1/99             2,858.00

44" Slurry Box                                              1/1/99             3,335.00

44" Slurry Box                                              1/1/99             3,335.00

Slurry Box                                                  1/4/99             6,670.80

30" Slurry Box                                              1/1/99             2,858.00

Slurry Box                                                  1/5/99             2,810.00

Slurry Box 34"                                              1/6/99             2,810.00

46" Slurry Box                                              1/4/00             3,335.00

Klockner Bicell        Incomplete                           1/1/95             3,472,856.04

Assembly Machine       unit/used for
                       parts

Automatic              Incomplete                           1/12/00            29,600.00

Puckloading system     unit/used for
                       parts



                                       17
<PAGE>


SVA Tape Applicator    Incomplete                           1/12/99            15,600.00
                       unit/used for
                       parts

Arcotronics CFS 1

Arcotronics CFS 2

Coater Feed System Scale                                    1/2/99             10,000.75

Coater Feed System Scale                                    1/2/99             10,000.75

</TABLE>


                                       18
<PAGE>




                                   APPENDIX B

                          (THE SOLVENT RECOVERY TOWER)




                                       19
<PAGE>


<TABLE>
<CAPTION>


------------------------------------------ ------------------------------ -----------------------
                                           BV Asset Tag#                  Area
------------------------------------------ ------------------------------ -----------------------
<C>                                        <C>                            <C>
1 Distillation Tower                       1223                           Distillation Column
Cooling System For Tower                   1228                           Distillation Column
Control Panel & Switchgear                 1362                           B/F Control Room B/F
PC Control system, PLC Control panels,     1363                           Control Room
software
Filing Cabinet & Documentation Therein     1364                           Distillation Column
3 50K Litre 304 S/S Tanks
1 15 K Litre 304 S/S Tank                  1224;1225;1226                 Distillation Column
1 30 K Litre 316 S/S cone top on legs      1227                           Distillation Column
2.6 m diameter x 7 m high in yard          1232                           Extraction T/F
5 x 2.2 K Litre S/S tanks
                                           1233; 1234; 1235; 1236; 1237   Extraction T/F
1 x 3.2 K litre tank 1 6m x 3.24 in
yard, including Vent and Flame             1231                           Extraction T/F
Arrestor.
1 x 2.95 K Litre 2.5 x 2.2 tank            647                            Mixing RM
4 x 13.5K Litre cylinders/jacketed         657;658;659;660                Mixing RM
mixing vessels 304 S/S 2.6 metre
diameter and 4.5m high

Related mechanical infrastructure -
frames - supports - pipe bridges - access
ladders - gantries, etc, deluge system
specific to the tower. Any Civil, E&M,
Design drawings, manuals, written operating
procedures available. Pipework and
supply runs specific to tower will
transfer ownership. In the event that Linden
Foods are able to agree terms to lease
the building from the new building owner
any pipework and supply runs which run
services in common with the main factory
will be subject to service agreement with
the new building owner (this includes
the main water tower that feeds the factory
floor sprinkler system and distillation
tower deluge system). Any proposed separation
would be subject to agreement with the new
building owner and only if this is possible
without detriment to main factory, in this
event any separation


                                       20
<PAGE>

must be at the cost of Linden Foods and
undertaken by agreed approved contractor.
Automation Controls and available
interconnections including pumps

2 x 5K litre jacketed s/s mixing vessels
2.1 x 2.2                                  656; 655                       Mixing RM
+ 2 1.5K Litre jacketed tanks 1.6x 1.8     641; 646                       Mixing RM &
                                                                          Lamination
3 x Carrier Chillers                       1243; 1242; 1244               Outside
Nitrogen feed and pipework from the        No Tag#                        Outside
rented Nitrogen Tank (property of BOC
Gas);

Miscellaneous Tanks comprising:-
Acetone Farm - I 55K Litre 304 S/S tank    1238                           Acetone T/F
4.5 m diameter x 5.5 m
2 x 27K Litre 304 S/S tanks 3.2 m          1240; 1241                     Acetone T/F
diameter x 5 m
1 x3K Litre S/S Tank                       1239                           Acetone T/F
1 by 0.9 K Litre S/S tank 1 m x 2.2        707                            Extraction RM
m(are these the same as those
highlighted below?)
2 x 500 gallon Lee Industries S/S tanks    792; 1358                      Outside yard
(see above)
2 x 700 gallon Lee Industries S/S Tanks    793; 1037                      Outside yard & Lamin
1 x 200 gallon Lee Industries S/S Tank     1359                           Outside yard

------------------------------------------ ------------------------------ -----------------------
SUBTOTAL RECOVERY TOWER AND MISC           (pound)285,000.00
EQUIPMENT
------------------------------------------ ------------------------------ -----------------------
      OTHER EQUIPMENT COMPRISING:-
1 Vac-U-Max Powder Filling Station and     611;608;609                    Powders & Lamination
Control panels including Hopper x2
6 Roots Blowers (blowers currently                                        Lamination
located in laminated area)                 1248;1353;1354;1355;1356;
                                           1357
1 V Blender & Panel +Vulcatherm Oil        603                            Powders
Heater & Vacuum Pump
2 Shredders - Integrated Recycling         631; 632                       Powders
Systems
2 Vacuum Sub Level Feeds To Master Mixers  1245; 1246                     Powders
1 x Muller System including Chronos        604                            Powders
System + Platform Scales
6 x Battery Tray Trollies                  No Tag#                        Back Factory
1 x Boss Forklift Truck c/w recharging     986                            Mobile
pack.


                                       21
<PAGE>


1 x Hyundai Van AKZ 6914                   No Tag#                        Outside
------------------------------------------ ------------------------------ -----------------------
SUBTOTAL OTHER EQUIPMENT                   (pound) 15,000
------------------------------------------ ------------------------------ -----------------------
TOTAL                                      (pound) 300,000

                                           Plus VAT
------------------------------------------ ------------------------------ -----------------------

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