Form 10SB12G/A NEWCOM INTERNATIONAL INC

What is Form 10SB12G/A?
  • Accession No.: 0001058553-01-500003 Act: 34 File No.: 000-30727 Film No.: 1689258
  • CIK: 0001058553
  • Submitted: 2001-07-26

AMENDMENT 2 FOR NEWCOM TXT

form10sb-a2.txt

                                                           U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-SB/A

                                 Amendment No. 2

                        GENERAL FORM FOR REGISTRATION OF
                      SECURITIES OF SMALL BUSINESS ISSUERS
           Under Section 12(b) Or 12(g) Of The Securities Act Of 1934


                           NewCom International Inc.,
                   (formerly Phileo Management Company, Inc.)
------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

           Nevada                                       88-0320439
---------------------------------          -----------------------------------
(State or Other Jurisdictions of                     (I.R.S. Employer
Incorporation or Organization)                      Identification No.)

515 West Pender Street, Vancouver, British Columbia                 V6B 6H5
----------------------------------------------------            --------------
     (Address of Principal Executive Offices)                     (Zip Code)

                                 (604) 681-5678
------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)



Securities to be registered under Section 12(b) of the Act:        None

Securities to be registered under Section 12(g) of the Act:

                         Common Stock , par value $.001
                             ----------------------
                                (Title of Class)





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                              INFORMATION STATEMENT

                            NEWCOM INTERNATIONAL INC.
                          COMMON STOCK, PAR VALUE $.001


NewCom is voluntarily filing its registration statement on Form 10-SB to make
information concerning itself more readily available to the public. Management
believes that being a reporting company under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), could provide a prospective merger or
acquisition candidate with additional information concerning NewCom. In
addition, management believes that this may make NewCom more attractive to an
operating business opportunity as a potential business combination candidate. As
a result of filing its registration statement, NewCom is obligated to file with
the Securities and Exchange Commission ("SEC") certain interim and periodic
reports including an annual report containing audited financial statements.
NewCom intends to continue to voluntarily file these periodic reports under the
Exchange Act even if its obligation to file such reports is suspended under
applicable provisions of the Exchange Act.




             The date of this Information Statement is July 25, 2001





<PAGE>



                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS.

Business Development

NewCom International Inc. ("NewCom") was incorporated in Nevada on September 12,
1996 under the name AgriNet, Incorporated. On October 24, 1996, AgriNet,
Incorporated amended its Articles of Incorporation to change its name to Phileo
Management Company, Inc. On April 19, 2000 the Articles of Incorporation were
amended to change the name to NewCom International Inc. Since its incorporation,
NewCom has not conducted any significant operations.

Business of Issuer

NewCom's activities to date have focused on incorporation and the identification
of potential operating opportunities or acquisition targets. NewCom has not yet
commenced principal operations or earned revenues. Because NewCom is a
blank-check company with virtually no assets or revenues, it is the view of the
office of Small Business of the Securities and Exchange Commission that, both
before and after a business combination or transaction with an operating entity
or other person, the promoters or affiliates of NewCom, as well as their
transferees, are "underwriters" of the securities issued. Accordingly, we are
also of the view that the securities involved, can only be resold through
registration under the Securities Act unless there is an applicable exemption.
Rule 144 would not be available for resale transactions in this situation.

On January 30, 1999, NewCom entered into an agreement to acquire certain assets,
consisting of 66% interest of a joint venture in a fibre-optic cable network in
China, for $60 million from the shareholders of Guangzhou South China
Fibre-Optic Network Engineering Co. Ltd. ("SCFC"). The consideration consisted
of 42 million shares of NewCom's common stock and 18 million shares of NewCom's
preferred stock. In the third quarter of 2000, after encountering difficulties
in the due diligence process, NewCom ceased its negotiations with SCFC.

Management of NewCom will attempt to become active and seek potential operating
businesses and business opportunities with the intent to acquire or merge with
such businesses. NewCom is considered a blank-check company, and due to its
status as a "shell" corporation, its principal business purpose is to locate and
consummate a merger or acquisition with a private entity. No representation is
made or intended that NewCom will be able to carry out its activities
profitably.

NewCom is voluntarily filing its registration statement on Form 10-SB to make
information concerning itself more readily available to the public. Management
believes that being a reporting company under the Securities Exchange Act of
1934 could provide a prospective merger or acquisition candidate with additional
information concerning NewCom. In addition, management believes that this may
make NewCom more attractive to an operating business opportunity as a potential
business combination candidate. As a result of filing its registration
statement, NewCom is obligated to file with the SEC certain interim and periodic
reports including an annual report containing audited financial statements.
NewCom intends to continue to voluntarily file these periodic reports under the
Exchange Act even if its obligation to file such reports is suspended under
applicable provisions of the Exchange Act.



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In the event NewCom completes the acquisition of any target acquisition or
merger candidate, the candidate may become subject to the same reporting
requirements as NewCom upon consummation of the business combination. The
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years, and in the event that the target
acquisition or merger candidate has been in business less than two years,
audited financial statements will be required from the period of inception of
the target acquisition or merger candidate. Since many private companies do not
have audited financial statements, obtaining them could be expensive and time
consuming and thus, delay or terminate the merger or acquisition process.

Source of Business Opportunities

NewCom intends to use various sources in its search for potential business
opportunities including its officers and directors, consultants, special
advisors, securities broker-dealers, venture capitalists, members of the
financial community and others who may present management with unsolicited
proposals. NewCom may investigate and ultimately acquire a venture that is in
its preliminary or development stage, is already in operation, or in various
stages of its corporate existence or development. Management cannot predict at
this time the status or nature of any venture in which NewCom may participate.
The most likely scenario for a possible business arrangement would involve the
acquisition of or merger with an operating business which does not need
additional capital, but which merely desires to establish a public trading
market for its shares.

On October 6, 1999, NewCom entered into a note payable with David Lo, President
of NewCom, in exchange for advances made to NewCom. The note, for the sum of
$62,449, accrues interest at the rate of 9.0% per annum, expires August 13, 2001
and is due on demand. As of December 31, 1999, this note had accrued interest in
the amount of $2,156. There are no other oral or written agreements or
understandings in regards to loans by or for NewCom with its officers,
directors, affiliates or lending institutions. Currently, NewCom is not
financially able to make loans, but in the future, will determine whether to
lend funds based on, but not limited to, financial status, ability to repay, and
the effect on the business and operations of the company.

Evaluation Criteria

Once NewCom has identified a particular entity as a potential acquisition or
merger candidate, management will seek to determine whether acquisition or
merger is warranted or whether further investigation is necessary. Such
determination will generally be based on management's knowledge and experience,
or with the assistance of outside advisors and consultants evaluating the
preliminary information available to them. Management may elect to engage
outside independent consultants to perform preliminary analyses of potential
business opportunities. However, because of NewCom's lack of capital it may not
have the necessary funds for a complete and exhaustive investigation of any
particular opportunity. Further, no member of management is a professional
business analyst and management will rely on its own business judgment in
formulating the types of businesses that NewCom may acquire. It is quite
possible that management will not have any business experience or expertise in
the type of business engaged in by any potential acquisition or merger
candidate.

In evaluating such potential business opportunities, NewCom will consider, to
the extent relevant to the specific opportunity, several factors including
potential benefits to NewCom and its shareholders; working capital, financial
requirements and availability of additional financing; history of operation, if
any; nature of present and expected competition; quality and experience of
management; need for further research, development or exploration; potential for
growth and expansion; potential for profits; and other factors deemed relevant
to the specific opportunity. Because NewCom has not located or identified any


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specific business opportunity to date, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available to
NewCom may involve new and untested products, processes or market strategies,
which may not ultimately prove successful.

Presently, there are no merger candidates. There is always the potential for a
promoter, management, or affiliate to present a merger candidate to NewCom.
Corporate policy does not preclude related party transactions. However, if a
promoter, management or an affiliate of NewCom directly or indirectly held an
ownership interest in a merger candidate, the merger decision would exclude
those with ownership interests due to the inherent conflicts of interest.
Further, any remuneration due to promoters, management or affiliates as a result
of a merger or acquisition transaction would undergo review by disinterested
management for its fairness in light of all the circumstances surrounding the
transaction.

Finder's fees or other acquisition related compensation may be paid to officers,
directors, promoters or their affiliates in connection with their identification
of a suitable merger candidate. However, presently, there are no agreements with
officers, directors, promoters or their affiliates that include finder's fees or
other acquisition related compensation. A finder's fee to be paid to these
parties would be addressed at the time negotiations begin with the merger
candidate. The finder's fee could be a factor in negotiations and whether a
merger takes place. Management has not set any limits on finder's fees other
than what is considered normal and reasonable under the circumstances. The
finder's fee could be paid in cash, securities or a combination thereof.

In the event that a merger is consummated, it is likely that there will be a
change in control, both as to ownership and management. Management reserves the
right to negotiate the change of control issue; however, under Nevada law,
management must seek shareholder approval if change of control is a condition to
the transaction.

Presently, NewCom cannot predict the manner in which it might participate in a
prospective business opportunity. Each separate potential opportunity will be
reviewed and, upon the basis of that review, a suitable legal structure or
method of participation will be chosen. The particular manner in which NewCom
participates in a specific business opportunity will depend upon the nature of
that opportunity, the respective needs and desires of NewCom and management of
the opportunity, and the relative negotiating strength of the parties involved.
Actual participation in a business venture may take the form of an asset
purchase, lease, joint venture, license, partnership, stock purchase,
reorganization, merger or consolidation. NewCom may act directly or indirectly
through an interest in a partnership, corporation, or other form of
organization, however, NewCom does not intend to participate in opportunities
through the purchase of minority stock positions. In any acquisition where
NewCom uses its stock to pay for the acquisition, current shareholders'
interests would be diluted.



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Further, stockholders of NewCom may not have the opportunity to approve or
consent to any particular merger or stock buy-out transaction. NewCom's business
plan entails seeking potential operating businesses and opportunities with the
intent to acquire or merge with such businesses or opportunities. Under Nevada
Revised Statutes and NewCom's Articles of Incorporation and By-Laws, to effect
these acquisitions, the Board of Directors has the ability to issue authorized,
unissued shares of common stock in excess of par value without the consent of
the shareholders. However, in the event that NewCom becomes listed on a national
stock exchange such as the American Stock Exchange, the Nasdaq Small Cap Market
or the OTC Bulletin Board, NewCom may be required to obtain shareholder consent
to effect these transactions. There are no arrangements, agreements or
understandings between non- management shareholders and management under which
non-management shareholders may directly or indirectly participate in or
influence the management of NewCom's affairs.

Competition

Because it has yet to commence operations, NewCom is currently unable to
evaluate the type and extent of its likely competition. NewCom is aware that
there are numerous other public companies with only nominal assets that are also
searching for operating businesses and other business opportunities as potential
acquisition or merger candidates. NewCom will be in direct competition with
these other public companies in its search for business opportunities and, due
to NewCom's lack of funds, it may be difficult to successfully compete with
these other companies. Also, there is no way for NewCom to distinguish itself
from other companies in a similar position.

Financing

Currently, NewCom is not able to obtain a loan by traditional methods because of
its financial status and lack of operations. There are no payments due or owed
to promoters, management or their affiliates and associates. In the event that
NewCom obtains a loan from promoters, management, or affiliates, the terms and
the conditions of these loans must provide for repayment only after NewCom
satisfies all other financial obligations and the financial health of NewCom
would not be affected. NewCom has no plans to enter into loan agreements with
promoters, management or their affiliates and associates or to make any other
payments to promoters, management or their affiliates and associates.

Other Information

As of this date, NewCom has one employee and until such time as NewCom's
business warrants the expense, or until NewCom successfully acquires the joint
venture interest or merges with an operating business, there is no need for
additional employees. No remuneration has been paid to date.

NewCom's office is located at 515 West Pender Street, Vancouver, British
Columbia V6B 6H5. NewCom leases space from an unaffiliated company, Westec
Venture Group, Inc. NewCom pays a monthly rental fee of $1,000.

NewCom will voluntarily send an annual report, including audited financial
statements, to its security holders.

NewCom will file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (SEC). The public
may read and copy the materials NewCom files with the SEC at the SEC's Public
Reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC. The address of the website is
http://www.sec.gov.




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ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Plan of Operation

NewCom was formed on September 12, 1996 under the name AgriNet, Incorporated on
October 26, 1996, AgriNet amended the Articles of Incorporation to change the
name to Phileo Management Company, Inc. On April 19, 2000, the Articles of
Incorporation were once again amended to change the name to NewCom International
Inc. Since its incorporation, NewCom has not conducted any significant
operations.

NewCom's activities to date have focused on incorporation activities and the
identification of potential operating opportunities or acquisitions targets.
Since NewCom has not yet commenced any principal operations and has not yet
earned revenues, NewCom is considered to be a blank-check company. The plan of
operation over the next twelve (12) months is to identify and successfully enter
into suitable joint venture agreements or other business combinations.

During 1999, NewCom had entered into an agreement to acquire certain assets of a
Joint Venture in a fibre-optic cable network in China. In connection with the
acquisition, NewCom paid a $461,000 finders fee to an unrelated third party,
Dragon King Investment Services Ltd. ("Dragon King"). As the acquisition
encountered difficulties in the due diligence process it was subsequently
abandoned by NewCom. The fee paid was charged to operations in the third quarter
of 2000. See fee agreement previously filed as Exhibit 10.3 to the Form 10SB.
Dragon King is primarily an investment company with its assets principally being
real estate holdings in the Peoples Republic of China and Hong Kong and is not a
broker dealer.

Results of Operations

To date, NewCom has had no revenues. NewCom has incurred expenses consisting
primarily of consulting services totaling $243,500 in 1999. A portion of the
consulting services expense in 1999 consisted of $233,000 relating to the fair
value of stock options granted to NuVen Advisors Limited Partnership ("NuVen" or
the "Advisor"). The consulting fees were incurred to NuVen for management,
financial advisory, and strategic planning services. General and administrative
expenses consist of rent, travel, and professional services. In 1998, management
and consulting expenses amounting to $50,000 consisted of fees paid to a
promoter.

Liquidity and Capital Resources, Going Concern

NewCom has not commenced significant operations, and has limited liquid
resources. Such matters raise substantial doubt about NewCom's ability to
continue as a going concern. NewCom expects to be able to meet all of its cash
requirements through December 31, 2001 by limiting its expenses, from existing
cash and from payments it is receiving on its receivables, and the accrual of
expenses. Further, NewCom does not expect it will be necessary to borrow funds
or to raise funds through a equity or debt offering to conduct its current
operations for at least the next twelve (12) months.

Management's plans with respect to these conditions are to continue searching
for additional sources of capital and new operating opportunities. NewCom had
entered into an acquisition agreement to acquire a fibre-optics cable network,
which encountered difficulties in the due diligence process and was ultimately
abandoned. In the interim, NewCom will continue operating with minimal overhead,
and key administrative and management functions which will be provided by
consultants. Accordingly, the financial statements have been presented under the
assumption NewCom will continue as a going concern. No adjustments have been
made to the financial statements as a result of this uncertainty.


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ITEM 3. DESCRIPTION OF PROPERTY.

Although NewCom does not own or control any material property, NewCom will
maintain its business address at 515 West Pender Street; Vancouver, British
Columbia V6B 6H5. NewCom currently subleases these offices from an unaffiliated
company, Westec Venture Group, Inc. NewCom pays a monthly rental fee of $1,000.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Currently, no Directors or Officers own any stock in NewCom an there are no
shareholders who own directly or indirectly five percent (5%) or more of the
outstanding common stock.

