CYBER MERCHANTS EXCHANGE, INC.

Index to
Annual Report on Form 10-KSB
For Year Ended June 30, 2000

PART I
Item 1: Description of Business
Item 2: Description of Property
Item 3: Legal Proceedings
Item 4: Submission of Matters to a Vote of Security Holders

PART II
Item 5: Market for Common Equity and Related Stockholder Matters
Item 6: Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7: Financial Statements
Item 8: Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

PART III
Item 9: Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
Item 10: Executive Compensation
Item 11: Security Ownership of Certain Beneficial Owners and Management
Item 12: Certain Relationships and Related Transactions
Item 13: Exhibits and Reports on Form 8-K

Signatures

Reports of Independent Certified Public Accountants

PART I

On August 15, 2000, the Company's common stock was held by approximately 562 shareholders of record or through nominee or street name accounts with brokers.

The Company has not paid dividends in prior years and has no plans to pay dividends in the near future. The Company intends to reinvest its earnings on the continued development and operation of its business. Any payment of dividends would depend upon the Company's pattern of growth, profitability, financial condition, and such other factors as the Board of Directors may deem relevant.

Recent Sales of Unregistered Securities

In June, 2000, the Company completed a private placement offering of 1,255,900 shares of its Common Stock at an offering price of $4.878 per share. Gross proceeds from the offering were $6,126,336. This offering was made pursuant to an exemption from the registration requirement under the Securities Act of 1933, as amended (the "Act"). The exemption relied upon was either Rule 506 of Regulation D or Regulation S of the Act. The Company limited the manner of the offering and provided all of the investors with an offering memorandum.

In June, 2000, the Company also issued 838,119 warrants to Factory 2-U Stores, Inc. to purchase Common Stock at $4.878 per share with an exercise period of 5 years. This offering was made pursuant to an exemption from the registration requirement under the Act. The exemption relied upon was Rule 506 of Regulation D of the Act.

Listing on the Nasdaq SmallCap Market

The Company delivered an application for listing on the Nasdaq SmallCap Market under the trading symbol "CMEE" on July 17, 2000. The application is under review by Nasdaq.

* Filed as an Exhibit to the Company's Registration Statement on Form SB-2, Amendment No. 5 on May 6, 1999, and incorporated herein by this reference.

** Filed on January 27, 2000 as an Exhibit to a report by the Company on a Form 8-A dated January 27, 2000.

*** Filed on July 18, 2000, as an Exhibit to a report by the Company on a Form 8-K dated June 30, 2000.

**** Filed on October 1, 1999, as an Exhibit to a report by the Company on a Form 8-K dated June 30, 1999.

Report on Form 8-K

No reports on Form 8-K were filed by the Company during the fourth quarter ended June 30, 2000.

On February 10, 2000, the Company filed a form 8-K to report that on February 4, 2000, the Company's board of directors voted to expand the board of directors to six and elected Philip Hawley as director at that point in time. In addition, on December 21, 1999, the Company signed an agreement forming a joint venture corporation with Abest Technology Company, Ltd. This partnership establishes a joint venture corporation in Taiwan under the name C-ME.com/Taiwan. Under the agreement, C-ME.com/Taiwan will expand Cyber Merchants Exchange's Internet Sourcing Network into Taiwan by opening merchandise-sourcing offices in Taipei, Taichung City, and Kaohsiung. These cities were chosen for their proximity to major manufacturing centers.

By: /s/ Frank S. Yuan
Frank S. Yuan
Chief Executive Officer

Date: September 28, 2000

By: /s/ John F. Busey
John F. Busey
President, Director

Date: September 28, 2000

By: /s/ Howard Moore
Howard Moore
Vice Chairman

Date: September 28, 2000

By: /s/ Philip M. Hawley
Philip M. Hawley
Director

Date: September 28, 2000

By: /s/ Charles Rice
Charles Rice
Director

Date: September 28, 2000

By: /s/ Deborah Shamaley
Deborah Shamaley
Director

Date: September 28, 2000

Independent Certified Public Accountants Report of BDO, Seidman LLP

Balance Sheets as at June 30, 2000 and 1999

Statements of Operations for the years ended June 30, 2000 and 1999

Statements of Stockholders Equity for the years ended June 30, 2000 and 1999

Statements of Cash Flows for the years ended June 30, 2000 and 1999

Notes to Financial Statements (audited)

Report on Audited Financial Statements
For the Years Ended June 30, 1999 and 2000

Assets

Current assets

Liabilities and Stockholders' Equity

Current liabilities:

Commitments and contingency (Note 9)

Shareholders' equity (Notes 6 and 7):

See accompanying notes to financial statements.

Revenues
- subscribers' fees

Other income (expenses):

Income taxes (Note 5)

800

1,715

See accompanying notes to financial statements.

See accompanying notes to financial statements.

Cash flows from operating activities:

- Net loss

- Adjustments to reconcile net loss to net cash used in operating activities:

Cash flows from investing activities:

Cash flows from financing activities:

Supplemental disclosure of cash flow information:
- Cash paid during the year for:

See accompanying notes to financial statements.

NOTE 2 - PROPERTY AND EQUIPMENT

A summary of property and equipment at cost is as follows:

Depreciation expense was $40,281 and $36,545 for the years ended June 30, 1999 and 2000, respectively.

NOTE 3 - INVESTMENT IN OVERSEAS JOINT VENTURES AND ABNET

The following table presents the investment in respective entities.

On December 22, 1999, the Company entered into an agreement with Abest Tech Company, Ltd. d.b.a. ABNet.tw (ABNet), to form a joint venture in Taiwan named C-ME.com Taiwan to facilitate the buying and selling activities between U.S.-based retailers and Taiwan-based exporters through the Company's web-based communication system. The Company invested $300,000 for a 30% interest in February 2000 and accounts for this investment under the equity method. During the year ended June 30, 2000, the Company recognized software sales revenue of approximately $210,000 and a return of $90,000 on the investment. As of June 30, 2000, the Company recognized an investment loss from this Taiwan joint venture of $74,573.

On March 11, 2000, the Company entered into an agreement with Vickem Patana Co., Ltd., a Thailand Corporation, to form a joint venture named E-SouthEast Asia, Inc. (E-SEA) a Delaware Corporation which will use the Company's proprietary web-based communication system to facilitate the front-end merchandise sourcing. By using the Company's proprietary web-based communication system, retailers will be able to communicate with vendors, conduct negotiations, and facilitate sourcing directly from manufacturers and exporters from Thailand, Philippines, Vietnam, Burma, Laos, and Cambodia and for such vendors to have guaranteed access and continuous electronic feedback directly from the retailers. The Company invested $400,000 for a 40% equity interest subsequent to June 30, 2000. (See Note 4.)

On March 25, 2000, the Company entered into an agreement with Good Support International Limited, a British Virgin Islands Company, to form a joint venture named Global Purchasing Dotcom, Inc. (GP.com), a Washington Company, which will focus on implementing several targeted businesses in China's e-commerce market. These areas are as follows: 1) aggregate Chinese vendor product information to retailers globally through the use of C-ME.com's proprietary web-based software; 2) provide Chinese domestic retailers with a direct purchasing channel to foreign vendors; 3) provide business-to-business procurement and fulfillment services to Chinese retailers; and 4) provide premium web design and hosting services. The Company invested $1 million for a 50% equity interest subsequent to June 30, 2000. (See Note 4.)

On February 10, 2000 the Company invested $1 million in Abest Tech Company, Ltd. for 1,500,000 shares of its common stock for 15% of the equity interest. The Company accounts for this investment under the cost method. During the fourth quarter, the Company made an adjustment to adjust the investment to cost.

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company maintains a certain banking relationship, such as checking, money market, certificates of deposit accounts, with a bank of which the Company's Chairman and CEO is a founder and a shareholder. As of June 30, 1999, the Company had cash and cash equivalent balance of $570,209 and certificates of deposit of $300,000 at this bank. As of June 30, 2000, the Company had cash and cash equivalents of approximately $26,000 and certificates of deposit of $100,000 at the bank. Management believes that the Bank offers competitive interest and services.

Software Sales

The Company sold its proprietary Linux-based sourcing software to C-ME.com Taiwan for $300,000 based upon the decision of management of C-ME.com Taiwan. As a reflection of the Company's 30% ownership in C-ME.com Taiwan, the Company recognized revenue of $210,000 and a return of $90,000 on investment in C-ME.com Taiwan. The Company collected the full amount of $300,000 prior to June 30, 2000.

The Company sold its proprietary web-based turnkey software to E-SouthEast Asia, Inc. (E-SEA) for $300,000 based upon the decision of management of E-SEA. As a reflection of the Company's 40% ownership in E-SEA, the Company recognized revenue of $180,000 and a return of $120,000 on investment in ESEA. The Company collected its account receivable subsequent to June 30, 2000.

The Company sold its proprietary web-based turnkey software to Global Purchasing Dotcom, Inc. (GP.com) for $400,000 based upon the decision of management of GP.com. As a reflection of the Company's 50% ownership in GP.com, the Company recognized revenue of $200,000 and a return of $200,000 on investment in GP.com. The Company collected its account receivable subsequent to June 30, 2000.

NOTE 5 - INCOME TAXES

Income tax expense is comprised of the minimum state franchise tax. The difference between the amount of income tax benefit recorded and the amount of income tax benefit calculated using the U.S. Federal statutory rate of 34% is due to a valuation allowance for any benefit from net operating losses.

The Company has gross deferred tax assets of $753,000 and $1,026,000 at June 30, 1999 and 2000, respectively, relating principally to tax effects of net operating loss carryforwards. In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that the assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable loss and projections for future taxable income over the periods in which the deferred tax items are recognizable for tax reporting purposes, management does not believe it is more likely than not the Company will realize the benefits of these differences at June 30, 1999 and 2000. As such, management has recorded a valuation allowance for the full amount of deferred tax assets at June 30, 1999 and 2000.

At June 30, 2000, the Company has available net operating losses of approximately $2,572,000 and $1,285,000 for Federal and California state income tax purposes, respectively, to offset future taxable income, if any, and expire at various dates through the year 2015 for federal income tax purpose and through the year 2005 for California state income tax purpose. However, the utilization of net operating losses may be subject to certain limitations as prescribed by Section 382 of the Internal Revenue Code.

NOTE 6 - SHAREHOLDERS' EQUITY

The Fiscal Year of 1999

On May 14, 1999, the Company filed and effected its prospectus with the Securities and Exchange Commission to offer 2,500,000 shares of its common stock to the public. On June 1, 1999, the Company launched its initial public offering on a best effort basis. The Company issued 253,170 shares of common stock at $8.00 per share and received $1,619,034 in cash (net of $406,326 issuance cost). The Company also received subscriptions for 83,003 shares of its common stock at $8.00 per share, totaling $664,024. As of June 30, 1999, $567,040 cash was received and the remaining $96,984 was received in July 1999.

In conjunction with its initial public offering the Company offered 7% commission to all broker-dealers based on securities they sold. The Company's Chairman and CEO sold certain securities of the Company and received commission in the amount of $41,934 based on the same commission percentage.

The Company has authorized 10,000,000 preferred shares, none have been issued as of June 30, 2000.

The Fiscal Year of 2000

On February 9, 2000, the Board of Directors of the Company authorized the issuance of 111,000 shares of its restricted common stock at $9.01 per share to raise $1 million for business development purposes. The cash proceeds of this issuance were $999,980, netting wire expense of $20.

In May 2000 the Company conducted a private placement to issue 1,255,900 shares of its common stock at $4.878 per share. The private placement was closed at June 30, 2000 with the net proceeds of $5,186,959, netting issuing expenses of $939,377. Among the net proceeds, $1,481,240 was received subsequent to June 30, 2000.

During the fiscal year ended June 30, 2000, a total of 105,000 options under the Company's 1996 stock option plan had been exercised. The Company received proceeds of $12,020, of which $6,000 was received subsequent to June 30, 2000, and issued 105,000 shares of its common stock accordingly.

The Company adopted a cashless policy that allows the stock option holders to exercise their options without paying any cash. During the year ended June 30, 2000 the Company issued a total of 31,596 shares of its common stock, canceled 8,664 options, and recognized additional stock compensation expense of $265,102.

NOTE 7 - STOCK OPTIONS AND WARRANTS

The 1996 Stock Option Plan

The Company's 1996 stock option plan (the Plan) provides for granting of stock options to employees, and non-employee directors. The Company has reserved 250,000 shares of common stock for issuance under the Plan. The terms and conditions of grants of stock options are determined by the Board of Directors. Generally, one-half of the granted option is exercisable after the employee's first year of employment. The remaining option is exercisable after the end of the employee's third year of employment. The option granted will expire within three months after termination of employment.

During the year ended June 30, 1999, the Company granted 15,000 options under 1996 Plan to a non-employee director at exercise price of $0.40 per share. During the year ended June 30, 2000, the Company granted 70,000 options under the 1996 Plan to all directors for their service for the year ended June 30, 1999 and 35,000 options to four employees as incentive at exercise price of $0.40 per share. The Company recognized a total stock compensation expense of $275,800, among which $91,000 was related to employees and $184,800 was related to non-employees.

The 1999 Stock Option Plan

The Company's 1999 stock option plan (the Plan) provides for granting of stock options to employees, officers, directors, and other entities who have made contributions to the Company. The Company has reserved 2,000,000 shares of common stock for issuance under the Plan. The Board of Directors determines the terms and conditions of granting stock options. Generally, the vesting period is two years allocating as follows: the first 25% of options granted is exercisable after the first six months of employment, then 4.16% is vested each month thereafter. The Plan provides for the useful life of the options granted to be 10 years starting from the granting date. The options granted will be expired within one month after the termination of employment.

During the year ended June 30, 2000, the Company granted a total of 1,655,315 options to employees, directors, officers, consultants, attorneys, finders, and outside sales representatives. The exercise prices of options granted vary and range from $3.25 to $13.12. The Company applies APB Opinion No. 25 "Accounting for Stock Issued to Employees" and related interpretations in accounting for its stock option plans. As a result, the Company recognized a total stock compensation expense of $2,077,187 among which $1,258,214 was related to employees and $818, 973 were related to non-employees.

The stock compensation expenses recognized will be amortized over a period of two year based on the respective vesting terms. In the year ended June 30, 2000, the total stock compensation expenses included in the net loss for both 1996 plan and 1999 plan were $1,172,791.

A summary of changes in stock options during each year is presented below:

The following table summarizes information about the stock options outstanding at June 30, 2000:

The fair value of the stock options granted during the years ended June 30, 1999 and 2000 was $0 and $3,426,343, respectively, on the date of grant using the Black Scholes option-pricing model. The pricing assumptions used were as follows:

The Company applies APB Opinion No. 25 in accounting for its Plan. Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Company's net loss would have been increased to the pro forma amount indicated below:

The compensation cost was calculated under the minimum-value method using the assumption of a three-year weighted average expected life of the options and a 6% risk-free interest rate.

On October 15, 1997, the Company entered into an agreement with Burlington Coat Factory Warehouse Corporation (BCF). Under the agreement, the Company and BCF jointly develop a network whereby participants of the network can do business through Internet. BCF agrees to use this proprietary network as its main internet sourcing method. BCF agrees to assist in marketing and promoting this network service to its vendors. In return, BCF is free to use the network designed and maintained by the Company and will share a certain portion of the fee revenue generated by this network with the Company. In addition, the Company granted a warrant to BCF to allow BCF to purchase up to 10% of the outstanding shares (maximum 676,241 shares as of June 30, 1999) of common stock of the Company on a fully diluted basis, subject to certain conditions and restrictions as defined in the warrant agreement. The common stock if issued to BCF will have certain registration rights. As of June 30, 1999, the exercise price was $4.00 per share. This agreement will expire on October 15, 2002.

On February 10, 1999, the Company issued 20,000 common stock warrant, subject to certain conditions and restrictions as defined in the warrant agreement, at $8.00 per share to an unrelated bank in addition to the personal guarantee from the Chairman and President of the Company in exchange for the extension of a line of credit with the Bank (Note 8). The warrant will expire on February 10, 2004.

The Company issued common stock warrants, subject to certain conditions and restrictions as defined in the warrant agreement, to each of the participating broker-dealers for securities they sold during the initial public offering period. The exercise price is 165% of the Company's IPO price ($8.00 per share). As of June 30, 1999, there were 10,815 warrants outstanding under these agreements. The warrants will expire in May 13, 2004.

On May 25, 2000, the Company entered into a joint marketing and cooperation with Factory 2-U (NASDAQ: FTUS). The agreement makes the Company the exclusive provider of private extranet merchandise sourcing for Factory 2-U, sets joint marketing arrangements, and sets a new Factory 2-U policy that all current and future vendors of Factory 2-U, as part of the cost of doing business will be required to pay the Company a subscription fee in an amount equal to, at each vendor's selection, either $150 per month or 2.5% of all purchases by Factory 2-U from such vendor. In addition, the Company granted Factory 2-U a warrant that allows Factory 2-U to purchase up to 10% of the issued and outstanding shares of the Company's common stock immediately after its recent private placement at the same price at which the shares were sold in the private placement. As of June 30, 2000, the maximum shares Factory 2-U could purchase were 838,119 shares at $4.878 per share. In accordance with SFAS No. 123, the Company recognized expense of $684,738. The warrant will expire on May 25, 2005.

NOTE 8 - LINE OF CREDIT

During the year ended June 30, 1999, the Company maintained a non-revolving line of credit of $300,000 with a bank. Borrowing under the line of credit beared interest at the bank's prime rate plus 1.5% and was personally guaranteed by the Company's Chairman and President. The Company issued 20,000 Common Stock warrant to the bank (Note 7). The line of credit expired on June 30, 1999.

On January 12, 2000, the Company entered into a revolving line of credit agreement with a commercial bank with the maximum amount of $600,000. Borrowing under this line of credit bears interest at 6.56% per annum and secured by a $700,000 time certificate of deposit at the bank. The line of credit will expire on January 11, 2001. During the year ended June 30, 2000, the Company borrowed $299,834 and paid the full amount in April 2000.

NOTE 9 - COMMITMENTS AND CONTINGENCY

Operating Lease

The Company leased office space under a noncancelable operating lease that will expire on September 30, 1999. The Company has entered into another noncancelable operating lease agreement, expiring on September 30, 2002, to facilitate its principal place for business. Future minimum lease payments under noncancelable operating leases as of June 30, 2000 are as follows:

Rent expenses for the years ended June 30, 1999 and 2000 were approximately $38,000 for each year.

Executive Employment Agreements

Busey Employment Agreement

On October 1, 1999, the Company entered into an employment agreement with Mr. John F. Busey. Mr. Busey is appointed as President and member of the board of directors of the Company, effective October 1, 1999 for a three-year term through October 1, 2002. The term of the 1999 Busey Agreement will be extended for one additional year at the end of each year unless either Mr. Busey or the Company elects not to extend the term by notice given at least 30 days prior to the expiration of the current term. If either party elects not to extend the 1999 Busey Employment Agreement in accordance with the foregoing, then, upon the then-current effective date of expiration, the Company will continue to pay Mr. Busey's salary and employee benefits for a period of three months.

Mr. Busey's base salary shall be $100,000 per year. The Company will provide Mr. Busey with medical/health insurance, three weeks paid vacation and sick leave. Mr. Busey is eligible to receive all other benefits made available by the Company to similarly situated corporate offices and employees, subject to the terms, conditions and overall administration of such benefits and plans, in accordance with the Company's Employee Handbook. The Company will reimburse all business expenses incurred by Mr. Busey on behalf of the Company.

Mr. Busey was granted stock options of 300,000 shares of common stock at the exercise price of $3.25 per share under the 1999 Stock Incentive Plan, which will vest in accordance with the newly-hired employee vesting schedule. Mr. Busey is also entitled to receive stock options for 5% of the shares of any new issuance of the Company's common stock on an undiluted basis at the exercise price equal to the current market price at the end of the day of new issuance. This additional stock option is subject to the approval of the investment bankers or investors who are leading the new issuance of the Company's common stock. Subsequent to June 30, 2000, Mr. Busey received additional 77,154 stock options pursuant to the aforementioned term.

In the event that the 1999 Busey Agreement is terminated with cause by Mr. Busey or without cause by the Company, Mr. Busey is entitled to receive the full amount of salary and employee benefits for three months. These damages shall be reduced by all amounts that he earns during the period between the termination of his employment under this agreement and payment of the damages. Any dispute arising between the Company and Mr. Busey will be resolved in arbitration.

