SOUTHWEST INDUSTRIAL PRODUCTS INC, DEFS14A, 1998-07-06

SOUTHWEST INDUSTRIAL PRODUCTS INC
DEFS14A, 1998-07-06
PLASTICS, FOIL & COATED PAPER BAGS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to
Section 14A of the Securities Exchange Act of 1934

Southwest Industrial Products Inc.
(Exact name of registrant as specified in its Charter)

Common Stock no par value
(Title of Class
of Securities)

845047 10 9
(CUSIP Number of Class of Securities)

Minnesota 0-23691 41-1853992
(State of (Commission file (IRS Employer Identification
Incorporation) number) Number)

Charles Clayton
527 Marquette, Suite 1800,
Minneapolis, Minnesota 55402
(612) 338-3738
(Name, address and telephone number of person authorized
to receive notice and communications of behalf of person filing statement)

<PAGE>

ITEM 1. DATE, TIME AND PLACE INFORMATION

The special meeting of shareholders of Southwest Industrial Products,
Inc., will be held at 2710 Stemmons Freeway, Dallas, Texas, on the 29th day of
July, 1998, at 9:00 a.m.

This Proxy Statement and form of proxy are being mailed to the
shareholders of Southwest Industrial Products, Inc. on or about July 8, 1998.

ITEM 2. REVOCABILITY OF PROXY

The proxy is not revokable.

ITEM 3. DISSENTER'S RIGHT OF APPRAISAL

All holders of outstanding shares of common stock of the company have
the right under Section 302A.471 of the Minnesota Statutes to dissent from the
Exchange and to obtain the fair value of their shares. Any shareholder seeking
to exercise his rights must follow the procedure specified in Section 302A.473
of the Minnesota Statutes. Copies of Minnesota Statutes, Section 302A.471
(Rights of dissenting shareholders) and 302A.473 (procedures for asserting
dissenters' rights) are attached to this Proxy Statement.

A shareholder may assert dissenters' rights only as to all of the
shares registered in his or her name unless the shareholder dissents with
respect to all of the shares which are beneficially owned by another person but
registered in the name of the shareholder and discloses the name and address of
each beneficial owner on whose behalf the shareholder dissents. In that event,
the rights of the dissenter shall be determined as if the shares as to which the
shareholder has dissented and the other shares were registered in the names of
different shareholders. Shareholders who have the right to exercise dissenters'
rights and obtain payment for their shares do not have a right at law or in
equity to have the proposed action at the special meeting set aside or
rescinded, except when the action is fraudulent with regard to the shareholder
or the corporation.

A shareholder that desires to dissent must give written notice to
Southwest Industrial Products, Inc., 580 Decker, Irving, Texas 75062.

ITEM 4. PERSONS MAKING THE SOLICITATION

The solicitation is made by the registrant. There is no director that
intends to oppose any action.

<PAGE>

ITEM 5. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Not Applicable

ITEM 6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The company knows of no person who is the beneficial owner of more than
5% of the company's voting securities except as follows:

Name of Beneficial Owner Number of Shares % of Ownership
- ----------------------------------------------------------------------------

Comercializadora Sagitario 3,002,319 11%

Romeo Mattuca 3,263,400 12%

Nunthorpe Services Limited 3,390,000 12%

Outclass Investments 3,210,000 12%

Platinum Fund Limited 3,150,000 11%

Ratouche Investments Limited 3,036,000 11%

Rockswain Overseas Trading, Ltd. 3,198,600 12%

Torres Holding & Trading Co. S.A. 3,432,000 12%

All officers and
Directors as a group -- 0%

The above shareholders all hold the shares in their names, however all
hold some shares as nominees: Comercializadore Sagitario holds 775,019 of its
shares as nominee, Romeo Mattuca holds 837,400 shares as nominee, Nunthorpe
Services Limited holds 1,010,000 as nominee, Outclass Investments holds 678,000
shares as nominee, Platinum Funds Limited holds 538,000 shares as nominee,
Ratouche Investments Limited holds 746,000 shares as nominee, Rockswain Overseas
Trading, Ltd. holds 1.064,600 shares as nominee, and Torres Holding & Trading
Co. S.A. holds 844,000 shares as nominee.

ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS

Name Age Position
- ---- --- --------

<PAGE>

Lindsey Vinson 40 President and Director

David Hayslip 47 Director

Clyde Parks 50 Director

R. Bruce Harris 47 Director

David L. Shade 52 Director

Deng Shan 47 Director

Aubrye A. Harris 24 Director

LINDSEY VINSON, President, and a Director. Mr. Vinson has a degree from
Drake University in Business Administration and a J.D. degree from Ohio State
University. He has practised law in his own firm in Dallas, Texas since 1983.

DAVID HAYSLIP, Director. Mr. Hayslip is a broker, he worked for
Laidlaw, Adams & Peck, Inc., and since 1994 has been the director of research
for Sunpoint Securities, Inc., a broker dealer based in Longview, Texas.

CLYDE PARKS, Director. Mr. Parks has an undergraduate degree from Texas
Tech University and a law degree from St. Mary's University. He has practised
law in Dallas, Texas since 1973.

R. BRUCE HARRIS, Director. Mr. Harris has a BS degree from Cal Poly
Pomona. He was the founder of Aubryn International, Ltd. in 1993.

DAVID L. SHADE, Director. Mr. Shade is an attorney.

DENG SHAN, Director. Mr. Shan was the Director of the Nanshan
Government Department of Science & Technology for five year. Currently he is the
Director of the Chinese Government's Representative Office in European Countries
& other foreign ventures. He is also Chairman of Kunming Xinmao Petrochemical
Industrial Co., Everlasting Group Co., Ltd., Shenzhen Shekou Hitech
Petrochemical Co., and Shenzhen Sparkle Science and Technology Co.

AUBRYE A. HARRIS, Director. Ms. Harris has a BS degree in International
Management from the University of La Verne.

ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

There are no officers or directors that received compensation in excess
of $60,000 or more during the last year.

<PAGE>

ITEM 9. INDEPENDENT PUBLIC ACCOUNTANTS

The accountant for the company is Gary A. LaPalme, CPA.

The principal accountant for the current year is not expected to be
present at the special meeting of shareholders, they are not expected to make a
statement and are not expected to be available to answer appropriate questions.

ITEM 10. COMPENSATION PLANS

The registrant has no compensation plans, and no action with respect to
any such plan will be taken at the special shareholders meeting.

ITEM 11. AUTHORIZATION OR ISSUANCE OF SECURITIES OTHERWISE THAN FOR EXCHANGE

The Board of Directors has entered into an agreement with Aubryn
International, Ltd. a Nevada Corporation for a merger. A copy of the agreement
is attached to this Proxy Statement as Appendix A. Under the terms of the
agreement Aubryn International, Ltd. transferred all of the issued and
outstanding shares of Aubryn International, Ltd. to the Company in exchange for
7,783,304 common shares, 500,000 shares of Class C preferred stock and 300,000
shares of Class D preferred stock.

ITEM 12. MODIFICATION OR EXCHANGE OF SECURITIES

There will be no modification of any class of securities of the
registrant except for the reverse stock split.

ITEM 13. FINANCIAL AND OTHER INFORMATION

The following is the unaudited pro forma condensed balance sheet, as of
March 31, 1998 for both Southwest Industrial Products, Inc. and Aubryn
International, Ltd., showing the condensed balance sheet items, and the total
for both combined, under generally accepted accounting principles.

Historical Pro forma
---------- ---------
Southwest Aubryn
--------- ------

Assets
Current assets $ 716,963 $ 783,222 $ 1,500,185
Fixed assets $2,837,500 $1,805,217 $ 4,642,717

<PAGE>

Other Assets $ -- $4,560,534 $ 4,560,534
---------- -----------

$3,554,463 $7,148,973 $10,703,436
---------- -----------

Liabilities and Stockholders Equity
Liabilities $2,572,229 $ 905,491 $ 3,477,720
Stockholders Equity $ 982,234 $6,243,482 $ 7,225,716
---------- ---------- -----------
Book Value per Share $ .03 $ 1.16 $ 1.19
$3,554,463 $7,148,973 $10,703,436
---------- ---------- -----------

The following is the unaudited pro forma condensed income statement, as
of March 31, 1998 for both Southwest Industrial Products, Inc. and Aubryn
International, Ltd., showing the condensed income statement items, and the total
for both combined, under generally accepted accounting principles.

Historical Pro forma
---------- ---------
Southwest Aubryn
--------- ------

Total Revenues $2,421,137 $ -- $ 2,421,137
Expenses $2,409,031 $ 1,343,218 $ 3,752,249
---------- ----------- ----------

Income (Loss) $ 12,106 $(1,343,218) $ 1,209,204
Per Share $ .0004 $ (.25) $

ITEM 14. MERGERS, CONSOLIDATIONS, ACQUISITIONS, ACQUISITIONS AND SIMILAR MATTERS

Southwest Industrial Products, Inc., 580 Decker, Irving, Texas 75062,
(972) 870-9591.

Aubryn International, Ltd. is a Nevada corporation, incorporated on
April 19, 1993. It has its main office at 1152 North Mountain Avenue, Upland,
California. It has three divisions.

Automotive

The Company announced its intent in July, 1993 to establish a
Sino-American joint venture, primarily to offer warranties for new automobiles
sold in China. The Company has an 80% interest in the joint venture. Almost all
new automobiles carry a manufacturer's warranty, yet the same new vehicle in
China has no warranty. The Company has agreements with manufacturers to issue,
upon inspection, a one year, 12,000 kilometer warranty. The Company sells
extended vehicle warranties for both new and used vehicles.

