VOTING AGREEMENT
EXHIBIT
2.7
This
VOTING AGREEMENT, dated as of this 16th
day of
August, 2006 (“Agreement”), is by and among KI Equity Partners II, LLC, a
Delaware limited liability company (“KI Equity”) and each of the other persons
whose signature appears under the caption “Shareholders” on the signature page
hereof. For purposes of this Agreement, KI Equity and each person whose
signature appears on the signature page hereof shall be referred to herein
individually as “Shareholder” and collectively as the
“Shareholders”.
WHEREAS,
as of the date hereof, each Shareholder owns beneficially of record or has
the
power to vote, or direct the vote of, shares of common stock, no par value
per
share (“Common Stock”) or shares of Series A Convertible Preferred Stock, no par
value per share (“Preferred Stock”), of Cyber Merchants Exchange, Inc.
(“Cyber”), a California corporation, as set forth opposite such Shareholder’s
name on Exhibit A
hereto
(all such shares of Common Stock and Preferred Stock and any shares of which
ownership of record or the power to vote is hereafter acquired by the
Shareholders, whether by purchase, conversion or exercise, prior to the
termination of this Agreement being referred to herein as the
“Shares”);
WHEREAS,
Cyber, Infosmart Group, Limited, a corporation organized in the British Virgin
Islands (the "Company") and the Shareholders have entered into an Exchange
Agreement, dated July 7, 2006, as amended August 14, 2006 (as the same may
be
further amended from time to time) (the “Exchange Agreement”) which provides,
upon the terms and subject to the conditions thereof, for the exchange of all
of
the Shares of the Company for Cyber’s shares of Series A Preferred Stock (the
“Exchange”);
WHEREAS,
Cyber’s shares of Series A Preferred Stock are convertible into the Conversion
Shares pursuant to the Series A Certificate of Determination;
WHEREAS,
as a condition to the consummation of the Exchange Agreement, KI Equity has
requested that the Shareholders agree, and the Shareholders have agreed,
severally, to enter into this Agreement; and
WHEREAS,
the capitalized terms used but not defined in this Agreement shall have the
meanings ascribed to them in the Exchange Agreement;
NOW,
THEREFORE, in consideration of the premises and of the mutual agreements and
covenants set forth herein and in the Exchange Agreement, and intending to
be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE
I
VOTING
OF
SHARES FOR DIRECTORS
SECTION
1.01 Vote
in Favor of the Directors.
During
the period commencing on the date hereof and terminating one year thereafter,
each Shareholder, in its capacity as a Shareholder of Cyber (or successor),
agrees to vote (or cause to be voted) all Shares directly or
indirectly
owned by the Shareholder or over which the Shareholder has the beneficial
ownership or the right to vote and all Shares which such Shareholder acquires
directly or indirectly or has the beneficial ownership or right to vote in
the
future, at any meeting of the Shareholders of Cyber, and in any action by
written consent of the Shareholders of Cyber, in favor of the election of the
Director Designees, as defined herein, to the Board of Directors of Cyber and
will not vote (or cause to be voted) for the removal of the Director Designees
from the Board of Directors. Any Director Designee may be removed from the
Board
of Directors in the manner allowed by law and Cyber’ governing documents, but
with respect to the Director Designee pursuant to Section 1.03 (c), in the
event such Director Designee is removed as a director of the Company, KI Equity
shall have the right to approve the designation and nomination such removed
director's replacement.
SECTION
1.02 Size
of Board of Directors.
The
Shareholders agree that the Board of Directors of Cyber shall consist of seven
(7) persons during the term hereof, and the Shareholders will take all such
action to set the number of directors consistent with this section 1.02.
SECTION
1.03 Director
Designees.
The
Director Designees will be as follows:
(a) Xxxx
Xxxxx, Xxxxxxx Xxx and Xxxxxx Xxxxx (collectively, the “Management Directors”)
or such other persons as designated by the remaining Management Directors in
the
event of resignation or removal of any of the Management Directors; and
(b) for
three
persons designated by the Management Directors, who shall all be independent
directors,
(c) so
long
as KI Equity is a shareholder of Cyber, for one person designated by KI Equity,
which person shall be an independent director.
Neither
the Shareholders, nor any of the officers, directors, shareholders, members,
managers, partners, employees or agents of any Shareholder, makes any
representation or warranty as to the fitness or competence of any Director
Designee to serve on the Board of Directors by virtue of such party’s execution
of this Agreement or by the act of such party in designating or voting for
such
Director Designee pursuant to this Agreement.
SECTION
1.04 Term
of Agreement.
The
obligations of the Shareholders pursuant to this Article I shall terminate
on the first anniversary of the date of this Agreement.
ARTICLE
II
VOTING
FOR CORPORATE ACTIONS
SECTION
2.01 Vote
in Favor of Corporate Matters.