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

Identification of Directors and Executive Officers

NewCom, pursuant to its Bylaws, is authorized to maintain a three to five (3-5)
member Board of Directors and executive officers as needed. The directors and
officers for fiscal 1999 are as follows:


                       Position
     Name            Held with NewCom      Age      Dates of Service
---------------    --------------------    ---  -------------------------------


David Lo           President, Director      54  September 21, 1999 to Present

Mohan Datwani      Secretary, Director      33  March 15, 2000 to Present

Xu Han             Director                 37  March 15, 2000 to Present

All directors of NewCom hold office until the next annual meeting of
shareholders and until their successors have been elected and qualified.
Vacancies in the Board of Directors are filled by the remaining members of the
Board until the next annual meeting of shareholders. The officers of NewCom are
elected by the Board of Directors at its first meeting after each annual meeting
of NewCom's shareholders and serve at the discretion of the Board of Directors
or until their earlier resignation or death.

Business Experience

The following is a brief account of the business experience during the past five
years of each director, director nominee and executive officer of NewCom,
including principal occupations and employment during that period and the name
and principal business of any corporation or other organization in which such
occupation and employment were carried on.

David Lo.

Mr. David Lo has served as Director and President of NewCom since September 21,
1999. David Lo has twelve (12) years of experience as an accountant. Mr. Lo has
been a Director of Empire Supermarket Ltd. in Richmond, British Columbia since
mid 1999 and has been the owner of David Lo Accounting & Management, Inc. since
1986. Previous work experience includes Manager of Oceanic Sportswear, Ltd.from
1977 to 1986 and Assistant Manager of Les Deax Fabricants Ltd. from 1972 to
1977.


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Mohan Datwani

Mr. Mohan Datwani, age 33, recently was appointed Director of NewCom on March
15, 2000 and was elected as Director by a majority vote of the shareholders of
the outstanding stock on March 31, 2000. Mr. Datwani, an attorney, resides in
Hong Kong and is a British citizen. Mr. Datwani received his Bachelor of Laws
(LL.B.) from the University of Hong Kong in 1988 and his Masters of Laws from
the University of Hong Kong in 1993. Mr. Datwani is licensed to practice as a
Solicitor of Hong Kong SAR since 1991 and admitted as a Solicitor of England and
Wales in 1994. Mr. Datwani has extensive experience as a banking finance lawyer
and has worked on many banking and commercial transactions involving the
People's Republic of China, including infrastructure financing.

Mr. Datwani is a founding partner of a large Hong Kong law firm, Koo and
Partners and has been with the firm since 1996. Currently, there are 200
employees and numerous clients, which include various banks and financial
institutions in Hong Kong and the People's Republic of China.

Xu Han

Mr. Xu Han, age 37, was appointed Director of NewCom in March 15, 2000 and was
elected as Director by a majority vote of the shareholders of the outstanding
stock on March 31, 2000. Mr. Han is in business and resides in the People's
Republic of China, but travels extensively. Mr. Han graduated from the
University of Beijing with a major in Science in 1986; he has furthered his
study in the US and was formerly a senior officer in the China National Science
Committee from 1991 to 1996. Mr. Han has been Executive Director and Vice
President of the China Success Group Corporation, a China-owned enterprise,
since 1996. The China Success Group Corporation has diverse investments in
insurance, transport network, information infrastructure, industrial and
trading, property development, tourism and leisure, and education.

Current directors and executive officers of NewCom have no present or future
plans to serve in a similar capacity with an organization similar to NewCom.
Each director and executive officer currently spends approximately 5 to 10 hours
per month on NewCom business.

Management, promoters, and affiliates may receive securities for services
rendered to NewCom, generally without shareholder approval or notice. Presently,
there are no plans to issue any authorized, but unissued stock to these
individuals or entities.

Involvement in Certain Legal Proceedings.

During the past five years, no director or officer of NewCom has:

     (1) Filed or has filed against him a petition under the fede
         al bankruptcy laws or any state insolvency law, nor has a receiver,
         fiscal agent or similar officer been appointed by a court for the
         business or property of such person, or any partnership in which he was
         a general partner, or any corporation or business association of which
         he was an executive officer at or within two years before such filings.

     (2) Been convicted in a criminal proceeding;

     (3) Been the subject of any order, judgment, or decree, not
         subsequently reversed, suspended or vacated, of any court of competent
         jurisdiction, permanently or temporarily enjoining such


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         person from, or otherwise limiting his involvement in any type of
         business, securities or banking activities;

     (4) Been found by a court of competent jurisdiction in a
         civil action, the SEC or the Commodity Futures Trading Commission
         ("FTC") to have violated any federal or state securities or commodities
         law, which judgment has not been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires NewCom's directors and officers and persons who own more than 10
percent of NewCom's equity securities, to file reports of ownership and changes
in ownership with the SEC. Directors, officers and greater than ten-percent
shareholders are required by SEC regulation to furnish NewCom with copies of all
Section 16(a) reports filed.

Based solely on its review of the copies of the reports it received from persons
required to file, NewCom believes that during fiscal 2000, all filing
requirements applicable to its officers, directors and greater than ten-percent
shareholders were complied with.


ITEM 6. EXECUTIVE COMPENSATION.

The following table sets forth all compensation awarded to, earned by or paid by
NewCom to the named directors and executive officers of NewCom for their
services.

Summary Compensation Table
--------------------------
         Name                   Salary   Bonus   Long-Term Compensation
-----------------------------   ------   -----   ----------------------
David Lo, President, Director
1999                              $0     None           None
2000                              $0     None           None

Mohan Datwani,
Secretary, Director
2000                              $0     None           None

Xu Han, Director
2000                              $0     None           None

Since NewCom's inception the directors and executive officers have served
without compensation and are expected to serve without compensation for the next
12 months. As such, there is no standard arrangement for the compensation of
directors, including any additional amounts for committee participation or
special assignments.

There have been no shares of common stock issued or stock options or warrants
granted to any directors or executive officers since NewCom's inception.



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ITEM 7.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Effective October 1, 1999, NewCom entered into an Advisory and Management
Agreement (the "Agreement") with NuVen. NuVen is primarily an advisory company
with interests in companies under management and is not a broker dealer. Such
Agreement was assigned to NewBridge Capital, Inc.. Other than acting as an
advisor, there is no relationship between the Company and either NuVen or
NewBridge. Pursuant to the terms of the NuVen Agreement, NewCom is required to
pay $3,500 per month, plus expenses, in exchange for NuVen's assistance in the
formulation of possible acquisition strategies, and the management of financial
and general and administrative matters. In addition, NewCom is required to pay a
fee equal to 10% of the asset value or investment made in NewCom resulting from
NuVen's efforts, and a transaction fee (as defined) equal to 5% of the proceeds
received by NewCom in connection with a sale of its assets. The agreement does
not provide for any additional fees to be paid to NuVen should NuVen also act as
a finder. In addition, NewCom granted a fully vested option to NuVen to purchase
500,000 shares of NewCom's common stock at $0.50 per share. Using the
Black-Sholes model to value these options, using a volatility of 50%, an
expected term of 5 years and a risk-free interest rate of 6.0%, NewCom valued
these options at $233,000. Since these options are fully vested, such value was
charged to operations for the year ended December 31, 1999. The Agreement has an
initial term of five years, but shall be automatically extended on an annual
basis, unless terminated by either party. NewCom had $10,500 due to NuVen as of
December 31, 1999. Such amounts do not bear interest, are uncollateralized and
have no stated repayment terms.

Effective October 6, 1999, NewCom entered into a note payable with David Lo, an
officer and director of NewCom, in exchange for advances made to NewCom. The
note, in the amount of $62,449, bears interest at 9.0% per annum, expires August
13, 2001and is due on demand. In connection with this note, accrued interest of
$2,156 has been recorded in the accompanying balance sheet as of December 31,
1999.

ITEM 8.   DESCRIPTION OF SECURITIES.

Common Stock

Pursuant to NewCom's Articles of Incorporation, the Board of Directors has
authority to issue up to 100,000,000 shares of common stock, par value $0.001
per share. As of February 28, 2001, there were 15,500,000 shares issued and
outstanding, one vote for each share held on all matters. Cumulative voting in
elections of directors and all other matters brought before stockholders
meetings, whether they are annual or special, is not provided for under NewCom's
Articles of Incorporation or Bylaws. NewCom has not paid cash dividends on its
common stock and does not intend to do so in the foreseeable future. NewCom
intends to retain earnings, if any, to provide funds for its operations. Future
dividend policy will be determined by the board of directors based upon
conditions then existing including NewCom's earnings and financial condition,
capital requirements and other relevant factors.

Preferred Stock

Pursuant to the NewCom's' Articles of Incorporation, the Board of Directors has
the authority, without further action by the stockholders, to issue up to
25,000,000 shares of preferred stock in one or more series and to fix the
designations, powers, preferences, privileges, and relative participating,
optional or specials rights and the qualifications, limitations of restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be greater than
the rights of the common stock. There are no shares of preferred stock currently
issued and outstanding. The Board of Directors, without stockholder approval,
can issue preferred stock with voting, conversion or other rights that could
adversely affect the voting power and other rights of the holders of common
stock. Preferred stock could thus be issued quickly with terms calculated to
delay or prevent a change in control of NewCom or


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make removal of management more difficult. Additionally, the issuance of
preferred stock may have the effect of decreasing the market price of the common
stock, and may adversely affect the voting and other rights of the holders of
common stock.

Issuance of Authorized, Unissued Stock

The Board of Directors has the authority to enter into transactions whereby
large portions of the authorized, but unissued shares of either common or
preferred stock will be issued. The amount of authorized common stock was
created by management to secure the Joint Venture interests. Since the Joint
Venture is no longer a merger candidate, the authorized, but unissued stock may
be used to secure another merger candidate. However, the Board must seek
shareholder approval in the event a change in control of NewCom would occur by
the issuance of the shares. Also, in the event that NewCom becomes listed on a
national stock exchange such as the American Stock Exchange, the Nasdaq Small
Cap Market or the OTC Bulletin Board, NewCom may be required to obtain
shareholder consent to effect these transactions. A large issuance of additional
shares of the registrant would dilute the ownership interests of existing
shareholders. Further, in the event that trading market develops for NewCom's
shares, a large issuance of shares may cause NewCom's net income per share to
materially decrease, which may decrease the market price of NewCom's common
stock and decrease shareholder's abilities to sell their stock for a premium, if
at all.

Penny Stock Regulations

The SEC has adopted special regulations referred to as the Penny Stock Reform
Act which define securities that have a market price of less than $5 per share
and that are not listed on a national exchange as "penny stock." These
regulations subject all broker-dealer transactions involving such securities to
the special penny stock rules set forth in Rule 15g-9 of the Securities Exchange
Act of 1934. NewCom common stock will come within the definition of a penny
stock. As a result, NewCom common stock will become subject to the penny stock
rules and regulations.

These rules affect the ability of broker-dealers to sell our securities and may
also affect the ability of purchasers to resell their shares. The penny stock
rules also impose special sales practice requirements on broker-dealers who sell
such securities to persons other than their established customers or accredited
investors. These regulations require that, prior to a transaction in penny
stock, broker-dealers must:

       -  make a written determination that the penny stock is a suitable
          investment for the purchaser;
       -  receive the purchaser's written consent to the transaction;
       -  deliver standardized risk disclosure documents that provide
          information about penny stock and the risks in the penny stock market;
       -  and provide information like current bid/offer quotations for the
          penny stock, compensation to be provided to the broker-dealer and
          salesperson, and subsequent to the transaction, provide monthly
          accounting for penny stocks held in the customer's account and
          information on the limited market of penny stock.

                                     PART II

ITEM 1.   MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
          EQUITY AND OTHER SHAREHOLDER MATTERS.

NewCom's Common Stock began trading on the Bulletin Board Over-the-Counter
Market on October 15, 1998. On March 9, 2000, NewCom's common stock was delisted
from the Bulletin Board and began trading on the NASDAQ "Pink Sheets." Under
current rules and regulations as promulgated by the SEC and NASD, quotations on
the OTC Bulletin Board are limited to the securities of issuers that make


                                       11

<PAGE>


current filings pursuant to Sections 13 and 15(d) of the Securities Exchange Act
of 1934. NewCom was a non-reporting company and as such, under these rules, was
delisted from the Bulletin Board. NewCom is now filing its Form 10-SB to be in
compliance with these rules and once such filing has been accepted, then NewCom
will seek, through the NASD, to be listed on the Bulletin Board. The "Pink
Sheets"trading market is limited and sporadic and should not be deemed to
constitute an "established trading market."

Currently, Equitrade is a market maker for NewCom common stock; however, there
have been no discussions with Equitrade or any other market makers regarding
participation in a future trading market for NewCom's securities.

The following table sets forth the range of the bid and asked prices for the
common stock during the periods indicated, and represents inter-dealer prices,
which do not include retail mark-ups and mark-downs, or any commission to the
broker-dealer, and may not necessarily represent actual transactions.


            Date                          Bid         Asked
---------------------------------       --------     --------
Quarter ending December 31, 2000        $    .10     $   1.00
Quarter ending September 30, 2000       $    .15     $   1.00
Quarter ending June 30, 2000            $    .13     $   1.25
Quarter ending March 31, 2000           $    .25     $   1.25
Quarter ending December 31, 1999        $   3.60     $   8.80
Quarter ending September 30, 1999       $   3.60     $   7.20
Quarter ending June 30, 1999            $   3.20     $  11.20
Quarter ending March 30, 1999           $   1.20     $  11.20

1.   Holders:

     The approximate number of holders of record of the common shares, as of
     February 28, 2001, was 26. None of the shareholders owns directly or
     indirectly five (5) percent or more of the outstanding stock.

2.   Dividends:

     NewCom has not paid cash dividends on its common stock since its
     inception. At the present time, NewCom is a blank check company with no
     operations, and therefore, has no ability to pay dividends.

3.   Shareholder Meetings:

     NewCom's shareholders held a meeting on March 31, 2000 and pursuant to
     that meeting and by majority vote of the outstanding common stock, agreed
     to change the name of the company from Phileo Management Company, Inc. to
     NewCom International Inc., to elect the current Board of Directors, to
     increased the authorized stock to include Twenty Five Million (25,000,000)
     shares of preferred stock, and to ratify the now defunct joint venture
     agreement.




                                       12

<PAGE>



ITEM 2.  LEGAL PROCEEDINGS.

NewCom is not and has not been a party to any legal proceedings, nor is NewCom
aware of any disputes that may result in legal proceedings.

ITEM 3.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE.

NewCom has had no changes in and/or disagreements with its accountants.

ITEM 4.  RECENT SALES OF UNREGISTERED SECURITIES.

On or about April 3, 1999, NewCom issued 9.5 million shares of its common stock
for $0.10 per share to twenty unaffiliated individuals in exchange for 10%
promissory notes totaling $950,000. On or about September 1, 1999, the notes
were acquired by a third party, for $950,000 in cash. The notes acquired are
secured by the 9.5 million shares of NewCom's common stock. Exemption from
registration under the Securities Act of 1933 is claimed for the issuance of
this common stock in reliance upon Regulation D, Rule 504 and Section 4(2) of
the Act, which exempts transactions by an issuer not involving a public
offering.

On October 1, 1999, NewCom entered into an Advisory and Management Agreement
with NuVen Advisors Limited Partnership. Pursuant to the terms of the agreement,
NewCom is required to pay $3,500 per month, plus expenses, in exchange for
NuVen's assistance in the formulation of possible acquisition strategies and the
management of financial and general and administrative matters. Further, NewCom
is required to pay a fee equal to 10% of the asset value or investment made in
NewCom resulting from NuVen's efforts and a transaction fee of 5% of the
proceeds received by NewCom in connection with the sale of its assets. In
addition, NewCom granted a fully vested option to NuVen to purchase 500,000
shares of NewCom's common stock at $0.50 per share. NuVen was advised that the
shares issued to it were "restricted securities" as defined by Rule 144 of the
Act and agreed that it would not sell, transfer or otherwise dispose of the
shares prior to registration except in compliance with the Act. NuVen
represented that by reason of its knowledge and experience in financial and
business matters in general, and investments in particular, it was capable of
evaluating the merits and risks of the transaction and bearing the economic
risks of an investment in the shares and fully understood the speculative nature
of such securities and the possibility of loss. Exemption from registration
under the Securities Act of 1933 is claimed for the issuance of these shares in
reliance upon Section 4(2) of the Act, which exempts transactions by an issuer
not involving a public offering, and Regulation D.