The Company signed three joint venture agreements in June, 1994 to
operate

<PAGE>

in the People's Republic of China. Short term licensing was finalized in July of
1995 and a permanent license was signed in March of 1996. The Company shipped
approximately $500,000 worth of diagnostic equipment for the service center in
February of 1997. The Company then began training personnel and warranty sales
began in July of 1997, and in late 1997 sales began. The service center opened
in February, 1998, and has been operating since. There is also an inspection
center that opened in late May, 1998, both are located in Wuhan.

All money taken in from the Chinese Joint Venture must stay in China
for a period of 6 months, after which it may be moved to the United States.

Footware

The Company purchased, in April, 1998, a 95% interest in a footware
manufacturing facility in Wuhan, China from the government. The manufacturing
facility produced and sold 723,402 units in 1997. The Company intends to sell
footware to women and children in the moderate and discount segments of the
footware market.

At this time the Company is interviewing the prospective 1,200
employees for the manufacturing facility, and is doing clean up of the plant. It
is anticipated that production will begin in September, 1998.

The Company purchased the license to sell Muro shoes in the United
States and Canada in May, 1998. The Muro line of shoes is manufactured in
Mexico, and, along with the license to sell the shoes the Company acquired a
sales force to sell them. It is anticipated that the Wuhan facility will also
manufacture Muro shoes, beginning with the spring line of shoes in 1999.

Real Estate

The Company entered into an agreement to purchase 50% of the equity
rights to the Costa Bella Club, La Jolla Cove and Todos Santos, all located in
Rosarito, Baja California, Mexico, in September, 1997.

The Costa Bella Club is a condominium development. The plan is to have
three phases of the development, Towers A, B and C. At this time Tower A is
completed and Tower B is approximately half way built. Tower B contains 29 units
with living space of approximately 48,760 square feet. There are five models
that range in size from 936 to 2,809 square feet. All have ocean views. The
resort has a pool, spa and clubhouse.

Rosarito is about 45 minutes south of San Diego, California. It is on
the beach and features golf, fishing, whale watching, hiking and horseback
riding. The town recently attracted a great deal of attention when the movie
Titanic was filmed there.

<PAGE>

The reason for engaging in the transaction is that the registrant was a
shell company in search for an operating company, and management of the
registrant felt that this was a desirable transaction.

There are no material differences in the rights of security holders of
the registrant as a result of this transaction, other than the reverse stock
split.

The accounting treatment of the transaction is as a merger, the
accounting will be done on a consolidated basis of the two corporations.

There are no federal income tax consequences of the transaction.

The securities to be issued to Aubryn International, Ltd. are common
shares of the registrant. Each share of common stock is entitled to participate
equally in dividends as and when declared by the Board of Directors of the
company out of funds legally available, and is entitled to participate equally
in the distribution of assets in the event of liquidation. All shares, when
issued and fully paid, are nonassessable and are not subject to redemption or
conversion and have no conversion rights.

No dividends have ever been declared, and therefore there are no
dividends in arrears.

ITEM 15. ACQUISITION OR DISPOSITION OF PROPERTY

Not Applicable

ITEM 16. RESTATEMENT OF ACCOUNTS

Not Applicable

ITEM 17. ACTION WITH RESPECT TO REPORTS

Not Applicable

ITEM 18. MATTERS NOT REQUIRED TO BE SUBMITTED

Not Applicable

ITEM 19. AMENDMENT OF CHARTER, BYLAWS OR OTHER DOCUMENTS

<PAGE>

After the special meeting of shareholders the registrant will file an
amendment to its Articles of Incorporation with the Secretary of State of
Minnesota to change the name to Aubryn International, Inc.

ITEM 20. OTHER PROPOSED ACTION

Not Applicable

ITEM 21. VOTING PROCEDURES

The Board of Directors has fixed the close of business on July 1, 1998
as the record date. Only holders of record of shares on the record date are
entitled to notice of and to vote at the meeting. There are 27,539,319 shares
outstanding and entitled to vote held by approximately 32 shareholders.

Each holder is entitled to cast one vote per share. The presence, in
person or by proxy of the holders of a majority of the outstanding shares is
necessary to constitute a quorum. The affirmative vote, in person or by proxy,
of the holders of a majority of the shares is required to approve the merger.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed by the President.

Southwest Industrial Products, Inc.

/S/ Lindsey Vinson

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTS, INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

July 8, 1998

Dear Fellow Shareholder:

The annual meeting of shareholders of Southwest Industrial Products,
Inc. will be held at the Company, located at 580 Decker, Irving, Texas, on the
29th day of July, 1998, at 9:00 a.m. to consider and act upon the following
matters:

A reverse stock split of 1 for 6 shares.

The merger with Aubryn International, Ltd.

Change of name to Aubryn International, Inc.

The foregoing matters are more fully described in the accompanying
proxy statement which is hereby made a part of this notice.

All shareholders of record at the close of business on July 1, 1998,
will be entitled to vote at the meeting.

BY THE BOARD OF DIRECTORS,

The execution of the enclosed proxy and its return as promptly as possible will
be greatly appreciated. A reply envelope is enclosed for your convenience.

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTS, INC.

PROXY STATEMENT

SPECIAL MEETING OF SHAREHOLDERS
July 29, 1998

PROXY SOLICITED BY THE BOARD OF DIRECTORS

This proxy statement is furnished to holders of the common stock of
Southwest Industrial Products, Inc., (the "Company") in connection with the
solicitation by the Board of Directors of proxies for use at the special meeting
of shareholders to be held on the 29th day of July, 1998, and at all
adjournments thereof, for the purpose of voting on the merger with Aubryn
International, Ltd. and the change of name to Aubryn International, Inc.

Holders of outstanding stock of record at the close of business on July
1, 1998, are entitled to vote at the meeting and to cast one vote for each share
held. The outstanding voting securities of the company, as of July 1, 1996,
consists of 27,539,319 shares.

This Proxy Statement and form of proxy are being mailed to the
shareholders of Southwest Industrial Products, Inc. on or about July 8, 1998.

PRINCIPAL SHAREHOLDERS OF SOUTHWEST INDUSTRIAL PRODUCTS, INC.

The company knows of no person who was the beneficial owner of more
than 5% of the company's voting securities, and all of these securities were
held for more than the past two years, except as follows:

Name of Beneficial Owner Number of Shares % of Ownership
- ----------------------------------------------------------------------------

Comercializadora Sagitario 3,002,319 11%

Romeo Mattuca 3,263,400 12%

Nunthorpe Services Limited 3,390,000 12%

Outclass Investments 3,210,000 12%

Platinum Fund Limited 3,150,000 11%

<PAGE>

Ratouche Investments Limited 3,036,000 11%

Rockswain Overseas Trading, Ltd. 3,198,600 12%

Torres Holding & Trading Co. S.A. 3,432,000 12%

All officers and
Directors as a group -- 0%

OFFICERS AND DIRECTORS OF SOUTHWEST INDUSTRIAL PRODUCTS, INC.

The officers and directors of Southwest Industrial Products, Inc. are
as follows. There was no audit, compensation, nominating or any other committee
of the Board of Directors.

Name Age Position
- ---- --- --------

Lindsey Vinson 40 President and Director

David Hayslip 47 Director

Clyde Parks 50 Director

R. Bruce Harris 47 Director

David L. Shade 52 Director

Deng Shan 47 Director

Aubrye A. Harris 24 Director

<PAGE>

CLYDE PARKS, Director. Mr. Parks has an undergraduate degree from Texas
Tech University and a law degree from St. Mary's University. He has practised
law in Dallas, Texas since 1973.

R. BRUCE HARRIS, Director. Mr. Harris has a BS degree from Cal Poly
Pomona. He was the founder of Aubryn International, Ltd. in 1993.

DAVID L. SHADE, Director. Mr. Shade is an attorney.

AUBRYE A. HARRIS, Director. Ms. Harris has a BS degree in International
Management from the University of La Verne.

EXECUTIVE COMPENSATION OF SOUTHWEST INDUSTRIAL PRODUCTS, INC.

There were no officers or directors that received compensation in
excess of $60,000 or more during the last year. There is no bonus, profit
sharing, pension, retirement or any other compensation plan for any officer or
director of the company.

FUTURE STOCKHOLDER PROPOSALS

The next annual meeting of the stockholders of the company is expected
to be held in April, 1999. If any stockholder intends to present a proposal at
the 1999 meeting and wishes the proposal to be included in the proxy material
the holder must submit the proposal to the company, in writing by February 15,
1999.

VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL

<PAGE>

vote held by approximately 32 shareholders.

RIGHTS OF DISSENTING SHAREHOLDERS

A shareholder may assert dissenters' rights only as to all of the
shares registered in his or her name unless the shareholder dissents with
respect to all of the shares which are beneficially owned by another person but
registered in the name of the shareholder and discloses the name and address of
each beneficial owner on whose behalf the shareholder dissents. In that event,
the rights of the dissenter shall be determined as if the shares as to which the
shareholder has dissented and the other shares were registered in the names of
different shareholders. Shareholders who have the right to exercise dissenters'
rights and obtain payment for their shares do not have a right at law or in
equity to have the proposed action at the special meting set aside or rescinded,
except when the action is fraudulent with regard to the shareholder or the
corporation.

