FIRST AMENDMENT TO ADVANCE AGREEMENT

FIRST AMENDMENT TO ADVANCE AGREEMENT

             Phoenix Metals U.S.A. II, Inc. (hereinafter “Phoenix Metals”) and Xxxxxx X. and Xxxxx X. Xxxxxxxx, Inc. (hereinafter “Xxxxxxxx”) hereby agree to this first amendment to the Advance Agreement previously executed between the parties on December 1, 1999, with respect to the terms and conditions under which cash advances have been made periodically from Xxxxxxxx to Phoenix Metals.

             Notwithstanding the language contained in the Advance Agreement with respect to Phoenix Metals paying the outstanding cash advances from Xxxxxxxx in lawful money of the United States, Phoenix Metals may satisfy the accrued unpaid principal and interest by exchanging Phoenix Metals common capital stock, or such other Phoenix Metals securities selected by Phoenix Metals for the outstanding debt.  In this respect, the parties agree that, effective November 19, 1999, Xxxxxxxx has agreed and accepted 3,000,000 shares of Phoenix Metals Common stock in exchange of the $3,263,191 in outstanding cash advances and accrued interest as of June 30, 1999.

In all other respects, the Advance Agreement remains in full force and effect.

Dated January 28, 2000

/s/ Xxxxxx X. Xxxxxxxx		/s/ Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President Phoenix Metals		Xxxxx X. Xxxxxxxx, Chairperson Xxxxxx X. and Xxxxx X. Xxxxxxxx, Inc.
/s/ Xxxxx X. Xxxxxxxx		/s/ Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Chairperson Phoenix Metals		Xxxxxx X. Xxxxxxxx, President Xxxxxx X. & Xxxxx X. Xxxxxxxx, Inc.