Document:

EXHIBIT
      10.14

     

     

    PLACEMENT
      AGREEMENT

     

    July
      7,
      2006

     

    
      	
              Keating
                Securities, LLC

            	
              Axiom
                Capital Management, Inc.

            
	
              5251
                DTC Parkway, Suite 1090

            	
              780
                Third Avenue, 43rd
                Floor

            
	
              Greenwood
                Village, CO 80111

            	
              New
                York, NY 10017-2024

            

    

     

    
      	Re:	
              Offering
                of Series B Convertible Preferred Stock in the Aggregate Principal
                Amount
                of $7,000,000 (Minimum) and $10,000,000 (Maximum) with Attached
                Warrants

            

    

     

    Gentlepersons:

     

    1.    Introduction.

     

    Keating
      Securities, LLC, a Delaware limited liability company (“Keating”), and Axiom
      Capital Management, Inc. (“Axiom” and together with Keating, the “Placement
      Agents”), propose to act on a best efforts basis as the exclusive placement
      agents for Infosmart Group Limited, a company incorporated in the British Virgin
      Islands (“Infosmart”), in a private placement offering (“Offering”) of Series B
      Convertible Preferred Stock (“Shares”) with attached warrants (“Warrants”), in a
      minimum principal amount of $7,000,000 (“Minimum Amount”) and a maximum
      principal amount of $10,000,000 (“Maximum Amount”), to be issued by Cyber
      Merchants Exchange, Inc., a California corporation (“Cyber Merchants”), upon the
      closing of the Exchange Agreement described below.

     

    Prior
      to
      the closing of the Offering (“Closing”), Infosmart and Cyber Merchants shall
      have completed the transactions under a certain exchange agreement (“Exchange
      Agreement”) to be entered into by and among Cyber Merchants, KI Equity Partners
      II, LLC, a shareholder of Cyber Merchants (“KI Equity”), Prime Fortune
      Enterprises, Ltd., the sole shareholder of Infosmart (“Prime Fortune”), and each
      of the shareholders of Prime Fortune (the “Shareholders”). Pursuant to the
      Exchange Agreement, all of the issued and outstanding shares of capital stock
      of
      Prime Fortune will be transferred to Cyber Merchants in exchange for 1,000,000
      shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) of
      Cyber Merchants (the “Exchange”). The shares of Prime Fortune to be exchanged
      pursuant to the Exchange Agreement will also include 58.82352 shares of Prime
      Fortune’s capital stock (the “HIG Shares”) to be issued by Prime Fortune to
      Hamptons Investment Group, Ltd. (“HIG”) immediately prior to the closing of the
      Exchange Agreement for services as a finder in connection with the Exchange
      Agreement. Upon completion of the Exchange, Infosmart will be an indirect,
      wholly owned subsidiary of Cyber Merchants. The Series A Preferred Stock will
      by
      designation of its terms be junior to the Series B Convertible Preferred
      Stock.

     

    The
      Shares will be entitled to quarterly dividends accruing at the rate of 8% per
      annum. The Shares will be convertible into Cyber Merchant’s common stock (the
“Conversion Shares”) at any time at the option of the investor at a fixed
      conversion price based on a $33,720,000 fully diluted pre-money valuation (the
      “Conversion Price”). The Shares will also be subject to mandatory conversion on
      the second anniversary of the closing of the Offering, and a forced

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    conversion
      by Cyber Merchants upon the occurrence of certain events.
      Investors in the Offering (“Investors”) will also receive five-year warrants to
      purchase shares of Cyber Merchant’s common stock (“Common Stock”) in an amount
      equal to 100% of the Conversion Shares. The Warrants will be exercisable at
      a
      price equal to 125% of the Conversion Price (“Exercise Price”).

     

    Following
      the consummation of the Exchange and prior to the closing of the Offering,
      Cyber
      Merchant’s shall assume all of Infosmart’s rights and obligations under this
      Agreement; provided that prior to Cyber Merchants’ approval and assumption of
      this Agreement, references to Infosmart shall only be deemed to include
      Infosmart and references to Cyber Merchants shall only be deemed to include
      Cyber Merchants.

     

    The
      Exchange and the transactions contemplated under the Exchange Agreement are
      herein referred to as the “Transaction” or collectively as the
“Transactions.”

     

    Upon
      consummation of the Exchange, Cyber Merchants will prepare a proxy or
      information statement pursuant to Regulation 14A or 14C under the Exchange
      Act
      (as defined below) (together with any amendments or supplements thereto, the
      “Proxy/Information Statement”) and will either solicit proxies from its
      shareholders or obtain majority consent from and inform its shareholders to:
      (i)
      approve a change in the name of Cyber Merchants to a name approved by its Board
      of Directors (“Board”); (ii) approve an increase in the authorized number of
      shares of Cyber Merchants Common Stock from 40,000,000 to 300,000,000; and
      (iii)
      to approve such other actions as may be approved by the Board. Upon
      effectiveness of the increase in the authorized number of shares of Common
      Stock, the shares of the Series A Preferred Stock will automatically convert
      by
      its terms into an aggregate of 116,721,360 fully paid and non-assessable shares
      of Common Stock. As a condition of the closing of the Exchange, KI Equity and
      the Shareholders will enter into a voting agreement (“Voting Agreement”) that
      requires their share approval vote favoring the actions provided in (i) through
      (iii) above.

     

    The
      Shares and the Warrants are more fully described in a private placement
      memorandum dated July 10, 2006, including any supplements or amendments thereto
      (the “Memorandum”). Except as otherwise defined herein, all capitalized terms
      shall have the meaning set forth in the Memorandum.

     

    Infosmart
      desires to employ the Placement Agents as its exclusive placement agents to
      offer, offer for sale and sell the Shares and Warrants subject to all of the
      terms and conditions of this Agreement and subject to the terms and conditions
      contained in the Memorandum. In the event of any inconsistency between this
      Agreement and the Memorandum, the terms and conditions of this Agreement shall
      supercede and be controlling.

     

    2.    Representations
      and Warranties of Infosmart and Cyber Merchants.

     

    (a)    Infosmart
      represents and warrants to, and covenants with, the Placement Agents as of
      the
      date of this Agreement and, unless otherwise set forth in the applicable
      representation or warranty, upon completion of the as of the date of the Closing
      as follows:

     

    (i)    Authority.
      As of
      the Closing (as defined in Section 4(d) below), all action required to be taken
      by Infosmart necessary for the authorization of this Agreement, the

      
        
           

        

        
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    Subscription
      Agreements between Infosmart and the purchasers of the Shares and Warrants,
      the
      form of which is attached as Exhibit
      A
      hereto
      (the “Subscription Agreements”), the Registration Rights Agreement in the form
      attached as Exhibit
      B
      hereto
      (the “Registration Rights Agreement” and together with the Subscription
      Agreements, the “Related Agreements”) and the performance of all obligations of
      Infosmart hereunder will have been taken; and this Agreement and the Related
      Agreements shall be in full force and effect.

     

    (ii)    Authority
      for Exchange Agreement.
      As of
      the Closing, all action required to be taken by Infosmart necessary for the
      authorization of the Exchange Agreement (collectively with each of the ancillary
      agreements related thereto, collectively the “Transaction Documents”) and the
      performance of all obligations of Infosmart thereunder will have been
      taken.

     

    (iii)    Organization
      and Qualification.

     

    (a)    Infosmart
      is a company incorporated in the British Virgin Islands, is duly formed or
      organized, validly existing and in good standing under the laws of its
      jurisdiction of organization and has the requisite power and authority to own,
      lease and operate its assets and properties and to carry on its business as
      it
      is now being or currently planned by Infosmart to be conducted. Infosmart is
      in
      possession of all franchises, grants, authorizations, licenses, permits,
      easements, consents, certificates, approvals and orders (“Approvals”) necessary
      to own, lease and operate the properties it purports to own, operate or lease
      and to carry on its business as it is now being conducted, and to consummate
      the
      Transactions contemplated under this Agreement and the Exchange Agreement,
      except where the failure to have such Approvals could not, individually or
      in
      the aggregate, reasonably be expected to have a Material Adverse Effect (as
      hereinafter defined) on Infosmart. Infosmart is not in violation of any of
      the
      provisions of Infosmart’s articles of organization or bylaws or similar
      governing, organization or charter documents (collectively referred to herein
      as
“Charter Documents”). Infosmart is in good standing in the British Virgin
      Islands. The minute books or the equivalent contain true, complete and accurate
      records of meetings and consents in lieu of meetings of its board of directors
      (and any committees thereof), similar governing bodies and stockholders
      (“Corporate Records”) of Infosmart, since the time of Infosmart’s organization.
      The ownership records of shares of Infosmart’s capital stock are true, complete
      and accurate records of the ownership such of shares as of the date of such
      records and contain all transfers of such shares since the time of Infosmart’s
      organization (“Share Records”). Infosmart is not required to qualify to do
      business as a foreign corporation in any other jurisdiction. For purposes of
      this Agreement, the term “Material Adverse Effect” when used in connection with
      an entity means any change, event, violation, inaccuracy, circumstance or
      effect, individually or when aggregated with other changes, events, violations,
      inaccuracies, circumstances or effects, that is materially adverse to the
      business, assets (including intangible assets), revenues, financial condition
      or
      results of operations of such entity or its subsidiaries, if any, taken as
      a
      whole (it being understood that neither of the following alone or in combination
      shall be deemed, in and of itself, to constitute a Material Adverse Effect:
      (i)
      changes attributable to the public announcement or pendency of the Exchange,
      the
      Offering or any related transactions, (ii) changes in general national or
      regional economic conditions, (iii) changes affecting the industry generally
      in
      which the entity operates (and with respect to Infosmart, in which the
      Affiliated Companies (as defined in Section 2(a)(v) below) operate), or (iv)
      any
      SEC (as defined in Section 2(a)(xxv) below) rulemaking requiring enhanced
      disclosure of transactions with a public shell.

      
        
           

        

        
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    (b)    Each
      member of the Group (as hereinafter defined) is organized under the laws of
      the
      jurisdiction set forth in Schedule 2(a)(iii) hereto, is duly formed or
      organized, validly existing and in good standing under the laws of its
      jurisdiction of organization and has the requisite power and authority to own,
      lease and operate its assets and properties and to carry on its business as
      it
      is now being or currently planned by each member of the Group to be conducted.
      Each member of the Group is in possession of all Approvals necessary to own,
      lease and operate the properties it purports to own, operate or lease, to carry
      on its business as it is now being conducted, to consummate the Transactions.
      No
      member of the Group is in violation of any of the provisions of their respective
      Charter Documents. The Corporate Records of each member of the Group contain
      true, complete and accurate records of meetings and consents in lieu of meetings
      of its board of directors (and any committees thereof), similar governing bodies
      and holders of its registered capital, since the time of their respective
      organization. The ownership records of each Group member’s registered capital
      are true, complete and accurate records of such ownership as of the date of
      such
      records and contains all transfers of such registered capital since the time
      of
      their respective organization. No member of the Group is required to qualify
      to
      do business as a foreign corporation in any other jurisdiction. For purposes
      of
      this Agreement, the term “Group” shall mean collectively Infosmart, Infoscience
      International Enterprises, Ltd., Info Smart Technology, Ltd., InfoScience Media
      Limited and Discobrás Indústria E Comércio de Eletro Eletrônica
      Limiteda.

     

    (iv)    Subsidiaries.
      Set
      forth in Schedule 2(a)(iv) hereto is a true and complete list of all
      Subsidiaries (as hereinafter defined) of Infosmart and any member of the Group
      stating, with respect to each Subsidiary, its jurisdiction of incorporation
      or
      organization, date of incorporation or organization, capitalization and equity
      ownership. Each Subsidiary is a corporation duly incorporated or organized,
      validly existing and in good standing under the laws of the jurisdiction of
      its
      incorporation or organization, has all requisite corporate power and authority
      to own, lease and operate its properties and to carry on its businesses as
      they
      are now being conducted, and no Subsidiary is required to qualify to do business
      as a foreign corporation in any other jurisdiction. All of the outstanding
      shares of capital stock of each Subsidiary have been duly and validly authorized
      and issued, are fully paid and non-assessable, have not been issued in violation
      of any preemptive or other right of stockholders, or any other Person (as
      defined below), or of any Legal Requirements (as defined in Section 2(a)(vii)
      below), and are owned beneficially and of record by the Person as specified
      on
      Schedule 2(a)(iv), free and clear of any liens, claims, charges, encumbrances,
      pledges, mortgages, security interests, options, rights to acquire, proxies,
      voting trusts or similar agreements, restrictions on transfer or adverse claims
      of any nature whatsoever (“Liens”). No Subsidiary is in violation of any of the
      provisions of its Charter Documents.

     

    Except
      as
      described in Schedule 2(a)(iv) hereto, neither Infosmart, any member of the
      Group nor any Subsidiary owns, directly or indirectly, any ownership, equity,
      profits or voting interest in any Person (other than Infosmart, a member of
      the
      Group or the Subsidiaries) or has any agreement or commitment to purchase any
      such interest, and Infosmart, each Group member and their Subsidiaries have
      not
      agreed and are not obligated to make nor are bound by any written, oral or
      other
      agreement, contract, subcontract, lease, binding understanding, instrument,
      note, option, warranty, purchase order, license, sublicense, insurance policy,
      benefit plan, commitment or undertaking of any nature, as of the date hereof
      or
      any date hereafter, under

      
        
           

        

        
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    which
      any
      of them may be obligated to make any future investment in or capital
      contribution to any other entity.

     

    For
      purposes of this Agreement, (i) the term “Subsidiary” shall mean any Person
      (other than a member of the Group) in which Infosmart, any member of the Group
      or any Subsidiary directly or indirectly, owns beneficially securities or
      interests representing more than 50% of (x) the aggregate equity or profit
      interests, or (y) the combined voting power of voting interests ordinarily
      entitled to vote for management or otherwise, and (ii) the term “Person” shall
      mean and include an individual, a corporation, a partnership (general or
      limited), a joint venture, an association, a limited liability company, a trust
      or any other organization or entity, including a government or political
      subdivision or an agency or instrumentality thereof.

     

    (v)    Capitalization.

     

    (a)    The
      authorized capital stock of Infosmart currently consists of 50,000 shares of
      capital stock, par value $1.00 per share, or an authorized and registered
      capital of $50,000. At the close of business on the business day prior to the
      date hereof, Schedule 2(a)(v) hereto contains all of the outstanding equity
      securities of Infosmart together with the HIG Shares to be issued by Infosmart
      immediately prior to closing of the Exchange Agreement. All Shares on Schedule
      2(a)(v) have been validly issued, fully paid and are non-assessable and have
      not
      been issued in violation of any preemptive or other right of stockholders (or
      any other Person), or of any legal requirement. Except as set forth in Schedule
      2(a)(v), there are no outstanding securities, convertible securities, options,
      warrants or derivative securities, and there are no agreements or commitments
      obligating Infosmart to issue or grant any of the foregoing, including any
      pre-emptive or similar rights. All outstanding shares of capital stock, options,
      warrants and other securities of Infosmart have been issued in compliance with
      (i) all applicable securities laws and (in all material respects) other
      applicable laws and regulations, and (ii) all requirements set forth in any
      applicable contracts. Except as described in Schedule 2(a)(v) or in
      Schedule 2(a)(v) hereto, there are no commitments or agreements of any
      character to which Infosmart is bound obligating Infosmart to accelerate the
      vesting of any options or warrants as a result of the Transactions.

     

    (b)    The
      authorized and registered capital stock of each member of the Group shall be
      as
      set forth in Schedule 2(a)(v) hereto. All of the outstanding shares of capital
      stock of each member of the Group have been duly and validly authorized and
      issued, are fully paid and non-assessable, have not been issued in violation
      of
      any preemptive or other right of stockholders (or any other Person) or of any
      Legal Requirement, and are owned beneficially and of record by the Person as
      specified on Schedule 2(a)(v), free and clear of any Lien. Except as set forth
      in Schedule 2(a)(v), there are no outstanding securities, convertible
      securities, options, warrants or derivative securities, and there are no
      agreements or commitments obligating any member of the Group to issue or grant
      any of the foregoing, including any pre-emptive or similar rights. All
      outstanding shares, options, warrants and other securities of each member of
      the
      Group have been issued in compliance with (i) all applicable securities laws
      and
      (in all material respects) other applicable laws and regulations, and (ii)
      all
      requirements set forth in any applicable contracts.

     

    (c)    Except
      as
      set forth in this Section 2(a)(v) or in Schedule 2(a)(v) hereto, there are
      no
      equity securities, partnership interests or similar ownership interests of
      any

      
        
           

        

        
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    class
      of
      any equity security of Infosmart, any member of the Group or any Subsidiary
      (collectively, the “Affiliated Companies” and individually, the “Affiliated
      Company”), or any securities exchangeable or convertible into or exercisable for
      such equity securities, partnership interests or similar ownership interests,
      issued, reserved for issuance or outstanding. Except as set forth in this
      Section 2(a)(v) or in Schedule 2(a)(v) hereof, there are no subscriptions,
      options, warrants, equity securities, ownership or partnership interests or
      similar ownership interests, calls, rights (including preemptive rights),
      commitments or agreements of any character to which the Affiliated Companies
      are
      a party or by which they are bound obligating them to issue, deliver or sell,
      or
      cause to be issued, delivered or sold, or repurchase, redeem or otherwise
      acquire, or cause the repurchase, redemption or acquisition of, any registered
      capital, ownership interests, partnership interests or similar ownership
      interests of the Affiliated Companies or obligating the Affiliated Companies
      to
      grant, extend, accelerate the vesting of or enter into any such subscription,
      option, warrant, equity security, call, right, commitment or
      agreement.

     

    (d)    Except
      as
      contemplated by this Agreement, and except as set forth in Schedule 2(a)(v)
      hereto, there are no registration rights, and there is no voting trust, voting
      agreement, proxy, rights plan, anti-takeover plan or other agreement or
      understanding to which the Affiliated Companies are a party or by which they
      are
      bound with respect to any shares of capital stock, registered capital, equity
      securities, partnership interests or similar ownership interests of any class
      of
      the Affiliated Companies, and there are no agreements to which the Affiliated
      Companies are a party, or which the Affiliated Companies have knowledge of,
      which conflict with this Agreement or the transactions contemplated herein
      or
      otherwise prohibit the consummation of the transactions contemplated
      hereunder.

     

    (e)    As
      of the
      Closing Date (as defined in Section 4(d)) (and following completion of the
      Exchange), Infosmart’s capitalization will be the capitalization of Cyber
      Merchants as described in Section 2(b)(vi).

     

    (vi)    Authority
      Relative to this Agreement.
      Infosmart has all necessary corporate power and authority to execute and deliver
      this Agreement and to perform its obligations hereunder and, to consummate
      the
      transactions contemplated hereby (including the Transactions). The execution
      and
      delivery of this Agreement and the consummation by Infosmart of the transactions
      contemplated hereby (including the Transactions) have been duly and validly
      authorized by all necessary action on the part of Infosmart (including the
      approval by Infosmart’s stockholders), and no other proceedings on the part of
      any Affiliated Company are necessary to authorize this Agreement or to
      consummate the transactions contemplated hereby. This Agreement has been duly
      and validly executed and delivered by Infosmart and, assuming the due
      authorization, execution and delivery thereof by the other parties hereto,
      constitutes the legal and binding obligation of Infosmart, enforceable against
      it in accordance with its terms, except as may be limited by bankruptcy,
      insolvency, reorganization or other similar laws affecting the enforcement
      of
      creditors’ rights generally and by general principles of equity and public
      policy.