On October 6, 1999, NewCom entered into a note payable with David Lo, President
of NewCom, in exchange for advances made to NewCom. The note, for the sum of
$62,449, accrues interest at the rate of 9.0% per annum, expires August 13, 2001
and is due on demand. As of December 31, 2000, this note had accrued interest in
the amount of $2,156. Exemption from registration under the Securities Act of
1933 is claimed for the issuance of this note in reliance upon Section 4(2) of
the Act, which exempts transactions by an issuer not involving a public
offering.

For each transaction listed above, NewCom claims exemption from the registration
requirements of Nevada, under Nevada Revised Statute Section 90.530(11), because
the facts of each transaction are as follows: the transaction was part of an
issue in which (a) there were no more than twenty-five (25) purchasers in
Nevada, other than financial or institutional investors or broker-dealers,
during any twelve (12) consecutive months; (b) no general solicitation or
general advertising is used in connection with the offer to sell or sale of the
securities; (c) no commission or other similar compensation is paid or given,
directly or indirectly, to a person, other than a broker-dealer licensed or not
required to be licensed under this chapter, for soliciting a prospective
purchaser in Nevada; and (d) one of the following conditions was satisfied: (1)
the seller reasonably believed that all the purchasers in Nevada, other than
financial or


                                       13

<PAGE>



institutional investors or broker-dealers, were purchasing for investment; or
(2) immediately before and immediately after the transaction, NewCom reasonably
believed that its securities were held by fifty (50) or fewer beneficial owners,
and the transaction was part of an aggregate offering that does not exceed five
hundred thousand dollars ($500,000) during any twelve (12) consecutive months.
NewCom is not aware of any prohibitions on the initial offer and sale or any
subsequent resale of securities of a shell corporation by the state of Nevada.

NewCom is a blank-check company with virtually no assets or revenues. It is the
view of the Securities and Exchange Commission that, both before and after a
business combination or transaction with an operating entity or other person,
the promoters or affiliates of a blank-check company, as well as their
transferees, are "underwriters" of the securities issued. Further, it is the
view of the SEC that securities issued by a blank check company, such as NewCom,
can only be resold through registration under the Securities Act unless there is
an applicable exemption. Rule 144 would not be available for resale transactions
in this situation.

ITEM 5.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Nevada law, a corporation may indemnify its officers, directors, employees
and agents under certain circumstances, including indemnification of such person
against liability under the Securities Act of 1933. A true and correct copy of
Section 78.7502 of Nevada Revised Statutes that addresses indemnification of
officers, directors, employees and agents is attached hereto as Exhibit 99.1.

In addition, Section 78.037 of the Nevada Revised Statutes and NewCom's Articles
of Incorporation and Bylaws provide that a director of this corporation shall
not be personally liable to the corporation or its stockholders for monetary
damages due to breach of fiduciary duty as a director except for liability (a)
for acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law; or (b) for the payments of distribution in violation of Nevada
Revised Statute 78.300.

The effect of these provisions may be to eliminate the rights of NewCom and its
stockholders (through stockholders' derivative suit on behalf of NewCom) to
recover monetary damages against a director for breach of fiduciary duty as a
director (including breaches resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (a) and (b) of the
preceding paragraph.




                                       14

<PAGE>



                                    PART F/S

The following financial statements are attached to this report and filed as a
part thereof:

    Independent Auditors' Report.............................................F-2
    Balance Sheets...........................................................F-3
    Statements of Operations and Comprehensive Income (Loss).................F-4
    Statements of Stockholder's Equity.......................................F-5
    Statements of Cash Flows.................................................F-6
    Notes to Financial Statements............................................F-7



                                       15

<PAGE>




                                    PART III

Item 1.   Index to Exhibits

3.1       Articles of Incorporation of AgriNet, Inc.(1)

3.1(a)    Certificate of Amendment of Articles of Incorporation of AgriNet,
          Inc.(1)

3.1(b)    Certificate of Amendment to Articles of Incorporation For Nevada
          Profit Corporations of Phileo Management Company, Inc. (1)

3.1(c)    Amended and Restated Articles of Incorporation of NewCom International
          Inc. (1)

3.2       By-laws (1)

4.1       Form of Common Stock Certificate (1)

10.1      Advisory and Management Agreement between NuVen Advisors, LP and
          Phileo Management Company, Inc. (1)

10.2      Share Exchange Agreement (1)

10.3      Fee Agreement for Introduction Services (1)

10.4      Exchange Agreement (1)

10.5      Note Purchase Agreement (1)

10.6      Promissory Note with David Lo dated October 6, 1999 (2)

10.7      Share Exchange Agreement between Phileo Management Company Inc. and
          the shareholders of Guangzhou South China Fibre-Optic Network
          Engineering Co. Ltd. as of January 30, 1999

10.8      Note Purchase Agreement between NuVen Advisors Limited Partnership and
          Phileo Management Company Inc. dated September 1, 1999.

23.1      Consent of Independent Auditors (2)

27        Financial Data Schedule (1)

99.1      Additional Exhibits Nevada Revised Statutesss.78.7502 (1)

     (1)  Previously filed with NewCom's Form 10-SB, filed May 31, 2000, File
          No. 0-30727.

     (2)  Previously filed with NewCom's Form 10-SB/A, filed March 26, 2001,
          File No. 0-30727.


                                       16

<PAGE>



                                   SIGNATURES



         Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, NewCom has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                   NewCom International Inc.




Date: July 25, 2001                            By: /s/ David Lo
                                                   --------------------
                                                   David Lo, President,
                                                   Director



                                               By: /s/ David Lo
                                                   --------------------
                                                   David Lo
                                                   Principal Accounting Officer,
                                                   Director








                                       17

<PAGE>


                            NewCom INTERNATIONAL INC.
                             (A blank-check company)

                          Index to Financial Statements




Description                                                               Page

Independent Auditors' Report...............................................F-2

Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999......F-3

Statements of Operations for the Three Months Ended March 31,
  2000 and 1999 (unaudited) and for the Years Ended December 31,
  1999 and 1998, and for the Period from Inception, September 12,
  1996 Through December 31, 1999...........................................F-4

Statements of Stockholders' Equity for the Period from Inception,
  September 12, 1996,  Through December 31, 1997, and for the
  Years Ended December 31, 1998 and 1999 and for the Three Months
  ended March 31, 2000 (unaudited).........................................F-5

Statements of Cash Flows for the Three Months Ended March 31,
  2000 and 1999 (unaudited) and for the  Years Ended December
  31, 1999 and 1998, and for the Period from Inception,
  September 12, 1996 Through December 31, 1999.............................F-6

Notes to Financial Statements..............................................F-7













                                       F-1
<PAGE>







                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
NewCom International Inc., formerly Phileo Management Company, Inc.
(A blank-check company)


We have audited the accompanying balance sheet of NewCom International Inc., a
blank-check company (the "Company"), as of December 31, 1999, and the related
statements of operations, stockholders' equity and cash flows for each of the
years in the two-year period ended December 31, 1999, and from the period from
inception, September 12, 1996 through December 31, 1999. These financial
statements are the responsibility of NewCom's management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NewCom as of December 31, 1999,
and the results of its operations and its cash flows for each of the years in
the two-year period ended December 31, 1999, and for the period from inception,
September 12, 1996, through December 31, 1999, in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming that NewCom
will continue as a going concern. As discussed in Note 1 to the financial
statements, NewCom has no operations and limited liquid resources. Such matters
raise substantial doubt about NewCom's ability to continue as a going concern.
Management's plans regarding those matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


                                               /s/ McKennon Wilson & Morgan LLP
                                                   McKENNON WILSON & MORGAN LLP





Irvine, California
March 10, 2000


                                       F-2
<PAGE>

                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                                 Balance Sheets



<TABLE>
<CAPTION>

                                                March 31,         December 31,
ASSETS                                            2000               1999
                                               (unaudited)
<S>                                            <C>                 <C>

Current assets:
   Cash                                        $     4,199         $    16,706
   Restricted certificate of deposit               465,000             465,000
   Prepaid expenses                                 27,500              27,500
Total current assets                               496,699             509,206
Notes receivable                                   420,790             424,290
Other receivables                                   47,710              47,710
Acquisition costs                                  461,000             461,000
                                               $ 1,426,199         $ 1,442,206
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses       $   112,834         $   107,265
   Note payable to bank                            465,000             465,000
   Note payable to related party                    65,449              62,449
Total current liabilities                          643,283             634,714
COMMITMENTS AND CONTINGENCIES (NOTE 6)
Stockholders' equity:
 Common stock, $.001 par value;
   100,000,000 shares authorized;
   15,500,000 shares issued and outstanding         15,500              15,500
 Additional paid-in capital                      1,218,500           1,218,500
 Deficit accumulated as a blank-check company     (451,084)           (426,508)

Total stockholders' equity                         782,916             807,492

                                               $ 1,426,199         $ 1,442,206
</TABLE>








                 See accompanying notes to financial statements.


                                       F-3
<PAGE>

                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                            Statements of Operations



<TABLE>
<CAPTION>

                                                                  For the Period
                                                                      from
                                                                    Inception,
                                                                   September 12,
                       For the Three Months  For the Years Ended   1996, Through
                            Ended March 31,      December 31,      December 31,
                         2000        1999        1999        1998        1999
                             (Unaudited)
<S>               <C>           <C>         <C>          <C>         <C>

Operating expenses:
 Management and
  consulting fees $     10,500  $        -  $   243,500  $   50,000  $  294,500
 General and
  administrative
  expenses              12,889           -      131,270           -     131,270

   Total operating
    expenses            23,389           -      374,770      50,000     425,770

Operating loss         (23,389)          -     (374,770)    (50,000)   (425,770)

Other expenses (income):
 Interest expense        6,254           -        4,401           -       4,401
 Interest (income)      (5,066)          -       (3,663)          -      (3,663)
   Total other
    expenses (income)    1,187           -          738           -         738

Net loss          $    (24,576) $        -  $  (375,508) $  (50,000) $  426,508)

Basic and diluted
 weighted average
 shares
 outstanding        15,500,000   6,000,000   13,125,000   6,000,000

Basic and
 diluted loss
 per common
 share            $          -  $        -  $     (0.03) $    (0.01)
</TABLE>




















                 See accompanying notes to financial statements


                                       F-4
<PAGE>

                            NEWCOM INTERNATIONAL INC.
                             (A blank-check company)
                       Statements of Stockholders' Equity
  For the Period from Inception, September 12, 1996, Through December 31, 1997,
               For the Years Ended December 31, 1999 and 1998, and
              For the Three Months Ended March 31, 2000 (Unaudited)


<TABLE>
<CAPTION>

                                                            Deficit
                                                          Accumulated
                                               Additional     as a
                              Common Stock      Paid-In   Blank-Check
                            Shares      Amount   Capital    Company    Total
<S>                         <C>        <C>     <C>        <C>        <C>
Initial capitalization       6,000,000 $ 6,000 $   45,000 $       -  $   51,000
Net loss from Inception,
 September 12, 1996 through
 December 31, 1997                   -       -          -    (1,000)     (1,000)

Balances, at December 31,
 1997                        6,000,000   6,000     45,000    (1,000)     50,000

Net loss                             -       -          -   (50,000)    (50,000)

Balances, at December 31,
 1998                        6,000,000   6,000     45,000   (51,000)          -

Issuance of common stock for
 cash at $0.10 per share     9,500,000   9,500    940,500         -     950,000

Value of stock options
 granted below FMV                   -       -    233,000         -     233,000

Net loss                             -       -          -  (375,508)   (375,508)

Balances, at
 December 31, 1999          15,500,000  15,500  1,218,500  (426,508)    807,492

Net loss                             -       -          -   (24,576)    (24,576)

Balances, at March 31,
 2000(unaudited)            15,500,000 $15,500 $1,218,500 $(451,084)  $ 782,916
</TABLE>





















                 See accompanying notes to financial statements.



                                       F-5


<PAGE>
                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                            Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                      September
                                                                         12,
                                                                        1996
                      For the Three Months   For the Years Ended       Through
                         Ended March 31,          December 31,         December
                       2000         1999       1999         1998      31, 1999
                         (Unaudited)
<S>               <C>         <C>         <C>          <C>         <C>
CASH FLOWS
FROM OPERATING
ACTIVITIES:
 Net loss         $ (24,576)  $        -  $ (375,508)  $ (50,000)  $  (426,508)
 Adjustment to
  reconcile net
  loss to net
  cash used in
  operating activities:
 Value of stock
  options granted
  below fair
  value                   -            -     233,000           -       233,000
 Changes in
  operating assets
  and liabilities:
 Prepaid expenses         -            -     (27,500)          -       (27,500)
 Accounts payable
  and accrued
  expenses            5,569            -     107,265           -       107,265
 Net cash used
  in operating
  activities        (19,007)           -     (62,743)    (50,000)     (113,743)
CASH FLOWS FROM
INVESTING
ACTIVITIES:
 Fees paid on
  fibre-optic
  cable network
  investment              -            -    (461,000)          -      (461,000)
 Purchase of
  certificate
  of deposit              -            -    (465,000)          -      (465,000)
 Net cash used
  in investing
  activities              -            -    (926,000)          -      (926,000)
CASH FLOWS FROM
FINANCING
ACTIVITIES:
 Payments from
  (to) related
  parties             3,500            -    (472,000)          -      (472,000)
 Initial
  capitalization          -            -           -           -        51,000
 Issuance of
  common stock            -            -     950,000           -       950,000
 Proceeds from
  note payable            -            -     465,000           -       465,000
 Increase in
  due to
  related party       3,000            -      62,449           -        62,449
 Net cash
  provided by
  financing
  activities          6,500            -   1,005,449           -     1,056,449
 Net increase
  (decrease) in
  cash              (12,507)           -      16,706     (50,000)       16,706
Cash, beginning
  of period          16,706            -           -      50,000             -
Cash, end of
  period          $   4,199  $         -  $   16,706  $        -  $     16,706

Cash paid
  during the
  period for:
 Interest         $   4,108  $         -  $    2,247  $        -  $      2,247
</TABLE>

                 See accompanying notes to financial statements.
                                      F-6
<PAGE>

                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                          Notes to Financial Statements

Note 1.  Description of Business and Summary of Significant Accounting Policies

Description of Business

NewCom International Inc. (the "Company") was incorporated in Nevada in
September 1996 under the name of AgriNet, Inc. In October 1996, NewCom amended
its Articles of Incorporation to change its name to NewCom International Inc.
Since its incorporation, NewCom has not conducted any significant operations.

NewCom's activities to date have focused primarily on incorporation activities
and the identification of potential operating opportunities or acquisitions
targets. Since NewCom has not yet commenced any principal operations and has not
yet earned significant revenues, NewCom is considered to be a blank-check
company.

Unaudited Interim Financial Statements

The accompanying financial statements are unaudited and are prepared in
accordance with rules and regulations of the Securities and Exchange Commission
for interim quarterly reporting. Accordingly, these financial statements do not
include all disclosures required under generally accepted accounting principles.
In the opinion of management, the accompanying consolidated financial statements
contain all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position of NewCom as of March 31,
2000, and the results of its operations and its cash flows for the three months
ended March 31, 2000 and 1999, respectively. Results for the three months ended
March 31, 2000, are not necessarily indicative of the operations which may occur
during the year ending December 31, 2000.