A shareholder that desires to dissent must give written notice to
Southwest Industrial Products, Inc., 580 Decker, Irving, Texas 75062.

REVERSE STOCK SPLIT

There are now 27,539,319 shares of common stock outstanding. The Board
of Directors decided that it was in the best interests of the Company to reverse
split the shares so that there will be 1 share for each 6 shares. This means
that there will be 4,589,887 shares outstanding of Southwest Industrial
Products, Inc. after the Merger.

The preferred shares of Southwest Industrial Products, Inc. will also
be reverse split 1 for 6, in regard to conversion to common stock, all other
provisions of the preferred shares shall remain the same.

<PAGE>

MERGER WITH AUBRYN INTERNATIONAL, LTD.

The Class C preferred shares were used by Aubryn International, Ltd. in
part for the purchase of its interest in the Mexican property. The holder of the
Class C shares may convert 250,000 into common shares two years after September
28, 1997 at a price of $7.00 per shares, and the remaining 250,000 shares may be
converted four years after September 28, 1997 at a price of $7.00 per share. If
the price of the common stock is less than $7.00 at the time of conversion the
holder shall receive a number of shares to make up the difference. The Class D
preferred shares were used by Aubryn International, Ltd. in part for the
purchase of the interest in the footware manufacturing facility in China. The
holder of the Class D shares may convert 250,000 into common shares one year
after April 1, 1998 at a price of $10.00 per share, and the remaining 50,000
shares may be converted eighteen months after April 1, 1998 at a price of $15.00
per share. If the price of the common stock is less than the $10.00 or $15.00 at
the time of conversion the holder shall receive a number of shares to make up
the difference.

Southwest Industrial Products, Inc.

Southwest Industrial Products, Inc. was formed in Minnesota on June 28,
1996 as Onyx-Five, Inc. Onyx-Five, Inc. was merged with Southwest Industrial
Products, Inc. in July, 1997, and the name was changed to Southwest Industrial
Products, Inc.

The Company purchased the assets of International Golden Pacific
Plastics Manufacturing, Inc. in September, 1997 through its wholly owned
subsidiary International Container Corp. Golden Pacific Plastics was in default
of its loans, with Bay Business Credit. Golden Pacific Plastics filed a Chapter
11 bankruptcy proceeding but was unable to propose a feasible plan or
reorganization and Bay Business Credit foreclosed on all of the assets held as
collateral. The Company purchased the assets from Bay Business Credit for
$2,750,000, with a down payment of $150,000. Bay Business Credit has entered
into a financing agreement with the Company for repayment of the balance, the
loan is amortized over 10 years, with a balloon payment due at the end of 5
years. The interest rates are 10% the first year, 11% the second year, and 12%
for the remainder of the loan.

As part of the purchase agreement the Company received three year

<PAGE>

commitments to purchase merchandise from the two largest customers of Golden
Pacific Plastics, Flamingo Industries and Central Bag Corp. Each of these
companies has in the past provided at or in excess of $1,000,000 in gross sales
to Golden Pacific annually and both are expected to provide sales at or above
the same each year of the three year purchase commitment. Flamingo provides
primarily government business and is the source of the U. S. Postal Service and
U.S.D.A. work. Central Bag provides primarily commercial work. Having the two
distinct sources ordering products provides the Company with a "cushion" because
the differing sources do not seem to be affected by the same economic factors.

International Container Corp., d.b.a Golden Pacific Bag Corp. is now a
wholly owned subsidiary of the Company, located in Houston, Texas. It operates a
60,000 square foot facility in which it manufactures woven polypropylene bags.
The Company purchases pelletized polypropylene, extrudes the pellets into sheets
and then cuts the sheets into approximately 1/8" strips of "thread." The
polypropylene thread is then woven onto bobbins, which are placed on weaving
machines. The weaving machines produce varying sizes of fabric and/or woven
tubes, which are then cut to measure per customers' orders, sewn into bags and
printed as necessary.

The bags are used by the United States Postal Service for bulk mail
purposes, vegetable growers, charcoal producers, etc., for any product that
needs to be shipped or stored in bulk.

Golden Pacific Bag Corp. has approximately 60 full and part time
employees, most of whom are involved in the manufacturing process. There are two
shifts per day, six days a week. Approximately 10 employees are involved in
maintenance of the equipment, sales and administration.

The facility had been shut down for approximately 45 days when it was
reopened by the Company. Consequently sales momentum and credibility had been
lost and a restart of the facility was for all practical purposes the same as
opening a new facility. This resulted in substantial additional costs and a
period of operations with very little sales and revenue. This has caused the
operations to show a loss for the second half of 1977. However, the Company
believes it is moving into 1998 with sales momentum at least partially
reestablished and there are no known extraordinary expenses looming which will
require additional working capital. The Company believes 1998 will see the
facility return to historical sales levels and to overall profitability.

Immediately after the Effective Date of the merger all of the shares of
International Container Corp., the owner of Golden Pacific Bag Corp., will be
transferred to Southwest Manufacturing Corporation, which will also assume the
debt of $2,516,319 to Bay Business Credit, and Southwest Manufacturing
Corporation will issue 1,500,000 of its shares to Aubryn International, Inc.

<PAGE>

Aubryn International, Ltd.

Aubryn International, Ltd. is a Nevada corporation, incorporated on
April 19, 1993. It has its main office at 1152 North Mountain Avenue, Upland,
California. It has three divisions.

Automotive

The Company signed three joint venture agreements in June, 1994 to
operate in the People's Republic of China. Short term licensing was finalized in
July of 1995 and a permanent license was signed in March of 1996. The Company
shipped approximately $500,000 worth of diagnostic equipment for the service
center in February of 1997. The Company then began training personnel and
warranty sales began in July of 1997, and in late 1997 sales began. The service
center opened in February, 1998, and has been operating since. There is also an
inspection center that opened in late May, 1998, both are located in Wuhan.

All money taken in from the Chinese Joint Venture must stay in China
for a period of 6 months, after which it may be moved to the United States.

Footware

<PAGE>

beginning with the spring line of shoes in 1999.

Real Estate

CHANGE OF NAME

The Company intends to change the name of the corporation to Aubryn
International, Inc.

OFFICERS AND DIRECTORS OF THE COMPANY

The following information sets forth information as to the persons who
are Officers and Directors of Aubryn International, Inc.

Name Age Position
- ---- --- --------

R. Bruce Harris 47 President, Director

David L. Shade 52 Director

Deng Shan 47 Director

Aubrye A. Harris 24 Chief Financial Officer, Director

James Baker 62 Vice President Automotive

Harold McLendon 58 Vice President Footware

<PAGE>

R. BRUCE HARRIS, President and a Director. Mr. Harris has a BS degree
from Cal Poly Pomona. He was the founder of Aubryn International, Ltd. in 1993.

DAVID L. SHADE, Director. Mr. Shade is an attorney.

AUBRYE A. HARRIS, Chief Financial Officer and a Director. Ms. Harris
has a BS degree in International Management from the University of La Verne.

JAMES BAKER, Vice President Automotive. Mr. Baker was director of fleet
operations with Shaver Auto Center in San Bernardino, California from 1994 to
1997, and has been with the Company since 1997.

HAROLD MCLENDON, Vice President Footware. Mr. McLendon was an
independent consultant to the footware industry from 1990 to 1997, and has been
with the Company since 1997.

SECURITY OWNERSHIP OF THE COMPANY

The following table sets forth information as to the owners of 5% or
more of the voting securities, and officers and directors of the new company:

Name of Beneficial Owner Number of Shares % of Ownership
- ------------------------------------------------------------------------

R. Bruce Harris (1) 3,661,780 30%

David L. Shade 30,000 1%

Deng Shan 50,000 1%

Aubrye A. Harris 520,000 4%

James Baker 10,000 1%

Harold McLendon 50,000 1%

All officers and
Directors as a group 4,321,780 35%

<PAGE>

(1) Mr. Harris is the trustee for a family trust that holds 700,000 shares; his
son is the owner of 500,000 shares and his wife is the owner of 500,000 shares.

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
As stated under GAAP

Historical Pro forma
---------- ---------
Southwest Aubryn
--------- ------

Assets
Current assets $ 716,963 $ 783,222 $ 1,500,185
Fixed assets $2,837,500 $1,805,217 $ 4,642,717
Other Assets $ -- $4,560,534 $ 4,560,534
---------- -----------

$3,554,463 $7,148,973 $10,703,436
---------- -----------

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
As stated under GAAP

Historical Pro forma
---------- ---------
Southwest Aubryn
--------- ------

Total Revenues $2,421,137 $ -- $ 2,421,137
Expenses $2,409,031 $ 1,343,218 $ 3,752,249
---------- ----------- ----------

Income (Loss) $ 12,106 $(1,343,218) $ 1,209,204
Per Share $ .0004 $ (.25) $

<PAGE>

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement")
dated this 4th day of June, 1998, between Aubryn International, Ltd. (the
"Company"), a Nevada corporation, and Southwest Industrial Products, Inc. (the
"Purchaser") a Minnesota corporation,

WHEREAS, the Company desires to merge with the Purchaser and the
Purchaser with the Company, all upon the terms and subject to the conditions of
this Agreement and the Plan of Merger attached as Exhibit A (the "Plan of
Merger"); and

WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
merger of the Company;

NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties agree as follows:

ARTICLE 1

THE MERGER; CLOSING; EFFECTIVE TIME

1.1 THE MERGER. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in section 1.4) the Company shall be merged
with and into the Purchaser and the separate corporate existence of the Company
shall cease (the "Merger"). The Purchaser shall be the surviving corporation in
the Merger (sometimes referred to as the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Minnesota, and the separate
corporate existence of the Purchaser with all its rights, privileges, immunities
and franchises shall continue unaffected by the Merger.