During
the term of this Agreement, each Shareholder hereby agrees and covenants to
vote
or cause to be voted all of his Shares then owned by him, or over which he
has
voting power, and all Shares which such Shareholder acquires directly or
indirectly or has the beneficial ownership or right to vote in the future,
at
any regular or special meeting of shareholders, or, in lieu of any such meeting,
to give his written consent in any action by written consent of the
shareholders, in favor of each of the following items (“Actions”):
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(a) To
approve the change of the name of Cyber to a name selected by the
Board;
(b) To
approve the increase in the number of authorized shares of common stock of
Cyber
from 40,000,000 to 300,000,000;
(c) All
such
other actions as shall be necessary or desirable in connection with or related
to the foregoing actions in (a) through (b) above including, without limitation,
any amendment to the articles of incorporation of Cyber to effect the
foregoing.
SECTION
2.02 Grant
of Proxy; Further Assurance.
In the
event that, in connection with any regular or special meeting of shareholders,
or, in lieu of any such meeting, with a written consent in any action by written
consent of the shareholders, within five (5) days following a written request
thereof by the Company (or a representative thereof), a Shareholder fails to
vote or cause to be voted all of his Shares in favor of the Actions in
accordance with the instructions set forth in such written request, or to
execute a written consent in connection therewith, each Shareholder, by this
Agreement, with respect to all Shares over which it has voting authority and
any
Shares hereinafter acquired by such Shareholder over which it may have voting
authority, does hereby irrevocably constitute and appoint Xxxx Xxxxx, or any
nominee, with full power of substitution, as his or its true and lawful attorney
and proxy, for and in his or its name, place and stead, to vote each of such
Shares as such Shareholder’s proxy, at every annual, special or adjourned
meeting of the shareholders of Cyber (including the right to sign his or its
name (as Shareholder) to any consent, certificate or other document relating
to
Cyber that may be permitted or required by applicable law) in favor of the
adoption and approval of each of the Actions. This proxy extends to no other
matter, except for the Actions as enumerated above. Each Shareholder shall
perform such further acts and execute such further documents and instruments
as
may reasonably be required to vest in Cyber the power to carry out the
provisions of this Agreement
SECTION
2.03 Termination.
The
obligations of each Shareholder pursuant to this Article II shall terminate
upon
the adoption and approval of the Actions by the shareholders of Cyber.
SECTION
2.04 Obligations
as Director and/or Officer.
If a
Shareholder or any of its affiliates or nominees is a member of the board of
directors of Cyber (a “Director”) or an officer of Cyber (an “Officer”), nothing
in this Agreement shall be deemed to limit or restrict the Director or Officer
acting in his or her capacity as a Director or Officer of Cyber, as the case
may
be, and exercising his or her fiduciary duties and responsibilities, it being
agreed and understood that this Agreement shall apply to Shareholder solely
in
his or her capacity as a shareholder of Cyber and shall not apply to his or
her
actions, judgments or decisions as a Director or Officer of
Cyber.
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ARTICLE
III
REPRESENTATIONS
AND WARRANTIES;
COVENANTS
OF THE SHAREHOLDERS
Each
Shareholder hereby severally represents warrants and covenants to the other
Shareholders as follows:
SECTION
3.01 Authorization.
Such
Shareholder has full legal capacity and authority to enter into this Agreement
and to carry out such person’s obligations hereunder. This Agreement has been
duly executed and delivered by such Shareholder, and (assuming due
authorization, execution and delivery by the other Shareholders) this Agreement
constitutes a legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with its terms.
SECTION
3.02 No
Conflict; Required Filings and Consents.
(a) The
execution and delivery of this Agreement by such Shareholder does not, and
the
performance of this Agreement by such Shareholder will not, (i) conflict
with or violate any Legal Requirement applicable to such Shareholder or by
which
any property or asset of such Shareholder is bound or affected, or
(ii) result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give
to
others any right of termination, amendment, acceleration or cancellation of,
or
result in the creation of any encumbrance on any property or asset of such
Shareholder, including, without limitation, the Shares, pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation.
(b) The
execution and delivery of this Agreement by such Shareholder does not, and
the
performance of this Agreement by such Shareholder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and (ii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay the performance by such
Shareholder of such Shareholder’s obligations under this Agreement.
SECTION
3.03 Litigation.
There
is no private or governmental action, suit, proceeding, claim, arbitration
or
investigation pending before any agency, court or tribunal, foreign or domestic,
or, to the knowledge of such Shareholder or any of such Shareholder’s
affiliates, threatened against such Shareholder or any of such Shareholder’s
affiliates or any of their respective properties or any of their respective
officers or directors, in the case of a corporate entity (in their capacities
as
such) that, individually or in the aggregate, would reasonably be expected
to
materially delay or impair such Shareholder’s ability to consummate the actions
contemplated by this Agreement. There is no judgment, decree or order against
such Shareholder or any of such Shareholder’s affiliates, or, to the knowledge
of such Shareholder of any of such Shareholder’s affiliates, any of their
respective directors or officers, in the case of a corporate entity (in their
capacities as such), that would prevent, enjoin, alter or materially delay
any
of the actions contemplated by this Agreement, or that would reasonably be
expected to have a material adverse effect on such Shareholder’s ability to
consummate the actions contemplated by this Agreement.
