Exhibit 10.44

                           DATED 6th DAY OF MAY 2005

                    EASTERN NANO-MATERIALS HOLDINGS PTE. LTD.
                                   as Borrower


                                       AND

                             VALUE MONETIZATION LTD
                                   as Lender A


                                       AND

                      INTERNATIONAL FACTORS (SINGAPORE) LTD
                                   as Lender B


                                       AND

                                  CHEN XIANGZHI
                                  as Warrantor




--------------------------------------------------------------------------------
                           CONVERTIBLE LOAN AGREEMENT
--------------------------------------------------------------------------------




                                  STAMFORD LAW


                      (incorporated with limited liability)

                            9 RAFFLES PLACE., #32-00
                                 REPUBLIC PLAZA
                                SINGAPORE 048619

                            TELEPHONE: (65) 6389-3000

                            FACSIMILE: (65) 6389-3099




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                                TABLE OF CONTENTS
                                -----------------

1.  INTERPRETATION ............................................................2
2.  LOAN ......................................................................5
3.  PURPOSE ...................................................................5
4.  DRAWDOWN AND CONDITIONS PRECEDENT .........................................S
5.  CONVERSION AND COMPENSATION ...............................................6
6.  REPAYMENT OF CONVERTIBLE LOAN .............................................8
7.  SHARE ALLOTMENT AND ISSUE .................................................8
8.  REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS ..............................9
9.  MINORITY RIGHTS ..........................................................10
10. EVENTS OF DEFAULT ........................................................11
11. RESTRICTION ON ANNOUNCEMENTS .............................................12
12. COSTS AND EXPENSES .......................................................13
13. TAXES ....................................................................13
14. NOTICES ..................................................................13
15. MISCELLANEOUS ............................................................14
16. LENDERS' RIGHTS AND OBLIGATIONS ..........................................14
17. JURISDICTION AND GOVERNING LAW CLAUSE ....................................15
SCHEDULE 1 ...................................................................16
SCHEDULE 2 ...................................................................18
SCHEDULE 3 ...................................................................19
SCHEDULE 4 ...................................................................20

SCHEDULE 5 ...................................................................30


























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"Companies Act"             the Companies Act. Chapter 50 of Singapore;

"Convertible Loans"        the convertible loans to be granted by the Lenders to
                           the   Borrower  on  the  terms  and  subject  to  the
                           conditions of this Agreement;

"Convertible Loan          the  agreement  to be entered into among the relevant
 Agreement"                parties in relation to the ST Convertible Loan:

"Encumbrance"              any mortgage,  assignment of receivables,  debenture,
                           lien,  charge,  pledge,   security  interest,   title
                           retention, right to acquire, options,  restriction on
                           transfer  and  any  other  encumbrance  or  condition
                           whatsoever;

"Event of Default"         any of the events of default described in Clause 10;

"FY"                       financial  year ended or ending as the case may be 31
                           December;

"Group"                    the  Borrower  and the  Subsidiaries  and  where  the
                           context  requires,  includes all  subsidiaries of the
                           Borrower for the time being and "Group Company" means
                           any or a specific company within the Group;

"Haize"                    Shandong Haize Nanomaterials Co., Ltd.

"Initial Public Offering"  the  initial  public  offering  of the Shares and the
                           listing of such Shares on the SGX-ST;

"Listing Manual"           the  Listing  Manual  of the  SGX-ST  as  amended  or
                           supplemented from time to time;

"Potential Event of        any event or  circumstances  which,  if it  continued
Default"                   after the  giving of any  notice,  the  expiry of any
                           grace period,  and/or (as the case may be) the making
                           of any  determination by the Lenders,  as provided in
                           Clause 10, would become an Event of Default;

"PRC"                      People's Republic of China;

"Prospectus"               a prospectus  to be prepared in  accordance  with all
                           relevant  laws  and   regulations  to  be  issued  in
                           relation to the Initial Public Offering;

"RMB"                      Reminbi dollars;

"Restructuring Exercise"   the  restructuring  exercise  to be  carried  out  as
                           between  Shengda Nano,  Shengda Chem and the Group to
                           rationalise and streamline the corporate structure of
                           the Group  for-the  purposes  of the  Initial  Public
                           Offering, pursuant to which the Group wiliacquire the
                           assets  of and  carry  out  the  business  previously
                           carried on by Shengda Nano and Shengda Chem


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"SGX-ST"                   the Singapore Exchange Securities Trading Limited;

"Shaanxi Haize"            Shaanxi Haize Nanomaterials Co., Ltd.

"Share(s)"                 share(s)  of  S$1.00  each  in  the  capital  of  the
                           Borrower  existing at the date of this  Agreement and
                           all other (if any) stock or shares  from time to time
                           and for the time being  ranking pari passu  therewith
                           and all other (if any) shares or stock resulting from
                           any sub-division,  consolidation or re-classification
                           thereof;

"Subsidiaries"             the  subsidiaries  (as such  term is  defined  in the
                           Companies Act) of the Borrower.  which as at the date
                           of this  Agreement  comprises  Haize,  Bangsheng  and
                           Shaanxi Haize,  whose relevant details are set out in
                           Schedule 2;

"S$"                       Singapore dollars;

"Taxation"                 all forms of taxation  and  statutory.  governmental,
                           supra   governmental,    state,   provincial,   local
                           government   or   municipal   impositions,    duties,
                           contributions and levies (including  withholdings and
                           deductions),  whether in the PRC or  elsewhere in the
                           world,  whenever  imposed and however arising and all
                           penalties,   fines,  charges,   costs  and  interest,
                           together  with the cost of  removing  any  charge  or
                           other encumbrance relating thereto;

"USS"                      United States dollars; and

"Warranties"               the various representations and warranties set out in
                           Schedule 4 of this Agreement;

1.2      Expressions  defined  in  the  Conditions  shall,  unless  the  context
         otherwise  requires,   have  the  same  meanings  where  used  in  this
         Agreement.

1.3      Except as  otherwise  expressly  provided,  expressions  defined in the
         Companies Act have the same meanings in this Agreement.

1.4      A reference to a statute or statutory provision includes a reference:

         1.4.1    to that statute or provision as from time to time  modified or
                  re-enacted;

         1.4.2    to any  repealed  statute  or  statutory  provision  which  it
                  re-enacts (with or without modification); and

         1.4.3    to any orders,  regulations,  instruments or other subordinate
                  legislation  made  under the  relevant  statute  or  statutory
                  provision.

1.5      Unless the context otherwise requires:

         1.5.1    words in the singular include the plural, and vice versa;

         1.5.2    words importing any gender include all genders; and


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         1.5.3    a  reference  to a  person  includes  a  reference  to a  body
                  corporate and to an unincorporated body of persons.

1.6      References  to  Recitals,  Clauses and  Schedules  are to the  relative
         numbered Recitals to. Clauses of and Schedules to. this Agreement.

1.7      The  headings  are  for   convenience   only  and  do  not  affect  the
         interpretation of this Agreement.

1.8      The Schedules form part of this Agreement and shall have the same force
         and effect as if expressly  set out in the body of this  Agreement  and
         any reference to this Agreement shall include the Schedules.


2.       LOAN

2.1      Lender A shall  grant the  Borrower,  at the  times  and in the  manner
         provided in this Agreement,  a convertible  loan of up to Five Million,
         One Hundred and Twenty Thousand United States Dollars (US$5,120,000.00)
         (equivalent to approximately S$8,500.000.00) (the "VML Loan Amount").

2.2      Lender B shall  grant the  Borrower,  at the  times  and in the  manner
         provided in this  Agreement.  a convertible  loan of up to One Million.
         Four Hundred and Fifty Thousand Singapore Dollars (S$1,450,000.00) (the
         "IFS Loan Amount").


3.       PURPOSE

         The  Convertible  Loans are  intended  for the  purpose of funding  the
         Acquisition  and the  Borrower  shall  apply all  amounts  raised by it
         hereunder in or towards  satisfaction of the aforesaid purpose. The use
         of the  Convertible  Loans  shall  be in  accordance  and as set out in
         Schedule 3 hereto.