1.2 TERMS OF MERGER. The Company shall transfer all shares of its
common stock, which is all of its issued and outstanding common stock, to the
Purchaser. The Purchaser agrees to issue 7,783,304 shares of its common stock,
500,000 shares of Class C preferred stock and 300,000 shares of Class D
preferred stock to the shareholders of the Company.

1.3 CLOSING. The closing of the Merger (the "Closing") shall take place
(i) at the offices of Charles Clayton, Minneapolis, Minnesota on the first
business day on which the last to be fulfilled or waived of the conditions set
forth in Article VII shall be fulfilled or waived in accordance with this
Agreement, at such time as the Company and Purchaser may agree, or (ii) on such
other date and/or at such other place and time as the Company and Purchaser may
agree.

<PAGE>

1.4 EFFECTIVE TIME. As soon as practicable following fulfillment or
waiver of the conditions specified in Article VII, and provided that this
Agreement has not been terminated or abandoned pursuant to Article VIII, the
Company and the Purchaser will cause the Articles of Merger (the "Articles of
Merger") to be executed and filed with the Secretary of State of Minnesota (the
"State Commission"). The merger shall become effective on the date on which the
Secretary of State issues a Certificate of Merger, and such time is referred to
as the "Effective Time".

ARTICLE II

ARTICLES OF INCORPORATION AND BY-LAWS OF THE
SURVIVING COMPANY

2.1 THE ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Purchaser (the "Articles") in effect at the Effective Time shall be Articles of
Incorporation of the Surviving Corporation, in accordance with the Minnesota
Statutes.

2.2 THE BY-LAWS. The By-Laws of the Purchaser in effect at the
Effective Time shall be the By-Laws of the Surviving Corporation, unless duly
amended in accordance with its terms and the Minnesota Statutes.

ARTICLE III

OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION

3.1 OFFICERS AND DIRECTORS. The directors and officers of the Purchaser
at the Effective Time shall, from and after the Effective Time, be directors and
officers, of the Surviving Corporation, until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Articles and By-Laws.

ARTICLE IV

CONVERSION OR CANCELLATION OF SHARES IN THE MERGER

4.1 At the Effective Time, all shares of common stock of the Company
issued and outstanding immediately prior to the Effective Time shall be
exchanged for validly issued, fully paid and nonassessable shares of the
Purchaser.

<PAGE>

ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.1 CORPORATE ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. The Company has the corporate power and authority to
carry on its respective businesses as they are now being conducted. The Company
has made available to Purchaser a complete and correct copy of the Company's
Articles, and the Company's By-Laws. The Company's Articles and By-Laws so
delivered are in full force and effect.

5.2 CORPORATE AUTHORITY. Subject only to approval of this Agreement and
the Plan of Merger by the holders of a majority of the outstanding shares, the
Company has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the Company.

5.3 COMPLIANCE. The execution and delivery of this Agreement by the
Company does not, and the consummation of the transactions contemplated by the
Company will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the Company or (ii) a breach or
violation of, a default under, the acceleration of, or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Company, or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-governmental
permit or license to which the Company is subject, except, in the case of clause
(ii) above, for such breaches, violations, defaults, or accelerations which,
alone or in the aggregate, will not have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company.

5.4 BROKERS AND FINDERS. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated.

5.5 FINANCIAL STATEMENTS. The financial statements as of March 31,
1998, which have been delivered to Purchaser ("Company Financial Statements")
are complete, accurate, and fairly present the financial condition of the
Company as of the date and the results of its operation for the periods covered.
To the best knowledge of the Company, there are no liabilities, either fixed or
contingent, not reflected in the financial statements other than contracts or
obligations in the

<PAGE>

ordinary and usual course of business, constituting liens or other liabilities
which, if disclosed, would alter substantially the financial condition of the
Company as reflected in the financial statements. These Financial Statements
have been prepared in accordance with generally accepted accounting principles
consistently applied.

5.6 LITIGATION AND PROCEEDINGS. To the best knowledge of the Company,
it is not involved in any pending litigation or governmental investigation or
proceeding not reflected in the financial statements, or otherwise disclosed in
the Schedules and, to the best knowledge of the Company, no litigation, claims,
assessments, or governmental investigation or proceeding is threatened against
the Company.

5.7 TAX RETURNS. The Company has filed all tax returns, forms, or
reports, which are due or required to be filed by it prior to this date and has
paid or made adequate provisions for the payment of all taxes, penalty fees, or
assessments which have or may become due pursuant to such returns or pursuant to
any assessments received.

5.8 TITLE AND RELATED MATTERS. The Company has good and marketable
title to all of its licenses, copyrights, trademark, patents, patents pending,
properties, inventory, interests in properties, and other assets, real and
personal, free and clear of all mortgages, liens, pledges, charges, or
encumbrances except (i) statutory liens or claims not yet delinquent; (ii) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the assets or properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties or in connection with such assets; and
(iii) as described in the financial statements or in Company Schedules. The
Company owns, free and clear of any liens, claims, encumbrances, royalty
interests, or other restrictions or limitations of any nature whatsoever, any
and all procedures, techniques, business plans, methods of management, or other
information utilized in the conduct of the Company's business or operations,
whether or not the value thereof is reflected in the most recent balance sheet
included in the Company Schedules. The plants, structures, and equipment of the
Company that are necessary or used in the operations of the business of the
Company are in good operating condition and repair, normal wear and tear
excepted.

5.10 COMPANY SCHEDULES. The Company has delivered to Purchaser the
following schedules which are collectively referred to as the "Schedules" and
which consist of separate schedules dated as of the date of execution of this
Agreement and instruments and data as of the same date, all certified by the
chief executive officer of the Company, as complete, true, and correct:

(A) A schedule containing complete and correct copies of the articles
of Incorporation and Bylaws of Company in effect as of the date of this
Agreement;

<PAGE>

(B) A schedule containing a description of all real property owned or
leased by the Company, together with a description of every mortgage,
deed of trust, pledge, lien, agreement, encumbrance, claim, or equity
interest of any nature whatsoever in real property with copies of the
underlying documentation;

(C) A schedule describing all material contracts, employee agreements,
licenses, agreements, or other instruments to which the Company is a
party or by which it or its properties or assets are bound;

(D) A schedule describing all loans and mortgages for which Company is
obligated and the terms;

(E) A schedule setting forth a description of any material adverse
change in business, operations, property, inventory, assets, or
condition of the Company since March 31, 1998;

(F) A schedule of all litigation or governmental investigation or
proceeding which is pending or which, to the best knowledge of
management, is threatened or contemplated;

(G) A schedule of all outstanding options and warrants to acquire
shares of common stock;

(H) A schedule describing all joint ventures, partnerships or
corporations in which the Company owns an interest or a right to
acquire an interest;

(I) A schedule of all documents, disclosures, or representations
required to be disclosed by this Agreement or required to be disclosed
in order to set forth all material facts regarding Acquiree.

5.11 CORPORATE ORGANIZATION AND QUALIFICATION. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota. The Purchaser has the corporate power and authority
to carry on its respective businesses as they are now being conducted. The
Purchaser has made available to the Company a complete and correct copy of the
Purchaser's Articles, and the Purchaser's By-Laws.
The Purchaser's Articles and By-Laws so delivered are in full force and effect.

5.12 CORPORATE AUTHORITY. Subject only to approval of this Agreement
and the Plan of Merger by the holders of a majority of the outstanding shares,
the Purchaser has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the Purchaser.

<PAGE>

5.13 COMPLIANCE. The execution and delivery of this Agreement by the
Purchaser do not, and the consummation of the transactions contemplated by the
Purchaser will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the Purchaser or (ii) a breach or
violation of, a default under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Purchaser or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-governmental
permit or license to which the Purchaser is subject, except, in the case of
clause (ii) above, for such breaches, violations, defaults, or accelerations
which, alone or in the aggregate, will not have a material adverse effect on the
financial condition, properties, business or results of operations of the
Purchaser.

5.14 BROKERS AND FINDERS. Neither the Purchaser nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated.

ARTICLE VI

COVENANTS

6.1 ACQUISITION PROPOSALS. The Company will, and shall direct (and
shall use its best efforts to cause) all of its officers and directors and
employees and any investment banker, attorney, accountant or other agent
retained by the Company not to, initiate or solicit any inquiries or the making
of any proposal with respect to, or, except to the extent required by fiduciary
obligations under applicable laws, as advised in writing by counsel, engage in
negotiations concerning, or provide any confidential information or data or to
have any discussions with, any person relating to, any acquisition, business
combination or purchase of all or any significant portion of the assets of, or
any equity interest in, the Company. The Company will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted with respect to any of the foregoing. The Company will
notify Purchaser immediately if any such inquiries or proposals are received by,
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with the Company.

