Signing a Contract

To: Eric H. Williams

Purchasing Manager

From: Michael Young

Marketing Manager

Date: January 24,2002

Re: Sigining a Contract of Dead-Burned Magnesite 9110

Dear Mr. Eric H. Williams,

Our folks are still buried in the atmosphere of being fooled. We doubt it there is a duty, an honor and a trust between you and us. Our enthusias is tempered by your unexpected water. It takes time to come back.

Mr. Ma Jun sent you the contract, including the penalty clause for Dead-Burned Magnesite 9110 for a quantity of 35,000 MT expected to be shipped in July. He signed it. I think you can countersign it and email by attachment back to us.

We’re flexible in doing the magnesite. We’ve built a reliable, honest reputation in the refracory world. For the active business we’re negotiating, we’re offered you the most competitive price with the superior quality which you understand that we provide you 91% grade to match. This is a no-secret plot among the refracory men. Be frank with you, we have to supply you the 92% grade, which means that you huy 9010 from us and we supply you the 9210 grade magnesite. Obviously you’re the big winner at the beginning of the deal.

We can only accept L/C at 90-day sight. No D/P at all. We must keep our cash flow in the normal way otherwise we’ll be out of business. We can’t afford of taking the risk of being credit-degraded. Right now, the commercial loaning interest rate in China is 10%, while 5% in America, it’s hard for us to decode the puzzle why you overemphasize the 90 days. Is that your cmpany’s policy or your policy that you beat down your supplier one by one while you reap off the profit and then you switch to the other and repeat the same scheme? I wish this is a rumor, not a truth..

Please at your earliest convenience sign the contract and email me back. I shall give it my full attention for applying export license, documents and the necessity for the stem date.

Your cooperation shall be highly appreciated.

Best regards,

Michael YoungMarketing Manager