Management Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Loss Per Share

NewCom discloses "basic" and "diluted" earnings (loss) per share. Basic earnings
(loss) per share are computed by dividing net income (loss) by the weighted
average number of common shares outstanding during each period. Diluted earnings
(loss) per share are similar to basic earnings (loss) per share except that the
weighted average number of common shares outstanding is increased to reflect the
dilutive effect of potential common shares, such as those issuable upon the
exercise of stock options or warrants, and the conversion of preferred stock, as
if they had been issued.

For the years ended December 31, 1999 and 1998, there is no difference between
basic and diluted loss per common share since the effects of outstanding options
to purchase 500,000 shares of common stock and since their effects are
anti-dilutive.



                                       F-7
<PAGE>
                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                    Notes to Financial Statements (Continued)




Note 1.  Description of Business and Summary of Significant
         Accounting Policies (continued)

Acquisition Costs

NewCom accounts for costs incurred for its acquisitions as a portion of the
purchase price with the costs being allocated to the fair value of the net
assets acquired. NewCom has incurred $461,000 for costs incurred in connection
with its proposed acquisition of certain assets consisting of a fibre-optic
cable network in China (Note 2). The acquisition was unsuccessful, and
accordingly, NewCom charged operations subsequent to March 31, 2000.

Income Taxes

NewCom accounts for income taxes using the "liability method." Accordingly,
deferred tax assets and liabilities, are determined based on the difference
between the financial statement and tax base of assets and liabilities using
enacted tax rates in effect for the year in which temporary differences are
expected to reverse. A valuation allowance is provided for certain deferred tax
assets if it is more likely than not that NewCom will not realize tax assets
through future operations.

Recent Accounting Standards

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
This Statement establishes standards for the reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in an entity's financial statements. This statement requires an entity to
classify items of other comprehensive income by their nature in a financial
statement and display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in-capital in the equity
section of a statement of financial position. In accordance with the provisions
of this statement, NewCom has adopted SFAS No. 130 with no effect to the
accompanying financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." This statement requires public enterprises
to report financial and descriptive information about its reportable operating
segments, and establishes standards for related disclosures about products and
services, geographic areas, and major customers. As of June 30, 1999 and 1998,
NewCom has only no reportable operating segment.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes a new
model for accounting for derivatives and hedging activities and supersedes and
amends existing accounting standards and is effective for fiscal years beginning
after June 15, 2000. SFAS 133 requires that all derivatives be recognized in the
balance sheet at their fair market value, and the corresponding derivative gains
or losses be either reported in the statement of operations or as a component of
other comprehensive income depending on the type of hedge relationship that
exists with respect to such derivative. NewCom does not expect the adoption of
SFAS 133 to have a material impact on its financial statements.






                                       F-8
<PAGE>
                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                    Notes to Financial Statements (Continued)



Note 1.  Description of Business and Summary of Significant
         Accounting Policies (continued)

Going Concern and Management's Plans

NewCom has not commenced significant operations, and has limited liquid
resources. Such matters raise substantial doubt about NewCom's ability to
continue as a going concern. Management's plans with respect to these conditions
are to continue searching for additional sources of capital and new operating
opportunities. NewCom has entered into an acquisition agreement to acquire a
fibre-optics cable network, the ultimate consummation of which has not been
achieved, yet. In the interim, NewCom will continue operating with minimal
overhead, and key administrative and management functions which will be provided
by consultants. Accordingly, the accompanying financial statements have been
presented under the assumption NewCom will continue as a going concern, and
accordingly, no adjustments have been made to accompanying financial statements
as a result of this uncertainty.

Note 2.  Proposed Acquisition

On January 30, 1999, NewCom entered into an agreement to acquire certain assets
consisting of a joint venture interest in a fibre-optic cable network in China
for $60 million from the shareholders of Guangzhou South China Fibre-Optic
Network Engineering Co. Ltd. The consideration consists of 42 million shares of
NewCom's common stock and 18 million shares of NewCom's preferred stock (see
Note 7 for discussion of terms of the preferred stock). In connection with the
proposed acquisition, NewCom paid a finder's fees to a third party totaling
$461,000 (see Note 6). The acquisition was aborted subsequent to March 31, 2000.

Note 3.  Restricted Certificate of Deposit

In connection with NewCom's note payable to a bank (Note 5), it is required to
maintain a certificate of deposit in the amount of $465,000. Such certificate
earned interest at 4.02% per annum, and expires on March 22, 2000.

Note 4.  Notes Receivable and Other Receivables

On September 1, 1999, NewCom entered into an agreement with an unaffiliated
company, NuOasis International, Inc. ("NUOI"), which is a wholly-owned
subsidiary of NuOasis Resorts, Inc. ("NuOasis"). to acquire an 8%, note
receivable of an unrelated party with a face value of $500,000, originally due
March 1, 1999 for $472,000 cash. The note was secured by 500,000 shares of
common stock of Oasis Resorts International, Inc. The issuer of the note
subsequently filed for bankruptcy. As a result, NewCom entered into an agreement
with NewBridge Capital, Inc. ("NewBridge") dated November 1, 1999 wherein NewCom
exchanged the note for $470,000 in receivables due from nine (9) unrelated
corporations and individuals. Additionally, NewBridge and NewCom agreed to cross
guarantees whereby NewBridge has agreed to guarantee that NewCom will collect a
minimum of $470,000 on the substituted receivables or from liquidation of the
collateral.



                                       F-9
<PAGE>
                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                    Notes to Financial Statements (Continued)



Note 5.  Note Payable To Bank

On December 28, 1999, NewCom entered into a note agreement with a bank totaling
$465,000, interest at 5.87% per annum, due July 1, 2000, as amended. The note is
secured by the restricted certificate of deposit (see Note 1).

Note 6.  Commitments and Contingencies

NewCom entered into an agreement with a consultant for the introduction to the
Joint Venture partners. The fee to the consultant was 10% of the purchase price
of the Joint Venture. Upon executing the services agreement, NewCom paid this
consultant a nonrefundable amount of $461,000 (in lieu of the stated payment of
$475,000) to secure a letter of intent to acquire the Joint Venture interest.
Upon the close of the acquisition of the Joint Venture interest, NewCom was
required to pay approximately $5,539,000 in the form of cash. Since the joint
venture was terminated subsequent to March 31, 2000, no additional amounts will
be paid and amounts previously paid were forfeited.

Note 7.  Stockholders' Equity

Common Stock

On or about April 3, 1999, NewCom issued 9.5 million shares of its common stock
for $0.10 per share in exchange for 10% promissory notes totaling $950,000. On
or about September 1, 1999, the notes were acquired by a third party for
$950,000 in cash. The notes acquired are secured by the 9.5 million shares of
NewCom's common stock.

Preferred Stock

Consideration in connection with the proposed acquisition (Note 2) will consist
of 18 million shares of NewCom's preferred stock pursuant to authorization of
such shares by the Board of Directors. The terms of the preferred stock will be
as follows:

1.  The preferred stock shall carry no voting rights and no dividend or other
    rights. It shall only carry rights of conversion to common stocks to rank
    pari passu to other common stock;

2.  The conversion of preferred stock may take place by written notice at the
    option of the persons entitled to the preferred stock at any time during the
    period commencing January 1, 2000 (or such later date as the audited
    financial statements of NewCom for year 1999 shall have been prepared) to
    March 31, 2003 (or 30 days after such later date as the audited financial
    statements of NewCom for year 2002 shall have been prepared);

3.  The conversion ratio of the preferred stock to common stock shall be based
    on the gross income (i.e., performance) of NewCom as set out in the latest
    audited financial statements prior to the exercise of the right of
    conversion. The conversion ratio is as follows:

   (A) for gross income of NewCom of over $10 million, but under $15 million:
       One (1) share of preferred stock may be converted to One (1) share of
       common stock;


                                      F-10
<PAGE>
                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                    Notes to Financial Statements (Continued)





Note 7.  Stockholders' Equity (continued)

   (B) for gross income of NewCom of over $15 million, but under $20 million:
       One (1) share of preferred stock may be converted to two (2) shares of
       common stock; and


   (C) for gross income of NewCom of over $20 million: One (1) share of
       preferred stock may be converted to three (3) shares of common stock.
       In case of performance of $10 million is not met or the conversion right
       is not exercised by March 31, 2003 (or 30 days after such later
       date as the audited financial statements of NewCom for year 2002 shall
       have been prepared), the preferred stock shall expire and have no
       further effect.

Note 8.  Related Party Transactions

Effective October 1, 1999, NewCom entered into an Advisory and Management
Agreement (the "Agreement") with NuVen Advisors Limited Partnership ("NuVen" or
the "Advisor"). Pursuant to the terms of the NuVen Agreement, NewCom is required
to pay $3,500 per month, plus expenses, in exchange for Advisor's assistance in
the formulation of possible acquisition strategies, and the management of
financial and general and administrative matters. In addition, NewCom is
required to pay a fee equal to 10% of the asset value or investment made in
NewCom resulting from Advisor's efforts, and a transaction fee (as defined)
equal to 5% of the proceeds received by NewCom in connection with a sale of its
assets. In addition, NewCom granted a fully vested option to NuVen to purchase
500,000 shares of NewCom's common stock at $0.50 per share. Using the
Black-Sholes model to value these options, using a volatility of 50%, an
expected term of 5 years and a risk-free interest rate of 6.0%, NewCom valued
these options at $233,000. Since these options are fully vested, such value was
charged to operations for the year ended December 31, 1999. The Agreement has an
initial term of five years, but shall be automatically extended on an annual
basis, unless terminated by either party. NewCom had $10,500 due to NuVen as of
December 31, 1999 and $21,000 (unaudited) at March 31, 2000. These deferred
amounts do not bear interest, are uncollateralized and have no stated repayment
terms.

Effective October 6, 1999, NewCom entered into a note payable with an officer of
NewCom in exchange for advances made to NewCom. The note bears interest at 9.0%
per annuum, expires two years from the date of the note and is due on demand. In
connection with this note, accrued interest of $2,156 has been recorded in the
accompanying balance sheet.


Note 9.  Income Taxes

NewCom's net deferred tax assets at December 31, 1999, consist of net operating
loss carryforwards amounting to approximately $427,000 each for federal and
state tax purposes. At December 31, 1999, NewCom provided a 100% valuation
allowance for these net operating loss carryforwards totaling approximately
$145,000. During the years ended December 31, 1999 and 1998, NewCom's valuation
allowance increased $128,000 and $17,000, respectively.

The difference between the tax benefit assuming a Federal rate of 34% and the
nominal amount the recorded in the financial statements is the result of NewCom
recording a 100% valuation allowance for its deferred tax assets.

                                      F-11

<PAGE>

                            NewCom INTERNATIONAL INC.
                             (A blank-check company)
                    Notes to Financial Statements (Continued)




Note 9.  Income Taxes (Continued)

As a result of changes in ownership, NewCom's use of net operating loss
carryforwards may be limited by section 382 of the Internal Revenue Code until
such net operating loss carryforwards expire. Deferred tax assets have been
computed using the maximum expiration terms of 20 and 5 years for federal and
state tax purposes, respectively.





















                                      F-12
                                      

EXHIBIT 10-8 TXT

ex10-8.txt

                                      EXHIBIT 10.8

                             NOTE PURCHASE AGREEMENT



     THIS NOTE PURCHASE AGREEMENT (the "Agreement") is made this 1st day of
September, 1999, by and between NuVen Advisors Limited Partnership, a Nevada
limited partnership ("Purchaser"), and Phileo Management Company, Inc., a Nevada
corporation ("Seller").

     WHEREAS, Seller owns certain promissory notes in the aggregate principal
amount of Nine Hundred Fifty Thousand Dollars ($950,000), copies of which are
attached hereto as Exhibit A-1 through A-20 (the "Notes"); and

     WHEREAS, Purchaser wishes to purchase the Notes; and

     IN CONSIDERATION of the mutual promises contained herein, the benefits to
be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged,
Purchaser and Seller agree as follows:

1.   Purchase and Sale

     On the basis of the representations and warranties herein contained,
subject to the terms and conditions set forth herein, Seller agrees to sell,
assign and transfer the Notes for Nine Hundred Fifty Thousand Dollars
($950,000), hereinafter referred to as the "Consideration".

2.   Closing

     The purchase and sale contemplated by this Agreement may be effected by
Purchaser in one or more transactions, with the minimum purchase transaction
being not less than Three Hundred Thirty Thousand Dollars ($330,000), with
purchase of all of the Notes (the "Closing") to occur no later than October 30,
1999 (the "Transfer Date").  At the Closing, Purchaser shall deliver the
Consideration to Seller. Notwithstanding the date of Closing, the Effective Date
shall be September 1, 1999.

2.1  Representations and Warranties of Seller

     Seller hereby represents and warrants to Purchaser that:

     A.   Organization. Seller is a corporation validly existing and in good
          standing under the laws of the State of Nevada, with the power and
          authority to carry on its business as now being conducted. The
          execution and delivery of this Agreement and the consummation of the
          transaction contemplated in this Agreement have been, or will be prior
          to Closing, duly authorized by all requisite corporate action on the
          part of Seller. This Agreement has been duly executed and delivered by
          Seller and constitutes a binding, and enforceable obligation of
          Seller;

     B.   Third Party Consent No authorization, consent, or approval of, or
          registration or filing with, any governmental authority or any other
          person is required to be obtained or made by Seller in connection with
          the execution, delivery, or performance of this Agreement, or if
          required, Seller has or will obtain same prior to Closing;

                                        1


<PAGE>


     C.   Litigation. Seller is not a defendant or a plaintiff against whom a
          counterclaim has been made or reduced to judgement, in any litigation
          or proceedings before any local, state or U.S. government, or any
          department, board, body or agency thereof, which could result in a
          claim against the Notes;

     D.   Status of Notes. To the best of Seller's knowledge, the Notes are
          validly issued by the makers thereof and there is no claim by the
          makers thereof which would serve to restrict the sale, assignment, and
          transfer of the Notes as contemplated herein. Further, Seller has not
          created any option, security interest or encumbrance involving the
          Notes that would give rise to any claims by third parties or otherwise
          conflict with or preclude the exchange as contemplated herein; and

     E.   Authority. This Agreement has been duly executed by Seller, and the
          execution and performance of this Agreement will not violate, or
          result in a breach of, or constitute a default in any agreement,
          instrument, judgement, order or decree to which Seller is a party or
          to which Seller is subject.

2.2  Representations and Warranties of Purchaser

     Purchaser hereby represents and warrants to Seller that:

     A.   Organization. Purchaser is a limited partnership validly existing and
          in good standing under the laws of the State of Nevada, with the power
          and authority to carry on its business as now being conducted. The
          execution and delivery of this Agreement and the consummation of the
          transaction contemplated in this Agreement have been, or will be prior
          to Closing, duly authorized by all requisite action on the part of
          Purchaser. This Agreement has been duly executed and delivered by
          Purchaser and constitutes a binding, and enforceable obligation of
          Purchaser;

     B.   Third Party Consent No authorization, consent, or approval of, or
          registration or filing with, any governmental authority or any other
          person is required to be obtained or made by Purchaser in connection
          with the execution, delivery, or performance of this Agreement, or if
          required, Purchaser has or will obtain same prior to Closing;

     C.   Authority. This Agreement has been duly executed by Purchaser, and the
          execution and performance of this Agreement will not violate, or
          result in a breach of, or constitute a default in any agreement,
          instrument, judgement, order or decree to which Purchaser is a party
          or to which Purchaser is subject.

3.   Conditions Precedent to Obligations of Purchaser and Seller

     All obligations of Purchaser under this Agreement are subject to the
     fulfillment, prior to or as of the Closing Date, of each of the following
     conditions:

     A.   Transfer and Delivery of the Notes. Seller shall have taken all action
          necessary to deliver the Notes to Purchaser free and clear of any and
          all encumbrances or claims of any kind.