Serena Kokjer-Greening Employment Agreement

On January 31, 2000 the Company entered into an employment agreement with Ms. Serena Kokjer-Greening. Ms. Kokjer-Greening is appointed as Chief Operating Officer of the Company, effective January 31, 2000 for a three-year term through January 30, 2003 unless earlier terminated. The term of employment shall continue on an annual basis until terminated at the option of either party upon (30) days written notice prior to the expiration of the term. The agreement may be terminated at any time by written agreement between the parties.

Ms. Kokjer-Greening's base salary shall be $150,000 per year. The Company will provide Ms. Kokjer-Greening with medical/health insurance, three weeks paid vacation and sick leave. Ms. Kokjer-Greening is eligible to receive all other benefits made available by the Company to similarly situated corporate officers and employees, subject to the terms, conditions and overall administration of such benefits and plans, in accordance with the Company's Employee Handbook. The Company will also reimburse all business expenses incurred by Ms. Kokjer-Greening on behalf of the Company.

Ms. Kokjer-Greening received a grant of 180,000 stock at the exercise price of $6.75 per share under the 1999 Stock Incentive Plan, which will vest in accordance with the newly hired employee vesting schedule. Ms. Kokjer-Greening is also entitled to receive stock options for 3% of the shares of any new issuance of the Company's common stock on undiluted basis at the exercise price equal to the current market price at the end of the day of new issuance. This additional stock option is subject to the approval of the investment bankers or investors who are leading the new issuance of the Company's common stock. Subsequent to June 30, 2000, Ms. Kokjer-Greening received additional 46,292 stock options pursuant to the aforementioned term.

In the event that the 2000 Kokjer-Greening Agreement is terminated with cause by Ms. Kokjer-Greening or without cause by the Company, Ms. Kokjer-Greening is entitled to receive the full amount of salary and employee benefits for three months. These damages shall be reduced by all amounts that she earns during the period between the termination of her employment under this agreement and payment of damages. Any dispute arising between the Company and Ms. Kokjer-Greening will be resolved in arbitration.

Pending Litigation

The Company has been named as a defendant, along with Burlington Coat Factory Warehouse ("BCF"), in a lawsuit brought by Stanley Rosner ("Rosner"), an individual. In March 1998, Rosner commenced an action in the Supreme Court of the State of New York alleging breach of oral and written contracts between the Company and Rosner and between BCF and Rosner in 1997. Rosner claims that he is due certain fees from both the Company and BCF for services allegedly rendered in connection with certain transactions involving the Company and BCF. These transactions relate to the Internet services that the Company has and will provide to BCF, and current and anticipated transactions arising from vendors of BCF. Rosner claims that he is due damages in an amount not less than $5,000,000 plus unspecified punitive damages from both the Company and BCF.

Rosner's attorney has agreed that the Company and BCF are entitled to have the venue of the lawsuit transferred from Nassau County, New York to New York County (Manhattan), New York; Rosner's attorney also agreed to arrange for the transfer. Rosner's attorney also agreed that the Company's and BCF's responsive papers would be due no later than ten (10) days after notice of such transfer had been served. To date, the Company has not received notice of the proposed transfer of venue and has not filed its responsive papers or otherwise moved against the complaint.

The Company intends to vigorously defend this action. The Company believes that it is not obligated to make any payments to Rosner and has meritorious defenses to all of Rosner's allegations. However, if the Company does not prevail and a significant damage award against the Company is granted, this would have a material adverse effect upon the Company.

NOTE 10 - SUBSEQUENT EVENT

In August 2000, the Company signed a new lease to increase its office space by approximately 2,000 square feet. The incremental monthly gross rent is about $3,604 and the lease will expire on October 30, 2002.

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

WARRANT TO PURCHASE STOCK

Corporation: Cyber Merchants Exchange, Inc., a California Corporation
Number of Shares: 20,000
Class of Stock: Common (subject to Section 1.9)
Initial Exercise Price: $8.00 per share or initial public offer price, whichever is less (subject to Section 1.9)
Issue Date: February 10, 1999
Expiration Date: February 10,2004 (subject to Article 4.1)

THIS WARRANT CERTIFIES THAT, in consideration of the payment of $1.00 and for other good and valuable consideration, IMPERIAL BANK or registered assignee ("Holder") is entitled to purchase the number of fully paid and nonassessable shares of the class of securities (the "Shares") of the corporation (the "Company") at the initial exercise price per Share (the "Warrant Price") all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth of this Warrant.

ARTICLE 1. EXERCISE

1.1 Method of Exercise. Holder may exercise this Warrant by delivering this Warrant and a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.

1.2 Conversion Right. In lieu of exercising this Warrant as specified in Section 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Section 1.5.

1.3 Intentionally left blank.

1.4 Intentionally left blank.

1.5 Fair Market Value. If the Shares are traded regularly in a public market, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company's stock into which the Shares are convertible) reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. If the valuation of such investment banking firm is greater than that determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the Company. In all other circumstances, such fees and expenses shall be paid by Holder.

1.6 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired.

1.7 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

1.8 Repurchase on Sale, Merger, or Consolidation of the Company.

1.8.1. "Acquisition". For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets (including intellectual property) of the Company, or any reorganization, consolidation, or merger of the Company where the holders of the Company's securities before the transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction.

1.8.2. Assumption of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant, then this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. The Company shall use reasonable efforts to cause the surviving corporation to assume the obligations of this Warrant.

1.8.3. Nonassumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this Warrant and Holder has not otherwise exercised this Warrant in full, then the unexercised portion of this Warrant shall be deemed to have been automatically converted pursuant to Section 1.2 and thereafter Holder shall participate in the Acquisition on the same terms as other holders of the same class of securities of the Company.

1.8.4. Purchase Right. Notwithstanding the foregoing, at the election of Holder, the Company shall purchase the unexercised portion of this Warrant for cash upon the closing of any Acquisition for an amount equal to (a) the fair market value of any consideration that would have been received by Holder in consideration of the Shares had Holder exercised the unexercised portion of this Warrant immediately before the record date for determining the shareholders entitled to participate in the proceeds of the Acquisition, less (b) the aggregate Warrant Price of the Shares, but in no event less than zero.

1.9 Adjustment in Underlying Preferred Stock Price and Exercise Price. If on or before May 30,1999, the Company sells and issues to any investors, preferred stock with aggregate gross proceeds to the Company of at least $15,000,000, the Warrant Price hereunder adjusted to equal the per share purchase price of such stock.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

2.1 Stock Dividends. Splits. Etc. If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.

2.2 Reclassification. Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company's Articles of Incorporation upon the closing of a registered public offering of the Company's common stock. The Company or its successor shall promptly issue to Holder a new Warrant for such new securities or other property. The new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

2.3 Adjustments for Combinations. Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased.

2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of Shares issuable upon exercise of this Warrant shall be subject to adjustment, from time to time, in the manner set forth on Exhibit B, if attached, in the event of Diluting Issuances (as defined on Exhibit B).

2.5 No Impairment. The Company shall not, by amendment of its Articles of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder's rights under this Article against impairment. If the Company takes any action affecting the Shares or its common stock other than as described above that adversely affects Holder's rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant Price of this Warrant is unchanged.

2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1 Representations and Warranties. The Company hereby represents and warrants to the Holder as follows:

1. The initial Warrant Price referenced on the first page of this Warrant is not greater than the fair market value of the Shares as of the date of this Warrant.

2. All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the company's securities for cash, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.

3.3 Information Rights. So long as the Holder holds this Warrant and/or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all communiques to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual audited financial statements of the Company certified by independent public accountants of recognized standing and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year, the Company's quarterly, unaudited financial statements.

3.4 Registration Under Securities Act of 1933. as amended. The Company agrees that the Shares shall be subject to the registration rights set forth on Exhibit C.

ARTICLE 4. MISCELLANEOUS.

4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. The Company shall give Holder written notice of Holder's right to exercise this Warrant in the form attached as Appendix 2 not more than 90 days and not less than 30 days before the Expiration Date. If the notice is not so given, the Expiration Date shall automatically be extended until 30 days after the date the Company delivers the notice to Holder.

4.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

4.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holder's notice of proposed sale.

4.4 Transfer Procedure. Subject to the provisions of Section 4.2, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s) (and Holder, if applicable). Unless the Company is filing financial information with the SEC pursuant to the Securities Exchange Act of 1934, the Company shall have the right to refuse to transfer any portion of this Warrant to any person who directly competes with the Company.

4.5 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such Holder from time to time.

4.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

4.7 Attorneys' Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees.

4.8 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

Cyber Merchants Exchange, Inc.

By: /s/ Frank S. Yuan

Name: Frank Yuan

Title: President

APPENDIX 1

NOTICE OF EXERCISE

1. The undersigned hereby elects to purchase _________ shares of the Common Stock of Cyber Merchants Exchange, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

1. The undersigned hereby elects to convert the attached Warrant into Shares/cash [strike one] in the manner specified in the Warrant. This conversion is exercised with respect to _________of the Shares covered by the Warrant.

2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:

Chief Financial Officer
Controllers Department
Imperial Bank
P.O. Box 92991
Los Angeles, CA 90009

3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

IMPERIAL BANK

________________________
(Signature)

________________________
(Date)

APPENDIX 2

NOTICE THAT WARRANT IS ABOUT TO EXPIRE

______________,______

Chief Financial Officer
Controllers Department
Imperial Bank
P.O. Box 92991
Los Angeles, CA 90009

Gentleperson:

This is to advise you that the Warrant issued to you described below will expire on Date.

Issuer:

Issue Date: Date

Class of Security Issuable: Common

Exercise Price Per Share: Price

Number of Shares Issuable: Number of Shares

Procedure for Exercise:

Please contact Frank Yuan at (626) 588-3660 with any questions you may have concerning exercise of the Warrant. This is your only notice of pending expiration.

Cyber Merchants Exchange, Inc.

By:_______________________________

Its: _______________________________

EXHIBIT A

Deliberately left blank.

EXHIBIT B

Deliberately left blank.

EXHIBIT C

Registration Rights

The Shares shall be deemed "registrable securities" or otherwise entitled to "piggy back" registration rights in accordance with the terms of the following agreement (the "Agreement") between the Company and its investor(s):

None

___________________

The Company agrees that no amendments will be made to the Agreement which would have an adverse impact on Holder's registration thereunder without the consent of Holder. By acceptance of the Warrant to which this Exhibit C is attached, Holder shall not be deemed to be a party to the Agreement, but solely entitled to the registration rights created thereby.

If no Agreement exists, then the Company and the Holder shall enter into Holder's standard form of Registration Rights Agreement as in effect on the Issue Date of the Warrant.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 1st day of October, 1999, between Cyber Merchants Exchange, Inc., a California corporation ("Company"), and John F. Busey. ("Employee"), with reference to the following facts:

A. Company is engaged in the business of business-to-business electronic commerce, and maintains an office in the City of Pasadena, County of Los Angeles, State of California.

B. Company desires to employ Employee as its President and a member of the Board of Directors and Employee desires to accept this employment subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the facts recited above, the covenants contained in this Agreement, and other valuable consideration, the parties agree as follows:

1. EMPLOYMENT AND APPOINTMENT.
Company employs Employee, and Employee accepts and agrees to employment with Company, on the terms and conditions set forth in this Agreement. Company appoints Employee to the position of President. Employee is authorized to use this title subject to any limitations set forth in Company's Bylaws, the internal rules and regulations of Company and the provisions of this Agreement. Employee hereby accepts this appointment.

2. DUTIES OF EMPLOYEE.
Employee shall perform all services, acts or other things necessary or advisable to perform his duties under this agreement. Employee also shall render any other services that are assigned to or reasonably required of him from time to time by the Chairman and Board of Directors of the Company.

3. STANDARD OF PERFORMANCE
Employee agrees that at all times during the Employment Term (defined herein) he will perform all of the services and duties that are required of Employee under this Agreement diligently and competently, to the best of Employee's ability. Employee shall devote such time and attention to the business of Company as shall be required to perform the required services and duties.

4. LOCATION OF EMPLOYMENT.
Employee's performance under this Agreement shall be rendered at the Company's principal office in Pasadena, California, and at any other place or places that Company reasonably requires or that the interests, needs, business and opportunities of Company require or make advisable.

5. TERM OF EMPLOYMENT.
Unless terminated earlier as provided in this Agreement, Employee shall be employed for a term commencing on October 1, 1999 and continuing for three (3) years thereafter (the "Employment Term") unless earlier terminated pursuant to the terms hereof. Thereafter, the Employment Term shall continue on an annual basis until terminated at the option of either party upon thirty (30) days written notice prior to expiration to the term. This Agreement may be terminated at any time by written agreement between the parties, or as provided in Sections 10 or 11 of this Agreement. This Agreement will terminate immediately upon Employee's death.

6. COMPENSATION.

6.1 Salary.
Company shall pay Employee a base salary at the rate of one hundred thousand dollars ($100,000) per year, payable in accordance with Company's usual payroll method for corporate officers and prorated for the actual Employment Term.

6.2. STOCK OPTIONS
Employee shall be entitled to the following stock options:

1. Options for three hundred (300,000) shares of Employer's stock in accordance with the terms and conditions of Employer's 1999 stock option plan, and:
2. The vesting period shall be as follows:
   1. 25% of the options shall vest six months after the date of employment.
   2. 4.16% of the options shall vest each month after the sixth month of following the date of employment.
3. The exercise price for the options shall be $3.25 per share.
4. In addition, Employee shall be entitled to options for an undiluted five percent (5%) of the shares of any new issuance of Employer's common stock. The exercise price shall be the current market price at the end of the day of new issuance. This additional stock option is subject to the approval of the investment bankers or investors who are leading the new issuance of Employer's common stock.

7. BENEFITS
Employee shall be entitled to medical/health insurance, three weeks paid vacation, sick leave, and shall be entitled to participate in or to receive all other benefits made available by Company to similarly situated corporate officers and employees, subject to the terms, conditions and overall administration of such benefits and plans, in accordance with Company's Employee Handbook.

8. BUSINESS EXPENSES.
Employee will be required to incur entertainment, travel and other business expenses on behalf of Company in the performance of Employee's duties hereunder. Company will reimburse Employee for all such reasonable business expenses, including, but not limited to, employee's cellular phone expenses, incurred by Employee in connection with Company's business upon presentation of receipts or other acceptable documentation of the expenditures.

9. INVENTIONS AND PATENTS.
All processes, inventions, patents, computer software, copyrights, trademarks and other intangible rights (collectively the "Intellectual Property") that may be conceived or developed by Employee during the Employment Term, either alone or with others, shall remain the sole property of Employee. Notwith-standing the foregoing, Company shall have a royalty-free license to make, use and sell products embodying Intellectual Property with respect to which the equipment, supplies, facilities or trade secret information of Company was used and which were not developed entirely on Employee's own time, and (a) which relate to the business of Company or to Company's actual or demonstrably anticipated research or development; or (b) which result from any work performed by Employee for Company (the "Employer's Intellectual Property"). The license granted to Company hereunder shall be exclusive during the Employment Term, and shall not terminate upon termination of the Employment Term, but the license shall remain in effect to Company indefinitely following termination of the Employment Term. Company and Employee each agree to execute such instruments upon the request of the other as shall be necessary or desirable to protect their respective rights in the Intellectual Property. Company shall not have any rights to make, use or sell any products embodying Intellectual Property which do not come within the definition of Employer's Intellectual Property.

10. TERMINATION BY EMPLOYEE.

10.1 Without Cause.
Employee may terminate this Agreement without cause upon 30 days prior written notice to Company.

10.2 With Cause.
Employee may terminate this Agreement immediately with cause, in which event Employee shall receive liquidated damages in accordance with Section 13 herein. For purposes of this Agreement, "cause" for termination by Employee shall be (a) a breach by Company of any material covenant or obligation hereunder; (b) the voluntary or involuntary dissolution of Company; (c) any merger or consolidation in which Company is not the surviving or resulting corporation;(d) any transfer of all or substantially all of the assets of Company; (e) the transfer of a majority of the shares of Company by one or more shareholders in one or more transactions; or (f) the issuance of shares of Company constituting a majority of the outstanding shares immediately following such issuance.

11. TERMINATION BY COMPANY.

11.1 Without Cause.
Company may terminate this Agreement without cause upon 30 days prior written notice to Employee. In such event, Employee shall receive liquidated damages in accordance with Section 13 herein.

11.2 With Cause.
Company may terminate this Agreement for cause. For purposes of this Agreement, "cause" for termination by Employer shall be (a) any felonious conduct or material fraud by Employee; (b) embezzlement or misappropriation of funds or property of Company by Employee; (c) any material breach by Employee of his duties under this Agreement; (d) gross negligence by Employee; (e) any conduct or act of moral turpitude, or any conduct or act done or committed by Employee that will, in the minds of reasonable people, tend to degrade him, or that reflects negatively on Company, or that brings Company into public hatred, contempt or ridicule or that tends to shock or offend the community in which Employee represents Company, in each case in a material or significant way; (f) the consistent refusal by Employee to perform his material duties and obligations; or (g) Employee's willful and intentional misconduct of Employee in the performance of his material duties and obligations, in each case after written notice to Employee specifying the cause for termination, and, in the case of the causes described in (c) and (f) above, the passage of not less than thirty (30) days after receipt of such notice, during which time Employee shall have the right to respond to Company's notice and cure the breach or other event giving rise to the termination. In the event that Employee is able to cure, this Agreement shall continue in full force and effect.

12. EFFECT OF COMBINATION OR DISSOLUTION.
This Agreement shall not be terminated by the voluntary or involuntary dissolution of Company, or by any merger or consolidation in which Company is not the surviving or result-ing corporation, or upon any transfer of all or substantially all of the outstanding shares or assets of Company. Instead, the provisions of this Agreement shall be binding on and inure to the benefit of Company's creditors, the surviving business entity or the business entity to which such shares or assets shall be transferred

13. LIQUIDATED DAMAGES.
In the event of any material breach of this Agreement by Company, Employee, at his sole option, may terminate this Agreement and, at his sole option, receive as liquidated damages (the "Liquidated Damages") the following:

The full amount of the salary and employee benefits provided for in Section 6 of this Agreement for three months. The sum payable to Employee under this Section shall be payable pursuant to the company's existing payroll practices.

The Liquidated Damages shall be reduced by all amounts that Employee earns during the period between termination of his employment under this Agreement and payment of the Liquidated Damages. The provisions of this Section 13 shall be in addition to any and all rights Employee may have in equity or at law to require Company to comply with or to prevent the breach by Company of this Agreement.

14. ARBITRATION.

14.1 Resolution of Disputes by Arbitration.
Any dispute between or among the parties arising under this Agreement will be resolved in the Superior Court of California by reference to a retired judge or justice associated with Judicial Arbitration and Mediation Services, Los Angeles County, ("JAMS"), pursuant to California Code of Civil Procedure Section 638 et seq. In any arbitration proceeding, the parties shall have the right to discovery, as set forth in Section 1283.05 of the California Code of Civil Procedure and any amendments or successor statutes thereto.

14.2 Selection of Arbitrator.
Within 30 days after filing the action, the complaining party will serve the complaint and a list of a least six retired judges or justices associated with JAMS on the other party. The party proceeded against will choose one of the judges from the list submitted by the complaining party. The judge so selected will hear the case. In the event that the party proceeded against rejects all of the judges or justices named on the list, the Presiding Judge or Assistant Presiding Judge of the Superior Court of California, Los Angeles County, will choose the reference judge from among all of the retired judges or justices associated with JAMS. The retired judge or justice selected will be judge for all purposes.

14.3 Powers of Arbitrator.
The judge selected under Section 14.2 above will:

1. rule on all discovery matters and motions and all pretrial or trial motions;
2. make any other orders or rulings a sitting judge of the Superior Court would have the power to make in an action or proceeding in the Superior Court;
3. try and decide any or all of the issues in any action or proceeding arising out of this Agreement (whether of fact or law or a combination thereof); and
4. report a finding and judgment thereon.

15. INDEMNIFICATION.
Company shall indemnify, defend and hold Employee harmless, to the fullest extent permitted by law, for all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorneys' fees that Employee shall incur or suffer that arise from, result from or relate to the discharge of Employee's duties under this Agreement. Company shall advance to Employee any expenses incurred in defending any such proceeding or claim to the maximum extent permitted by law. Company shall maintain adequate indemnity insurance for this purpose.

