Document:

November 29, 1999

Anthony L. M. Inder Rieden
Ridgeway Investment Limited
Charlotte House, Charlotte Street
P.O. Box N 9204
Nassau, Bahamas
Fax (242) 323-7918

Dear Anthony:

     This letter sets forth the agreement of Ridgeway Investment Limited (the
"Purchaser") and Valence Technology, Inc. (the "Company") regarding the purchase
by the Purchaser from the Company of the Company's common stock (the "Common
Stock") on the date hereof. The parties agree as follows:

1.        This agreement relates to the purchase by the Purchaser of 595,889
     shares of the Company's Common Stock for an aggregate purchase price of
     $3,500,000.00 (three million five hundred thousand and 00/100 US dollars),
     which purchase is being settled by the parties on the date hereof.

2.        The Company represents and warrants that (a) the shares of Common
     Stock issued by the Company to the Purchaser have been registered under the
     Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
     registration statement on Form S-3, Commission File Number 333-76589 (the
     "Registration Statement"); and (b) the Company has filed a prospectus
     supplement to the Registration Statement in connection with the
     transaction.

3.        The Company has filed with the NASDAQ National Market an application
     for the listing of the shares of Common Stock to be purchased hereby.

4.        The Company will promptly notify the Purchaser of (a) any stop order
     or other suspension of the effectiveness of the Registration Statement and
     (b) the happening of any event as a result of which the prospectus included
     in the Registration Statement includes an untrue statement of a material
     fact or omits to state a material fact required to be stated therein, or
     necessary to make the statements therein, in light of the circumstances
     under which they were made, not misleading.

5.        This agreement and the legal relations between the parties hereto with
     respect to any purchase of Common Stock by the Purchaser hereunder shall be
     governed and construed in accordance with the substantive laws of the State
     of New York without giving effect to the conflicts of law principles
     thereunder.

<PAGE>

6.        Delivery of an executed copy of a signature page to this agreement by
     facsimile transmission shall be effective as delivery of a manually
     executed copy of this agreement shall be effective and enforceable as the
     original.

     Please execute a copy of this letter which, when executed by the Purchaser,
will constitute an agreement between the Company and the Purchaser.

                                 Very truly yours,

                                 COMPANY
                                 VALENCE TECHNOLOGY, INC.

                                 By:   /S/ JAY L. KING
                                     ----------------------------
                                 Name:  Jay L. King
                                 Title: Vice President & Chief Financial Officer

AGREED TO:

PURCHASER:
RIDGEWAY INVESTMENT LIMITED

By:  /S/ ANTHONY L.M. INDER RIEDEN
   ------------------------------------
     Name:   Anthony L.M. Inder Rieden
     Title:  Director[Letterhead of Valence Technology, Inc.]

THIS AGREEMENT, entered into as of JUNE 16, 2000 ("Effective Date") by and
between Valence Technology, Inc., with offices 301 Conestoga Way, Henderson, NV
("Valence") and GEORGE W. ADAMSON ("Indemnitee").

WHEREAS, Indemnitee performs a valuable service to Valence in his capacity as an
officer or director of Valence;

WHEREAS, the Companies Act of 1989 (the "Act") permits contracts between Valence
and its agents, officers, employees and other agents with respect to
indemnification of such persons; and

WHEREAS, in order to induce Indemnitee to continue to serve as an Indemnitee of
Valence, Valence has determined and agreed to enter into this Agreement with
Indemnitee.

NOW THEREFORE, in consideration of Indemnitee's continued service as an officer
or director of Valence after the date hereof, the parties hereto agree as
follows:

1.   SERVICES TO VALENCE

Indemnitee will serve, at the will of Valence or under separate contract, if any
such contract exists, as an Indemnitee of Valence faithfully and to the best of
his ability so long as he is duly appointed or elected and qualified in
accordance with the provisions of the By-laws or other applicable charter
documents of Valence; provided, however, that Indemnitee may at any time and for
any reason resign from such position (subject to any contractual obligation that
Indemnitee may have assumed apart from this Agreement) and that Valence shall
have no obligation under this Agreement to continue Indemnitee in any such
position.

2.   INDEMNITY OF INDEMNITEE

Valence hereby agrees to hold harmless and indemnify Indemnitee to the fullest
extent authorized or permitted by the provisions of applicable law.

3.   ADDITIONAL INDEMNITY

In addition to and not in limitation of the indemnification otherwise provided
for herein, and subject only to the exclusions set forth in Section 4 hereof,
Valence hereby further agrees to hold harmless and indemnify Indemnitee against
any and all expenses (including attorneys' fees), witness fees, damages,
judgments, fines and amounts paid in settlement and any other amounts that
Indemnitee becomes legally obligated to pay because of any claim or claims made
against or by him in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative (including an action by or in the right of
Valence) to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Indemnitee is, was or
at any time becomes a director, officer, employee or other agent of Corporation,
or is or was serving or at any time serves at the request of Valence as a
director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.

