STEAM COAL PURCHASE AND SALES CONTRACT

SALES CONTRACT

Date: 12.06.2009

This Contract is made between the Seller and the Buyer for Steam Coal, whereas the Buyer agrees to buy and the Seller agrees to sell the Commodity on the following terms and conditions.

The contract is for One (01) year, made and entered into on 12THJune 2009. Prices are negotiated quarterly and agreed between Buyer and Seller.

The following signed Contract is a document that is legally binding and enforceable under International Law and ICC Rules and Regulation, including Non Circumvention and Non Disclosure.

Whereas the Seller agrees and warrants under penalty of perjury to sell and delivery (Coal Caloric Value 5800 Kcal/Kg) in the form of steam coal, quantity 60,000 MTW and roll over (“Hereinafter referred to as steam coal”) and the Buyers agrees and warrants under the penalty of perjury to buy the Coal Caloric Value 5800 Kcal/Kg, The specification, terms and conditions agreed between the above said parties are as follow;

The Buyer :

Address :

Country:

Tel:

Fax:

Email:

Represented by:

Hereinafter referred to as the “Buyer”, And

The Seller:

Address :

Tel :

Fax :

E-mail:

Represented by:

Hereinafter referred to as the “Seller”,

Hereinafter referred to as the “Parties”,

This Contract is made by and between the Seller and the Buyer whereas the Seller agrees to sell and the Buyer agrees to buy the under-mentioned material as specified below subject to the following terms and conditions.

STEAM COAL PURCHASE AND SALES CONTRACT

COMMODITY : Steam Coal 5800 Kcal/Kg ROM

  1. PRICE : CIF US$ 56/MT FUJIANPort, China
  1. SPECIFICATION:

Gross Caloric Value: 5800 kcal/kg (ADB)

Total Moisture : 27% Max above 30% reject (ARB)

Inherent Moisture:15%Max(ADB)

Ash Content : 13% Max(ADB)

Volatile Matter: 43% Max (ADB)

Fixed Carbon: 40% By Balance (ADB)

Total Sulphur: Below 0.8% reject at 1.2% (ADB)

HGI: 55% Index Point

Size: ROM mm (100%)

3. Packing: Break Bulk

4. QUANTITY : 60,000 ROM MTW (10%) x 12 months.

5. ORIGIN : Indonesia

6.LOADINGPORT: South Kalimantan, Banjarmasin

7. DESTINATION PORT: FUJIAN Port, China.

8.SHIPMENT: Min 60,000 MTW per months,

9. QUANTITY AND QUALITY

9.1The unit of measurement in this contract is metric tons of weight (MTW). Months arecalendar months according to the Gregorian calendar.

STEAM COAL PURCHASE AND SALES CONTRACT

9.2Quantity of each monthly shipment is 60,000 MTW (10%)

9.3The total quantity of goods to be delivered are for every 60,000 MTW (10%)

9.4The total 60,000 MT quantity and quality of goods will be delivered in 1 calendar monthwith a mutually agreeable for delays in case of Force Majeure.

9.5The quantity of goods will be confirmed on a certificate issued by independentinternational survey company CCIC.

9.6Other quantity and Quality inspections at the port of unloading shall be at the buyer’sexpense.

9.7Weight for invoicing purposes shall be established by the actual net weight. In caseshort/over weight exceeds10% the Seller/Buyer shall compensate Buyer/Seller for theamount on the basis on contracted price.

  1. Premium/Penalty

The load port analysis carried out by reputed agency will be binding on both side

Buyer and seller.

10. Weight and Price Adjustment

10.1 For Gross Calorific Value (air dried basis):This Unit Price of the product is based on contractual specification 5800Kcal/kg (ADB)?The right of Rejection is granted to the Buyer if the Actual Gross Calorific Value (air dried basis) inspected by the Chinese commodity inspection report falls below 5600Kcal/kg (ADB)?

10..2 For Gross Calorific Value content (ADB):

The base price shall be decreased by USD1per MT for each 100 Kcal/kg below 5800 Kcal/kg. The base price shall be increased by USD1 per MT for each 100 Kcal/kg above 5800 Kcal/kg. Below 5600Kcal/Kg rejected.

