Document:

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                                                                    EXHIBIT 10.4

              GUANGDONG XINSHENG ENVIRONMENTAL PROTECTION CO., LTD.

                         FILE NO.: XIN-HAN-ZI (2004)004
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TO: HAIYANG MUNICIPAL PLANNING AND CONSTRUCTION ADMINISTRATIVE BUREAU

To guarantee the effective operation of Haiyang Sewage Treatment Plant and
ensure the continuous implementation of the "BOT Investment and Operation
Contract of Shangdong Haiyang Sewage Treatment Plant", our company has
incorporated Haiyang Shengshi Environmental Protection Co., Ltd. in Haiyang city
on July 30, 2003. Hereby our company authorizes Haiyang Shengshi Environmental
Protection Co., Ltd. to take charge of the construction and operation of Haiyang
Sewage Treatment Plant and to fully act for us to handle all relating affairs.
Haiyang Shenshi Environmental Protection Co., Ltd. has the right of enjoying all
operational revenue after the start of the operation and bearing all rights,
obligations and responsibilities stipulated in the "BOT Contract".

We shall appreciate your cooperation and support. Thanks!

                           GUANGDONG XINSHENG ENVIRONMENTAL PROTECTION CO., LTD.

                                                             Date: Feb. 10, 2004

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                     SHANDONG HAIYANG SEWAGE TREATMENT PLANT

                CONTRACT FOR BOT PROJECT INVESTMENT AND OPERATION

            SHANDONG HAIYANG PLANNING AND CONSTRUCTION ADMINISTRATION

              GUANGDONG XINSHENG ENVIRONMENTAL PROTECTION CO., LTD.

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            CONTRACT FOR BOT PROJECT (HAIYANG SEWAGE TREATMENT PLANT)
                            INVESTMENT AND OPERATION

PARTY A: Shandong Haiyang Planning and Construction Administration (hereinafter
referred to as Party A)

ADDRESS: 94 Hushan Street, Haiyang City, Shandong Province

PARTY B: Guangdong Xinsheng Environmental Protection Co., Ltd. (hereinafter
referred to as Party B)

ADDRESS: 6/F, Guowei Building, 73 Xianlie Road Central, Guangzhou, Guangdong

In accordance with relevant provisions of the Contract Law of the People's
Republic of China, the Building Law of the People's Republic of China,
Regulations on Contract for Survey and Design of Construction Project and Jian
Cheng (2001) No. 223 Document issued by Ministry of Construction and
Environmental Protection Bureau, Party A wholly assign Haiyang Sewage Treatment
Plant to Party B in BOT form for investment and operation. After the signing of
this contract, Party B shall own the investment and operation right of this
project. In order to define the rights, obligations and economic
responsibilities of both parties during project construction and operation, both
parties enter into this contract for joint observation after consultation.

ARTICLE 1 PROJECT NAME, CONSTRUCTION SITE AND PROJECT SCALE

      1.1   Project name: Haiyang Sewage Treatment Plant

      1.2   Construction site: Hexi, Zangjia Village, Yaiyang Touring and
            Vacationing Area

      1.3   Project scale: Daily sewage treatment capacity: 50,000 tons
            (phase-I: 20,000 tons). The construction scale of the project
            hereunder: 20,000 tons.

      1.4   Total amount of investment: The amount of investment in the project
            is RMB 30 million. Party B shall be responsible for the investment.

      1.5   Content of construction: Sewage treatment plant with daily treatment
            capacity of 20,000 tons and its supporting facilities and greening
            in the plant.

      1.6   Design requirements: As per the parameters agreed herein.

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      1.7   Construction period: The valid construction period of this project
            shall be 300 days. In case of rainstorm, flood, frost and extremely
            serious natural calamity, the construction period shall be extended
            accordingly.

      1.8   Floor space: About 30 mu.

ARTICLE 2 INVESTMENT, OPERATION AND SETTLEMENT MODE

      2.1   Party A shall assign the right of investment construction and
            operation of Haiyang Sewage Treatment Plant in BOT manner. Party B
            shall make full investment in it and be solely responsible for the
            design, construction, operation and management of the project. Upon
            the expiration of the contract, Party B shall hand over the sewage
            treatment plant to Party A for management without compensation and
            guarantee the sewage treatment plant will operate normally at the
            time of handover.

