Exclusive
Sales Agreement
 
 This
Exclusive Sales Agreement (the “Agreement”) is
entered into as of this day of 10thof April, 2009
by and between:
 
 
 Party A:
Sichuan Xinlong Telluronium & Technique Co., Ltd.
 Zhenzang
Road, Dongsheng Township, Shuangliu County, Sichuan Province
 Registered
code: 510122000026482
 
 AND
 
 Party B:
Sichuan Xinju Mineral Resource Development Co., Ltd.
 11F,
Tianxiang Building, No.90, Wanhe Road, Chengdu, China
 Registered
code:5100001810329
  WHEREAS, Party A is a wholly foreign owned enterprise with limited
liability founded in the People’s Republic of China (“China”);
 
 WHEREAS,
Party B which is a limited liability company incorporated in China, possess the
exploration rights to that certain land of 6.29 square kilometers in the
Dashuigou area and the mining rights of that certain tellurium and bismuth mine
of 0.0568 square kilometers in Shimian Majiagou (such exploration rights and
mining rights of Party B, collectively the “Mining
Business”).
 
 WHEREAS,
Party A intends to acquire the exclusive rights to buy all the output of the
Mining Business from Party B; and
  WHEREAS,
Party B intends to sell the merchandise set forth in Article II hereof to Party
A on the terms as set forth in Article XVII hereof;
 
 NOW THEREFORE, in accordance with laws and regulations of the People's Republic
of China, the Parties agree as follows after friendly consultation based on the
principle of equality and mutual benefit.
 
 1
 Article
I
 Fundamental
Provisions
 
 1.1           All
the provisions of this Agreement shall be deemed applicable to each and every
individual distribution contract signed during the term of this Agreement,
regardless of whether or not such distribution contracts specifically reference
this Agreement.
 
 1.2           Each
and every distribution contract shall include: (i) the terms of distribution
(including but not limited to, the name of merchandise, list prices, deal size,
shipping dates, shipping destinations, shipping conditions, packing, payment
making conditions and others terms as applicable) and (ii) certain general terms
and conditions.
 
 
 Article
II
 Agreement;
Merchandise
 
 2.1          
During the term of this Agreement, Party B agrees to sell the prescribed
merchandise on an exclusive basis to Party A in accordance with the terms of
this Agreement and the terms of each individual distribution
contracts.
 
 2.2           Notwithstanding
Section 2.1,
Party A shall be under no obligation to purchase any merchandise from Party B
unless and until it enters into an individual distribution
contract.
 
 
 
 Article
III
 Individual
Distribution Contracts
 
 3.1           Party
A and Party B agree that, with respect to each and every merchandise deal
arising under this Agreement that a specific individual distribution contract
shall be entered into between the parties with respect thereto. Unless agreed to
contrary therein each and every individual distribution contract shall form part
of this Agreement once it is executed by both parties hereto. In the event if
dispute between the terms of this Agreement and any individual distribution
agreement the terms of this Agreement shall prevail.
 
 3.2           Any
amendment, change or attachment to this Agreement and/or to any individual
contract shall only become effective on such amendment, change or attachment
having been signed in writing by both parties hereto.
 
 2
 Article
IV
 Delivery
and Shipment
 
 4.1           Party
B should deliver the merchandise to the place prescribed in the particular
individual contract. After deliver of the prescribed merchandise at the
prescribed place to Party A, Party B’s delivery obligation shall
terminate.
 
 4.2           Unless
expressed elsewhere to the contrary in this Agreement, Party B is responsible
for all expenses incurred in the delivery of the prescribed merchandise to Party
A until delivery has been made to Party A.
 
 
 Article
V
 Ownership
and Risk
 
 5.1           Notwithstanding
anything contained in this Agreement to the contrary, the risk of loss from any
damage or casualties to the prescribed merchandise shall be borne by Party B
until the prescribed merchandise has been accepted by Party A.
 
 5.2           Party
A agrees to accept the goods and pay for them in accordance with the terms of
the individual distribution contract. Before the title of the goods is
transferred to the buyer, the buyer can neither dispose the goods nor use the
goods as collateral.
 
 5.3           Regardless
of cause, the risk of loss from any damage or casualties to the prescribed
merchandise shall be the responsibility of the Party B until the goods have been
accepted by Party A.  Prescribed merchandise shall be deemed received
by Party A when delivered to the address of Party A as first set forth
above.
 
 
 Article
VI
 Right
of Inspection
 
 6.1           Party
A shall have the right to inspect the prescribed merchandise on arrival and,
within seven (7) business days after delivery, Party A must give a notice to
Party B of any claim for damages on account of condition, quality or grade of
the prescribed merchandise, and Party B must specify the basis of the claim of
Party A in detail.  The failure of Party A to comply with these conditions
shall constitute irrevocable acceptance of the goods by Party A.
 