Adjusted Price = (CIF Price x Actual GCV (ADB)/5800 Kcal/kg))

STEAM COAL PURCHASE AND SALES CONTRACT

10.3 For Total Moisture(ARB)

When total moisture inspected by the independent inspection organization at unloading port is more than 27%, the draft weight at unloading port deducted by exceeding water weight will be final weight for settlement;

The right of Rejection is granted to the Buyer if the Total moisture (ARB) exceeds 30 %

10.4 The above price based on GCV of 5800 Kcal/kg and 27% moisture (ARB). If the actual GCV is above/below 5800 Kcal/kg (or option) then price will be adjusted as per formula:

QUANTITY ADJUSTMENT

TOTAL MOISTURE (as received)

If the Total Moisture (as received) is above or below 27%, the Bill of Lading Weight at the Loading port will be adjusted to arrive at the Actual Weight for the purpose of Invoicing using the following formula:

(100 – Actual Total Moisture)

Actual Weight = ------x Bill of Lading Weight

e.g. (100 – 27%)

10.5 For Total Sulpur (ADB)

The right of Rejection is granted to the Buyer if sulfur content in the product inspected by the independent inspection organization at unloading port is greater than 1.2% under ADB?

10.6 For Ash content (ADB)

The right of Rejection is granted to the Buyer if the ash content in the Product inspected by the independent inspection organization at unloading port is in excess of13% by weight?

10.7 For Volatile Matter(ADB)

The right of Rejection is granted to the Buyer if the Volatile Matter in the Product inspected is >45%by weight.

11) UNIT PRICE AND TOTAL AMOUNT

a.The Buyer shall pay the Seller in united States Dollars USD$ 3,360,000(American Dollars THREE million THREE HUNDRED SIXTY Thousand Only)Seller and Buyer are mutually agreed of a constant for this contract at a base price of USD56.00/ MTW CIF FUJIAN port, China.

STEAM COAL PURCHASE AND SALES CONTRACT

b.The monthly shipment value of deliveries is about USD$ 3,360,000(American Dollars THREE million THREE HUNDRED SIXTY Thousand Only)

c.The total amount of the contract is 60,000MT x 12MTHS X $56/MT= USD40,320,000 FOURTY MILLIONTHREE HUNDRED ANDTWENTY THOUSAND American Dollars)

d.The price of goods includes all costs incurred by Seller up to port of loading and to mother vessel. The unit price is fixed for 3 months (subjected to market oil price fluctuation) and firm for any quantity not exceeding the maximum permitted under the contract delivered on or before expiry of the contract period or such extended period as expressly provided in this contract or agreed by mutual written understanding.

12)DELIVERY TIME

  1. First shipment delivery of coal for a quantity of 60,000 MTW (10%) shall be ready on port within 30 (thirty) working days after executed of official contract and received of the payment instrument (LC in favour to Seller’s bank verbiage).
  1. The Parties may agree upon the extension of the delivery period. On this event, the Party responsible for the delays (seller in cargo reading or buyer in nominating the time) will have to bear the costs at respective storage of cargo.

13)PAYMENT

Non-Transferable, Irrevocable, confirmed of credit (LC in favour to Seller’s bank verbiage), payable 100% at sight in USD.

14)DOCUMENT REQUIRED FOR PAYMENT

Payable against all documents.

STEAM COAL PURCHASE AND SALES CONTRACT

15) LOADING AND UNLOADING TERMS

1Loading Rate - Working days, including Sundays and Indonesia Legal Holidays, minimum 7000 mt/ weather day.

2. Demurrage as per CHARTER PARTY

3 The BUYER will inform SELLER upon nomination of the VESSEL the rate of

demurrage AND other details of the VESSEL.

4. Should the vessel Buyer nominated delay to arrive the loading port, Buyer take responsibility for the loss.

16)SHIPMENT

Cargo is to be load ready within 30 days from L/C issuing date.

Weight for invoice shall be established by the actual net weight. Weight franchise of 0.5 % shall be allowed against bill of lading weight.