      2.2   Party B shall adopt MHA process as the applicable process of this
            sewage treatment plant and determine the designed influent and
            effluent water quality based on Environment Assessment Report
            provided by Party A and the Official Written Reply to Environmental
            Assessment issued by the local environmental protection bureau.
            Party B shall ensure the water quality after treatment shall meet
            level-2 discharge standard for secondary treatment in National
            Comprehensive Sewage Discharge Standard (GB8978-96). As agreed upon
            by both parties, the design parameters of influent and effluent
            water quality and the implementation standard of acceptance
            inspection are as follows:

      TABLE 2. 1
      --------------------------------------------------------------------------
              Indicator      Influent water indicator   Effluent Water indicator
      --------------------------------------------------------------------------
            CODcr mg/L                =<380                      =<120
      --------------------------------------------------------------------------
            BOD5 mg/L                 =<180                       =<30
      --------------------------------------------------------------------------
             SS mg/L                  =<200                       =<30
      --------------------------------------------------------------------------
       Ammonia nitrogen (mg/l)         =<40                       =<25
      --------------------------------------------------------------------------
            P04(3) mg/L               =<3.0                      =<1.0
      --------------------------------------------------------------------------
                 PH                     6-9                        6-9
      --------------------------------------------------------------------------

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      2.3   Party A shall control the standard for the discharge of industrial
            sewage into municipal sewage network according to national
            regulations. If the influent water quality of this project exceeds
            the standard agreed upon by both parties due to factories' excessive
            discharge so that sewage treatment fails to come up to standard, the
            liability therefor shall be borne by Party A instead of Party B.
            Besides, Party A shall still pay sewage treatment fee to Party B
            according to the status of normal running and pay excessive
            pollutant discharge fee collected by environmental protection
            department.

      2.4   In order to ensure the smooth implementation of the project, Party A
            shall require the participation of local banks so as to give play to
            banks' function of recognition and supervision of this project.
            After the signing of this contract, Party B shall locally establish
            a wholly-owned specialized sewage treatment company based on this
            project as the economic entity for implementing this project. This
            company shall be solely responsible for the preparation for,
            construction, operation and management of the project. Party A shall
            allow Party B to pledge the right of operation of sewage treatment
            plant and charge collection hereunder to a bank to apply for the
            supporting loan of this project. In order to ensure the safe
            completion of this project on time and with agreed quality, Party B
            shall effect insurance with insurance companies or guarantee with
            guarantee companies for this project. In order to guarantee the
            recovery of Party B's investment, both parties shall respectively
            open a special account at the same agreed bank. The sewage treatment
            fee collected by Party A shall be deposited into such special bank
            account. The bank shall supervise settlement. Party B shall also
            open a special account at this bank as settlement account.

      2.5   After the completion of Haiyang Sewage Treatment Plant, the date of
            completion and acceptance of the project shall be the starting day
            of Party B's operation period. Party B's operation period shall be
            22 years. Party B shall conduct management by itself in the
            operation period and recover investment and obtain return from
            operation. During Party B's operation period, Party A shall be
            responsible for depositing sewage control fee collected with tap
            water into the special bank account designated by both parties as
            the fund source for paying sewage treatment fee of Party B and
            repaying loans. Method of settlement: Party A shall pay Party B
            sewage treatment fee for the previous month before the fifth day of
            each month (to be postponed if falling on holidays). The standard of
            sewage treatment fee (including tax) paid by Party A to Party B:
            [omitted]. The total period is 22 years.

      2.6   Party A shall guarantee the monthly settlement of Party B's sewage
            treatment fee on time as Party B's recovered investment and
            reasonable return. If the sewage control fee collected by Party A is
            insufficient to pay Party B's sewage treatment fee, Party A shall be
            responsible for raising funds from other channels. The local
            government shall formulate the document of guaranteeing payment on
            time by governmental finance department. Party A shall guarantee
            full payment of sewage treatment fee to Party B on time. If Party A
            fails to pay sewage treatment fee to Party B, the financial unit or

<PAGE>

            guarantee unit shall be responsible for payment until the end of
            operation period. Upon the expiration of the operation period, Party
            B shall deliver the sewage treatment plant in good condition that is
            able to safely and normally run to Party A without compensation and
            Party B's operation right, management right and ownership of limited
            assets shall be terminated.