                                        2

<PAGE>


     B.   Acceptance of Documents. All instruments and documents delivered to
          Purchaser by Seller pursuant to the provisions of this Agreement shall
          be satisfactory to Purchaser and its legal counsel.

4.   Private Transaction

     A.   Private Offering. Seller and Purchaser mutuall acknowledge and agree
          that the purchase and sale of the Notes contemplated herein
          constitutes a private, arms-length transaction between the parties
          without the use or reliance upon a distribution or securities
          underwriter.

     B.   Purchase for Own Account. Neither Seller nor Purchaser are
          underwriters of, or dealers in, securities, and neither party is
          acting as such or participating, pursuant to a contractual agreement,
          in the distribution, purchase or redistribution of the Notes.

     C.   Access to Information. Seller and Purchaser an their advisors have
          been afforded the opportunity to discuss the transaction with legal
          and accounting professionals and to examine and evaluate the financial
          impact of the purchase and exchange contemplated herein.

5.   Termination

This Agreement may be terminated at anytime prior to the date of Closing by
either party if (a) there shall be any actual or threatened action or proceeding
by or before any court or any other governmental body which shall seek to
restrain, prohibit, or invalidate the transaction contemplated by this
Agreement, and which, in the judgment of such party giving notice to terminate
and based upon the advice of legal counsel, makes it inadvisable to proceed with
the transaction contemplated by this Agreement, or (b) if the transaction
contemplated herein has not closed by October 30, 1999 for reasons outside the
control of the parties.

6.   Miscellaneous

     A.   Authority. The Purchaser and general partner of Seller executing this
          Agreement are duly authorized to do so and each party has taken all
          action required by law or otherwise to properly and legally execute
          this Agreement.

     B.   Notices. Any notice under this Agreement shall be deemed to have been
          sufficiently given if sent by registered or certified mail, postage
          prepaid, addressed as follows:

          To Seller:         Phileo Management Company Inc.
                             910-510 Burrard Street
                             Vancouver, BC, Canada V6C3A8
                             Telephone: (800)668-9880
                             Facsimile: (604)688-3565

          To Purchaser:      NuVen Advisors Limited Partnership
                             4001 So. Decatur Blvd., Suite 399
                             Las Vegas, NV 89103
                             Telephone: (702) 871-9080
                             Facsimile: (702) 875-5945

                                        3

<PAGE>



          With a copy to:    Archer & Weed
                             4695 MacArthur Court, Suite 530
                             Newport Beach, CA 92660
                             Telephone: (949) 475-9086
                             Facsimile: (949) 475-9087

          or to any other address which may hereafter be designated by either
          party by notice given in such manner. All notices shall be deemed to
          have been given as of the date of receipt.

     C.   Entire Agreement. This Agreement sets forth the entire understanding
          between the parties hereto and no other prior written or oral
          statement or agreement shall be recognized or enforced.

     D.   Severability. If a court of competent jurisdiction determines that any
          clause or provision of this Agreement is invalid, illegal or
          unenforceable, the other clauses and provisions of the Agreement shall
          remain in full force and effect and the clauses and provision which
          are determined to be void, illegal or unenforceable shall be limited
          so that they shall remain in effect to the extent permissible by law.

     E.   Assignment. None of the parties hereto may assign this Agreement
          without the express written consent of the other parties and any
          approved assignment shall be binding on and inure to the benefit of
          such successor or, in the event of death or incapacity, on assignor=s
          heirs, executors, administrators and successors.

     F.   Applicable Law. This Agreement has been negotiated and is being
          contracted for in the State of Nevada and shall be governed by the
          applicable laws of the State of Nevada, notwithstanding any
          conflict-of-law provision to the contrary.

     G.   Attorney's Fees. If any legal action or other preceding
          (non-exclusively including arbitration) is brought for the enforcement
          of or to declare any right or obligation under this Agreement or as a
          result of a breach, default or misrepresentation in connection with
          any of the provisions of this Agreement, or otherwise because of a
          dispute among the parties hereto, the prevailing party will be
          entitled to recover actual attorney's fees (including for appeals and
          collection) and other expenses incurred in such action or proceeding,
          in addition to any other relief to which such party may be entitled.

     H.   No Third Party Beneficiary. Nothing in this Agreement, expressed or
          implied, is intended to confer upon any person, other than the parties
          hereto and their successors, any rights or remedies under or by reason
          of this Agreement, unless this Agreement specifically states such
          intent.

     I.   Counterparts. It is understood and agreed that this Agreement may be
          executed in any number of identical counterparts, each of which may be
          deemed an original for all purposes.

     J.   Further Assurances. At any time, and from time to time after the
          Closing, each party hereto will execute such additional instruments
          and take such action as may be reasonably requested by the other party
          to confirm or perfect title to the Notes to be transferred hereunder,
          or otherwise to carry out the intent and purposes of this Agreement.


                                        4

<PAGE>



     K.   Brokers or Finders Fee; Expenses. Seller an Purchaser each warrant
          that they have not incurred any liability, contingent or otherwise,
          for brokers' or finders' fees or commissions relating to this
          Agreement for which the other party shall have responsibility. Except
          as otherwise provided herein, all fees, costs and expenses incurred by
          either party relating to this Agreement shall be paid by the party
          incurring same.

     L.   Amendment or Waiver. Every right and remedy provided herein shall be
          cumulative with every other right and remedy, whether conferred
          herein, at law, or in equity, and may be enforced concurrently
          herewith, and no waiver by any party of the performance of any
          obligation by the other shall be construed as a waiver of the same or
          any other default then, theretofore, or thereafter occurring or
          existing. At any time prior to Closing, this Agreement may be amended
          by a writing signed by all parties hereto.

     M.   Headings. The section and subsection headings in this Agreement are
          inserted for convenience only and shall not affect in any way the
          meaning or interpretation of this Agreement.

     N.   Facsimile. A facsimile, telecopy or other reproduction of this
          instrument may be executed by one or more parties hereto and such
          executed copy may be delivered by facsimile or similar instantaneous
          electronic transmission device pursuant to which the signature of or
          on behalf of such party can be seen, and such execution and delivery
          shall be considered valid, binding and effective for all purposes. At
          the request of any party hereto, all parties agree to execute an
          original of this instrument as well as any facsimile, telecopy or
          other reproduction hereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.

"Purchaser"                                     "Seller"

NuVen Advisors Limited Partnership              Phileo Management Company Inc.


By:   /s/ Fred G. Luke                          By:   /s/ David Lo
      ------------------------------                  ------------------------
Name:     Fred G. Luke                          Name:     David Lo
Title:    President                             Title:    President





                                        5
                                      

EXHIBIT 10-7 TXT

ex10-7.txt

                                      EXHIBIT 10.7

                            SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT is made on this January 30, 1999

BETWEEN  :-

(1)    PHILEO MANAGEMENT COMPANY INC. ("Purchaser")

AND :-

(2)    The SHAREHOLDERS set out in the Schedule hereto (the "Shareholders").

WHEREAS :-

(A)    By the Closing Date, the Shareholders shall collectively be the ultimate
       registered and beneficial shareholders of the Shares in the Target Co.

(B)    Target Co. collectively hold the Relevant Percentage of the Chinese Joint
        Venture.

(C)    The Chinese Joint Venture holds relevant approvals to build and operate
       the Project in three Phases comprising a five (5) trunk fiber optic
       network in the Guangdong Province as follows:-

       Phase       Location      Length      Completion    No. of Cores

       Phase I     Guangzhou     168 km        01.1997        36
                   -Shenzhen

       Phase II    Guangzhou     220 km        12.1997        40
                   -Zhuhai

       Phase III   Guangzhou     2,451km       08.1999        16
                   -Shantou                    (scheduled)
                   -Zhangjiang
                   -Shaoguan
                   (circular loop)

(D)    The Purchaser desires to acquire and the Shareholders desires to sell all
       the Shares for a purchase price of $60,000,000 (the "Purchase Price")
       subject to and on terms and conditions of this Agreement;

(E)    The Purchaser is non-reporting company whose shares of common stock are
       traded on the NASD OTC Bulletin Board.

NOW, THEREFORE :-

In consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.

                                        1


<PAGE>


ARTICLE I

Definitions

1.1


       Definitions.

(a)    As used in this Agreement, the following defined terms shall have the
       meanings indicated below unless the context otherwise requires :

       "Actions or Proceedings" means any action, suit, proceeding, arbitration
       or Governmental or Regulatory Authority investigation or audit.

       "Affiliate" means, as applied to any Person, (i) any other Person
       directly or indirectly controlling, controlled by or under common control
       with, that Person, (ii) any other Person that owns or controls five
       percent (5%) or more of any class of equity securities (including any
       equity securities issuable upon the exercise of any Option) of that
       Person or any of its Affiliates, or (iii) any member, director, partner,
       officer, agent, employee or relative of such Person. For the purposes of
       this definition, "control" (including with correlative meanings, the
       terms "controlling", "controlled by", and "under common control with") as
       applied to any Person, means the possession, directly or indirectly, of
       the power to direct or cause the direction of the management and policies
       of that Person, whether through ownership of voting securities or by
       contract or otherwise.

       "Agreement" means this Share Exchange Agreement, the Exhibits and the
       Schedule and the certificates delivered in connection herewith, as the
       same may be amended, modified or restated from time to time in accordance
       with the terms hereof.

       "Assets and Properties" of any Person means all assets and properties of
       every kind, nature, character and description (whether real, personal or
       mixed, whether tangible or intangible, whether absolute, accrued,
       contingent, fixed or otherwise and wherever situated), including the
       goodwill related thereto, operated, owned or leased by such Person,
       including, without limitation, cash, cash equivalents, accounts and notes
       receivable, chattel paper, documents, instruments, general intangibles,
       real estate, equipment, inventory, goods and Intellectual Property.

       "Books and Records" means all files, documents, instruments, papers,
       books and records relating to the Business, Target Co. or the
       Subsidiaries, including without limitation financial statements, Tax
       Returns and related work papers and letters from accountants, budgets,
       pricing guidelines, ledgers, journals, deeds, title policies, minute
       books, stock certificates and books, stock transfer ledgers, Contracts,
       Permits, customer lists, computer files and programs, retrieval programs,
       operating data and plans and environmental studies and plans.

       "Business Combination" means with respect to any Person any (i) merger,
       consolidation or combination to which such Person is a party, (ii) any
       sale, issuance dividend, split or other disposition of any capital stock
       or other equity interests (or any security or loan convertible into or
       exchangeable for such capital stock or other equity interests) of such
       Person, (iii) any tender offer (including without limitation a
       self-tender), exchange offer, recapitalization, liquidation, dissolution
       or similar transaction, (iv) any sale, dividend or other disposition of
       all or a material portion of the Assets and Properties of such Person or
       (v) the entering into of any agreement or understanding, or the granting
       of any rights or options, with respect to any of the foregoing.

                                        2

<PAGE>



       "Business Day" means a day other than Saturday, Sunday or any day on
       which banks located in the State of California and Guangzhou, China are
       authorized or obligated to close.

       "Business and/or Condition of Target Co. " means the Business, condition
       (financial or otherwise), results of operations, Assets and Properties of
       Target Co. and the Subsidiaries taken as a whole.

       "China" means the People Republic of China.

       "Chinese Joint Venture" means the sino-foreign joint venture to be
       established in accordance with PRC laws owning the Project.

       "Closing Date" means 31st March 1999 or such earlier or later date
       acceptable to the Purchasers and the Shareholders.

       "Code" means the Internal Revenue Code of 1986, as amended, and the rules
       and regulations promulgated thereunder.

       "Contract" means any agreement, lease, license, evidence of Indebtedness,
       mortgage, indenture, security agreement or other contract or other
       commitment (whether written or oral).

       "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
       the rules and regulations of the SEC thereunder.

       "GAAP" means United States generally accepted accounting principles,
       consistently applied throughout the specified period and in all prior
       comparable periods.

       "Governmental or Regulatory Authority" means any court, tribunal,
       authority, agency, commission, official or other instrumentality of the
       United States, any foreign country or any domestic or foreign state,
       county, city or other political subdivision, any arbitrator, tribunal or
       panel of arbitrators and, shall include, without limitation, any stock
       exchange, quotation service and the National Association of Securities
       Dealers.

       "Indebtedness" means, as to any Person: (i) all obligations, whether or
       not contingent, of such Person for borrowed money (including, without
       limitation, reimbursement and all other obligations with respect to
       surety bonds, letters of credit and bankers' acceptances, whether or not
       matured), (ii) all obligations of such Person evidenced by notes, bonds,
       debentures or similar instruments, (iii) all obligations of such Person
       representing the balance of deferred purchase price of property or
       services, except trade accounts payable and accrued commercial or trade
       liabilities arising in the ordinary course of business, (iv) all interest
       rate and currency swaps, caps, collars and similar agreements or hedging
       devices under which payments are obligated to be made by such Person,
       whether periodically or upon the happening of a contingency, (v) all
       indebtedness created or arising under any conditional sale or other title
       retention agreement with respect to property acquired by such Person
       (even though the rights and remedies of the seller or lender under such
       agreement in the event of default are limited to repossession or sale of
       such property), (vi) all obligations of such Person under leases which
       have been or should be, in accordance with GAAP, recorded as capital
       leases, (vii) all indebtedness secured by any Lien (other than Liens in
       favor of lessors under leases other than leases included in clause (vii))
       on any property or asset owned or held by that Person regardless of
       whether the indebtedness secured thereby shall have been assumed by

                                        3

<PAGE>



       that Person or is non-recourse to the credit of that Person, and (viii)
       all Indebtedness of any other Person referred to in clauses (i) through
       (vii) above, guaranteed, directly or indirectly, by that Person.

       "Intellectual Property" means all patents and patent rights, trademarks
       and trademark rights, trade names and trade name rights, service marks
       and service mark rights, service names and service name rights, brand
       names, inventions, processes, formulae, copyrights and copyright rights,
       trade dress, business and product names, logos, slogans, trade secrets,
       industrial models, processes, designs, methodologies, computer programs
       (including all source codes) and related documentation, technical
       information, manufacturing, engineering and technical drawings, know-how
       and all pending applications for and registrations of patents,
       trademarks, service marks and copyrights.

       "IRS" means the United States Internal Revenue Service.

       "Laws" means all laws, statutes, rules, regulations, ordinances and other
       pronouncements having the effect of law of the United States, any foreign
       country or any domestic or foreign state, county, city or other political
       subdivision or of any Governmental or Regulatory Authority.

       "Liabilities" means all Indebtedness, obligations and other liabilities
       of a Person (whether absolute, accrued, contingent, known or unknown,
       fixed or otherwise, or whether due or to become due).

       "Liens" means any mortgage, pledge, assessment, security interest, lease,
       lien, adverse claim, levy, charge or other encumbrance of any kind, or
       any conditional sale Contract, title retention Contract or Contract
       committing to grant any of the foregoing.

       "Loss" means any and all damages, fines, fees, penalties, deficiencies,
       losses and expenses, including, without limitation, interest, reasonable
       expenses of investigation, court costs, reasonable fees and expenses of
       attorneys, accountants and other experts or other expenses of litigation
       or other proceedings or of any claim, default or assessment (such fees
       and expenses to include without limitation, all fees and expenses,
       including, without limitation, fees and expenses of attorneys, incurred
       in connection with (i) the investigation or defense of any third party
       claims or (ii) asserting or disputing any rights under this Agreement
       against any party hereto or otherwise).

       "Option" with respect to any Person means any security, right,
       subscription, warrant, option, "phantom" stock right or other Contract
       that gives the right to (i) purchase or otherwise receive or be issued
       any shares of capital stock or other equity interests of such Person or
       any security of any kind convertible into or exchangeable or exercisable
       for any shares of capital stock or other equity interest of such Person
       or (ii) receive any benefits or rights similar to any rights enjoyed by
       or accruing to the holder of shares of capital stock or other equity
       interest of such Person, including, without limitation, any rights to
       participate in the equity, income or election of directors, management
       committee members or officers of such Person.