6.2 INTERIM OPERATIONS OF THE COMPANY. The Company covenants and agrees
that after this date and prior to the Effective Time (unless Purchaser shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement):

<PAGE>

(a) the business of the Company shall be conducted only in the
ordinary and usual course and, to the extent consistent
therewith, the Company shall use its reasonable best efforts
to preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees and
business associates;

(b) the Company shall not materially modify or amend or terminate
any of its material contracts or waive, release or assign any
material rights or claims, except in the ordinary and usual
course of business;

6.3 MEETINGS OF THE SHAREHOLDERS. As soon as practicable after this
date, Purchaser and the Company shall prepare a joint proxy/registration
statement (the "Registration Statement"), which shall comply as to form with all
applicable law and its governing instruments to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon the approval
of this Agreement and the Plan of Merger and the Merger. Subject to fiduciary
requirements of applicable law, the respective boards of directors of each of
Purchaser and the Company shall recommend such approval and take all lawful
action to solicit such approval; provided, however, and notwithstanding any
other provision in this Agreement to the contrary, if either Purchaser or the
Company should experience any development or combination of developments having
a material adverse effect on the financial condition, properties, business or
results of operations of Purchaser, taken as a whole, or the Company, taken as a
whole, as the case may be, other than as a result of factors affecting the
industry or the economy generally, then the board of directors of the other
Company may withdraw its recommendation of the merger and may postpone the
meeting of its shareholders to allow adequate time to disseminate relevant
disclosure material. The Company agrees, as to information with respect to the
Company, its officers, directors, and shareholders contained when the
Registration Statement becomes effective and at the date of the meeting of the
respective shareholders of Purchaser and the Company, will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make the statement not misleading.

ARTICLE VII

CONDITIONS

7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AND COMPANY. The respective
obligations of Purchaser and the Company to consummate the merger are subject to
the fulfillment of each of the following conditions, any or all of which may be
waived in whole or in part by Purchaser or the Company as the case

<PAGE>

may be, to the extent permitted by applicable law:

(a) Shareholder Approval. This Agreement shall have been duly
approved by the holders of (i) at least a majority of the
voting power of the outstanding shares of the Purchaser common
stock, voting together as a single class, in accordance with
applicable law and the Certificate of Incorporation and
By-Laws of Purchaser and (ii) a majority of the outstanding
shares, in accordance with applicable law and the Articles and
By-Laws of the Company.

(b) Continuing Warranties, Certificate. The representations and
warranties of the Company contained in this Agreement shall be
correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this Agreement,
and the Company shall have performed in all material respects
all of its obligations to be performed, and Purchaser shall
have received at the Effective Time a certificate to that
effect, dated the Effective Time, and executed on behalf of
the Company by an executive officer of the Company.
Notwithstanding anything in the foregoing to the contrary,
this Section 7.1(b) shall be deemed to have been fulfilled
regardless of whether the representations contained in Section
5.1 shall not be so correct or the covenants in Sections 6.1
and 6.2 to the extent it is applied to these sections.

7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to consummate the merger are subject to the fulfillment of each of the
following conditions, any or all of which may be waived in whole or in part by
the Company to the extent permitted by applicable law:

(b) Continuing Warranties, Certificate. The representations and
warranties of the Purchaser contained in this Agreement shall
be correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this Agreement,
and the Purchaser shall have performed in all material
respects all of its obligations to be performed, and Company
shall have received at the Effective Time a certificate to
that effect, dated

<PAGE>

the Effective Time, and executed on behalf of the Purchaser by
an executive officer of the Purchaser.

ARTICLE VIII

TERMINATION

8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the merger may be abandoned at any time prior to the Effective Time, before or
after the approval by shareholders of the parties by the mutual consent of
Purchaser and the Company by action of their respective boards of directors.

8.2 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and abandonment of the merger pursuant to this Article VIII,
no party (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except as provided in
Section 9.2 and except that nothing will relieve any party from liability for
any breach of this Agreement.

ARTICLE IX

MISCELLANEOUS AND GENERAL

9.1 PAYMENT OF EXPENSES. Whether or not the merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
merger.

9.2 SURVIVAL. The agreements shall survive the consummation of the
merger.

9.3 MODIFICATION OR AMENDMENT. Subject to the Minnesota Statutes, at
any time prior to the Effective Time, the parties may, by written agreement,
make any modification or amendment of this Agreement approved by their
respective boards of directors. This Agreement shall not be modified or amended
except pursuant to an instrument in writing executed and delivered on behalf of
each of the parties. After the Effective Time, none of the agreements may be
amended.

9.4 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.

<PAGE>

9.5 COUNTERPARTS. For the convenience of the parties this Agreement may
be executed in any number of counterparts, each such counterpart being deemed to
be an original instrument, and all counterparts shall together constitute the
same agreement.

9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota regardless of the laws that
might otherwise govern under applicable principles of conflicts of law except
that the provisions of this Agreement relating to the merger shall also be
governed by the laws of the State of Minnesota.

9.7 NOTICES. Any notice, request, instruction, or other document to be
given by any party to the other, shall be in writing and delivered personally or
sent by a registered or certified mail, postage prepaid to the Company to R.
Bruce Harris, 1152 North Mountain Avenue, Suite 210, Upland, California 91786,
and to the Purchaser to Lindsey Vinson, 2710 Stemmons Freeway, Dallas, Texas
75201, or to such other persons or addresses as may be designated in writing by
the party to receive such notice.

9.8 ENTIRE AGREEMENT, ETC. This Agreement (a) constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter and (b)
shall not be assignable by operation of law or obligation to, or rights in
respect of, any persons other than the parties, it being expressly agreed that
all of the persons (and their successors and assigns) who are beneficiaries of
such sections or schedule (whether as individuals or as members of a class or
group) shall be entitled to enforce such sections and schedule against Purchaser
or the surviving corporation or of the Purchaser.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.

AUBRYN INTERNATIONAL, LTD.

By: /s/ R. Bruce Harris
--------------------------

Name: R. Bruce Harris
------------------------

Title: President
-----------------------

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTS, INC.

By: /s/ Lindsey Vinson
--------------------------

Name: Lindsey Vinson
------------------------

Title: President
-----------------------

<PAGE>

PLAN OF MERGER

SECTION 1. CORPORATIONS PLANNING TO MERGE.

Aubryn International, Ltd. (Aubryn), a Nevada corporation shall be
merged with Southwest Industrial Products, Inc. (Southwest), a Minnesota,
corporation. At the Effective Time the corporate existence of Aubryn shall
cease. Southwest shall be the surviving corporation, and shall continue to be
governed by the laws of the State of Minnesota.

SECTION 2. TERMS AND CONDITIONS.

2.1 The merger shall be effective upon the issuance of a Certificate of
Merger by the Secretary of State of the State of Minnesota.

2.2 The Articles of Incorporation shall be the Articles of
Incorporation of Southwest.

2.3 The By-Laws shall be the By-Laws of Southwest.

2.4 The Directors and Officers shall be the Directors and Officers of
Southwest.

SECTION 3. MANNER AND BASIS OF CONVERTING THE SHARES.

3.1 At the Effective Time, all of the shares of the common stock of
Aubryn issued and outstanding immediately before the Effective Time shall be
retired.

3.2 Promptly after the Effective Time Southwest shall cause to be
mailed to each person who was at the Effective Time a holder of record of shares
of Aubryn common stock his pro rata share of 7,783,304 shares of common stock,
500,000 shares of Class C preferred stock and 300,000 shares of Class D
preferred stock.

IN WITNESS WHEREOF, the parties have executed this Plan of Merger this
4th day of June, 1998.

Aubryn International, Ltd. Southwest Industrial Products, Inc.

by /s/ R. Bruce Harris by /s/ Lindsey Vinson
---------------------------------- ------------------------------------
President President

<PAGE>

C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . 1

Balance Sheet at September 30, 1997 and December 31, 1996. . . . . . . 2-3

Statement of Operations for the Nine Months Period Ended
September 30, 1997 and for the Year Ended December 31, 1996 . . . . 4

Statement of Stockholders' Equity for the Period From Inception
(June 11, 1993) through September 30, 1997. . . . . . . . . . . . . 5-6

Statement of Cash Flows for the Nine Months Period Ended
September 30, 1997 and for the Year Ended December 31, 1996 . . . . 7-8

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . 9-15

All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
Aubryn International Ltd.
Upland, CA 91786

We have audited the accompanying balance sheet of Aubryn International Ltd. (the
Company), as of September 30, 1997 and December 31, 1996, and the related
statements of operations, stockholders' equity and cash flows for the nine
months period then ended and for the year ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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 audit of the financial statements provides a reasonable
basis for our opinion.

In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company at September 30, 1997 and
December 31, 1996 and the results of its operations and its cash flows for the
nine months period then ended and the year then ended in conformity with
generally accepted accounting principles.

Clancy and Co., P.L.L.C.
Phoenix, Arizona
December 20, 1997

<PAGE>

AUBRYN INTERNATIONAL LTD.
BALANCE SHEET
SEPTEMBER 30, 1997 AND DECEMBER 31 , 1996

<TABLE>
<CAPTION>
ASSETS
1997 1996
---- ----
<S> <C> <C>
Current Assets
Cash $ 2,407 $ 80,000
Marketable Securities-Trading (Note 3) 30,612 474,120
Accounts Receivable-Other 10,000 0
Note Receivable (Note 4) 43,000 43,000
----------- -----------
Total Current Assets 86,019 597,120

Property and Equipment (Note 5)
Office Equipment 32,512 29,200
Automobiles 98,298 98,298
----------- -----------
130,810 127,498
Less Accumulated Depreciation 57,842 29,174
----------- -----------
Total Property and Equipment 72,968 98,324

Other Assets
Joint Venture Wuahan Huamei (Note 6) 1,559,109 20,000
Investment-Mexican Tourist Properties (Note 7) 3,500,000 0
Prepaid Expenses 22,000 22,000
Investments (Note 8) 0 457,765
Notes Receivable (Note 8) 457,000 0
----------- -----------
Total Other Assets 5,538,109 499,765
----------- -----------

Total Assets $ 5,697,096 $ 1,195,209
=========== ===========

The accompanying notes are integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
BALANCE SHEET
SEPTEMBER 30, 1997 AND DECEMBER 31 , 1996

LIABILITIES AND STOCKHOLDERS' EQUITY
1997 1996
---- ----

Current Liabilities
Accounts Payable 3,714 3,447
Bank Overdraft 3,204 0
Notes Payable-Related Party (Note 9) 19,000 25,000
Notes Payable-Installment, Current Portion (Note 10) 16,521 16,521
Accrued Expenses 244,500 105,000
----------- -----------
Total Current Liabilities 286,939 149,968

Long Term Liabilities
Notes Payable-Installment, Noncurrent Portion (Note 10) 47,725 58,443
Notes Payable-Stockholders (Note 11) 4,120 150,000
----------- -----------
Total Long Term Liabilities 51,845 208,443
----------- -----------

Total Liabilities 338,784 358,411

Stockholders' Equity
Preferred Stock: Authorized $0.001 Par Value, 10,000,000
Shares; Issued and Outstanding, 500,000 Shares at September
30, 1997 and 0 Shares at December 31, 1996 500 0

Common Stock: Authorized $0.001 Par Value, 25,000,000
Shares; Issued and Outstanding, 3,724,500 Shares at September
30, 1997 and 3,662,500 Shares at December 31, 1996 3,725 3,663
Additional Paid In Capital 5,559,143 487,637
Retained Earnings (Deficit) (205,056) 345,498
----------- -----------
Total Stockholders' Equity 5,358,312 836,798
----------- -----------

Total Liabilities and Stockholders' Equity $ 5,697,096 $ 1,195,209
=========== ===========
</TABLE>

The accompanying notes are integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996

For the Nine
Months For the Year
Period Ended Ended
September December
30, 1997 31, 1996
-------- --------

Revenues $ 0 $ 59,406

Expenses
General and Administrative 294,212 247,817
----------- -----------

Net Operating Loss (294,212) (188,411)

Other Income (Expense)
Interest Income 0 83
Loss on Sale of Investment (765) 0
Gain on Sale of Securities 558 26,245
Temporary Increase (Decrease) in Value of
Marketable Securities (256,135) 656,468
----------- -----------
Total Other Income (Expense) (256,342) 682,796
----------- -----------

Provision for Income Taxes - Note 11 0 0
----------- -----------

Net Income (Loss) Available to Common
Shareholders $ (550,554) $ 494,385
=========== ===========

Net Income (Loss) Per Share of Common Stock $ (0.15) $ 0.14
=========== ===========

Weighted Number of Common Shares and Common
Share Equivalents Outstanding 3,683,167 3,527,250
=========== ===========

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JUNE 11, 1993)
THROUGH SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
Loss
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common Stock For Cash at $.001 Per
Share on December 31, 1993 $ 1,000,000 $ 1,000 $ 9,000 $ $ 10,000

Income (Loss) Year Ended December 31, 1993 0 0
--------- -------- --------- --------- ---------- ----------- ----------
Balance, December 31, 1993 0 0 1,000,000 1,000 9,000 0 10,000

Loss For the Year Ended December 31, 1994 (31,426) (31,426)
--------- -------- --------- --------- ---------- ----------- ----------
Balance, December 31, 1994 0 0 1,000,000 1,000 9,000 (31,426) (21,426)

Issuance of Common Stock For Cash at $.25 to
$1.00 Per Share During the Year Ended
December 31, 1995 2,392,000 2,392 218,408 220,800

Loss For the Year Ended December 31, 1995 (117,461) (117,461)
--------- -------- --------- --------- ---------- ----------- ----------
Balance, December 31, 1995 0 0 3,392,000 3,392 227,408 (148,887) 81,913

Issuance of Common Stock For Cash at $.50 to
$1.00 Per Share During the Year Ended
December 31, 1996 270,500 271 260,229 260,500

Income For the Year Ended December 31, 1996 494,385 494,385
--------- -------- --------- --------- ---------- ----------- ----------
Balance, December 31, 1996 0 0 3,662,500 3,663 487,637 345,498 836,798

Investment in Joint Venture on February 23, 1997 1,448,335 1,448,335

Issuance of Common Stock For Cash at $2.00 Per
Share Through September 30, 1997 62,000 62 123,938 124,000

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JUNE 11, 1993)
THROUGH SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
Loss
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Less Offering Costs (267) (267)
Issuance of Preferred Stock in Exchange for 50%
Interest in Various Companies
500,000 500 3,499,500 3,500,000
Loss For the Nine Months Period Ended
September 30, 1997
(550,554) (550,554)
--------- -------- --------- --------- ---------- ----------- ----------

Balance, September 30, 1997 500,000 $ 500 3,724,500 $ 3,725 $5,559,143 $ (205,056) $5,358,312
========= ======== ========= ========= ========== =========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
Nine
Months
Period
Ended Year Ended
September December
30, 1997 31, 1996
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ (550,554) $ 494,385
Depreciation 28,668 29,174
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by (Used in) Operating Activities
Changes in Assets and Liabilities
(Increase) Decrease in Accounts Receivable (10,000) 0
(Increase) Decrease in Other Assets 0 (22,000)
Increase (Decrease) in Accounts Payable 267 2,526
Increase ( Decrease) in Bank Overdraft 3,204 0
Increase (Decrease) in Accrued Expenses 139,500 105,000
----------- -----------
Total Adjustments 161,639 114,700
----------- -----------
Net Cash Provided by (Used in) Operating Activities (388,915) 609,085

Cash Flows From Investing Activities
Purchase of Property and Equipment (3,312) (127,498)
Purchase of Marketable Securities 443,478 (408,586)
Purchase of Investments (89,979) (477,765)
----------- -----------
Net Cash Flows Provided by (Used in) Investing Activities 350,187 (1,013,849)

Cash Flows from Financing Activities
Proceeds From Sale of Common Stock 123,733 260,500
Proceeds From Notes Payable 0 129,138
Net Proceeds (Repayments) From Officer Loans (145,880) 150,000
Payments on Notes Payable-Related Parties (6,000) 0
Payments on Notes Payable (10,718) (29,174)
Notes Receivable Advanced 0 (43,000)
----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
Nine
Months
Period
Ended Year Ended
September December
30, 1997 31, 1996
-------- --------
<S> <C> <C>
Net Cash Provided by (Used in) Financing Activities $ (38,865) $ 467,464
----------- -----------

Increase (Decrease) in Cash and Cash Equivalents (77,593) 62,700

Cash and Cash Equivalents, Beginning of Period 80,000 17,300
----------- -----------

Cash and Cash Equivalents, End of Period $ 2,407 $ 80,000
=========== ===========

Supplemental Information
- ------------------------
Cash paid for:
Interest $ 0 $ 0
=========== ===========

Income taxes $ 0 $ 0
=========== ===========

NonCash Transactions:
Investment in Joint Venture $ 1,448,335 $ 0
=========== ===========
Preferred Stock Exchanged for 50% interest in Various
Companies
$ 3,500,000 $ 0
=========== ===========
Exchange of Shares for a Note Receivable $ 457,000 $ 0
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 1 - ORGANIZATION

Aubryn International Ltd. (the Company) was incorporated under the laws
of the State of Nevada on June 11, 1993, with an authorized capital of
25,000,000 shares of common stock with a par value of one mil ($0.001)
per share. On July 2, 1997, the Company amended its Articles of
Incorporation authorizing 10,000,000 shares of preferred stock at
$0.001 par value. The Company has developed and is marketing an
Extended Coverage Automotive Protection Plan for the Chinese automotive
marketplace.

On December 31, 1993, the Company issued 1,000,000 shares of common
stock for cash at $0.001, or $10,000.

During the year ended December 31, 1995, the Company issued 2,000,000
shares of common stock for cash at $0.25 per share or $20,000, and
392,000 shares of common stock for cash at a range of $.25 to $1.00 per
share, or $200,800.

During the year ended December 31, 1996, the Company issued 270,500
shares of common stock for cash at a range of $.50 to $1.00 per share,
or $260,500.

During the month of June, 1997, the Company pursuant to a Regulation D
Offering Memorandum offered 500,000 shares common stock for sale at
$2.00 per share.

During the period April through September 30, 1997, the Company issued
62,000 shares of common stock for cash under the offering memorandum at
$2.00 per share, or $124,000, less offering costs of $267, or a net of
$123,733.

On September 28, 1997, the Company issued 500,000 of Preferred Stock in
Exchange for 50% Interest in Various Companies.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

A. Accounting Method

The Company's financial statements are prepared using the accrual
method of accounting.

B. Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with a
maturity of three months or less to be cash and cash equivalents.

C. Income or Loss Per Share

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The computations of income or loss per share of common stock are based
on the weighted average number of shares outstanding at the date of the
financial statements.

D. Depreciation

The cost of property, plant and equipment is depreciated over the
useful lives of the related assets. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.

Estimated lives of assets are as follows:

Office Equipment 3-5 years
Automobiles 3 years

E. Revenue Recognition

The Company recognizes revenues when services are performed, or other
activities are completed that constitute the entity's ongoing
operations.

F. Use of Estimates

Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary from
the estimates that were assumed in preparing the financial statements.

G. Presentation

Certain accounts from prior years have been reclassified to conform
with the current year's presentation.

H. Pending Accounting Pronouncements

It is anticipated that current pending accounting pronouncements will
not have an adverse impact on the financial statements of the Company.

NOTE 3 - MARKETABLE SECURITIES - TRADING

The following is a summary of Marketable Securities-Trading at
September 30, 1997:

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 3 - MARKETABLE SECURITIES - TRADING (CONTINUED)

Price Per Market
Shares Share Cost Value

Largo Vista Group, Ltd. 500 $ 0.12 $ 95 $ 60
Money Market Assets 552 1.00 552 552
Capital Assurance
Corporation 250,000 0.12 30,000 30,000
-------- --------
Total $ 30,647 $ 30,612
======== ========

The following is a summary of Marketable Securities-Trading at December
31, 1996:

<TABLE>
<CAPTION>
Temporary
Increase
Price Per Market In Value of
Shares Share Cost Value Securities
------ ----- ---- ----- ----------
<S> <C> <C> <C> <C> <C>
Largo Vista Group, Ltd. 984,500 $ 0.45 $ 187,055 $ 443,025 $ 255,970
Prudential Securities 1,095 1.00 1,095 1,095 0
Capital Assurance
Corporation 250,000 0.12 30,000 30,000 0
---------- --------- ---------
Total $ 218,150 $ 474,120 $ 255,970
========== ========= =========
</TABLE>

NOTE 4 - NOTES RECEIVABLE

Notes Receivable is a secured note in the original amount of $63,000
dated May 4, 1995, payable at the rate of $1,000 per month with
interest at the rate of 0% per annum. The balance at September 30, 1997
and December 31, 1996 was $43,000.

NOTE 5 - PROPERTY AND EQUIPMENT

Depreciation expense in the amount of $28,668 and $29,174 was charged
to operations during the period ended September 30, 1997 and December
31, 1996, respectively.

NOTE 6 - JOINT VENTURE - WUAHAN HUAMEI

On February 27, 1997, the Company entered into a joint venture
agreement with Wuhan Badamateral Industry Co., P. R. China, whereby the
Company has a 60% interest and Wuhan Badamateral Industry Co., P. R.
China has a 40% interest. The Company has committed to furnish $600,000
in equipment, $400,000 in technology

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 6 - JOINT VENTURE - WUAHAN HUAMEI (CONTINUED)

transfer, and $200,000 in cash. As of September 30, 1997 the Company
has contributed $1,079,109 to the joint venture. Additionally, land and
buildings located in Wuahan have been purchased by the joint venture in
the amount of $480,000. The name of the joint venture company is Wuhan
Huamei General Motors Automotive Service Co., Ltd.

NOTE 7 - INVESTMENT - MEXICAN TOURIST PROPERTIES

On September 28, 1997, the Company exchanged 500,000 shares of
Preferred Stock at $7 per share for 50% interest in the following
Mexican Companies: Inversiones Turisticas Aljusa, S.A. de C.V.,
Turisticas Todos Santos, S.A. de C.V., Lomas Malibu S.A. de C.V., and
Hacienda Del Estero S.A. de C.V. The transaction was valued at
$3,500,000.

NOTE 8 - INVESTMENTS

Investments represent 5,100 shares of the outstanding stock of National
Equity Lendors, Inc., recorded at cost from National Equity Lendors,
Inc. audited financial statements as of December 31, 1996. National
Equity Lendors, Inc. is a mortgage bank and is in the process of
setting up its office and funding lines. On September 15, 1997, the
Company exchanged its 5,100 shares of National Equity Lendors, Inc.
stock for a Note Receivable from National Equity Lendors, Inc. The note
is payable over a ten year period at 8% per annum, with no interest
payable in the first year and interest only payable in the second year,
and with principal and interest payments due at the beginning of the
third year.

NOTE 9 - NOTES PAYABLE - RELATED PARTY

Notes Payable-Related Party is a unsecured note payable to Liberty
Limited, dated May 10, 1994, with interest payable at the rate of 10%
per annum. The note is due May 10, 1998. The balance due at September
30, 1997 and December 31, 1996 was $19,000 and $25,000, respectively.

NOTE 10 - NOTES PAYABLE - INSTALLMENT

The following is a schedule of notes payable at September 30, 1997 and
December 31, 1996:

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
World Omni Financial Corp. Installment note dated
January 1, 1996 in the original amount of $32,438
plus interest at the rate of 15% per annum. The note
is payable monthly for 72 months at the rate of $528.49.
Secured by 1996 Mercedes automobile. $ 22,301 $ 27,047
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 10 - NOTES PAYABLE - INSTALLMENT (CONTINUED)

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
GMAC Installment note dated February 8, 1996 in the
original amount of $44,718 plus interest at the rate of
15% per annum. The note is payable monthly for 36
months at the rate of $572.60. Secured by 1995
Chevrolet Model LL automobile. 30,061 32,066

Toyota Motor Credit Corporation Installment note
dated January 31, 1996 in the original amount of
$21,141 plus interest at the rate of 15% per annum. The
note is payable monthly for 36 months at the rate of
$518.66. Secured by 1996 Toyota Camry automobile. 11,884 15,851
-------- --------
Total $ 64,246 $ 74,964

Less Current Portion 16,521 16,521
-------- --------

Balance $ 47,725 $ 58,443
======== ========
</TABLE>

NOTE 11 - NOTES PAYABLE - STOCKHOLDERS

Note Payable-Stockholders are unsecured notes, dated September 30,
1997, in the original amount of $4,120, payable on demand, with 8%
interest per annum.

NOTE 12 - LEASES

The Company leases 1299 square feet of office space located at 115
North Mountain, Suite 210, Upland, California. The lease is a
month-to-month lease in the amount of $1,143, beginning January 5, 1996
and cancelable upon 30 days written notice.

Additionally, the Company leases 800 square feet of office space
located at 1850 E. Flamingo, Suite 111, Las Vegas, Nevada. The lease is
a month-to-month lease in the amount of $1,000.

Rent expense charged to operations was $9,622 for the nine months ended
September 30, 1997 and $2,400 for the year ended December 31, 1996.

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 13 - INCOME TAXES

No provision has been made for income taxes, as the Company has elected
S Corporation Status, effective on August 1, 1993, whereby the income
or loss of the Company is reported in the income tax return of the
shareholder. The Company's S election was revoked effective January 1,
1997. However, no provision has been made for the period ended
September 30, 1997 as a result of the current year loss to date.

NOTE 14 - PENDING LITIGATION

On November 27, 1996, the Company filed a lawsuit (Case No. RCV 25171)
in the Superior Court of Rancho Cucamonga, CA for possession of
Personal Property Claim and Delivery, Specific Performance, Injunctive
Relief Conversion, and Fraud. The nature of the case rests on a claim
for possession of the controlling stock previously paid for by the
Company, for a Shell Corporation (Filmagic, Inc.) Presently, a
stipulation is in effect whereby the Defendants' have agreed to pay to
the Company the sum of $125,000 within 60 days of March 16, 1997 or
transfer the stock to a receivor appointed by the Court.

NOTE 15 - SUBSEQUENT EVENTS - UNAUDITED

1. The Company has sold approximately 468,320 shares at $2.00 per
share, or $936,640 from September 30, 1997 through December 31,
1997 in connection with its 504 Offering Memorandum.
Additionally, 78,230 shares of restricted stock was sold at $2.00
per share, or $156,460 through December 31, 1997.

2. The acquisition of 90% of the Chinese District Company, BADA
Materials Company (BADA) which consist of a shoe manufacturing
company, a jewelry store and a textiles company, operating under
the names Wuhan Heng-Chang Shoes, Wuhan Hauging Jewelry and Wuhan
Heng-Chang Textiles was completed . The acquisition was completed
by exchanging 200,000 shares of the Company's preferred stock at
$15.00 per share or a total of $3,000,000. The preferred stock is
convertible into common stock, four years from the date of the
agreement at $15.00 per share. The Company has agreed to
contribute up to $1,000,000 to BADA over the next two years.

3. The acquisition is subject to a audit under U. S. generally
accepted auditing standards. Under the agreement, the 90%
interest has to be at least $4,500,000, and any amount under the
minimum will be supplemented by providing additional assets or by
accepting a higher conversion price on the preferred stock.

4. The Company purchased approximately $185,000 of additional
equipment from

The accompanying notes are an integral part of these financial statements.

<PAGE>

AUBRYN INTERNATIONAL LTD.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 15 - SUBSEQUENT EVENTS - UNAUDITED (CONTINUED)

Bondsun Company of San Francisco, California, that was shipped to
Wuhan China during the months of November and December, 1997. The
equipment is to be installed in the Huamei General Motors
Automotive Service Co. facility.

5. The Company has had warranty sales from the Wuhan office of
Huamei General Motors Automotive Service Co., Ltd. of
approximately 700 warranty policies, all of which have been
placed in the Receivable Trust deposits account in Wuhan, China,
until January 22, 1998, at which time the Wuhan office will
become operational. The policies were sold at an average price of
$1,400 each or a total of $980,000. After operations begin,
vehicles can be inspected and revenues can be recognized as
inspections are completed.