16. GENERAL PROVISIONS.

16.1 Further Assurances.
The parties agree that, at any time and from time to time during the Employment Term, they will take any action and execute and deliver any document which any other party reasonably requests in order to carry out the purposes of this Agreement.

16.2 Amendment of Agreement.
This Agreement may be amended or supplemented only in writing, and no amendment or supplement will be effective unless executed by all of the parties.

16.3 Notices.
Any notice, consent, waiver, demand, or other communication required or permitted to be given by or to any person pursuant to this Agreement (collectively, "Notice") will be in writing, and will be given either by personal service, by certified mail, return receipt requested, or by Federal Express or similar commercial overnight courier service, to a party at the address set forth below.

If to Company:
600 South Lake Street, Suite 405
Pasadena, CA 91106
Attention: Chairman

If to Employee:
John Busey
(not available)

In the case of personal service, Notice will be deemed effective on the date of service. In all other cases, Notice will be deemed effective on the date of delivery, as shown on the return receipt or other written evidence of delivery, if any, or three (3) days after dispatch if there is no return receipt or written evidence of delivery. A party may change the address at which Notice is to be given, at any time and from time to time, by giving Notice of the new address to the other parties in accordance with this Section.

16.4 Entire Agreement.
This Agreement contains the entire understanding between the parties, and supersedes all prior understandings and agreements between them, regarding its subject matter. There are no oral or written representations, agreements, arrangements, or understandings between the parties relating to the subject matter of this Agreement which are not fully set forth herein.

16.5 Binding Effect; Assignment and Delegation.
This Agreement is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns. Neither party may assign their rights or delegate their duties under this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld.

16.6 Applicable Law.
This Agreement has been made and executed under, and will be construed and interpreted in accordance with, the laws of the State of California (other than its choice of law rules). The parties consent to the jurisdiction of the courts of the State of California and the United States District Courts located in the State of California in any action or proceeding arising out of this Agreement, and agree that in those actions or proceedings, venue will be proper in Los Angeles County (if the action or proceeding is brought in the Superior Court of California) or in the Central District of California (if the action or proceeding is brought in the United States District Court).

16.7 Attorneys' Fees.
In any action or proceeding to enforce or interpret this Agreement, or arising out of this Agreement, the prevailing party or parties are entitled to recover a reasonable allowance for fees and disbursements of counsel and costs of suit, to be determined by the court in which the action or proceeding is brought. For purposes of this Section 16.7, the term "action" includes any arbitration pursuant to Section 14, the term "costs" includes any arbitrator's fees or expenses incurred in connection with the arbitration, and the term "court" includes any arbitrator.

16.8 Provisions Severable.
Every provision of this Agreement is intended to be severable from every other provision of this Agreement. If any provision of this Agreement is held to be void or unenforceable, in whole or in part, the remaining provisions will remain in full force and effect. If any provision of this Agreement is held to be unreasonable or excessive in scope or duration, that provision will be enforced to the maximum extent permitted by law.

16.9 Non-Waiver of Rights and Breaches.
Any waiver by a party of any breach of any provision of this Agreement will not be deemed to be a waiver of any subsequent breach of that provision, or of any breach of any other provision of this Agreement. No failure or delay in exercising any right, power, or privilege granted to a party under any provision of this Agreement will be deemed a waiver of that or any other right, power, or privilege. No single or partial exercise of any right, power, or privilege granted to a party under any provision of this Agreement will preclude any other or further exercise of that or any other right, power, or privilege.

16.10 Interpretation of Agreement.
Each of the parties has been represented by counsel in the negotiation and preparation of this Agreement. The parties agree that this Agreement is to be construed as jointly drafted. Accordingly, this Agreement will be construed according to the fair meaning of its language, and the rule of construction that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement.

16.11 Gender and Number.
Wherever any words are used in this Agreement in the masculine, feminine, or neuter gender, they will be construed as though they were also used in another gender in all cases where they would so apply. Wherever any words are used in this Agreement in the singular or plural form, they will be construed as though they were also used in the other form in all cases where they would so apply.

16.12 Computation of Time.
If any period of time specified in this Agreement for the performance of any action ends on a Saturday, Sunday, or legal holiday in the State of California, that period will be deemed extended to end on the next day which is not a Saturday, Sunday, or legal holiday in the State of California.

16.13 Headings.
The headings of the Sections and Paragraphs of this Agreement are inserted for ease of reference only, and will have no effect in the construction or interpretation of this Agreement.

16.14 Counterparts.
This Agreement and any amendment or supplement to this Agreement may be executed in two or more counterparts, each of which will constitute an original but all of which will together constitute a single instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement at the time and place set forth above.

CYBER MERCHANTS EXCHANGE, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 31st day of January 2000, between Cyber Merchants Exchange, Inc., a California corporation ("Company"), and Serena Kokjer-Greening. ("Employee"), with reference to the following facts:

A. Company is engaged in the business of business-to-business electronic commerce, and maintains an office in the City of Pasadena, County of Los Angeles, State of California.

B. Company desires to employ Employee as its Chief Operating Officer and Employee desires to accept this employment subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the facts recited above, the covenants contained in this Agreement, and other valuable consideration, the parties agree as follows:

1. EMPLOYMENT AND APPOINTMENT.
Company employs Employee, and Employee accepts and agrees to employment with Company, on the terms and conditions set forth in this Agreement. Company appoints Employee to the position of Chief Operating Officer. Employee is authorized to use this title subject to any limitations set forth in Company's Bylaws, the internal rules and regulations of Company and the provisions of this Agreement. Employee hereby accepts this appointment.

2. DUTIES OF EMPLOYEE.
Employee shall perform all services, acts or other things necessary or advisable to perform his duties under this agreement. Employee also shall render any other services that are assigned to or reasonably required of him from time to time by the Chairman and Board of Directors of the Company.

3. STANDARD OF PERFORMANCE
Employee agrees that at all times during the Employment Term (defined herein) he will perform all of the services and duties that are required of Employee under this Agreement diligently and competently, to the best of Employee's ability. Employee shall devote such time and attention to the business of Company as shall be required to perform the required services and duties.

4. LOCATION OF EMPLOYMENT.
Employee's performance under this Agreement shall be rendered at the Company's principal office in Pasadena, California, and at any other place or places that Company reasonably requires or that the interests, needs, business and opportunities of Company require or make advisable.

5. TERM OF EMPLOYMENT.
Unless terminated earlier as provided in this Agreement, Employee shall be employed for a term commencing on January 31, 2000, and continuing for three (3) years thereafter (the "Employment Term") unless earlier terminated pursuant to the terms hereof. Thereafter, the Employment Term shall continue on an annual basis until terminated at the option of either party upon thirty (30) days written notice prior to expiration to the term. This Agreement may be terminated at any time by written agreement between the parties, or as provided in Sections 10 or 11 of this Agreement. This Agreement will terminate immediately upon Employee's death.

6. COMPENSATION.

6.1 Salary.
Company shall pay Employee a base salary at the rate of one hundred thousand dollars ($150,000) per year, payable in accordance with Company's usual payroll method for corporate officers and prorated for the actual Employment Term.

6.2. STOCK OPTIONS
Employee shall be entitled to the following stock options:

1. Options for one hundred eighty thousand (180,000) shares of Employer's stock in accordance with the terms and conditions of Employer's 1999 stock option plan, and:
2. The vesting period shall be as follows:
   1. 25% of the options shall vest six months after the date of employment.
   2. 4.16% of the options shall vest each month after the sixth month of following the date of employment.
3. The exercise price for the options shall be $6.75 per share.
4. In addition, Employee shall be entitled to options for an undiluted three percent (3%) of the shares of any new issuance of Employer's common stock. The exercise price shall be the current market price at the end of the day of new issuance. This additional stock option is subject to the approval of the investment bankers or investors who are leading the new issuance of Employer's common stock.

7. BENEFITS
Employee shall be entitled to medical/health insurance, three weeks paid vacation, sick leave, and shall be entitled to participate in or to receive all other benefits made available by Company to similarly situated corporate officers and employees, subject to the terms, conditions and overall administration of such benefits and plans, in accordance with Company's Employee Handbook.

8. BUSINESS EXPENSES.
Employee will be required to incur entertainment, travel and other business expenses on behalf of Company in the performance of Employee's duties hereunder. Company will reimburse Employee for all such reasonable business expenses, including, but not limited to, employee's cellular phone expenses, incurred by Employee in connection with Company's business upon presentation of receipts or other acceptable documentation of the expenditures.

9. INVENTIONS AND PATENTS.
All processes, inventions, patents, computer software, copyrights, trademarks and other intangible rights (collectively the "Intellectual Property") that may be conceived or developed by Employee during the Employment Term, either alone or with others, shall remain the sole property of Employee. Notwith-standing the foregoing, Company shall have a royalty-free license to make, use and sell products embodying Intellectual Property with respect to which the equipment, supplies, facilities or trade secret information of Company was used and which were not developed entirely on Employee's own time, and (a) which relate to the business of Company or to Company's actual or demonstrably anticipated research or development; or (b) which result from any work performed by Employee for Company (the "Employer's Intellectual Property"). The license granted to Company hereunder shall be exclusive during the Employment Term, and shall terminate upon termination of the Employment Term. Company and Employee each agree to execute such instruments upon the request of the other as shall be necessary or desirable to protect their respective rights in the Intellectual Property. Company shall not have any rights to make, use or sell any products embodying Intellectual Property which do not come within the definition of Employer's Intellectual Property.

10. TERMINATION BY EMPLOYEE.

10.1 Without Cause.
Employee may terminate this Agreement without cause upon 30 days prior written notice to Company.

10.2 With Cause.
Employee may terminate this Agreement immediately with cause, in which event Employee shall receive liquidated damages in accordance with Section 13 herein. For purposes of this Agreement, "cause" for termination by Employee shall be (a) a breach by Company of any material covenant or obligation hereunder; (b) the voluntary or involuntary dissolution of Company; (c) any merger or consolidation in which Company is not the surviving or resulting corporation;(d) any transfer of all or substantially all of the assets of Company; (e) the transfer of a majority of the shares of Company by one or more shareholders in one or more transactions; or (f) the issuance of shares of Company constituting a majority of the outstanding shares immediately following such issuance.

11. TERMINATION BY COMPANY.

11.1 Without Cause.
Company may terminate this Agreement without cause upon 30 days prior written notice to Employee. In such event, Employee shall receive liquidated damages in accordance with Section 13 herein.

11.2 With Cause.
Company may terminate this Agreement for cause. For purposes of this Agreement, "cause" for termination by Employer shall be (a) any felonious conduct or material fraud by Employee; (b) embezzlement or misappropriation of funds or property of Company by Employee; (c) any material breach by Employee of his duties under this Agreement; (d) gross negligence by Employee; (e) any conduct or act of moral turpitude, or any conduct or act done or committed by Employee that will, in the minds of reasonable people, tend to degrade him, or that reflects negatively on Company, or that brings Company into public hatred, contempt or ridicule or that tends to shock or offend the community in which Employee represents Company, in each case in a material or significant way; (f) the consistent refusal by Employee to perform his material duties and obligations; or (g) Employee's willful and intentional misconduct of Employee in the performance of his material duties and obligations, in each case after written notice to Employee specifying the cause for termination, and, in the case of the causes described in (c) and (f) above, the passage of not less than thirty (30) days after receipt of such notice, during which time Employee shall have the right to respond to Company's notice and cure the breach or other event giving rise to the termination. In the event that Employee is able to cure, this Agreement shall continue in full force and effect.

12. EFFECT OF COMBINATION OR DISSOLUTION.
This Agreement shall not be terminated by the voluntary or involuntary dissolution of Company, or by any merger or consolidation in which Company is not the surviving or result-ing corporation, or upon any transfer of all or substantially all of the outstanding shares or assets of Company. Instead, the provisions of this Agreement shall be binding on and inure to the benefit of Company's creditors, the surviving business entity or the business entity to which such shares or assets shall be transferred

13. LIQUIDATED DAMAGES.
In the event of any material breach of this Agreement by Company, Employee, at his sole option, may terminate this Agreement and, at his sole option, receive as liquidated damages (the "Liquidated Damages") the following:

The full amount of the salary and employee benefits provided for in Section 6 of this Agreement for three months. The sum payable to Employee under this Section shall be payable pursuant to the company's existing payroll practices.

The Liquidated Damages shall be reduced by all amounts that Employee earns during the period between termination of his employment under this Agreement and payment of the Liquidated Damages. The provisions of this Section 13 shall be in addition to any and all rights Employee may have in equity or at law to require Company to comply with or to prevent the breach by Company of this Agreement.

14. ARBITRATION.

14.1 Resolution of Disputes by Arbitration.
Any dispute between or among the parties arising under this Agreement will be resolved in the Superior Court of California by reference to a retired judge or justice associated with Judicial Arbitration and Mediation Services, Los Angeles County, ("JAMS"), pursuant to California Code of Civil Procedure Section 638 et seq. In any arbitration proceeding, the parties shall have the right to discovery, as set forth in Section 1283.05 of the California Code of Civil Procedure and any amendments or successor statutes thereto.

14.2 Selection of Arbitrator.
Within 30 days after filing the action, the complaining party will serve the complaint and a list of a least six retired judges or justices associated with JAMS on the other party. The party proceeded against will choose one of the judges from the list submitted by the complaining party. The judge so selected will hear the case. In the event that the party proceeded against rejects all of the judges or justices named on the list, the Presiding Judge or Assistant Presiding Judge of the Superior Court of California, Los Angeles County, will choose the reference judge from among all of the retired judges or justices associated with JAMS. The retired judge or justice selected will be judge for all purposes.

14.3 Powers of Arbitrator.
The judge selected under Section 14.2 above will:

1. rule on all discovery matters and motions and all pretrial or trial motions;
2. make any other orders or rulings a sitting judge of the Superior Court would have the power to make in an action or proceeding in the Superior Court;
3. try and decide any or all of the issues in any action or proceeding arising out of this Agreement (whether of fact or law or a combination thereof); and
4. report a finding and judgment thereon.

15. INDEMNIFICATION.
Company shall indemnify, defend and hold Employee harmless, to the fullest extent permitted by law, for all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorneys' fees that Employee shall incur or suffer that arise from, result from or relate to the discharge of Employee's duties under this Agreement. Company shall advance to Employee any expenses incurred in defending any such proceeding or claim to the maximum extent permitted by law. Company shall maintain adequate indemnity insurance for this purpose.

16. GENERAL PROVISIONS.

16.1 Further Assurances.
The parties agree that, at any time and from time to time during the Employment Term, they will take any action and execute and deliver any document which any other party reasonably requests in order to carry out the purposes of this Agreement.

16.2 Amendment of Agreement.
. This Agreement may be amended or supplemented only in writing, and no amendment or supplement will be effective unless executed by all of the parties.

16.3 Notices.
Any notice, consent, waiver, demand, or other communication required or permitted to be given by or to any person pursuant to this Agreement (collectively, "Notice") will be in writing, and will be given either by personal service, by certified mail, return receipt requested, or by Federal Express or similar commercial overnight courier service, to a party at the address set forth below.

If to Company:
600 South Lake Street, Suite 405
Pasadena, CA 91106
Attention: Chairman

If to Employee:
Serena Kokjer-Greening
(not available)

In the case of personal service, Notice will be deemed effective on the date of service. In all other cases, Notice will be deemed effective on the date of delivery, as shown on the return receipt or other written evidence of delivery, if any, or three (3) days after dispatch if there is no return receipt or written evidence of delivery. A party may change the address at which Notice is to be given, at any time and from time to time, by giving Notice of the new address to the other parties in accordance with this Section.

16.4 Entire Agreement.
This Agreement contains the entire understanding between the parties, and supersedes all prior understandings and agreements between them, regarding its subject matter. There are no oral or written representations, agreements, arrangements, or understandings between the parties relating to the subject matter of this Agreement which are not fully set forth herein.

16.5 Binding Effect; Assignment and Delegation.
This Agreement is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns. Neither party may assign their rights or delegate their duties under this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld.

16.6 Applicable Law.
This Agreement has been made and executed under, and will be construed and interpreted in accordance with, the laws of the State of California (other than its choice of law rules). The parties consent to the jurisdiction of the courts of the State of California and the United States District Courts located in the State of California in any action or proceeding arising out of this Agreement, and agree that in those actions or proceedings, venue will be proper in Los Angeles County (if the action or proceeding is brought in the Superior Court of California) or in the Central District of California (if the action or proceeding is brought in the United States District Court).

16.7 Attorneys' Fees.
In any action or proceeding to enforce or interpret this Agreement, or arising out of this Agreement, the prevailing party or parties are entitled to recover a reasonable allowance for fees and disbursements of counsel and costs of suit, to be determined by the court in which the action or proceeding is brought. For purposes of this Section 16.7, the term "action" includes any arbitration pursuant to Section 14, the term "costs" includes any arbitrator's fees or expenses incurred in connection with the arbitration, and the term "court" includes any arbitrator.

16.8 Provisions Severable.
Every provision of this Agreement is intended to be severable from every other provision of this Agreement. If any provision of this Agreement is held to be void or unenforceable, in whole or in part, the remaining provisions will remain in full force and effect. If any provision of this Agreement is held to be unreasonable or excessive in scope or duration, that provision will be enforced to the maximum extent permitted by law.

16.9 Non-Waiver of Rights and Breaches.
Any waiver by a party of any breach of any provision of this Agreement will not be deemed to be a waiver of any subsequent breach of that provision, or of any breach of any other provision of this Agreement. No failure or delay in exercising any right, power, or privilege granted to a party under any provision of this Agreement will be deemed a waiver of that or any other right, power, or privilege. No single or partial exercise of any right, power, or privilege granted to a party under any provision of this Agreement will preclude any other or further exercise of that or any other right, power, or privilege.

16.10 Interpretation of Agreement.
Each of the parties has been represented by counsel in the negotiation and preparation of this Agreement. The parties agree that this Agreement is to be construed as jointly drafted. Accordingly, this Agreement will be construed according to the fair meaning of its language, and the rule of construction that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement.

16.11 Gender and Number.
Wherever any words are used in this Agreement in the masculine, feminine, or neuter gender, they will be construed as though they were also used in another gender in all cases where they would so apply. Wherever any words are used in this Agreement in the singular or plural form, they will be construed as though they were also used in the other form in all cases where they would so apply.

16.12 Computation of Time.
If any period of time specified in this Agreement for the performance of any action ends on a Saturday, Sunday, or legal holiday in the State of California, that period will be deemed extended to end on the next day which is not a Saturday, Sunday, or legal holiday in the State of California.

16.13 Headings.
The headings of the Sections and Paragraphs of this Agreement are inserted for ease of reference only, and will have no effect in the construction or interpretation of this Agreement.

16.14 Counterparts.
This Agreement and any amendment or supplement to this Agreement may be executed in two or more counterparts, each of which will constitute an original but all of which will together constitute a single instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement at the time and place set forth above.

CYBER MERCHANTS EXCHANGE, INC.

Cyber Merchants Exchange, Inc. dba c-me.com

1999 STOCK OPTION PLAN

1. Purpose. The purpose of this Plan is to provide additional incentives to key em-ployees, officers, directors and consultants of Cyber Merchants Exchange, Inc., and any of its Subsidi-aries, there-by helping to attract and retain the best available personnel for positions of responsi-bility with those corporations and otherwise promoting the success of the business activities of such corporations. It is intended that Options issued under this Plan constitute nonqualified stock options.

2. Definitions. As used herein, the following definitions apply:
   1. "1934 Act" means the Securities Exchange Act of 1934, as amended.
      
      
   2. "Board" means the Board of Directors of the Employer.
      
      
   3. "Code" means the Internal Revenue Code of 1986, as amended.
      
      
   4. "Common Stock" means the Employer's common stock.
      
      
   5. "Committee" means the Board or the Committee appointed by the Board in accordance with Section 4(a).
      
      
   6. "Continuous Status as an Employee" means the absence of any interruption or termination of service as an Employee; Con-tinuous Status as an Employee will not be considered interrupted in the case of sick leave, military leave, or any other approved leave of absence.
      