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SECTION
3.04 Title
to Shares.
Such
Shareholder is the legal and beneficial owner of its Shares free and clear
of
all Liens.
SECTION
3.05 Absence
of Claims.
Each
Shareholder has no knowledge of any causes of action or other claims that could
have been or in the future might be asserted by the Shareholder against Cyber
or
any of its predecessors, successors, assigns, directors, employees, agents
or
representatives arising out of facts or circumstances occurring at any time
on
or prior to the date hereof and in any way relating to any duty or obligation
of
Cyber or any Shareholder.
ARTICLE
IV
GENERAL
PROVISIONS
SECTION
4.01 Notices.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by overnight courier service, by telecopy,
or by
registered or certified mail (postage prepaid, return receipt requested) to
the
respective parties at the following addresses (or at such other addresses as
shall be specified by notice given in accordance with this
Section 4.01):
(a) If
to any
Shareholder (other than KI Equity):
Infosmart
Group, Limited
A2,
18/F
Fortune Factory Building
00
Xxx
Xxxxx Xxxxxx
Xxxx
Xxx,
Xxxx Xxxx
Attn:
Xx.
Xxxx Xxxx or CEO
(000
0000-0000 telephone
(000)
0000-0000 telecopy
with
a
copy to:
Xxxxxxxxxx
& Xxxxx LLP
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xx.
Xxxxx X. Xxxxx, Esq.
(000)
000-0000 telephone
(000)
000-0000 telecopy
(b) If
to KI
Equity:
KI
Equity
Partners II, LLC
Xx.
Xxxxxxx X. Xxxxxxx, Manager
0000
XXX
Xxxxxxx, Xxxxx 0000
Xxxxxxxxx
Xxxxxxx, XX XXX 00000-0000
-5-
(000)
000-0000 telephone
(000)
000-0000 telecopy
SECTION
4.02 Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
SECTION
4.03 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the
extent possible.
SECTION
4.04 Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof. This Agreement may
not be amended or modified except in an instrument in writing signed by, or
on
behalf of, the parties hereto.
SECTION
4.05 Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event that
any
provision of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
SECTION
4.06 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of California applicable to contracts executed in and to be performed
in that State.
SECTION
4.07 Disputes.
All
actions and proceedings arising out of or relating to this Agreement shall
be
heard and determined exclusively in any state or federal court in
California.
SECTION
4.08 No
Waiver.
No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION
4.09 Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
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SECTION
4.10 Waiver
of Jury Trial.
Each of
the parties hereto irrevocably and unconditionally waives all right to trial
by
jury in any action, proceeding or counterclaim (whether based in contract,
tort
or otherwise) arising out of or relating to this Agreement or the Actions of
the
parties hereto in the negotiation, administration, performance and enforcement
thereof.
SECTION
4.11 Exchange
Agreement.
All
references to the Exchange Agreement herein shall be to such agreement as may
be
amended by the parties thereto from time to time.
[Signature
page(s) follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
SHAREHOLDERS:
KI
EQUITY
PARTNERS II, LLC
By:
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx, Manager
PRIME
CORPORATE DEVELOPMENTS LIMITED
By:
/s/ Sze Po Nei
Sze
Po
Nei, Director
/s/
Xxxx
Xxxxx
Xxxx
Xxxxx, Individually
/s/
Xxx
Xxx Xxx
Xxx
Xxx
Xxx, Individually
WORLDWIDE
GATEWAY CO., LTD.
By:
/s/ Xxxx Xxx
Xxxx
Xxx,
Chairman and CEO
HAMPTONS
INVESTMENT GROUP LIMITED
By:
/s/ Xxx Xxx Sui
Xxx
Xxx
Sui, William, Director
-8-
EXHIBIT A
SHAREHOLDERS
|
Name
of Shareholder
|
Number
of Shares Owned
Beneficially and of Record
|
|
|
KI
Equity Partners II, LLC
|
8,604,160
Common Stock
|
|
|
Prime
Corporate Developments Limited
|
673,389
Series A Preferred (1)
|
|
|
Xxxx
Xxxxx
|
200,222
Series A Preferred (1)
|
|
|
Xxx
Xxx Wan
|
70,833
Series A Preferred (1)
|
|
|
Worldwide
Gateway Co., Ltd.
|
2,850,000
Common Stock
|
|
|
Hamptons
Investment Group Ltd.
|
55,556
Series A Preferred (1)
|
|
| (1) |
Each
share of Series A Preferred Stock is convertible into 116.721360
shares of
Cyber’s common stock, with preferred stockholders voting with common
stockholders on an as converted
basis.
|