 6.2           Party
A acknowledges having the right to provide Party B with a property inspection
report pursuant to this Agreement and agrees that except as may be specifically
provided for in this Agreement, Party A will not otherwise undertake a property
inspection or prepare a property inspection report regarding the prescribed
merchandise.
 
 3
 Article
VII
 Payment
on Receipt
 
 7.1           The
price and quantity of the prescribed merchandise for each deal between Party A
and Party B will be described in details in the applicable individual
distribution contract. Party A shall make payment for the prescribed merchandise
at the time when, and at the place where, the prescribed merchandise are
received by Party A.
 
 7.2           Party
B agrees that interest on encumbrances, taxes, insurance, and rents of
warehouse, if applicable, shall be prorated at the time of closing and all
existing liens shall be paid by Party B, prior to or at the time of
closing.
 
 Article
VIII
 Confidentiality
 
 8.1           Nondisclosure:
Both parties hereto acknowledge and agree to hold each other’s information in
form of technical data or other proprietary information in confidence and not
use or disclose any proprietary information to any third party.
 
 8.2           Neither
party shall disclose any confidential information or the terms of this Agreement
to a third party for any reason. The parties hereto agree to keep the
information contained within this Agreement confidential and not to disclose or
allow disclosure by any of their representatives to a third party.
 
 8.3           This
Article VIII shall remain in full force and effect notwithstanding the maturity
of this Agreement or termination of this Agreement for any reason.
 
 Article
IX
 Relationship
of the Parties
 
 9.1           The
relationship between Party B and Party A shall be that of vendor and vendee, not
employee and employer. Party A is not responsible for employees of Party B. The
relationship between Party B and Party A should not be deemed to be any kind of
partnership, joint-venture, franchise business, sales representative or
trust.
 
 9.2           Party
A has the right but not the obligation to purchase prescribed merchandise from
Party B.  Nothing contained in this Agreement shall
prevent  Party A from acquiring any product from any third party. The
merchandise of Party B shall be sold on an exclusive basis solely to Party
A.  Any deal for the sale of merchandise by Party B to a third party
will be a violation of this Agreement.
 
 9.3           Party
B’s agents and employees shall, under no circumstances, be deemed employees,
agents or representatives of Party A. Party A will not modify any of the
prescribed merchandise acquired from Party B without the prior written consent
of Party B. Neither Party A nor Party B shall have any right to enter into any
contract or commitment in the name of, or on behalf of the other, or to bind the
other in any respect whatsoever.
 
 4
 
 Article
X
 General
Obligations
 
 10.1           Party
A shall maintain a place of business in the territory, including suitable
showroom facilities to display Party B's products. Party B shall provide
maintenance services on products sold to Party A in the territory, using
qualified personnel and subject to service policies satisfactory to Party
A.
 
 10.2           If
necessary, Party B shall hire relevant personnel or appoint representatives to
introduce, conduct, demonstrate and repair the prescribed merchandise sold to
Party A. Such personnel and/or representatives shall be adequately trained and
paid by Party B. Party B shall employ sufficient numbers of after-sales
personnel and/or technical support representatives to properly assist Party A in
its use of the prescribed merchandise.
 
 10.3           Party
B agrees not to engage in the distribution, promotion or advertisement of
merchandise that competes or conflicts with the prescribed merchandise sold to
Party A.  Party A shall be entitled to receive form Party B a list of
items handled by Party B following Party A's request to ensure that no conflict
exists.
 
 10.4           In
the event that: (i) Party B fails to provide Party A with qualified prescribed
merchandise, (ii) the prescribed merchandise acquired by Party A is manufactured
following the instructions provided by Party B or (iii) the merchandise acquired
by Party A is purchased from a third party appointed or strongly recommended by
Party B, then any casualties that arise from the foregoing sub-clauses (i) to
(iii) should be the responsibility of Party B.  Party B shall be
solely responsible for all expenses or fines that arise in connection with the
foregoing.
 
 
 Article
XI
 Maturity
of Debt
 
 11.1           Any
payable debt of Party B due from Party A shall been deemed matured with
immediate effect in the event that:
 
 11.1.1        Party
B fails to fulfill any obligation under this Agreement or any other agreements
till (i) the time that the above-mentioned agreements can be terminated
expressly; or (ii)within 30 days if the above-mentioned agreement cannot be
terminated;
 
 11.1.2       
Party B files a bankrupt application or assets of Party B become or are in the
process of being sold by auction by government;
 
 11.1.3       
Party B has been materially punished by any ministry authorities or
jurisdictions because of a violation of government operation
standards;
 
 11.1.4       
Party B reduces its registered capital, terminates its operations or eliminates
a significant factory or department or starts liquidation without the prior
written consent of Party A;
 
 11.1.5       
Any third party or authorities or Party B starts liquidation or files a bankrupt
application;
 
 5
 11.1.6        Any
check that is issued by Party B is not honored; or
 
 11.1.7        A
deterioration in the credit status of Party B or its sponsoring
party.
 
 11.2           In
the event of any of the foregoing, Party A shall be entitled to terminate this
Agreement without any prior notice to Party B, and Party B shall be responsible
for all and any losses that result from such a termination.
 