4.       DRAWDOWN AND CONDITIONS PRECEDENT

4.1      The drawdown of the  Convertible  Loans shall be  conditional  upon the
         following:

         4.1.1    the auditors of the Borrower. KPMG. having completed the audit
                  of the  combined  financial  statements  of the  Borrower  for
                  FY2002,  FY2003 and FY2004 for the purposes of the  submission
                  of a new listing  application  to the SGX-ST in respect of the
                  Initial Public Offering;

         4.1.2    the finalisation of drafts of all relevant legal due diligence
                  reports or comfort letters from the relevant legal advisers to
                  the  Borrower  for the  purposes  of the  submission  of a new
                  listing  application  to the SGX-ST in respect of the  Initial
                  Public Offering;

         4.1.3    there being no material  adverse  changes in the financial and
                  business  conditions  of the Group since the Accounts Date and
                  there  being no change of law which may  adversely  affect the
                  Borrower's ability to perform any of its obligations hereunder
                  or which may have a material  adverse  impact on the  proposed
                  Initial Public Offering:

         4.1.4    the  execution  of a licence  agreement  between the Group and
                  Nanomaterial  Technology  Pte.  Ltd.  allowing  the use of the
                  patent  relating  to  the  high-gravity  precipitation  method




                                       4
<PAGE>

                  (Patent  Number  ZL95105343.4  granted  by  the  China  Patent
                  Office) by the Group for its  precipitated  calcium  carbonate
                  nanomaterials business (in relation to the Group expanding its
                  production  capacity  beyond 30.000 tonnes per annum) on terms
                  reasonably satisfactory to the Lenders;

         4.1.5    the finalisation of the financial forecast of the Borrower for
                  FY2005 and FY2006 by the  Borrower  which  finalised  forecast
                  shall not  materially  deviate  from the  forecast  previously
                  presented to the Lenders;

         4.1.6    the issue of a legal  opinion in form and  content  reasonably
                  satisfactory  to the  Lenders  by  the  legal  adviser  to the
                  Borrower  on PRC laws  stating  their  opinion  that Haize and
                  Bangsheng  are  eligible  to apply  for and are  qualified  to
                  receive tax incentives in the form of a full exemption for the
                  first two years and a 50% reduction for the  subsequent  years
                  from  enterprise  income tax beginning  from their  respective
                  first profit-making year;

         4.1.7    the receipt of approval from the State  Development and Reform
                  Commission and the State Administration of Foreign Exchange or
                  any  other   relevant  PRC  authority  for  the   transactions
                  contemplated  herein  or  the  Restructuring   Exercise  or  a
                  confirmation  from the same or from the legal  adviser  to the
                  Borrower on PRC laws that no approval therefrom is required;

         4.1.8    all  representations  and warranties  made by the Borrower and
                  the  Warrantor in this  Agreement  being true and accurate and
                  remaining  true and accurate if repeated on the proposed  date
                  of  drawing  of the  Convertible  Loans  by  reference  to the
                  circumstances then existing;

         4.1.9    no  Event  of  Default  or  Potential  Event  of  Default  has
                  occurred,  whether by reason of the drawing of the Convertible
                  Loans or otherwise; and

         4.1.10   the execution of the Convertible Loan Agreement.

4.2      Within fourteen (14) days after the satisfactory fulfillment of all the
         conditions  precedent set out in Clause 4.1.1 to 4.1.7 and 4.1.10 above
         as  reasonably  determined  by the  Lenders  and upon the  giving  of a
         drawdown notice  substantially in the form set out in Schedule 1 by the
         Borrower, the Convertible Loans shall be paid into an escrow account to
         be  established  in accordance  with the Lenders'  instructions  and in
         Singapore  Dollars.  The  operation of the escrow  account  shall be in
         accordance with the use of the Convertible Loans as set out in Schedule
         3.


5.       CONVERSION AND COMPENSATION

5.1      The Lenders may elect, at any time during the tenure of the Convertible
         Loans as set out in Clause  6.1,  to  convert  the  entire  outstanding
         principal amount of the Convertible  Loans into Shares (the "Conversion
         Shares") as set out below:

         Lender A          may  convert  the VML Loan Amount into such number of
                           Shares  as  shall   amount   to   15.79%   (the  "VML
                           Percentage")  of the entire  issued share  capital of
                           the Borrower

         Lender B          may  convert  the IFS Loan Amount into such number of
                           Shares   as  shall   amount   to  2.69%   (the   "IFS
                           Percentage")  of the entire issued share capital.  of
                           the Borrower


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         (in both cases  assuming full  conversion of the  Convertible  Loans as
         well as the ST Convertible Loan on a fully-diluted basis).

5.2      For the avoidance of doubt:

         5.2.1    the Lenders may only exercise  such right of  conversion  once
                  and shall fully convert the Convertible  Loans into Conversion
                  Shares; and

         5.2.2    the  Convertible  Loans  shall be  deemed  fully  repaid  upon
                  conversion into Conversion Shares. Conversion shall take place
                  on the third  Business Day after notice of conversion has been
                  given in writing by the Lenders to the Borrower, whereupon the
                  Borrower  shall  issue and  deliver to the  Lenders  the share
                  certificates  in respect of the relevant  number of Conversion
                  Shares

5.3      (a)      Where the  Borrower's  audited (in  accordance  with Singapore
                  Auditing  Standards)  net profit  after tax for FY2004 is less
                  than RMB66.1  million,  the Warrantor shall pay to the Lenders
                  such amounts  calculated in  accordance  with the formulae set
                  out immediately below:

                  (i)      For Lender A:

                           Amount = (A/B x 4) - 0.1579) x C x D
                           where A is the VML Loan Amount
                           B is the  actual  audited  net  profit  after tax for
                           FY2004
                           C is the actual number of Shares  allotted and issued
                           immediately prior to the Initial Public Offerin

                           D is the offer  price of each Share  pursuant  to the
                           Initial Public Offering

                           Lender  A shall  have the  option  of  receiving  the
                           compensation  in the  form of  Shares  calculated  in
                           accordance  with the  formula (MB x 4) - 0.1579) x C.
                           where A, B and C bear the same meanings as above.

                  (ii)     For Lender B:

                           Amount = (A/(B x 4) -  0.0269) x C x D
                           where A is the IFS Loan Amount
                           B is the  actual  audited  net  profit  after tax for
                           FY2004
                           C is the actual number of Shares  allotted and issued
                           immediately prior to the Initial Public Offering
                           D is the offer  price of each Share  pursuant  to the
                           Initial Public Offering

                           Lender  B shall  have the  option  of  receiving  the
                           compensation  in the  form of  Shares  calculated  in
                           accordance  with the  formula (MB x 4) - 0.0269) x C.
                           where A, B and C bear the same meanings as above.

         (b)      Where the  Borrower's  audited (in  accordance  with Singapore
                  Auditing Standards) net profit after tax for FY2004 is greater
                  than RMB68.1  million,  the Lenders shall pay to the Warrantor
                  such amounts  calculated in  accordance  with the formulae set
                  -out immediately below:


<PAGE>

                  (iii)    For Lender A:

                           Amount = (0.1579 - A/(B x 4)) x C x D
                           where A is the VML Loan Amount
                           B is the  actual  audited  net  profit  after tax for
                           FY2004
                           C is the actual number of Shares  allotted and issued
                           immediately prior to the Initial Public Offering
                           D is the offer  price of each Share  pursuant  to the
                           Initial Public Offering

                           Lender  A  shall   have  the  option  of  paying  the
                           compensation  in the  form of  Shares  calculated  in
                           accordance with the formula (0.1579 - A/(B x 4)) x C,
                           where A, B and C bear the same meanings as above.

                  (iv)     For Lender B:

                           Amount (0.0269 - A/(B x 4)) x C x D
                           where A is the IFS Loan Amount
                           B is the  actual  audited  net  profit  after tax for
                           FY2004
                           C is the actual number of Shares  allotted and issued
                           immediately prior to the Initial Public Offering
                           D is the offer  price of each Share  pursuant  to the
                           Initial Public Offering

                           Lender  B  shall   have  the  option  of  paying  the
                           compensation  in the  form of  Shares  calculated  in
                           accordance with the formula (0.0269 - A/(B x 4)) x C,
                           where A, B and C bear the same meanings as above.


6.       REPAYMENT OF CONVERTIBLE LOAN

6.1      Except  where the  Convertible  Loans  have been fully  converted  into
         Conversion  Shares pursuant to Clause 5 above, the Borrower shall repay
         the Convertible Loans in the manner provided in Clause 6.2 at the close
         of business in  Singapore  on the date (the  "Terminal  Date")  falling
         twelve (12)  calendar  months  after the date on which the  Convertible
         Loans are advanced in  accordance  with this  Agreement,  provided that
         where the Terminal Date is not a Business Day, the Borrower shall repay
         the Convertible Loans on the preceding Business Day falling immediately
         before the Terminal  Date.  However,  the Lenders shall in its absolute
         discretion  have the option of extending  the  Terminal  Date to a date
         falling  eighteen  (18)  calendar  months  after  the date on which the
         Convertible Loans are advanced in accordance with this Agreement.

6.2      The Borrower shall repay the Convertible  Loans by making payment of an
         aggregate  amount equal to the VML Loan Amount to the account of Lender
         A and the IFS  Loan  Amount  to the  account  of  Lender  B (both  with
         interest from the drawdown date of the Convertible Loans up to the date
         of repayment at a rate of eighteen percent (18%) per annum,  compounded
         annually);  provided always that no interest shall be chargeable if the
         Convertible  Loans are converted  into  Conversion  Shares  pursuant to
         Clause 5 above.


