SHARE EXCHANGE AGREEMENT




  SHARE EXCHANGE AGREEMENT

  






 



THIS SHARE
EXCHANGE AGREEMENT  (Agreement)
is entered into on this 10th day of July 2002, by and between: 



Prime Equipment
Inc., a
Nevada corporation (herein called PRIME) whose corporate office is
Suite 200 8275 South Eastern Avenue, Las Vegas, NV 89123, U.S.A.  



and 



Netmagic
Investments Limited (herein called NETMAGIC)
whose registered office is TrustNet Chambers, Lotemau Center, Apia, Somoa.  



PRIME and NETMAGIC are also collectively called the
Parties. 



RECITALS: 



A)          
PRIME is in the process of applying to become a fully
reporting US company trading on the NASDAQ OTCBB. The authorized share capital
of Prime consists of fifty million (50,000,000) common shares and twenty four
million (24,000,000) preferred shares.  Prime
currently has four million forty nine thousand (4,046,000) common shares issued
and outstanding 



B)            NETMAGIC
owns 100% of IP Teleservices Inc., a British Columbia company (herein
called IPT) whose office is at 105 539 Main Street, Vancouver,
BC, Canada V6A2V1. 



C)       
IPT specializes in the integration of Voice over Internet Protocol (VoIP)
technology and have been establishing their own points of presences (POP) and
VoIP gateways throughout major cities in China and North America, enabling the
latest in telecommunications technology and a cost effective global VoIP network
for voice and data applications. NETMAGIC is a company developing Application
Software for the telecommunications industry; it has developed a software based
Prepaid/Postpaid calling card platform with Call Back capability suitable for
VoIP applications in a switch less environment ( hereinafter called the
Platform). 



D)       
PRIME wishes to acquire NETMAGIC's proprietary software Platform and
its operating company IPT, and NETMAGIC wishes to sell it's software Platform,
including its subsidiary IPT to PRIME.  



NOW, THEREFORE,
based on the foregoing premises, which are incorporated herein by reference, and
for and in consideration of the mutual covenants and agreements contained
herein, and in reliance on the representations and warranties set forth in this
Agreement, and for other valuable consideration, the sufficiency of which is
hereby expressly acknowledged, the Parties agree as follows:



 



1.1                          
1 )
SHARE EXCHANGE    





1.1    NETMAGIC agrees to
transfer to Prime 100% of  IPT's
issued and outstanding shares, and the ownership of it's software Platform, in
exchange for which Prime agrees to issue to NETMAGIC five million (5,000,000)
common shares and to its referral agent  POLINVEST
Ltd. , five
hundred thousand (500,000) preferred shares of PRIME , at Closing.



1.2     The Prime
Shares will be restricted from trading in accordance with Rule 144 of the United
States Securities and Exchange Commission ("SEC").





      1.3     
Closing shall take place in Seattle, Washington on or before July 31st,
2002 (the "Closing")

       at  the offices of to Parsons Law Firm, located 500 108th Ave. NE,
Suite 1710, Bellevue, WA   98004.



      At
Closing NETMAGIC will deliver IPT's minute book and share certificates
evidencing all Shares,                            



together
with the necessary stock powers duly endorsed for transfer, and also the source
code of the software Platform certified by the Director of NETMAGIC or its
authorized representative, the transfer of ownership of the software Platform to
Prime.



At Closing PRIME will deliver the Prime Shares issued
in the names of the shareholders of  NETMAGIC as per attached shareholders list in Appendix B





2.     
PRIME Warranties and Representations 



      
2.1            
PRIME hereby warrants and represents as follows: 



2.1.1    
PRIME has and will have on the Closing Date, full and lawful power and
authority to enter into and to carry out the terms and conditions of this
Agreement.   



2.1.1          PRIME has full
and lawful power and authority to transfer and deliver the Prime Shares to
NETMAGIC pursuant to the terms of this Agreement and upon Closing NETMAGIC shall
be the rightful title owner of fully paid and non-assessable Prime Shares. 



2.1.2     Neither this Agreement nor any schedule or
document attached hereto or presented to NETMAGIC by PRIME in connection with
this Agreement or the share exchange, contain any materially misleading
statement, or omit any material fact of statement necessary to make the other
statements or facts therein set forth not materially misleading. 



2.1.3     As of Closing, PRIME shall have authorized
for issuance fifty million (50,000,000) shares of voting Common Stock,,of which
a total of four million and forty nine thousand (4,046,000)
validly issued, fully paid and non-assessable shares will be issued and
outstanding.  PRIME also has twenty
four million (24,000,000) shares of Preferred Stock authorized and held in
treasury.  To the best of PRIME's
knowledge, all such issued and outstanding shares were issued pursuant to a
valid registration statement under the Act or pursuant to valid exemptions
therefrom.  No other voting or
equity securities are authorized or issued and no other securities convertible
into voting or equity stock are authorized or issued.   



2.1.4    
To the best of the PRIME's knowledge, it has complied with all
reporting requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and that all such filings do not contain and have not
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, false or misleading. 
 



2.1.5     To the best of the PRIME's knowledge, it
has never been subject to any SEC administrative proceedings, enforcement
actions or sanctions and there is not such proceeding or enforcement
investigation pending or threatened. 



2.1.6 Except as specifically set
forth in its Financial Statements: 



a)          PRIME does not
owe any money, securities, or property to any affiliate of PRIME, as defined
under the Securities Act of 1933. 



b)          PRIME does not
have any material debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, that is not
reflected in its audited financial statements.          



         




2.1.7    
PRIME does not currently have, nor will it have on the Closing Date any
pension plan, profit sharing plan, or stock purchase plan for any of its
employees or certain options to proposed executive officers.  



2.1.8     Except as otherwise set forth in this
Agreement, there have not been since the date of the latest Financial Statement
delivered by PRIME any changes of the following nature: 



a)        
Any significant labor disputes or any material adverse change in PRIME's
properties, business supply of raw materials, or markets for its products,
including, but not limited to, damage or destruction of property by fire or
other casual, whether or not covered by insurance, or any material adverse
change in the financial condition or results of operations of PRIME taken as a
whole. 



b)        
Any change in the authorized, issued, or outstanding capital stock of
PRIME; any granting of any stock option or right to purchase shares of capital
stock or any issuance of any security convertible into shares of capital stock
of PRIME; any purchase, redemption, retirement, or other acquisition of any
shares of capital stock by NETMAGIC; or any agreement to do any of the
foregoing; or any declaration, setting aside; or payment of any dividend or
other distribution in respect of the capital stock of PRIME. 



c)         Any sale or lease of
the PRIME's property or assets, other than inventory sold in the ordinary
course of business, any mortgage or pledge of any properties or assets of PRIME,
any borrowing incurred, assumed or guaranteed by PRIME other than in the
ordinary course of business. 



d)         Any employment
contract, bonus, stock option, profit sharing, pension, retirement, incentive or
similar arrangement or plan instituted, agreed to, or amended. 



2.1.9     Neither this Agreement nor any schedule or
document attached hereto or presented to NETMAGIC by PRIME in connection with
this Agreement or the share exchange, contain any materially misleading
statement, or omit any material fact of statement necessary to make the other
statements or facts therein set forth not materially misleading. 



3.                 
NETMAGIC Warranties and Representations 



3.1           
NETMAGIC hereby warrants and represents as follows: 



3.1.1     NETMAGIC understands that the exchanged PRIME
Shares have not been registered under the Act and may not be sold, assigned or
otherwise transferred without registration unless such sale, assignment or
transfer involves a transaction not requiring registration under the Act. 



3.1.2     NETMAGIC has not relied upon any business
representations of PRIME regarding the acquisition of the shares of PRIME and
has been advised to seek independent legal representation and is in no way
entitled to rely on any representations or opinions of Parsons Law Firm or any
other agent of PRIME, and NETMAGIC together with their advisors have the
requisite knowledge and experience to understand the risks involved in the
transactions contemplated herein. 



3.1.3     IPT is duly organized, validly existing and
in good standing.  IPT has all
requisite power and authority to own or lease all of their respective properties
and/or assets and to conduct its businesses in the manner and in the places
where such properties and/or assets are now owned or leased or such business is
now conducted. 



3.1.4    
NETMAGIC has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and to perform its obligations
hereunder.  Neither the execution
nor delivery of this Agreement nor the consummation or performance of this
Agreement will contravene, conflict with, constitute default or result in a
violation of: (i) any provisions of the Articles of Incorporation or Bylaws of
any the NETMAGIC; or (ii) any external restraint, ruling, agreement, law,
judgment, contract, agreement, plan or order relating to the NETMAGIC, which
contravention, conflict, violation or default would materially and adversely
effect the business.  NETMAGIC have obtained and executed all corporate resolutions
and documents necessary and required for it to enter into the transactions
contemplated by this Agreement.   



3.1.5     Within the times and in the manner prescribed
by law, NETMAGIC and its subsidiaries have filed all income or other tax returns
and reports required to be filed with all governmental agencies and has paid or
accrued for payment all taxes as shown on such returns, such that a failure to
file, pay or accrue will not have a material adverse effect on the IPT or any of
their respective subsidiaries.  NETMAGIC
have not been advised, nor are they aware, that any taxing authorities auditing
or is considering an audit of any operations or tax returns. 



3.1.6     To the best of its knowledge after diligent
inquiry: 



a)          There are no
legal actions, lawsuits, proceedings or investigations, either administrative or
judicial, pending or threatened or affecting  IPT. 



b)          There are no
legal actions, lawsuits, proceedings or investigations, either administrative or
judicial, pending or threatened or affecting any of the officers or directors
therewith that arise out of their operation in IPT. 



c)          IPT is not in
material violation of law, ordinance or regulation of any kind whatever,
including, but not limited to laws, rules and regulations governing the sale of
its products, services or securities.   



d)          There is no
judgment, order, writ, injunction or decree or award has been issued by or, so
far as is known by NETMAGIC after reasonable inquiry, requested of any court or
governmental agency which might result in an adverse change in the business,
property or assets, or in the condition, financial or otherwise, of IPT or which
might adversely affect the transactions contemplated by this Agreement. 
 



e)          Neither IPT nor
its subsidiaries have ever been subject to any bankruptcy or other insolvency
proceedings.   



3.1.7     IPT and its subsidiaries own no assets and
has not incurred liabilities except as disclosed in the Financial Statements and
in this Agreement. 



3.1.8    
NETMAGIC has delivered or will deliver to PRIME IPT's year end
financial statements ("Financial Statements") as of December 31, 2001, plus
interim financial statements as of the date of Closing (the Interim
Statements') when available.   



3.1.9     The Financial Statements and Interim
Statements are true and correct in all material respects and present fairly the
financial position of IPT as of the dates thereof and the results of operations
and changes in financial position for the respective periods covered by such
statements; and have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with  past
practices. 



3.1.10    
IPT does not have any indebtedness, liability, claim or obligation of any
nature, fixed or contingent, choate or inchoate, liquidated or unliquidated,
secured or unsecured or otherwise of any kind or nature whatsoever, except as
shown dollar for dollar on the Balance Sheet or incurred in the ordinary course
of business on commercially reasonable terms subsequent to the Interim Date. 



3.1.11    
The Financial Statements reflect as of the dates shown thereon
substantially all of its material items of income and expense, and all of its
assets, liabilities, liens and accruals required to be reflected therein. 



3.1.12    
Except as disclosed in the Financial Statements or this Agreement, IPT is
not a party to, nor is any of their respective properties or assets subject to
or otherwise bound by, any: 



(a)          
Contract with any present or former stockholder, director, officer or
employee, agent or consultant;



 



(b)           Lease or
similar agreement regarding any real property or personal property;



 



(c)           Any
contract for the future purchase or sale of commodities, materials, inventory,
ingredients, supplies, products, merchandise, services or equipment;



 



(d)           Guarantees
or indemnities, direct or indirect, current or contingent, of the obligations of
customers of IPT or any other person or entity; 




 



(e)           Any real
estate mortgage, loan or credit agreement with any lender, any indenture,
pledge, conditional sale or title retention agreement, equipment obligation or
lease, or lease purchase agreement;



 



(f)           Any
agreement restricting the freedom of  IPT
or of its respective employees, to compete in any line of business, in any
geographic area or with any person or entity; or



 



(g)           Any other
material contracts affecting IPT.



 



3.1.13    
To the best of its knowledge after reasonable inquiry, there has been no
breach or default of any provisions of any contract, commitment, lease or other
agreement by IPT, or, any other party thereto, and nothing has occurred which,
with lapse of time or the giving of notice or both, would constitute a breach or
default by NETMAGIC. 



3.1.14    
Prior to Closing, PRIME will be furnished with true and complete copies
of all scheduled contracts and commitments. 



3.1.15    
NETMAGIC is aware that PRIME is subject to SEC reporting requirements. 
 



3.1.16    
Appendix "A" attached to this Agreement is a complete list of all
hardware assets of IPT, including approximate market value, as of the date shown
therein and the software component of the Platform from NETMAGIC.



4.    Expenses 



4.1       
Each of the Parties shall bear and pay the costs and expenses they have
allocated prior to the execution of the Agreement, and that they shall bear and
pay the costs incurred by them or on their behalf in connection with the
consummation of this Agreement, including, without limiting the generality of
the foregoing, fees and expenses of financial consultants, accountants and
counsel and the cost of any documentary stamps, sales and excise taxes which may
be imposed upon or be payable in respect to the transaction. 
 



 5. 
Conditions Precedent to Closing 



5.1     The obligations of the Parties under this
Agreement shall be and are subject to fulfillment, prior to or at the Closing,
of each of the following conditions: 



5.1.1     That each of the Representations and
Warranties of the Parties contained herein shall be true and correct at the time
of Closing as if such Representations and Warranties were made at such time. 



5.1.2     That the Parties shall have performed or
complied with all agreements, terms and conditions required by this Agreement to
be performed or complied with by them prior to or at the time of the Closing. 



5.1.3                  
That the Parties shall be satisfied with the results of their due
diligence and review of the other Parties' books and records as set forth
herein. 



6.  Validity
of this Agreement 



6.1       
By Closing, all corporate and other proceedings required to be taken by
NETMAGIC and PRIME in order to enter into and to carry out this Agreement shall
have been duly and properly taken.  Upon
execution, this Agreement shall constitute the valid, binding and enforceable
obligations of the Parties and shall inure to the benefit of the heirs,
executors, administrators, successors and assigns of the Parties, except to the
extent limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other laws relating to or effecting generally the enforcement of creditors
rights. 



7.  Termination 



7.1       
This Agreement may be terminated at any time before Closing by:



 



7.1.1  The mutual agreement of the Parties;



 



7.1.2  Any party if:



 



a)  
Any provision of this Agreement applicable to a party shall be materially
untrue or fail to be accomplished;



b)   Any legal proceeding shall have been instituted or shall
be imminently threatening to delay, restrain or prevent the consummation of this
Agreement; or



c)   The conditions precedent to Closing are not satisfied.



 



7.2       
Upon termination of this Agreement for any reason, in accordance with the
terms and conditions set forth in this paragraph, each said party shall bear all
costs and expenses as each party has incurred and no party shall be liable to
the other.



 



8.            
Miscellaneous Provisions



 



8.1       
This Agreement is the entire agreement between the Parties in respect of
the subject matter hereof, and no other agreements exist, written or oral, nor
may this Agreement be modified except in writing and executed by all of the
Parties hereto.  The failure to
insist upon strict compliance with any of the terms, covenants or conditions of
this Agreement shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.



 



8.2       
The validity, interpretation, and performance of this Agreement shall be
governed by the laws of the state of Nevada, without regard to any conflict of
laws.  Any dispute arising out of
this Agreement shall be brought in a court of competent jurisdiction in Nevada. 
The Parties exclude any and all statutes, laws and treaties that would
allow or require any dispute to be decided in another forum or by other rules of
decision than provided in this Agreement.



 



8.3       
All notices, requests, instructions, or other documents to be given
hereunder shall be in writing and sent by registered mail to the Parties at the
following addresses:



 



Netmagic
Investment Limited



C/o IP Teleservices Inc.,



105 539 Main Street



Vancouver, BC, Canada V6A2V1



 



PRIME
Equipment, Inc.



Suite 200 8275 South Eastern
Avenue,



Las Vegas, NV 89123, U.S.A



 



 



8.4     This Agreement may be executed in duplicate
facsimile counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one counterpart being
delivered to each party hereto.



 



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



 



Prime
Equipment Inc.                       
  
                
Netmagic Investments Limited



 



/s/ Perry Guglielmi                                  
             /s/
John Thorpe



Perry Guglielmi -  Director                        
John Thorpe - Director



 



 



 



/s/ Giovanni Iachelli          
                    
/s/ J.....



Witness                       
Witness



 



 



 



 






                                                                




 



          
                                  



Appendix  A




                                
 Hardware and Software Inventory as at February 28th,
2002



 



	
      Hardware Inventory

      

    	
       Market Value in USD

      

    
	
      QUINTUM - VoIP Hardware

      

    	
       

      

    
	
       

      

    	
      High Density Gateway

      

    	
       

      

    
	
       

      

    	
      Carrier Multipath 8E1 Beijing Gateway

      

    	
       $         
      90,000

      

    
	
       

      

    	
      Carrier Multipath 8T1 YVR Gateway

      

    	
       $         
      80,000

      

    
	
       

      

    	
      Carrier Multipath 4T1 Japan Gateway

      

    	
       $         
      40,000

      

    
	
       

      

    	
      Carrier Multipath 4T1 Calling Card
      Gateway

      

    	
       $         
      40,000

      

    
	
       

      

    	
      T1 Digital Tenor Gateway

      

    	
       

      

    
	
       

      

    	
      1.     
      TENOR32-000648

      

    	
       $         
      11,000

      

    
	
       

      

    	
      2.     
      TENOR32-00012D

      

    	
       $         
      11,000

      

    
	
       

      

    	
      3.     
      TENOR32-000353

      

    	
       $         
      11,000

      

    
	
       

      

    	
      4.     
      TENOR32-000649

      

    	
       $         
      11,000

      

    
	
       

      

    	
       

      

    	
       

      

    
	
      CISCO - Call Manager Hardware and Routers

      

    	
       

      

    
	
       

      

    	
      Media Convergence Server 7825  
      s/n 6J14JHQ2B035

      

    	
       $           
      9,060

      

    
	
       

      

    	
      2 x Routers 7206 
      - Jitong Phase 1

      

    	
       $         
      54,950

      

    
	
       

      

    	
      2 x T1/E1 CSU - Jitong Phase 1

      

    	
       $         
      36,424

      

    
	
       

      

    	
      6 x Routers 2610 - Jitong Phase 1

      

    	
       $         
      18,792

      

    
	
       

      

    	
      12 x Memory upgrades - Jitong Phase 1

      

    	
       $         
      24,492

      

    
	
       

      

    	
      6 x 2 port RJ48 Multiplex trunks - Jitong
      Phase 1

      

    	
       $         
      28,260

      

    
	
       

      

    	
      2 x Routers 2610 - Jitong Trial Phase

      

    	
       $           
      6,264

      

    
	
       

      

    	
      4 x Memory upgrades - Jitong Trial Phase

      

    	
       $        
         8,164

      

    
	
       

      

    	
      2 x 1 port RJ48 Multiplex trunks - Jitong
      Trial Phase

      

    	
       $           
      5,652

      

    
	
       

      

    	
      2 x Router 3640

      

    	
       $         
      20,410

      

    
	
       

      

    	
      4 x Memory upgrades - Jitong Trial Phase

      

    	
       $           
      8,478

      

    
	
       

      

    	
      2 x 10/100 E Network Module - Jitong
      Trial Phase

      

    	
       $         
      10,048

      

    
	
       

      

    	
      2 x 2 port RJ48 Multiplex trunks - Jitong
      Trial Phase

      

    	
       $           
      9,420

      

    
	
      ICI Computer Systems

      

    	
       

      

    
	
       

      

    	
      Rackmount Application Server

      

    	
       $           
      1,400

      

    
	
       

      

    	
      Rackmount IVR Server

      

    	
       $           
      1,686

      

    
	
       

      

    	
      Rackmount Firewall Server

      

    	
       $           
      1,686

      

    
	
       

      

    	
      Rackmount Database Server

      

    	
       $           
      2,113

      

    
	
       

      

    	
      Rackmount Raid Server for IPT Japan

      

    	
       $           
      1,400

      

    
	
       

      

    	
      Toshiba Notebook

      

    	
       $           
      1,500

      

    
	
      Misc. Networking hardwares

      

    	
       

      

    
	
       

      

    	
      3 x 8 Port 10/100MB Switch DSS-8+

      

    	
       $              
      270

      

    
	
       

      

    	
      6" RJ45 ethernet cables and Power
      bars

      

    	
       $              
      100

      

    
	
       

      

    	
       

      

    	
       

      

    
	
       

      

    	
      TOTAL HARDWARE

      

    	
       $     
         544,569

      

    


 



 



	
      Software Inventory

      

    	
       Market Value in USD

      

    
	
      Software Platform

      

    	
       

      

    
	
      1

      

    	
      IVR Platform (unlimited port multi-system
      license)

      

    	
       $           
      250,000

      

    
	
       

      

    	
       

      

    	
       

      

    
	
      2

      

    	
      PIN Database Module (unlimited connection
      multi-system license)

      

    	
       $           
      100,000

      

    
	
      3

      

    	
      CDR Database Module (unlimited connection
      multi-system license)

      

    	
       $           
      100,000

      

    
	
      4

      

    	
      Franchise Databae Module (unlimited
      connection multi-system license)

      

    	
       $           
      100,000

      

    
	
      5

      

    	
      Reseller Database Module (unlimited
      connection multi-system license)

      

    	
       $             
      75,000

      

    
	
      6

      

    	
      Agents Databae Module (unlimited
      connection multi-system license)

      

    	
       $             
      75,000

      

    
	
       

      

    	
       

      

    	
       

      

    
	
      7

      

    	
      PIN Management Module (unlimited seats
      license)

      

    	
       $           
      150,000

      

    
	
      8

      

    	
      Accounting Reporting and Analysis Module
      (unlimited seats license)

      

    	
       $           
      150,000

      

    
	
      9

      

    	
      CDR Reporting and Analysis Module
      (unlimited seats license)

      

    	
       $           
      150,000

      

    
	
      10

      

    	
      Franchise Reporting and Analysis Module
      (unlimited seats license)

      

    	
       $       
          150,000

      

    
	
      11

      

    	
      Reseller Reporting and Analysis Module
      (unlimited seats license)

      

    	
       $             
      90,000

      

    
	
      12

      

    	
      Agents Reporting and Analysis Module
      (unlimited seats license)

      

    	
       $             
      90,000

      

    
	
       

      

    	
       

      

    	
       

      

    
	
      Research and Development Cost

      

    	
       

      

    
	
      Cisco/ Quintum gateway interoperability

      

      Open VoIP network and gateway management
      tool

      

      VoIP software application platform/
      operating system

      

    	
       $          
      600,000

      

    
	
       

      

      CISCO

      

    	
       

      

    
	
      13

      

    	
      Cisco Call Manager 3.0.(8) (one site
      license)

      

    	
       $               
      7,542

      

    
	
       

      

    	
       

      

    	
       

      

    
	
       

      

    	
      TOTAL SOFTWARE

      

    	
       $        
      2,087,542