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| 1. | Scope      of know-how: The      entire production processes of new composite colloid, including the      involved ingredient preparation ratio, production reaction conditions,      ingredient charging sequences, production equipment model selection and      corresponding application processes. |
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| 2. | Technological      indicators and parameters: including the      compositions of new composite colloid, the preparation ratio, production      reaction conditions, ingredient charging sequences, production and new      spray-coating process equipment model selection and      design |
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| 3. | Industrialized      development degree of this know-how: This know-how is at      the mature industrialization development degree, with mature production      process and mainly applied to steel-purpose high-temperature      anti-oxidization coatings and refactory materials, in wide      applicability. |
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| 1. | Ingredient names and      preparation ratio list of new composite      colloid    ; |
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| 2. | Production process of      new composite      colloid                      ; |
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| 3. | Production equipment      model selection of new composite      colloid       ; |
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| 4. | Arrangement plan of      equipments in the production workshop of new composite      colloid     ;  and |
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| 5. | Design plans for      spray-coating new process of new composite      colloid   . |
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| 1. | Time      of submittal:   within 20      days since and upon this Contract enters into  force |
|----|---------------------------------------------------------------------------------------------------------|

| 2. | Place      of submittal:   Dalian |
|----|---------------------------------------------|

| 3. | Form      of submittal:   Written      version |
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| 1. | The      status that Party B has performed this know-how hereunder (time, place,      form and scale): Pilot test completed      and pilot production realized in Dec.,  2005 |
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| 2. | The      status that Party B has transferred others to use this know-how hereunder      (time, place, form and scale): None |
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| 1. | Scope      of performance:   Pursuant      to this Contract, Party B hereby authorizes Party A to use this know-how      and Party A may use this know-how for production and      sale. |
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| 2. | Form      of performance: Party A may organize      and construct the production workshops in appropriate scale pursuant to      the market condition and zoom in or out the design of supporting      spray-coating process equipments (however, the intellectual property and      technical data in the process shall be owned by both parties),      particularly shall ensure the colloid supply and spray-coating application      of downstream product manufacturers, and meanwhile may conduct the market      promotion sale. |
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| 3. | Period      of performance: 15 years      . |
|----|---------------------------------------------|

| 4. | Period      of confidentiality: 20 years      . |
|----|-------------------------------------------------|

| 1. | Contents      of confidentiality (including technology information and operation      information): The entire production      processes of new composite colloid, including the involved ingredient      preparation ratio, production reaction conditions, ingredient charging      sequences, production equipment model selection; meanwhile, the design      plans for spray-coating application process of this designated composite      colloid and the condition of downstream products that it aims at shall be      also kept confidential. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Scope      of personnel involved in confidentiality: Any and all production      workers involved in the process of bond production as mentioned herein and      the production chief of this project as well as users of new      products. |
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| 3. | Duration      of confidentiality:   20      years  . |
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| 4. | Liabilities      for disclosure of confidentiality: Provided any personnel      of Party A, who are involved in confidentiality, disclose this know-how,      Party B will claim against Party A for corresponding      liabilities. |
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| 1. | Contents      of technological service and technological instructions: Party A shall provide      Party A with the entire production processes of new composite colloid,      including the involved ingredient preparation ratio, production reaction      conditions, ingredient charging sequences, production equipment and      spray-coating process design plans and meanwhile offer necessary      instructions for production site planning, equipment commissioning and      trial production. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Form      of technological service and technological instructions: On-site instructions      . |
|----|------------------------------------------------------------------------------------------------|

| 1. | The      total loyalty shall be RMB 4,000,000 Yuan      (say: RMB FOUR MILLION Yuanonly); |
|----|-------------------------------------------------------------------------------------------|

| 2. | Party      A shall pay the loyalty to Party B in terms of installment      (lump sum, installment orpercentage). |
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|   | (1) | Party A shall remit      the down payment of RMB 1,000,000 Yuan (say: ONE MILLION Yuan only) to the      account of Party B within three months upon the conclusion of contract and      this Contract will enter into force upon the invoice is      opened; |
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|   | (2) | Party A shall remit      the second installment of RMB 1,000,000 Yuan (say: ONE MILLION Yuan only)      to the account of Party B within twelve months upon the conclusion of      contract; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Party A shall remit      the third installment of RMB 1,000,000 Yuan (say: ONE MILLION Yuan only)      to the account of Party B within eighteen months upon the conclusion of      contract; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Party A shall remit      the rest RMB 1,000,000 Yuan (say: ONE MILLION Yuan only) to the account of      Party B within three months upon the first equipment set is put into      service. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Provided      Party A fails to pay the loyalty on schedule, Party B will refuse to      perform the obligations; and in case of the payment in arrears for one      month, this Contract will beterminated. |
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| 1. | Party B provides Party      A with the product quality acceptance standards of this know-how and      trains the related technicians of Party A upon the performance of this      know-how ; |
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| 2. | Party B is responsible      for the first quality acceptance of products upon the performance of this      know-how and ensures the quality to be eligible ;    and |
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| 3. | Party B is responsible      for process design and application acceptance of spray-coating application      process equipments concerning this know-how  . |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1. | Party      A is entitled to conduct the subsequent improvement on the composite      colloid production technology transferred by Party B and the accordingly      generated new technological achievements with substantial or creative      technology progress characteristics shall be owned by both      parties. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Party      B is entitled to conduct the subsequent improvement on the know-how      transferred to Party A and the accordingly generated new technological      achievements with substantial or creative technology progress      characteristics shall be owned by both      parties. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Both      parties hereby agree via negotiation that, on the basis of transfer      cooperation of this know-how, both parties decide to establish the future-oriented      long-term cooperation for the technological development and improvement in      related fields and Party B decides to set up the R&D incubation base      of related technologies and products at Party A  . |
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| 1. | Provided the market      exploration scale of downstream products involved with this know-how      fluctuates greatly, Party B may ask for the appropriate interest      percentage ; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | The percentage line      shall be 3% when the annual output value of Party A is no more than 60      million Yuan and that be equivalent to 2 million Yuan when the annual      output value exceeds 60 million Yuan. |
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| 3. | Provided the      downstream products involved in this know-how requires the improvement on      current technology, Party B may apply to Party B and Party B will assist      Party A in improvement study. |
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| 4. | The intellectual      properties of the design of a new spray-coating equipments and as well as      improvement in technology achieved by Party A based on original technology      developed by Party B, shall be owned by both parties    . |
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