7.       SHARE ALLOTMENT AND ISSUE

7.1      As soon as practicable after the execution of this Agreement and in any
         event  not  later  than  seven (7) days  after  the  execution  of this



<PAGE>

         Agreement,  the  Lenders and the  Warrantor  shall  subscribe  and make
         payment  for and the  Borrower  shall  allot and issue  such  number of
         Shares to the Lenders and the Warrantor as set out below:

         Party                      Number of Shares
         -----                      ----------------

         Lender A                   16
         Lender B                   3
         Warrantor                  80

7.2      The Borrower  and the  Warrantor  hereby  undertake to procure that all
         necessary  corporate  and  shareholder  actions  to allot and issue the
         Shares as set out  above  shall be  effected  upon the  receipt  of the
         relevant subscription and payment.

7.3      The Warrantor further  undertakes that, in the event the Initial Public
         Offering does not take place within eighteen (18) months of the date of
         the drawdown of the Convertible  Loans and the Convertible  Loans shall
         have been fully converted into Conversion  Shares.  the Warrantor shall
         grant an option to each of the Lenders to call for the transfer to each
         of them of such  number of Shares such that the final  shareholding  of
         the  Lenders in the issued  and paid up share  capital of the  Borrower
         after  such  transfer  shall be in  direct  proportion  to its  capital
         contribution to the Borrower.  Such option may only be exercised by the
         Lenders if the Borrower  shall have divested its  subsidiaries  and the
         transfer  shall be made upon the payment of the sum of S$1.00 from each
         of the Lenders.


8.       REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

8.1      Each of the party to this  Agreement  hereby  represents,  warrants and
         undertakes to and with each other that:

         8.1.1    it has full power and authority to enter into and perform this
                  Agreement  and this  Agreement  constitutes  valid and binding
                  obligations on it;

         8.1.2    the  execution  and  delivery of, and the  performance  of its
                  obligations under this Agreement will not:

                  (a)      result in a breach of any provision of its memorandum
                           or articles of  association  or of any  agreement  or
                           arrangement  to which it is a party or by which it is
                           bound: and/or

                  (b)      result in a breach of any order,  judgement or decree
                           of or  undertaking  to any  court,  government  body,
                           statutory  authority or regulatory  body  (including,
                           without  limitation,  any relevant  stock exchange or
                           securities  council)  to  which  it is a party  or by
                           which it is bound.

8.2      Each  of the  Borrower  and  the  Warrantor  represents,  warrants  and
         undertakes to and with the Lenders that:

         8.2.1    the total  audited net profit  after tax for the  Borrower for
                  FY2003 and FY2044 shall not be less than  RMB22.0  million and
                  RMB64.0 million respectively. For the purposes of this clause,
                  "audited"  shall mean  audited in  accordance  with  Singapore
                  Auditing Standards; and

         8.2.2    the Borrower shall use its best efforts to achieve the Initial
                  Public  Offering  within  eighteen  (18) months of the date of
                  this Agreement.



<PAGE>

8.3      Each of the Borrower and the Warrantor  further warrants and undertakes
         to and with the Lenders that:

         8.3.1    each of the  Warranties  is true and  accurate in all respects
                  and not  misleading  at the  date of this  Agreement  and will
                  continue  to be true  and  accurate  in all  respects  and not
                  misleading   down  to  and   including  the  drawdown  of  the
                  Convertible Loans; and

         8.3.2    in relation to any  Warranty  which  refers to the  knowledge,
                  information or belief of the Borrower or the  Warrantor,  that
                  the  Borrower or the  Warrantor  (as the case may be) has made
                  reasonable enquiry into the subject matter of that Warranty.

8.4      The  Borrower  further  undertakes  to  provide  reasonable  access  to
         information  promptly  upon  request  by any  Lender  and to allow  the
         participation of the Lenders' representatives in management meetings of
         the Borrower.


9.       MINORITY RIGHTS

9.1      For as long as any portion of the Convertible Loans remain  outstanding
         or, if the Convertible  Loans shall have been converted into Conversion
         Shares,  up to the date of the Initial Public Offering,  Lender A shall
         be entitled  to nominate  one (1)  non-executive  director  and one (I)
         observer to the Board and that of the Borrower's  related companies and
         Lender B shall be entitled to  nominate  one (1)  observer to the Board
         and that of the  Borrower's  related  companies.  The  Borrower and the
         Warrantor hereby undertake to effect all necessary corporate actions to
         procure such appointment.

9.2      Prior to the Initial Public  Offering,  the unanimous  consent,  of the
         Board and the  Borrower's  shareholders,  and  written  consent  of the
         Lenders which have  advanced  more than 75% of the aggregate  amount of
         the Convertible  Loans (assuming that the VMI, Loan Amount is converted
         into Singapore Dollars) will be required for the following:

9.2.1    approval of the annual business plan of the Borrower;

         9.2.2    the  issue or  allotment  or  agreement  to issue or allot any
                  securities  (whether  voting or  otherwise)  or  debentures or
                  securities   convertible   into  shares   (whether  voting  or
                  otherwise)  or any other  debentures  or share  capital in any
                  form whatsoever except as otherwise  contemplated herein or in
                  the Convertible Loan Agreement;

         9.2.3    any merger,  restructuring,  reorganisation  or dissolution of
                  the  Borrower  except  as  may  be  effected  pursuant  to the
                  Restructuring Exercise;

         9.2.4    the termination of the operations of any GroupCompany;

         9.2.5    any change in the principal business activities of the Group;

         9.2.6    engaging  in  business   unrelated  to  the  Group's   current
                  business;

         9.2.7    any  capital  expenditure  above  RMB400,000  and  major  cash
                  disbursements  above  RMB200,000 which are not included in the
                  Borrower's annual business and budget plan;

         9.2.8    any major  acquisition  or  disposals  of assets  except as in
                  accordance with the Restructuring Exercise;

         9.2.9    the  implementation  or formulation of any dividend  policy by
                  the Borrower;


<PAGE>


         9.2.10   the entering into any interested  person  transactions  by any
                  Group  Company  within the scope of  Chapter 9 of the  Listing
                  Manual;

         9.2.11   the  appointment of any additional  director or the removal of
                  any director from the Board;

         9.2.12   the  appointment  of and/or  change  in any key  member of the
                  Borrower's management team; and

         9.2.13   the removal of the current  auditors or the appointment of new
                  auditors of the Borrower.

         For the avoidance of doubt, the provisions of this Clause 9.2 shall not
         affect the repayment of the Convertible Loans and/or the ST Convertible
         Loan, provided that they shall be repaid simultaneously.


10.      EVENTS OF DEFAULT

10.1      Each of the following events shall be an Event of Default:

         10.1.1   there is a breach of any obligations  and/or any terms in this
                  Agreement,  and in the case of any breach of an  obligation or
                  term of this Agreement which, in the sole determination of the
                  Lenders,  is capable of remedy,  it is not remedied  within 30
                  days of such breach:

         10.1.2   any Group  Company (a) stops or  threatens  to stop payment of
                  its debts or is otherwise unable to pay all or any part of its
                  debts without reasonable cause or ceases or threatens to cease
                  to carry on its business or takes  proceedings  or other steps
                  with a view to rescheduling  or deferring its  indebtedness or
                  any part of its indebtedness which it will otherwise be unable
                  to  pay  when  due;  (b)  makes  a  general  assignment  or an
                  arrangement  or  composition  with or for the  benefit  of its
                  creditors  generally;  (c) becomes  insolvent  or is unable or
                  legally  deemed  unable to pay its debts within the meaning of
                  section  254(2)  of the  Companies  Act or any  other  similar
                  provision in any other  applicable  jurisdiction  or admits in
                  writing its  inability  to pay its debts as and when they fall
                  due; or (d) a distress or execution or other legal  process is
                  levied or enforced upon or commenced against any material part
                  of  its  business,  property  or  assets  and  such  distress,
                  execution or legal  process is not  terminated  or  discharged
                  within 14 days;

         10.1.3   an encumbrancer  takes possession of, or a receiver,  trustee,
                  administrator,  judicial  manager or other similar  officer is
                  appointed  over,  the  whole  or any part of the  property  or
                  assets of any Group Company;

         10.1.4   except  for  the  purpose  of  a  solvent   reconstruction  or
                  amalgamation  on terms and  conditions  which shall have first
                  been approved by the Lender:

                  10.1.4.1a petition is presented or other proceedings initiated
                           for   its   winding-up,    judicial   management   or
                           administration  of any  Group  Company  which  is not
                           discharged for a period of 30 days; or

                  10.1.4.2a court order is made for the winding up,  bankruptcy,
                           judicial  management or  administration  of any Group
                           Company;