       "Order" means any writ, judgment, decree, injunction or similar order of
       any Governmental or Regulatory Authority (in each such case whether
       preliminary or final).



                                        4

<PAGE>


       "Permits" means all licenses, permits, certificates of authority,
       authorizations, approvals, registrations, franchises and similar consents
       granted or issued by any Governmental or Regulatory Authority.

       "Permitted Lien" means (i) any Lien for Taxes, governmental, charges or
       levies not yet due or delinquent or being contested in good faith by
       appropriate proceedings for which adequate reserves have been established
       in accordance with GAAP, (ii) the Liens set forth in any Disclosure
       Schedule, (iii) any minor imperfection of title, easements, rights of way
       or similar Lien as normally exist with respect to property similar in
       character to the property affected thereby and which individually or in
       the aggregate with other such Liens does not impair the value or
       marketability of the property subject to such Lien or interfere with the
       use of such property in the conduct of the business of the Company or any
       Subsidiary and which do not secure obligations for money borrowed and
       (iv) Liens imposed by any law, such as mechanic's, materialman's,
       landlord's, warehouseman's and carrier's Liens, securing obligations
       incurred in the ordinary course of business which are not yet overdue or
       which are being diligently contested in good faith by appropriate
       proceedings and, with respect to such obligations which are being
       contested, for which the Company has set aside adequate reserves.

         "Person" means any individual, corporation, joint stock corporation,
         limited liability company or partnership, general partnership, limited
         partnership, proprietorship, joint venture, other business
         organization, trust, union, association or Governmental or Regulatory
         Authority.

       "Project" means the Project as referred to in Recital (C) hereof, which
       Project is valued with RMB1,100,000,000 in accordance with the Valuation
       Report.

       "Projections" means the projections for the Chinese Joint Venture assets,
       results of operations, assets, liabilities, cash flow and other
       information supplied by the Shareholders.

       "Purchase Price" has the meaning ascribed to it in Section 2.1.

       "Purchaser" has the meaning ascribed to it in the forepart of this
       Agreement.

       "Relevant Percentage" means sixty-six per cent (66%)

       "Securities Act" means the Securities Act of 1933, as amended, and the
       rules and regulations thereunder.

       "Shares" means the entire issued and paid up share capital of Target Co.
       owned by the respective Shareholders as registered and beneficial
       shareholder as set out in the Schedule hereto.

       "Subsidiary" means any Person in which Target Co., directly or indirectly
       through Subsidiaries or otherwise, beneficially owns more than fifteen
       percent (15%) of either the equity interests in, or the voting control
       of, such Person.

       "Target Co." means collectively New Communication International
       Enterprises Ltd. and Magnum Enterprises Group Limited, both companies
       incorporated under the laws of the British Virgin Islands with limited
       liability and where the context requires any of them.



                                        5

<PAGE>


       "Tax" or "Taxes" means all federal, state, local or foreign net or gross
       income, gross receipts, net proceeds, sales, use, ad valorem, value
       added, franchise, bank shares, withholding, payroll, employment, excise,
       property, alternative or add-on minimum, environmental or other taxes,
       assessments, duties, fees, levies or other governmental charges of any
       nature whatever, whether disputed or not, together with any interest,
       penalties, additions to tax or additional amounts with respect thereto.

       "Tax Returns" means any returns, reports or statements (including any
       information returns) required to be filed for purposes of a particular
       Tax.

       "Taxing Authority" means any governmental agency, board, bureau, body,
       department or authority of any United States Federal, state or local
       jurisdiction or any foreign jurisdiction, having or purporting to
       exercise jurisdiction with respect to any Tax.

       "Transfer Taxes" means sales, use, transfer, real property transfer,
       recording, gains, stock transfer and other similar taxes and fees.

       "Valuation Report means the Valuation Report prepared subject to terms
       and conditions set out therein by Arthur Anderson dated as of April 3rd,
       1998

(b)    Unless the context of this Agreement otherwise requires, (i) words of any
       gender include each other gender, (ii) words using the singular or plural
       number also include the plural or singular number, respectively, (iii)
       the terms "hereof," "herein," "hereby" and derivative or similar words
       refer to this entire Agreement, (iv) the terms "Article" or "Section"
       refer to the specified Article or Section of this Agreement, and (v) the
       phrases "ordinary course of business" and "ordinary course of business
       consistent with past practice" refer to the business and practice of
       Target Co. or a Subsidiary. All accounting terms used herein and not
       expressly defined herein shall have the meanings given to them under
       GAAP.

(c)    When used herein, the phrase "to the knowledge of " any Person, "to the
       best knowledge of " any Person or any similar phrase, means (i) with
       respect to any Person who is an individual, the actual knowledge of such
       Person, and (ii) with respect to any other Person, the actual knowledge
       of the directors, officers, members, general partners and other similar
       Person in a similar position or having similar powers and duties; and, in
       the case of each of (i) and (ii), the knowledge of facts that such
       individuals should have after reasonable inquiry.

ARTICLE II

Sale of Purchased Interests; Closing

2.1    Sale and Purchase. On the terms and subject to the conditions of this
       Agreement,

(a)    At the Closing, Purchaser shall purchase from the Shareholders, free and
       clear of all Liens, all of the Shares.

(b)    The Purchase Price shall be Sixty Million Dollars (US$ 60,000,000)
       payable at the Closing as set forth below.


                                        6

<PAGE>



(c)    The Purchase Price shall consist of the following payments to the
       Shareholders distributed in accordance with the Schedule hereto :-

       (i)  Forty-Two Million (42,000,000) shares of Purchaser  common stock;
            and

       (ii) Eighteen Million (18,000,000) shares of Purchaser  preferred stock.

(d)    The details of the preferred stocks are as follows :-

       (i)  The preferred stocks shall carry no voting rights and no dividend or
            other rights.  It shall only carry rights of conversion to common
            stocks to rank pari passu to other common stocks detailed below.

       (ii) The conversion of preferred stocks may take place by written notice
            at the option of the persons entitled to the preferred stocks at any
            time during the period commencing 1st January 2000 (or such later
            date as the audited financial statements of the Purchaser for year
            1999 shall have been prepared) to 31st March 2003 (or 30 days after
            such later date as the audited financial statements of the Purchaser
            for year 2002 shall have been prepared);

       (iii)The conversion ratio of the preferred stocks to common stocks shall
            be based on the gross income (i.e. performance) of the Purchaser as
            set out in the latest audited financial statements prior to the
            exercise of the right of conversion.  The conversion ratio is as
            follows :-

            (A)     for gross income of the Purchaser of over US$10 million but
                    under US$15 million
                    : 1 preferred stock may be converted to 1 common stock;

            (B)     for gross income of the Purchaser of over US$15 million but
                    under US$20 million
                    : 1 preferred stock may be converted to 2 common stocks; and

            (C)     for gross income of the Purchaser of over US$20 million : 1
                    preferred stock may be converted to 3 common stocks

            In case the performance of US$10 million is not met or the
            conversion right is not exercised by 31st March 2003 (or 30 days
            after such later date as the audited financial statements of the
            Purchaser for year 2002 shall have been prepared), the preferred
            stocks shall expire and have no further effect.

       (iv) The Purchaser shall issue the converted common stocks requested for
            under the written notice to the persons entitled as soon as
            practicable and subject to and in accordance with applicable rules
            and regulations.

2.2  Closings. The Closing will take place at Room 1501, Central Tower, 28
Queen Road Central, Hong Kong on the Closing Date in accordance with the terms
of this Agreement, or at such other place or time as Purchaser and the
Shareholders mutually agree. At the Closing, Purchaser shall pay to the
Shareholders the Purchase Price pursuant to Section 2.1. Simultaneously, the
Shareholders shall deliver to Purchaser the certificates representing the Shares
together with all necessary instruments of transfer, in form and substance
reasonably satisfactory to Purchaser. At the Closing, there shall also be
delivered to Purchaser and Target

                                        7

<PAGE>



Co. the opinions, certificates and other Contracts, documents and instruments
required to be delivered under the terms of this Agreement.

ARTICLE III

Representations and Warranties of Shareholders

The Shareholders represent and warrant to Purchaser that the statements
contained in this Article III are true and correct as of the date of this
Agreement unless stated otherwise, and will be true and correct as of the
Closing Date (as though made then and as though such Closing Date was
substituted for the date of this Agreement throughout this Article III).

3.1    Organization and Relationship of Parties. Each Shareholder, Target Co.,
Chinese Joint Venture (the elevant Parties prior to the Closing Date shall be a
corporation duly incorporated, validly existing and in good standing under the
laws of its place of incorporation. On or prior to the Closing Date, the
Shareholders shall own 100% of Target Co., Target Co. shall own the Relevant
Percentage of the Chinese Joint Venture and the Chinese Joint Venture shall own
the Project. Each of the Relevant Parties is duly qualified, licensed or
admitted to do business and is in good standing in its place of incorporation .

3.2    Power and Authority. Each Shareholder has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by each Shareholder of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action. This Agreement has been duly and validly executed
and delivered by each Shareholder and constitutes a legal, valid and binding
obligation of each Shareholder enforceable against each Shareholder in
accordance with its terms.

3.3    Capitalization. As of the date hereof, and immediately prior to the
consummation of the transactions contemplated hereby and before giving effect to
such transactions, the authorized capital stock of the Target Co. consists
50,000 shares of par value of US$1.00, of which 100 shares are issued and
outstanding in accordance with the Schedule hereto. As of the date hereof, there
are no preemptive or similar rights to purchase or otherwise acquire shares of
the capital stock of Target Co. pursuant to any provision of law, the Charter or
memorandum and articles of association (in each case, as amended and in effect
on the date hereof), or any agreement to which Target Co. is a party. All of the
outstanding shares of capital stock of Target Co. have been duly authorized and
validly issued, are fully paid and non-assessable.

3.4    Business. The Shareholders agree, prior to the Closing Date, to deliver
to Purchaser true and complete copies of the certificate or articles of
incorporation and by-laws (or other comparable charter documents) of the Target
Co. and the Chinese Joint Venture. The Target Co. has no other Subsidiary nor
carry on any business except the holding of the Relevant Percentage of the
Chinese Joint Venture and the Chinese Joint Venture has no other Subsidiary or
business except the Project. Except for aforesaid, the Target Co. nor Chinese
Joint Venture hold no equity, partnership, limited liability company, joint
venture or other interest in any Person.

3.5    No Conflicts. The execution and delivery by the Shareholders of this
Agreement, the performance by the Shareholders of their obligations hereunder
and the consummation of the transactions contemplated hereby does not and will
not:


                                        8

<PAGE>



(a)    conflict with or result in a violation or breach of any of the terms,
       conditions or provisions of the Charter or the certificate or articles of
       incorporation or organization or by-laws (or other comparable charter
       documents) of the Shareholders, or any Subsidiary;

(b)    conflict with or result in a violation or breach of any term or provision
       of any Law or Order applicable to the Shareholders, or any Subsidiary or
       any of their respective Assets and Properties; or

(c)    (i) conflict with or result in a violation or breach of, (ii) constitute
       (with or without notice or lapse of time or both) a default under, (iii)
       require the Shareholders, or any Subsidiary to obtain any consent or
       approval, make any filing with or give any notice to any Person as a
       result or under the terms of, (iv) result in or give to any Person any
       right of termination, cancellation, acceleration or modification in or
       with respect to, (v) result in or give to any Person any additional
       rights or entitlement to increased, additional, accelerated or guaranteed
       payments under, (vi) result in the creation of any new additional or
       increased liability of the Company or any Subsidiary under or (vii)
       result in the creation or imposition of any Lien upon, the Shareholders
       or any Subsidiary or any of their respective Assets and Properties under,
       any Contract or Permit to which the Shareholders or any Subsidiary is a
       party or by which any of their respective Assets and Properties are
       bound.

3.6    Governmental Approvals and Filings. No consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
the Shareholders, or any Subsidiary is required in connection with the
execution, delivery and performance of this Agreement, or the consummation of
the transactions contemplated hereby or shall have been obtained by the Closing
Date.

3.7    Corporate Formalities; Books and Records.

(a)    Target Co. has complied in all material respects with al corporate
       formalities required to be complied with under applicable laws.

(b)    The minute books and other similar records of Target Co. and each
       Subsidiary as made available to Purchaser prior to the Closing Date under
       this Agreement contain a true and complete record, in all material
       respects, of all action taken at all meetings and by all written consents
       in lieu of meetings of directors, members, stockholders, the management
       committee or boards of directors, subcommittees and committees of the
       boards of directors of Target Co. and each Subsidiary.

3.8    Projections. The Projections constitute a reasonable forecast of the
Chinese Joint Venture and business operations for the periods set forth therein.
The Projections have been prepared based on the estimates and assumptions set
forth therein, which assumptions and estimates are all of the assumptions and
estimates used in formulating such Projections and are reasonable and fair in
light of current conditions and reflect the reasonable estimate of Shareholders
of the results of operations, assets, liabilities, cash flow and other
information projected therein. To the knowledge of the Shareholders, no facts
exist which would result in any material change in any such Projections, save
the adjustments set forth above.

3.9    Absence of Changes. Since the transactions contemplated by this
Agreement, there has not been any event or development which, individually or
together with other such events, could reasonably be expected to have a material
adverse effect on the Target Co. In addition, without limiting the foregoing and
except for the transactions contemplated by this Agreement neither Target Co.
nor any Subsidiary:



                                        9

<PAGE>


(a)    has (i) declared, set aside or paid any dividend or othe distribution in
       respect of the capital stock of Target Co. or any Subsidiary or (ii)
       directly or indirectly redeemed, purchased or otherwise acquired any such
       capital stock or other equity interests; (b) authorized, issued, sold or
       otherwise disposed of, or granted any Option with respect to any shares
       of capital stock or other equity interests of Target Co. or any
       Subsidiary, or modified or amended any right of any holder of any
       outstanding shares of capital stock or other equity interests of Target
       Co. or any Subsidiary or Option with respect thereto;

(c)    (i) increased salary, wages or other compensation (including, without
       limitation, any bonuses, commissions and any other payments) of any
       officer, employee or consultant of Target Co. or any Subsidiary whose
       annual salary, wages and such other compensation is, or after giving
       effect to such change would be, in the aggregate, $1,000 or more per
       annum; (ii) established or modified (A) targets, goals, pools or similar
       provisions under any benefit plan, employment contract or other employee
       compensation arrangement or (B) salary ranges, increase guidelines or
       similar provisions in respect of any benefit plan, employment Contract or
       other employee compensation arrangement; or (iii) adopted, entered into,
       amended, modified or terminated (in whole or in part) any benefit plan;

(d)    (i) incurred any Indebtedness, (ii) made or agreed to make any loans to
       any Person or (iii) made or agreed to make any voluntary purchase,
       cancellation, prepayment or complete or partial discharge in advance of a
       scheduled payment date with respect to, or waiver of any right of Target
       Co. or any Subsidiary under, any Indebtedness of or owing to Target Co.
       or any Subsidiary;

(e)    suffered any physical damage, destruction or other casualty loss (whether
       or not covered by insurance) adversely affecting any of the real or
       personal property or equipment of the material Assets and Properties of
       Target Co. or any Subsidiary;

(f)    failed to pay or satisfy when due any obligation of Target Co. or any
       Subsidiary, except when the failure would not have a material adverse
       effect on the Business or Condition of Target Co. or its Subsidiaries;

(g)    acquired any business or Assets and Properties of any Person (whether by
       merger, consolidation or otherwise) or disposed or leased, or incurred a
       Lien (other than a Permitted Lien) on, any Assets and Properties of
       Target Co. or any Subsidiary, in each case, other than acquisitions or
       dispositions of products in the ordinary course of business of Target Co.
       or such Subsidiary consistent with past practice;

(h)    entered into, amended, modified, terminated (in whole or in part) or
       granted a waiver under or given any consent with respect to any
       Intellectual Property;

(i)    commenced, terminated or changed any line of the Business;

(j)    entered into any transaction with any stockholder or Affiliate of Target
       Co. or any Subsidiary, other than pursuant to any Contract in effect on
       the Audited Financial Statement Date;

(k)    made any change in the accounting methods or procedures of Target Co. or
       any Subsidiary or became subject to any conditions or event which has or
       could reasonably be expected to have a material adverse effect on the
       Business or Condition of Target Co.; or


                                       10

<PAGE>


(l)    entered into any agreement to do any of the things described in the
       preceding paragraphs, including, without limitation, with respect to any
       Business Combination not otherwise restricted by the preceding
       paragraphs.