      2.7   The method of calculating sewage treatment fee paid by Party A to
            Party B: When Party B constructs the sewage treatment plant, it
            shall conduct design and construction according to the volume of
            sewage treatment determined by Party A and install flowmeter on
            influent water pump of the sewage treatment plant. Party A shall
            take the readings of the flowmeter as the basis for payment of
            sewage treatment fee to Party B. When Party A fails to provide
            sewage to Party B for treatment according to the rated sewage
            quantity, the quantity of influent water of Party A shall not be
            lower than 15,000 tons. Party A shall pay Party B's sewage treatment
            fee according to 75% of the rated quantity (limited to phase-I
            project only). Upon the expiration of the period of 2 years, if the
            quantity of water is lower than 20,000 tons per day, the fee shall
            be collected according to the standard of 20,000 tons per day. If
            the quantity is higher than 20,000 tons per day, the fee shall be
            collected according to the actual measurement.

      2.8   The date of meter reading of monthly sewage treatment capacity shall
            be 28th day of a month. Party B shall copy the reading as of the
            current day to the meter reading and settlement sheet. Party A shall
            send personnel to verify the meter reading and settlement sheet
            before 12:00 p.m. of the current day. After being signed, the meter
            reading and settlement sheet shall be made out in triplicate, one
            copy for each party for future reference and one copy for the bank.
            The bank shall transfer the amount in Party A's special account
            directly into Party B's special account according to this meter
            reading and settlement sheet.

      2.9   If the price rises due to the adjustment of national policy or
            market change during Party B's operation period and the accumulated
            margin of rise does not exceed 15% based on the price index
            published by the State in 2002, the charging standard of sewage
            treatment fee shall not be adjusted. If the margin of rise exceeds
            15%, Party A shall adjust the unit settlement price of sewage
            treatment fee paid to Party B according to the coefficient of the
            exceeding part.

      2.10  Before the signing of the contract by both parties, Party A's local
            government or competent governmental department shall promulgate the
            policy on levy and management of sewage treatment fee, clarify loan
            supervision bank, sewage treatment fee settlement unit, settlement
            guarantee and guarantor and relevant policies. Upon Party B's
            acceptance, the official documents shall be appendices attached
            hereto, take effect with this contract simultaneously and become the
            integral part of this contract.

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ARTICLE 3 RESPONSIBILITIES OF BOTH PARTIES

PARTY A SHALL BE RESPONSIBLE FOR PROVIDING THE LAND OF 30 MU FOR CONSTRUCTION OF
SEWAGE TREATMENT PLANT (PROVIDING GEOLOGIC INFORMATION OF LAND FOR DESIGN AND
ENSURING FOUNDATION LOAD BEARING OF 15T/SQUARE METER) WITHOUT COMPENSATION AND
THE GEOLOGIC STANDARDS OF SEWAGE TREATMENT PLANT AREA. PARTY A SHALL BE
RESPONSIBLE FOR UTILITIES AND ROADS AND GUARANTEE THE SUPPLY OF WATER AND
ELECTRICITY NECESSARY FOR PARTY B'S CONSTRUCTION. DURING PARTY B'S FRANCHISING
PERIOD, PARTY B SHALL NOT BEAR THE TAXES AND EXPENSES RELATED TO THE LAND FOR
THE SEWAGE TREATMENT PLANT. PARTY A SHALL PROVIDE 10KV TWO-CIRCUIT POWER SOURCE
FOR PRODUCTION BEFORE TRIAL RUN, DELIVER IT TO THE PLACE OF TRANSFORMER WITHIN
BATTERY LIMIT AND PROVIDE TRANSFORMERS.

      3.1   The construction period of the sewage treatment plant is 9 months
            calculated according to the number of days for construction (from
            the date of settlement of all construction application procedures by
            Party A when Party B is able to officially enter the site for
            construction). After the completion of the project, acceptance
            inspection of the quality of the project shall be conducted based on
            the drawings reviewed by both parties and their attestation. Party A
            shall organize acceptance inspection within seven days after receipt
            of Party B's notice requesting acceptance inspection. If Party A
            fails to organize acceptance inspection without proper reasons
            within seven days after receipt of the notice, it shall be deemed to
            have accepted the quality of the project and Party B may conduct
            commissioning. Party B shall complete commissioning within three
            months after acceptance. Party A shall organize acceptance
            inspection within 10 days after receipt of Party B's notice
            requesting acceptance inspection. If Party A fails to organize
            acceptance inspection upon the expiration of the period of 10 days,
            it shall be deemed to have accepted the commissioning and the date
            of giving the notice shall be the starting day of Party B's
            collection of sewage treatment fee and operation. The final
            acceptance indicator: It means the effluent water meets the
            indicators specified in contract schedule 2.1. If effluent water
            meets the standard agreed in contract schedule 2.1, the project
            shall be deemed to come up to standard and be accepted.