<PAGE>

         10.1.5   any Group  Company  without the prior  written  consent of the
                  Lenders  sells or  otherwise  disposes of any  undertaking  or
                  assets  representing 25 percent or more of its net asset value
                  based on its latest  available  audited  accounts (or if there
                  are no audited accounts. its latest management accounts):

         10.1.6   any other  indebtedness  in respect of  borrowed  money of any
                  Group  Company  (a)  is  not  paid  when  due  or  within  any
                  applicable  grace  period in any  agreement  relating  to that
                  indebtedness  without  reasonable  cause  or (b)  becomes  (or
                  becomes  capable of being rendered) due and payable before its
                  normal  maturity  by reason of a default  or event of  default
                  (actual or potential), however described;

         10.1.7   any creditor of any Group Company becomes  entitled to declare
                  any indebtedness of the relevant Group Company due and payable
                  prior to its  specified  maturity  as a result  of an event of
                  default (or other event equivalent to an event of default);

         10.1.8   the present or future security  constituted by any mortgage or
                  charge upon the whole or any part of the undertaking or assets
                  of any Group Company shall become enforceable and/or steps are
                  taken to enforce the same;

         10.1.9   a  moratorium   is  agreed  or  declared  in  respect  of  any
                  indebtedness of any Group Company or any government  authority
                  or  agency  condemns,   seizes,   compulsorily   purchases  or
                  expropriates  all or a  substantial  part of the assets of any
                  Group Company;

         10.1.10  it is or will become  unlawful  for the Borrower to perform or
                  comply with any one or more of its material  obligations under
                  this Agreement;

         10.1.11  any litigation or arbitration  proceeding (whether criminal or
                  civil) is  instituted  against any Group  Company  which would
                  have a material  adverse effect on the financial  condition of
                  the relevant Group Company;

         10.1.12  it is claimed by or on behalf of the  Borrower  that the terms
                  of this Agreement are not binding and enforceable  against it;
                  and

         10.1.13  any event occurs in relation to the Borrower or Group Company
                  which, under the laws of any applicable jurisdiction, has an
                  effect analogous or equivalent to any of the events referred
                  to in this Clause 9.1.

10.2     Upon the occurrence of an event of default, the Lenders may at any time
         thereafter. whether individually or collectively, whether or not notice
         shall have been given to the Borrower of the  occurrence  of such event
         of default,  declare that the whole of the total  indebtedness  for the
         time being  outstanding  and unpaid  shall become  immediately  due and
         payable as the Lender or Lenders (as the case may be) may determine.


11.      RESTRICTION ON ANNOUNCEMENTS

         Save as may be required  to be  disclosed  pursuant  to any  applicable
         requirement issued by any competent governmental or statutory authority
         or rules or regulations  of any relevant  regulatory  body  (including,
         without limitation,  any relevant stock exchange or securities council)
         or to their  respective  professional  advisers or  otherwise as may be
         necessary in connection  with the initial Public  Offering,  each party
         undertakes that during the tenure of the  Convertible  Loan it will not
         make any  announcement  in connection  with this  Agreement  unless the
         other party shall have given its written  consent to such  announcement
         (which consent not to be unreasonably withheld).


<PAGE>

12.      COSTS AND EXPENSES

         The  Borrower  shall  reimburse  the Lenders for all costs and expenses
         (including legal fees) together with any goods and services tax thereon
         incurred by it in connection  with the  completion of the  transactions
         herein contemplated.

13.      TAXES

         All payments to be made by the Borrower to the Lenders  hereunder shall
         be made free and clear of and  without  deduction  for or on account of
         tax unless the  Borrower is required to make such a payment  subject to
         the deduction or  withholding  of tax, in which case the sum payable by
         the  Borrower  in respect of which such  deduction  or  withholding  is
         required  to be made  shall be  increased  to the extent  necessary  to
         ensure that, after the making of the required deduction or withholding,
         the Lenders  receive and retain (free from any  liability in respect of
         any such deduction or  withholding) a net sum equal to the sum which it
         would  have  received  and  so  retained  had  no  such   deduction  or
         withholding been made or required to be made.

14.      NOTICES

         Any  notice  required  to be given by any party to the  other  shall be
         deemed  validly  served by hand  delivery  or by  telefax or by prepaid
         registered  letter sent through the post to its address given herein or
         such  other  address  as may  from  time to time be  notified  for this
         purpose.  Any notice served by hand shall be deemed to have been served
         on delivery,  any notice served by telefax shall be deemed to have been
         served  when sent  provided  that such  notice  sent by  telefax  shall
         thereafter be sent by post by way of a confirmation copy and any notice
         served by prepaid registered letter shall be deemed to have been served
         seven (7) days  after the time at which it was  posted  and in  proving
         service it shall be  sufficient  to prove that the notice was  properly
         addressed  and  delivered  or posted,  as the case may be. The  initial
         addresses and telefax numbers of the parties are:

         The Borrower:     Eastern Nano-Materials Holdings Pte. Ltd.
                           9 Raffles Place, #32-00 Republic Plaza.
                           Singapore 048619
                           Telefax no: (86) 538 8560618
                           Attention: Mr Chen Xiangzhi

         Lender A:         Value Monetization Ltd
                           50 Raffles Place, 434-03, Singapore Land Tower,
                           Singapore 048624
                           Telefax no: (65) 65322002
                           Attention: Peter Chan Pee Teck/Yong Thian Sze

         Lender B:         International Factors (Singapore) Ltd
                           7 Temasek Boulevard, #10-01 Suntec Tower One
                           Singapore 038987
                           Telefax no: (65) 63399527
                           Attention: Lee Soon Kie/Ong Geok Yeow

         The Warrantor:    Chen Xiangzhi
                           c/o 9 Raffles Place, #32-00 Republic Plaza,
                           Singapore 048619
                           Telefax no: (86) 538 8560618


<PAGE>

15.      MISCELLANEOUS

15.1     Except as otherwise provided, time is of the essence of this Agreement.

15.2     No failure or delay or omission to exercise any power,  right or remedy
         provided  by law or under  this  Agreement  shall  operate  as a waiver
         thereof nor shall any single or partial  exercise or waiver of any such
         power, right or remedy preclude its further exercise or the exercise of
         any other  power,  right or remedy.  The  powers,  rights and  remedies
         provided in this  Agreement  are  cumulative  and not  exclusive of any
         powers, rights or remedies provided by law.

15.3     The single or partial  exercise of any right,  power or remedy provided
         by law or under this Agreement  shall not preclude any other or further
         exercise thereof or the exercise of any other right, power or remedy.

15.4     Any  liability  of any  party  hereunder  may in  whole  or in  part be
         released,  compounded or compromised,  or time or indulgence given by a
         party to another party, in its absolute  discretion  without in any way
         prejudicing  or  affecting  any  other or  further  rights of the party
         against the other party.

15.5     This  Agreement and the documents  referred to herein contain the whole
         agreement between the parties relating to the transactions contemplated
         by this  Agreement and supersede  all previous  agreements  between the
         parties relating to these transactions.

15.6     The parties shall do and execute or procure to be done and executed all
         such further acts,  deeds,  things and documents as the other party may
         reasonably  require  to fulfil  the  provisions  of and to give to each
         party the full benefit of this Agreement.

15.7     If any  provision  in this  Agreement  shall be,  or at any time  shall
         become invalid,  illegal or unenforceable in any respect under any law,
         such invalidity,  illegality or  unenforceability  shall not in any way
         affect  or impair  any  other  provisions  of this  Agreement  but this
         Agreement   shall  be  construed  as  if  such   invalid,   illegal  or
         unenforceable provision had never been contained herein.

15.8     Unless expressly  provided to the contrary in this Agreement,  a person
         who is not a party to this  Agreement  has no right under the Contracts
         (Rights of Third  Parties) Act,  Chapter 53B of Singapore to enforce or
         to enjoy the benefit of any term of this Agreement.

16.      LENDERS' RIGHTS AND OBLIGATIONS

16.1     The  obligations  of each  Lender  under this  Agreement  are  several.
         Failure by a Lender to perform  its  obligations  under this  Agreement
         does  not  affect  the  obligations  of  any  other  party  under  this
         Agreement.  No Lender is responsible  for the  obligations of the other
         Lender under this Agreement.

16.2     The rights of each Lender under or in  connection  with this  Agreement
         are separate  and  independent  rights and any debt arising  under this
         Agreement  to a  Lender  from the  Borrower  shall  be a  separate  and
         independent debt.

16.3     A Lender may, except as otherwise stated in this Agreement,  separately
         enforce its rights under this Agreement.



<PAGE>

17.      JURISDICTION AND GOVERNING LAW CLAUSE

17.1     This  Agreement  shall be governed by and  construed in all respects in
         accordance with the laws of Singapore.