3.10   No Undisclosed Liabilities. At Closing, Target Co. will have no
Liabilities of, relating to or affecting the Target Co. Assets or any Subsidiary
or any of their respective Assets and Properties except Liabilities incurred in
the ordinary course of business in accordance with the provisions of this
Agreement.

3.11   Taxes.

(a)    All Taxes which could constitute a lien on the Assets an Properties of
       Target Co. or the Subsidiaries and which were due and payable by Target
       Co. or the Subsidiaries with respect to the Closing Date and all periods
       beginning and ending prior thereto have been or will be paid by Target
       Co. prior to delinquency. All Tax Returns that have been filed by or with
       respect to Target Co. or any Subsidiary, or any affiliated, combined,
       consolidated, unitary or similar group of which Target Co. is or was a
       member with any Taxing Authority correctly and completely reflects the
       income, franchise or other Tax liability and all other information
       required to be reported thereon. Target Co. and the Subsidiaries have
       withheld and paid all Taxes required to have been withheld and paid in
       connection with amounts paid or due and payable to any employee,
       creditor, independent contractor or other third party.

(b)    Target Co. does not expect any Taxing Authority to asses any additional
       Taxes against or in respect of it or any Subsidiary for any past period.
       There is no dispute or claim concerning any Tax liability of Target Co.
       or any Subsidiary either (i) claimed or raised by any Taxing Authority or
       (ii) otherwise known to Target Co., or any Subsidiary. Target Co. has
       delivered to Purchaser, with respect to Target Co. and each Subsidiary,
       complete and correct copies of all federal, state, local and foreign
       income Tax Returns filed by, and all correspondence, agreements, notices,
       reports or statements of deficiencies with, from or to any Taxing
       Authority in each case since the date of its incorporation.

3.12   Legal Proceedings.

(a)    Neither Target Co. nor any Subsidiary has knowledge of any Orders
       outstanding against Target Co. or any Subsidiary; and

(b)    there are no Actions or Proceedings pending or, to the knowledge of
       Target Co., or any Subsidiary, threatened against, relating to or
       affecting Target Co. or any Subsidiary or any of their respective Assets
       and Properties. Neither Target Co. nor any Subsidiary is in default with
       respect to any Order of any court or Governmental or Regulatory Authority
       and there are no unsatisfied judgments against Target Co., or any
       Subsidiary.

3.13   Compliance With Laws and Orders.  Target Co. and the Subsidiaries and the
conduct of the Business are in compliance with all applicable Laws and Orders,
except where the failure to comply would not have a material adverse effect on
the Business or Condition of Target Co. or the Shares.  None of Target Co., or
any Subsidiary has any knowledge that it is not in compliance with any of such
Laws or Orders where the failure to comply would have a material adverse effect
on the Business or Condition of Target Co. or the Shares.  None of Target Co.,
or any Subsidiary has any reasonable basis to anticipate that any presently
existing circumstances are likely to result in violations of any such Laws or
Orders which would, individually or in the aggregate, have a material adverse
effect on the Business or Condition of Target Co.

                                       11

<PAGE>


3.14   Permits.

(a)    Target Co. and each Subsidiary own or validly hold all Permits that are
       material to the Business; and

(b)    neither Target Co. nor any Subsidiary is, or has receive any notice that
       it is, in default (or with the giving of notice or lapse of time or both,
       would be in default) under any such Permit.

3.15   Affiliate Transactions.

(a)    there are no Liabilities owed to Target Co. or any Subsidiary, on the one
       hand, by any current or former equity holder or Affiliate of Target Co.,
       on the other hand,

(b)    there are no liabilities owed by Target Co. or any Subsidiary on the one
       hand, to any such current or former stockholder or Affiliate of Target
       Co. or any Affiliate of any such stockholder or Affiliate, on the other
       hand,

(c)    neither Target Co., nor any such current or former stockholder or
       Affiliate provides or causes to be provided any Assets and Properties,
       services or facilities to Target Co. or any Subsidiary, and

(d)    neither Target Co. nor any Subsidiary provides or causes to be provided
       any assets, services or facilities to any such current or former
       stockholder or Affiliate.

3.16   Business Relationships. Since the date of its incorporation, no business
relationship of Target Co. or any Subsidiary with any customer, supplier or any
group of customers or suppliers whose purchases or sales, as the case may be,
are individually or in the aggregate material to the Business or Condition of
Target Co. has been, or to the knowledge of Target Co., or any Subsidiary, has
been threatened to be, terminated, canceled, limited or changed or modified
adversely, and, to the knowledge of Target Co., or any Subsidiary, there exists
no present condition or state of facts or circumstances with respect to such
business relationship that would materially adversely affect the Business or
Condition of Target Co., or prevent Target Co. from conducting the Business
after the consummation of the transactions contemplated by this Agreement, in
substantially the same manner in which it has heretofore been conducted.

3.17   Other Negotiations; Brokers. Neither Target Co., nor any of their
respective Affiliates (nor any investment banker, financial advisor, attorney,
accountant or other Person retained by or acting for or on behalf of Target Co.,
any Subsidiary, or any such Affiliate) (i) has entered into any agreement that
conflicts with any of the transactions contemplated by this Agreement or (ii)
has entered into any agreement or had any discussions with any third party
regarding any transaction involving the Company or any Subsidiary which could
result in Purchaser or its members, officers, director, employee, agent or
Affiliate of any of them being subject to any claim for liability to said third
party as a result of entering into this Agreement or consummating the
transactions contemplated hereby or thereby.

3.18   Disclosure. This Agreement does not, and the documents and certificates
executed by Target Co. or otherwise furnished by Target Co. to Purchaser do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.



                                       12

<PAGE>


ARTICLE IX

Representations and Warranties of Purchaser

Purchaser represents and warrants to Shareholders that:

4.1    Organization and Authority. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of its state of
incorporation , with the corporate power and authority to carry on its business
as now being conducted. The execution and delivery of this Agreement and the
consummation of the transactions contemplated in this Agreement have been, or
will be prior to closing, duly authorized by all requisite corporate actions on
the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser and constitutes the valid, binding, and enforceable obligation of
Purchaser.

4.2    Ability to Carry Out Agreement. To the best of Purchaser's knowledge and
belief, the execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in, any provisions of applicable
law, any agreement, instrument, judgment, order or decree to which Purchaser is
a party or to which Purchaser is subject. No consents of any persons under any
contract or agreement required to be disclosed pursuant to this Agreement are
required for the execution, delivery, and performance by Purchaser of this
Agreement.

4.3    The Consideration Shares. The Consideration Shares to be issued pursuant
to this Agreement will be issued at Closing, free and clear of liens, claims,
and encumbrances, and Purchaser has all necessary right and power to issue the
consideration Shares to the Shareholders as provided in this Agreement without
the consent or approval of any person, firm, corporation, or governmental
authority.

4.4    Capitalization of Purchaser. The capitalization of Purchaser is, as of
the Closing Date, comprises of one hundred million (100,000,000) shares of
US$0.001 par value common stock of which, as of the Closing Date, not more than
Six Million (6,000,000) shares will be issued and outstanding. All issued and
outstanding shares are legally issued, fully paid, and non-assessable, and are
not issued in violation of the preemptive or other right of any person. In
addition to the shares outstanding, there will be, if mutually agreeable between
the Purchaser and the Shareholders as of the Closing Date, certain outstanding
shares, warrants and/or option to raise financing for such purpose mutually
agreeable between the Purchaser and the Shareholders.

4.5    Financial Information. Purchaser has provided to the Shareholders, or
will provide prior to Closing, the Information and Disclosure Statement filed
with NASD on or about March 28, 1998 which with all other information included
in such statement, shall be referred to as the "Purchaser Financials." Purchaser
has no obligations or liabilities (whether accrued, absolute, contingent,
liquidated or otherwise, including without limitation any tax liabilities due or
to become due) which are not fully disclosed and adequately provided for in
Purchaser Financials, excepting current liabilities incurred and obligations
under agreements entered into in the usual and ordinary course of business since
the date of Purchaser Financials, none of which (individually or in the
aggregate) are material except as expressly indicated in Purchaser Financials.
Purchaser is not a guarantor or otherwise contingently liable for any material
amount of such indebtedness. Except as indicated in Purchaser Financials or
Purchaser Disclosure Documents, there exists no default under the provisions of
any instrument evidencing such indebtedness or of any agreement relating thereto
in excess of an aggregate of US$1,000.



                                       13

<PAGE>



4.6    Litigation. To the best knowledge and belief of Purchaser, except as
disclosed pursuant to this Agreement, there is neither pending nor threatened,
any action, suit or arbitration to which its property, assets or business is or
is likely to be subject and in which an unfavorable outcome, ruling or finding
will or is likely to have a material adverse effect on the condition, financial
or otherwise, or properties, assets, business or operations, which would create
a material liability on the part of Purchaser, or which would conflict with this
Agreement or any action taken or to be taken in connection with it.

4.7    Tax Matters. Purchaser has filed or will file all federal, state, and
local income, excise, property, and other tax returns, forms, or reports, which
are due or required to be filed by it and has paid, or made adequate provision
for payment of all taxes, interest, penalty fees, assessments, or deficiencies
shown to be due or claimed to be due or which have or may become due on or in
respect to such returns or reports.

4.8    Contracts. Except as disclosed pursuant to this Agreement, there are no
contracts, actual or contingent obligations, agreements, franchises, license
agreements, or other commitments between Purchaser and other third parties which
are material to the business, financial condition, or results of operation of
Purchaser, taken as a whole. For purposes of the preceding sentence, the term
"material" refers to any obligation or liability which by its terms calls for
aggregate payments of more than US$1,000.

4.9    Material Contract Breaches; Defaults. To the best of Purchaser's
knowledge and belief, except as disclosed in Purchaser Financials, it has not
materially breached, nor has it any knowledge of any pending or threatened
claims or any legal basis for a claim that it has materially breached, any of
the terms or conditions of any agreements, contracts, or commitments to which it
is a party or is bound and which might give rise to a claim by anyone against
Purchaser. To the best of its knowledge and belief, Purchaser is not in default
in any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which might give rise to a claim against Purchaser,
and there is no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect under any such
contract, agreement, lease, or other commitment which might give rise to a claim
against Purchaser in respect of which Purchaser has not taken adequate steps to
prevent such a default from occurring.

4.10   Securities Laws. Purchaser is a public company and represents that,
except as disclosed in Purchaser Disclosure Documents and in Purchaser
Financials, it has no existing or threatened liabilities, claims, lawsuits, or
basis for the same with respect to its original stock issuance to its founders,
its initial public offering, any other issuance of stock, or any dealings with
its stockholders, the public, the brokerage community, the SEC, any state
regulatory agencies, or other persons.

4.11   Brokers. Purchaser has not agreed to pay any brokerage fees, finder's
fees, or other fees or commissions with respect to the transactions contemplated
in this Agreement which could give rise to a claim against the Shares except as
set out in section 2.1(d). To the best of Purchaser's knowledge, no person or
entity, is entitled, or intends to claim that it is entitled, to receive any
such fees or commissions in connection with such transactions. Purchaser further
agrees to indemnify and hold harmless the other parties to this Agreement
against liability to any other broker claiming to act on behalf of Purchaser.

4.12  Corporate Records. Copies of all corporate books and records, including,
but not limited to, any other documents and records of Purchaser relating to the
proceeding of its shareholders and directors will be provided to the
Shareholders prior to Closing at the request of the Shareholders. All such
records and documents are and will be complete, true, and correct.



                                       14

<PAGE>



4.13 _____ Approvals. Except as otherwise provided in this Agreement, no
authorization, consent, or approval of, or registration or filing with, any
governmental authority or any other person is required to be obtained or made by
Purchaser in connection with the execution, delivery, or performance of this
Agreement.

4.14 _____ Full Disclosure. The information concerning Purchaser, set forth in
this Agreement, and in Purchaser Disclosure Documents, is, to the best of
Purchaser's knowledge and belief, complete and accurate in all material respects
and does not contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.

4.15 _____ Date of Representations and Warranties. Each of the representations
and warranties of Purchaser set forth in this Agreement is true and correct at
and as of the Closing Date, with the same force and effect as though made at and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement. Without limiting the generality of the foregoing, Company represents
and warrants that as of the Closing Date, its payables will be US$1,000 or less.

ARTICLE V

Conditions Precedent to Obligations of the Shareholders

All obligations of the Shareholders under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the following
conditions:

5.1 ______ Representations and Warranties. The representations and warranties by
Purchaser set forth in this Agreement shall be true and correct at and as of the
Closing Date, with the same force and effect as though made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
Purchaser shall deliver on the Closing Date a certificate to this effect,
referred to as Purchaser Certificate of Representations and Warranties.

5.2    No Breach or Default. Purchaser shall have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.

5.3    Action to Pay Purchase Price. Purchaser shall have taken all corporate
and other action necessary to issue and deliver the Consideration Shares
representing the Purchase Price to the Shareholders pursuant to this Agreement
at Closing.

5.4    Company Disclosure Documents. Before Closing, Purchaser will have
delivered to the Shareholders, or caused the delivery of, Purchaser Disclosure
Documents.

5.5    Approval of Other Instruments and Documents by the Shareholders. All
instruments and documents delivered to the Shareholders pursuant to the
provisions of this Agreement shall be reasonably satisfactory to their legal
counsel.

5.6    Opinion of Counsel. Purchaser shall have delivered to the Shareholders an
opinion of counsel dated the Closing Date or thereabouts to the effect that:



                                       15

<PAGE>


(a)    Purchaser is duly organized, validly existing, and in good standing under
       the laws of the United States and its state of incorporation.

(b)    Purchaser has the corporate power to conduct business and, specifically,
       to carry on its business as now being conducted and is duly qualified to
       do business in the United States and its state of incorporation.

(c)    All corporate actions and director approvals have been properly obtained
       and completed by Purchaser, to the extent, if any, that they are
       necessary, for all actions required under this Agreement prior to
       Closing.

(d)    This Agreement has been duly authorized, executed, and delivered by
       Purchaser and is a valid and binding obligation of Purchaser and, in this
       regard, Purchaser shall provide the Shareholders at Closing with a
       certified copy of the resolution or resolutions of the Board of Directors
       of Purchaser, approving and authorizing the issuance by Purchaser of the
       Shares upon the terms and conditions herein set forth.

ARTICLE VI

Conditions Precedent to Obligations of Purchaser

All obligations of Purchaser under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the following
conditions:

6.1    Representations and Warranties. The representations and warranties
executed by and on behalf the Shareholders set forth in this Agreement shall be
true and correct at and as of the Closing Date, with the same force and effect
as though made at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement. The Shareholders shall cause to be delivered on
the Closing Date the certificate to this effect, referred to in this Agreement
as the Certificate of Representations and Warranties executed by the Director of
the Shareholders.

6.2    No Breach or Default. The Shareholders shall have performed and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.

