Joint Technology Development Contract

Exhibit 10.20


Contract Registration No.: - ------ --- ---- --- --- ---- --- --- ---- - ------ --- ---- --- --- ---- --- --- ----


Technical Development Contract


Project Name: Development of the process of producing nano calcium carbonate by micro-mixing reactor


Entrusting Party (Party A): Shandong Haize Nanomaterials Co., Ltd


Address: Youth Development Zone, Tai'an City


R&D Party (Party B): Tsinghua University (Department of Chemical Engineering)


Address: Haidian District, Beijing


This Contract is signed in Beijing.


This Contract is signed on January 12, 2005


Period of Validity: January 2005 - May 31, 2006


Supervised by the State Scientific and Technology Commission


In accordance with the provisions of Contract Law of the People's Republic of China and after discussions and negotiations about the development of the process of producing nano calcium carbonate by micro-mixing reactor based on the existing technology of producing nanometer granule by micro-mixing reactor developed by Party B, the two parties agree to enter into this contract.


I. The Content, Form and Requirements of the Target Technology:


Based on the existing production conditions provided by Party A, Party B shall carry out the study of the producing method of nano calcium carbonate by the micro-mixing reactor, find the proper reacting condition, and carry out the tests on small-scale test, pilot scale experiment and commercial test for the realization of industrial production.


1. The process of producing nano calcium carbonate by micro-mixing reactor


Based on the raw materials provided by Party A, Party B shall find out the laws by studying how the flow rate, reaction temperature and the concentration of white lime milk will affect the size and appearance of the obtained nano calcium carbonate and the flow law inside the micro-mixing reactor, in order to get prepared for designing the equipment for pilot scale experiments. After finishing the above technical experiments, Party B shall submit a research report, and discuss with the technical personnel from Party A about the feasibility of pilot scale experiments.


2. Determination of the reacting conditions and key parameters of relevant equipment for carbonization reactions in pilot scale experiments


After getting permission from Party A to carry out the pilot scale experiments, based on the research result of small-scale tests, Party B shall determine the reacting conditions of the carbonization reactor and key parameters of relevant equipment for carbonization reactions, and design the production process for pilot scale experiments and relevant equipment by cooperating with the design organization invited by Party A.


3. Pilot scale experiments


After getting permission from Party A about the stipulations in the above provision, Party B shall provide a micro-mixing reactor for pilot scale experiments. Party A shall provide the necessary equipment coordinating with the micro-mixing reactor as well as other conditions required in the pilot scale experiments, and carry out such tests under the instructions of Party B.


Pilot scale experiments are designed to study how the gas-liquid phase ratio and the concentration of white lime milk will affect the size and appearance of the obtained nano calcium carbonate, and check the stable operating conditions of equipment. If there are problems affecting the technical stability of the micro-mixing reactor during the pilot scale experiments, Party B shall be responsible for fixing them.


Party B shall submit a report of the pilot scale experiments. Party A shall ask experts to conduct the check and acceptance of the result of the pilot scale experiments.


4. Commercial tests


After getting permission from Party A to carry out the commercial tests, based on the research results of pilot scale experiments, Party B shall determine the reacting conditions of the micro-mixing reactors and key parameters of relevant equipment for carbonization reactions, and design the production process for commercial tests and relevant equipment by cooperating with the design organization invited by Party A.


Commercial tests are designed to study how the gas-liquid phase ratio and the concentration of white lime milk will affect the size and appearance of the obtained nano calcium carbonate, and check the stable operating conditions of equipment. If there are problems affecting the technical stability of the micro-mixing reactor during the pilot scale experiments, Party B shall assist Party B to fix them.


Party A and Party B shall jointly submit the report of commercial tests. Party A shall ask experts to conduct the check and acceptance of the result of the commercial tests.


While working at the location of Party B, the board and lodging expenses of the staff of Party A shall be covered by Party A. If some staff of Party B need to go the locale of Party A and do necessary work for the sake of the implementation of this project, the travel expenses arising from this shall be covered by Party A.


II. Required Technical Indicators and Parameters:


(I) Required technical indicators and parameters for small-scale tests


1. The granule diameter of the primary granule of the nano calcium carbonate
obtained by this technical method shall be less than 60 nanometers. The
granules whose diameters are more than 60 nanometers shall account less
than 5% of the total mass.


2. When the process reaches the stage of carbonization, the pH value of the
white lime shall not be higher than 8.5 within 4 hours.


(II) Required technical indicators and parameters for pilot scale experiments


1. All the above required technical indicators and parameter for small-scale
tests shall have been satisfied. 2. The composition of the kiln gas for carbonization should be: CO2 (28%), O2
(4%) and CO (2%). The other ingredients are mainly N2, small amount of
water vapor and soot. The utilization ratio of CO2 during the reacting
process should be >/= 80%. 3. The carbonization temperature will be acceptable within the range of
30iA10iae for the convenience of control and operation. 4. This process shall guarantee the whiteness after carbonation will be 1.5 -
2.0 degrees higher than that before carbonation. 5. The concentration of white lime milk for carbonization shall be >/+=
60g/l.


(III) Required technical indicators and parameters for commercial tests


1. All the above required technical indicators and parameter for tests on
small-scale tests and pilot scale experiments shall have been satisfied. 2. The producing method in this process can be used in industrial production,
with the annual output for single equipment being more than 3,000 tons.


III. Plans for Research and Development


1. The small-scale tests shall be carried out and completed within 3 months
after this contract has become effective. 2. The pilot scale experiments shall be carried out and completed within 3
months after receiving the first fund for pilot scale experiments. 3. The enlarged commercial test shall be carried out and completed within 3
months after receiving the first fund for commercial tests. The producing
conditions shall be technically satisfied.


As the above R&D plans will be carried out at the location of Party A and that of Party B respectively and the two parties will take joint responsibilities, so the parties shall closely cooperate with each other in the execution of the plans. In case that the pilot plant or commercial plant cannot be prepared timely, the research plans shall be postponed. The changes of the R&D schedule shall be determined after the negotiations of the two parties.


IV. R&D Expenses, Remuneration and Mode of Payment or Settlement


(I) R&D expenses refer to the costs needed for the R&D. Remuneration refers to the royalty of the achievement developed by this project and the allowance and subsidies for the R&D staff.


R&D expenses and remuneration for this project total at RMB 1,500,000.00 yuan, that is, RMB one million and five hundred thousand yuan exactly.


Among which:


1. Party A shall pay RMB two hundred and fifty thousand yuan to Party B for
the research work of small-scale tests (item 1 of Article 1). 2. After small-scale tests have been finished and accepted by Party A, Party
A shall pay RMB six hundred thousand yuan to Party B for pilot scale
experiments of this project (item 2 of Article 1). When personnel from
Party B work at the location of Party A for the execution of this project,
the relevant boarding and lodging expenses shall be covered by Party A,
but the expenses shall be subject to Party A's examination. 3. After pilot scale experiments have been finished and accepted by Party A,
Party A shall pay RMB six hundred and fifty t ...