     

    (vii)    No
      Conflict; Required Filings and Consents.

     

    (a)    The
      execution and delivery of this Agreement and the Exchange Agreement by Infosmart
      does not, and the performance of this Agreement and the Exchange

      
        
           

        

        
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    Agreement
      by Infosmart shall not, (i) conflict with or violate their respective Charter
      Documents, (ii) conflict with or violate any Legal Requirements (as defined
      below), or (iii) result in any breach of or constitute a default (or an event
      that with notice or lapse of time or both would become a default) under, or
      materially impair the Affiliated Company’s rights or alter the rights or
      obligations of any third party under, or give to others any rights of
      termination, amendment, acceleration or cancellation of, or result in the
      creation of a Lien or encumbrance on any of the properties or assets of any
      Affiliated Company pursuant to, any Material Contracts (as defined in Section
      2(a)(xxi) below), except, with respect to clauses (ii) or (iii), for any such
      conflicts, violations, breaches, defaults or other occurrences that would not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Affiliated Companies. For purposes of this Agreement,
      the
      term “Legal Requirements” means any federal, state, local, municipal, foreign or
      other law, statute, constitution, principle of common law, resolution,
      ordinance, code, edict, decree, rule, regulation, ruling or requirement issued,
      enacted, adopted, promulgated, implemented or otherwise put into effect by
      or
      under the authority of any Governmental Entity (as defined below).

     

    (b)    The
      execution and delivery of this Agreement and the Exchange Agreement by Infosmart
      does not, and the performance of obligations of Infosmart hereunder or
      thereunder will not, require any consent, approval, authorization or permit
      of,
      or filing with or notification to, any court, administrative agency, commission,
      governmental or regulatory authority, domestic or foreign (a “Governmental
      Entity”), except (i) for applicable requirements, if any, of the Securities Act
      of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934,
      as amended (the “Exchange Act”), state securities laws (“Blue Sky Laws”), and
      the rules and regulations thereunder, and appropriate documents with the
      relevant authorities of other jurisdictions in which Infosmart is qualified
      to
      do business, and (ii) where the failure to obtain such consents, approvals,
      authorizations or permits, or to make such filings or notifications, would
      not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Affiliated Companies or, after the closing of the Exchange
      Agreement, Cyber Merchants, or prevent consummation of the Transactions or
      otherwise prevent the parties hereto from performing their obligations under
      this Agreement or the Exchange Agreement.

     

    (viii)    Compliance.
      Each
      Affiliated Company has complied with and is not in violation of any Legal
      Requirements with respect to the conduct of their business, or the ownership
      or
      operation of their business, except for failures to comply or violations which,
      individually or in the aggregate, have not had and are not reasonably likely
      to
      have a Material Adverse Effect on the Affiliated Companies. To the knowledge
      of
      Infosmart, the businesses and activities of the Affiliated Companies have not
      been and are not being conducted in violation of any Legal Requirements. Each
      Affiliated Company is not in default or violation of any term, condition or
      provision of any applicable Charter Documents or Contracts. Except as set forth
      on Schedule 2(a)(viii), no written notice of non-compliance with any Legal
      Requirements relating or with respect to the business of the Affiliated
      Companies has been received by the Affiliated Companies (and each Affiliated
      Company has no knowledge of any material such notice delivered to any other
      Person). To the knowledge of Infosmart, the Affiliated Companies are not in
      violation of any material term of any contract or covenant relating to
      employment, patents, proprietary information disclosure, non-competition or
      non-solicitation.

     

    (ix)    Financial
      Statements.

      
        
           

        

        
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    (a)    The
      audited financial statements of Infosmart in the Memorandum are a correct and
      complete copy of the audited financial statements (including, in each case,
      any
      related notes thereto) of Infosmart and the members of the Group, on a
      consolidated basis, for the fiscal years ended December 31, 2004 and 2005,
      prepared in accordance with the published rules and regulations of any
      applicable Governmental Entity and with generally accepted accounting principles
      of the United States (“U.S. GAAP”) applied on a consistent basis throughout the
      periods involved (except as may be indicated in the notes thereto) and audited
      in accordance with the auditing standards of the Public Company Accounting
      Oversight Board (“PCAOB”) by an independent accountant registered with PCAOB,
      and such statements fairly present in all material respects the financial
      position of Infosmart and the members of the Group, on a consolidated basis,
      at
      the respective dates thereof and the results of its operations and cash flows
      for the periods indicated, and each does not contain any untrue statement of
      a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made, not misleading.

     

    (b)    The
      unaudited financial statements of Infosmart in the Memorandum are a complete
      copy of the unaudited financial statements (including, in each case, any related
      notes thereto) of Infosmart and each member of the Group, on a consolidated
      basis, for the three-month period ended March 31, 2006, prepared in accordance
      with U.S. GAAP applied on a consistent basis throughout the period involved
      (except as may be indicated in the notes thereto), and have been reviewed by
      an
      independent accountant registered with PCAOB, and such statements will fairly
      present in all material respects the financial position of Infosmart and the
      members of the Group, on a consolidated basis, at the dates thereof and the
      results of its operations and cash flows for the periods indicated, except
      that
      the unaudited interim financial statements will be subject to normal adjustments
      which are not expected to have a Material Adverse Effect on Infosmart or the
      members of the Group. The audited financial statements and the unaudited
      financial statements described in this Section 2(a)(ix) are collectively
      referred to herein as the “U.S. GAAP Financial Statements”.

     

    (c)    Infosmart
      and each member of the Group maintains a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management’s general or specific authorization, and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    (x)    No
      Undisclosed Liabilities.
      Except
      as set forth in Schedule 2(a)(x) hereto, the Affiliated Companies have no
      liabilities individually in excess of $25,000 and in the aggregate in excess
      of
      $100,000 (absolute, accrued, contingent or otherwise) of a nature required
      to be
      disclosed on a balance sheet or in the related notes to the consolidated
      financial statements prepared in accordance with U.S. GAAP which are,
      individually or in the aggregate, material to the business, results of
      operations or financial condition of the Affiliated Companies, except:
      (i) liabilities provided for in or otherwise disclosed in the consolidated
      balance sheets of Infosmart and the members of the Group as of December 31,
      2005, prepared in accordance with U.S. GAAP, as included in the Memorandum,
      and
      (ii) such liabilities arising in the ordinary

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

    course
      of
      business of the Affiliated Companies since December 31, 2005, none of which
      would have a Material Adverse Effect on the Affiliated Companies.

     

    (xi)    Absence
      of Certain Changes or Events.
      Except
      as set forth in Schedule 2(a)(xi) hereto or in the Memorandum, including the
      consolidated balance sheets of Infosmart and the members of the Group since
      December 31, 2005, and except for the transactions contemplated under this
      Agreement (including the Offering), there has not been, with respect to any
      Affiliated Company: (a) any Material Adverse Effect, (b) any declaration,
      setting aside or payment of any dividend on, or other distribution (whether
      in
      cash, securities or property) in respect of, any of equity securities, or any
      purchase, redemption or other acquisition of any of equity securities or any
      options, warrants, calls or rights to acquire any equity securities or other
      securities, (c) any split, combination or reclassification of any equity
      securities, (d) any granting of any increase in compensation or fringe benefits,
      except for normal increases of cash compensation in the ordinary course of
      business consistent with past practice, or any payment of any bonus, except
      for
      bonuses made in the ordinary course of business consistent with past practice,
      or any granting of any increase in severance or termination pay or any entry
      into any currently effective employment, severance, termination or
      indemnification agreement or any agreement the benefits of which are contingent
      or the terms of which are materially altered upon the occurrence of a
      transaction of the nature contemplated hereby, (e) entry into any licensing
      or
      other agreement with regard to the acquisition or disposition of any
      Intellectual Property (as hereinafter defined) other than licenses in the
      ordinary course of business consistent with past practice or any amendment
      or
      consent with respect to any licensing agreement filed or required to be filed
      with respect to any Governmental Entity, (f) any material change in its
      accounting methods, principles or practices, (g) any change in the auditing
      firm, (h) any issuance of securities, or (i) any revaluation of any of their
      respective assets, including, without limitation, writing down the value of
      capitalized inventory or writing off notes or accounts receivable or any sale
      of
      assets other than in the ordinary course of business.

     

    (xii)    Litigation.
      Except
      as disclosed in Schedule 2(a)(xii) hereto, there are no claims, suits, actions
      or proceedings pending, or to the knowledge of any Affiliated Company,
      threatened against the Affiliated Companies, before any court, governmental
      department, commission, agency, instrumentality or authority, or any arbitrator
      that seeks to restrain or enjoin the consummation of the transactions
      contemplated by this Agreement or which could reasonably be expected, either
      individually or in the aggregate with all such claims, actions or proceedings,
      to have a Material Adverse Effect on the Affiliated Companies or have a Material
      Adverse Effect on the ability of the parties hereto to consummate the
      Transactions.

     

    (xiii)    Employee
      Benefit Plans.

     

    (a)    To
      the
      knowledge of Infosmart, all employee compensation, incentive, fringe or benefit
      plans, programs, policies, commitments or other arrangements (whether or not
      set
      forth in a written document) covering any active or former employee, director
      or
      consultant of the Affiliated Companies, or any trade or business (whether or
      not
      incorporated) which is under common control with the Affiliated Companies,
      with
      respect to which the Affiliated Companies has liability (collectively, the
      “Plans”) has been maintained and administered in all material respects in
      compliance with its terms and with the requirements prescribed by any and all
      statutes, orders, rules and regulations which are applicable to such Plans,
      and
      all liabilities with respect to the Plans have been properly reflected in the
      consolidated

      
        
           

        

        
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    financial
      statements of Infosmart and the members of the Group. No suit, action or other
      litigation (excluding claims for benefits incurred in the ordinary course of
      Plan activities) has been brought or is continuing, or to the knowledge of
      Infosmart is threatened, against or with respect to any such Plan. To the
      knowledge of Infosmart, there are no audits, inquiries or proceedings pending
      or, to the knowledge of Infosmart, threatened by any governmental agency with
      respect to any Plans. To the knowledge of Infosmart, all contributions, reserves
      or premium payments required to be made or accrued as of the date hereof to
      the
      Plans have been timely made or accrued. To the knowledge of Infosmart, each
      Plan
      can be amended, terminated or otherwise discontinued after the closing of the
      Transactions in accordance with its terms, subject to applicable laws, without
      liability to Infosmart or the Affiliated Companies (other than ordinary
      administration expenses and expenses for benefits accrued but not yet
      paid).

     

    (b)    Except
      as
      disclosed on Schedule 2(a)(xiii) hereto, neither the execution and delivery
      of
      this Agreement or the Exchange Agreement nor the consummation of the
      transactions contemplated hereby or thereby will (i) result in any payment
      (including severance, unemployment compensation, golden parachute, bonus or
      otherwise) becoming due to any stockholder, officer, director or employee of
      the
      Affiliated Companies under any Plan or otherwise, (ii) materially increase
      any benefits otherwise payable under any Plan, or (iii) result in the
      acceleration of the time of payment or vesting of any such
      benefits.

     

    (xiv)    Labor
      Matters.
      Except
      as disclosed in Schedule 2(a)(xiv) hereto, the Affiliated Companies are not
      a
      party to any collective bargaining agreement or other labor union contract
      applicable to persons employed by the Affiliated Companies nor does any
      Affiliated Company know of any activities or proceedings of any labor union
      to
      organize any such employees.

     

    (xv)    Restrictions
      on Business Activities.
      Except
      as disclosed on Schedule 2(a)(xv)to, to the knowledge of Infosmart, there is
      no
      agreement, commitment, judgment, injunction, order or decree binding upon the
      Affiliated Companies or to which the Affiliated Companies is a party which
      has
      or could reasonably be expected to have the effect of prohibiting or materially
      impairing any business practice of the Affiliated Companies, any acquisition
      of
      property by the Affiliated Companies or the conduct of business by the
      Affiliated Companies as currently conducted other than such effects,
      individually or in the aggregate, which have not had and could not reasonably
      be
      expected to have a Material Adverse Effect on the Affiliated
      Companies.

     

    (xvi)    Title
      to Property.

     

    (a)    All
      real
      estate or land use rights owned by the Affiliated Companies (including land
      use
      rights, improvements and fixtures thereon, easements and rights of way) (the
      “Real Property”) is shown or reflected on the U.S. GAAP Financial Statements.
      The Affiliated Companies have good, valid and marketable title to the Real
      Property, and except as set forth in the U.S. GAAP Financial Statements or
      on
      Schedule 2(a)(xvi) hereto, all of the Real Property is held free and clear
      of
      all Liens, rights of way, easements, restrictions, exceptions, variances,
      reservations, covenants or other title defects or limitations of any kind,
      other
      than Liens for taxes not yet due and payable and such Liens or other
      imperfections of title, if any, that do not materially detract from the value
      of
      or materially interfere with the present use

      
        
           

        

        
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    of
      the
      property affected thereby. Schedule 2(a)(xvi) hereto is a list of all options
      or
      other contracts under which any Affiliated Company has a right to acquire any
      interest in real property.

     

    (b)    All
      leases of real property held by the Affiliated Companies and all personal
      property and other property and assets of the Affiliated Companies (other than
      Real Property) owned, used or held for use in connection with the business
      of
      the Affiliated Companies (the “Personal Property”) are shown or reflected on the
      U.S. GAAP Financial Statements. The Affiliated Companies own and have good
      and
      marketable title to the Personal Property, and all such assets and properties
      are in each case held free and clear of all Liens, except for Liens disclosed
      in
      the U.S. GAAP Financial Statements or in Schedule 2(a)(xvi) hereto, none of
      which Liens has or will have, individually or in the aggregate, a Material
      Adverse Effect on such property or on the present or contemplated use of such
      property in the businesses of the Affiliated Companies.

     

    (c)    All
      leases pursuant to which an Affiliated Company leases from others material
      real
      or personal property are valid and effective in accordance with their respective
      terms, and there is not, under any of such leases, any existing material default
      or event of default of the Affiliated Companies or, to the knowledge of
      Infosmart, any other party (or any event which with notice or lapse of time,
      or
      both, would constitute a material default), except where the lack of such
      validity and effectiveness or the existence of such default or event of default
      could not reasonably be expected to have a Material Adverse Effect on the
      Affiliated Companies.

     

    (xvii)    Taxes.

     

    (a)    Definition
      of Taxes.
      For the
      purposes of this Agreement, “Tax” or “Taxes” refers to any and all applicable
      central, federal, provincial, state, local, municipal and foreign taxes,
      including, without limitation, gross receipts, income, profits, sales, use,
      occupation, value added, ad valorem, transfer, franchise, withholding, payroll,
      recapture, employment, excise and property taxes, assessments, governmental
      charges and duties together with all interest, penalties and additions imposed
      with respect to any such amounts and any obligations under any agreements or
      arrangements with any other person with respect to any such amounts and
      including any liability of a predecessor entity for any such
      amounts.

     

    (b)    Tax
      Returns and Audits.
      Except
      as set forth in Schedule 2(a)(xvii) hereto, to the knowledge of
      Infosmart:

     

    (i)    The
      Affiliated Companies have timely filed all federal, state, local and foreign
      returns, estimates, information statements and reports relating to Taxes
      (“Returns”) required to be filed by the Affiliated Companies with any Tax
      authority prior to the date hereof. All such Returns are true, correct and
      complete in all material respects. The Affiliated Companies have paid all Taxes
      shown to be due on such Returns.

     

    (ii)    All
      Taxes
      that the Affiliated Companies are required by law to withhold or collect have
      been duly withheld or collected, and have been timely paid over to the proper
      governmental authorities to the extent due and payable.

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

    (iii)    The
      Affiliated Companies have not been delinquent in the payment of any Tax nor
      is
      there any Tax deficiency outstanding, proposed or assessed against the
      Affiliated Companies, nor have the Affiliated Companies executed any unexpired
      waiver of any statute of limitations on or extending the period for the
      assessment or collection of any Tax.

     

    (iv)    No
      audit
      or other examination of any Return of the Affiliated Companies by any Tax
      authority is presently in progress, nor have the Affiliated Companies been
      notified of any request for such an audit or other examination.

     

    (v)    No
      adjustment relating to any Returns filed by the Affiliated Companies has been
      proposed in writing, formally or informally, by any Tax authority to the
      Affiliated Companies or any representative thereof.

     

    (vi)    The
      Affiliated Companies have no liability for any unpaid Taxes which have not
      been
      accrued for or reserved on Infosmart’s balance sheets included in the U.S. GAAP
      Financial Statements for the most recent fiscal year ended, whether asserted
      or
      unasserted, contingent or otherwise, other than any liability for unpaid Taxes
      that may have accrued since the end of the most recent fiscal year in connection
      with the operation of the business of the Affiliated Companies in the ordinary
      course of business, none of which is material to the business, results of
      operations or financial condition of the Affiliated Companies.

     

    (xviii)    Environmental
      Matters.
      Except
      as disclosed in Schedule 2(a)(xviii) hereto and except for such matters that,
      individually or in the aggregate, are not reasonably likely to have a Material
      Adverse Effect, to the knowledge of Infosmart: (a) the Affiliated Companies
      have
      complied with all applicable Environmental Laws; (b) the properties currently
      owned or operated by the Affiliated Companies (including soils, groundwater,
      surface water, buildings or other structures) are not contaminated with any
      Hazardous Substances; (c) the properties formerly owned or operated by the
      Affiliated Companies were not contaminated with Hazardous Substances during
      the
      period of ownership or operation by the Affiliated Companies; (d) the Affiliated
      Companies are not subject to liability for any Hazardous Substance disposal
      or
      contamination on any third party property; (e) the Affiliated Companies have
      not
      been associated with any release or threat of release of any Hazardous
      Substance; (f) the Affiliated Companies have not received any notice, demand,
      letter, claim or request for information alleging that the Affiliated Companies
      may be in violation of or liable under any Environmental Law; and (g) the
      Affiliated Companies are not subject to any orders, decrees, injunctions or
      other arrangements with any Governmental Entity or subject to any indemnity
      or
      other agreement with any third party relating to liability under any
      Environmental Law or relating to Hazardous Substances.

     

    As
      used
      in this Agreement, the term “Environmental Law” means all applicable central,
      federal, provincial, state, local or municipal law, regulation, order, decree,
      permit, authorization, opinion, common law or agency requirement relating to:
      (A) the protection, investigation or restoration of the environment, health
      and
      safety, or natural resources; (B) the handling, use, presence, disposal, release
      or threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
      pollution, contamination or any injury or threat of injury to persons or
      property.

     

    As
      used
      in this Agreement, the term “Hazardous Substance” means any substance that is:
      (a) listed, classified or regulated pursuant to any Environmental Law; (b)
      any
      petroleum product or by-product, asbestos-containing material, lead-containing
      paint or plumbing, polychlorinated

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

    biphenyls,
      radioactive materials or radon; or (c) any other substance which is the subject
      of regulatory action by any Governmental Entity pursuant to any Environmental
      Law.

