ATTENTION:

Mr. Florian Bordier

De-Dietrich Process Systems

Unit 1804, Shenshi Mansion, No. 511 Weihai Road, Shanghai. P.R. China, 200041

Tel: 52610128/52610097 Fax: 52610104

REPORT DATE: October 20, 2007

Dear Sirs,

Re: Zibo Chemet litigation

1. Brief background

-The year of 2003, DDPS fund Zibo Chemet Equipment Co, Ltd(“Zibo Chemet” 淄博贝特化工设备有限公司), a Chinese company registered in 137 New World Business Street, Zibo, Shandong Provice, have been copying DDPS’s drafts, designs and drawings in its company brochures, websites(http://www.chemet.net and http://www.corrosion.363.net), internet database, bidding documents, product advertisements and other marketing materials. Zibo Chemet have been even directly copying DDPS’s “Glaslock” elucidation and trademark.

-September 19, 2003, DDPS lawyers (Mack Liu of Dacheng Law Offices, Shanghai) sent warning letters to Zibo Chement, demanded Zibo Chemet immediately retract and destroy all infringing adoptions. Zibo Chemet ignored our warning letters even after the lawyer’s series phone calls and personal visit, infringements continue;

-November 12, 2005, DDPS filed litigation against Zibo Chemet to People’s Court of Zibo (“Zibo Court”);

-May 22, 2006 and July 7, 2006, Zibo Court hearings on this case;

-September 29, 2006, Zibo Court made a judgment. It orders:

1. Zibo Chemet to stop infringing PCCS’s copyright immediately;

2. Zibo Chemet to compensate PCCS RMB 34,255 in total.

The judgment is an final and effective judgment because neither the plaintiff (DDPS) nor the defendant (Zibo Chemet) appealed to Super Court of Shandong.