      
   7. "Consultant" means any person who is not an employee or officer of Employer who serves as a consultant of the Employer or any Subsidiary of the Employer which is hereafter organized or acquired by the Employer
      
      
   8. "Employee" means any person employed by or serving as an employee, officer or director of the Employer or any Subsidiary of the Employer which is hereafter organized or acquired by the Employer.
      
      
   9. "Employer" means Cyber Merchants Exchange, Inc., a California corporation.
      
      
   10. "Nonemployee Director" has the meaning set forth in Rule 16b-3 under the 1934 Act.
       
       
   11. "Option" means a stock option granted under the Plan.
       
       
   12. "Optioned Stock" means the Common Stock subject to an Option.
       
       
   13. "Optionee" means any person who receives an Option.
       
       
   14. "Plan" means this 1999 Stock Option Plan.
       
       
   15. "Subsidiary" means any bank or other corporation of which not less than fifty percent (50%) of the voting shares are held by the Employer or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Employer or a Subsidiary.

3. Stock Subject to Options.
   1. Number of Shares Reserved. The maximum number of shares which may be optioned and sold under the Plan is two million {2,000,000) shares of Common Stock of the Employer, subject to adjustment as provided in Section 6(j). However no more than two hundred fifty thousand (250,000) of such shares may be issued to Consultants. During the term of this Plan, the Employer will at all times reserve and keep available a suffi-cient number of shares of its Common Stock to satisfy the requirements of the Plan.
      
      
   2. Expired Options. If any outstanding Option expires or becomes unexercis-able for any reason without having been exercised in full, the shares of Common Stock allo-cable to the unexercised portion of such Option will again become available for other Op-tion grants.

4. Administration of the Plan.
   1. The Committee. The Plan is administered by the Board directly, acting as a Committee of the whole, or if the Board elects, by a separate Committee appointed by the Board for that purpose and consisting of at least two Board members, all of whom must be Nonemployee Directors. All references in the Plan to the "Committee" are to such separate Committee, if any is established, or if none is then in existence, then to the Board as a whole. Once appointed, any such Committee must continue to serve until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereto, remove members (with or without cause), appoint new members in substitution therefor, and fill vacancies (however caused). At all times, the Board has the power to remove all members of the Committee and thereafter to directly administer the Plan as a Committee of the whole.
      
      
   2. Meetings; Reports. The Committee shall select one of its members as chair-man, and hold meetings at such times and places as the chairman or a majority of the Com-mittee may determine. All actions of the Committee must be either by (i) a majority vote of the members of the full Committee at a meeting of the Committee, or (ii) by unanimous written consent of all members of the full Committee without a meeting. At least annually, the Committee must present a written report to the Board indicating the persons to whom Options have been granted since the date of the last such report, and in each case the date or dates of Options granted, the number of shares optioned, and the Option price per share.
      
      
   3. Powers of the Committee. Subject to all provisions and limitations of the Plan, the Committee has the authority and discretion to:
      1. Determine the persons to whom Options are to be granted, the times of grant, and the number of shares to be represented by each Option;
         
         
      2. Interpret the Plan;
         
         
      3. Authorize any person or persons to execute and deliver Option agreements or to take any other actions deemed by the Committee to be necessary or appropriate to effectuate the grant of Options by the Committee; and
         
         
      4. Make all other determinations and take all other actions which the Committee deems necessary or appropriate to administer the Plan in accordance with its terms and conditions.
         
         
   4. Final Authority; Limitation of Liability. The Committee's decisions, deter-minations and interpretations are final and binding on all persons, including all Optionees and any other holders or persons interested in any Options, unless otherwise expressly determined by a vote of the majority of the entire Board. No member of the Committee or of the Board may be held liable for any action or determination made in good faith with respect to the Plan or any Option.

5. Eligibility; Limitation of Rights. The grant of Options under the Plan is entirely discretionary with the Committee, and the adoption of the Plan does not confer upon any person any right to receive any Option or Options unless and until granted by the Committee, in its sole discretion. Neither the adoption of the Plan nor the grant of any Options to any person or Optionee will confer any right to continued employment, nor shall the same interfere in any way with that person's right or that of the Employer (or any Subsidiary) to termi-nate the person's employment at any time.

6. Option Terms; Conditions. All Option grants under the Plan must be (i) approved in advance by the Committee; and (ii) documented in written Option agreements in such form as the Committee approves from time to time. All Option agreements must comply with, and are subject to the following terms and conditions:
   1. Number of Shares. Each Option agree-ment must state the number of shares subject to Option. Any number of Options may be granted to a single eligible person at any time and from time to time.
      
      
   2. Option Price. The Option price for the shares of Common Stock to be is-sued under the Option will be the weighted average closing price of the Common Stock for the thirty (30) calendar days prior to the date of grant.
      
      
   3. Consideration; Manner of Exercise. The Option price is payable either (i) in U.S. dollars upon exercise of the Option, or (ii) if approved by the Board, in other considera-tion including without limitation Common Stock of the Employer, services, or other prop-erty. An Option is deemed to be exercised when written notice of exercise has been given to the Employer in accordance with the terms of the Option by the person entitled to exer-cise the Option, together with full payment for the shares of Common Stock subject to said notice.
      
      
   4. Term of Option. Under no circumstances may an Option granted under the Plan be exercisable after the expiration of ten (10) years from the date such Option is granted. The term of each Option must be determined by the Committee in its discretion .
      
      
   5. Date of Grant; Vesting, Holding Period. The grant date of an Option, for all pur-poses, is the date the Committee makes the determination granting the Option, as set forth in the Option agreement. All Options shall vest as follows:
      
      
      1. For Consultants, 100% upon completion of the project by Consultant and acceptance of the project by Employer.
         
         
      2. For newly hired Employees, 25% shall vest 6 months after the date of employment of Employee and 4.16% per month thereafter.
         
         
      3. For existing Employees; 4.16% per month commencing with date of grant.
         
         
      Shares of Common Stock obtained upon the exercise of any Option may not be sold by any Optionee that is subject to Section 16 of the 1934 Act until six (6) months have elapsed since the date of the Option grant.
      
      
   6. Death of Optionee. In the event of the death of an Optionee who at the time of his death was an Employee and who had been in Continuous Status as an Employee since the date of grant of the Option, the Option terminates on the earlier of (i) six (6) months after the date of death of the Optionee, or (ii) the expiration date otherwise provided in the Option agreement. Under these circumstances, the Option will be exercisable at any time prior to such termination by the Optionee's estate, or by such person or persons who have acquired the right to exercise the Option by bequest or by in-heritance or by reason of the death of the Optionee.
      
      
   7. Disability of Optionee. If an Optionee's status as an Employee is terminated at any time during the Option period by reason of a disability (within the meaning of Sec-tion 22(e)(3) of the Code) and if the Optionee had been in Continuous Status as an Employ-ee at all times between the date of grant of the Option and the termination of his status as an Employee, the Option terminates on the earlier of (i) one (1) year after the date of termi-nation of his status as an Employee, or (ii) the expiration date otherwise pro-vided in the Option agreement.
      
      
   8. Termination of Status as an Employee. If an Optionee's status as an Em-ployee is terminated at any time after the grant of an Option by the Optionee for any reason other than death or disability, as provided in Sections 6(f) and 6(g), and not by the Com-pany, as provided below, the Option terminates on the earlier of (i) thirty (30) days follow-ing termination of status as an Employee, or (ii) the expiration date otherwise provided in the Option agreement. If an Optionee's status as an Employee is terminated at any time after the grant of an Option by the Company for any reason, then the Option terminates on the date of termination of status as an Employee.
      
      
   9. Nontransferability of Options. No Option granted under the Plan may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.
      
      
   10. Adjustments Upon Changes in Capitalization. Subject to any required ac-tion by the shareholders of the Employer, the number of shares of Common Stock covered by each outstanding Option, the number of shares of Common Stock available for grant of additional Options, and the price per share of Common Stock specified in each outstanding Option, must be proportionately adjusted for any increase or decrease in the number of is-sued shares of Common Stock resulting from any stock split or other subdivision or con-solidation of shares, the payment of any stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such shares of Common Stock effected without receipt of consideration by the Employer; provided, however, that conversion of any convertible securities of the Employer will not be deemed to have been "effected with-out receipt of consideration."
       
       Any adjustments as a result of a change in the Employer's capitalization will be made by the Committee, whose determination in that respect is final, binding and conclu-sive. Except as otherwise expressly provided in this Section 6(j), no Optionee shall have any rights by reason of any stock split or the payment of any stock dividend or any other increase or decrease in the number of shares of Common Stock. Except as otherwise expressly provided in this Section 6(j), any issue by the Employer of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect the number of shares or price of Common Stock subject to any Options, and no adjustments in Options shall be made by reason thereof. The grant of an Option under the Plan does not in any way affect the right or power of the Employer to make adjustments, reclassifications, reorganizations or changes of its capital or business structure.
       
       
   11. Conditions Upon Issuance of Shares. Shares of Common Stock may not be issued with respect to an Option granted under the Plan unless the exercise of the Option and the issuance and delivery of such shares pursuant thereto complies with all applicable provisions of law, including, applicable federal and state securities laws.
       
       As a condition to the exercise of an Option, the Employer may require the person exercising such Option to represent and warrant at the time of exercise that the shares of Common Stock are being pur-chased only for investment and without any present intention to sell or distribute such Common Stock if, in the opinion of counsel for the Employer, such a representation is required by any relevant provisions of law.
       
       All Shares of Common Stock issued pursuant to the Plan will be "Restricted Securities" as defined in Rule 144 promulgated under the Securities Act of 1933, as amended.
       
       
   12. Change of Control, Merger, Sale of Assets, Etc. In the event of the sale or other transfer of the outstanding shares of stock of the Employer in one transaction or a series of related transactions or a merger or reorganization of the Employer with or into any other corporation, where immediately following the transaction, those persons who were shareholders of the Employer immediately before the transaction control less than 50% of the voting power of the surviving organization (a "change of control event") or in the event of a proposed sale of sub-stantially all of the assets of the Employer, or in the event of a proposed dissolution or liqui-dation of the Employer (collectively, "sale transaction") all outstanding Options that are not then fully exercisable become exercisable immediately before the date of closing of any change of control event or sale transaction or such earlier date as the Committee may fix.
       
       
   13. Substitute Stock Options. In connection with the acquisition or proposed acquisition by the Employer or any Subsidiary, whether by merger, acquisition of stock or assets, or other reorganization transaction, of a business any employees of which have been granted options, the Committee is authorized to issue, in substitution of any such unexercised stock options, a new Option under this Plan which confers upon the Op-tionee substantially the same benefits as the old option
       
       
   14. Tax Compliance. The Employer, in its sole discretion, may take any actions that it reasonably believes to be required in order to comply with any local, state, or federal tax laws relating to the reporting or withholding of taxes attributable to the grant or exercise of any Option or the disposition of any shares of Common Stock issued upon exercise of an Option, including, but not limited to: (i) withholding from any Optionee exercising an Op-tion a number of shares of Common Stock having a fair market value equal to the amount required to be withheld by Employer under applicable tax laws, and (ii) withholding from any form of compensation or other amount due an Optionee or holder of shares of Common Stock issued upon exercise of an Option any amount required to be withheld by Employer under applicable tax laws. Withholding or reporting is considered required for purposes of this Section 6(n) if any tax deduction or other favorable tax treatment available to Employer is conditioned upon such reporting or withholding.
       
       
   15. Other Provisions. Option agreements executed under the Plan may contain such other provisions as the Committee deems advisable, provided that they are not in-consistent with any of the other terms and conditions of the Plan or applicable laws.

7. Term of the Plan. The Plan is effective on the date of adoption of the Plan by the Board. Unless sooner terminated as provided in Section 8, the Plan will terminate on the tenth (10th) anniversary of its effective date. Options may be granted at any time after the effective date and prior to the date of termination of the Plan.

8. Amendment; Early Termination. The Board may terminate or amend the Plan at any time and in such respects as it deems advisable, although no amendment or termination would affect any previously-granted Options, which would remain in full force and effect notwithstanding any amendment or termination of the Plan Shareholder approval of any amendments to the Plan must be obtained whenever required by applicable law(s).

CYBER MERCHANTS EXCHANGE, INC.

NOTICE OF GRANT OF OPTION UNDER
THE 1999 CYBER MERCHANTS EXCHANGE, INC.
STOCK OPTION PLAN

Date:                

Name
Address
City, State Zip

Subject to your acceptance, Cyber Merchants Exchange, Inc. (the "Company") hereby grants to you an Option to purchase up to                 (               ) common shares of the Company at an Option price of                 (               ) per share, all on the terms and conditions set forth per the 1999 Cyber Merchants Exchange, Inc. Stock Option Plan.

Please acknowledge your receipt of this Notice of Grant of Option and the 1999 Cyber Merchants Exchange, Inc. Stock Option Plan, and your acceptance thereof, by signing the enclosed copy of this Notice as indicated below and returning it to the Company's Secretary.

CYBER MERCHANTS EXCHANGE, INC.
BOARD OF DIRECTORS' SUB-COMMITEE

By: /s/ Howard Moore
Howard Moore

Its: Chairman

By: /s/ Frank S. Yuan
Frank S. Yuan

Its: Member

By: /s/ Charles Rice
Charles Rice

Its: Member

ACCEPTANCE

The undersigned represents and acknowledges that by his/her signature below, he/she has received a copy of the 1999 Cyber Merchants Exchange, Inc. Stock Option Plan (the "Plan"), has reviewed it in its entirety and is familiar with the terms and provisions thereof, and accepts the Option subject to all the terms and conditions of the Plan.

SOFTWARE SALES AGREEMENT

Recitals.

WHEREAS Cyber Merchants Exchange, d.b.a. C-ME.com owns Internet Sourcing Network™ (ISN) and Virtual Trade Show™ (VTS), hereinafter refers to as the Software

WHEREAS Global Purchasing Dotcom wishes to purchase the ISN And VTS

WHEREAS Cyber Merchants Exchange wishes to sell to Global Purchasing Dotcom the software,

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties agree as follows,

AGREEMENT

1. Parties. The parties to this Agreement are Cyber Merchants Exchange hereinafter refers to as Seller, a corporation created under the laws of the State of California, United States of America, and Global Purchasing Dotcom, a corporation created under the laws of the State of Washington, hereinafter refers to as Buyer

   1. Sales.

      1.1 Territory of Use. Upon the terms, royalty payments, and conditions set forth in this Agreement, the Seller hereby grants an exclusive right to use the technology, Software and trademarks, in the Market Region as defined in the Joint Venture Agreement between Cyber Merchants Exchange and Global Purchasing Dotcom.

      1.2 Amount of Sales. The Buyer understands, and agrees to pay the Seller US$ 400,000 for the Software. The payment shall be within 3 months of the effective date of this contract.

      1.3 Terms of Maintenance. In the event that the Buyer desires to update, or ask Cyber Merchants Exchange to maintain the Software, terms and conditions are to be separately negotiated.

   2. Hardware Expenses.
      
      The parties understand that the fees do not include any hardware, and storage media. Seller may make recommendations and Buyer may purchase equipments directly from vendors.

   3. Travel Expenses.
      
      Seller and Buyer understand the fees do not include Seller's travel related expenses in connection with on-site Software performed by Seller. Buyer agrees to reimburse all such expenses.

   4. Confidentiality

      a. Except as specifically authorized under this Section, neither Seller nor Buyer shall use or disclose any Confidential Information of the other. For purposes of this Agreement, the term "Confidential Information" shall mean any and all information, data, know-how and documentation relating to the other party's proprietary rights or business, including but not limited to information related to, product development, software products, algorithms, business, marketing and distribution plans, the terms and conditions of this Agreement, financial statements and financial projections, which either party learns or receives from the other, excluding any information that either party can document is generally known in the computer industry, or becomes known to the other party by means other than through a breach by anyone under an obligation of confidence, or is provided to the other party by a third party under no obligation to keep such information confidential.

      b. Seller and Buyer agree to maintain each other's Confidential Information in strict confidence using at least the same degree of care as each uses to maintain the confidentiality of its own most confidential information.

      c. Seller and Buyer agree to maintain Confidential Information for use only by those of its respective employees who require access to such information to fulfill its respective obligations under this Agreement, provided that such employees and individuals have agreed in writing to maintain the confidentiality of confidential information in a manner that is sufficient to protect the Confidential Information. Seller and Buyer both agree to advise the other immediately in the event that it learns or has reasons to believe that a person who has access to the other's Confidential Information, or any portion thereof, has violated or intends to violate the terms of this Agreement; and each will, at its own expense, cooperate with the other in seeking injunctive or other equitable relief against such person.

   5. Intellectual Property Rights and Restrictions.

      a. Seller shall give Buyer advance written notice if any proprietary information or any work, Software or deliverables provided to Buyer under this Agreement is non-transferable and non-assignable or cannot be used, partially or in full, to provide Software to or develop products for a third party.
      
      b. If Buyer files any patent based on the Software provided by Seller in the Market Region, Seller shall be the Inventor or on the inventor's list and Buyer shall be the Assignee.
      
      c. In the event that the Buyer discloses public information containing, in full, or any portion thereof, relating to the use of the Software, the Buyer agrees to make public the name of the Seller as part of the press release note.

   6. Equipment Failure.
      
      Buyer understands that Seller does not manufacture nor has control over the quality, reliability, performance, and durability of the hardware equipment purchased by Buyer and used by Seller to provide Software as set forth in Section 2. However, Seller will work with the equipment's manufacturers/providers to reasonably ensure a maximized performance of the equipment. Extra Software charge may apply.

   7. Internet Connectivity.
      
      Buyer understands that Seller does not own the Internet connection which Seller leases from its ISP, nor is Seller responsible for connectivity, reliability and performance of the Internet connection. However, Seller will work with its ISP to reasonably ensure that performance and connectivity from Seller to its ISP is maximized.

   8. Indemnity.
      
      Buyer agrees to indemnify and hold Seller not liable against any claim, actions or demands arising out of any content or software disseminated by Buyer and/or its users in any way connected to the Software, and out of Seller's hosting and maintenance of Buyer's servers, systems, and domain names.

   9. Limitation of Liability
      
      IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

   10. Force Majeure
       
       Seller exercises no control over, and accepts no responsibility for, the content stored on Buyer's servers, the way Buyer and/or its users use the applications residing on the servers, and the information passing through Seller's computer network in connection with Buyer's business. Seller shall not be liable for any delay or failure in performance due to Force Majeure, which shall include without limitation acts of God, earthquake, labor disputes, changes in law, regulation or government policy, riots, war, fire, epidemics, acts or omissions of vendors or suppliers, equipment failures, loss of Internet connections, transportation difficulties, or other occurrences which are beyond Seller's reasonable control.
       
       In any case, Seller's entire liability under or arising out of this Agreement shall be limited to the sales amount Buyer paid for the Software that gave rise to the liability.

   11. Marketing and Promotion
       
       a. Subject to the terms of this Agreement, Seller and Buyer have the right to use the other party's name, trade name(s), trademarks, and logos solely in connection with marketing and promotion of its own business provided that both parties shall agree mutually on the content.
       
       b. All costs and expenses associated with marketing and promotional efforts under this Agreement shall be borne exclusively by the initiating party. The other party shall have no financial responsibility with respect to such activities unless previously agreed in writing.

   12. No Assignment.
       
       Buyer shall not sell, transfer, or assign this Agreement without the prior written consent of Seller. Any act in derogation of the foregoing shall be null and void, and Buyer will remain obligated under this Agreement. This Agreement shall benefit and be binding upon the parties to this Agreement and their respective permitted successors and assigns.

   13. Waiver.
       
       The waiver or failure of either party to exercise in any respect any right provided for in this Agreement shall not be deemed a waiver of any further right under this Agreement.

   14. Severability.
       
       If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement will remain in full force and effect.

   15. Governing Law and Arbitration.
       
       Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This Agreement shall be construed in accordance with the laws of California, except the arbitration clause which shall be enforced pursuant to the Federal Arbitration Act. All arbitration proceedings shall take place within the city limits of Pasadena, California. The award of the arbitrator(s) must be made in writing, with findings of fact and conclusions of law.

   16. No Oral Modification.
       
       No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless made in writing specifically referring to this Agreement and duly signed by each party hereto.

   17. Entire Agreement.
       
       This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and any and all written or oral agreements heretofore existing between the parties hereto with respect to the subject matter hereof are expressly canceled.