     

    (xix)    Brokers;
      Third Party Expenses.
      Except
      as set forth in this Agreement and in the Related Agreements, and except as
      set
      forth in this Section 2(a)(xix), neither the Affiliated Companies nor, to the
      knowledge of Infosmart, Prime Fortune or the Shareholders, have incurred, nor
      will they incur, directly or indirectly, any liability for brokerage, finders’
fees, agent’s commissions or any similar charges in connection with this
      Agreement or the Exchange Agreement or any transactions contemplated hereby
      or
      thereby. Immediately prior to the closing of the Exchange Agreement, Infosmart
      will issue the HIG Shares as a finder’s fee in connection with the transactions
      contemplated under this Agreement. Except as disclosed in this Section 2(a)(xix)
      or on Schedule 2(a)(xix), no ownership interests, equity securities, convertible
      securities, warrants, options, or other derivative securities of the Affiliated
      Companies or Cyber Merchants are payable to any third party by any Affiliated
      Company, Prime Fortune or any Shareholder as a result of the
      Transactions.

     

    (xx)    Intellectual
      Property.
      For the
      purposes of this Agreement, the following terms have the following
      definitions:

     

    (a)    “Intellectual
      Property” shall mean any or all of the following: (i) patents and
      applications therefor and all reissues, divisions, renewals, extensions,
      provisionals, continuations and continuations-in-part thereof (“Patents”)
      worldwide; (ii) inventions (whether patentable or not), invention disclosures,
      improvements, trade secrets, proprietary information, know how, technology,
      technical data and customer lists, and all documentation relating to any of
      the
      foregoing; (iii) registered copyrights and applications therefor, and all other
      rights corresponding thereto, worldwide; (iv) material domain names, uniform
      resource locators (“URLs”) and other names and locators associated with the
      Internet (“Domain Names”); (v) registered industrial designs and applications
      therefor, worldwide; (vi) registered trade names, logos, trademarks and service
      marks, and any applications therefor (collectively, “Trademarks”), worldwide;
      (vii) all databases and data collections and all rights therein; and (viii)
      all
      moral and economic rights of authors and inventors, however
      denominated.

     

    (b)    “Infosmart
      Intellectual Property” shall mean any Intellectual Property that is owned by, or
      licensed to, the Affiliated Companies.

     

    (c)    “Infosmart
      Products” means all current versions of products or services of the Affiliated
      Companies.

     

    (d)    Except
      as
      disclosed on Schedule 2(a)(xx), to the knowledge of Infosmart, Infosmart
      Intellectual Property and Infosmart Products are not subject to any material
      proceeding or outstanding decree, order, judgment, contract, license, agreement
      or stipulation restricting in any manner the use, transfer or licensing thereof
      by the Affiliated Companies, or which may affect the validity, use or
      enforceability of such Infosmart Intellectual Property or Infosmart Products,
      which in any such case could reasonably be expected to have a Material Adverse
      Effect on the Affiliated Companies.

     

    (e)    Except
      as
      disclosed on Schedule 2(a)(xx) hereto, to the knowledge of Infosmart, the
      Affiliated Companies either own and have good and marketable title to
      each

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

    material
      item of Infosmart Intellectual Property owned by it free and clear of any Liens
      (excluding licenses and related restrictions granted in the ordinary course)
      or
      have one or more licenses sufficient for use of Infosmart Intellectual Property
      by the Affiliated Companies; and the Affiliated Companies are the owner or
      licensee of all material Trademarks used in connection with the operation or
      conduct of the business of the Affiliated Companies including the sale of any
      Infosmart Products.

     

    (f)    The
      operation of the business of the Affiliated Companies as such business currently
      is conducted, including the use of any product, device or process, to the
      knowledge of Infosmart and except as could not reasonably be expected to have
      a
      Material Adverse Effect, has not and does not infringe or misappropriate the
      Intellectual Property of any third party or constitute unfair competition or
      trade practices under the laws of any jurisdiction.

     

    (xxi)    Agreements,
      Contracts and Commitments.

     

    (a)    For
      purposes of this Agreement, (i) the term “Contracts” shall mean all written
      contracts, agreements, leases, mortgages, indentures, notes, bonds, Liens,
      licenses, arbitration awards, judgments, decrees, orders, documents,
      instruments, understandings and commitments to which the Affiliated Companies
      is
      a party or by or to which any of the properties or assets of the Affiliated
      Companies may be bound, subject or affected (including without limitation notes
      or other instruments payable to the Affiliated Companies), and the term
“Material Contracts” shall mean (x) each Contract, (I) providing for payments
      (present or future) to the Affiliated Companies in excess of $100,000 in the
      aggregate, or (II) under which or in respect of which the Affiliated Companies
      presently have any liability or obligation of any nature whatsoever (absolute,
      contingent or otherwise) in excess of $100,000, and (y) without limitation
      of
      subclause (x), each of the following Contracts:

     

    (i)    any
      mortgage, indenture, note, installment obligation or other instrument, agreement
      or arrangement for or relating to any borrowing of money by or from the
      Affiliated Companies;

     

    (ii)    any
      guaranty, direct or indirect, by the Affiliated Companies or any officer,
      director or 5% or more stockholder (“Insider”) of the Affiliated Companies of
      any obligation of the Affiliated Companies for borrowings, or otherwise,
      excluding endorsements made for collection in the ordinary course of
      business;

     

    (iii)    any
      Contract made other than in the ordinary course of business or (x) providing
      for
      the grant of any preferential rights to purchase or lease any asset of the
      Affiliated Companies or (y) providing for any right (exclusive or non-exclusive)
      to sell or distribute, or otherwise relating to the sale or distribution of,
      any
      product or service of the Affiliated Companies;

     

    (iv)    any
      obligation to register any shares of the capital stock or other securities
      of
      the Affiliated Companies with any Governmental Entity;

     

    (v)    any
      obligation to make payments, contingent or otherwise, arising out of the prior
      acquisition of the business, assets or stock of other Persons;

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

    (vi)    any
      collective bargaining agreement with any labor union;

     

    (vii)    any
      lease
      or similar arrangement for the use by the Affiliated Companies of personal
      property;

     

    (viii)    any
      Contract granting or purporting to grant, or otherwise in any way relating
      to,
      any mineral rights or any other interest (including, without limitation, a
      leasehold interest) in real property; and

     

    (ix)    any
      Contract with the Affiliated Companies to which any Insider of the Affiliated
      Companies is a party.

     

    (b)    Each
      Material Contract was entered into at arms’ length and in the ordinary course,
      is in full force and effect and, to the knowledge of Infosmart, is valid and
      binding upon and enforceable against each of the parties thereto.

     

    (c)    Except
      as
      set forth in Schedule 2(a)(xxi), neither the Affiliated Companies nor, to the
      knowledge of Infosmart, any other party thereto, is in breach of or in default
      under, and no event has occurred which with notice or lapse of time or both
      would become a breach of or default under, any Material Contract, which breach,
      individually or in the aggregate, could be reasonably likely to have a Material
      Adverse Effect on the Affiliated Companies, and no party to any Material
      Contract has given any written notice of any claim of any such breach, default
      or event, which, individually or in the aggregate, are reasonably likely to
      have
      a Material Adverse Effect on the Affiliated Companies. Each Material Contract
      to
      which the Affiliated Companies is a party or by which it is bound that has
      not
      expired by its terms is in full force and effect, except where such failure
      to
      be in full force and effect is not reasonably likely to have a Material Adverse
      Effect on the Affiliated Companies.

     

    (xxii)    Insurance.
      Schedule 2(a)(xxii) sets forth the insurance policies and fidelity bonds
      covering the assets, business, equipment, properties, operations, employees,
      officers and directors (collectively, the “Insurance Policies”) of the
      Affiliated Companies.

     

    (xxiii)    Governmental
      Actions/Filings; Approvals.
      Except
      as set forth in Schedule 2(a)(xxiii), the Affiliated Companies hold, and/or
      have made, all Governmental Actions/Filings and Approvals reasonably necessary
      for the conduct by the Affiliated Companies of their business (as presently
      conducted and to be conducted following the Closing and the closing of the
      Exchange Agreement), except with respect to any Governmental Actions/Filings
      and
      Approvals the failure of which to hold or make would not reasonably be likely
      to
      have a Material Adverse Effect on the Affiliated Companies.

     

    For
      purposes of this Agreement, the term “Governmental Action/Filing” shall mean any
      franchise, license, certificate of compliance, authorization, consent, order,
      permit, approval, consent or other action of, or any filing, registration or
      qualification with, any federal, state, municipal, foreign or other
      governmental, administrative or judicial body, agency or authority.

     

    (xxiv)    Interested
      Party Transactions.
      Except
      as set forth in the Schedule 2(a)(xxiv) hereto or as reflected in the financial
      statements included in the Memorandum, no employee, officer, director or
      stockholder of the Affiliated Companies or a member of his or her

      
        
           

        

        
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    immediate
      family is indebted to the Affiliated Companies, nor are the Affiliated Companies
      indebted (or committed to make loans or extend or guarantee credit) to any
      of
      them, other than (a) for payment of salary for services rendered,
      (b) reimbursement for reasonable expenses incurred on behalf of the
      Affiliated Companies, and (c) for other employee benefits made generally
      available to all employees. Except as set forth in Schedule 2(a)(xxiv), to
      the
      knowledge of Infosmart, none of such individuals has any direct or indirect
      ownership interest in any Person with whom the Affiliated Companies is
      affiliated or with whom the Affiliated Companies has a contractual relationship,
      or any Person that competes with the Affiliated Companies, except that each
      employee, officer, director or stockholder of the Affiliated Companies and
      members of their respective immediate families may own less than 5% of the
      outstanding stock in publicly traded companies that may compete with the
      Affiliated Companies. Except as set forth in Schedule 2(a)(xxiv), to the
      knowledge of Infosmart, no employee, officer, director or stockholder or any
      member of their immediate families is, directly or indirectly, interested in
      any
      material contract with the Affiliated Companies (other than such contracts
      as
      relate to any such individual ownership of interests in or securities of the
      Affiliated Companies).

     

    (xxv) Management.
      Except
      as set forth in Schedule 2(a)(xxv) hereto, during the past five year period,
      to
      the knowledge of Infosmart, no current or former officer or director or
      stockholder of the Affiliated Companies has been the subject of:

     

    (a)    a
      petition under bankruptcy laws or any other insolvency or moratorium law or
      has
      a receiver, fiscal agent or similar officer been appointed by a court for such
      person, or any partnership in which such person was a general partner at or
      within two years before the time of such filing, or any corporation or business
      association of which such person was an executive officer at or within two
      years
      before the time of such filing;

     

    (b)    a
      conviction in a criminal proceeding or a named subject of a pending criminal
      proceeding (excluding traffic violations that do not relate to driving while
      intoxicated or driving under the influence);

     

    (c)    any
      order, judgment or decree, not subsequently reversed, suspended or vacated,
      of
      any court of competent jurisdiction, permanently or temporarily enjoining any
      such person from, or otherwise limiting, the following activities:

     

    (i)    Acting
      as
      a futures commission merchant, introducing broker, commodity trading advisor,
      commodity pool operator, floor broker, leverage transaction merchant, any other
      person regulated by the United States Commodity Futures Trading Commission
      or an
      associated person of any of the foregoing, or as an investment adviser,
      underwriter, broker or dealer in securities, or as an affiliated person,
      director or employee of any investment company, bank, savings and loan
      association or insurance company, or engaging in or continuing any conduct
      or
      practice in connection with such activity;

     

    (ii)    Engaging
      in any type of business practice; or

     

    (iii)    Engaging
      in any activity in connection with the purchase or sale of any security or
      commodity or in connection with any violation of securities laws or commodities
      laws;

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

    (d)    any
      order, judgment or decree, not subsequently reversed, suspended or vacated,
      of
      any authority barring, suspending or otherwise limiting for more than 60 days
      the right of any such person to engage in any activity described in the
      preceding sub paragraph, or to be associated with persons engaged in any such
      activity;

     

    (e)    a
      finding
      by a court of competent jurisdiction in a civil action or by the U.S. Securities
      and Exchange Commission (“SEC”) or other authority to have violated any
      securities law, regulation or decree and the judgment in such civil action
      or
      finding by the SEC or any other authority has not been subsequently reversed,
      suspended or vacated; or

     

    (f)    a
      finding
      by a court of competent jurisdiction in a civil action or by the Commodity
      Futures Trading Commission to have violated any federal commodities law, and
      the
      judgment in such civil action or finding has not been subsequently reversed,
      suspended or vacated.

     

    (xxvi)    Representations
      and Warranties Complete.
      The
      representations and warranties of Infosmart included in this Agreement and
      any
      Schedule provided pursuant to this Agreement, are true and complete in all
      material respects and do not contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary to
      make
      the statements contained therein not misleading, under the circumstance under
      which they were made. Any disclosure on one schedule will be deemed notice
      of
      and disclosure in respect of any other representation and warranty.

     

    (xxvii)    Escrow
      Agreement.
      The
      Escrow Agreement (the “Escrow Agreement”) among Infosmart, Cyber Merchants,
      Keating and Steele Street State Bank (the “Escrow Agent”) has been duly and
      validly executed and delivered by or on behalf of Infosmart and constitutes
      a
      legal, valid, and binding obligation of Infosmart enforceable in accordance
      with
      its terms, except as such enforceability may be limited by (a) applicable
      bankruptcy, insolvency, reorganization, moratorium, or other laws of general
      application relating to or affecting enforcement of creditors’ rights generally
      and (b) laws relating to the availability of specific performance, injunctive
      relief, or other equitable remedies.

     

    (xxviii)    Injunction.
      None of
      the Affiliated Companies is or has been subject to any order, judgment, or
      decree of any court of competent jurisdiction temporarily, preliminarily, or
      permanently enjoining such person for failure to comply with Rule 503 under
      Regulation D.

     

    (b)    Cyber
      Merchants
      represents, warrants, and agrees that upon the consummation of the Transactions,
      the following are true, correct and complete at and as of the date of Closing.
      The parties acknowledge that Cyber Merchants assumes no responsibility for
      the
      representations, warranties and agreements in this Section 2(b) until completion
      of the Exchange:

     

    (i)    All
      reports and statements required to be filed by Cyber Merchants with the SEC
      under the Exchange Act and the rules and regulations thereunder, including
      all
      reports and statements with respect to the Transactions contemplated hereunder,
      have been made or will be made at or prior to the Closing. Such filings,
      together with all documents incorporated by reference therein, are referred
      to
      as “Exchange Act Documents.” Each Exchange Act Document, as amended, conformed
      in all material respects to the requirements of the Exchange Act and the rules
      and regulations thereunder, and no Exchange Act Document, as amended, at the
      time each

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

    such
      document was filed, included any untrue statement of a material fact or omitted
      to state any material fact required to be stated therein or necessary to make
      the statements therein, in light of the circumstances under which they were
      made, not misleading.

     

    (ii)    The
      financial statements, together with the related notes, of Cyber Merchants
      contained in the Exchange Act Documents filed for the 36 months prior to the
      date of this Agreement, and the financial statements that will be included
      in
      Cyber Merchants’ Annual Report on Form 10-KSB for the year ended May 31, 2006,
      fairly present in all material respects, on the basis stated therein and on
      the
      date thereof, the financial position of Cyber Merchants at the respective dates
      therein specified and its results of operations and cash flows for the periods
      then ended. To the knowledge of Cyber Merchants such statements and related
      notes have been prepared in accordance with U.S. GAAP applied on a consistent
      basis except as expressly noted therein (provided that the unaudited financial
      statements lack footnotes and other presentation items).

     

    (iii)    Except
      for the Transactions or the transactions contemplated by this Agreement, or
      as
      disclosed in the Exchange Act Documents or on Schedule 2(b)(iii), since December
      31, 2005, Cyber Merchants has not incurred any material liabilities or
      obligations, direct or contingent, except in the ordinary course of business,
      and there has not been any material adverse change, or to the actual knowledge
      of Cyber Merchants, any development involving a prospective material adverse
      change, in the condition (financial or otherwise), business, or results of
      operations of Cyber Merchants or any change in the capital or material increase
      in the long-term debt of Cyber Merchants, nor has Cyber Merchants declared,
      paid, or made any dividend or distribution of any kind on its capital
      stock.

     

    (iv)    All
      action required to be taken by Cyber Merchants for the authorization of this
      Agreement, the Exchange Agreement and Related Agreements, the performance of
      all
      obligations of Cyber Merchants and Infosmart hereunder and thereunder at the
      Closing, and as a condition to the due and proper authorization, issuance,
      sale,
      and delivery of the Shares and Warrants to subscribers therefor in accordance
      with the terms of this Agreement has been, or prior to the Closing Date (as
      defined in Section 4(d) below), will have been taken and upon the payment of
      the
      consideration for the Shares and Warrants shall be fully paid. 

     

    (v)    Cyber
      Merchants is a corporation duly organized, validly existing, and in good
      standing under the laws of the State of California and has all requisite right,
      power, and authority to own or lease its properties, to conduct its business
      as
      described in the Exchange Act Documents, and to execute, deliver, and perform
      this Agreement, the Exchange Agreement, the Subscription Agreements and the
      Registration Rights Agreement, to issue and sell the Shares and Warrants and
      to
      carry out the provisions of this Agreement, and the Related Agreements and
      to
      carry on its business as presently conducted. Cyber Merchants is duly qualified
      to do business and in good standing as a foreign corporation in all other
      jurisdictions in which its ownership or leasing of properties, or the conduct
      of
      its business requires or may require such qualification except where the failure
      to be so qualified would not have a Material Adverse Effect on Cyber Merchants.
      Cyber Merchants has complied in all material respects with all material laws,
      rules, regulations, applicable to Cyber Merchants’ business, operations,
      properties, assets, products, and services, and Cyber Merchants is in possession
      of and operating in compliance with all material permits, licenses, and other
      authorization, required to conduct its business as currently
      conducted.

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

    (vi)    The
      authorized capital stock of Cyber Merchants consists of: (i) 40,000,000
      shares of common stock, no par value per share (“Common Stock”), and
      (ii) 10,000,000 shares of preferred stock, no par value per share
      (“Preferred Stock”). Prior to the closing of the Transactions under the Exchange
      Agreement, 1,200,000 shares of Preferred Stock will be designated as Series
      A
      Convertible Preferred Stock (“Series A Preferred Stock”) and 1,800,000 shares of
      Preferred Stock will be designated as Series B Convertible Preferred Stock
      (“Series B Preferred Stock”). Following the closing of the Transactions, and
      immediately prior to the Closing of the Offering, Cyber Merchants will have:
      (i)
      12,619,040 shares of Common Stock issued and outstanding, and (ii) 1,000,000
      shares of Series A Preferred Stock issued and outstanding, which will be
      convertible into 116,721,360 shares of Common Stock, based on a conversion
      rate
      of 116.721360 shares of Common Stock for each share of Series A Preferred Stock.
      Except
      as
      contemplated by this Agreement and the Exchange Agreement, or as described
      in
      the Exchange Act Documents or on Schedule 2(b)(vi), immediately prior to the
      Closing (a) there is no commitment by Cyber Merchants to issue any shares of
      capital stock, subscriptions, warrants, options, convertible securities, or
      other similar rights to purchase or receive Cyber Merchants securities or to
      distribute to the holders of any of its equity securities any evidence of
      indebtedness, cash, or other assets, (b) Cyber Merchants is under no obligation
      (contingent or otherwise) to purchase, redeem, or otherwise acquire any of
      its
      equity or debt securities or any interest therein, and (c) to Cyber Merchants’
knowledge, there are no voting trusts or similar agreements, stockholders’
agreements, pledge agreements, buy-sell agreements, rights of first refusal,
      preemptive rights, or proxies relating to any securities of Cyber Merchants.
      Except for those persons issued securities pursuant to the Exchange Agreement
      or
      as set forth in the Exchange Act Documents or filings with the Commission made
      by third parties pursuant to Schedule 13D or 13G or Form 3 or 4, and to the
      knowledge of Cyber Merchants, no person holds of record or beneficially, 5%
      or
      more of the outstanding shares of the capital stock of Cyber Merchants. All
      outstanding securities of Cyber Merchants were issued in compliance with
      applicable Federal and state securities laws.

