The Acquisition Agreement

of

SeZone County Hong Xing Coal Washing Factory

with

L&L Yunnan Tianneng Industry Co. Ltd.

(English Translation)

Party A: L&L Yunnan Tianneng Industry Co. Ltd. (Sino-American Joint Venture
Enterprise) (which L&L owns 70% voting equity and Tianneng Co. owns 30%)

Legal Representative: Dickson V. Lee

Chinese Business License: 530100400004890

Address: JingKai District ChuangXing Yuan A25, Kunming City

 

Party B: SeZone County Hong Xing Coal Washing Factory (Sole Proprietorship
Enterprise)

Legal Representative: Hong Xing Li

Chinese Business License: 5303232000269

Address: SeZone County XiongBi Township DaWaLu Village, Yunnan Province, China

To fully utilize Party A’s advanced technology and capital, for increase of
Party B’s coal washing factory’s economic benefits, both parties via friendly
discussions, pursuant to relevant laws and regulations and on a mutual voluntary
basis, agree that Party A acquires 100% of Party B, that:

I.      Company Name Before Acquisition: SeZone County Hong Xing Coal Washing
Factory.   II.      Company Name After Acquisition: SeZone County Hong Xing Coal
Washing Factory, with Legal Representative of Lao Zhong Yang (a shareholder of
L&L’s subsidiary TNI)   III.      Acquisition Method: Party A shall fully-fund
the acquisition of Hong Xing Coal Washing Factory. After Party B receives the
funds, it shall start changing the business registration and other relevant
business licenses of Party B.   IV.      Amount for Acquisition: Approximately
$1 million USD, subject to negotiation by both parties based on a valuation
report.  

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V.      Debts and Liabilities: Prior to the issuance of pre-acquisition audit
and valuation reports of Party B which was acquired on November 30, 2009, all
debts of Party B shall belong to the original owner of Hong Xing Coal Washing
Factory. After issuance of the pre-acquisition audit and valuation reports,
Party A shall assume all debts and liabilities.   VI.      The acquisition of
SeZone Hong Xing Coal Washing Factory is effective November 30, 2009.   VII.   
  Party A’s Duties and Obligations     1.      The American investor (L&L) is
responsible to inject the purchase capital from the United States to Party A’s
bank account. Party A and Party B will jointly convert such foreign currency
from USD to RMB, and to transfer the converted RMB into Party B’s bank account.
Party A will monitor Party B use of fund.     2.      Party A will provide
advanced production skill and management to Party B.     3.      Party A will
guide Party B on financial management.     4.      During the acquisition
process, Party A will not disrupt Party B’s daily operation.   VIII.      Party
B’s Duties and Obligations     1.      Party B shall use the injected funds only
for its operations.     2.      Party B shall change its business registration
immediately.     3.      Party B shall change related operation permits
immediately.     4.      Party B shall apply for an expanded 600,000 tons
washing capacity as soon as possible.     5.      Party B shall retain good
management, production safety, and normal daily operation.  

IX. Breach of Contract

If Party A fails to transfer funds on or before January 10, 2010, Party A has to
pay a 5% penalty.

X. Dispute Resolution

The parties should settle any dispute arising from interpretation or performance
in connection with this Agreement through friendly negotiation. In case no
settlement can be reached, the dispute should be settled by Yunnan Province
Foreign Investment Arbitration Commission.

This Agreement is effective on November 30, 2009, after execution by the
representatives of Party A and Party B.

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Party A: L&L Yunnan Tianneng Industry Co. Ltd.

Representative: /s/ Dickson V. Lee

 

Party B: SeZone County Hong Xing Coal Washing Factory

Representative: /s/ Li, Hong Xing

Date: January 1, 2010

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