The accompanying notes are an integral part of these financial statements.

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTS AND SUBSIDIARIES
CONSOLIDATED
INCOME STATEMENT
10 MONTHS ENDED - MARCH 31, 1998

Income 2,421,137.70

Office Expenses

Accounting 210.00
Automobile 3,192.37
Bank Charges 1,861.00
Cash Discounts 1,668.95
Commission 67,376.35
Copy Services 173.47
Courier 385.80
Dividends Paid 27,285.66
Equipment Purchase 12,961.65
Equipment Rental 60,087.03
Filing Fees 1,980.00
Freight 84,683.35
Insurance: 58,943.76
License and Permits 1,988.94
Materials 587,708.72
Medical 8,731.67
Miscellaneous 44,996.17
Overnight Express 673.50
Payroll Expense 940,962.07
Postage & Delivery 79,666.63
Printing & Reproduction 19,630.24
Professional fees 6,000.00
Rent 166,361.74
Repairs 37,170.31
Security 2,343.46
Subscriptions 197.00
Supplies 106,538.72
Taxes 12,591.55
Telephone 12,067.80
Travel & Entertainment 7,014.90
Utilities 107,578.07

Total Expenses 2,409,030.98
------------

Net 12,106.72

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF ASSETS,
LIABILITIES AND EQUITY
AS OF MARCH 31, 1998
(UNAUDITED)

ASSETS

Current Assets:
Cash 22,698.00
Accounts Receivable 384,265.00
Inventory and work in progress 310,000.00
Total Current Assets $ 716,963.00

Property and Equipment:
Equipment 2,750,000.00
F, F & E 30,000.00
Vehicle 7,500.00
Leasehold improvements 50,000.00
Total Property and Equipment $ 2,837,500.00
--------------
Total Assets $ 3,554,463.00
==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable 55,910.00
Total Current Liabilities $ 55,910.00

Long - Term Liabilities:
Bay Business Credit: 2,516,319.00
Total Long Term Liabilities $2,516,319.00

Common Stock Equity $ 299,683.00
Preferred Stock Equity $ 682,551.00
-------------

Total Liabilities and Stockholders Equity $3,554,463.00
=============

<PAGE>

AUBRYN INTERNATIONAL LTD.
BALANCE SHEET
AS OF MARCH 31, 1998

MAR 31, '98
-----------------------

ASSETS
Current Assets
Checking/Savings
Bank of China 126,000.00
Wells Fargo-Mont. Branch 663.21
Wells Fargo-Nevada AIL 33,994.13
------------------------
Total Checking/Savings 160,657.34

Accounts Receivable
Accounts Receivable 349,386.00
------------------------
Total Accounts Receivable 349,386.00

Other Current Assets
Customer Warranty Deposits 525,726.00
H&R loans 10,000.00
Interco loans-National Equity 3,839.28
Marketable Securities
Capital Assurance Stock 30,000.00
-----------
Total Marketable Securities 30,000.00
Notes Receivable 43,000.00
------------------------
Total Other Current Assets 612,565.28
------------------------
Total Current Assets 1,122,608.62

Fixed Assets
Chinese Joint Ventures
China Property Deposit 20,000.00
Chinese J/V Wuhan Huamei 425,000.00
J V DIRECT 141,141.67
Service Equipment (China) 140,978.00
Wuhan Huamei Buildings 580,000.00
Wuhan Huamei J/V Elect. Analyzer 423,741.23
-----------
Total Chinese Joint Venture 1,730,860.90

Property and Equipment
Equipment 3,179.82
Furniture and Fixtures 42,075.93
Less Depreciation -11,680.00
-----------
Total Property and Equipment 33,575.75

Vehicle-Mercedes

Cost 32,437.86
Less Depreciation -14,390.60
-----------
Total Vehicle-Mercedes 18,047.26

Vehicle-Suburban
Cost 44,718.52
Less Depreciation -29,719.60
-----------

Total Vehicle-Suburban 14,998.92

Vehicle-Toyota
Cost 21,141.20
Less Depreciation -13,407.80
-----------
Total Vehicle-Toyota 7,733.40
------------------------
Total Fixed Assets 1,805,216.23

Other Assets
China Footware-Everlast Shoe Co 5,000,000.00
Film JV 10,000.00
Investment-Biotech 27,500.00
Mexican Tourist Properties
Inversiones Turisticas Aljusa 2,190,112.10
Lornas Malibu SA 620,750.00
Turisticas Todos Santos 901,950.00
------------

<PAGE>

AUBRYN INTERNATIONAL LTD.
BALANCE SHEET
AS OF MARCH 31, 1998

MAR 31, '98
----------------------

Total Mexican Tourist Properties 3,712,812.10

Notes Receivable-National Equ 457,000.00
Notes Receivable-Officers 331,222.71
Prepaid Expenses 22,000.00
----------------------
Total Other Assets 9,560,534.81
----------------------
TOTAL ASSETS 12,488,389.66
======================
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 503,714.00
----------------------
Total Accounts Payable 503,714.00

Other Current Liabilities
Accrued Expenses 233,385.10
Liberty Limited 12,000.00
Unearned Revenue 525,726.00
----------------------
Total Other Current Liabilities 771,111.10
----------------------
Total Current Liabilities 1,274,825.10

Long Term Liabilities
Note Payable-GMAC-Suburban 20,616.09
Note Payable-Toyota Credit 6,204.54
Notes Payable-Install-Mercedes 11,889.09
Stock Holder Notes
Aubryn Harris 11,088.59
R. Brandyn Harris 500.00
R. Bruce Harris 80,368.36
-----------
Total Stock Holder Notes 91,956.95
----------------------
Total Long Term Liabilities 130,666.67
----------------------
Total Liabilities 1,405,491.77

Equity
Common Stock-Auth-25M shares 1,255,746.59
Paid in Capital 7,179,019.94
Preferred Stock 3,250,500.00
Retained Earnings -691,338.56
Net Income 88,939.92
----------------------
Total Equity 11,082,867.89
----------------------

TOTAL LIABILITIES & EQUITY 12,488,359.66
======================

<PAGE>

AUBRYN INTERNATIONAL LTD.
PROFIT AND LOSS
JANUARY THROUGH MARCH 1998

JAN - MAR '98
--------------------

Ordinary Income/Expense
Income
Chinese JV-Wuhan Huamei 542,812.00
--------------------
Total Income 542,812.00

Cost of Goods Sold
Cost of Goods Sold 203,426.00
--------------------
Total COGS 203,426.00
--------------------
Gross Profit 339,386.00

Expense
Automobile Expense 6,895.11
Bank Service Charges 460.33
Dues and Subscriptions 543.15
Equipment Lease 1,042.67
Filing Fees 270.00
Insurance 5,103.00
Other Expenses 7,528.00
Postage and Delivery 3,904.74
Printing and Reproduction 643.35
Professional Fees
Investment Relations 44,100.00
Accounting 5,590.00
Legal Fees 11,369.48
Professional Fees - Other 53,619.16
---------
Total Professional Fees 114,678.64

Rent 6,570.46
Repairs
Building Repairs 45,000.00
---------
Total Repairs 45,000.00

Supplies
Office 2,532.49
Supplies - Other 1,161.08
---------
Total Supplies 3,693.57

Telephone 5,336.81
Travel & Ent
Entertainment 3,650.92
Meals 944.08
Travel 35,051.33
Travel & Ent - Other 3,680.61
---------
Total Travel & Ent 43,326.94

Uncategorized Expenses 0.00
Vehicle Lease 5,449.31
--------------------
Total Expense 250,446.08
--------------------
Net Ordinary Income 88,939.92
--------------------
Net Income 88,939.92
====================

<PAGE>

SOUTHWEST INDUSTRIAL PRODUCTSS, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS

Special Meeting of Shareholders

July 29, 1998

The undersigned, having received the Notice of Special Meeting of
Shareholders and Proxy Statement of Southwest Industrial Products, Inc., dated
July 8, 1998, hereby constitute and appoint Lindsey Vinson with full power of
substitution, as attorney and proxy of the undersigned, to attend the special
meeting of shareholders of Southwest Industrial Products, Inc,, at the Company
located at 580 Decker, Irving, Texas on the 29th day of July, 1998, at 9:00
a.m., or at any adjournment or adjournments thereof, and to vote, as designated
below, all of the common shares of the undersigned in Southwest Industrial
Products, Inc., which the undersigned would be entitled to vote if personally
present, as follows:

Reverse split the shares of stock 1 for 6.

______YES ______NO

Approve the Merger Agreement with Aubryn International, Ltd.

______YES ______NO

Change the name of the Company to Aubryn International, Inc.

______YES ______NO

This proxy will be voted as directed, or if no such direction is
indicated and the signed proxy is returned to Golden Phoenix Minerals, Inc., it
will be voted in favor thereof.

Dated: ___________________, 1998.

-----------------------------------
(Printed Shareholders Name)

<PAGE>

-----------------------------------
(Shareholders Signature)

-----------------------------------
(Print Joint Shareholders Name,
if any)

-----------------------------------
(Joint Shareholders Signature)

IMPORTANT: PLEASE DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THE
STOCK CERTIFICATE. WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
GIVE FULL TITLE AS SUCH; IF SHARES ARE HELD BY JOINT TENANTS, EACH JOINT TENANT
IS ASKED TO SIGN.