     

    (vii)    Except
      as
      disclosed in the Exchange Act Documents or as described on Schedule 2(b)(vii),
      there is no pending or, to the knowledge of Cyber Merchants, threatened (a)
      action, suit, claim, proceeding, or investigation against Cyber Merchants,
      at
      law or in equity, or before or by any Federal, state, municipal, or other
      governmental department, commission, board, bureau, agency or instrumentality,
      domestic or foreign Governmental Entity, (b) arbitration proceeding against
      Cyber Merchants, (c) governmental inquiry against Cyber Merchants, or (d) any
      action or suit by or on behalf of Cyber Merchants pending or threatened against
      others.

     

    (viii)    Cyber
      Merchants is not in violation of its articles of incorporation or bylaws, or
      in
      default, or with the giving of notice or lapse of time or both, would be in
      default, in the performance of any material obligation, agreement, or condition
      contained in any lease, license, material contract, indenture, or loan agreement
      or in any bond, debenture, note, or any other evidence of indebtedness, except
      for such defaults as would not have a Material Adverse Effect on Cyber
      Merchants. The execution, delivery, and performance of this Agreement, the
      Related Agreements, and the Escrow Agreement, the incurrence of the obligations
      herein, the issuance, sale, and delivery of the Shares and Warrants, and the
      consummation of the transactions contemplated herein, have been duly authorized
      by all requisite corporate action on the part of Cyber Merchants and (a) do
      not
      and will not conflict with Cyber Merchants’ articles

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

    of
      incorporation or bylaws, (b) do not and will not, with or without the passage
      of
      time or the giving of notice, result in the breach of, or constitute a default,
      cause the acceleration of performance, or require any consent under, or result
      in the creation of any lien, charge or encumbrance upon any property assets
      of
      Cyber Merchants pursuant to, any material loan agreement, mortgage, deed of
      trust, indenture, or other instrument or agreement to which Cyber Merchants
      is a
      party or by which Cyber Merchants or its properties are bound, except such
      consents as have been obtained as of the date hereof or to the extent that
      the
      same have been, or prior to the Closing Date will be, waived or cured, and
      as
      may be required by the Over-the-Counter Bulletin Board (“OTC BB”), which Cyber
      Merchants undertakes to obtain as promptly as practicable, or (c) do not and
      will not result in the violation of any law, statute, order, rule,
      administrative regulation, or decree of any court, or governmental agency or
      body having jurisdiction over Cyber Merchants or its properties. Upon execution
      and delivery the Exchange Agreement will be in full force and
      effect.

     

    (ix)    Except
      as
      disclosed in the Exchange Act Documents or as described on Schedule 2(b)(ix),
      and other than pursuant to the Exchange Agreement and the documents related
      thereto, there are no pre-emptive rights or other rights to subscribe for or
      to
      purchase, or any restriction upon the voting or transfer of, shares of Common
      Stock pursuant to Cyber Merchants’ articles of incorporation, bylaws, or any
      agreement or other instrument to which Cyber Merchants is a party. Except as
      disclosed on Schedule 2(b)(ix), the issuance of the Shares and Warrants is
      not
      subject to any preemptive right of any stockholder of Cyber Merchants or to
      any
      right of first refusal or other right in favor of any person. 

     

    (x)    The
      obligations of Cyber Merchants under this Agreement has been duly and validly
      assumed by Cyber Merchants and this Agreement constitutes a legal, valid, and
      binding obligation of Cyber Merchants enforceable in accordance with its terms,
      except to the extent that its enforceability is limited by (a) applicable
      bankruptcy, insolvency, reorganization, moratorium, or other laws of general
      application relating to or affecting the enforcement of creditors’ rights
      generally, and (b) laws relating to the availability of specific performance,
      injunctive relief, or other equitable remedies and except as enforceability
      of
      the indemnity and contribution provisions contained in Section 7 hereof may
      be
      limited by applicable law or principles of public policy.

     

    (xi)    The
      Escrow Agreement has been duly and validly executed and delivered by or on
      behalf of Cyber Merchants and constitutes a legal, valid, and binding obligation
      of Cyber Merchants enforceable in accordance with its terms, except as such
      enforceability may be limited by (a) applicable bankruptcy, insolvency,
      reorganization, moratorium, or other laws of general application relating to
      or
      affecting enforcement of creditors’ rights generally and (b) laws relating to
      the availability of specific performance, injunctive relief, or other equitable
      remedies.

     

    (xii)    No
      consent, approval, authorization, or order of any court or governmental
      authority or agency is required for the consummation by Cyber Merchants of
      the
      transactions contemplated by this Agreement, except such as may be required
      by
      the NASD, the Securities Act, or the rules and regulations thereunder or state
      securities or Blue Sky laws.

     

    (xiii)    Except
      as
      disclosed on Schedule 2(b)(xiii), Cyber Merchants has filed, or caused to be
      filed, on a timely basis, all tax returns (including payroll, unemployment,
      and
      other taxes related to its employees and independent contractors) required
      to be
      filed with any

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

    Governmental
      Entity and has paid or caused to be paid all taxes, levies, assessments,
      tariffs, duties or other fees imposed, assessed, or collected by any
      Governmental Entity that may have become due and payable pursuant to those
      tax
      returns or otherwise except taxes being disputed by Cyber Merchants in good
      faith. Except as disclosed on Schedule 2(b)(xiii), no deficiency assessment
      with
      respect to or proposed adjustment of any of Cyber Merchants’ Federal, state,
      municipal, or local tax returns has occurred or is threatened. There has been
      no
      tax lien imposed by any Governmental Entity outstanding against Cyber Merchants’
assets or properties, except the lien for current taxes not yet due. The
      charges, accruals, and reserves on the books of Cyber Merchants with respect
      to
      taxes for all fiscal periods are adequate, in the opinion of Cyber Merchants,
      and Cyber Merchants does not know of any actual or proposed tax assessment
      for
      any fiscal period or of any basis therefor against which adequate reserves
      have
      not been set up. Except as disclosed on Schedule 2(b)(xiii), Cyber Merchants
      has
      not been advised that any Federal income tax return of Cyber Merchants has
      been,
      or will be, examined or audited by the Internal Revenue Service.

     

    (xiv)    The
      Cyber
      Merchants Common Stock is registered pursuant to Section 12(g) of the Exchange
      Act and is listed for quotation with the symbol “CMXG” on the OTC BB.

     

    (xv)    Cyber
      Merchants has not during the past twelve months offered or sold any security
      by
      or for Cyber Merchants that is of the same or a similar class as the Shares
      and
      Warrants, other than offers of securities made solely to accredited investors
      or
      otherwise under an employee benefit plan as defined in Rule 405 under the
      Securities Act, securities issued in connection with the Transactions or other
      acquisitions, or other securities that will not invalidate the exemption from
      registration relied on to offer and sell the Shares and Warrants. 

     

    (xvi)    Neither
      Cyber Merchants nor any of its affiliates is or has been subject to any order,
      judgment, or decree of any court of competent jurisdiction temporarily,
      preliminarily, or permanently enjoining such person for failure to comply with
      Rule 503 under Regulation D.

     

    (xvii)    The
      execution, delivery, and performance by Cyber Merchants of this Agreement and
      the Related Agreements, and the offer and sale of the Shares and Warrants
      require no consent of, action by or in respect of, or filing with, any person
      or
      Governmental Entity other than those consents that have been obtained and
      filings that have been made pursuant to applicable state securities laws and
      post-sale filings pursuant to applicable state and federal securities laws,
      which Cyber Merchants undertakes to file within the applicable time
      period.

     

    (xviii)    All
      disclosure provided to you regarding Cyber Merchants, its business and the
      transactions contemplated hereby, furnished by or on behalf of Cyber Merchants
      (including the disclosures, representations and warranties made by each of
      the
      parities to the Exchange Agreement) are true and correct and do not contain
      any
      untrue statement of a material fact or omit to state any material fact necessary
      in order to make the statements made therein, in light of the circumstances
      under which they were made, not misleading.

     

    (xix)    Other
      than pursuant to this Agreement, there are no brokers, representatives or other
      persons which have an interest in commissions or other compensation payable
      by
      Cyber Merchants in connection with the transactions contemplated
      hereunder.

      
        
           

        

        
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    3.    Representations
      and Warranties of the Placement Agents.

     

    (a)    Keating
      represents and warrants to, and agrees with, Infosmart and Cyber Merchants
      that:

     

    (i)    Keating
      has been duly organized and validly existing and in good standing as a limited
      liability company under the laws of the State of Delaware with power and
      authority (corporate and other) to perform its obligations under this Agreement
      and the Escrow Agreement; Keating is a broker-dealer registered and in good
      standing under the Exchange Act and under the securities or Blue Sky laws of
      each state in which the Shares and Warrants are being offered or sold by
      Keating, and Keating is a member in good standing of the NASD; Keating is in
      possession of and operating in compliance with all authorizations, licenses,
      permits, consents, certificates, and orders required for the performance of
      its
      duties under this Agreement and the Escrow Agreement, and Keating’s performance
      of its duties hereunder and thereunder will be in compliance with all applicable
      laws, including state securities and Blue Sky laws.

     

    (ii)    There
      are
      no legal or governmental proceedings pending to which Keating is a party or
      of
      which any of its properties is the subject or, to Keating’s knowledge,
      threatened, which, if determined adversely to Keating, would individually or
      in
      the aggregate materially and adversely affect its ability to perform its
      obligations under this Agreement or the Escrow Agreement.

     

    (iii)    No
      consent, approval, authorization or order of any court or governmental authority
      or agency is required for the performance by Keating of its obligations under
      this Agreement, except such as may be required by the NASD or under Regulation
      D
      or state securities or Blue Sky laws.

     

    (iv)    This
      Agreement has been duly and validly executed and delivered by or on behalf
      of
      Keating and constitutes a legal, valid, and binding obligation of Keating
      enforceable in accordance with its terms, except to the extent that its
      enforceability is limited by (i) applicable bankruptcy, insolvency,
      reorganization, moratorium, or other laws of general application relating to
      or
      affecting the enforcement of creditors’ rights generally, and (ii) laws relating
      to the availability of specific performance, injunctive relief, or other
      equitable remedies and except as enforceability of the indemnity and
      contribution provisions contained in Section 7 hereof may be limited by
      applicable law or principles of public policy.

     

    (v)    The
      Escrow Agreement among Infosmart, Keating, Cyber Merchants and the Escrow Agent
      has been duly and validly executed and delivered by or on behalf of Keating
      and
      constitutes a legal, valid, and binding obligation of Keating enforceable in
      accordance with its terms, except as such enforceability may be limited by
      (i)
      applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
      of
      general application relating to or affecting enforcement of creditors’ rights
      generally and (ii) laws relating to the availability of specific performance,
      injunctive relief, or other equitable remedies.

     

    (b)    Axiom
      represents and warrants to, and agrees with, Infosmart and Cyber Merchants
      that:

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

    (i)    Axiom
      has
      been duly organized and validly existing and in good standing as a limited
      liability company under the laws of the State of Delaware with
      power and authority (corporate and other) to perform its obligations under
      this
      Agreement; Axiom is a broker-dealer registered and in good standing under the
      Exchange Act and under the securities or Blue Sky laws of each state in which
      the Shares and Warrants are being offered or sold by Axiom, and Axiom is a
      member in good standing of the NASD; Axiom is in possession of and operating
      in
      compliance with all authorizations, licenses, permits, consents, certificates,
      and orders required for the performance of its duties under this Agreement,
      and
      Axiom’s performance of its duties hereunder and thereunder will be in compliance
      with all applicable laws, including state securities and Blue Sky
      laws.

     

    (ii)    There
      are
      no legal or governmental proceedings pending to which Axiom is a party or of
      which any of its properties is the subject or, to Axiom’s knowledge, threatened,
      which, if determined adversely to Axiom, would individually or in the aggregate
      materially and adversely affect its ability to perform its obligations under
      this Agreement.

     

    (iii)    No
      consent, approval, authorization or order of any court or governmental authority
      or agency is required for the performance by Axiom of its obligations under
      this
      Agreement, except such as may be required by the NASD or under Regulation D
      or
      state securities or Blue Sky laws.

     

    (iv)    This
      Agreement has been duly and validly executed and delivered by or on behalf
      of
      Axiom and constitutes a legal, valid, and binding obligation of Axiom
      enforceable in accordance with its terms, except to the extent that its
      enforceability is limited by (i) applicable bankruptcy, insolvency,
      reorganization, moratorium, or other laws of general application relating to
      or
      affecting the enforcement of creditors’ rights generally, and (ii) laws relating
      to the availability of specific performance, injunctive relief, or other
      equitable remedies and except as enforceability of the indemnity and
      contribution provisions contained in Section 7 hereof may be limited by
      applicable law or principles of public policy.

     

    4.    Offering
      and Sale of the Shares and Warrants.

     

    (a)    On
      the
      basis of the representations, warranties, and covenants herein contained, but
      subject to the terms and upon the conditions herein set forth, the Placement
      Agents are hereby appointed the placement agents of Infosmart and Cyber
      Merchants on an exclusive basis during the term herein specified (the “Offering
      Period”) for the purpose of finding subscribers for the Shares and Warrants on a
      best-efforts basis for the account of Cyber Merchants (conditioned upon closing
      of the Exchange Agreement) at $7.00 per Share (“Offering Price”) through a
      private offering (the “Offering”) to an unlimited number of “accredited
      investors” (as such term is defined in Rule 501 of Regulation D) (“Accredited
      Investors”) pursuant to and in accordance with the Securities Act. The minimum
      subscription amount will be $25,000 unless Infosmart agrees to accept a lesser
      amount. Subject to the performance by Infosmart and Cyber Merchants of all
      its
      obligations to be performed hereunder, and to the completeness and accuracy
      of
      all the representations and warranties contained herein, the Placement Agents
      hereby accept such agency and agree on the terms and conditions herein set
      forth
      to use their best efforts during the Offering Period to find subscribers for
      the
      Shares and Warrants at the Offering Price. The Placement Agents’ agencies
      hereunder, which are terminable as provided in Section 11 hereof, shall
      terminate at 11:59 p.m., New York time, on September 30, 2006; provided
      that such

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

    termination
      date (the “Termination Date”) may be extended by mutual written agreement of the
      parties until November 30, 2006.

     

    (b)    Each
      Investor desiring to purchase Shares and Warrants will be required to:
      (i) complete, execute, and deliver to the Placement Agents an executed copy
      of a Subscription Agreement in the form attached as Exhibit
      A
      hereto
      together with an Investor Questionnaire, and (ii) deliver to the Escrow Agent
      payment for such purchase in the form of a wire transfer of immediately
      available funds in the amount that the Investor desires to purchase in
      accordance with the wire transfer instructions set forth in the Subscription
      Agreement. Any payment received that does not conform to this requirement will
      be returned to an Investor by the end of the next business day following
      receipt. In
      the
      event funds are received by Keating or Axiom, such party shall hold all such
      Subscription Agreements for safekeeping and immediately forward all such funds
      to the Escrow Agent. The Escrow Agent, upon receipt of such funds, will hold
      the
      funds in an escrow account pursuant to the Escrow Agreement. The
      Placement Agents shall
      promptly forward each executed Subscription Agreement received to Infosmart
      for
      acceptance or rejection, together with a schedule setting forth the name and
      address of each subscriber and the amount received from each
      subscriber.

     

    (c)    In
      the
      event that acceptable subscriptions for $7,000,000 in aggregate principal amount
      of the Shares (the “Minimum Amount”) shall not have been received and accepted
      by the Placement Agents by the Termination Date, all funds received from
      subscribers (if any) shall be returned in full, and the Placement Agents’
agencies and this Agreement shall terminate without obligation on their part
      or
      on the part of Infosmart or Cyber Merchants.

     

    (d)    If,
      by
      the Termination Date or such earlier time as may be agreed upon by the Placement
      Agents and Infosmart, the Placement Agents have received subscriptions for
      the
      Minimum Amount and such subscriptions have been accepted by Infosmart (in its
      sole discretion) and the other conditions to Closing of the Offering have been
      satisfied, the Placement Agents shall promptly notify Infosmart in writing
      of
      the aggregate amount of Shares and Warrants for which the Placement Agents
      have
      received subscriptions (the “Notice Date”). Payment of the purchase price for
      the Shares and Warrants, and delivery, with respect to each subscriber for
      the
      Shares and Warrants, of a copy of a Subscription Agreement signed by such
      subscriber (the “Closing”), shall then be made at such place and time as shall
      be agreed upon between the Placement Agents and Infosmart, no later than the
      fifth full business day after the Notice Date (the “Closing Date”).

     

    (e)    As
      compensation for the Placement Agents’ services, Infosmart will pay the
      Placement Agents a cash fee (“Fee”) with respect to all subscriptions as to
      which the payments and deliveries provided for in this Section 4 are made at
      the
      Closing Date equal to 8% of
      the
      gross proceeds from the Offering. Such cash Fees shall be paid to the Placement
      Agents, in immediately available funds, pursuant to a mutually agreeable
      disbursement schedule provided to Infosmart by the Placement Agents prior to
      the
      Closing Date.

     

    (f)    In
      addition, Infosmart agrees to pay the Placement Agents a non-accountable expense
      allowance (“Allowance”) equal to 2% of
      the
      gross proceeds from the Offering. Infosmart will pay Keating a $10,000
      non-refundable advance against the Allowance at the time the Offering is
      commenced. Such Allowance (less any advance previously paid) shall be paid
      to
      Keating, as the Lead Placement Agent, on the Closing Date by bank wire transfer
      payable in

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

    immediately
      available funds, and shall be allocated among the Placement Agents as they
      may
      separately agree.

     

    (g)    Infosmart
      will
      pay
      all costs and expenses related to the Offering and/or the performance of
      Infosmart’s obligations under this Agreement, including preparation and
      distribution of the Memorandum and related documentation, accounting fees,
      legal
      fees, experts’ fees, consultants’ fees, escrow fees, filing fees with the SEC
      and applicable states, any costs and expenses to qualify the Shares and Warrants
      for sale in any state, any all costs and expenses for investor or road show
      presentations, any and all costs and expenses incurred by the Placement Agents
      in connection with the preparation of closing books and post-Closing expenses.
      Except for the specific expenses of Placement Agents set forth above, Infosmart
      shall not be responsible for any expenses of the Placement Agents or any
      Additional Agents (as hereinafter defined) incurred in connection with the
      Offering, including, but without limitation, attorneys’ fee, operating expenses,
      travel expenses and other incidental expenses incurred by the Placement Agents
      or any Additional Agents.