      3.2   The property right of sewage treatment plant shall be owned by Party
            A. The project itself is a municipal construction project with the
            nature of public welfare. Party B shall invest in and operate the
            project. Therefore, Party B shall enjoy the preferential policies of
            the government of the level concerned and environmental protection
            industry and those on taxes and levies during the period of
            construction and operation.

      3.3   Party A shall be responsible for relevant procedures concerning the
            environmental assessment, position planning, project establishment,
            land requisition, application for approval and construction,
            obtainment of certificates and licenses (including Party B's
            non-local builder's license) and road occupation and bear relevant
            expenses. Party A shall be liable and compensate Party B for the
            losses incurred to Party B by work stoppage or punishment resulting
            from the above issues after Party B's entrance for construction.
            Meanwhile, Party A shall assist Party B in handling the matters
            concerning relationship with the neighborhood, environment, public
            security, etc.

<PAGE>

      3.4   After the signing of the contract, Party A shall issue design and
            construction notification to Party B. Meanwhile, Party A shall
            submit red line chart of construction, geologic report for design,
            the information about underground facilities within land scope and
            the elevation of the nozzle of sewage conduit to the sewage
            treatment plant and discharge opening to Party B free of charge.
            Party B shall submit preliminary design scheme to Party A according
            to the notification within thirty working days after provision of
            basic design parameters including the availability point of domestic
            water and electricity consumption of the sewage treatment plant.
            After Party A's consent, Party B shall complete construction design
            within 1 month and submit it to Party A for review.

      3.5   Timely promulgation of relevant policies on the sewage treatment
            plant: Party A shall arrange the municipal (county) people's
            government to promulgate the following relevant policies on
            municipal (county) sewage treatment plant as the appendices attached
            hereto within three months after the signing of the contract to
            ensure the smooth implementation of this project:

      1)    The regulations on levy, management and settlement of sewage control
            fee issued according to the gist of (1999) No. 192 Document jointly
            issued by National Planning Commission, Ministry of Construction and
            State Environmental Protection Administration.

      2)    To determine the settlement unit that pays sewage treatment fee,
            account opening bank, supervision unit and guarantor and settle
            relevant procedures as the policy guarantee of the implementation of
            this project.

      3)    Party A shall assist Party B in successfully applying to banks for
            project supporting loans equivalent to 45% of the amount of total
            investment in the project hereunder and guarantee loan funds shall
            be available for use within three months after the signing of the
            contract.

      3.6   Party B shall fully enter the site for construction within 10 days
            after all relevant matters of Party A have been settled, drawings
            have passed review, conditions for entrance and construction
            commencement have been satisfied and Party A's construction
            commencement notification is received. The following conditions
            shall be satisfied before entrance and construction commencement:

      1)    Drawings have passed review and Party A's representative has signed
            the review document;

      2)    The procedures concerning environmental assessment report, project
            establishment, official written reply, land requisition, application
            for approval and construction, builder's licence (including Party
            B's non-local construction certificate) have been settled. The roads
            outside battery limit are unblocked. Foundation load bearing of 15T/
            square meter has been completed. The water and power supply for
            construction has been connected to the battery limit.

      3)    Party A's construction commencement notification has been received.

      4)    Supporting loans have been available from local banks.

<PAGE>

      3.7   Pricing of electricity charge: In addition to the preferential
            electricity rate offered by power supply bureau to municipal and
            environmental protection projects, other preferential policies shall
            be granted as far as possible. At present, electricity rate
            applicable to municipal facilities shall apply.

      3.8   Party A shall be responsible for transporting sewage into the area
            of sewage treatment plant of this project and discharging the clean
            water after treatment out of required facilities and buildings.
            Party A shall be responsible for transporting out the sludge after
            dewatering for disposal.

      3.9   The project of investment in the sewage treatment plant for which
            Party B shall be responsible includes:

      (1)   The excavation and backfill of earth within the scope of the sewage
            treatment plant with the capacity of 20,000 tons per day;

      (2)   Preliminary design, construction drawing design and proposal of
            construction plan within battery limit of the sewage treatment plant
            with the capacity of 20,000 tons per day;

      (3)   Civil works (including offices, chemical laboratories, interior
            finish, roads in plant and enclosing wall), automatic control and
            power distribution works (not including power transformation works),
            water supply and sewerage works, technological equipment and
            installation works, landscape works, fire control and flood
            prevention works within battery limit of the sewage treatment plant
            with the capacity of 20,000 tons per day. Party B shall guarantee
            the built-up sewage treatment plant shall be a garden-type plant.