 
 Article
XII
 Right
of Set-off
 
 12.1           Party
B must fulfill its obligations to Party A hereunder in accordance with the terms
of this Agreement regardless of any other contracts and Party A shall be
entitled to set-off payables to Party B in accordance with any outstanding
receivables due from Party B on an equivalent basis.
 
 12.2           Where
any outstanding payables of Party A have been settled by way of set-off before
the maturity date, Party A shall be deemed to have paid off such outstanding
payables and the accrued interest expenses of Party A in respect of such
outstanding payables shall be marked off accordingly. The interest rate is
calculated based on benchmark basis of the set-off date.
 
 12.3           In
the event that Party A elects to exercise its rights under clauses 12.1 and 12.2 Party B shall
not have the right to refuse Party A’s request. Party B must accept the outcome
of Party A’s exercise of such rights in all circumstances and cases and Party B
shall not be entitled to seek any changes from Party A.
 
 Article
XIII
 Indemnification
 
 13.1           Party
B agrees to protect Party A and hold Party A harmless from any loss or claim
arising out of inherent defects in any of Party B's products existing at the
time such products are acquired by Party A, provided that Party A gives Party B
immediate notice of any such loss or claim and Party A cooperates fully with
Party B in the handling thereof. If either party hereto breaches any term of
this Agreement however so caused, such a breach will be deemed as violation of
this Agreement.  The party hereto in breach will assume all
obligations that shall result from such breach.
 
 13.2           While
Party B is fulfilling its obligations under Section 4.1, if Party
A refuses to accept delivery of prescribed merchandise for any reason, Party B
without any prior notice to Party A shall be entitled to dispose of the delivery
by itself without assuming any obligations to Party A.  Party A need
to make a reply in terms of bellows within 7 days it received Notice of
Statement of Claim from Party B:
 
 13.2.1      
 Party A is responsible for payment in full for all prescribed merchandise
ordered from Party B.  Following the delivery of the prescribed
merchandise from Party B to Party A, Party A must pay Party B in full the
purchase price. Party B shall have the right to impose a fine for any delay in
such payment; or
 
 6
 13.2.2         If
the payment that Party B received from Party A is: (i) less than the Party B’s
list price, Party A shall pay the difference, or (ii) more than Party B’s list
price, then Party B does not have to return the difference and Party A shall not
be entitled to ask for a return.
  13.2.3  
     In the event Party A delays in making payment for
its prescribed merchandise, Party A shall be deemed to have directly breached
this Agreement. In such an event, a penalty of 0.05% shall be applied to the
outstanding unpaid balance of the payment of Party A on a daily basis. The
payment of Party A’s next order shall first be offset against the outstanding
payment before being applied to payment of the new order.
 
 13.3       
    If Party B violates this Agreement, and such violation
continues to exist for a period of not less than thirty (30) days following
Party A’s notice to Party B of such violation, the violation shall be deemed a
material violation and Party A shall be entitled to either (i) terminate this
Agreement by serving notice on Party B, or (ii) terminate the applicable
individual distribution contract by serving notice on Party B.
 
 13.4           Party
B agrees to protect Party A and hold Party A harmless from any loss or claim
arising out of the negligence of the prescribed merchandise of Party B. Further,
in the event that any of Party B's representatives shall, with respect to any of
Party A's prescribed merchandise purchased from Party B, fail to discharge Party
B's obligations to the original consumer pursuant to the terms and conditions of
Party A's product warranty and consumer service policies, Party B agrees to
discharge promptly such unfulfilled obligations.
 
 13.5           The
stipulations contained in this Article XIII do not affect any other provisions
that address violations of articles herein.
   Article
XIV
 Force
Majeure
 
 The
parties hereto agree that a party that fails to fulfill its obligations
hereunder due to the occurrence of any irresistible events (including but not
limited to earthquakes, war, civil war, the collapse of local or national
government, weather, or changes to the law), the party affected by the
irresistible event shall not take any responsibilities its failure that
results.  Notwithstanding the foregoing, such party shall provide
notice to the other party of the irresistible events as soon as practical. If
the irresistible events last or are expected to last more than 60 days, any
party shall have the right to terminate this Agreement or any individual
distribution contract to which it applies.
 