     

    (h)    Neither
      Keating, Axiom, Infosmart, Cyber Merchants nor any Additional Agent (as
      hereinafter defined) shall, directly or indirectly, pay or award any finder’s
      fees, commissions or other compensation to any person engaged by a potential
      investor for investment advice as an inducement to such advisor to advise the
      purchase of the Shares and Warrants; provided, however, that normal sales
      commissions payable to a registered broker-dealer or other properly licensed
      person for selling the Shares and Warrants shall not be prohibited
      hereby.

     

    (i)    As
      additional compensation, Infosmart will issue to the Placement Agents or their
      designees on the Closing Date a Common Stock purchase warrant (the “Agent
      Warrants”) in substantially the form attached hereto as Exhibit
      C
      granting
      such party the right to purchase from Infosmart for a period commencing after
      the Closing Date and ending five years after the Closing Date, a number of
      shares of Common Stock equal to 10% of the number of Conversion Shares
      underlying the Shares purchased at the Closing. Such Agent Warrants shall be
      issued by Infosmart to the Placement Agents in accordance with Keating’s
      instructions, as Lead Placement Agent, which shall be in accordance with the
      Placement Agents’ separate agreement, for an issue price of $0.0001 per warrant.
      The Agent Warrants shall be exercisable at an exercise price equaling 125%
      of
      the conversion price of the Shares. Such Agent Warrants shall not be redeemable
      by Infosmart and may be exercised on a cashless or net-issuance basis. Infosmart
      hereby grants the same registration rights to the Placement Agents or their
      designees with respect to the shares of Common Stock underlying the Agent
      Warrants as are granted to Investors with respect to the Warrants as set forth
      in this Agreement.

     

    (j)    In
      connection with the Offering, the Placement Agents will, to the extent within
      their control, conduct the Offering in accordance with the applicable provisions
      of the Securities Act and Regulation D so as to preserve for Infosmart the
      exemption provided by Rule 506 of Regulation D. The Placement Agents agree
      not
      to offer or sell the Shares and Warrants by means of (i) any means of general
      solicitation, including any advertisement, article, notice, or other
      communication published in any newspaper, magazine, or similar media or
      broadcast over television or radio or (ii) any seminar or meeting, whose
      attendees have been invited by any general solicitation or general advertising.
      Prior to the sale of any of the Shares and Warrants, the Placement Agents will
      have reasonable grounds to believe, and in fact believe, that each subscriber
      for the Shares and Warrants is an Accredited Investor. The Placement Agents
      agree

      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

    not
      to
      disclose any material nonpublic information regarding Infosmart to any
      subscriber except as such disclosure may be permitted pursuant to Regulation
      FD,
      is included in the Memorandum or other written information provided to the
      Placement Agents by Infosmart, or is otherwise is agreed to in advance by
      Infosmart.

     

    (k)    In
      connection with the performance of its obligations under this Agreement, the
      Lead Placement Agent may engage, for the account of Infosmart, the services
      of
      one or more broker-dealers (“Additional Agents”) who are members of NASD and who
      are acceptable to Infosmart, and, as compensation for their services, shall
      pay
      to such Additional Agents an amount to be negotiated between the Lead Placement
      Agent and such Additional Agents. Such amount will be paid to the Additional
      Agents by the Lead Placement Agent only out of the cash fees received by you
      in
      respect of sales of the Shares and Warrants as described in paragraph (e) of
      this Section 4, and Infosmart shall have no obligation to any Additional Agents
      respecting any such payment. The arrangements, if any, between Infosmart, you,
      and any Additional Agent shall be set forth in an Additional Agent Agreement
      (“Additional Agent Agreement”), which shall provide, among other things, that
      such Additional Agent shall be deemed to have agreed to the matters set forth
      herein as if the Additional Agent were a signatory hereof. Nothing contained
      in
      this Agreement or in the Additional Agent Agreement shall be deemed to
      constitute the Additional Agents, if any, as agents of the Lead Placement Agent,
      and the Lead Placement Agent shall not be liable to Infosmart in respect of
      the
      performance by the Additional Agents, if any, of any representations, warranties
      or covenants of such Additional Agents contained herein or in the Additional
      Agent Agreement.

     

    5.    Covenants
      and Agreements of Infosmart and Cyber Merchants.
      Infosmart and Cyber Merchants severally and not jointly covenant and agree
      with
      the Placement Agents that:

     

    (a)    Except
      as
      contemplated or described in this Agreement, the Exchange Agreement or in a
      public disclosure made prior to the date hereof, neither Infosmart nor Cyber
      Merchants will, prior to the Closing Date, incur any material liability or
      obligation, direct or contingent, or enter into any material transaction, in
      each case, other than in the ordinary course of business. Infosmart nor Cyber
      Merchants will, prior to the Closing Date, declare or pay any dividend on its
      shares of common or preferred stock or any distribution on its common or
      preferred stock payable to stockholders of record on a date prior to the Closing
      Date.

     

    (b)    Infosmart
      will cooperate with the Placement Agents to enable the Shares and Warrants
      to be
      qualified for sale under the securities laws of such jurisdictions as the
      Placement Agents may designate, subject to approval by Infosmart, and at the
      Placement Agents’ request will make such applications and furnish such
      information as may be required of it for that purpose; provided, however, that
      the Placement Agents and Infosmart shall first determine whether an exemption
      from registration other than the Uniform Limited Offering Exemption (ULOE)
      or a
      similar exemption is available in each such jurisdiction and Infosmart shall
      not
      be required to qualify to do business or to file a general consent to service
      of
      process in any such jurisdiction or to subject itself to taxation. Infosmart
      will, from time to time, prepare and file all applications, forms and documents
      required in each jurisdiction where the Shares and Warrants are to be qualified
      or registered or qualified or offered in an exempt transaction under the state
      securities laws, and Infosmart will continue such qualifications in effect
      for
      so long a period as the Placement Agents may reasonably request for the
      distribution of the Shares and Warrants. 

      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

    Infosmart
      shall provide the Placement Agents with copies of all applications, forms and
      documents filed in each jurisdiction.

     

    (c)    Infosmart
      will make available to the Placement Agents and each purchaser of the Shares
      and
      Warrants at a reasonable time prior to the Closing Date the opportunity to
      ask
      questions and receive answers concerning the terms and conditions of the
      Offering and to obtain any additional information that Infosmart possesses
      or
      can acquire without unreasonable effort or expense that is necessary to verify
      the accuracy of any information in the Memorandum, the Exchange Act Documents
      or
      otherwise furnished by Infosmart to the Placement Agents or any purchaser of
      the
      Shares and Warrants; provided, however, that Infosmart shall not be required
      to
      disclose any material nonpublic information to any purchaser of the Shares
      and
      Warrants.

     

    (d)    Infosmart
      or its counsel will prepare and file a Form D (and any and all amendments or
      supplements thereto) with the SEC in timely manner and deliver copies thereof
      to
      the Placement Agents, together with copies of all forms (including without
      limitation, Form Ds) and other documents and/or materials filed either before
      or
      after the Closing, and comply with Regulation D and all applicable state Blue
      Sky laws and make any fillings required by the SEC and state securities
      authorities in a timely manner.

     

    (e)    Infosmart
      will not offer or sell any securities of Infosmart that are of the same or
      a
      similar class as the Shares and Warrants for a period of six months after the
      Closing Date, other than those offers or sales of securities under an employee
      benefit plan as defined in Rule 405 under the Securities Act, in connection
      with
      options, warrants, or convertible securities outstanding as of the Closing
      Date,
      or in connection with an acquisition of assets or another business by Infosmart,
      if such offering will be integrated with the Offering of the Shares and Warrants
      pursuant to this Agreement for purposes of the exemptions under Regulation
      D, so
      as to invalidate the exemption from registration relied on to offer and sell
      the
      Shares and Warrants.

     

    (f)    For
      a
      period of at least 24 months following the Closing Date, Infosmart will maintain
      the registration of Cyber Merchants’ common stock under Section 12 of the
      Exchange Act so long as the Exchange Act requires it to be so registered, will
      comply in all respects with its reporting and filing obligations under the
      Exchange Act, and will not take any action or file any document (whether or
      not
      permitted by the Exchange Act or the rules thereunder) to terminate or suspend
      such registration or to terminate or suspend its reporting and filing
      obligations under said Act unless required to do so by the Exchange
      Act.

     

    (g)    Infosmart
      shall prepare and file with the OTC BB an additional shares listing application
      covering the shares of common stock issuable upon conversion of the Shares
      and
      exercise of the Warrants and Agent Warrants and take all steps necessary to
      cause such shares to be approved for listing as soon as practicable
      thereafter.

     

    (h)    For
      a
      period of at least 24 months following the Closing Date, Infosmart will use
      its
      best efforts (i) to timely file all reports required to be filed by Cyber
      Merchants under the Securities Act and the Exchange Act (including the reports
      pursuant to Section 13(a) or 15(d) of the Exchange Act referred to in
      subparagraph (c)(1) of Rule 144) and the rules and regulations adopted by the
      Commission thereunder), (ii) if Cyber Merchants is not required to file reports
      pursuant to such sections, Infosmart will prepare and furnish to the purchasers
      of the Shares and Warrants and make publicly available in accordance with Rule
      144(c) such information as is

      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

    required
      for the purchasers to sell the shares underlying the Shares and Warrants under
      Rule 144, and (iii) to take such further action as any holder of the Shares
      and
      Warrants may reasonably request, all to the extent required from time to time
      to
      enable the purchasers to sell shares underlying the Shares and Warrants without
      registration under the Securities Act within the limitation of the exemptions
      provided by Rule 144, including causing its attorneys to issue and deliver
      any
      appropriate legal opinion required to permit a purchaser to sell shares
      underlying the Shares and Warrants under Rule 144 upon receipt of appropriate
      documentation relating to such sale.

     

    (i)    Infosmart
      and Cyber Merchants shall use commercially reasonable efforts to consummate
      the
      Transactions.

     

    6.    Memorandum.
      Infosmart warrants and represents to the Placement Agents that the Memorandum,
      and any amendments or supplements thereto, as of the date hereof, and at all
      subsequent times through the Closing, together with all other information
      concerning Infosmart provided to the Placement Agents in connection with the
      Offering, shall in all material respects conform to all applicable provisions
      of
      the Securities Act, the rules and regulations under the Securities Act and
      state
      securities laws, and shall not contain any untrue statement of a material fact
      or omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein not misleading

     

    7.    Indemnification
      and Contribution.

     

    (a)    Infosmart
      agrees to indemnify and hold harmless Keating, Axiom, each Additional Agent,
      and
      each person, if any, who controls Keating, Axiom or such Additional Agent within
      the meaning of the Securities Act (the “Indemnified Parties”), along with the
      agents and advisors of such Indemnified Parties, against any losses, claims,
      damages, liabilities, or expenses (including, unless Infosmart elects to assume
      the defense as hereinafter provided, the reasonable cost of investigating and
      defending against any claims therefor and counsel fees incurred in connection
      therewith), joint or several, which arise out of Infosmart’s breach of a
      representation or warranty or covenant or agreement contained in this Agreement
      (it being understood that in the event the Transactions are not completed,
      Infosmart shall not provide any indemnity or contribution with respect to
      breaches by Cyber Merchants); provided that in no case is Infosmart to be liable
      with respect to any claims made against Keating, Axiom, such Additional Agent,
      or any such controlling person unless Keating, Axiom, such Additional Agent,
      or
      such controlling person shall have notified Infosmart in writing promptly after
      the summons or other first legal process giving information of the nature of
      the
      claim shall have been served upon it, but failure to notify Infosmart of any
      such claim shall not relieve it from any liability that it may have to such
      party otherwise than on account of the indemnity agreement contained in this
      paragraph. Infosmart will be entitled to participate at its own expense in
      the
      defense, or if it so elects, to assume the defense of any suit brought to
      enforce any such liability, but, if Infosmart elects to assume the defense,
      such
      defense shall be conducted by counsel chosen by it and reasonably acceptable
      to
      the indemnified parties. In the event Infosmart elects to assume the defense of
      any such suit and retain such counsel, Keating, Axiom, such Additional Agent,
      or
      such controlling person or persons, defendant or defendants in the suit, may
      retain additional counsel but shall bear the fees and expenses of such counsel
      unless (i) Infosmart shall have specifically authorized the retaining of
      such counsel or (ii) the parties to such suit include Keating, Axiom, such
      Additional Agent, or such controlling person or persons, and
      Infosmart

      
        
           

        

        
          -28-

          
            

          

        

        
           

        

      

    and
      Keating, Axiom, such Additional Agent, or such controlling person or persons
      have been advised by counsel that one or more material legal defenses may be
      available to Keating, Axiom, such Additional Agent, or them that may not be
      available to Infosmart in which case Infosmart shall not be entitled to assume
      the defense of such suit notwithstanding its obligation to bear the reasonable
      fees and expenses of such counsel. In no event shall Infosmart be liable for
      the
      fees and expenses of more than one counsel for all indemnified parties in
      connection with any one action or separate but similar or related actions in
      the
      same jurisdiction arising out of the same general allegations or circumstances.
      Infosmart shall not be required to indemnify any person for any settlement
      of
      any such claim effected without Infosmart’s consent, which shall not be
      unreasonably withheld. Infosmart shall not, without an indemnified party’s
      consent, consent to the entry of any judgment or enter into any settlement
      that
      does not include as an unconditional term thereof, the giving by the claimant
      or
      plaintiff to such indemnified party of a release from all liability in respect
      of such claim or litigation. This indemnification obligation will be in addition
      to any primary liability that Infosmart might otherwise have.

     

    (b)    Keating,
      Axiom and each Additional Agent agrees to indemnify and hold harmless Infosmart,
      each of Infosmart’s officers, directors, and each other person, if any, who
      controls Infosmart within the meaning of the Securities Act, against any losses,
      claims, damages, liabilities, or expenses (including, unless Keating, Axiom
      or
      such Additional Agent elects to assume the defense, the reasonable cost of
      investigating and defending against any claims therefor and counsel fees
      incurred in connection therewith), joint or several, which (i) arise out of
      any
      untrue statement of a material fact with respect to Infosmart made by Keating,
      Axiom or such Additional Agent to any purchaser of Shares and Warrants not
      contained in an Exchange Act Document, the Memorandum or other written material
      provided to Keating, Axiom or such Additional Agent by Infosmart, (ii) arise
      out
      of any acts or omissions by Keating, Axiom, any Additional Agent, or any
      purchaser of the Shares or Warrants that cause the offering to involve a public
      offering under the Securities Act or such party’s failure to be properly
      licensed to sell the Shares or Warrants, or (iii) arise out of such party’s
      breach of a representation or warranty or covenant or agreement contained in
      this Agreement; provided, however, that in no case are Keating, Axiom or any
      Additional Agent to be liable with respect to any claims made against Infosmart
      or any such person against whom the action is brought unless Infosmart or such
      person shall have notified Keating, Axiom or such Additional Agent, as the
      case
      may be, in writing within a reasonable time after the summons or other first
      legal process giving information of the nature of the claim shall have been
      served upon Infosmart or such person, but failure to provide such notification
      shall not relieve Keating, Axiom or such Additional Agent from any liability
      that Keating, Axiom or such Additional Agent may have to Infosmart or such
      person otherwise than on account of the indemnity agreement contained in this
      paragraph. Keating, Axiom or such Additional Agent shall be entitled to
      participate at its expense in the defense, or if Keating, Axiom or such
      Additional Agent so elect, to assume the defense of any suit brought to enforce
      any such liability, but, if Keating, Axiom or such Additional Agent elect to
      assume the defense, counsel chosen by Keating, Axiom or such Additional Agent
      and reasonably acceptable to Infosmart shall conduct such defense. In the event
      that Keating, Axiom or such Additional Agent elect to assume the defense of
      any
      such suit and retain such counsel, Infosmart, said officers and directors and
      any person or persons, defendant or defendants in the suit, may retain
      additional counsel but shall bear the fees and expenses of such counsel unless
      (i) the indemnifying parties shall have specifically authorized the retaining
      of
      such counsel or (ii) the parties to such suit include Keating, Axiom, such
      Additional Agent, or such controlling person or

      
        
           

        

        
          -29-

          
            

          

        

        
           

        

      

    persons,
      and Infosmart and Keating, Axiom, such Additional Agent, or such controlling
      person or persons have been advised by counsel that one or more material legal
      defenses may be available to Infosmart that may not be available to Keating,
      Axiom or them in which case the indemnifying party parties not be entitled
      to
      assume the defense of such suit notwithstanding their obligation to bear the
      reasonable fees and expenses of such counsel. Keating, Axiom or such Additional
      Agent shall not be liable to indemnify any person for any settlement of any
      such
      claim effected without its consent which consent shall not be unreasonably
      withheld. Keating, Axiom or an Additional Agent shall not, without the consent
      of Infosmart, consent to entry of any judgment or enter into any settlement
      that
      does not include as an unconditional term thereof, the giving by the claimant
      or
      plaintiff to such indemnified party of a release from all liability in respect
      of such claim or litigation. This indemnification obligation will be in addition
      to any primary liability that Keating, Axiom or any Additional Agent might
      otherwise have.

     

    (c)    If
      the
      indemnification provided for in this Section 7 is unavailable, then each
      indemnifying party shall contribute to the amount paid or payable by such
      indemnified party as a result of such losses, claims, damages, liabilities
      or
      expenses (or actions in respect thereof) in such proportion as is appropriate
      to
      reflect not only the relative benefits received by Infosmart on one hand and
      Keating, Axiom and the Additional Agents, if any, on the other from the
      Offering, but also the relative fault of Infosmart on the one hand and Keating,
      Axiom and the Additional Agents, if any, on the other in connection with the
      statements or omissions which resulted in such losses, claims, damages,
      liabilities, or expenses (or actions in respect thereof), as well as any other
      relevant equitable considerations. The relative benefits received by Infosmart
      on the one hand and Keating, Axiom and the Additional Agents, if any, on the
      other, shall be deemed to be in the same proportion as the total gross proceeds
      from the Offering (before deducting expenses) received by Infosmart, bear to
      the
      total cash fees received by Keating, Axiom and the Additional Agents, if any,
      pursuant to Section 4(e) and the value of the Agent Warrant issued to Keating,
      Axiom and the Additional Agents, if any, pursuant to Section 4(i). The relative
      fault shall be determined by reference to, among other things, whether the
      untrue or alleged untrue statement of a material fact or the omission or alleged
      omission to state a material fact relates to information supplied by Infosmart,
      Keating, Axiom, or an Additional Agent, the party’s relative intent, knowledge,
      access to information and opportunity to correct or prevent such statement
      or
      omission, and whether a party breached a representation or warranty or covenant
      or agreement contained in this Agreement. Infosmart and Keating, Axiom and
      the
      Additional Agents agree that it would not be just and equitable if contribution
      were determined by pro rata allocation or by any other method of allocation
      which does not take account of the equitable considerations referred to above.
      The amount paid or payable by an indemnified party as a result of the losses,
      claims, damages, liabilities or expenses (or actions in respect thereof)
      referred to above shall be deemed to include any legal or other expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending any such claim. No person guilty of fraudulent misrepresentation
      (within the meaning of Section 11(f) of the Securities Act) shall be entitled
      to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

     

    8.    Survival
      of Indemnities, Representations, Warranties, etc.
      The
      respective representations and warranties of Keating, Axiom and Infosmart as
      set
      forth in this Agreement or made by them respectively, pursuant to this
      Agreement, shall remain in full force and effect, regardless of any
      investigation made by or on behalf of Keating, Axiom, Infosmart, or any of
      the
      officers or directors of Infosmart or any controlling person, and shall survive
      delivery of and payment for

      
        
           

        

        
          -30-

          
            

          

        

        
           

        

      

    the
      Shares and Warrants for a period ending on the date two years subsequent to
      the
      Closing Date.