      (4)   Party B shall construct the infrastructure supporting both phase-I
            and phase-II project at the time of construction of phase-I project
            of the sewage treatment plant. Phase-I and phase-II project shall be
            connected at the time of satisfying the demand of sewage treatment.
            The construction of phase-II project shall be constructed one year
            in advance. Its construction scale is 30,000 tons per day. The
            phase-II project shall be built up with lump-sum investment. Both
            parties shall renegotiate over concrete matters:

      (5)   Commissioning of all works within battery limit of the sewage
            treatment plant;

      (6)   The post training of operating workers of the plant and
            whole-process independent operation and management during operation
            period;

      (7)   Party B shall complete commissioning and realize the agreed
            treatment effect within 3 months after the completion of the
            project;

      (8)   Maintenance of the project of plant area during operation period.

      3.10  Upon Party A's satisfying all provisions of Article 3.1 / 3.6 / 3.7
            hereof, Party B shall pay performance bond of RMB 0.5 million in
            advance to Party A's account jointly supervised by both parties
            within 20 days after the signing of the contract. Upon the
            completion of civil work, Party A shall relieve supervision and
            Party B may freely dispose of this fund of RMB 0.5 million.

      3.11  Party B shall establish a specialized sewage treatment company
            within 20 days after the signing of the contract and Party A shall
            assist in settling the procedure of registration.

ARTICLE 4 AGREEMENT REACHED BY BOTH PARTIES

      4.1   Party B shall provide advantageous inoculum and carrier of
            biochemical system.

      4.2   Acceptance inspection and monitoring unit shall be Haiyang
            Environmental Protection and Monitoring Central Station. If the
            monitored result reaches the effluent water indicators listed in
            contract schedule 2.1, it shall be deemed to pass acceptance
            inspection. When necessary, Party B may entrust national central

<PAGE>

            station to conduct monitoring and the data monitored by national
            central station shall apply. Sewage treatment capacity is designed
            by Party B according to Party A's requirements. If the quantity of
            sewage is insufficient at the time of acceptance inspection, so long
            as effluent water meets the standard specified in this contract, the
            sewage treatment capacity of this project shall be deemed to pass
            acceptance inspection and the acceptance inspection of the works
            done by Party B shall not be affected.

      4.3   Party A shall permit Party B to conduct annual shutdown overhaul
            according to relevant regulations within the operation period and
            allow appropriate commissioning period after overhaul.

      4.4   Party A shall have the right to conduct regular or irregular
            monitoring of the sewage treated and discharged by Party B. In case
            of coming up to standards, monitoring expenses shall be borne by
            Party A. In case of failure to come up to standards, monitoring
            expenses shall be borne by Party B. Non-routine monitoring expenses
            shall be paid by the party that requires monitoring.

      4.5   The treated sewage water utilization and disposition right after the
            sewage treatment plant comes up to standards shall be owned by Party
            A.

      4.6   Tentative plan for treated sewage water utilization: If the sewage
            fails to meet the standard of treated sewage water utilization after
            treatment by the sewage treatment plant, a treatment system of
            corresponding scale shall still be constructed for retreatment. If
            reasonable water rate and determined quantity of treated sewage
            water are available, Party B may continue to invest in and construct
            the supporting facilities of treated sewage water utilization
            system. Party A shall give priority to the connection of supporting
            facilities of the whole sewage treatment system by Party B.

      4.7   Party B may conduct operation management in the manners including
            contracted operation by others and assignment of operation right
            during operation period, provided that it shall give prior notice to
            Party A and all liabilities therefor shall be borne by Party B.

      4.8   If the sewage treatment system malfunctions due to long-time power
            failure not caused by reasons on the part of Party B after the
            sewage treatment plant is put into operation, Party B shall not be
            liable therefor. From the date of power failure to the date of
            acceptance of commissioning, Party A shall pay the sewage treatment
            fee according to the unit price specified in Article 2.5 and the
            rated quantity of water to Party B and the excessive pollutant
            discharge fee thus incurred to environmental protection department.