IN WITNESS WHEREOF, this Agreement has been executed in counterparts by the parties hereto as of the date first written above.

SELLER

/s/Frank S. Yuan
By: Frank S. Yuan

Date: June 21, 2000

BUYER

/s/ Julia Wang
By: Julia Wang

Date: June 21, 2000

SOFTWARE SALES AGREEMENT

Recitals.

WHEREAS Cyber Merchants Exchange, d.b.a. C-ME.com owns Internet Sourcing Network™ (ISN) and Virtual Trade Show™ (VTS), hereinafter refers to as the Software

WHEREAS eSEA Co., LTD wishes to purchase the ISN And VTS

WHEREAS Cyber Merchants Exchange wishes to sell to eSEA Co., LTD the software,

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties agree as follows,

AGREEMENT

1. Parties. The parties to this Agreement are Cyber Merchants Exchange hereinafter refers to as Seller, a corporation created under the laws of the State of California, United States of America, and eSEA Co., LTD, a corporation created under the laws of the State of Delaware, hereinafter refers to as Buyer

   1. Sales.

      1.1 Territory of Use. Upon the terms, royalty payments, and conditions set forth in this Agreement, the Seller hereby grants an exclusive right to use the technology, Software and trademarks, in the Market Region as defined in the Joint Venture Agreement between Cyber Merchants Exchange and eSEA Co., LTD.

      1.2 Amount of Sales. The Buyer understands, and agrees to pay the Seller US$ 300,000 for the Software. The payment shall be within 3 months of the effective date of this contract.

      1.3 Terms of Maintenance. In the event that the Buyer desires to update, or ask Cyber Merchants Exchange to maintain the Software, terms and conditions are to be separately negotiated.

   2. Hardware Expenses.
      
      The parties understand that the fees do not include any hardware, and storage media. Seller may make recommendations and Buyer may purchase equipments directly from vendors.

   3. Travel Expenses.
      
      Seller and Buyer understand the fees do not include Seller's travel related expenses in connection with on-site Software performed by Seller. Buyer agrees to reimburse all such expenses.

   4. Confidentiality

      a. Except as specifically authorized under this Section, neither Seller nor Buyer shall use or disclose any Confidential Information of the other. For purposes of this Agreement, the term "Confidential Information" shall mean any and all information, data, know-how and documentation relating to the other party's proprietary rights or business, including but not limited to information related to, product development, software products, algorithms, business, marketing and distribution plans, the terms and conditions of this Agreement, financial statements and financial projections, which either party learns or receives from the other, excluding any information that either party can document is generally known in the computer industry, or becomes known to the other party by means other than through a breach by anyone under an obligation of confidence, or is provided to the other party by a third party under no obligation to keep such information confidential.

      b. Seller and Buyer agree to maintain each other's Confidential Information in strict confidence using at least the same degree of care as each uses to maintain the confidentiality of its own most confidential information.

      c. Seller and Buyer agree to maintain Confidential Information for use only by those of its respective employees who require access to such information to fulfill its respective obligations under this Agreement, provided that such employees and individuals have agreed in writing to maintain the confidentiality of confidential information in a manner that is sufficient to protect the Confidential Information. Seller and Buyer both agree to advise the other immediately in the event that it learns or has reasons to believe that a person who has access to the other's Confidential Information, or any portion thereof, has violated or intends to violate the terms of this Agreement; and each will, at its own expense, cooperate with the other in seeking injunctive or other equitable relief against such person.

   5. Intellectual Property Rights and Restrictions.

      a. Seller shall give Buyer advance written notice if any proprietary information or any work, Software or deliverables provided to Buyer under this Agreement is non-transferable and non-assignable or cannot be used, partially or in full, to provide Software to or develop products for a third party.
      
      b. If Buyer files any patent based on the Software provided by Seller in the Market Region, Seller shall be the Inventor or on the inventor's list and Buyer shall be the Assignee.
      
      c. In the event that the Buyer discloses public information containing, in full, or any portion thereof, relating to the use of the Software, the Buyer agrees to make public the name of the Seller as part of the press release note.

   6. Equipment Failure.
      
      Buyer understands that Seller does not manufacture nor has control over the quality, reliability, performance, and durability of the hardware equipment purchased by Buyer and used by Seller to provide Software as set forth in Section 2. However, Seller will work with the equipment's manufacturers/providers to reasonably ensure a maximized performance of the equipment. Extra Software charge may apply.

   7. Internet Connectivity.
      
      Buyer understands that Seller does not own the Internet connection which Seller leases from its ISP, nor is Seller responsible for connectivity, reliability and performance of the Internet connection. However, Seller will work with its ISP to reasonably ensure that performance and connectivity from Seller to its ISP is maximized.

   8. Indemnity.
      
      Buyer agrees to indemnify and hold Seller not liable against any claim, actions or demands arising out of any content or software disseminated by Buyer and/or its users in any way connected to the Software, and out of Seller's hosting and maintenance of Buyer's servers, systems, and domain names.

   9. Limitation of Liability
      
      IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

   10. Force Majeure
       
       Seller exercises no control over, and accepts no responsibility for, the content stored on Buyer's servers, the way Buyer and/or its users use the applications residing on the servers, and the information passing through Seller's computer network in connection with Buyer's business. Seller shall not be liable for any delay or failure in performance due to Force Majeure, which shall include without limitation acts of God, earthquake, labor disputes, changes in law, regulation or government policy, riots, war, fire, epidemics, acts or omissions of vendors or suppliers, equipment failures, loss of Internet connections, transportation difficulties, or other occurrences which are beyond Seller's reasonable control.
       
       In any case, Seller's entire liability under or arising out of this Agreement shall be limited to the sales amount Buyer paid for the Software that gave rise to the liability.

   11. Marketing and Promotion
       
       a. Subject to the terms of this Agreement, Seller and Buyer have the right to use the other party's name, trade name(s), trademarks, and logos solely in connection with marketing and promotion of its own business provided that both parties shall agree mutually on the content.
       
       b. All costs and expenses associated with marketing and promotional efforts under this Agreement shall be borne exclusively by the initiating party. The other party shall have no financial responsibility with respect to such activities unless previously agreed in writing.

   12. No Assignment.
       
       Buyer shall not sell, transfer, or assign this Agreement without the prior written consent of Seller. Any act in derogation of the foregoing shall be null and void, and Buyer will remain obligated under this Agreement. This Agreement shall benefit and be binding upon the parties to this Agreement and their respective permitted successors and assigns.

   13. Waiver.
       
       The waiver or failure of either party to exercise in any respect any right provided for in this Agreement shall not be deemed a waiver of any further right under this Agreement.

   14. Severability.
       
       If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement will remain in full force and effect.

   15. Governing Law and Arbitration.
       
       Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This Agreement shall be construed in accordance with the laws of California, except the arbitration clause which shall be enforced pursuant to the Federal Arbitration Act. All arbitration proceedings shall take place within the city limits of Pasadena, California. The award of the arbitrator(s) must be made in writing, with findings of fact and conclusions of law.

   16. No Oral Modification.
       
       No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless made in writing specifically referring to this Agreement and duly signed by each party hereto.

   17. Entire Agreement.
       
       This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and any and all written or oral agreements heretofore existing between the parties hereto with respect to the subject matter hereof are expressly canceled.

IN WITNESS WHEREOF, this Agreement has been executed in counterparts by the parties hereto as of the date first written above.

SELLER

/s/ Frank S. Yuan
By: Frank S. Yuan

Date: June 23, 2000

BUYER

/s/ Padoongkiat Apichaidejudom
By: Padoongkiat Apichaidejudom

Date: June 23, 2000

Cyber Merchants Exchange, Inc. Technology Transfer Agreement

Cyber Merchants Exchange, Inc., d.b.a. C-ME.com hereby agrees to license its proprietary Linux-based software system "ISN" in a turnkey format to C-ME.com/Taiwan

Cost:
United States $300,000

Duration:
This license is valid for the duration of C-ME.com/Taiwan's legal existence.

Payment:
Payment will be wired within two weeks of the establishment of C-ME.com/Taiwan by registration of the corporation with local government officials.

Training:
C-ME.com will be responsible for training all appropriate C-ME.com/Taiwan personal on the techniques and procedures for implementing the C-ME.com software system and inputting product information into the system.

Documentation:
C-ME.com will provide accompanying documentation for its software system in the form of training manuals.

Maintenance:
C-ME.com will maintain and update all C-ME.com/Taiwan product information in detail on its main servers in the United States.

Agreed:

Cyber Merchants Exchange

/s/ Frank Yuan
Frank Yuan
Chairman & CEO

Date: _____________

C-ME.com/Taiwan

/s/ Hsiao-Pai Chen
Hsiao-Pai Chen
Chairman

Date: _____________

Joint Venture Agreement

This Joint Venture Agreement (hereinafter the "Agreement") is entered into this day 25th day of March 2000 (hereinafter the "Effective Date") by and between:

Cyber Merchants Exchange, Inc., a NASDAQ-listed corporation duly registered under the laws of the United States of America and having its registered office at 600 S. Lake Avenue, Suite 405, Pasadena, CA 91106 (hereinafter referred to as "C-ME.com");

and

Good Support International Limited., a limited company duly registered under the laws of BVI and having its registered office PO Box 957 offshore Incorporations Center, Road Town Tortola, BVI. (hereinafter referred to as "Good Support")

WHEREAS, C-ME.com owns a proprietary web-based communications system for the retail industry that enables retailers and their vendors to conduct negotiations and facilitate global merchandise sourcing;

WHEREAS, C-ME.com desires to expand its business in the People's Republic of China region through the establishment of a joint venture company (hereinafter the "JV");

WHEREAS, Good Support is willing to meet C-ME.com's intention and is ready to invest into the JV;

WHEREAS, C-ME.com and Good Support have agreed to cooperate in expanding the proposed business of the JV and to establish their relationship as shareholders of the JV by entering into this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows:

1. A. Provisions for the Incorporation of Joint Venture Company

   1. Organization and Registration. After the Effective Date of this Agreement, the parties hereto shall promptly cause JV, under the name of "Global Purchasing Dotcom, Inc.," to be organized and registered as a company with liability limited by shares under the laws of state of Washington U.S.A. All costs necessary therefor shall be borne by the JV. The parties hereto shall fully cooperate with each other with respect to the procedures and particulars of the organization and registration of JV.

   2. Market Region. The region in which JV operate and have activities in shall be People of Republic China (hereinafter the "Market Region"). In consideration for the risk, investment and effort involved in developing the Market Region, C-ME.com agrees and undertakes to retain, on an exclusive basis, the region solely for JV. If C-ME.com shall breach this exclusivity obligation; C-ME.com shall be liable for the capitals invested by Good Support plus interest of 24% per annum.

   3. Business Purpose of Joint Venture. The purpose of this joint venture is to:
      
      
      • Allow, through C-ME.com's proprietary web-based communicated system to facilitate the front-end merchandise sourcing of the following:
        
        
        • Retailers to communicate, conduct negotiations, and facilitate sourcing (searching for and locating products) directly from manufacturers and exporters (hereinafter "Vendors") from the Market Region and for such Vendors to have guaranteed access and continuous electronic feedback directly from the retailers.
          
          
        • Retailers from the Market Region to communicate, conduct negotiations, and facilitate sourcing (searching for and locating products) directly from Vendors and for such Vendors to have guaranteed access and continuous electronic feedback directly from the retailers.
          
          
      • Establish other internet-related businesses to be approved by the Board of Directors.
        
        

   4. Capital of JV. The first round of capital of JV shall be two million U.S. dollars (US$2,000,000). Ten million (10,000,000) shares with par value of twenty cents (US¢ 20) per share, shall be subscribed and paid by the parties hereto within fifteen (15) days after the Initial Shareholders' Meeting of JV. The number of shares to be subscribed and the amount to be paid in cash on the above subscription by each of the parties hereto shall be as follows:
      • Good Support consortium   50%   5 million shares   US$1,000,000
        
        
      • C-ME.com consortium   50%   5 million shares   US$1,000,000

      The second round of capital of JV shall be two million U.S. dollars (US$2,000,000). Ten million (10,000,000) shares with par value of twenty cents (US¢ 20) per share, shall be subscribed and paid by the parties hereto within two (2) years after the Initial Shareholders' Meeting of JV. The number of shares to be subscribed and the amount to be paid in cash on the above subscription by each of the parties hereto shall be as follows:

      • Good Support consortium   50%   5 million shares   US$1,000,000
        
        
      • C-ME.com consortium   50%   5 million shares   US$1,000,000

   5. Restriction of Transfers. The parties hereto agree that the founding shares of JV are non-transferable for one year. Both parties further agree to inform the other party of the intention to sell or transfer shares after the one-year restricted period and before JV becomes a publicly traded company.
      
      Except in accordance with prior written approval from the other party, the parties hereto agree that any shareholder of JV shall not sell, assign, grant, transfer title or rights to, nor otherwise pledge or encumber any of the shares of JV held by itself in any way whatsoever, to any market competitor, nor take any action leading to or likely result in any of the foregoing.

   6. Right of First Refusal. In the event a party at any time desires to sell any or part of its shares to a third party, the other party shall have the right of first refusal to purchase the same. If such right of first refusal is not exercised within the period of fifteen (15) days after the offer, the selling party may then offer its shares to the third party.

   7. Additional Capital. Should the parties hereto determine that additional capital is required for JV beyond the capital to be contributed by the parties hereto pursuant to Clause A.4 hereof, such additional capital shall be funded in the following manner:
      • Proportionate to the percentage ownership of each party; else
        
        
      • If one party does not participate, in part or in full, in the capital increase, the other party has the right of first refusal to fund the balance of the required capital increase; else
        
        
      • If both parties do not participate, in part or in full, in the capital increase, a third party may be invited to provide the required funds in return for an equivalent percentage shareholding in the JV.

   8. Guarantee to Lender. If any lender requires guarantees as a condition to make a loan to JV, the parties hereto undertake to provide the guarantee respectively in proportion to their shareholding ratio in JV.

   9. No Competition. The shareholders shall not, in the Market Region, engage in any business activity, either directly or indirectly, in any manner or capacity, on its own behalf or on behalf of any other person, firm, corporation or organization, that may interfere with or impair its ability to perform any of its duties or obligations under this Agreement, nor accept or continue any obligations which may interfere with or impair its ability to perform any of its duties or obligations under this Agreement. A breach of this clause will result in the defaulting party to be liable for the capital invested by the non-defaulting party plus interest of 24% per annum.

2. C-ME.com's Responsibilities and Contributions

   1. Retail Buyer Relationships. C-ME.com is responsible for supporting relationships with existing retail partners and facilitating each retail partner's use of its service as their primary internet merchandise sourcing method, and developing new relationships with large U.S.-based retailers such as Wal-mart, K-Mart, Sears, J.C. Penney, etc.

   2. Joint Venture Relationships. C.ME.com is responsible to ensure that C-ME.com's joint venture companies outside the Market Region guarantee the direct communication, negotiation, and sourcing between their retailers and JV's Vendors and their Vendors with JV's retailers through C-ME.com's proprietary web-based communication system.

   3. Product Information Maintenance: C-ME.com is responsible for hosting all Vendors' product and information from the Market Region on its servers in order to "push" or broadcast such information to U.S.-based retail buyers. C-ME.com shall permit and guarantee access to its servers for JV and its Vendors to update, communicate and transact with retail buyers.
      
      JV shall be responsible to host all Vendors' product and information on its servers in order to "push" or broadcast such information to retail buyers in the Market Region.

   4. Training. C-ME.com is responsible for training and enhancing the skills of JV's employees to be proficiently skilled at using Software, at C-ME.com's expense. All costs related to the initial training, including food and accommodation expenses, shall be borne by C-ME.com. Thereafter, food and accommodation expenses for any further training shall be borne by JV.

3. Good Support's Responsibilities and Contributions

   1. Vendor Relationships. Good Support's overall responsibility is to help JV secure additional Vendors for JV.

   2. Retail Buyer Relationships. Good Support's overall responsibility is to help JV develop new relationships with retail partners in the Market Region and facilitating each retail partner's use of its service as their primary internet merchandise sourcing method.

   3. Offices. Good Support will help JV secure conveniently located office space and procure the necessary accessories and equipment (computer, scanner, digital camera, telephone, facsimile machines, etc.) at reasonable market prices in order for JV to provide and support its services to Vendors.

4. Revenue Distribution

   • Subscription Fees:
     Each manufacturer, who wishes to be on our ISN, pays a fixed subscription fee. The subscription fee structure will be adjusted according to the local business environment. A revenue sharing program will work as follows:
     (Note: Current Subscriptions Fees are (in USD): USA 2100, Taiwan 1000, Hong Kong 1000, China 600)
     
     Example:
     C-ME.com Germany secures a retailer (Karstadt-Hertie), and an exclusive ISN extranet is set up for Karstadt-Hertie. After the installation of Karstadt-Hertie ISN, all other C-ME.com's regional offices will be notified. C-ME.com China (Global Purchasing Dotcom) will enlist as many manufacturers as possible to be on KH ISN, with an annual subscription fee of 1000 USD from Chinese manufacturers. C-ME.com China will retain 90% of the subscription fee, while 10% will be paid to C-ME.com Germany. Other regional C-ME.com JV companies from other countries will also perform similar activities. It is therefore to the JV Company's best interest to enlist quality and reliable manufacturers to attract large and reputable retailers. Retailers want reliable and quality manufacturers to be on their ISN network. Please note that a retail group is one exclusive ISN, therefore the more retail groups we have, the more ISN we will establish. Furthermore, a manufacturer can join more than one ISN, depending on the needs of the retailers. The Regional JV Partner can decide the subscription fees for Good Support ISN.

   • Transaction Fee Paid by Retailer:
     Retailers will pay a 5% transaction commission to the JV Company that enlisted the retailer. (One ISN, Factory 2 U, has already signed the agreement) A revenue sharing scheme will work as follows:
     
     Example:
     C-ME.com USA will receive a 5% transaction commission from F2U ISN transactions. 70% will be retained by C-ME.com USA, and 30% will be paid to the JV Company that enlisted the transacting manufacturing vendor (C-ME.com China)

   • Transaction Fee Paid by Manufacturers:
     At the present time, we are seeking the possibilities of manufacturers to pay transaction commissions as well. If manufacturers pay a percentage commission, the revenue sharing scheme will work similar to the above listed transaction fees paid by the retailers.
     
     Example:
     A transaction is completed between C-ME.com China's client (Company A) and Factory 2 U, using the F2U ISN. A 5% percentage commission is paid to C-ME.com China. C-ME.com China will retain 70%, while 30% will be paid to C-ME.com USA who is responsible for the care taking of F2U business relationship, and ISN operation.

5. Management of Joint Venture Company

   1. General Meeting of Shareholders. A quorum for a general meeting of the shareholders of JV shall require the presence, in person or by proxy, of shareholders of JV holding one half (1/2) or more of the total issued and outstanding shares of JV entitled to vote. Resolutions of a general meeting of the shareholders of JV shall be adopted by an affirmative vote of half (1/2) of shares represented, in person or by proxy, at a meeting at which a quorum is present.

      Decisions on the following matters shall be made by special resolution only which shall require affirmative votes not less than three-fourths (3/4) of the shares held by shareholders, in person or by proxy, present at the meeting:

      • Transfer or change of all or an important part of JV's own business
      • Granting of subscription rights to new shares of stock of JV to any person other than shareholders of JV
      • Merger with or acquisition of all or an important part of other company
      • Increase or decrease of the capital stock
      • Dissolution of JV

   2. Board of Directors of JV. The directors of JV shall be elected at the General Meeting of Shareholders. The number of directors of JV shall be five (5). Two (2) of the directors shall be nominated by Good Support and two (2) of the directors shall be nominated by C-ME.com. One (1) of directors shall be nominated by Good Support and C-ME. Com jointly. In case of death, resignation or removal of a director prior to the end of his/her term, Good Support or C-ME.com shall agree to appoint such new director who is nominated by the other company until the end of his/her term.

      Responsibility for the management and direction of JV shall be vested in the Board of Directors. A quorum for the Board of Directors shall require the presence of four (4) directors and any resolutions of the Board of Directors shall be adopted by the affirmative vote of three (3) or more of the directors.

   3. Management Personnel. The nomination and appointment of the management personnel of JV shall be vested with the Board of Directors. The management personnel shall be responsible for the planning and control of JV's human resource.

6. Confidentiality and Proprietary Information

   1. Proprietary Information. Neither party shall, without the other party's prior written consent, disclose, provide, or make available any of the Proprietary Information of the other party in any form to any person, except to bona fide employees, officers, directors or consultants of such party whose access is necessary to enable the establishment of the JV and who are similarly bound to hold the Proprietary Information in confidence. Proprietary Information as used in this Agreement includes, without limitation, all information disclosed at any time before, after or at the time of execution of this Agreement between the parties and relating to their respective businesses, customers, products, services, patents, copyrights and/or other intellectual property rights, methods, marketing and sales plans, financial status, strategies and the like and any other confidential information or trade secrets which have been or will be disclosed between the parties. Provided, however, such obligations shall not apply to any information which is or becomes published or otherwise generally available to the public.

7. Term and Termination

   1. Term. This Agreement shall become effective upon execution by both parties and shall continue in effect thereafter until the establishment of the JV as signified by the signing of the Corporation By-laws and the Shareholders' Agreement, both of which shall supercede this Joint Venture Agreement.

   2. Termination. This Agreement shall terminate under the follow circumstances:
      • In the event of a default or material breach of any provisions of the Agreement by either of the parties hereto, if the non-defaulting party gives notice in writing of such default or breach and such default or breach is not cured within thirty (30) days after such notice, the non-defaulting party giving such notice shall have the right to terminate this Agreement at any time thereafter by giving written notice of the termination.
        
        
      • In the event of an occurrence of any of following events which exist as to either party, the non-defaulting party shall have the right to terminate this Agreement at any time after giving a written notice of the termination:
        
        
        • entry of an order for relief under applicable bankruptcy laws
        • action under applicable insolvency or similar law in effect for the purpose of bankruptcy, dissolution, liquidation or winding up
        • cancellation of permits or approvals by government order, or other conditions that will interfere with its performance of this Agreement

   3. Effect of Termination. Upon termination of this Agreement, the non-defaulting party shall have the option to request the defaulting party to assign its whole shares of JV to such non-defaulting party or any third party nominated by it. Upon such request, the defaulting party shall consummate the sales of the shares within thirty (30) days. The price of the shares shall be calculated based upon the book value of the assets of JV at the time of such request.

8. Arbitration

   1. All disputes, controversies or differences that may arise between the parties hereto, out of or in relation to or in connection with this Agreement, or for the material breach thereof, shall be settled in state of Washington, U.S.A. through bona fide negotiations between the parties hereto. Should such negotiation fail to come an agreement for settlement within two (2) months after the commencement thereof, either of the parties may require the final settlement under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the Rules. The award to be rendered shall be final and binding upon both parties hereto.

9. General Provisions

   1. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior agreements between the parties, whether written or oral, relating to the same subject matter. No modifications, amendments, or supplements to this Agreement shall be effective for any purpose unless in writing and signed by the parties.

   2. No Waiver. The waiver by either party of a breach or default in any of the provisions of this Agreement by the other party shall not be construed as a waiver of any succeeding breach of the same or other provisions; nor shall any delay or omission on the part of either party to exercise or avail itself of any right, power, privilege that has or may have hereunder operated as a waiver of any breach or default by the other party.

   3. Force Majeure. Any delay or nonperformance of any provision of this Agreement (other than for the payment of amounts due hereunder) caused by conditions beyond reasonable control of either party or its employees, shall not constitute a breach of this Agreement, and the time of performance of such provision, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing such performance.

   4. Severability. If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable, the invalidity of such provision shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity shall remain in full force and effect.

   5. Governing Law. This Agreement and any disputes arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the country of incorporation of JV.

   6. Headings. Headings contained in this Agreement are for reference purposes only and do not form part of this Agreement and shall not be deemed to alter or affect the meaning of any of the provisions hereof or the interpretation hereof.

   7. Section F shall survive any termination of this Agreement.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly executed this Agreement to become effective as of the date first above written.

Good Support International Limited, Inc.,

By: /s/ Julia Wang
Julia Wang
Chairman & CEO

Cyber Merchants Exchange, Inc.

By: /s/ Frank Yuan
Mr. Frank Yuan
Chairman & CEO

Joint Venture Agreement

This Joint Venture Agreement (hereinafter the "Agreement") is entered into this day 11th day of March 2000 (hereinafter the "Effective Date") by and between:

Cyber Merchants Exchange, Inc., a NASDAQ-listed corporation duly registered under the laws of the United States of America and having its registered office at 600 S. Lake Avenue, Suite 405, Pasadena, CA 91106 (hereinafter referred to as "C-ME.com");

and

Vickem Patana Co., Ltd., a limited company duly registered under the laws of Thailand and having its registered office at No. 42 Soi 49, Sukhumvit Road, Klongton-nua, Wattana, Bangkok 10110 (hereinafter referred to as "VICKEM").

WHEREAS, C-ME.com owns a proprietary web-based communications system for the retail industry that enables retailers and their vendors to conduct negotiations and facilitate global merchandise sourcing;

WHEREAS, C-ME.com desires to expand its business in the Asia Pacific region through the establishment of a joint venture company (hereinafter the "JV");

WHEREAS, VICKEM is willing to meet C-ME.com's intention and is ready to invest into the JV;

WHEREAS, C-ME.com and VICKEM have agreed to cooperate in expanding the proposed business of the JV and to establish their relationship as shareholders of the JV by entering into this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows:

1. Provisions for the Incorporation of Joint Venture Company

   1. Organization and Registration. After the Effective Date of this Agreement, the parties hereto shall promptly cause JV, under the name of "C-ME (Far East) Co., Ltd." to be organized and registered as a company with liability limited by shares under the laws of either Thailand or the United States. All costs necessary therefor shall be borne by JV. The parties hereto shall fully cooperate with each other with respect to the procedures and particulars of the organization and registration of JV.

   2. Market Region. The region in which JV operate and have activities in shall be Thailand, Philippines, Vietnam, Burma, Laos and Cambodia (hereinafter the "Market Region"). JV shall have the right of first refusal to include Korea in the Market Region. In consideration for the risk, investment and effort involved in developing the Market Region, C-ME.com agrees and undertakes to retain, on an exclusive basis, the region solely for JV. If C-ME.com shall breach this exclusivity obligation, C-ME.com shall be liable for the capital invested by VICKEM plus interest of 24% per annum.

   3. Business Purpose of Joint Venture. The purpose of this joint venture is to:
      
      
      • Allow, through C-ME.com's proprietary web-based communicated system to facilitate the front-end merchandise sourcing of the following:
        
        
        • Retailers to communicate, conduct negotiations, and facilitate sourcing (searching for and locating products) directly from manufacturers and exporters (hereinafter "Vendors") from the Market Region and for such Vendors to have guaranteed access and continuous electronic feedback directly from the retailers.
          
          
        • Retailers from the Market Region to communicate, conduct negotiations, and facilitate sourcing (searching for and locating products) directly from Vendors and for such Vendors to have guaranteed access and continuous electronic feedback directly from the retailers.
          
          
      • Establish other internet-related businesses to be approved by the Board of Directors.
        
        

   4. Capital of JV. The authorized capital of JV shall be one million U.S. dollars (US$1,000,000), or its equivalent in Thai Baht. Five million (5,000,000) shares with par value of twenty cents (US¢ 20) per share, or its equivalent in Thai Baht, shall be subscribed and paid by the parties hereto within one (1) month after the Initial Shareholders' Meeting of JV. The number of shares to be subscribed and the amount to be paid in cash on the above subscription by each of the parties hereto shall be as follows:
      • VICKEM consortium   60%   3 million shares   US$600,000
        
        
      • C-ME.com consortium   40%   2 million shares   US$400,000

   5. Restriction of Transfers. The parties hereto agree that the founding shares of JV are non-transferable for one year. Both parties further agree to inform the other party of the intention to sell or transfer shares after the one-year restricted period and before JV becomes a publicly traded company.
      
      Except in accordance with prior written approval from the other party, the parties hereto agree that any shareholder of JV shall not sell, assign, grant, transfer title or rights to, nor otherwise pledge or encumber any of the shares of JV held by itself in any way whatsoever, to any market competitor, nor take any action leading to or likely result in any of the foregoing.

   6. Right of First Refusal. In the event a party at any time desires to sell any or part of its shares to a third party, the other party shall have the right of first refusal to purchase the same. If such right of first refusal is not exercised within the period of fifteen (15) days after the offer, the selling party may then offer its shares to the third party.

   7. Additional Capital. Should the parties hereto determine that additional capital is required for JV beyond the capital to be contributed by the parties hereto pursuant to Clause A.4 hereof, such additional capital shall be funded in the following manner:
      • Proportionate to the percentage ownership of each party; else
        
        
      • If one party does not participate, in part or in full, in the capital increase, the other party has the right of first refusal to fund the balance of the required capital increase; else
        
        
      • If both parties do not participate, in part or in full, in the capital increase, a third party may be invited to provide the required funds in return for an equivalent percentage shareholding in the JV.

   8. Guarantee to Lender. If any lender requires guarantees as a condition to make a loan to JV, the parties hereto undertake to provide the guarantee respectively in proportion to their shareholding ratio in JV.

   9. No Competition. The shareholders shall not, in the Market Region, engage in any business activity, either directly or indirectly, in any manner or capacity, on its own behalf or on behalf of any other person, firm, corporation or organization, that may interfere with or impair its ability to perform any of its duties or obligations under this Agreement, nor accept or continue any obligations which may interfere with or impair its ability to perform any of its duties or obligations under this Agreement. A breach of this clause will result in the defaulting party to be liable for the capital invested by the non-defaulting party plus interest of 24% per annum.

2. C-ME.com's Responsibilities and Contributions

   1. Retail Buyer Relationships. C-ME.com is responsible for supporting relationships with existing retail partners and facilitating each retail partner's use of its service as their primary internet merchandise sourcing method, and developing new relationships with large U.S.-based retailers such as Wal-Mart, K-Mart, Sears, J.C. Penney, etc.

   2. Joint Venture Relationships. C.ME.com is responsible to ensure that C-ME.com's joint venture companies outside the Market Region guarantee the direct communication, negotiation, and sourcing between their retailers and JV's Vendors and their Vendors with JV's retailers through C-ME.com's proprietary web-based communication system.

   3. Product Information Maintenance: C-ME.com is responsible for maintaining the Vendors' product and information from the Market Region on its servers in order to "push" or broadcast such information to U.S.-based retail buyers. C-ME.com shall permit and guarantee access to its servers for JV and its Vendors to update, communicate and transact with retail buyers.
      
      JV shall be responsible to host all Vendors' product and information on its servers in order to "push" or broadcast such information to retail buyers in the Market Region.

   4. Training. C-ME.com is responsible for training and enhancing the skills of JV's employees to be proficiently skilled at using Software, at C-ME.com's expense. All costs related to the initial training, including food and accommodation expenses, shall be borne by C-ME.com. Thereafter, food and accommodation expenses for any further training shall be borne by JV.

3. VICKEM's Responsibilities and Contributions

   1. Vendor Relationships. VICKEM's overall responsibility is to help JV secure additional Vendors for JV.

   2. Retail Buyer Relationships. VICKEM's overall responsibility is to help JV develop new relationships with retail partners in the Market Region and facilitating each retail partner's use of its service as their primary internet merchandise sourcing method.

   3. Offices. VICKEM will help JV secure conveniently located office space and procure the necessary accessories and equipment (computer, scanner, digital camera, telephone, facsimile machines, etc.) at reasonable market prices in order for JV to provide and support its services to Vendors.

4. Revenue Distribution

   • Subscription Fees:
     Each manufacturer who wishes to be on our ISN pays fixed subscription fees. The subscription fee structure will be adjusted according to local business environment. A revenue sharing program will work as follows:
     (Note: Current Subscriptions Fees are (in USD): USA 2100, Taiwan 1000, Hong Kong 1000, China 600)
     
     Example:
     C-ME.com Germany secures a retailer (Karstadt-Hertie), and an exclusive ISN extranet is set up for Karstadt-Hertie. After the installation of Karstadt-Hertie ISN, all other C-ME.com's regional offices will be notified. C-ME.com Thailand will enlist as many manufacturers as possible to be on KH ISN, with an annual subscription fee of 1000 USD from Thai manufacturers. C-ME.com Thailand will retain 90% of the subscription fee, while 10% will be paid to C-ME.com Germany. Other regional C-ME.com JV companies from other countries will also perform similar activities. It is therefore to the JV Company's best interest to enlist quality and reliable manufacturers to attract large and reputable retailers. Retailers want reliable and quality manufacturers to be on their ISN network. Please note that a retail group is one exclusive ISN, therefore the more retail groups we have, the more ISN we will establish. Furthermore, a manufacturer can join more than one ISN, depending on the needs of the retailers. The Regional JV Partner can decide the subscription fees for multiple ISN.

   • Transaction Fee Paid by Retailer:
     Retailers will pay a 5% transaction commission to the JV Company that enlisted the retailer. (One ISN, Factory 2 U, has already signed the agreement) A revenue sharing scheme will work as follows:
     
     Example:
     C-ME.com USA will receive a 5% transaction commission from F2U ISN transactions. 70% will be retained by C-ME.com USA, and 30% will be paid to the JV Company that enlisted the transacting manufacturing vendor (C-ME.com Thailand)

   • Transaction Fee Paid by Manufacturers:
     At the present time, we are seeking the possibilities of manufacturers to pay transaction commissions as well. If manufacturers pay a percentage commission, the revenue sharing scheme will work similar to the above listed transaction fees paid by the retailers.
     
     Example:
     A transaction is completed between C-ME.com Thailand's client (Company A) and Factory 2 U, using the F2U ISN. A 5% percentage commission is paid to C-ME.com Thailand. C-ME.com Thailand will retain 70%, while 30% will be paid to C-ME.com USA who is responsible for the care taking of F2U business relationship, and ISN operation.

5. Management of Joint Venture Company

   1. General Meeting of Shareholders. A quorum for a general meeting of the shareholders of JV shall require the presence, in person or by proxy, of shareholders of JV holding one half (1/2) or more of the total issued and outstanding shares of JV entitled to vote. Resolutions of a general meeting of the shareholders of JV shall be adopted by an affirmative vote of half (1/2) of shares represented, in person or by proxy, at a meeting at which a quorum is present.

      Decisions on the following matters shall be made by special resolution only which shall require affirmative votes not less than three-fourths (3/4) of the shares held by shareholders, in person or by proxy, present at the meeting:

      • Transfer or change of all or an important part of JV's own business
      • Granting of subscription rights to new shares of stock of JV to any person other than shareholders of JV
      • Merger with or acquisition of all or an important part of other company
      • Increase or decrease of the capital stock
      • Dissolution of JV

   2. Board of Directors of JV. The directors of JV shall be elected at the General Meeting of Shareholders. The number of directors of JV shall be five (5). Three (3) of the directors shall be nominated by VICKEM and two (2) of the directors shall be nominated by C-ME.com. In case of death, resignation or removal of a director prior to the end of his/her term, VICKEM or C-ME.com shall agree to appoint such new director who is nominated by the other company until the end of his/her term.

      Responsibility for the management and direction of JV shall be vested in the Board of Directors. A quorum for the Board of Directors shall require the presence of four (4) directors and any resolutions of the Board of Directors shall be adopted by the affirmative vote of three (3) or more of the directors.

   3. Management Personnel. The nomination and appointment of the management personnel of JV shall be vested with the Board of Directors. The management personnel shall be responsible for the planning and control of JV's human resource.

6. Confidentiality and Proprietary Information

   1. Proprietary Information. Neither party shall, without the other party's prior written consent, disclose, provide, or make available any of the Proprietary Information of the other party in any form to any person, except to bona fide employees, officers, directors or consultants of such party whose access is necessary to enable the establishment of the JV and who are similarly bound to hold the Proprietary Information in confidence. Proprietary Information as used in this Agreement includes, without limitation, all information disclosed at any time before, after or at the time of execution of this Agreement between the parties and relating to their respective businesses, customers, products, services, patents, copyrights and/or other intellectual property rights, methods, marketing and sales plans, financial status, strategies and the like and any other confidential information or trade secrets which have been or will be disclosed between the parties. Provided, however, such obligations shall not apply to any information which is or becomes published or otherwise generally available to the public.

7. Term and Termination

   1. Term. This Agreement shall become effective upon execution by both parties and shall continue in effect thereafter until the establishment of the JV as signified by the signing of the Corporation By-laws and the Shareholders' Agreement, both of which shall supercede this Joint Venture Agreement.

   2. Termination. This Agreement shall terminate under the follow circumstances:
      • In the event of a default or material breach of any provisions of the Agreement by either of the parties hereto, if the non-defaulting party gives notice in writing of such default or breach and such default or breach is not cured within thirty (30) days after such notice, the non-defaulting party giving such notice shall have the right to terminate this Agreement at any time thereafter by giving written notice of the termination.
        
        
      • In the event of an occurrence of any of following events which exist as to either party, the non-defaulting party shall have the right to terminate this Agreement at any time after giving a written notice of the termination:
        
        
        • entry of an order for relief under applicable bankruptcy laws
        • action under applicable insolvency or similar law in effect for the purpose of bankruptcy, dissolution, liquidation or winding up
        • cancellation of permits or approvals by government order, or other conditions that will interfere with its performance of this Agreement

   3. Effect of Termination. Upon termination of this Agreement, the non-defaulting party shall have the option to request the defaulting party to assign its whole shares of JV to such non-defaulting party or any third party nominated by it. Upon such request, the defaulting party shall consummate the sales of the shares within thirty (30) days. The price of the shares shall be calculated based upon the book value of the assets of JV at the time of such request.

8. Arbitration

   1. All disputes, controversies or differences that may arise between the parties hereto, out of or in relation to or in connection with this Agreement, or for the material breach thereof, shall be settled in Thailand through bona fide negotiations between the parties hereto. Should such negotiation fail to come an agreement for settlement within two (2) months after the commencement thereof, either of the parties may require the final settlement under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the Rules. The award to be rendered shall be final and binding upon both parties hereto.

9. General Provisions

   1. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior agreements between the parties, whether written or oral, relating to the same subject matter. No modifications, amendments, or supplements to this Agreement shall be effective for any purpose unless in writing and signed by the parties.

   2. No Waiver. The waiver by either party of a breach or default in any of the provisions of this Agreement by the other party shall not be construed as a waiver of any succeeding breach of the same or other provisions; nor shall any delay or omission on the part of either party to exercise or avail itself of any right, power, privilege that has or may have hereunder operated as a waiver of any breach or default by the other party.

   3. Force Majeure. Any delay or nonperformance of any provision of this Agreement (other than for the payment of amounts due hereunder) caused by conditions beyond reasonable control of either party or its employees, shall not constitute a breach of this Agreement, and the time of performance of such provision, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing such performance.

   4. Severability. If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable, the invalidity of such provision shall not affect the other provisions of this Agreement, and all provisions not affected by such invalidity shall remain in full force and effect.

   5. Governing Law. This Agreement and any disputes arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the country of incorporation of JV.

   6. Headings. Headings contained in this Agreement are for reference purposes only and do not form part of this Agreement and shall not be deemed to alter or affect the meaning of any of the provisions hereof or the interpretation hereof.

   7. Section F shall survive any termination of this Agreement.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly executed this Agreement to become effective as of the date first above written.

Accepted by:
Vickem Patana Co., Ltd.

By: /s/ Padoongkiat Apichaidejudom
Mr. Padoongkiat Apichaidejudom
Executive Director

Accepted by:
Cyber Merchants Exchange, Inc.

By: /s/ Frank Yuan
Mr. Frank Yuan
Chairman & CEO

C-ME.com/Taiwan Joint Venture Agreement

1. Participating Entities
   Cyber Merchants Exchange (d.b.a. C-ME.com)
   Abest Tech Company, Ltd (d.b.a. Ab.net.tw)

2. Purpose of Joint Venture

   The purpose of this joint venture is to allow U.S. based retailers to buy directly from Taiwanese manufacturers and exporters. and Taiwanese manufacturers and exporters to sell directly to U.S. based retailers. The buying and selling will be facilitated using C-ME.com's proprietary web-based communication system.

3. III. Name of Joint Venture
   C-ME.com/Taiwan

4. IV. Corporate Structure:
   1. Security: Common Stock
   2. Number of Shares and Amount To Be Issued:
      C-ME.com/Taiwan will authorize 10 million share at a par value of NTD 10 per share. Initially, three million shares will be issued at par value, reflecting the total initial capital investment of NTD 30 million.
   3. Distribution of Ownership:
      
      C-ME.com will invest NTD 9 million to gain 900,000 shares of C-ME.com/Taiwan representing 30 percent of the outstanding shares. Abest Tech Company, Ltd will invest NTD 21 million to gain 2,100,000 shares of C-ME.com/Taiwan representing 70 percent of the outstanding shares. Therefore, the total shares initially issued is 3 million with a total value of NTD 30 million.
      
      C-ME.com will wire the funds to Taiwan. Due to exchange rate fluctuation, the amount wired may not be exactly 9 million NTD. Abest Tech Company, Ltd will therefore adjust the total amount it invests so that the percentage invested will remain the same. (70 percent by Abest Tech Company, Ltd and 30 percent by C-ME.com)
      
      C. Restrictions
      
      1. In accordance with the commercial laws of the Republic of China, Taiwan, both entities agree that the founding shares of the new company are non-transferable for one year.
         
      2. Both entities further agree that each must inform the other entity if they wish to sell the shares after the one year restricted period and before C-ME.com/Taiwan becomes a publicly-traded company. Furthermore, either entity must attain written permission from the other entity before it may transfer any shares to a market competitor.

   1. C-ME.com remittance will be net of Taiwanese taxes.

5. Management
   
   1. Board of Directors
      C-ME.com/Taiwan's corporate bylaws will establish a total of five board seats with two to be filled by C-ME.com and three to be filled by ABNet.
      
      
   2. Board Supervisors
      C-ME.com/Taiwan will also have two board of supervisors, with C-Me.com and ABNet each appointing one board of supervisor.
      
      
   3. Management and Marketing
      ABNet will have sole discretion over the hiring and training of the employees of C-ME.com/Taiwan , executing the marketing plan, and maintaining all accounting functions. C-ME.com/Taiwan's board of directors will establish C-ME.com/Taiwan's general business direction, plan its budget and marketing plans prior to implementation by C-ME.com/Taiwan's management.

6. Revenue Distribution
   
   1. C-ME.com will receive 70 percent and C-ME.com/Taiwan will receive 30 percent of any transaction commission received from U.S. retail partners. C-ME.com's retail partners will pay five percent of the seller's invoice on any purchases made from C-ME.com/Taiwan's vendors using C-ME.com's Internet Sourcing Network.
      
      
   2. C-ME.com will receive 30 percent and C-ME.com/Taiwan will receive 70 percent of any transaction commission charged to C-ME.com/Taiwan's vendors based on invoice amount of goods vendors sell to C-ME.com's retail partners.
      
      
   3. C-ME.com will receive 10 percent and C-ME.com/Taiwan will receive 90 percent of any monthly subscription fees charged to C-ME.com/Taiwan's vendors.

7. Agreement
   This agreement shall be governed by and construed in accordance with the Republic of China, Taiwan commercial laws, applicable to agreements made and wholly to be performed within said country. In the event of any legislation, the code of Taiwan will regulate such legislation.

This agreement shall be binding upon and shall inure to the benefit of the parties, their personal representatives, nominees, transferees, successors and assigns.

Cyber Merchants Exchange, Inc.
(d.b.a. C-ME.com)

/s/ Frank S. Yuan
Frank S. Yuan
Chairman & CEO

Abest Tech Company, Ltd.

/s/ Hsiao-Pai Chen
Hsiao-Pai Chen
Chairman

SUMMARY TERMS AND CONDITIONS
C-ME.COM AND FACTORY 2-U
JOINT MARKETING AND COOPERATION AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the adequacy of which are hereby acknowledged, Cyber Merchants Exchange, Inc. ("C-Me.com") and Factory 2-U Stores, Inc. ("Factory 2-U") hereto agree as follows:

• Factory 2-U's policy will be that all current and future vendors of Factory 2-U, as part of the cost of doing business, will be required to pay C-ME.com's subscription fee in an amount equal to, at each vendors election, either $150/month or 2.5% of all purchases by Factory 2-U from such vendor. Not withstanding the foregoing, so as not to harm its vendor relationships, Factory 2-U's management will have sole discretion in deciding which vendors they exempt from their standard policy. Factory 2-U cannot guarantee or represent the degree to which its vendors will participate.

• Factory 2-U will provide C-ME.com with a contact list for their existing vendor base and will allow C-ME.com to solicit those vendors. C-Me.com will keep the list confidential and will not disclose the list with out Factory 2-U's consent.

• Factory 2-U will agree to a joint marketing relationship where C-ME.com may, at Factory 2-U's expense (within parameters and at costs to be unilaterally set by Factory 2-U), utilize the Heil Brice advertising agency for creative direction in marketing. This clause will be renewed annually at Factory 2-U's discretion.

• C-ME.com will be able to solicit all off-price retailers except Ross, Value City, TJX Corporation and any future retailer that directly imitates the Factory 2-U concept. This would leave Ames, Dollar General, Family Dollar, Consolidated Stores, 99¢ stores, Dollar Tree and others.

• Factory 2-U will forgo all subscription fee-sharing agreements as soon as, and for such period as, Burlington Coat Factory does the same.

• Factory 2-U, in their sole discretion, will allow C-ME.com to have a full time person share space free of charge in Factory 2-U's New York office. Factory 2-U will have no obligation under this agreement with respect to sharing their New York office until that office has been opened. The Factory 2-U's New York office is not scheduled to be opened until 2001 or such later date as Factory 2-U deems appropriate

• Factory 2-U senior management, when they attend, will set aside time to be available for pre-set joint meetings at Magic.

• Factory 2-U CEO, Mike Searles, will be available via phone to answer questions from potential investors during C-ME.Com's upcoming "road-show".

• Factory 2-U agrees not to participate with other third party internet providers, which would specifically build a private extranet for the purpose of aggregating vendors into a private channel for merchandise sourcing purposes, for Factory 2-U use. This will not preclude Factory 2-U from using the Internet to source merchandise from individual manufacturers or Internet sites.

• C-ME.com will issue to Factory 2-U a warrant to purchase shares of C-ME.com which is reasonably acceptable to Factory 2-U. The warrant will be issued Thursday May 11, 2000 and will have the following attributes;

  • Right to purchase a number of shares of C-ME.com's common stock (CMEE.OB) such that after taking into effect the issuance of those purchased shares, the purchased shares will represent 10% of the common stock outstanding after the completion of C-ME.com's private placement.

  • The strike price of the warrant will be the per share price confirmed on C-ME.com's private placement.

  • Standard participation rights for any future funding including, but not limited to, the issuance of all classes of equity and debt securities.

  • The warrant will have a 5-year term.

  • The warrant will have standard registration rights.

• There are no third party beneficiaries to this agreement.

ACCEPTED AND AGREED

Cyber Merchants Exchange, Inc.

By: /s/ John F. Busey

Date: 05/09/2000

Factory 2-U Stores, Inc.

By: /s/ Michael Searles

Date:

MASTER PURCHASE AGREEMENT

BY AND BETWEEN:

RETEX COOPERATIVE, INC

AND
CYBER MERCHANTS EXCHANGE, INC.

This MASTER PURCHASE AGREEMENT (this "Agreement") is made as of the 20th day of April, 2000 (the "Effective Date"), by and between Retex Cooperative, Inc. ("Retex") a California Company, with offices at 350 5th Ave., Suite 1514, New York, New York 10118, and Cyber Merchants Exchange, Inc., d.b.a. C-ME.com, ("C-ME"), a California Company, with offices at 600 South Lake Avenue, Suite 405, Pasadena, California 91106.

WHEREAS, Retex is a not-for-profit cooperative and desires to obtain certain products and services set forth more fully below on behalf of its Members, as defined below; and

WHEREAS, C-ME has developed technology, and desires to engage in the business of providing a service which utilizes such technology, defined as Internet Sourcing Network ("ISN") - a private extranet built and maintained by the Company according to each Retex member's specifications. These web-based turnkey systems automate the front-end merchandise sourcing activities of members at no cost, and provide tremendous time and cost savings; and

WHEREAS, C-ME receives revenue from Manufacturers, in consideration for providing information about such Manufacturers to potential purchasers, such as but not limited to Members; and

WHEREAS, Retex desires to make available C-ME's products and services to its Members under the terms set forth in this Agreement, and C-ME desires to make its products and services available to such Members under the terms of this Agreement;

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises set forth below,

IT IS AGREED AS FOLLOWS:

1. DEFINITIONS

   1.1 "Affiliate" means any entity controlling or controlled by or under common control with a Member, where "control" is defined as the ownership of at least twenty-five percent (25%) of the equity or beneficial interests of such entity or the right to vote for or appoint a majority of the board of directors or other governing body of such entity, and any other entity with respect to which a Member or any of such Affiliates has significant management or operational responsibility (even though Member or its Affiliate may own less than twenty-five percent (25%) of the equity of such entity); provided that both the Member and each such entity agree that such entity shall be deemed an "Affiliate" under this Agreement.

   1.2 "Aggregate Monthly Revenue" means all monthly revenue received by C-ME in connection with payments made by Manufacturers and payments made by Members, relating to this Agreement, including but not necessarily limited to Base ISN Hosting Fees, Base ISN Set-Up Fees, Change Fees, Excess Hosting Fees, and payment made in connection with C-ME's provision of Special Products and Services.

   1.3 "Base ISN" shall mean the first ISN chosen by a Manufacturer in which the Manufacturer agrees to have C-ME include promotional data with respect to fifteen (15) of the Manufacturer's products and/or services.

   1.4 "Base ISN Hosting Fee" shall mean the monthly fee, set forth in Exhibit A, payable to C-ME by Manufacturers for C-ME's creation and operation of the Manufacturer's Base ISN.

   1.5 "Base ISN Set-Up Fee" shall mean the initial set-up fee payable to C-ME by a Manufacturer in connection with the establishment of such Manufacturer's Base ISN.

   1.6 "Basic Products and Services" means those Products and Services provided by C-ME described in Exhibit B.

   1.7 "Change Fees" shall mean the fees payable to C-ME by any Manufacturer for changes including, but not limited to, additions, deletions, or modifications made by C-ME to such Manufacturer's product information and/or product images.

   1.8 "Commission" means the amount payable by C-ME to Retex, as specified in Section 5.

   1.9 "Domestic" means a type of Manufacturer that is organized under the laws of and has offices in any state in the United States or any United States territory.

   1.10 "Dynamic End-User Portfolio System" or "DEPS" shall mean the proprietary technology developed by C-ME, and more fully described in the Specifications, whereby ISN users can: (i) independently manipulate information contained within their databases including, but not limited to, selectively deleting, restoring, and archiving information, without affecting the databases created by other ISN users, and (ii) receive notifications of new information transmitted to their databases.

   1.11 "Excess Hosting Fee" shall mean the monthly fee payable to C-ME by Manufacturers for the display of any products in excess of the fifteen (15) products and services included in the Base ISN or additional ISNs.

   1.12 "EDI" shall mean the electronic data interchange which provides the capability to exchange business documents and transfer funds over the Internet.

   1.13 "FOCASTING" shall mean the proprietary technology developed by C-ME, and more fully described in the Specifications, whereby ISN users can create their own private web pages by selecting categories and product lines which fall within their specific areas of interest to be pushed and broadcast to such web pages.

   1.14 "IMA" means an Individual Member Agreement, entered into by and between a Member and C-ME, in the form set forth in Exhibit C, or such other written agreement that Retex expressly approves in writing and deems to be an IMA for purposes of this Agreement.

   1.15 "Manufacturer" means those Domestic and Non-Domestic suppliers of goods and services from which C-ME obtains information for the purpose of making such information available to Members via ISNs pursuant to this Agreement.

   1.16 "Member" means any member or patron of Retex in good standing which has elected to purchase C-ME's Products and/or Services under this Agreement, and its Affiliates, and which has entered into an IMA, however, notwithstanding the foregoing, the companies set forth in Exhibit D shall not be considered Members and are excluded from participating in this Agreement.

   1.17 "Member ISN" shall mean the ISN created and maintained by C-ME for a Member's exclusive use.

   1.18 "Non-Domestic" means other than a Domestic Manufacturer.

   1.19 "Products and Services" shall mean all those products and services provided by C-ME to Members under this Agreement and under the IMA.

   1.20 "Special Products and Services" means those Products or Services provided by C-ME to a Member that are not set forth in Exhibit B.

   1.21 "Specifications" means the descriptions of Basic Products and Services set forth in Exhibit B, and those additional specifications set forth in all user manuals, operator manuals, product specifications, technical manuals, training manuals and marketing brochures set forth in Exhibit E.

2. SCOPE OF AGREEMENT

   This Agreement shall apply to all Products and Services provided to Members. Upon the agreement of C-ME and a Member as to each Product or Service to be provided by C-ME, an IMA shall be executed by C-ME and the Member. Execution of such IMA shall constitute an agreement by such Member and C-ME that all of the terms and conditions of this Agreement shall govern such Member's purchase of Products or Services from C-ME specified in such IMA. ANY ORDER OR OFFER, OR ATTEMPTED ORDER OR OFFER CONTAINING TERMS AND CONDITIONS INCONSISTENT WITH OR IN ADDITION TO THE TERMS AND CONDITIONS OF THIS AGREEMENT IS NOT BINDING UPON C-ME OR MEMBER UNLESS APPROVED BY RETEX IN WRITING.

3. PRICE AND COMMISSION

   3.1 General. C-ME shall pay Retex a Commission as set forth in Exhibit A. Members shall have the right to obtain Basic Products and Services without any charge whatsoever. In the event a Member desires to purchase Special Products or Services, the Member shall be responsible for payment therefor as set forth in Exhibit A. Neither the Commissions nor the rates and charges listed in Exhibits A are subject to any minimum revenue or term commitments. Such prices are the maximum prices for Products and Services during the term of this Agreement, and shall be reduced by the discount set forth in Exhibit A.

   3.2 New Products and Services. Any new, replacement or substitute Product or Service introduced by C-ME will be added to this Agreement provided C-ME and Retex agree upon Commission rates and, if applicable, pricing terms. Special Products and Services will be quoted to Members in accordance with Section 16.3 of this Agreement.

   3.3 Discontinuation of Products or Services. C-ME shall not have the right to discontinue Products and Services unless all Members and Retex are notified in writing of C-ME's intent to discontinue a Product or Service at least six months prior to discontinuation. During the six month period and for a period of two months thereafter, C-ME shall fully cooperate with Members and Retex with respect to Members' and Retex's reasonable efforts to find substitutes for Products and Services. Such cooperation shall include but not be limited to providing reasonable access to C-ME's records, agreements, employees, and independent contractors, which relate to this Agreement. Retex and Members shall maintain confidentiality with respect to information obtained through C-ME's cooperation required under this provision.

   3.4 Mutual Exclusivity. Retex shall not enter into contractual arrangements with other similar internet sourcing companies for the purpose of providing sources of merchandise through the use of the internet. C-ME shall not enter into contractual arrangements with other entities involved in group purchasing activities (whether or not such entity is organized as a cooperative) for the purpose of providing sources of merchandise through the use of the internet.

4. PROMOTION

   4.1 Promotion. Retex agrees to promote C-ME, as set forth below, on an exclusive basis, to its Members, and C-ME agrees to promote Retex and this Agreement, as set forth below, on an exclusive basis, to its current retail industry customers and prospective retail industry customers, and in addition, C-ME shall use its best efforts to cause its current retail industry customers and prospective retail industry customers to become Retex Members.

   4.2 Marketing Strategy. Each party shall designate one individual to coordinate that party's promotional activities, and within thirty (30) days after the execution of this Agreement, the parties shall meet and agree upon a joint marketing strategy, including specific tasks, timelines and responsibilities, such tasks may include but are not necessarily limited to minimum annual numbers of joint trade shows, joint advertising in trade journals, joint press and advertising releases, catalogues and brochures, direct mail, telephonic and on-site marketing activities, with associated budgets that divide costs equitably between the parties. Such strategy, plan and budget shall be reviewed and updated on an annual basis. Notwithstanding the foregoing, the parties acknowledge and agree that certain activities must be commenced immediately, before development of the first annual marketing plan. Accordingly, upon effectiveness of this Agreement, Retex shall commence its standard marketing procedures, including development and mailing of product brochures and quarterly newsletter announcement and press releases; and C-ME shall pay to Retex, as its contribution toward such initial production and development costs, a total of $50,000, payable upon execution of this Agreement, and $50,000 upon each anniversary of the Effective Date thereafter. The joint marketing strategy developed by the parties hereunder shall include an accounting for such initial production and development costs and expenditures. If as a result of such accounting an adjustment is warranted, the parties shall agree to an adjustment to the allocation of initial estimated costs, and in such event, appropriate adjustments shall be made to the parties share of future costs to allow recoupment of any over- or under-payments.

   4.3 Trademarks. Neither party shall use the other's proprietary trademarks, services marks, trade names or the like without prior written consent, subject to any and all license limitations.

5. COMMISSION

   C-ME shall pay Retex a monthly Commission based upon Aggregate Monthly Revenue in accordance with Exhibit A. C-ME shall use its best efforts to calculate and remit Commissions owing to Retex, and related Summary Reports (as described in Exhibit F), within thirty (30) days after the close of each month of revenue receipt. As agent for C-ME, Retex shall pay Members all of the Commissions related to such Member's purchases less an amount equal to [5%] of Aggregate Monthly Revenue. Commissions shall be calculated on a net invoice basis as follows: gross invoice minus taxes and other governmental charges.

6. PRODUCTS AND SERVICES

   C-ME agrees to provide Products and Services to Members in accordance with terms and conditions of this Agreement and the applicable IMAs. C-ME shall enroll each Member that elects to purchase Products and/or Services under this Agreement. Existing C-ME customers shall not be assessed or liable for any penalties or charges (termination or otherwise) for or in connection with any amendment to or termination of their existing agreements necessary to enable them to execute IMAs. Once a Member has executed an IMA, or a prospective Member has been identified by Retex to C-ME, C-ME shall not solicit, encourage or allow such Member to terminate its status as a Member hereunder, nor shall C-ME solicit, encourage or allow such prospective Member to order Products or Services other than as a Member hereunder.

7. REPORTS

   7.1 Summary Reports. A monthly "Summary Report," including overall purchase and usage reports, Aggregate Monthly Revenues and Commissions, performance and warranty reports, and marketing information, will be issued by C-ME to Retex for management purposes, in form and content substantially similar to Exhibit F hereto.

   7.2 Audit. At Retex's written request at any time during the term of this Agreement and for a period of three (3) years thereafter, C-ME shall permit an inspection of records during normal business hours by one or more persons chosen by Retex and approved by C-ME, which approval shall not be unreasonably withheld. In the judgment of the inspectors, such inspections may include an inspection of all of C-ME's records and accounts as may contain information bearing upon (a) the compliance by C-ME with the provisions of this Agreement, and/or (b) the amount of Commissions and other fees or sums paid or payable to Retex under this Agreement. Prompt adjustment will be made to correct any underpayments, or overpayments not already distributed by Retex to the applicable Member(s), finally determined by such inspection(s). The cost of such inspection shall be paid by Retex unless such inspection reveals any month's underpayment to Retex of five percent (5%) or more of that month's Commission, in which case the inspection costs shall be paid by C-ME. It is understood that the inspections allowed by this Section 7.2 shall commence on an informal basis, using Retex staff. However, if as a result of any informal inspection, the parties are unable to agree on needed adjustments, Retex may determine to include professional auditors to conduct a more complete examination.

8. SERVICE REQUESTS

   8.1 IMAs. C-ME shall not unreasonably or untimely withhold acceptance of IMAs. C-ME will acknowledge each Member's IMA, which shall be and hereby is deemed to include and incorporate the terms and conditions of this Agreement.

   8.2 Additional Products and Services. All Products and Services shall be provided in accordance with this Agreement and the IMA. Any additional Products and Services not specified on the original IMA may be ordered only by employees who have been authorized by the Member to bind the Member to additional orders. Such authorized employees shall be identified by the Member to C-ME in writing, and the Member shall not be responsible to pay C-ME for any Products or Services unless ordered by an authorized employee pursuant to a new or amended IMA.