     

    9.    Conditions
      of Keating’s Obligations.
      The
      Placement Agents’ obligations hereunder are subject to: (i) the accuracy in all
      material respects at and (except as otherwise stated herein) as of the date
      hereof, of the representations and warranties made by Infosmart in Sections
      2(a)
      and 6; (ii) the accuracy in all material respects at and (except as otherwise
      stated herein) as of the Closing Date, of the representations and warranties
      made by Infosmart and Cyber Merchants in Sections 2(a), 2(b) and 6; (iii) the
      compliance in all material respects at and as of the Closing Date by Infosmart
      and Cyber Merchants with its covenants and agreements herein contained and
      other
      provisions hereof to be satisfied at or prior to the Closing Date; and (iv)
      the
      following additional conditions:

     

    (a)    The
      Transactions shall have been consummated.

     

    (b)    The
      Placement Agents shall have received a certificate, dated the Closing Date,
      on
      behalf of Cyber Merchants by the Chief Executive Officer or the President and
      the Chief Financial or Accounting Officer of Cyber Merchants to the effect
      that:

     

    (i)    The
      representations and warranties in Sections 2(a), 2(b) and 6 are true and correct
      in all material respects at and as of the Closing Date, and Infosmart and Cyber
      Merchants has complied with all the agreements and satisfied in all material
      respects all the conditions on its part to be performed or satisfied at or
      prior
      to the Closing Date; 

     

    (ii)    The
      Transactions have been consummated;

     

    (iii)    The
      representations and warranties of Cyber Merchants contained in each subscription
      agreement entered into with an Investor are true and correct in all material
      respects as of the date of such certificate, except to the extent any such
      representation or warranty was expressly made as of any other date, in which
      case such representation and warranty was true and correct in all material
      respects as of such other date;

     

    (iv)    Between
      the date of this Agreement and the Closing Date, no litigation has been
      instituted or, to the knowledge of Cyber Merchants, threatened against Infosmart
      or Cyber Merchants; and

     

    (v)    Between
      the date of this Agreement and the Closing Date, there has not been any material
      adverse change in the financial condition, business, or results of operations
      of
      Infosmart or Cyber Merchants.

     

    (c)    The
      Certificate of Determination for the Series B Preferred Stock shall have been
      filed with the Secretary of State of the State of California and be
      effective.

     

    (d)    Cyber
      Merchants shall have entered into the Registration Rights Agreement with the
      Investors.

     

    (e)    Cyber
      Merchants shall have accepted subscriptions in such amount as mutually
      determined by Cyber Merchants and Keating, but not less than the Minimum
      Amount.

      
        
           

        

        
          -31-

          
            

          

        

        
           

        

      

    (f)    The
      conditions set forth in subscription agreement between Cyber Merchants and
      each
      Investor shall have been satisfied.

     

    (g)    The
      Placement Agents shall have received an opinion of Cyber Merchants’ U.S.
      counsel, as to matters reasonably requested by Keating.

     

    (h)    Cyber
      Merchants shall have filed the Proxy/Information Statement contemplated by
      the
      Exchange Agreement with the SEC.

     

    (i)    Cyber
      Merchants shall have delivered a Voting Agreement executed by each of KI Equity
      and the Shareholders, substantially in the form attached to the Exchange
      Agreement.

     

    (j)    Cyber
      Merchants shall have obtained all consents, waivers and approvals required
      in
      connection with the consummation of the transactions contemplated by the
      Offering, other than consents, waivers and approvals the absence of which,
      either alone or in the aggregate could not reasonably be expected to have a
      Material Adverse Effect on Cyber Merchants.

     

    (k)    Immediately
      prior to Closing, Cyber Merchants shall be in compliance with the reporting
      requirements under the Exchange Act and shall be quoted on the OTC
      BB.

     

    If
      any of
      the conditions provided for in this Section 9 shall not have been satisfied
      when
      and as required by this Agreement, this Agreement may be terminated by the
      Placement Agents by notifying Infosmart of such termination in writing at or
      prior to the Closing Date, but the Placement Agents shall be entitled to waive
      any of such conditions.

     

    10.    Effective
      Date.
      This
      Agreement shall become effective at 11:00 A.M., Denver time, on the date hereof
      (the “Effective Time”).

     

    11.    Termination.
      In the
      event of any termination of this Agreement under this or any other provision
      of
      this Agreement, there shall be no liability of any party to this Agreement
      to
      any other party, other than as provided in Sections 7 and 8, and this Section
      11. This Agreement may be terminated after the Effective Time by (a) Infosmart
      for any reason by notice to the Placement Agents, and (b) the Placement
      Agents by notice to Infosmart (i) if, Infosmart shall materially breach any
      of
      its representations and warranties in this Agreement or shall fail to fulfill
      its covenants and agreements contained in this Agreement; (ii) if at or prior
      to
      the Closing Date there shall have been a material escalation of hostilities
      between the United States and any foreign country (other than Iraq), or any
      other material insurrection or armed conflict involving the United States which,
      in the reasonable judgment of Keating, as Lead Placement Agent, after
      consultation with Infosmart, makes it impracticable or inadvisable to offer
      or
      sell the Share and Warrants; or (iii) if there shall be any material litigation
      or regulatory action, pending or threatened against or involving Infosmart,
      which, in the reasonable judgment of Keating, as Lead Placement Agent, after
      consultation with Infosmart, makes it impracticable or inadvisable to offer
      or
      deliver the Shares and Warrants on the terms contemplated by this
      Agreement.

     

    If,
      and
      only if, Infosmart terminates this Agreement after it becomes effective for
      any
      reason (other than Keating’s or Axiom’s material failure to comply with its
      obligations under this Agreement or material breach of its representations
      and
      warranties) or the Offering fails to close because of Infosmart’s breach of any
      representations or warranties contained in this Agreement

      
        
           

        

        
          -32-

          
            

          

        

        
           

        

      

    or
      Infosmart’s failure to fulfill its covenants and agreements contained in this
      Agreement, Infosmart shall pay the Placement Agents their actual out-of-pocket
      expenses incurred (less than amount of the advance of the Allowance paid under
      Section 4(f)).

     

    12.    Agreement
      Concerning Disclosure of Information.
      The
      Placement Agents agree to treat confidentially any information that is furnished
      to such parties (or to parties acting on their behalf) by or on behalf of
      Infosmart (the “Information”) until such time as such Information is disclosed
      to the public (including disclosures in SEC filings). The Placement Agents
      agree
      that they will use the Information only for the purposes related to a
      determination of your willingness to act as exclusive selling agents pursuant
      to
      this Agreement, and that the Information will be kept confidential by them
      and
      their partners, members, managers, officers, directors, employees, agents,
      and
      other affiliates (collectively, the “Affiliates”), and their attorneys and
      accountants (collectively, the “Professionals”), and that the Placement Agents,
      such Affiliates, or Professionals will not disclose the Information to any
      Investor or other person; provided, however, that the Information may be
      disclosed to (a) Additional Agents, Affiliates and Professionals who need to
      know such Information for the purpose of evaluating or providing services in
      connection with the Placement Agents and their clients’ investment in Infosmart;
      provided such parties agree to be bound by this undertaking, (b) to any federal
      or state regulatory agency and their employees, agents, and attorneys
      (collectively, “Regulators”) for the purpose of making any filings with
      Regulators if disclosure of such Information is required by law (provided that
      you advise Infosmart in writing of the Information to be so disclosed within
      a
      reasonable time prior to such filing), and (c) any other person to which
      Infosmart consents in writing prior to any such disclosure.

     

    In
      the
      event that either of the Placement Agents are requested or required (by oral
      questions, documents, subpoena, civil investigation, demand, interrogatories,
      request for information, or other similar process) to disclose to any person
      or
      entity any information supplied to such party, Additional Agents, its
      Affiliates, or its Professionals in the course of their dealings with Infosmart
      or their respective representatives, such Placement Agent agrees that it will
      provide Infosmart with prompt notice of such request(s) within a reasonable
      time
      prior to such disclosure so that Infosmart may seek an appropriate protective
      order and/or waiver of compliance with the provisions of this Agreement. It
      is
      further agreed that, if a protective order is not obtained, or a waiver is
      not
      granted hereunder, and such Placement Agent is nonetheless, in the written
      opinion of counsel, compelled to disclose information concerning Infosmart
      to
      any tribunal or else stand liable for contempt or suffer the censure or penalty,
      such Placement Agent may disclose such information to such tribunal without
      liability hereunder. Prior to making such disclosure, such Placement Agent
      shall
      deliver a written opinion of its counsel to Infosmart’s counsel that disclosure
      is compelled by law. Such Placement Agent will exercise its best efforts to
      obtain a protective order or other reliable assurance that confidential
      treatment will be accorded the Information.

     

    Before
      Infosmart releases any information referring to the Placement Agents’ role under
      this Offering or uses the Placement Agents’ name in a manner which may result in
      public dissemination thereof, Infosmart shall furnish drafts of all documents
      or
      prepared oral statements to the Placement Agents for comments, and shall not
      release any information relating thereto without the prior written consent
      of
      the Placement Agents. Nothing herein shall prevent Infosmart from releasing
      any
      information to the extent that such release is required by law, rule or
      regulation.

      
        
           

        

        
          -33-

          
            

          

        

        
           

        

      

    13.    Notices.
      All
      notices or other communications that are required or permitted under this
      Agreement shall be in writing and sufficient if delivered by hand, by facsimile
      transmission, by registered or certified mail, postage pre-paid, by electronic
      mail, or by courier or overnight carrier, to the persons at the addresses set
      forth below (or at such other address as any party shall have furnished to
      the
      other parties in writing),
      and
      shall be deemed to have been delivered as of the date so delivered:

     

    If
      to
      Infosmart:

    Andy
      Kwok

    Infosmart
      Group Limited

    5th
      Floor,
      QPL Industrial Building

    126-140
      Texaco Road

    Tsuen
      Wan, Hong Kong

    (852)
      2595-0911 telephone

    (852)
      2558-7316 telecopy

     

    with
      a
      copy to:

    Richardson
      & Patel LLP

    10900
      Wilshire Blvd., Suite 500

    Los
      Angeles, California 90024

    Attn:
      Kevin K. Leung, Esq.

    (310)
      208-1182 telephone

    (310)
      208-1154 telecopy

     

    If
      to
      Keating:

    Keating
      Securities, LLC

    5251
      DTC
      Parkway, Suite 1090

    Greenwood
      Village, CO 80111

    Attn:
      Timothy J. Keating

    (720)
      889
      -0131 telephone

    (720)
      889-0139 telecopy

     

    If
      to
      Axiom:

    Axiom
      Capital Management, Inc.

    780
      Third
      Avenue, 43rd
      Floor

    New
      York,
      NY 10017-2024

    Attn:
      Mark D. Martino

    (212)
      521-3800 telephone

    (212)
      521-3888 telecopy

     

    with
      a
      copy to:

    Wollmuth
      Maher & Deutsch LLP

    500
      Fifth
      Avenue

    New
      York,
      NY 10110

    Attn:
      Rory M. Deutsch, Esq.

    (212)
      382-3300 telephone

    (212)
      382-0050 telecopy

     

    14.    Successors.
      This
      Agreement shall inure to the benefit of and be binding upon the Placement
      Agents, and Additional Agents, Infosmart, Cyber Merchants and their respective
      successors and legal representatives, except that neither Infosmart nor the
      Placement Agents may assign or transfer any of its or their rights or
      obligations under this Agreement without the prior written consent of the other;
      provided, however, that upon consummation of the Transactions,

      
        
           

        

        
          -34-

          
            

          

        

        
           

        

      

    Cyber
      Merchants shall assume all of the rights and obligations of Infosmart under
      this
      Agreement without the need for further consent of the parties. Nothing expressed
      or mentioned in this Agreement is intended or shall be construed to give any
      person other than the persons mentioned in the preceding sentence any legal
      or
      equitable right, remedy or claim under or in respect of this Agreement, or
      any
      provisions herein contained, this Agreement and all conditions and provisions
      hereof being intended to be and being for the sole and exclusive benefit of
      such
      persons and for the benefit of no other person; except that the indemnities
      of
      Infosmart contained in this Agreement shall also be for the benefit of the
      person or persons, if any, who control the Placement Agents or any Additional
      Agents within the meaning of Section 15 of the Securities Act, and the Placement
      Agents’ and any Additional Agent’s indemnities shall also be for the benefit of
      each officer and director of Infosmart and the person or persons, if any, who
      control Infosmart within the meaning of Section 15 of the Securities
      Act.

     

    15.    Applicable
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California. Any judicial proceeding brought against either of the
      parties to this agreement or any dispute arising out of this Agreement or any
      matter related hereto may be brought in the courts of the State of California
      or
      in the United States District Court located in Los Angeles, California and,
      by
      its execution and delivery of this agreement, each party to this Agreement
      accepts the jurisdiction of such courts. The foregoing consent to jurisdiction
      shall not be deemed to confer rights on any person other than the parties to
      this Agreement. The prevailing party in any such litigation shall be entitled
      to
      receive from the losing party or parties all costs and expenses, including
      reasonable attorney fees, incurred by the prevailing party.

     

    16.    Miscellaneous
      Provisions.

     

    (a)    Severability.
      If any
      portion of this Agreement shall be held invalid or inoperative, then, so far
      as
      is reasonable and possible (i) the remainder of this Agreement shall be
      considered valid and operative, and (ii) effect shall be given to the intent
      manifested by the portion held invalid or inoperative.

     

    (b)    Modification
      or Amendment.
      This
      Agreement may not be modified or amended except by written agreement executed
      by
      the parties hereto.

     

    (c)    Number
      and Gender of Words.
      Whenever the contest so requires, the masculine shall include the feminine
      and
      neuter, and the singular shall include the plural, and conversely.

     

    (d)    Other
      Instruments; Counterparts.
      The
      parties hereto covenant and agree that they will execute such other and further
      instruments and documents are or may become necessary or convenient to effect
      and carry out the terms of this Agreement. This Agreement may be executed by
      facsimile signatures and in multiple counterparts, each of which shall be deemed
      an original. It shall not be necessary that each party executes each
      counterpart, or that any one counterpart be executed by more than one party
      so
      long as each party executes at least one counterpart.

     

    (e)    No
      Partnership.
      Neither
      of the Placement Agents is a principal of or a partner with, or does not control
      in any way, Infosmart or its employees or agents.

      
        
           

        

        
          -35-

          
            

          

        

        
           

        

      

    (f)    Entire
      Agreement.
      This
      Agreement contains the entire understanding between the parties and supersedes
      any prior understandings or written or oral agreements between them respecting
      the subject matter hereof.

     

    [Signatures
      on following page]

    
      
         

      

      
        -36-

        
          

        

      

      
         

      

    

    

    If
      the
      foregoing correctly sets forth our understanding please indicate your acceptance
      thereof in the space provided below for that purpose, whereupon this letter
      and
      your acceptance shall constitute a binding agreement between us.

     

    Very
      truly yours,

     

    INFOSMART
      GROUP LIMITED

    

    

    By:  
      /s/ Andy Kwok

      
        

      

    

    Andy
      Kwok, CEO

    

    Accepted
      and agreed:

     

    KEATING
      SECURITIES, LLC

    

    

    By: 
      /s/ Timothy J. Keating

      
        

      

    

    Timothy
      J. Keating, President 

    

     

    AXIOM
      CAPITAL MANAGEMENT, INC.

    

    

    By: 
      /s/ Mark D. Martino

      
        

      

    

    Mark
      D.
      Martino, President

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    SUBSCRIPTION
      AGREEMENT

     

     

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      B

    REGISTRATION
      RIGHTS AGREEMENT

     

    

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      C

    FORM
      OF AGENT WARRANT

     

    

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

        
        

      

    

    DISCLOSURE
      SCHEDULES 

    TO
      

    PLACEMENT
      AGREEMENTUnassociated Document

    Exhibit
      10.15

    

    TERMS
      AND CONDITIONS OF SUBSCRIPTION

    

    The
      following sets forth the terms and conditions for the purchase by investors
      (each, an “Investor”)
      of
      shares of Series B Convertible Preferred Stock, no par value per share (each,
      a
“Share”
and
      collectively, the “Shares”)
      of
      Cyber Merchants Exchange, Inc., a California corporation (the “Company”),
      having the rights, privileges, powers and restrictions set forth in the
      Certificate of Determination of Rights, Preferences, Privileges and Restrictions
      (“Certificate
      of Determination”)
      attached as Exhibit
      F
      to the
      Confidential Private Placement Memorandum, dated July 10, 2006, as amended
      or supplemented from time to time (the “Memorandum”),
      and
      warrants to purchase common stock, no par value per share, of the Company
      (“Common
      Stock”),
      pursuant to a purchase warrant in substantially the form attached to the
      Memorandum as Exhibit
      H
      (“Warrants”).
      The
      Shares, the Warrants and the Common Stock issuable upon conversion or exercise
      thereof are collectively referred to herein as the “Securities.”

    

    1.  Purchase
      and Sale of the Shares and Warrants.
      Subject
      to the terms and conditions set forth herein, the Investor agrees to purchase
      at
      the Closing (as defined below), and the Company agrees to sell and issue to
      such
      Investor, in the manner set forth in Section 2 hereof, the number of Shares
      set
      forth on the signature page to the Subscription Agreement to which these Terms
      and Conditions of Subscription are a part (the “Subscription
      Agreement”)
      for a
      purchase price of $7.00 per Share (the aggregate purchase price for such Shares
      being referred to herein as the “Purchase
      Price”).
      Concurrent with the issuance of the Shares to the Investor at the Closing,
      the
      Company will issue Warrants to purchase such number of shares of Common Stock
      as
      is equal to the number of shares of Common Stock issuable upon conversion of
      the
      Shares purchased hereunder. The Shares and Warrants are offered for sale in
      a
      private placement in accordance with the terms set forth in the Memorandum,
      which has been delivered to the Investor. The Shares and the Warrants shall
      have
      the terms as set forth herein and in Exhibit
      F
      and
Exhibit
      H,
      respectively, of the Memorandum.