6.3    Action to Transfer the Shares. The Shareholders shall have taken all
action necessary to transfer the Shares to Purchaser pursuant to this Agreement.
In this regard, the conveyance(s) of the Shares shall contain such good and
sufficient instruments of transfer and bought and sold notes in form and
substance reasonably satisfactory to Purchaser's counsel and with all requisite
documentary stamps, if any, affixed, as shall be required or as may be
appropriate in order effectively to vest in Purchaser's good, indefeasible, and
marketable title to the Shares free and clear of all liens, mortgages,
conditional sales, and other title retention agreements, pledges, assessments,
covenants, restrictions, reservations, easements, and all other encumbrances of
every nature.

In addition to the conveyance and delivery of the Shares , the Shareholders
shall have taken all action necessary to deliver all of Target Co.'s corporate
books and records, including but not limited to its files, documents, papers,
agreements, formulas, books of account, and records pertaining to its business,
and evidence of compliance with applicable securities laws, if required and
requested by Purchaser's counsel.

                                       16

<PAGE>


6.4    Approval of Other Instruments and Documents by Purchaser. All instruments
and documents delivered to Purchaser pursuant to the provisions of this
Agreement shall be reasonably satisfactory to Purchaser and its legal counsel.

6.5    Opinions, Affidavits and Declarations of the Shareholders. The
Shareholders shall have delivered to Purchaser an opinion :-

(a)    of qualified legal counsel reasonably satisfactory to Purchaser dated as
       at the Closing Date or thereabouts, that:

       (i)  each Shareholder and Target Co. is duly organized, validly existing,
            and in good standing under the laws of British Virgin Islands and
            that the Shares are based on the information provided from the
            Shareholders free from encumbrances except as disclosed pursuant to
            this Agreement.

       (ii) each Shareholder and Target Co. has the corporate power to carry on
            its business as now being conducted and is duly qualified to do
            business.

       (iii)All action and approvals required in connection to the transfer of
            the Shares to Purchaser have been properly taken, completed or
            obtained by the Shareholders and the Target Co. respectively, to the
            extent, if any, that they are necessary.

       (iv) This Agreement has been duly authorized, executed, and delivered by
            the Shareholders and is a valid and binding obligation of the
            Shareholders.

(b)    of qualified legal counsel reasonably satisfactory to Purchaser, dated as
       at the Closing Date or thereabouts, that:

       (i)  the Chinese Joint Venture is duly organized, validly existing, in
            China.

       (ii) the Chinese Joint Venture has the corporate power to carry on its
            business as now being conducted and is duly qualified to do
            business.

       (iii)All action and approvals required in connection to the establishment
            of the Joint Venture Company and entry into the Project have been
            properly taken, completed or obtained by the Chinese Joint Venture,
            to the extent, if any, that they are necessary.

ARTICLE VII

Covenants and Agreements of the Shareholders

Up to and including the Closing Date, the Shareholders covenant that:

7.1 ______ Access and Information. After the execution of this Agreement, the
Shareholders will permit Purchaser to have reasonable access to all information
necessary to verify the representations and warranties made herein. After the
Closing, the Shareholders will continue to permit Purchaser access to such
additional documentation and information as is reasonably necessary to
completion of the transactions contemplated under this Agreement.

                                       17

<PAGE>


7.2    Conduct of Business as Usual. Up until the Closing Date, the Shareholders
shall insure that the Shareholder's operations shall be conducted only in the
usual and ordinary course, and that no change will be made to such operations
which might adversely affect the value of the Shares to be transferred to
Purchaser.

7.3    Best Efforts. The Shareholders shall use its best efforts to fulfill all
conditions of the Closing including the timely solicitation of affirmative
consent of all third parties necessary to effect a Closing under this Agreement.

7.4    Assent to Sale of Shares. In the event the sale of the Shares is
consummated, then the shareholders of the Shareholders agree to such sale and
waive, surrender, and agree not to exercise any rights which such shareholders
might have concerning the sale of the Shares.

ARTICLE VIII

Covenants and Agreements of Purchaser

Up to and including the Closing Date, Purchaser covenants that:

8.1    Change in Purchaser Directors. Purchaser's Board of Directors shall
immediately subsequent to Closing comprise a new board with five (5) seats and
the Purchaser shall render all assistance for appointment of the new board
required by the Shareholders including resignation of all existing directors
with confirmation by such resigning directors of no claims against the
Purchaser.

8.2    Maintenance of Capital Structure. Up until the Closing Date, or
termination hereof, whichever is the earlier, except as disclosed herein or
required under the terms of this Agreement, no change shall be made in the
Articles of Incorporation or By laws of Purchaser, or the authorized capital
stock of Purchaser.

8.3    Avoidance of Distributions. Up until the Closing Date, Purchaser shall
not declare any dividends, make any payments or distributions to its
stockholders or purchase for cash or redeem any of its shares of capital stock.

8.4    Conduct of Business as Usual. Up until the Closing Date, Purchaser shall
conduct its operations only in the usual and ordinary course, and that no change
will be made to such operations which might adversely affect the value of
Purchaser.

8.5    Access and Information. After the execution of this Agreement, Purchaser
will permit the Shareholders to have reasonable access to all information
necessary to verify the representations and warranties of Purchaser. After the
Closing, Purchaser will continue to permit the Shareholders access to such
additional documentation and information regarding Purchaser as is reasonably
necessary to completion of the transactions contemplated under this Agreement.

8.6    Best Efforts. Purchaser shall use its best efforts to fulfill or obtain
the fulfillment of all conditions of the Closing, including the timely
solicitation of affirmative consent of all third parties necessary to effect a
Closing under this Agreement.



                                       18

<PAGE>


ARTICLE IX

Termination

9.1    Termination Without Cause. This Agreement may be terminated at any time
prior to the Closing Date without cost or penalty to either party:

(a)    Mutual Consent. By mutual consent of the Shareholders and Purchaser.

(b)    Actions or Proceedings. By the Shareholders or Purchaser (unless the
       action or proceeding referred to is caused by a breach or default on the
       part of the Shareholders or Purchaser of any of their representations,
       warranties, or obligations under this Agreement), if there shall be any
       actual or threatened action or proceeding by or before any court or any
       other governmental body which shall seek to restrain, prohibit, or
       invalidate the transactions contemplated by this Agreement and which, in
       the judgment of the Shareholders or Purchaser, made in good faith and
       based upon the advice of legal counsel, makes it inadvisable to proceed
       with the transactions contemplated by this Agreement.

9.2    Termination with Cause. This Agreement may be terminated, with the
terminating party to be reimbursed by the other party of all expenses and costs
related to this Agreement, if:

(a)    Breach or Noncompliance by Shareholders. The Shareholders shall fail to
       comply in any material aspect with any of their representations,
       warranties, or obligations under this Agreement, or if any of the
       representations or warranties made by the Shareholders under this
       Agreement shall be inaccurate in any material respect and is not cured
       within ten (10) business days of notice of such breach.

(b)    Breach or Noncompliance by Purchaser. Purchaser shall fail to comply in
       any material aspect with any of its representations, warranties, or
       obligations under this Agreement, or if any of the representations or
       warranties made by Purchaser under this Agreement shall be inaccurate in
       any material respect and is not cured within ten (10) business days of
       notice of such breach.

ARTICLE X

Securities

10.1   Private Transaction. The Shareholders understand that the Shares issued
pursuant to this Agreement, have not been nor will they be registered under the
Securities Act of 1933 as amended ("'33 Act"), but are issued pursuant to
exemptions from registration of the '33 Act, and Purchaser's reliance on such
exemptions in issuing the Shares is predicated in part on the representations of
the Shareholders, to be executed by the Shareholders and delivered to Purchaser
at Closing.

10.2   Shareholders Restrictions. The Shareholders acknowledge and agree that
there may be certain restrictions under applicable legislation restricting sale
and/or disposal of the Consideration Shares under applicable state or federal
laws or other applicable directives.



                                       19

<PAGE>



ARTICLE XI

Indemnification

11.1   Indemnification. As provided herein, the Shareholders and Purchaser shall
each indemnify and hold harmless the other for one (1) year following the date
of Closing under this Agreement against and in respect of any liability, damage,
or deficiency, all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses resulting from any misrepresentations, breach of covenant or
warranty, or from any misrepresentation contained in any certificate furnished
hereunder. In this regard, the Shareholders agree that Purchaser is held
harmless from and indemnified against any loss, damage, or expense resulting
from the falsity or breach of any of the representations, warranties, or
agreements of the Shareholders contained herein under which the Shares hereunder
are transferred to the Shareholders.

ARTICLE XII

Confidential Information

12.1   Confidential Information. Notwithstanding any termination of this
Agreement, Purchaser, the Shareholders and their representatives, agree to hold
in confidence any information not generally available to the public received by
them from the other party pursuant to the terms of this Agreement. If this
Agreement is terminated for any reason, Purchaser, the Shareholders. and their
representatives will continue to hold such information in confidence and will,
to the extent requested by any party, promptly return to the requesting party
all written material and all copies or abstracts thereof previously furnished.

ARTICLE XIII

Miscellaneous Provisions

13.1   Survival of Representations and Warranties. All representations,
warranties, and covenants made by any party in this Agreement shall survive the
Closing hereunder and the consummation of the transactions contemplated hereby
for three (3) years from the Closing Date. The Shareholders and Purchaser are
executing and carrying out the provisions of this Agreement in reliance on the
representations, warranties, and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for including
any investigation upon which they might have made or any representations,
warranty, agreement, promise, or information, written or oral, made by the other
party or any other person other than as specifically set forth herein.

13.2   Costs and Expenses. Subject to paragraph 9 herein, all costs and expenses
in the proposed sale and transfer described in this Agreement shall be borne by
the Shareholders and Purchaser in the following manner:

(a)    Attorneys Fees and Costs. Each party has been represente by its own
       attorney(s) in this transaction, shall pay the fees of its own
       attorney(s), except as may be expressly set forth herein to the contrary.

(b)    Costs of Closing. Each party shall bear its reasonable share of all other
       Closing costs and expenses arising from this Agreement.

                                       20

<PAGE>


13.3   Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.

13.4   Waiver. Any failure of any party to this Agreement to comply with any of
its obligations, agreements, or conditions hereunder may be waived in writing by
the party to whom such compliance is owed. The failure of any party to this
Agreement to enforce at any time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every such provision. No
waiver of any breach of or non-compliance with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.

13.5   Notices. All notices and other communications hereunder shall either be
in writing and shall be deemed to have been given if delivered in person, sent
by overnight delivery service or sent by facsimile transmission, to the parties
hereto, or their designees, as follows: To Shareholders:

c/o Mr. Lawrence Lok
Room 1501, Central Tower
28 Queen  Road Central
Hong Kong

Telephone  (852) 2525 6088
Facsimile  (852) 2525 6168

To Purchaser:

c/o  Carmine J.  Bua,  III, Esq
Suite 333, 3838 Camino Del Rio North
San Diego, California 92108-1789
United States of America

Telephone  (619) 280 8000
Facsimile  (619) 280 8001

13.6   Headings. The paragraph and subparagraph headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

13.7   Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

13.8   Governing Law. This Agreement shall be governed by the laws of the United
States, State of Nevada.

13.9   Binding Effect. This Agreement shall be binding upon the parties hereto
and inure to the benefit of the parties, their respective heirs, administrators,
executors, successors, and assigns.


                                       21

<PAGE>



13.10  Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and supersedes any and all prior agreements, arrangements, or
understandings between the parties relating to the subject matter of this
Agreement. No oral understandings, statements, promises, or inducements contrary
to the terms of this Agreement exist. No representations, warranties, covenants,
or conditions, express or implied, other than as set forth herein, have been
made by any party.

13.11  Severability. If any part of this Agreement is deemed to be unenforceable
the balance of the Agreement shall remain in full force and effect.

13.12  Amendment. This Agreement may be amended only by a written instrument
executed by the parties or their respective successors or assigns.

13.13  Facsimile Counterparts. A facsimile, telecopy or other reproduction of
this Agreement may be executed by one or more parties hereto and such executed
copy may be delivered by facsimile of similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.

13.14  Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.




                                       22

<PAGE>





SCHEDULE

Shareholders                  Shares in Target Co.  Consideration Shares

Common Stock
---------------

CSI Telecoms Limited               60 (NewCom)      19,500,000 (common stock)
                                    5 (Magnum)

Actionville Assets Limited         10 (NewCom)       3,000,000 (common stock)

Goldwell Agents Limited            10 (Magnum)       3,000,000 (common stock)

Golden Joy Agents Limited          10 (Magnum)       3,000,000 (common stock)

Dragon Winner Limited              10 (Magnum)       3,000,000 (common stock)

Healthy Choice Assets Limited       9 (Magnum)       2,700,000 (common stock)

Bell Star Developments Limited      9 (Magnum)       2,700,000 (common stock)

Mak Wai Keung, Shawn                9 (Magnum)       2,700,000 (common stock)

Cheryl Chan                         8 (Magnum)       2,400,000 (common stock)


Preferred Stock

Good Wisdom Industries Limited     15 (NewCom)       4,500,000 (preferred stock)

Kind Planet Assets Limited         15 (NewCom)       4,500,000 (preferred stock)

Busywell Trading Limited           11 (Magnum)       3,300,000 (preferred stock)

Gold Accessories Limited           11 (Magnum)       3,300,000 (preferred stock)

Prosperous Choice Limited           8 (Magnum)       2,400,000 (preferred stock)







                                       23

<PAGE>



                         Purchaser

                         Phileo Management Company Inc.




                         By:   /s/ George Delmas
                               -----------------------------
                         Name:     George Delmas
                         Title:    President

                         Shareholders


                         CSI  Telecoms Limited



                         By:   /s/ Han Xu
                               -----------------------------
                         Name:     Han Xu
                         Title:    Director


                         Actionville Assets Limited


                         By:   /s/ Fung Pliney
                               -----------------------------
                         Name:     Fung Pliney
                         Title:    Director


                         Bell Star Developments Limited


                         By:   /s/ Chang Lee
                               -----------------------------
                         Name:     Chang Lee
                         Title:    Director



                         Busywell Trading Limited



                         By:   /s/ East Asia Corporate Services (Nominees) Ltd.
                               ----------------------------------------------
                         Name:     East Asia Corporate Services (Nominees) Ltd.
                         Title:    Director

                                       24

<PAGE>



                         Dragon Winner Limited



                         By:   /s/ Holistic Secretaries Limited
                               ---------------------------------
                         Name:     Holistic Secretaries Limited
                         Title:    Director

                         Gold Accessories Limited


                         By:   /s/ Lok Wien Ming Lawrence
                               -----------------------------
                         Name:     Lok Wien Ming Lawrence
                         Title:    Director



                         Golden Joy Agents Limited


                         By:   /s/ Lie San Wai Cecilia
                               -----------------------------
                         Name:     Lie San Wai Cecilia
                         Title:    Director


                         Goldwell Agents Limited


                         By:   /s/ Wong Wing Koseng
                               -----------------------------
                         Name:     Wong Wing Koseng
                         Title:    Director



                         Good Wisdom Industries Limited


                         By:   /s/ Kiau Walter
                               -----------------------------
                         Name:     Kiau Walter
                         Title:    Director





                                       25

<PAGE>


                         Healthy Choice Assets Limited


                         By:   /s/ Chan Cheuk Liau
                               -----------------------------
                         Name:     Chan Cheuk Liau
                         Title:    Director


                         Kind Planet Assets Limited


                         By:   /s/ Wong Cheuk Ling
                               -----------------------------
                         Name:     Wong Cheuk Ling
                         Title:    Director


                         Prosperous Choice Limited


                         By:   /s/ Chen Wai Lai
                               -----------------------------
                         Name:     Chen Wai Lai
                         Title:    Director


                         Cheryl Chan

                               /s/  Cheryl Chan
                               -----------------------------


                         Mak Wai Keung, Shawn

                              /s/ Mak Wai Keung, Shawn
                               -----------------------------




                                       26