17.2     In relation  to any legal  action or  proceedings  arising out of or in
         connection with this Agreement,  each of the parties hereto irrevocably
         submits to the exclusive jurisdiction of the courts of Singapore,
























<PAGE>

                                   SCHEDULE 1


                                 DRAWDOWN NOTICE
                                  (Clause 4.2)

                            [Letterhead of Borrower]



To:      Value Monetization Ltd
         50 Raffles Place,
         #34-03 Singapore Land Tower
         Singapore 048624

         International Factors (Singapore) Ltd 7
         Temasek Boulevard
         #10-01 Suntec Tower One
         Singapore 038987


Dear Sirs

CONVERTIBLE LOAN AGREEMENT

We  refer  to the  above  Convertible  Loan  Agreement  dated  3 May  2005  (the
"Agreement") made between ourselves, as Borrower, and yourselves, as Lender. All
the terms as defined in the  Agreement  shall bear the same meaning when used in
this notice.

We give you notice that we wish to drawdown the following  amounts to be made to
us under the terms of the Agreement on [oDate] (or, if it is not a Business Day,
on the next Business Day) to be deposited in [oname of bank] Account No. [o]:

(a)      US$5,120,000.00 from Value Monetization Ltd; and

(b)      S$1,450,000.00  from international  Factors  (Singapore) Ltd.

We hereby confirm:

(i)      that the conditions precedent under Clause 4 of the Agreement have been
         complied with in every respect;

(ii)     that each of the warranties and  representations  contained in Clause 8
         of the  Agreement  are true and accurate in all respects as though made
         on the date of this Notice with  reference  to facts and  circumstances
         presently  subsisting  and will be true and accurate in all respects on
         the date of the  intended  drawing  as  though  made on the date of the
         intended  drawing  with  reference  to  facts  and  circumstances  then
         subsisting; and

(iii)    that as at the date  hereof no Event of Default or  Potential  Event of
         Default  has  occurred,  and we  undertake  that no Event of Default or
         Potential  Event of  Default  will  exist  at the date of the  intended
         drawing.





<PAGE>

Yours faithfully,
For and on behalf of
Eastern Nano-Materials Holdings Pte. Ltd.




________________________________
Name: [o]
Designation: [o]


































<PAGE>
<TABLE>
<CAPTION>

                                   SCHEDULE 2
         DETAILS OF GROUP STRUCTURE AND THE SUBSIDIARIES Group Structure


                           --------------------------
                             EASTERN NANO-MATERIALS
                               HOLDINGS PTE. LTD.
                           --------------------------
                                       |
           ----------------------------|----------------------------
           | 100%                      | 100%                      | 100%
---------------------       ----------------------    --------------------------
    SHAANXI HAIZE               SHANDONG HAIZE            SHANDONG BANGSHENG
    NANO CO., LTD.              NANO CO., LTD.             CHEMICAL CO., LTD.
---------------------       ----------------------    --------------------------


Details of Subsidiaries

                                                                        Issued and
                 Place of        Principal           Principal Place    Paid-up Capital       Percentage
Name             Incorporation   Business            of Business        Registered Capital    owned
<S>              <C>             <C>                 <C>                <C>                   <C>

SHANDONG         PRC             Manufacture of      Daiyue             RMB46,530.000         100%
   HAIZE NANO                    nanosized           Economic and
   CO., LTD.                     precipitated        Technology
                                 calcium             Development
                                 carbonate           Zone, Taian
                                                     City, Shandong
                                                     Province. PRC

SHANDONG          PRC            Manufacture of      No. 342,           R M B24,500,000       100%
   BANGSHENG                     chemical            Lingshan
   CHEMICAL                      products            Avenue. Taian
   CO., LTD.                                         City. Shandong
                                                     Province, PRC

SHAANXI MAIZE     PRC            Manufacture of      Yangyu Town,        RMB50,000,000        100%
   NANO CO.                      nanosized           Qianxian
   LTD.                          precipitated        County.
                                 calcium             Xianyang City,
                                 carbonate           Shaanxi
                                                     Province, PRC
</TABLE>












<PAGE>

                                   SCHEDULE 3
                             USE OF CONVERTIBLE LOAN


1.       The Convertible Loans shall be used by the Borrower for the acquisition
         of relevant  assets of Shengda  Nano and Shengda  Chem  pursuant to the
         Asset Acquisition  Agreements as part of the Restructuring Exercise for
         the  Initial  Public  Offering  on the  SGX-ST.  Any other  uses of the
         Convertible Loans shall require the written approval of the Lenders.

2.       The  Convertible  Loans shall be advanced  into an escrow  account (the
         "Escrow Account") set up by the Borrower at a Singapore bank designated
         by  the  Lenders.  The  funds  to be  used  by  the  Borrower  for  the
         Acquisition  shall be paid into the escrow accounts of Shengda Nano and
         Shengda Chem designated by the Lenders to be established in the PRC for
         this  purpose.  The funds shall be converted  into RMB at the spot rate
         quoted  by the  relevant  bank  in the PRC on the  day  the  funds  are
         received by the bank.














<PAGE>

                                   SCHEDULE 4
                           WARRANTIES AS TO THE GROUP


1.       Accounts
         --------

1.1      The  Audited  Accounts  have  been  prepared  in  accordance  with  all
         applicable laws and on a consistent basis in accordance with accounting
         principles,  standards and practices generally accepted in Singapore at
         the date of this  Agreement  so as to give a true and fair  view of the
         state of affairs of the Group at the date of the Audited  Accounts  and
         of the profits or losses for the period  concerned  and as at that date
         make:

         1.1.1.   full provision for all actual liabilities  (including taxation
                  liabilities);

         1.1.2.   proper  provision (or note in accordance with good accountancy
                  practice) for all contingent liabilities;

         1.1.3.   provision  reasonably  regarded  as  adequate  for all had and
                  doubtful debts; and

         1.1.4.   due provision for  depreciation  and  amortisation and for any
                  obsolescence of assets.

1.2.     The  stock  were  included  in the  Audited  Accounts  at  figures  not
         exceeding the amounts which could in the circumstances  existing at the
         date of the Audited  Accounts  reasonably be expected to be realised in
         the normal course of carrying on the business of the Group.

1.3.     The  profits  and losses of the Group for each of the  financial  years
         ended on the Accounts  Date as shown by the Audited  Accounts  have not
         (except as therein  disclosed)  been  affected to a material  extent by
         inconsistencies   of   accounting   practices,   by  the  inclusion  of
         non-recurring items of income or expenditure,  by transactions  entered
         into otherwise than on normal  commercial terms or by any other factors
         rendering  such  profits for all or any of such  periods  exceptionally
         high or low (other than as disclosed in the relevant accounts).

1.4.     The Group has no  outstanding  loan capital and has not factored any of
         its  debts,  or  engaged  in  financing  of a type  which  would not be
         required to be shown or reflected  in the Audited  Accounts or borrowed
         any money  which it has not  repaid and that no Group  Company  has any
         other debt whatsoever other than as disclosed in the Audited Accounts.

1.5.     There are no liabilities  (including contingent  liabilities) which are
         outstanding  on the part of the Group,  other  than  those  liabilities
         disclosed in the Audited Accounts or which have arisen in the ordinary'
         course of business since the date of the Audited Accounts.

1.6.     The Group has not been party to any transaction of material  importance
         which,  if it had  taken  place on or  before  the date of the  Audited
         Accounts,  would have been required to be disclosed or reflected in the
         Audited Accounts,

2.       Changes  Since  Accounts  Date
         ------------------------------

         Since the Accounts Date as regards each Group Company:

2.1      its business has been lawfully carried on in the ordinary course and so
         as to maintain the same as a going concern;

<PAGE>

2.2      it has not  disposed of any assets or assumed or incurred  any material
         liabilities  (including contingent  liabilities)  otherwise than in the
         ordinary course of carrying on its business;

2.3      its  business  has  not  been  adversely  affected  by the  loss of any
         important  customer or source of supply or by any  abnormal  factor not
         affecting similar businesses to a like extent or by any other cause and
         the  Borrower  and/or  the  Warrantor  after  making  due  and  careful
         enquiries  are not aware of any facts  which are likely to give rise to
         any such effects;

2.4      no dividend or other  distribution  has been declared,  made or paid to
         its members except as provided for in the Audited Accounts;

2.5      its turnover and its trading position has not materially deteriorated;

2.6      it has not  borrowed  any money or issued any  guarantee or created any
         charge or  Encumbrance  over any asset other than as  disclosed  in the
         Audited Accounts;

2.7      no share or loan  capital  has been  allotted or issued or agreed to be
         issued except as otherwise  contemplated  herein or in the  Convertible
         Loan Agreements;

2.8      there has been no  unusual  increase  or  decrease  in the level of its
         stock;

2.9      it has not entered into any unusual,  long term or onerous  commitments
         or contracts;

2.10     the  Borrower  and/or  the  Warrantor  after  making  due  and  careful
         enquiries has not learnt of any circumstance making bad or doubtful any
         of the book debts of the relevant Group Company;

2.11     there has been no material adverse change in its financial  position or
         prospects;

2.12     it has not  knowingly  waived or released any  proprietary  rights of a
         material or substantial value howsoever arising;

2.13     no  resolutions  have  been  passed  and  nothing  has been done in the
         conduct or  management  of the affairs of any Group Company which would
         be likely to  materially  reduce the net  tangible  asset  value of the
         relevant Group Company.

3.       Litigation
         ----------

3.1      Since the Accounts  Date, no claim in damages has been made against any
         Group Company.

3.2      No Group  Company  is at  present  engaged,  whether  as  plaintiff  or
         defendant or otherwise, in any legal action,  proceeding or arbitration
         (other than as  plaintiff  in the  collection  of debts  arising in the
         ordinary  course of its business) or being  prosecuted for any criminal
         offence.

3.3      There are no  circumstances  known to the Borrower and/or the Warrantor
         after making due and careful enquiries likely to lead to any such claim
         or legal action, proceeding or arbitration (other than as aforesaid) or
         prosecution.

3.4      There  is not  in  force  any  court  injunction,  order  or  directive
         restraining  or  restricting  any Group  Company  from  carrying on its
         business or any part thereof.

3.5      No Group  Company  is subject to any  outstanding  judgement:  order or
         decree of any court,  tribunal or regulatory or government  body or any
         undertaking  to  any  court,   judicial   authority  or  regulatory  or
         government  body or any  outstanding  arbitration  award;  there are no
         civil,   criminal,   administrative   or  disciplinary  or  arbitration
         proceedings  in  progress,  pending  or  threatened  against  any Group

<PAGE>

         Company  and  there  are no  facts  likely  to give  rise  to any  such
         proceedings.

3.6      No Group  Company  nor any  person,  for whose acts or  defaults of any
         Group Company may be liable,  has  committed  any criminal,  illegal or
         other  unlawful act or any breach of contract or statutory  duty or any
         tortious  or  other  act or  default  which  could  lead to a claim  or
         proceedings  against  the  relevant  Group  Company  or give rise to or
         increase a liability or  obligation of any Group Company or which could
         entitle any other person to terminate  any contract to which such Group
         Company is a party.

3.7      There are no investigations,  inquiries or disciplinary  proceedings by
         or before  any  regulatory  or  government  body  concerning  any Group
         Company,  none are pending or threatened  and there are no facts likely
         to give rise to any such investigation, inquiry or proceedings.

3.8      No Group Company has been convicted of any offence. No employee,  agent
         or former  officer,  agent or  employee  of any Group  Company has been
         convicted of any offence in relation to the relevant Group Company, and
         no employee  has, so far as the  Borrower  and/or'  the  Warrantor  are
         aware,  been  convicted  of any  offence  (save for any  minor  traffic
         offences)  which reflects upon his  suitability to hold his position or
         upon the reputation of the relevant Group Company.

4.       Taxation
         --------

4.1      There is no  liability  on any Group  Company to Taxation in respect of
         which a  Taxation  claim  could be made and there are no  circumstances
         likely to give rise to such a liability.

4.2      All income tax. goods and services and  value-added  tax.  salaries tax
         and property tax, stamp duties, withholding tax and other taxes charges
         and levies  assessed or imposed by any  government or  governmental  or
         statutory  body which have been assessed upon each Group Company or any
         of them and which are due and payable on or before completion have been
         paid and were paid on or before the relevant due date for payment.

4.3      In relation to stamp duty assessable or payable in the PRC or elsewhere
         in the world,  as at the date of this  Agreement,  all documents in the
         enforcement of which any Group Company may be interested have been duly
         stamped  and no  document  belonging  to any  Group  Company  now or at
         completion  which is  subject  to ad  valorem  stamp duty is or will be
         unstamped or insufficiently  stamped; nor has any relief from such duty
         been  improperly  obtained,  nor has any event  occurred as a result of
         which any such duty from which any Group  Company has obtained  relief,
         has become  payable;  and all stamp duty  payable  upon any transfer of
         shares in each Group Company before Completion has been duly paid.

4.4      In  relation  to goods and  services  tax and/or  value-added  or other
         similar tax, where applicable. each Group Company:

         4.4.1    has been duly registered and is a taxable person;

         4.4.2    has   complied,   in  all   respects,   with   all   statutory
                  requirements, orders, provisions, directions or conditions;

         4.4.3    maintains  complete,  accurate  and  up-to-date  records as is
                  required by the applicable legislation; and

         4.4.4    has not been required by the relevant  authorities  of customs
                  and excise to give security.

<PAGE>

4.5      No Group  Company  has paid or,  since the  Accounts  Date,  has become
         liable  to pay any  penalty  or  interest  under any  Taxation  statute
         anywhere in the world.

4.6      No Group Company has been the subject of an investigation, discovery or
         access  order  by or  involving  any Tax  Authority  and  there  are no
         circumstances  existing  which  make it likely  that an  investigation,
         discovery or order will be made.

5.       Tax Returns
         -----------

         Each Group Company has duly made all returns and given or delivered all
         notices,  accounts and information  which on or before the date of this
         Agreement ought to have been made,  given or delivered for the purposes
         of Taxation and all such  returns,  notices,  accounts and  information
         (and all other information  supplied to the relevant tax or customs and
         excise or other fiscal  authority  concerned for any such purpose) have
         been  complete  and correct and made on a proper basis and none of such
         returns, notices, accounts or information is disputed in any respect by
         the  fiscal  authority  concerned  and  there  is no fact  known to the
         Borrower  and/or the Warrantor  after making due and careful  enquiries
         which  might be the  occasion  of any such  dispute or of any claim for
         taxation in respect of any  financial  period down to and including the
         Accounts Date not provided for in the Audited Accounts.

6.       Employees
         ---------

6.1      There are not in existence any  contracts of service with  directors or
         employees of each Group Company,  nor any  consultancy  agreements with
         each Group  Company,  which cannot be  terminated  by three (3) months'
         notice or less or (where not reduced to writing) by  reasonable  notice
         (not  exceeding a three (3) month  period)  without  giving rise to any
         claim for damages or compensation  except otherwise as disclosed in the
         Prospectus.

6.2      There are no amounts owing to any present or former  director or to any
         employee  of  each  Group   Company  save  for  accrued   benefits  and
         remuneration  due to  present  directors  and  employees  of each Group
         Company,  full  details  of  which  have  been  set out in the  Audited
         Accounts.

6.3      Save to the extent (if any) to which  provision or  allowance  has been
         made in the relevant Audited Accounts:

         6.3.1    no liability has been incurred by any Group Company for breach
                  of any  contract of service or for  services,  for  redundancy
                  payments or for compensation for wrongful  dismissal or unfair
                  dismissal  or for  failure  to  comply  with any order for the
                  reinstatement or re-engagement of any employee; and

         6.3.2    no  gratuitous  payment has been made or promised by any Group
                  Company in connection with the actual or proposed  termination
                  or  suspension  of  employment or variation of any contract of
                  employment of any present or former director or employee.

6.4      Each Group Company has in relation to each of its employees (and so far
         as relevant to each of its former  employees)  complied in all respects
         with:

         6.4.1    all obligations imposed on it by all statutes, regulations and
                  codes  of  conduct  and  practice  relevant  to the  relations
                  between it and its employees or any trade union and each Group
                  Company has maintained current,  adequate and suitable records
                  regarding the service of each of its employees;

<PAGE>

         6.4.2    all  collective  agreements  and customs and practices for the
                  time being  dealing with such  relations or the  conditions of
                  service of its employees; and

         6.4.3    all  relevant  orders  and  awards  made  under  any  relevant
                  statute,  regulation or code of conduct and practice affecting
                  the conditions of service of its employees.

6.5      Each Group  Company is not involved in and has not  received  notice of
         any industrial or trade dispute or any dispute or negotiation  with any
         trade union or association of trade unions or  organisation  or body of
         employees.

6.6      Each Group  Company does not have in existence  and is not proposing to
         introduce any incentive scheme,  share incentive  scheme,  share option
         scheme,  profit sharing  scheme or other bonus  commission or incentive
         scheme for all or any of its directors or employees.

6.7      There are no amounts  owing to any  present or former  employee of each
         Group Company other than  remuneration  accrued for the current wage or
         salary period or for  reimbursement of normal business  expenses and no
         present or former  employee of each Group Company has any claim against
         the relevant  Group Company or right to be  indemnified by the relevant
         Group  Company  arising  out of an act or omission in the course of his
         office or employment on or before the date of this Agreement.

6.8      There has been no strike,  work to rule or industrial  action (official
         or  unofficial)  by any employee of each Group Company  within the last
         five (5) years.

6.9      There  are no  claims  pending  or  threatened  or,  to the best of the
         knowledge of the  Borrower  and/or the  Warrantor,  having made due and
         careful enquiries, capable of arising, against each Group Company:

         6.9.1    by an  employee  or workman or third  party,  in respect of an
                  accident or injury which is not fully covered by insurance; or

         6.9.2    by an  employee  or  director  in  relation  to his  terms and
                  conditions of employment or appointment.

7.       Capital Commitments, Unusual Contracts, Guarantees
         --------------------------------------------------

         Each Group Company:

7.1      has no capital  commitment  in excess of S$100,000  except as otherwise
         disclosed in the Prospectus;

7.2      is not a party  to any  contract  entered  into  otherwise  than in the
         ordinary  and usual course of business or any contract of an onerous or
         long-term nature (exceeding a 12 month period);

7.3      has not by reason of any default by it in any of its obligations become
         bound or liable to be called upon to repay prematurely any loan capital
         or borrowed moneys;

7.4      is not a party to any agreement which is or may become  terminable as a
         result of the entry into this Agreement;

7.5      has not entered into or is bound by any  guarantee  or indemnity  under
         which any liability or contingent liability is outstanding;

7.6      is not and has not  agreed to  become,  a member of any joint  venture,
         consortium, partnership or other unincorporated association; is not and
         has not agreed to become,  a party to any agreement or arrangement  for

<PAGE>

         participating with others in any business sharing  commissions or other
         income; and

7.7      is not a party to any agency. distributorship,  marketing,  purchasing,
         manufacturing or licensing agreement or arrangement or any agreement or
         arrangement  of any nature  whatsoever  which  restricts its freedom to
         carry on its business in any part of the world in any manner  except as
         otherwise disclosed in the Prospectus.

8.       Book Debts

         Save as disclosed in the Audited Accounts, none of the book debts which
         are included in the Audited Accounts or which have subsequently  arisen
         have been outstanding for more than six (6) months from their due dates
         for  payment  and each such debt has  realised  or will  realise in the
         normal course of  collection  its full value as included in the Audited
         Accounts  or in the  books of each  Group  Company  after  taking  into
         account any provision for such debt made in the Audited Accounts.

9.       Insurance
         ---------

9.1      All material  insurable  risks of each Group Company have been duly and
         properly insured with adequate coverage in keeping with normal industry
         practice.

9.2      In respect of all such insurances:

         9.2.1    all premiums have been duly paid to date; and

         9.2.2    all the  policies are in force and are not voidable on account
                  of any  act,  omission  or  non-disclosure  on the part of the
                  insured party; and

         9.2.3    none of the  insurance  policies  is subject to any special or
                  unusual terms or restrictions or to the payment of any premium
                  in excess of the usual rate.

9.3      Each Group Company has not made any claim on its insurers, nor have any
         circumstances arisen which may give rise to any claim, which (in either
         case)  could have the effect of causing  future  premiums  to be higher
         than would otherwise be the case.

10.      Title to and Condition of Assets
         --------------------------------

10.1      All assets owned by each Group Company:

         10.1.1   are legally and beneficially  owned by that Group Company free
                  from any Encumbrance;

         10.1.2   are in the  possession or under the exclusive  control of that
                  Group  Company:  and 10.1.3  are  situated  in its  respective
                  country of incorporation.

10.2     There is no Encumbrance  on, over or affecting the whole or any part of
         the  undertaking  or  assets  of each  Group  Company  and  there is no
         agreement or commitment to give or create any  Encumbrance and no claim
         has been made by any person to be entitled to(.) any Encumbrance.

10.3     Each Group  Company is able to prove  title to all the assets  owned by
         it.

<PAGE>

10.4     Except as disclosed in the  Prospectus,  the assets owned by each Group
         Company  comprise all the assets  necessary to enable the Group Company
         to carry on its business fully and effectively in the ordinary  course,
         as carried on up to the present time and no such assets are used wholly
         or  partly  for any  purpose  other  than the  business  of that  Group
         Company.

10.5     All  assets  owned  by  each  Group  Company  which  are  subject  to a
         requirement of licensing or registration of ownership possession or use
         are duly licensed or registered in the sole name of that Group Company.

10.6     The assets  registers  of each Group  Company  comprise a complete  and
         accurate record of all plant, machinery,  equipment and vehicles owned,
         held or used by that Group Company and are capable of being  reconciled
         in  respect  of each  item with the book  values of such  assets in the
         accounting records of that Group Company.

10.7     All plant,  machinery,  equipment  and  vehicles  owned or used by each
         Group Company are in good and safe repair and  condition  having regard
         to their age. have been  regularly and properly  maintained  and are in
         working  order and none are in a dangerous or (in the case of vehicles)
         unroadworthy condition or in need of renewal or replacement.

11.      Compliance with Leases and Other Agreements
         -------------------------------------------

11.1     The terms of all leases, tenancies.  licences,  concessions.  agencies,
         franchises and agreements of whatsoever nature to which each Group is a
         party have been duly complied with by that Group Company.

11.2     No such lease,  tenancy,  licence,  concession,  agency.  franchise  or
         agreement will become subject to avoidance,  revocation or be otherwise
         affected upon or in consequence of the making or implementation of this
         Agreement.

12.      Statutory and Other Requirements, Consents and Licences
         -------------------------------------------------------

12.1     Each Group  Company has  carried on its  business  in  accordance  with
         applicable  laws and  regulations in the PRC or elsewhere and so far as
         the Borrower  and/or the Warrantor  are aware in any relevant  country.
         There is no investigation  or enquiry by, or order,  decree or judgment
         of. any court or any governmental agency or regulatory body outstanding
         or  anticipated  against any Group Company or which may have a material
         adverse effect upon its assets or business.

12.2     All statutory and other  requirements  applicable to the carrying on of
         the  business  of  each  Group  Company  as now  carried  on.  and  all
         conditions  applicable  to any licences  and  consents  involved in the
         carrying on of such business,  have been complied with and the Borrower
         and/or  the  Warrantor  are not aware of any  breach  thereof or of any
         intended or  contemplated  refusal or revocation of any such licence or
         consent.

13.      Books and Records
         -----------------

13.1     The statutory records,  registers and books and the books of account of
         each Group  Company are duly entered up and  maintained  in  accordance
         with all legal  requirements  applicable thereto and contain true, full
         and accurate  records of all matters  required to be dealt with therein
         and all such books and all records and documents  (including  documents
         of  title)  which  are its  property,  in its  possession  or under its
         control  and  all  accounts,  documents  and  returns  required  to  be
         delivered or made to the relevant  authority in the PRC or elsewhere in
         the world have been duly and correctly delivered or made.

<PAGE>

13.2     No Group Company has received any notice of any application or intended
         application  under any relevant  legislation for the  rectification  of
         that Group Company's statutory records, registers and/or books.

14.      Options on Share Capital
         ------------------------

14.1     Except as otherwise  contemplated  herein and in the  Convertible  Loan
         Agreement,  no unissued shares of any Group Company are under option or
         agreed  conditionally or  unconditionally  to be placed under option or
         created or issued.

14.2     Except as otherwise  contemplated  herein and in the  Convertible  Loan
         Agreement,  there is no option,  right to  acquire,  mortgage.  charge,
         pledge,  lien or other form of  security  or  encumbrance  on,  over or
         affecting  the shares in any Group Company and there is no agreement or
         commitment to give or create any of the foregoing.

15.      Intellectual Property Rights
         ----------------------------

15.1     All intellectual property rights used or required by each Group Company
         in  connection  with its  business are in full force and effect and are
         vested in and beneficially owned or otherwise licensed by it.

15.2     Except as  disclosed  in the  Prospectus,  each Group  Company does not
         require  any  patent,   trade  or  service  mark,   registered  design,
         copyright,  design right, licence or other right of any other person in
         order to carry on its business and none of the activities of each Group
         Company infringes any patent or other intellectual property of any kind
         whatsoever  of any other person or gives rise to an  obligation  to pay
         any sum in the nature of a royalty.

15.3     The business of each Group Company (and of any licensee under a licence
         granted  by any Group  Company)  as now  carried on does not and is not
         likely to infringe any intellectual  property right of any other person
         (or would not do so if the same were valid) or give rise to a liability
         pursuant to the laws relating to  intellectual  property rights and all
         licences to each Group Company in respect of any such right are in full
         force and effect.

16.      Leasehold Properties
         --------------------

16.1     Each Group  Company has paid the rent and  observed and  performed  the
         covenants on the part of the tenant and the conditions contained in any
         leases  under  which  the  properties  (the  "Properties")  used by the
         relevant  Group  Company for its business are held,  and all the leases
         are valid and in full force.

16.2     All licences,  consents and  approvals  required from the landlords and
         any superior  landlords  under any leases of the  Properties  have been
         obtained,  and the covenants on the part of the tenant contained in the
         licences, consents and approvals have been duly performed and observed.