    

    2.  Terms
      of Purchase and Sale of the Shares.
      The
      closing of the transactions contemplated hereby (the “Closing”)
      shall
      take place on or before the fifth full business day after the Notice Date (as
      such term is defined in the Placement Agreement, dated as of July 7, 2006 (the
      “Placement
      Agreement”),
      by
      and among the Company, as assignee of InfoSmart Group Limited (“InfoSmart”),
      Keating Securities, LLC (the “Lead Placement
      Agent”)
      and
      Axiom Capital Management, Inc. (together with the Lead Placement Agent, the
      “Placement
      Agents”),
      at
      the offices of the Lead Placement Agent, or at such other time and place as
      the
      Company and the Placement Agents may agree upon. Contemporaneously with the
      delivery of the Subscription Agreement, the Investor shall deliver to Steele
      State Street Bank (the “Escrow
      Agent”)
      the
      Purchase Price by wire transfer of immediately available funds pursuant to
      wire
      transfer instructions provided to the Investor in the Subscription Agreement.
      The minimum subscription amount for the Shares is $25,000; however, the Company
      may accept subscriptions for less than $25,000 in its sole discretion. At the
      Closing, the Escrow Agent shall deliver to the Company the Purchase Price by
      wire transfer of immediately available funds pursuant to wire transfer
      instructions given to the Escrow Agent by the Company and the Lead Placement
      Agent. As soon as reasonably practicable following the Closing, the Company
      shall deliver to each Investor the duly executed purchase warrant evidencing
      the
      Warrants and a certificate evidencing the Shares, each registered in the name
      of
      the Investor. Notwithstanding the foregoing, the obligations of the Company
      and
      the Investor are subject to the Company’s receipt of aggregate subscriptions for
      a minimum of $7,000,000 in aggregate gross proceeds for the Shares on or prior
      to September 30, 2006 (or such closing date as may be agreed by the Company
      and the Placement Agent), which date may be extended by the Company and the
      Placement Agent pursuant to the terms of the Placement Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.  Representations
      and Warranties of the Company.
      In order
      to induce the Investor to enter into the Subscription Agreement, the Company
      represents and warrants to the Investor the following:

    

    (a)  Authority.
      The
      Company is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of California, and has all requisite right, power,
      and authority to execute, deliver and perform the Subscription Agreement other
      than, with respect to the issuance of the shares of Common Stock issuable upon
      conversion of the Shares (the “Conversion
      Shares”)
      and
      upon exercise of the Warrants (“Warrant
      Shares”),
      the
      approval by the Company’s stockholders and the filing of the Articles Amendment
      (as defined in Section 8(a)), which will be completed after the Closing, to
      increase the number of authorized shares of Common Stock so that the Company
      has
      a sufficient number of authorized and unissued shares of Common Stock to permit
      the conversion and exercise of all outstanding Shares and Warrants.

    

    (b)  Subsidiary.
      Except
      as disclosed in Schedule 3(a), as of the Closing, the Company has no direct
      or
      indirect subsidiaries (the “Subsidiaries”).
      Except as disclosed in Schedule 3(a), the Company owns (or will own upon
      completion of the Exchange (as defined in Section 9(a)), directly or indirectly,
      all of the capital stock of the Subsidiaries free and clear of any and all
      liens, and all the issued and outstanding shares of capital stock of the
      Subsidiary are validly issued and are fully paid, non-assessable and free of
      preemptive and similar rights. 

    

    (c)  Enforceability.
      The
      execution, delivery, and performance of the Subscription Agreement by the
      Company have been duly authorized by all requisite corporate action. The
      Subscription Agreement has been duly executed and delivered by the Company,
      and,
      upon its execution by the Investor, shall constitute the legal, valid, and
      binding obligation of the Company, enforceable in accordance with its terms,
      except to the extent that its enforceability is limited by bankruptcy,
      insolvency, reorganization, or other laws relating to or affecting the
      enforcement of creditors’ rights generally and by general principles of
      equity.

    

    (d)  No
      Violations.
      The
      execution, delivery, and performance of the Subscription Agreement by the
      Company do not and will not violate or conflict with any provision of the
      Company’s Articles of Incorporation or Bylaws and do not and will not, with or
      without the passage of time or the giving of notice, result in the breach of,
      or
      constitute a default, cause the acceleration of performance, or require any
      consent under (except such consents as have been obtained as of the date
      hereof), or result in the creation of any lien, charge or encumbrance upon
      any
      property or assets of the Company pursuant to, any material instrument or
      agreement to which the Company is a party or by which the Company or its
      properties are bound, except such consents as have been obtained as of the
      date
      hereof.

    

    (e)  Capitalization.
      The
      authorized capital stock of the Company consists of: (i) 40,000,000 shares
      of Common Stock and (ii) 10,000,000 shares of preferred stock, no par value
      per share (“Preferred
      Stock”).
      Prior
      to the closing of the transactions under the Exchange Agreement, 1,200,000
      shares of Preferred Stock will be designated as Series A Convertible Preferred
      Stock (“Series
      A Preferred Stock”)
      and
      1,800,000 shares of Preferred Stock will be designated as Series B Convertible
      Preferred Stock (“Series
      B Preferred Stock”).
      Following the closing of the transactions under the Exchange Agreement, and
      immediately prior to the Closing of the transactions contemplated herein, the
      Company will have: (i) 12,619,040 shares of Common Stock issued and outstanding,
      and (ii) 1,000,000 shares of Series A Preferred Stock issued and
      outstanding, which will be convertible into 116,721,360 shares of Common Stock,
      based on a conversion rate of 116.721360 shares of Common Stock for each share
      of Series A Preferred Stock. Upon issuance in accordance with the terms of
      this
      Agreement against payment of the Purchase Price therefore, and assuming the
      accuracy of the representations and warranties of the Investor and all other
      purchasers of the Securities in the offering contemplated by the Placement
      Agreement, the Securities will be issued in accordance with a valid exemption
      from the registration or qualification provisions of the Securities Act of
      1933,
      as amended (the “Securities
      Act”),
      and
      any applicable state securities laws (the “State
      Acts”).
      Subject to the approval of the increase in authorized shares of Common Stock
      and
      the filing of an amendment to the Company’s Articles of Incorporation in
      connection therewith (to be filed by the Company following Stockholder Approval
      and mailing of the Proxy Statement or Information Statement as described in
      Section 8, each of which will occur after the Closing), the Conversion Shares
      and Warrant Shares have been duly authorized, and upon issuance of the
      Conversion Shares upon proper conversion of the Shares, and upon issuance of
      the
      Warrant Shares upon exercise of the Warrants, in accordance with their
      respective terms following the filing of the Articles Amendment (as defined
      in
      Section 8(a)), in accordance with the terms thereof, the Conversion Shares
      and
      Warrant Shares will be validly issued, fully paid, and
      non-assessable.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (f)  Exchange
      Act Filing.
      During
      the twelve (12) calendar months immediately preceding the date of the
      Subscription Agreement, all reports and statements required to be filed by
      the
      Company with the Securities and Exchange Commission (“SEC”)
      under
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      and
      the rules and regulations thereunder, have been timely filed. Such filings,
      together with all documents incorporated by reference therein, are referred
      to
      as “Exchange
      Act Documents.”
Each
      Exchange Act Document, as amended, conformed in all material respects to the
      requirements of the Exchange Act and the rules and regulations thereunder,
      and
      no Exchange Act Document, as amended, at the time each such document was filed,
      included any untrue statement of a material fact or omitted to state any
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.

    

    (g)   
Financial
      Statements. The
      audited financial statements, together with the related notes, of InfoSmart
      and
      its subsidiaries (on a consolidated basis) for the fiscal years ended December
      31, 2005 and December 31, 2004, and the unaudited financial statements, together
      with the related notes, of InfoSmart and its subsidiaries (on a consolidated
      basis) for the three-month period ended March 31, 2006, copies of which have
      been provided to the Investor as part of the Memorandum (the “Financial
      Statements”),
      fairly present in all material respects, on the basis stated therein and on
      the
      date thereof, the financial position of InfoSmart at the respective dates
      therein specified and its results of operations and cash flows for the periods
      then ended, except that the unaudited financial statements are subject to normal
      adjustments which are not expected to have a Material Adverse Effect (as defined
      in Section 3(h) below) on InfoSmart or its subsidiaries. The Financial
      Statements have been prepared in accord-ance with general-ly accepted accounting
      principles in the United States applied on a consistent basis. The audited
      Financial Statements have been audited in accordance with the standards of
      the
      U.S. Public Company Accounting Oversight Board (“PCAOB”), except as expressly
      noted therein. The unaudited Financial Statements have been reviewed by an
      independent accountant registered with the PCAOB.

    

    (h)    
      No
      Material Liabilities.
      Except
      for liabilities or obligations not individually in excess of $25,000 or in
      the
      aggregate in excess of $100,000, and as set forth on Schedule
      3(h),
      since
      February 28, 2006, with respect to the Company, and since March 31, 2006, with
      respect to InfoSmart, the Company and its Subsidiaries (including InfoSmart)
      have not incurred any material liabilities or obligations, direct or contingent,
      except in the ordinary course of business and except for liabilities or
      obligations reflected or reserved against on their balance sheets as of February
      28, 2006, with respect to the Company, and March 31, 2006, with respect to
      InfoSmart and its Subsidiaries, and there has not been any change, or to the
      knowledge of the Company, development or effect (individually or in the
      aggregate) that is or is reasonably likely to be, materially adverse to the
      condition (financial or otherwise), business, prospects, or results of
      operations of the Company and its Subsidiaries considered as a whole (a
“Material
      Adverse Effect”)
      or any
      change in the capital or material increase in the long-term debt of the Company,
      nor has the Company declared, paid, or made any dividend or distribution of
      any
      kind on its capital stock.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (i)    
      No
      Disputes Against the Company.
      Except
      as disclosed in the Exchange Act Documents or the Memorandum or as set forth
      set
      forth on Schedule
      3(i),
      there
      is no material pending or, to the knowledge of the Company, threatened (a)
      action, suit, claim, proceeding, or investigation against the Company or its
      Subsidiaries, at law or in equity, or before or by any Federal, state,
      municipal, or other governmental department, commission, board, bureau, agency
      or instrumentality, domestic or foreign, (b) arbitration proceeding against
      the
      Company or its Subsidiaries, (c) governmental inquiry against the Company or
      its
      Subsidiaries, or (d) any action or suit by or on behalf of the Company or its
      Subsidiaries pending or threatened against others.

    

    (j)    
      Approvals.
      Other
      than (A) the approval of the increase in the number of shares of authorized
      Common Stock and the filing of the Articles Amendment in connection therewith
      (to be filed by the Company following Stockholder Approval and/or mailing of
      the
      Proxy Statement or Information Statement as described in Section 8) and (B)
      the
      filing of the Certificate of Determination, which the Company undertakes to
      file
      with the California Secretary of State prior to the Closing, (i) the execution,
      delivery, and performance by the Company of the Subscription Agreement
      (including the Registration Rights Agreement (as hereinafter defined)),
      (ii) the offer and sale of the Shares and Warrants, and (iii) the issuance
      of the Conversion Shares upon due conversion of the Shares and the Warrant
      Shares upon due exercise of the Warrants require no consent of, action by or
      in
      respect of, or filing with, any person, governmental body, agency, or official
      other than those consents that have been obtained and filings that have been
      made pursuant to applicable state securities laws and post-sale filings pursuant
      to applicable state and federal securities laws, which the Company undertakes
      to
      file within the applicable time period.

    

    (k)    
      Compliance.
      Except
      as set forth in the Memorandum or on Schedule
      3(k),
      neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company
      or any
      Subsidiary under), nor has the Company or any Subsidiary received notice of
      a
      claim that it is in default under or that it is in violation of, any indenture,
      loan or credit agreement, or any other agreement or instrument to which it
      is a
      party or by which it or any of its properties is bound (whether or not such
      default or violation has been waived), (ii) is in violation of any order of
      any court, arbitrator, or governmental body, or (iii) is or has been in
      violation of any statute, rule, or regulation of any governmental authority,
      including without limitation all foreign, federal, state, and local laws
      relating to taxes, environmental protection, occupational health and safety,
      product quality and safety and employment and labor matters, except in each
      case
      as could not, individually or in the aggregate, have or reasonably be expected
      to result in a Material Adverse Effect. The Company is in compliance with the
      applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and
      the
      rules and regulations thereunder, except where such noncompliance could not
      have
      or reasonably be expected to result in a Material Adverse Effect. 

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (l)    
      Patents
      and Trademarks.
      To its
      knowledge, the Company and the Subsidiaries have, or have rights to use, all
      patents, patent applications, trademarks, trademark applications, service marks,
      trade names, copyrights, licenses, and other similar rights that are necessary
      or material for use in connection with their respective businesses as described
      in the Exchange Act Documents and which the failure to so have could,
      individually or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company violates or infringes upon
      the
      rights of any person. Except as set forth in the Exchange Act Documents, to
      the
      knowledge of the Company, all such Intellectual Property Rights are enforceable
      and there is no existing infringement by another person of any of the
      Intellectual Property Rights, except where such infringement could not have
      or
      reasonably be expected to result in a Material Adverse Effect.

    

    (m)    
      Transactions
      With Affiliates and Employees.
      Except
      as set forth in the Exchange Act Documents or the Memorandum or as set forth
      on
Schedule
      3(m),
      none of
      the officers or directors of the Company and, to the knowledge of the Company,
      none of the employees of the Company is presently a party to any transaction
      with the Company or any Subsidiary (other than for services as employees,
      officers, and directors), including any contract, agreement, or other
      arrangement providing for the furnishing of services to or by, providing for
      rental of real or personal property to or from, or otherwise requiring payments
      to or from any officer, director, or such employee or, to the knowledge of
      the
      Company, any entity in which any officer, director, or any such employee has
      a
      substantial interest or is an officer, director, trustee, or
      partner.

    

    (n)    
      Internal
      Accounting Controls.
      The
      Company and its Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management’s general or specific authorization, and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences. The Company has established disclosure controls and procedures
      (as
      defined in Exchange Act rules 13a-14 and 15d-14) for the Company and designed
      such disclosure controls and procedures to ensure that material information
      relating to the Company, including its Subsidiaries, is made known to the
      certifying officers by others within those entities, particularly during the
      period in which the Company’s Form 10-KSB or 10-QSB, as the case may be, is
      being prepared. The Company’s certifying officers have evaluated the
      effectiveness of the Company’s controls and procedures as of a date within 90
      days prior to the filing date of the Form 10-QSB for the Company’s most recently
      ended fiscal quarter (such date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed Form 10-KSB or Form 10-QSB the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the Evaluation Date.
      Since the Evaluation Date, there have been no significant changes in the
      Company’s internal controls (as such term is defined in Item 307(b) of
      Regulation S-B under the Exchange Act) or, to the Company’s knowledge, in other
      factors that could significantly affect the Company’s internal
      controls.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (o)    
      Solvency.
      Based
      on the financial condition of the Company and its Subsidiaries (on a
      consolidated basis) as of the Closing Date (and assuming that the Closing shall
      have occurred), (i) the fair saleable value of its consolidated assets exceeds
      the amount that will be required to be paid on or in respect of its consolidated
      existing debts and other liabilities (including known contingent liabilities)
      as
      they mature; (ii) the consolidated assets do not constitute unreasonably small
      capital to carry on the businesses of the Company and its Subsidiaries for
      the
      current fiscal year as now conducted and as proposed to be conducted including
      its capital needs taking into account the particular capital requirements of
      the
      businesses conducted by the Company and its Subsidiaries, and projected capital
      requirements and capital availability thereof; and (iii) the current cash flow
      of the Company and its Subsidiaries, together with the proceeds the Company
      and
      its Subsidiaries would receive, were it to liquidate all of their assets, after
      taking into account all anticipated uses of the cash, would be sufficient to
      pay
      all amounts on or in respect of its consolidated debt when such amounts are
      required to be paid. The Company and its Subsidiaries do not intend to incur
      debts beyond their ability to pay such debts as they mature (taking into account
      the timing and amounts of cash to be payable on or in respect of such
      debt).

    

    (p)    
      Certain
      Fees.
      Except
      as may be due to the Placement Agent from the Company and/or its Subsidiaries,
      no brokerage or finder’s fees or commissions are or will be payable by the
      Company or its Subsidiaries to any broker, financial advisor or consultant,
      finder, placement agent, investment banker, bank, or other person with respect
      to the transactions contemplated herein. The Investor shall have no obligation
      with respect to any Placement Agent fees or with respect to any claims (other
      than such fees or commissions owed by an Investor pursuant to written agreements
      executed by the Investor which fees or commissions shall be the sole
      responsibility of such Investor) made by or on behalf of other Persons for
      fees
      of a type contemplated in this Section that may be due in connection with the
      transactions contemplated herein.

    

    (q)    
      Certain
      Registration Matters.
      Assuming the accuracy of the Investor’s representations and warranties set forth
      in Section 5, no registration under the Securities Act is required for the
      offer
      and sale of the Shares and Warrants by the Company to the Investor
      hereunder.

    

    (r)    
      Listing
      and Maintenance Requirements.
      The
      Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with the maintenance requirements for
      continued quotation of the Common Stock on the NASD’s OTC Bulletin
      Board.

    

    (s)    
      Investment
      Company.
      The
      Company is not, and is not an “affiliate” of, an “investment company” within the
      meaning of the Investment Company Act of 1940, as amended.

    

    (t)    
      No
      Additional Agreements.
      The
      Company does not have any agreement or understanding with any Investor with
      respect to the transactions contemplated by the Subscription Agreement,
      including the Registration Rights Agreement, on terms that differ from those
      set
      forth herein and in the Registration Rights Agreement.

    

    (u)    
      Disclosure.
      All
      disclosure provided to the Investor regarding the Company and its Subsidiaries,
      their businesses and the transactions contemplated hereby, furnished by or
      on
      behalf of the Company and its Subsidiaries (including the Company’s
      representations and warranties set forth herein) are true and correct and do
      not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.  Reserved.

    

    5.  Representations
      and Warranties of the Investor.
      In order
      to induce the Company to enter into the Subscription Agreement, the Investor
      represents and warrants to the Company the following:

    

    (a)  Authority.
      If a
      corporation, partnership, limited partnership, limited liability company, or
      other form of entity, the Investor is duly organized or formed, as the case
      may
      be, validly existing, and in good standing under the laws of its jurisdiction
      of
      organization or formation, as the case may be. The Investor has all requisite
      individual or entity right, power, and authority to execute, deliver, and
      perform the Subscription Agreement (including the Registration Rights
      Agreement).

    

    (b)  Enforceability.
      The
      execution, delivery, and performance of the Subscription Agreement by the
      Investor have been duly authorized by all requisite partnership or corporate
      action, as the case may be. The Subscription Agreement has been duly executed
      and delivered by the Investor, and, upon its execution by the Company, shall
      constitute the legal, valid, and binding obligation of the Investor, enforceable
      in accordance with its terms, except to the extent that its enforceability
      is
      limited by bankruptcy, insolvency, reorganization, moratorium, or other laws
      relating to or affecting the enforcement of creditors’ rights generally and by
      general principles of equity.

    

    (c)  No
      Violations.
      The
      execution, delivery, and performance of the Subscription Agreement by the
      Investor do not and will not, with or without the passage of time or the giving
      of notice, result in the breach of, or constitute a default, cause the
      acceleration of performance, or require any consent under, or result in the
      creation of any lien, charge or encumbrance upon any property or assets of
      the
      Investor pursuant to, any material instrument or agreement to which the Investor
      is a party or by which the Investor or its properties may be bound or affected,
      and, do not or will not violate or conflict with any provision of the articles
      of incorporation or bylaws, partnership agreement, operating agreement, trust
      agreement, or similar organizational or governing document of the Investor,
      as
      applicable.