17)PAYMENT

  1. After signing of this contract, Seller shall issue a 2% Performance Bond in the form of a non-operative BG in favour of the buyer prior to the issuance of the operative LC, within five (5) days from the signing and sealing of this contract. Upon receipt of the Seller’s non-operative Performance Bond, Buyer shall within seven(7) International banking days issue an Operative, Irrevocable, non-transferable, confirmed LETTER OF CREDIT for 100% invoice value covering 60,000MT
  2. equivalent to USD3,360,000PAYMENT
  3. INSTRUMENT shall name the Seller as beneficiary payable at sight against presentation of the documents. The payment instrument shall allow a quantity and contractual value amount difference of +/- 5%.
  4. All bank charges related to the issuance of the payment instrument are for the buyer's account Bank charges related to the negotiation of either document are for the respective Beneficiary's accounts.
  5. Spelling and typographical errors and differences of such nature between Bank issued and Beneficiary issued documents shall not be deemed discrepancies
  6. The issuing Bank must be in the top 50 in the world.

STEAM COAL PURCHASE AND SALES CONTRACT

  1. Performance bond: The seller will place 2% Bank Guarantee (BG) to the buyer as PB upon receipt of Payment instrument from the buyer.
  2. The Seller and the Buyer will bear the bank charges for the transfer fee shall be borne by the buyer.

18) DOCUMENTS REQUIRED FOR PAYMENT

  1. Full set of 3/3, “Clean on board “Bill of Lading, marked “Freight Pre-Paid”.Or Forward Certificate Receipt issued byInternational LogisticsCompany certify that goods' nameand quantity in one original.")

1. Commercial Invoice(s) in three originals

2Certificate of origin, 1 Original + 3Copies.

3Certificate of quality and quantity issued by CCIC in 1 original and 1 copy.

4. Packing List

5. Insurance Certificate

19) CLAIMS

a.The cargo shall be inspected by CCIC at site (Kalimantan Selatan, Banjarmasin). Buyer are requested to provide a qualified surveyor at Buyer’s cost to counter check, inspected and confirmed the Quantity, Quality and specification of cargo, the result are final and binding. No claims or dispute after cargo loaded to mother vessel.

  1. Upon Seller’s failure to deliver the goods at stock pile Jetty according to the date and term stipulated on this contract agreement, Buyer has the right to enforce the penalty claim from the Seller’s.
  2. Should the Seller fail to make delivery on time as stipulated in the contract the Buyer shall agree to postpone the delivery on the condition the Seller pays a penalty, which shall be deducted by the paying bank from the payment under negotiation from the BG The rate of penalty is charge at 1% of the total value of the goods whose delivery has been delayed for every seven days, odd days less than seven days should be counted as seven days. But the total amount of penalty, however, shall not exceed 2% of the total value of the goods involved in the late delivery.

STEAM COAL PURCHASE AND SALES CONTRACT

  1. In case the Seller fails to make delivery five weeks later the time of shipment stipulated in the contract, the Buyer shall have the right to cancel the contract and the Seller, in the spite of the cancellation, shall still pay the aforesaid penalty to the Buyer without delay.
  2. In case Buyer fails to issue payment LC upon signing the agreement in 7(seven) working days after received the Notaries stamp agreement, the Buyer should pay 1% of the total value of the contract to the Seller. The Seller has no goods and could not deliver the goods not as per Force Majeure, the Seller should pay the Buyer 1% of the total value of the contract as the fee.

20) Governing Law

The Contract shall be governed by, and construed in accordance with, the laws of Indonesiaand International laws.

21) Arbitration

All disputes in connection with this contract or the execution there of shall be settled by friendly negotiation. If no settlement can be reached, the case in dispute shall be submitted to the Arbitration Court in Indonesia for arbitration in accordance with the international Chamber of Commerce arbitration procedures. The decision made by the commission shall be accepted as final and binding upon both parties. The fees for arbitration shall be borne by the failing party unless otherwise awarded by the commission. The laws of Indonesia govern this contract.

22) Force Majeure

1Both sides in this contract will be exonerated from their obligation in case of Force Majeure event.