ARTICLE 5 LIABILITY FOR BREACH OF CONTRACT

      5.1   Party A's breach of contract:

      (1)   If Party A fails to provide conditions as agreed herein and thus
            causes losses to Party B, it shall extend construction period and
            operation period according to the number of days of delay in
            addition to bearing all losses of Party B.

<PAGE>

      (2)   If Party A fails to pay sewage treatment fee on time, it shall pay
            Party B overdue interest and fine for delayed payment according to
            the amount of arrears and banks' regulations on deferred payment
            from the next day of the tenth day of delay as well as damages of
            RMB 10,000 for each day of delay.

      5.2   Party B's breach of contract: If Party B fails to complete the
            project according to the construction period specified in the
            contract, it shall pay Party A damages of RMB 10,000 for each day of
            delay.

      (1)   If construction quality fails to meet design criteria and
            requirements, the terms of the appendix attached hereto shall apply.

      (2)   If Party B fails to make sewage treatment come up to standards
            within specified time, it shall be responsible for commissioning
            without compensation until meeting agreed discharge standard. If
            Party B fails to meet the agreed discharge standard through
            commissioning within 120 days from the date of commissioning and
            trial run, Party A shall have the right to require Party B to engage
            experts to participate in commissioning or carry out additional
            design and construction again until meeting discharge standard
            through commissioning.

ARTICLE 6 FORCE MAJEURE

Force majuere shall mean natural calamities beyond human resistance including
explosion, fire, typhoon and earthquake caused by war, turmoil, falling of
objects flying in the air or other reasons for which both parties are not
responsible.

Once a force majeure event occurs, Party B shall quickly take actions, endeavor
to reduce losses and report the information about the injury to Party A's
representative within 24 hours. In case of any loss thus incurred, the loss
shall be borne by both parties according to relevant national regulations after
consultation.

ARTICLE 7 SAFE CONSTRUCTION

      7.1   Party B shall observe national and local laws and regulations, set
            up fire safety and protection works, observe and implement
            regulations on fire prevention, safe construction, civilized
            construction and construction at night. Otherwise, Party B shall be
            responsible for the losses thus incurred or the punishment imposed
            by relevant department.

      7.2   The liability for compensation in respect of personal injury
            accidents caused due to reasons on part of Party B (including
            project quality and unexpected accidents) within the scope of
            construction shall be borne by Party B.

<PAGE>

      7.3   Party A shall coordinate the public order and relationship with the
            neighborhood during the period of engineering construction and
            contracted operation.

ARTICLE 8 SETTLEMENT OF DISPUTES

Any dispute arising between both parties from the performance of this contract
shall first be settled by through friendly consultation. If no settlement can be
reached through consultation, the dispute shall be submitted to the arbitral
agency at the place where Party A is located for settlement.

ARTICLE 9 EFFECTIVENESS OF THE CONTRACT

This contract shall take effect from the date of signing and sealing by both
parties and signing and sealing by the guarantor and become invalid upon the
completion of contract performance. This contract shall be made out in ____
originals, ___ for Party A, ___ for Party B, ___ for the guarantor and ___ for
the supervising lending bank. Each shall have the same legal effect.

The matters not dealt with herein shall be settled by both parties through
consultation. Supplementary clauses separately signed shall be an integral part
of this contract and shall have the same legal effect with this contract.

   PARTY A:                         PARTY B: GUANGDONG XINSHENG ENVIRONMENTAL
                                    PROTECTION CO., LTD.

   LEGAL REPRESENTATIVE             LEGAL REPRESENTATIVE

   REPRESENTATIVE:                  REPRESENTATIVE:

                                              DATE: June 30, 2003

   GUARANTOR:

   LEGAL REPRESENTATIVE:

<PAGE>

Annex 1

               Matters agreed relating to the construction project
                          of the sewage treatment plant

CLAUSE 1 QUALITY STANDARD OF THE PROJECT

The overall construction project shall satisfy the standard of excellent project
so as to guarantee the safety, reliability and applicability of the construction
project. The state project quality standard shall be applied.

CLAUSE 2 GENERAL RESPONSIBILITIES OF PARTY A DURING THE PROCESS OF CONSTRUCTION

2.1   Representative of Party A: Party A shall station a representative to on
      the site of construction, who shall exercise the rights and fulfill the
      responsibilities agreed on in the contract:

2.1.1 The representative of Party A has the right of assigning the managing
      personnel to exercise or fulfill part or whole rights and responsibilities
      on behalf of the representative of Party A, and has the right to withdraw
      such assignment at any time. The assignment and the withdrawal shall be
      notified to Party B five days in advance.

2.1.2 Any letter of instructions or notice of the representative of Party A
      shall firstly be signed by the representative of Party A, and then be
      submitted to the representative of Party B. The letter becomes effective
      after the representative of Party B signs in the return receipt and
      indicates the time of receiving the letter. In case regarding the
      instructions in the letter as not reasonable, the representative of Party
      B shall submit a written appeal within 24 hours. Within 24 hours after
      receiving the appeal, the representative of Party A shall discuss with the
      representative of Party B for a solution.

2.1.3 In accordance with the agreement in the contract, Party A shall provide
      Party B with necessary support, approval, drawings and the fulfillment of
      other obligations of Party A without delay, otherwise Party B shall notify
      the representative of Party A of the detailed requirement, the reason of
      demand and the consequences of delay in writing within 24 hours after the
      agreed time limit of the fulfillment of Party A. In case the
      representative of Party A does not reply within 48 hours after receiving
      the notification, Party A shall bear the expenses arising from the delay
      and is liable for the relating losses of Party A, and the time limit for
      the project shall be postponed accordingly.

The Chief Supervision Engineer assigned by Party A shall exercise part or whole
rights of the representative Party A and fulfill the responsibilities of the
representative of Party A as stipulated in the contract in accordance with the
agreed clauses in the agreement, but has no right to relieve the rights and
obligations of Party B as stipulated in the contract.

Party A shall inform Party B of any substitution of the representative of Party
A and the General Supervision Engineer within 7 days after the decision. The
successors shall bear the responsibilities of the predecessors (the obligations
stipulated in the contract and the commitment within their authority).

2.2   The obligations of Party A. Party A shall be responsible for the following
      work:

2.2.1 Take charge of submitting the initial design scheme to relating
      authorities for registration and approval.

<PAGE>

2.2.2 Complete the formalities of reporting the project to relating authorities
      and getting the various certificates and approval documents from the
      relating authorities at least 10 days before the start of the
      construction, which allow the construction, the temporary usage of the
      construction site, the usage of occupied roads and buildings, and the
      relating installation.

2.2.3 Connect the water supply for living and the electricity for lighting
      before the construction team enters the construction site, and connect the
      water supply and electricity for construction 10 days before the start of
      the construction; Take charge of completing the fitting project of the
      electricity network required by operation of the sewage treatment plant
      one month before the completing of the sewage plant.

2.2.4 Notify Party B of the names of the stationed representatives (including
      the supervision engineer) designated by Party A and send the notification
      of approving the start of construction to Party B before the start of the
      construction.

2.2.5 Provide the information of the geology and the underground pipelines and
      electrical lines on the construction site to Party B and such data shall
      be authentic and accurate; Any consequences arising from the deviation of
      such information or data shall be borne by Party A.

2.2.6 Offer the information of benchmark and the coordinates control points to
      Party B in writing and carry out the site verification.

2.2.7 Coordinate and carry out the protection of the nearby underground
      pipelines and lines on the construction site and the protection of
      adjacent buildings and constructions, and bear the relating expenses.

2.2.8 The site-stationed representative of Party A shall supervise the progress
      and quality of the construction project, urge Party B to test the test
      pieces and pressure of materials and sort out the technical information
      and data, and take charge of the licenses and other related matters within
      the authority as stipulated in the contract.

CLAUSE 3 GENERAL RESPONSIBILITIES OF PARTY B DURING THE PROCESS OF CONSTRUCTION

3.1   The site-stationed representative of Party B: Party B shall designate a
      site-stationed principal, who shall exercise the rights and fulfill the
      responsibilities agreed in the contract.

3.1.1 Any requirement, request or notification of Party B shall be in written
      form, which shall be signed by the representative of Party B before
      sending to the representative of Party A, and shall become effective after
      the representative of Party A signs and indicates the time of receiving in
      the return receipt.

3.1.2 The representative of Party B shall organize the construction in
      accordance with the design drawings and construction organization design
      (or construction scheme) checked and confirmed by Party A, and the orders
      of Party A sent on the basis of the contract.

Party B shall notify Party A of any substitution of the representative of Party
B at least 7 days in advance. The successor shall bear the responsibilities of
the predecessor (the agreed obligations in the contract document and the
commitment within the authority).

3.1.3 Responsibilities of Party B. Party B shall take charge of completing the
      following work:

3.1.4 Complete the initial design scheme, design of construction drawings within
      the agreed time limit and provide Party B with 5 copies of the initial
      design scheme, design of construction drawings.

<PAGE>

3.1.5 Within 5 days after Party A approves the initial design scheme, Party B
      shall submit the water and electricity usage plan to Party A within 5 days
      after Party A approves the initial design scheme. Party B shall complete
      the co-examination of the construction drawings, and draw up the
      construction organization design and the construction progress schedule to
      Party A as the basis of checking and supervising the implementation of the
      construction schedule. Party B shall submit the electricity and water
      consumption estimation of the whole sewage treatment plant to Party A
      within 1 month after the start of the construction.

3.1.6 At least 5 days before the state of the construction, Party B shall submit
      the names of the site-stationed representative of Party B and the contact
      persons (including those of the sub-contractors) to Party A, so that Party
      A can urge and inspect the construction work.

3.1.7 Submit the annual, quarterly and monthly project progress schedules and
      the relating statistics of progress and the special report for any
      engineering accident to the representative of Party A.

3.1.8 Abide by the regulations of the local government and authorities on the
      transportation at the construction site or any other regulations. Party A
      is responsible for going through relating formalities.

3.1.9 Party B shall carry out the construction in strict conformity with the
      operating procedures specified in the construction drawings and the
      construction instructions examined and approved by Party A, and the
      technical criteria of construction, and shall test the material of the
      test pieces in accordance with relating regulations. The quality of
      construction project shall be supervised by the quality supervision
      authorities and Party A; In case finding any problem in the key
      construction section, Party A shall notify Party B of such problem in
      writing and Party B must take corrective actions according to the
      requirements of the representative of Party A.

3.1.10 Party B must organize the construction of the project according to the
      schedule approved by Party A, and receives the check and supervision
      carried out by the representative of Party A. In case the actual progress
      of the construction in not in conformity with the progress schedule, Party
      B shall propose the corrective measures according to the requirements of
      the representative of Party A, which shall be implemented after they are
      approved by the representative of Party A.

3.1.11 Party B bears responsibilities for protecting the underground pipelines
      at the construction site and the adjacent building and constructions, and
      ensure the cleanness of the site complies with the relating regulations.<PAGE>

                                                                    Exhibit 10.5

                                    AGREEMENT

Party A:          Pu Chong Liang
Address:          Suite 402, S20 Street, Donghui Garden, Tianfu Road
                  Guangzhou, Guangdong Province, China
                  ID No. 441324590410533

Party B:          Guang Dong Xin Xing Mei Biology Company Limited
                  Address: 6th Floor, No. 73, Guowei Building
                  Guangzhou, Guangdong Province, China
                  Registration No. 4400001900493

After amicable negotiation with respect to the technologies owned by Party A
concerning certain MHA biological treatment processes technology and GM
bio-carriers, for consideration received and the sufficiency thereof is hereby
acknowledged, the Parties have agreed as follows:

Section 1:        Scope of Assignment

Party A hereby agrees to assign to Party B the right to use the patents owned by
Party A concerning certain MHA biological treatment processes technology and CM
bio-carriers (PRC Patent No. ZL 01-1-07624.0) (the "Patents").

Section 2:        Method of Assignment

Effective as of the date hereof, Party B shall have the perpetual right to use
the Patents.

Section 3:        Undertakings

Party A agrees that he will not assign the Patents or the right to use the
Patents to any third party and Party B will be the exclusive user of the Patents
with the right to sub-license.

Section 4:        License Fee

Party A agrees that the Party B will have the right to use the Patents
free-of-charge.

Section 5:        Dispute Resolution

In the event that there is any dispute arising from any default or termination
of this Agreement, the Parties shall negotiate to resolve the dispute amicably;
failing which either Party may submit such dispute to the court in China for
resolution.

<PAGE>

Section 6:        Effective Conditions and Date

This Agreement shall become effective upon the signing by the Parties and
supersede all agreements reached by the Parties previously on the subject matter
of this Agreement.

Section 7:        Number of Copies

This Agreement shall be executed in four counterparts which shall have the same
legal effects.

Party A:
Pu Chong Liang

  /S/ PU CHONG LIANG
-----------------------------------------------

Party B:
Guang Dong Xin Xing Mei Biology Company Limited

 /S/ [SIGNATURE ILLEGIBLE]
-----------------------------------------------
By:
Title:

Dated as of:  October 20, 2004

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