    

    (d)  Knowledge
      of Investment and its Risks.
      The
      Investor has knowledge and experience in financial and business matters as
      to be
      capable of evaluating the merits and risks of Investor’s investment in the
      Shares and Warrants. The Investor is an investor in securities of companies
      in
      the same stage as the Company and acknowledges that the Investor is able to
      fend
      for itself and bear the economic risk of the Investor’s investment, including
      the complete loss thereof. Investor has a preexisting personal or business
      relationship with the Company or one or more of its officers, directors or
      other
      persons in control of the Company, or Investor has such knowledge and experience
      in financial or business matters that it is capable of evaluating the merits
      and
      risks of the investment in the Shares and the Warrants. If an entity, the
      Investor has not been organized for the purpose of acquiring the Securities.
      The
      Investor understands that an investment in the Company represents a high degree
      of risk and there is no assurance that the Company’s business or operations will
      be successful. The Investor has considered carefully the risks attendant to
      an
      investment in the Company, and that, as a consequence of such risks, the
      Investor could lose Investor’s entire investment in the Company.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (e)  Investment
      Intent.
      The
      Investor hereby represents and warrants that (i) the Shares and Warrants are
      being acquired for investment for the Investor’s own account, and not as a
      nominee or agent and not with a view to the resale or distribution of all or
      any
      part of the Shares or Warrants, and the Investor has no present intention of
      selling, granting any participation in, or otherwise distributing any of the
      Shares or Warrants within the meaning of the Securities Act, (ii) the Shares
      and
      Warrants are being acquired in the ordinary course of the Investor’s business,
      and (iii) the Investor does not have any contracts, understandings, agreements,
      or arrangements, directly or indirectly, with any person and/or entity to
      distribute, sell, transfer, or grant participations to such person and/or entity
      with respect to, any of the Shares or Warrants. The Investor is not purchasing
      the Shares and Warrants as a result of any advertisement, article, notice or
      other communication regarding the Shares or Warrants published in any newspaper,
      magazine or similar media or broadcast over television or radio or presented
      at
      any seminar or any other general solicitation or general
      advertisement.

    

    (f)  Investor
      Status.
      The
      Investor is an “accredited investor” as that term is defined by Rule 501 of
      Regulation D promulgated under the Securities Act and the information provided
      by the Investor in the Investor’s Questionnaire included in the Subscription
      Agreement, is truthful, accurate, and complete. The Investor is not registered
      as a broker-dealer under Section 15 of the Exchange Act.

    

    (g)  Disclosure.
      The
      Investor has reviewed information provided by the Company in connection with
      the
      decision to purchase the Shares and Warrants, consisting of the Company’s
      publicly available filings with the SEC, the Memorandum, the Financial
      Statements and the information contained therein. The Company has provided
      the
      Investor with all the information that the Investor has requested in connection
      with the decision to purchase the Shares and Warrants. The Investor further
      represents that the Investor has had an opportunity to ask questions and receive
      answers from the Company regarding the business, properties, prospects, and
      financial condition of the Company. All such questions have been answered to
      the
      full satisfaction of the Investor. Neither such inquiries nor any other
      investigation conducted by or on behalf of the Investor or its representatives
      or counsel shall modify, amend, or affect the Investor’s right to rely on the
      truth, accuracy, and completeness of the disclosure materials and the Company’s
      representations and warranties contained herein.

    

    (h)  No
      Registration.
      The
      Investor understands that Investor may be required to bear the economic risk
      of
      Investor’s investment in the Company for an indefinite period of time. The
      Investor further understands that (i) neither the offering nor the sale of
      the Shares and Warrants has been registered under the Securities Act or any
      applicable State Acts in reliance upon exemptions from the registration
      requirements of such laws, (ii) the Shares, the Warrants, the Conversion
      Shares and the Warrant Shares (collectively, the “Securities”)
      must
      be held by he, she or it indefinitely unless the sale or transfer thereof is
      subsequently registered under the Securities Act and any applicable State Acts,
      or an exemption from such registration requirements is available, (iii) except
      as set forth in the Registration Rights Agreement, the Company is under no
      obligation to register any of the Securities on the Investor’s behalf or to
      assist the Investor in complying with any exemption from registration, and
      (iv) the Company will rely upon the representations and warranties made by
      the Investor herein in order to establish such exemptions from the registration
      requirements of the Securities Act and any applicable State Acts.

    

    (i)  Transfer
      Restrictions.
      The
      Investor will not transfer any of the Securities unless such transfer is
      registered or exempt from registration under the Securities Act and applicable
      State Acts, and, if requested by the Company in the case of an exempt
      transaction, the Investor has furnished an opinion of counsel reasonably
      satisfactory to the Company that such transfer is so exempt. The Investor
      understands and agrees that (i) the instruments or certificates evidencing
      the
      Securities will bear appropriate legends indicating such transfer restrictions
      placed upon the Securities, (ii) the Company shall have no obligation to honor
      transfers of any of the Securities in violation of such transfer restrictions,
      and (iii) the Company shall be entitled to instruct any transfer agent or agents
      for the securities of the Company to refuse to honor such
      transfers.

    

    (j)  Principal
      Address.
      The
      Investor’s principal residence, if an individual, or principal executive office,
      if an entity, is set forth in the Subscription Agreement.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    6.  Independent
      Nature of Investor’s Obligations and Rights.
      The
      obligations of the Investor under the
      Subscription Agreement,
      including the Registration Rights Agreement, and any other documents delivered
      in connection herewith and therewith (collectively, the “Transaction
      Documents”)
      are
      several and not joint with the obligations of any other purchaser of the Shares
      and Warrants, and the Investor shall not be responsible in any way for the
      performance of the obligations of any other purchaser of the Shares and Warrants
      under any Transaction Document. The decision of the Investor to purchase the
      Shares and Warrants pursuant to the Transaction Documents has been made by
      the
      Investor independently of any other purchaser of the Shares and Warrants.
      Nothing contained herein or in any Transaction Document, and no action taken
      by
      any purchaser of the Shares and Warrants pursuant thereto, shall be deemed
      to
      constitute such purchasers as a partnership, an association, a joint venture,
      or
      any other kind of entity, or create a presumption that the purchasers of the
      Shares and Warrants are in any way acting in concert or as a group with respect
      to such obligations or the transactions contemplated by the Transaction
      Document. The Investor acknowledges that no other purchaser of the Shares and
      Warrants has acted as agent for the Investor in connection with making its
      investment hereunder and that no other purchaser of the Shares and Warrants
      will
      be acting as agent of the Investor in connection with monitoring its investment
      in the Shares and Warrants or enforcing its rights under the Transaction
      Documents. The Investor shall be entitled to independently protect and enforce
      its rights, including without limitation the rights arising out of the
      Subscription Agreement
      or out of the other Transaction Documents, and it shall not be necessary for
      any
      other purchaser of the Shares and Warrants to be joined as an additional party
      in any proceeding for such purpose.

    

    7.  Prospectus
      Delivery Requirement.
      The
      Investor hereby covenants with the Company not to make any sale of the
      Securities without complying with the provisions hereof and of the Registration
      Rights Agreement, and without effectively causing the prospectus delivery
      requirement under the Securities Act to be satisfied (unless the Investor is
      selling such Securities in a transaction not subject to the prospectus delivery
      requirement).

    

    8.  Articles
      Amendment; Stockholder Approval.

    

    (a) As
      soon
      as practicable following the Closing, the Company agrees that it shall
      (i) prepare and file with the SEC a preliminary proxy statement (as amended
      and supplemented, the “Proxy
      Statement”)
      in
      connection with a meeting of its stockholders at which the stockholders will
      approve (“Stockholder
      Approval”)
      an
      amendment to the Company’s Articles of Incorporation which will increase the
      number of authorized shares of Common Stock from 40,000,000 to 300,000,000
      (the
“Articles
      Amendment”)
      or
      (ii) after securing Stockholder Approval by written consent, prepare and file
      with the SEC a preliminary information statement (as amended and supplemented,
      the “Information
      Statement”)
      in
      connection with the stockholder approval by written consent in lieu of a meeting
      of the Articles Amendment. The Company shall use its reasonable efforts to
      respond to written comments of the SEC and its staff, and, to the extent
      permitted by law, to cause the Proxy Statement or the Information Statement
      to
      be mailed to the Company’s stockholders as promptly as practicable after
      responding to all such comments to the satisfaction of the SEC staff. Each
      Investor shall cooperate with the Company in its preparation of the Proxy
      Statement or the Information Statement or any amendment or supplement thereto
      and shall furnish the Company with all information required to be included
      therein with respect to the Investor, this subscription, and this
      offering.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (b) Without
      limiting the generality of the foregoing, the Investor shall correct as promptly
      as practicable any information provided by it to be used specifically in the
      Proxy Statement or the Information Statement, if required by applicable law,
      that shall have become false or misleading in any material respect. The Company
      shall take all reasonable steps necessary to file with the SEC and have declared
      effective or cleared by the SEC any amendment or supplement to the Proxy
      Statement or the Information Statement so as to correct the same and cause
      the
      Proxy Statement or the Information Statement as so corrected to be disseminated
      to the stockholders of the Company, in each case to the extent required by
      applicable law.

    

    (c) As
      a
      condition to Closing, KI Equity and each of the Shareholders (as such terms
      are
      defined in Section 9 below) shall
      have entered into a Voting Agreement pursuant to which such owners agree to
      vote
      all of their shares of the Company’s voting stock in favor of the proposal set
      forth in paragraph (a) above.

    

    (d) The
      Company shall take all necessary steps to file the Articles Amendment as soon
      as
      practicable following the Closing and Stockholder Approval.

    

    9.  Exchange
      Agreement and Related Matters.

    

    (a) Exchange.
      As a
      condition to Closing, InfoSmart and the Company shall have completed the
      transactions under a certain exchange agreement (“Exchange
      Agreement”)
      entered into by and among the Company, KI Equity Partners II, LLC, a shareholder
      of the Company (“KI
      Equity”),
      Prime
      Fortune Enterprises, Ltd., the sole shareholder of InfoSmart (“Prime
      Fortune”),
      and
      each of the shareholders of Prime Fortune (the “Shareholders”).
      Pursuant to the Exchange Agreement, all of the issued and outstanding shares
      of
      capital stock of Prime Fortune will be transferred to Cyber Merchants in
      exchange for 1,000,000 shares of the Series A Preferred Stock (the “Exchange”).
      Upon
      completion of the Exchange, InfoSmart will be an indirect, wholly owned
      subsidiary of the Company. Upon filing of the Articles Amendment following
      the
      Closing, each share of the Series A Preferred Stock will automatically convert
      by its terms into 116.721360 shares of Common Stock. A copy of the Exchange
      Agreement has been made available to the Investor.

    

    (b) Approvals.
      As a
      condition to Closing, the board of directors of the Company, as constituted
      by
      the Company immediately following the closing of the Exchange, shall have
      approved the terms and conditions of the sale of Securities to Investors as
      contemplated herein and shall have accepted the Subscription Agreement on behalf
      of the Company.

    

    (c) Covenant
      Not to Sue.
      From
      and after the Closing, the Investor agrees, on behalf of itself and its
      officers, directors, shareholders and affiliates, that none of the Investor
      or
      its officers, directors, shareholders and affiliates will assert, or assist
      in
      the assertion of, any claim or action before any federal, state, local or
      foreign judicial, arbitration, administrative, executive or other type of body
      or tribunal against the officers, directors and advisors of the Company in
      such
      positions prior to completion of the Exchange and each of their respective
      affiliates, subsidiaries, partners, successors and assigns and all of their
      respective employees, officers, directors, agents and representatives in such
      positions prior to completion of the Exchange (collectively, “Company
      Persons”)
      that
      is based in whole or in part on their actions as an officer, director or advisor
      of the Company in such positions prior to completion of the Exchange or by
      reason of their conduct in respect of the business of the Company, unless such
      claim or action is based on the gross negligence or commission of fraud. The
      grants of immunity set forth in this Section: (i) are irrevocable and (ii)
      shall
      survive indefinitely, and (iii) are binding on all successors and assigns of
      the
      Investor.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (d) Release.
      The
      Investor hereby agrees to unconditionally and irrevocably release, exonerate,
      acquit and discharge the Company Persons, from any and all actions, causes
      of
      action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
      specialties, covenants, contracts, controversies, agreements, promises,
      variances, trespasses, judgments, executions, claims, demands, counterclaims,
      rights to damages and liabilities (collectively, “Claims”),
      that
      the Investor ever had, now has, or hereafter might, can or shall have against
      the Company Persons under statute, common law or otherwise, for or by reason
      of
      any matter, cause or thing whatsoever from the beginning of the world to, and
      including, the date of the consummation of the Exchange, other than Claims
      that
      are for gross negligence or the commission of fraud as an officer, director
      or
      advisor in their conduct of the business of the Company.

    

    (e) Third
      Party Beneficiaries.
      The
      Company Persons are third-party beneficiaries with respect to this Section
      9 and
      may enforce the foregoing provisions as if they were a signatory
      hereto.

    

    10.  Indemnification
      of Investor.
      In
      addition to the indemnity provided in the Registration Rights Agreement, the
      Company will indemnify and hold the Investor and its directors, officers,
      shareholders, partners, employees and agents (each, an “Investor
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs, and reasonable attorneys’ fees and costs of
      investigation (collectively, “Losses”)
      that
      any such Investor Party may suffer or incur as a result of or relating to any
      misrepresentation, breach, or inaccuracy of any representation, warranty,
      covenant, or agreement made by the Company in any Transaction Document. In
      addition to the indemnity contained herein, the Company will reimburse each
      Investor Party for its reasonable legal and other expenses (including the cost
      of any investigation, preparation, and travel in connection therewith) incurred
      in connection therewith, as such expenses are incurred.

    

    11.  Registration
      Rights.
      The
      Investor (and certain assignees thereof) is entitled to the benefit of such
      registration rights in respect of Conversion Shares and Warrant Shares in
      accordance with and subject to the terms and conditions of the Registration
      Rights Agreement attached to the Memorandum as Exhibit
      B
      (“Registration
      Rights Agreement”),
      which
      constitutes a part of the Subscription Agreement.

    

    12.  Non-Public
      Information.
      Subsequent to the Closing, the Company covenants and agrees that neither it
      nor
      any other person acting on its behalf will provide Investor or its agents or
      counsel with any information that the Company believes constitutes material
      non-public information, unless prior thereto Investor shall have executed a
      written agreement regarding the confidentiality and use of such information.
      The
      Company understands and confirms that Investor shall be relying on the foregoing
      representations in effecting transactions in securities of the
      Company.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    13.  Further
      Assurances.
      The
      parties hereto will, upon reasonable request, execute and deliver all such
      further assignments, endorsements and other documents as may be necessary in
      order to perfect the purchase by the Investor of the Shares and
      Warrants.

    

    14.  Entire
      Agreement; No Oral Modification.
      The
      Subscription Agreement, including the Registration Rights Agreement, contains
      the entire agreement among the parties hereto with respect to the subject matter
      hereof and supersedes all prior agreements and understandings with respect
      thereto and may not be amended or modified except in a writing signed by both
      of
      the parties hereto, or, with respect to rights set forth in the Registration
      Rights Agreement, pursuant to the provisions of the Registration Rights
      Agreement.

    

    15.  Binding
      Effect; Benefits.
      The
      Subscription Agreement shall inure to the benefit of and be binding upon the
      parties hereto and their respective heirs, successors and assigns; provided,
      that, nothing in the Subscription Agreement, expressed or implied, is intended
      to confer on any other person other than the parties hereto, or their respective
      heirs, successors or assigns, any rights, remedies, obligations or liabilities
      under or by reason of the Subscription Agreement; and provided further, that,
      the assignment of rights under the Registration Rights Agreement shall be
      governed by the terms of the Registration Rights Agreement.

    

    16.  Counterparts.
      The
      Subscription Agreement may be executed in any number of counterparts, each
      of
      which shall be deemed to be an original and all of which together shall be
      deemed to be one and the same instrument. The execution of the Subscription
      Agreement may be evidenced by facsimile or electronic signature, and such
      signature shall for all purposes be treated as an original signature of such
      party. 

    

    17.  Governing
      Law.
      The
      Subscription Agreement shall be governed by, and construed and enforced in
      accordance with, the laws of the United States of America and the State of
      California, both substantive and remedial. Any
      judicial proceeding brought against either of the parties to the
      Subscription Agreement
      or any dispute arising out of the
      Subscription Agreement
      or any matter related hereto shall be brought in the courts of the State of
      California, or in the United States District Court located in Los Angeles,
      California and, by its execution and delivery of the
      Subscription Agreement,
      each party to the
      Subscription Agreement
      accepts the jurisdiction of such courts.

    

    18.  Prevailing
      Parties.
      In any
      action or proceeding brought to enforce any provision of the Subscription
      Agreement, or where any provision hereof is validly asserted as a defense,
      the
      prevailing party shall be entitled to receive and the nonprevailing party shall
      pay upon demand reasonable attorneys’ fees in addition to any other
      remedy.

    

    19.  Headings.
      The
      section headings herein are included for convenience only and are not to be
      deemed a part hereof.

    

    20.  Survival.
      All
      representations, warranties and covenants contained herein shall survive (i)
      the
      acceptance of the subscription by the Company, (ii) changes in the transactions,
      documents and instruments described in the Memorandum and (iii) the death or
      disability of the Investor.

    

    21.  Legends.
      Each
      certificate representing Shares and the Warrants sold pursuant to the
      Subscription Agreement will be imprinted with a legend in substantially the
      following form:

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    “This
      security has been acquired for investment and has not been registered under
      the
      Securities Act of 1933, as amended (the “Act”), or applicable state securities
      or “blue sky” laws. This security may not be sold, pledged, assigned or
      otherwise transferred nor will any assignee, pledgee, vendee, transferee,
      endorsee thereof be recognized by the issuer as having acquired such securities
      for any purpose unless (i) a registration statement under the Act with respect
      to such security shall then be in effect and such transfer has been qualified
      under all applicable state securities or “blue sky” laws or (ii) an exemption
      therefrom shall be available under the Act and such laws, supported by an
      opinion of counsel that such registration is not required, which opinion and
      counsel are reasonably satisfactory to the Company and its
      counsel.”

    22. Variable
      Securities; Dilutive Issuances.
      For so
      long as any Shares or Warrants remain outstanding, the Company shall
      not, in any manner, issue or sell any rights, warrants or options ("Common
      Stock
      Equivalents") to subscribe for or purchase Common Stock, or
      directly or indirectly convertible into or exchangeable or exercisable for
      Common Stock, at a price which varies or may vary with the market price of
      the Common Stock, including by way of one or more reset(s) to any
      fixed price unless the conversion, exchange or exercise price of any such
      security cannot be less than the then applicable Conversion Price (as defined
      in
      the Shares) with respect to the  Common Stock, into which any Share is
      convertible or exchangeable or the then applicable Exercise Price (as defined
      in
      the Warrants) with respect to the Common Stock into which any Warrant is
      exercisable. For so long as any Warrants or Shares remain outstanding the
      Company shall not, in any manner, enter into or affect any issuances of
      additional shares of Common Stock or Common Stock Equivalents less than a price
      equal to the Conversion Price or Exercise Price immediately in effect prior
      to
      such issuance (as adjusted hereunder to such date) (a "Dilutive Issuances")
      if
      the effect of such such Dilutive Issuance is to cause the Company to be
      required to issue upon conversion or exchange of any Share or exercise of any
      Warrant any shares of Common Stock in excess of that number of Common Stock
      which the Company may issue upon conversion of the Shares and exercise of
      the Warrants without breaching the Company's obligations under the rules and
      regulations of the principal market in which the Common Stock is
      listed.

     

     

    
      
        
        

      

      
        13

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