  1. Force Majeure is understood as per provisions under ICC500 and means any event such fire, explosion, hurricanes, floods, earthquakes and similar natural calamities, wars, epidemics, military operations, terrorism, riots, revolt, strikes, industrial, unrest, government embargoes, or other unforeseeable actions occurring after the conclusion of this contract and outside the sides reasonable control and which cannot be avoided by the reasonable diligence that could delay or prevent the performance of either sides obligations in this contract.

STEAM COAL PURCHASE AND SALES CONTRACT

  1. The party to this contract whose performance of this contract is prevented by a Force Majeure event must notify the other party within seven (7) days of the effective date of occurrence, which notice is to be confirmed by a certificate issued by the local chamber of commerce and industry, including particulars of the event and expected duration. Failure to submit such a notification will prevent the parties’ exoneration from contractual obligation under Force Majeure event makes such notice impossible.
  1. The performance of either party’s obligation will be in such a case postponed with the period of the existence of the Force Majeure event plus a reasonable period to remobilizing production and shipping. No penalty shall be payable for the duration of this delay.
  1. Should the delay caused by a Force Majeure event last for more than 1 (one) month the side will attempt to agree measures to allow contract to continue. Should such an agreement not be reached within 30 (thirty) days from the date of certified Force Majeure event, the sides are entitled to terminate the contract.
  1. The Majeure event does not exonerate the Buyer from paying for the goods already delivered.

23) EFFECTIVE DATE

This contract shall become binding on the Buyer and Seller on the date when both Buyer and Seller have received a fully executed Contract. Facsimile and/or Mail signatures are acceptable. The Contract shall terminate upon completion of the final delivery and payment thereof. This Contract may be extended upon written agreement of Buyer and Seller.

24) CONFIDENTIALITY

The Buyer and the Seller shall respect the confidentiality of this contract and agree to maintain in strict confidence.

25) NON-CIRCUMVENTION

Both parties in this agreement hereby accept to the provisions of ICC

Non-circumvention and non-disclosure agreements with regard to all parties involved in the transaction or subsequent transaction or add on transaction renewal, third party assignments with reciprocation.

STEAM COAL PURCHASE AND SALES CONTRACT

26) OTHER CONDITIONS

1.Original documents issued by THIRD PARTIES are ACCEPTABLE.

2.All DOCUMENTS must be issued in ENGLISH.

3.This CONTRACT could be changed, agreed and confirmed by a written ANNEX only singed by both parties.

4.This CONTRACT is made in 2 (two) equal copies.

5.Fax copies accepted and considered legally binding for contract duration. The contract could be signed by fax and the original one will be followed by express mail (DHL) BY MANDATE

6. Should the commodity to be asked export license, the buyer entrust the seller to make procedure.

7. This contract constitutes the entire understanding between the parties related to the subject matter hereof and conclusively supersedes all prior writing. Negotiation, and understanding with respect hereto.

8. All transactions to be Bank to Bank.

27)PROCEDURES

  1. Buyer and seller sign the contract.
  1. Seller put up 2% PB (by BG) prior to buyer’s operative LC.
  1. Buyer issues payment instrument amounting to 100% of contractual value US$3,360,000.00) within 7 banking days after signing the contract.

28) EFFECTIVE DATE

This contract shall come into effect immediately after both parties in four

original copies sign and date it, each party hold TWO copies via Mandate’s Posting.

STEAM COAL PURCHASE AND SALES CONTRACT

29) BANKING

BUYER'S INFORMATION:

Company
Legal address
Telephone
Fax
Email address
Represented by
Title
Bank name
Bank address
Account name
Account number
Swift
Bank phone
Bank fax
Bank officer

SELLER'S INFORMATION

Company Name:
Company Address:
Contact Person:
Telephone:
Fax:
Email:
Company Bank:
Bank Address:
Bank officer:
Bank Telephone
Bank Fax Number:
Bank SWIFT

29) SIGNATURES

Seller’s: Buyer’s:

...... ……………………………………

Accepted on behalf ofthe sellerAccepted on behalf of the buyer: