Wow! Before you go ballistic, you need to consider why your child thought this would be a good choice. Is sex taken very casually in your home? Is it an event the child may have observed (either seen it or heard it)? What are your attitudes about it?
I know kids are starting younger, but 10 still isn't old enough for most of the puberty hormones to have kicked in. This doesn't sound right. You don't say whether it was your son or daughter, or who the other partner was, but it sounds like abuse.
Get your kid into counseling immediately! If you have a son, you want to be sure you don't have a rape suit on your hands, because since he's a minor, guess who gets to pay for the baby - YOU! And you don't want this escalating. Either gender could become sexually abusive at any time.
In fact, since this has probably affected the entire family, you may want to find a marriage & family therapist who can talk to all of you as well as your child alone. An MFT can also advise you on how best to discuss sex with your child, since the physical introduction has already occured. Good luck!