16.3     No obligation  necessary to comply with any notice or other requirement
         given by the landlord under any leases of the Properties is outstanding
         and unobserved and unperformed.

16.4     There is no  obligation  to  reinstate  the  Properties  by removing or
         dismantling  any  alteration  made to it by any  Group  Company  or any
         predecessor in title to the relevant Group Company.

17.      Corporate Matters
         -----------------

17.1     Each Group Company has been duly  incorporated and are validly existing
         and is not in  receivership  or  liquidation,  it has taken no steps to
         enter into  liquidation  and the Borrower  and/or the Warrantor are not

<PAGE>

         aware of any  petition  being  presented  for  winding  up of any Group
         Company  and the  Borrower  and/or the  Warrantor  are not aware of any
         grounds  on which a  petition  or  application  could be based  for the
         winding up or appointment of a receiver of any such company.

17.2     All  governmental  approvals.  licences and  authorisations  which were
         necessary or desirable in  connection  with the  incorporation  of each
         Group  Company,  the allotment or transfer of its shares to the present
         and former  holders  thereof and the  activation  of each Group Company
         (including the appointment of directors) were duly obtained.

18.      Banking and Finance
         -------------------

18.1     No  circumstances  have arisen which could now (or which could with the
         giving  of  notice  or lapse of time or both)  entitle  a  provider  of
         finance  to  each  Group  Company  (other  than on a  normal  overdraft
         facility) to call in the whole or any part of the monies advanced or to
         enforce his security,  and no provider of finance to each Group Company
         on  overdraft  facility has  demanded  repayment or indicated  that the
         existing  facility  will be withdrawn or reduced or not renewed or that
         any terms thereof will be altered to the  disadvantage  of the relevant
         Group Company.

18.2     Each Group  Company's  borrowings  may be repaid by the relevant  Group
         Company at any time at no more than one months'  notice and without any
         premium or penalty (howsoever called) on repayment.

18.3     Each Group  Company  has not  engaged  in any  borrowing  or  financing
         transaction or  arrangement  which does not appear as borrowings in the
         Audited Accounts.

18.4     No Group  Company or any other person has given or  undertaken  to give
         any security or  guarantee  for any  liability  of the  relevant  Group
         Company except as disclosed in the Prospectus.

18.5     No Group  Company  has  given or  undertaken  to give any  security  or
         guarantee for any liability of any person.

19.      Contracts
         ---------

19.1     To the best of the knowledge of the Borrower and/or the Warrantor, none
         of the contracts or purported  contracts of each Group Company is void,
         voidable or unenforceable by it. Each Group Company is not in breach of
         any of its  contractual  obligations and no other party to any contract
         to which each Group Company is a party is in breach of that contract or
         is  unlikely   to  be  able  or  willing  to  fulfil  its   contractual
         obligations.

19.2     No event or  omission  has  occurred or been  permitted  to arise which
         would entitle any third party to terminate  prematurely any contract to
         which any Group  Company is a party or call in any money or enforce any
         obligation  before  the  date on which  payment  or  performance  would
         normally be due.

19.3     Save  as  disclosed  in the  Prospectus,  there  are no  related  party
         transactions entered into by any Group Company.

20.      Customers and Suppliers
         -----------------------

20.1     The loss of any single  supplier  to or customer of the Group would not
         have a material affect on its business.

<PAGE>

20.2     To the best of the knowledge of the Borrower, the Borrower is not aware
         that after the drawdown of the Convertible Loan (whether by reason of
         an existing agreement or arrangement or otherwise):

         20.2.1   any  supplier of the Group will cease  supplying  the Group or
                  may substantially reduce its supplies to the Group:

         20.2.2   any material customer of the Group will cease to deal with the
                  Group  or may  substantially  reduce  its  existing  level  of
                  business with the Group: or

         20.2.3   any officer or senior employee of the Group will leave.

21.      Licences
         --------

21.1     The Group has all the licences  that are necessary or desirable for the
         carrying on of its business.

21.2     The Group is not in breach of the terms and conditions  relating to the
         grant,  continued  use or  renewal  of any of  the  licences,  and  the
         Borrower  and/or the  Warrantor  are not aware of any reason why any of
         them should be suspended, cancelled, refused, revoked or not renewed.

22.      Insolvency
         ----------

22.1     No order has been made or petition or other  application  presented  or
         resolution   passed  for  the   winding-up,   judicial   management  or
         administration of any Group Company, nor are there any grounds on which
         any person  would be  entitled to have such Group  Company  wound up or
         placed under  judicial  management  or in  administration,  nor has any
         person  threatened to present such a petition or convened or threatened
         to  convene a meeting  of the  relevant  Group  Company  to  consider a
         resolution  to  wind  up  the  relevant  Group  Company  or  any  other
         resolutions,  nor has any such step been taken in relation to any Group
         Company  under the law relating to  insolvency or the relief of debtors
         in any part of the world.

22.2     No distress,  execution  or other  process has been levied on any asset
         owned or used by the  Group,  nor has any  person  threatened  any such
         distress,  execution or other  process,  whether in the PRC or anywhere
         else in the world.

22.3     No person has appointed or threatened to appoint or become  entitled to
         appoint a receiver or receiver and manager or other similar  officer of
         the Group's business or assets or any part of them.

22.4     No Group Company has ceased trading or stopped payment to its creditors
         and there are no  grounds on which  such  company  could be found to be
         unable to pay its debts for the purposes of determining insolvency.




<PAGE>

                                   SCHEDULE 5
                            BENEFICIAL SHAREHOLDINGS


           Name                   Percentage of Beneficial Shareholding (%)
     ------------------------     -----------------------------------------

           Chen Xiangzhi                          52.55

           Kong Fanying                            2.76

            Chen Houzhi                            2.41

             Wang Ting                             2.96

             Li Xuewen                             2.73

            Gong Xingyu                            2.72

            Zhang Juan                             2.72

            Xu Zhiping                             2.71

              Yu Yibo                              2.70

           Wang Gongqin                            2.69

           Shan Chuanpo                            2.68

             Cao Luren                             2.68

             Chen Zhen                             2.67

             Xu Xiqing                             2.63

            Yu Xuehuai                             2.59

             Li Shujin                             2.59

          Wang Mingqiang                           2.46

           Guo Yongming                            2.41

           Yue Guangjun                            2.34




<PAGE>

IN WITNESS  WHEREOF the parties have hereunto set their hands on the date stated
at beginning of this Agreement.


THE BORROWER
------------

Signed by
Name:
for and on behalf of
EASTERN NANO-MATERIALS HOLDINGS PTE.
LTD.
in the presence of
Name:


LENDER A
--------

Signed by
Name:
for and on behalf of
VALUE MONETIZATION LTD
in the presence of
Name:


LENDER B
--------

Signed by
Name:
for and on behalf of
INTERNATIONAL FACTORS (SINGAPORE) LTD
in the presence of
Name:


THE WARRANTOR
-------------

Signed by
CHEN XIANGZHI
in the presence of
Name:




<PAGE>

                           CREST CAPITAL PARTNERS LTD
                    Correspondance Address: 50 Raffles Place
                 #34-Q3: Singapore Land Tower, Singapore 046323


30 December 2005

Shandong Shengda Technology Co. Ltd.
Taishan Development Zone for Youth Do Pioneering Work


Attn: Ms. Guo Anhui
      Chief Financial Officer


Subject: Settlement of Expenses Pursuant to Project Nano


We refer to WS letter dated 29 December 2005.  Further which, the payment should
cover legal cast jointly incurred by IFS and Crest Capital.  We confirm that the
agreement signed between International Factors (Singapore) Ltd, Yide Investments
Pte Ltd,  Eastern  Nano-Materials  Holdings Pte Ltd, Value  Monetization Ltd and
Chen Xiangzhl will henceforth be terminated.


Thank you.



Yours Faithfully

/s/ Yong Thian Sze
-------------------
Yong Thian Sze
Partner





                     C R E S T C A P I T A L P A R T N E R S
--------------------------------------------------------------------------------
          BEIJING o JAKARTA o KUALA LUMPUR o GEOUI o SHANGHAI o SINGAPORE

<PAGE>

INTERNATIONAL FACTORS (SINGAPORE) LTD



29 December 2005



Shandong Shengda Technology Co., Ltd.
Taishan Development Zone for Youth Do Pioneering Work


Attn: Ms. Guo Anhui
      Chief Financial Officer


Subject: Settlement of Expenses Pursuant to Project Nano

Further to our letter to you dated 27 December  2005.  we confirm that all other
terms in all the agreements  signed between  International  Factors  (Singapore)
Ltd, Yide  Investments Pte Ltd, Eastern  Nano-Materials  Holdings Pte Ltd, Value
Monetization  Ltd and Chen Xiangzhi will  henceforth be  terminated.


Thank you.



Yours faithfully

/s/ Lee Soon Kie
-----------------
Lee Soon Kie
Chief Executive Officer