<PAGE>

4.   LIMITATIONS ON ADDITIONAL INDEMNITY

No indemnity pursuant to Section 3 hereof shall be paid by Valence:

     i.   on account of any claim against Indemnitee for an accounting of
          profits made from the purchase or sale by Indemnitee of securities of
          Valence pursuant to the provisions of Section 16(b) of the United
          States Securities Exchange Act of 1934 and amendments thereto or
          similar provisions of any federal, state or local statutory law;

     ii.  on account of Indemnitee's conduct that was fraudulent or dishonest or
          that constituted willful misconduct;

     iii. on account of Indemnitee's conduct that constituted a breach of
          Indemnitee's duty of loyalty to Valence or resulted in any personal
          profit or advantage to which Indemnitee was not legally entitled;

     iv.  for which payment is actually made to Indemnitee under a valid and
          collectible insurance policy or under a valid and enforceable
          indemnity clause, bylaw or agreement, except in respect of any excess
          beyond payment under such insurance, clause, bylaw or agreement;

     v.   if indemnification is not lawful (and, in this respect, both Valence
          and Indemnitee have been advised that the United States Securities and
          Exchange Commission believes that indemnification for liabilities
          arising under the federal securities laws is against public policy and
          is, therefore, unenforceable and that claims for indemnification
          should be submitted to appropriate courts for adjudication); or

     vi.  in connection with any proceeding (or part thereof) initiated by
          Indemnitee, or any proceeding by Indemnitee against Valence or its
          directors, officers, employees or other agents, unless such
          indemnification is expressly required to be made by law, the
          proceeding was authorized by the Board of Directors of Valence, or
          such indemnification is provided by Valence, in its sole discretion,
          pursuant to the powers vested in Valence under the Act.

5.   CONTINUATION OF INDEMNITY

All agreements and obligations of Valence contained herein shall continue during
the period Indemnitee is a director, officer, employee or other agent of Valence
(or is or was serving at the request of Valence as a director, officer, employee
or other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise) and shall continue thereafter so long
as Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative, by reason of the fact that Indemnitee was
serving in the capacity referred to herein.

6.   NOTIFICATION AND DEFENSE OF CLAIM

a.   Not later than thirty (30) days after receipt by Indemnitee of notice of
     the commencement of any action, suit or proceeding, Indemnitee will, if a
     claim in respect thereof is to be made against Valence under this
     Agreement, notify Valence of the commencement thereof; but the omission so
     to notify Valence will not relieve it from any liability which it may have
     to Indemnitee otherwise than under this Agreement.

b.   With respect to any such action, suit or proceeding as to which Indemnitee
     notifies Valence of the commencement thereof:

         i. Valence will be entitled to participate therein at its own expense;

         ii. except as otherwise provided below, Valence may, at its option and
jointly with any other indemnifying party similarly notified and electing to
assume such defense, assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from Valence to Indemnitee of its
election to assume the defense thereof, Valence will not be liable to Indemnitee
under this Agreement for any legal or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof except for reasonable costs of
investigation or otherwise as provided below. Indemnitee shall have the right to
employ separate counsel in such action, suit or proceeding but the fees and
expenses of such counsel incurred after notice from Valence of its assumption of
the defense thereof shall be at the expense of Indemnitee unless the employment
of counsel by Indemnitee has been authorized by Valence, Indemnitee shall have
reasonably concluded that there may be a conflict of interest between Valence
and

                                     Page 2

<PAGE>

Indemnitee in the conduct of the defense of such action or Valence shall not in
fact have employed counsel to assume the defense of such action, in each of
which cases the fees and expenses of Indemnitee's separate counsel shall be at
the expense of Valence. Valence shall not be entitled to assume the defense of
any action, suit or proceeding brought by or on behalf of Valence or as to which
Indemnitee shall have made the conclusion provided for in the above; and

         iii. Valence shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent, which shall not be unreasonably withheld. Valence
shall be permitted to settle any action except that it shall not settle any
action or claim in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent, which may be given or withheld
in Indemnitee's sole discretion.

7.   NON-EXCLUSIVITY OF RIGHTS

The rights conferred on Indemnitee by this Agreement shall not be exclusive of
any other right which Indemnitee may have or hereafter acquire under any
statute, provision of Valence's Articles of Association or By-laws, agreement,
vote of shareholders or directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding office.

8.   SURVIVAL OF RIGHTS

The rights conferred on Indemnitee by this Agreement shall continue after
Indemnitee has ceased to be a director, officer, employee or other agent of
Valence or to serve at the request of Valence as a director, officer, employee
or other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and shall inure to the benefit of
Indemnitee's heirs, executors and administrators.

9.   SEPARABILITY

Each of the provisions of this Agreement is a separate and distinct agreement
and independent of the others, so that if any provision hereof shall be held to
be invalid for any reason, such invalidity or unenforceability shall not affect
the validity or enforceability of the other provisions hereof. Furthermore, if
this Agreement shall be invalidated in its entirety on any ground, then Valence
shall nevertheless indemnify Indemnitee to the fullest extent provided by
applicable law.

10.  GOVERNING LAW

This Agreement shall be interpreted and enforced in accordance with the laws of
the State of Delaware.

11.  AMENDMENT AND TERMINATION

No amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing signed by both parties hereto.

12.  COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall
for all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart need be
produced to evidence the existence of this Agreement.

13.  HEADINGS

The headings of the sections of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction hereof.

                                     Page 3

<PAGE>

14.  NOTICES

All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon delivery if delivered
by hand to the party to whom such communication was directed or upon the third
business day after the date on which such communication was mailed if mailed by
certified or registered mail with postage prepaid.

ACCEPTED AND AGREED:

VALENCE TECHNOLOGY, INC.                 INDEMNITEE

By:   /S/ LEV M. DAWSON                  By:     /S/ GEORGE W. ADAMSON
   -----------------------------------        ---------------------------------
signature of authorized representative   signature of authorized representative

Lev M. Dawson                            George W. Adamson
--------------------------------------   --------------------------------------

Chairman and Chief Executive Officer
--------------------------------------
title

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