 
 Article
XV
 Financial
Policy
 
 15.1          At Party A’s
request Party B shall provide Party A with accurate, clear and comprehensive
financial statements and other documents which shall be reflect Party B’s
operating results.
 
 15.2           Party
B shall provide notice to Party A before it makes any material changes or
operational strategies to its business.
 
 15.3           Party A
has the right to enter Party B’s workshops and operational facilities in the
event that on the occurrence of the events set forth in Articles 10.1
or
 
 7
 Article
XVI
 Transfer
 
 16.1           Without
the written prior consent of Party A, Party B shall not transfer any rights or
obligations under this Agreement to any third party.
 
 16.2           Under any
circumstance, Party A is allowed to transfer any articles which has been
prescribed under this Agreement or any individual distribution contract to its
associate parties after notifying Party B of the same in writing. The associate
parties herein means (i) entities owned by Party A by not less than 30% of the
shares directly or indirectly, or (ii) entities that own over 30% or Party A’s
shares, or (iii) entities owned by the same entity that owns over 30% of Party
A’s shares.
 
 Article
XVII
 Terms
 
 17.1                This
Agreement shall become effective once it has been signed or sealed by both
parties hereto, and expire on the first day of April, 2018 or on an earlier date
if Party A shall terminate this Agreement at such earlier date in accordance
with the terms of this Agreement.
 
 17.2                Unless
terminated on the expiry date or prior thereto the term of this Agreement shall
automatically be extend for another ten (10) years.
 
 17.3                Notwithstanding
the foregoing, if within the one month period prior to the termination of this
Agreement there is still an individual distribution contract in process, then
this Agreement shall be extended to the end date of such individual distribution
contract.
 
 Article
XVIII
 Notice
 
 Any
notice under this Agreement shall be in writing, with the delivery in the form
of: (i) particular delivery by assigned personnel, (ii) express mail, or (iii)
facsimile.  Delivery shall be made to the parties at the following
addresses:
 
 Party
A:                      Sichuan
Xinlong Telluronium & Technique Co., Ltd.
 Mailing
address: No. 485, Teng Fei Third
Road, Shuangliu Southwest AirportEconomic Development Zone, Shuangliu,
Chengdu
 Fax:
86-28-85745525
 Telephone:
86-28-85745561
 Receiver:
Xiong Lei
 Party
B:                      Sichuan
Xinju Mineral Resource Development Co., Ltd.
 Mailing
address: No. 485, Teng Fei Third
Road, Shuangliu Southwest      AirportEconomic
Development Zone, Shuangliu, Chengdu
 Fax:
86-28-85745601
 Telephone:86-28-85745578
 Receiver:Ling
Yong
 
 8
 Each
party shall be responsible for informing the other party as soon as possible of
any change in its contact information.
 
 Article
      XIX
 Governing
      Law
 
 This
Agreement shall be construed and enforced in accordance with the laws of the
People’s Republic of China.
 
 Article
XX
 Severability
 
 20.1           Any
disputes, controversy or claim arising out of or relating to this Agreement
shall be resolved through friendly consultation. If within 30 days following the
date on which such dispute, controversy or claim shall have occurred; the
dispute shall be submitted to arbitration upon the request of either party with
notice to the other.
 
 20.2           Any
argument arising out of this Agreement shall not affect or impact any other
Articles under this Agreement.
 
 Article
XXI
 Miscellaneous
 
 21.1           Any
action of delay fulfillment or failure of delivery the obligation prescribed in
this Agreement does not form any form of waiver of rights prescribed in this
Agreement.
 
 21.2                If
at any time any provision of this Agreement shall become illegal, invalid or
unenforceable in any respect, such provision shall not affect or impair the
legality, validity or enforceability any other provision of this
Agreement.
 
 
 21.3                This
Agreement must be in written and shall not be effective until signed or sealed
by both parties hereto.
 
 21.4                The
rights and obligation described in this Agreement shall be
cumulative.
 
 21.5                This
Agreement is made in duplicate, each of Party A and Party B shall hold one
copy.
 
 21.6           This
Agreement and its appendixes contain the whole agreement between the parties
hereto relating to the transactions contemplated by this Agreement and supersede
all previous agreements, whether oral or in writing.
 
 21.7                Amendments
to this Agreement shall require the written consent of both parties
hereto.
 
 21.8    This
agreement is made in both English and Chinese. English version shall prevail
where difference arising between English version and Chinese
Version.
 
 9
  IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above
written.
 
 By:
      Party A:Sichuan
      Xinlong Telluronium Industry & Technique Co., Ltd./s/Renyi
      HouRenyi Hou
 
 By:
      Party B:Sichuan
      Xinju Mineral Resource Development Co., Ltd./s/Renyi
      HouRenyi Hou
 
  10