9. MEMBER EDUCATION

   "Documentation" for the purpose of this Agreement shall include all user manuals, operator manuals, product specifications, technical manuals, training manuals and marketing brochures applicable to a Product or Service. Member shall have the right, at no additional cost, to reproduce for the internal use of Member and its Affiliates any and all Documentation supplied by C-ME.

10. TERMS AND CONDITIONS

    10.1 Terms. There is no charge to the Member for Basic Products and Services. As to each Special Product and Service, terms of payment shall be net thirty (30) days of receipt of invoice. All amounts are payable by the Member to C-ME at the address set forth in the IMA.

    10.2 Testing and Acceptance. Members and Retex shall have the right to test, accept and reject Products and Services in accordance Exhibit H.

    10.3 Conditions. If a Member fails to make payment within ten (10) days after receipt of a notice of default from C-ME, C-ME may (a) refuse to accept such Member's subsequent requests for Products and Services; (b) allow such Member to make other arrangements satisfactory to C-ME prior to shipment; or (c) cancel such Member's IMA pursuant to the terms therein.

    10.4 Taxes. The Member will pay all sales taxes associated with the sale and delivery of the Products and Services (or provide C-ME with a valid certificate of exemption in form and substance reasonably satisfactory to C-ME), excluding taxes based on C-ME's income.

11. PERFORMANCE WARRANTY

    11.1 Warranty. C-ME represents and warrants to Retex and each Member that the Products and Services shall be without defects or limitations which would render them unsuitable for their intended use, and C-ME will repair, replace or upgrade the Products or Services if such performance standards cannot be met. Products and Services shall perform in accordance with generally accepted industry standards and the Specifications, which are incorporated herein. Additional terms of C-ME's written Warranty are attached hereto as Exhibit G, and shall apply to all Products and Services.

    11.2 ISN Standards

    1. Availability. ISNs created and/or operated in connection with this Agreement, directly or indirectly by C-ME or its agents or independent contractors shall be available to Members and Manufacturers a minimum of 99.9% of the time during any 24 hour period, 99.9% of the time during any 7 day period, and 99.9% of the time during any 30 day period; and there will be no period of interruption that exceeds 24continuous hours.

    2. Response Time. The mean response time for server response to all accesses to the ISNs shall not exceed 10 seconds during any 1 hour period.

    3. Security. C-ME shall prevent unauthorized access to ISNs, other restricted areas of the ISNs and any databases or other sensitive material generated from or used in conjunction with the ISNs, and C-ME shall immediately notify Retex of any known security breaches or holes.

    4. Backup. C-ME shall, at its expense, make, or cause to be made, a complete backup of the ISNs every day which shall be stored at a secure, off-site location. On the first day of every month, and at any other time as reasonably requested by Retex, C-ME shall, at its expense, deliver to Retex a complete electronic copy of ISNs.

    5. Interruptions. C-ME shall maintain, at its expense, a complete current copy of the ISN on a server located at a remote location. In the event that service is interrupted to a ISN, the remote server shall be immediately activated so that Member and Manufacturer access to the ISN continues without interruption.

    6. Remedies for Non-compliance. In the event C-ME fails to adhere to the above standards, the following financial penalties shall apply.

       [financial penalties to be discussed]

    7. INDEMNIFICATION

       C-ME represents and warrants to Retex, its Members and its and their Affiliates, officers, directors, agents, employees and assigns that: (a) it has all right, title and/or interest and authority necessary to deliver and sell the Products and Services hereunder; (b) there is no claim, litigation or proceeding pending or threatened with respect to such Products or Services or any component thereof; and (c) such Products and Services and their components do not infringe or violate any patents, copyrights, mask works, trademarks, trade secrets or other proprietary rights of any third party.

       C-ME agrees to indemnify, defend and hold Retex, Members, Affiliates and their respective directors, officers, agents and employees ("Indemnified Parties") harmless from and against any claim or cause of action for patent and/or copyright infringement, unlawful disclosure or use or misappropriation of a trade secret or other intellectual property right ("Infringement Claim") asserted against any of the Indemnified Parties by virtue of Retex's or Members' use of C-ME's Products or Services. Retex may participate in the defense of the claims by counsel of its own choosing, at its cost and expense.

       Each party shall give prompt notice of any such claim to the other. C-ME shall have the right to control and direct the investigation, defense and settlement of each such claim. Retex shall reasonably cooperate with C-ME in connection with the foregoing at C-ME's expense. Should the Products or Services as used by Retex or Members become, or in C-ME's opinion be likely to become, the subject of an Infringement Claim, C-ME shall at its option and sole expense either: (i) procure for Retex and Members the right to continue to use Products and Services as contemplated under this Agreement, or (ii) modify Products and Services to eliminate any Infringement Claim which might result from use hereunder, provided that the performance of Products and Services must remain the same as provided in the applicable specifications thereof, or (iii) replace Products and Services with an equally suitable, compatible and functionally equivalent non-infringing Product or Service at no additional charge to either Retex or Member.

    8. DISPUTE RESOLUTION

       13.1 Mediation. If a dispute arises out of or relates to this Agreement, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to some other remedy, which may include arbitration, litigation, or some other dispute resolution procedure. This Section 13 is not intended to prevent either party from pursuing any remedy at law or in equity, should the mediation be deemed unsuccessful by either party at its sole and absolute discretion.

       13.2 Qualifications of Mediator. The qualifications of the mediator shall be as follows:

       1. Attorney at law licensed in the State of New York.

       2. A minimum of five years of professional legal experience in which at least 50% in each year has been in the specialty field of computer law.

       3. A minimum of at least fifteen years of professional legal experience overall.

       13.3 Selection Process. In the event a mediator is required, the parties shall request the American Arbitration Association to provide, within 10 days of the request, a list of ten qualified mediators, to be ranked by each party hereto, from first choice to tenth choice (i.e., ranked 1 - 10). Each party shall submit its ranking to the American Arbitration Association within 10 days of receipt of the initial list. Within 5 days of receipt of the rankings from the parties hereto, the American Arbitration Association shall appoint the mediator having the lowest score overall (i.e., highest rank) and give notice to the parties accordingly. In the event of a tie, the American Arbitration Association shall select the mediator, giving the most weight to the candidates' experience in computer law.

       Either party has the right to reject the appointed mediator in the event of a party's reasonable belief of a conflict in interest, in which event the next highest ranked mediator shall be appointed.

       13.4 Location. The mediation shall be held in New York City.

    9. CONFIDENTIALITY

       14.1 Agreement. Each party may, during the course of this Agreement or in connection herewith, have access to, and acquire knowledge from, lists, material, data, systems and other information of or with respect to the other, Members, suppliers and business, which may not be accessible or known to the general public, including but not limited to Membership and prospect lists ("Confidential Information"). Any knowledge acquired by a party hereto (the "Recipient") from such Confidential Information or otherwise in connection herewith shall not be used, published or divulged by the Recipient to any other person, firm or corporation, in any manner or connection whatsoever, without first having obtained the written permission of the party who disclosed the information (the "Discloser").

       14.2 Exceptions. The obligations of Section 14.1, above, shall not apply to the extent (a) a party hereto is required by law to respond to any demand for information from any court, governmental entity, or governmental agency, or as may be required by federal or state securities laws, (b) disclosure is necessary to be made to a party's independent accountants, attorneys, auditors (technical and otherwise) and the like under the obligations of confidentiality set forth in Section 14.1, (c) the parties may mutually agree in writing, and/or (d) information is (i) published or otherwise available to the public other than by the recipient's breach of this Section 14.1, (ii) otherwise rightfully received from a third party without obligations of confidentiality to the owner thereof, (iii) independently developed by employees having no access to the disclosed information, (iv) known prior to its first receipt from the owner thereof under this or any other agreement of the parties, or (v) disclosed by the owner thereof to a third party without restriction; provided that the owner shall be provided advance notice and opportunity to object thereto. Notwithstanding the foregoing, public disclosure shall not affect patents, copyrights, trademarks or mask works.

       14.3 Equitable Relief. Each party acknowledges and agrees that, in the event of its threatened or actual breach of the provisions of this Section 14, damages alone will be an inadequate remedy, that such breach will cause the Discloser immediate and irreparable injury and damage, and that the Discloser shall therefore be entitled to injunctive and other equitable relief in addition to, and not in lieu of, any remedies they may have at law or under this Agreement.

       14.4 Survival. The term of the provisions of this Section 14 shall survive termination or expiration of this Agreement or any determination that this Agreement or any portion hereof is void or voidable.

    10. TERM OF AGREEMENT

        15.1 Term. This Agreement shall be in full force and effect beginning on the Effective Date, and shall remain in effect until 2 years thereafter or until terminated in accordance with its terms or by mutual written agreement of the parties (the "Term"). Unless either party gives written notice to the other party at least sixty (60) days prior to the end of the initial Term, the Term will continue on a year-to-year basis until the end of any additional one-year Term or until this Agreement is terminated by either party on at least sixty (60) days prior written notice to the other party.

        15.2 Termination After Cure Period. Any party entitled to terminate this Agreement under any of the provisions outlined herein or otherwise by reason of a material breach hereof (the "Terminating Party") may terminate this Agreement so long as such Terminating Party gives the other party thirty (30) days' written notice specifying the events or circumstances giving rise to the notice. The termination shall become effective after the lapse of such thirty (30) days, unless within such thirty (30) days the events or circumstances specified in the notice have been remedied or a plan for remedying them in a prompt and effective manner has been proposed by the other party and accepted by the Terminating Party.

        Retex shall have the right to terminate this Agreement immediately in the event of any Triggering Event described in Section 15.5.

        15.3 Expiration/Continuation of Rights. Upon termination or expiration of this Agreement for any reason, the rights and obligations, terms and conditions, of this Agreement shall expire; except that (a) the provisions of Sections 4.3, 7.2, 11.1, 12, 14, 15.3, 15.4, 16.4, Exhibit A and Exhibit G shall survive the term of this Agreement, and (b) Retex shall continue to receive Commissions as if this Agreement were in effect, and the terms and conditions of this Agreement shall continue to apply until the later of: (i) one year subsequent to termination; or (ii) the expiration of all IMAs.

        15.4 Cooperation Upon Termination. Upon the termination of this Agreement for any reason, C-ME shall provide reasonable assistance, without charge, to Retex and Members for 90 days subsequent to such termination. Reasonable assistance shall include, but not be limited to providing access to employees, independent contractors, documents, developers tools, , data basis, and other personnel and sources of information reasonably related to Retex or Member's interest in avoiding disruption of the functionality provided by Products and Services.

    11. GENERAL TERMS

        16.1 Compliance With Laws. Each party shall, at its own expense, operate in full compliance with all laws, rules and regulations applicable to, and maintain in force all licenses and permits required for, its performance under this Agreement. Each party shall notify the other in writing immediately of the commencement or threatened commencement of any action, suit or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency or other governmental instrumentality, involving its activities under this Agreement or which may affect its ability to perform its obligations hereunder.

        16.2 Responsibilities. The payment of charges for Special Products and Services ordered under an IMA by a Member, and all other responsibilities and obligations of such Member under such Agreement, shall be the sole responsibility of such Member. In no event shall Retex or any other Member be liable, responsible for or affected by the payment or non-payment of charges for any Products or Services furnished to, or any other responsibilities or obligations of, such Member under such Agreement; nor shall any Member be liable, responsible or affected by any responsibility or obligation of Retex hereunder.

        16.3 16.3 Most Favored Customer. C-ME represents, warrants and agrees that the terms, conditions, benefits, warranties, prices, allowances, discounts, rebates, credit, and all rates and charges ("Terms") to Retex Members under this Agreement and any IMA are and shall be throughout the Term of this Agreement, comparable to or more favorable than, and if less favorable than shall be modified to the most favorable such Terms heretofore or hereafter charged by C-ME to any non-Retex customer for comparable products and services under comparable terms. If at any time during the Term of this Agreement, C-ME shall contract with any other non-Retex person or entity for Terms more favorable to such person or entity, C-ME shall notify Retex and each affected Member of such more favorable Terms, and such more favorable terms shall be available to Retex and such Member under this Agreement and the relevant IMAs, retroactive to the date of any such contract. Notwithstanding the foregoing, contractual arrangements between C-ME and the companies set forth in Exhibit D shall not apply to this Section 16.3.

        16.4 Applicable Laws. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, but without giving effect to the choice of laws provisions thereof.

        16.5 Alterations and Waivers. The waiver, amendment or modification of any provision of this Agreement or any right, power or remedy hereunder, whether by agreement of the parties or by custom, course of dealing or trade practice, shall not be effective unless in writing and signed by the party against whom enforcement of such waiver, amendment or modification is sought. Terms of this Agreement shall not be amended or changed by the terms of any purchase order or acknowledgment, even though a party may have signed such documents. No failure or delay by either party in exercising any right, power or remedy with respect to any of the provisions of this Agreement shall operate as a waiver of such provisions with respect to such occurrences; nor shall any extension of time or other indulgence granted to a party hereunder otherwise alter or affect any power, remedy or right of the other party, or the obligations of the party to whom such extension or indulgence is granted.

        16.6 Severability. In the event any non-material provision of this Agreement or the application of any such non-material provision shall be held to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability; but, the remaining provisions of this Agreement shall remain in full force and effect, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties shall use their best efforts to replace the provision that is contrary to law with a legal one approximating to the extent possible the original intent of the parties.

        16.7 Parties Independent. Each party is an independent contractor, and this Agreement shall not be construed as creating a partnership, joint venture or employment relationship between the parties or as creating any other form of legal association that would impose liability on one party for the act or failure to act of the other party. Neither of the parties (including its affiliates, agents, representatives, employees or others acting on its behalf) is a representative of the other for any purpose, and no such party has any power or authority to represent, act for, bind, or otherwise create or assume any obligation on behalf of the other party for any purpose whatsoever, except that Retex Members shall be intended third party beneficiaries of this Agreement.

        16.8 Assignment. Except as otherwise provided by the terms of this Agreement, this Agreement is not transferable or assignable, whether in whole or in part, except in the event of a merger, consolidation or sale of all or substantially all of the assets of a party, provided that the purchaser or assignee, by written contract or by operation of law, assumes all of such party's rights and obligations hereunder. Any transfer or assignment in derogation of the foregoing shall be void.

        16.9 Notices. All notices or other communications which shall or may be given pursuant to this Agreement shall be in writing, shall be effective upon receipt, and shall be delivered by certified or registered air mail, facsimile transmission or electronic or telex mail addressed as set forth below (or as is provided in the future by written notice):

        If to C-ME:

        C-ME.com
        600 South Lake Avenue
        Suite 405
        Pasadena, CA 91106

        Attn: Serena Kokjer-Greening
        Chief Operating Officer

        If to Retex:

        Retex Cooperative, Inc.
        350 Fifth Ave., Suite 1514
        New York, NY 10118

        Attn: Charles Presti

        16.10 Copies of Agreement. This Agreement may be executed in any number of copies, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

        16.11 Complete Agreement; Modifications. This Agreement, and any schedules, annexes, exhibits and other documents referred to herein or executed contemporaneously herewith (all of which are incorporated herein by this reference), constitutes the entire agreement between the parties with respect to the subject matter hereof, and may not be amended, altered or modified except by a writing signed by the parties. This Agreement supersedes all prior written, and all prior and contemporaneous oral, agreements, representations, warranties, statements, promises and understandings with respect to the subject matter hereof.

    
    IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the Effective Date.

CYBER MERCHANTS EXCHANGE, INC.

/s/ Frank Yuan
By: Frank Yuan
Its: Chairman & CEO

____________________________
April 20th, 2000

RETEX COOPERATIVE, INC.

/s/ Umberto J. Gallo
By: Umberto J. Gallo
Its: President

____________________________
April 20th, 2000

EXHIBIT A
PRICING AND COMMISSIONS

1. Products and Services

   Basic Products and Services. Basic Products and Services are free of charge to a Members.

   Special Products and Services. Special Products and Services will be provided by C-ME to Member and billed on a time and materials basis. Rates will be in accordance with C-ME's then current rate schedule. Member will receive a 15% invoice discounts for these services, and the discount will be noted on the invoice as a "Retex Value Added Discount".

2. ISN Hosting Fees

   All Manufacturers will pay C-ME a $150.00 per month Base ISN Hosting Fee for a Base ISN, and $30.00 per month for each additional ISN in which the Manufacturer agrees to include itself in any manner or form.

3. Commission:

   Retex will receive a commission based on the following tier(s) of Aggregate Monthly Revenue:

Once a tier has been reached, the Commission rate applicable to that tier shall apply to all Aggregate Monthly Revenue.

Commission payments shall be made on a monthly basis within thirty (30) days after the end of the immediately preceding month, together with a statement showing revenues and a computation of fees payable for such preceding month. Member and Retex shall have the right to audit C-ME's books and records from time to time to ensure the accuracy of statements provided, and payments made under this Agreement. C-ME shall make best efforts to collect all fees due from Manufacturers and Members.

EXHIBIT B
BASIC PRODUCTS AND SERVICES

1. Internet Sourcing Network ("ISN")

   The cornerstone of C-ME's services is Internet Sourcing Networks ("ISNs"). An ISN is a private extranet built and maintained by C-ME according to each Retex Member's specifications. These web-based turnkey systems automate merchandise sourcing (front-end) activities for retailers in an efficient manner at no cost to them.

   ISNs allow retailers and vendors to conduct business using any internet connection without investing in expensive hardware, software or training. Retex Members create personalized profiles, and get product information on only the products they want to buy. After paying to join a retailer's ISN, small and large vendors can get instant feedback about purchasing needs and decisions, and make product changes and additions instantly. Vendors who join an ISN can update product listings and photographs any time from any computer with an Internet connection.

2. Virtual Trade Show

   This centralized product showcase features vendors' products, allows buyers to freely search or customize searches, and allows vendors to directly reach a wider universe of buyers.

3. Wholesale Auction Center

   This auction provides a vertical marketplace for retailers to buy odd lots and closeouts with dynamic pricing, and allows vendors to liquidate odd lots and closeouts in bulk quantity. C-ME is currently pursuing patent protection for the auction process, which is designed to eliminate fraudulent transactions. C-ME expects to launch this service in the Year of 2000.

4. Factory Outlet Mall

   This forum allows vendors to sell products directly to consumers. It is C-ME.com's only business-to-consumer segment, and is a complete e-commerce package consisting of secure credit card transactions, shopping cart functions and automatic calculation of sales tax and freight charges. C-ME plans to launch this service in the Year of 2000.

5. Template Web Design and Web Site Hosting.

   Many vendors do not have an Internet commerce strategy and most do not have a web presence. C-ME provides cutting-edge web design and hosting services to meet these needs.

6. Dynamic End-User Portfolio System (as defined in the Agreement).

7. Member ISN. (as defined in the Agreement).

8. FOCASTING (as defined in the Agreement).

9. C-Me Software (as defined in the Agreement).

10. Training and Instructional Materials.

    C-ME will provide, upon Members reasonable request, training and up-to-date instructional materials for the operation of all C-ME Software and all other aspects of the Member ISN.

11. Installation

    [to be determined]

12. Maintenance

    1. Definitions

       Severity 1 Defect - the ISN is inoperable and the inability to use the ISN has a critical impact on Retex's or the Member's operation.

       Severity 2 Defect - the ISN is usable, but an essential component of the ISN is malfunctioning and substantially impacts Retex's or Member's operation.

       Severity 3 Defect - the ISN is usable but is not functioning in material conformance with the Specifications.

    2. Access to Help

       C-ME shall provide Retex and Members with support services that shall include, without limitation; a) creating, maintaining and updating help and support pages accessible by Retex, Members and Manufacturers within and as a part of the ISN including a list of frequently asked questions, and b) a C-ME help desk accessible by Retex and Members 24 hours per day, 7 days per week, provided that after C-ME's business hours, the help desk support shall be accomplished through a pager to a C-ME employee capable of addressing problems with the ISN and/or server and providing the services as contemplated therein. C-ME shall provide Retex and Members with this pager number (and employee name) as of the Effective Date and will provide updated information as applicable.

EXHIBIT C
INDIVIDUAL MEMBER AGREEMENT
(IMA)

EXHIBIT D
EXCLUDED RETAIL COMPANIES

1. Burlington Coat Factory

2. Factory 2-U, Inc.

EXHIBIT E
SPECIFICATIONS

1. End User (Buyer) Profile set-up instructions
2. End User (Buyer) merchandise daily operational instructions for ISN use.

EXHIBIT F
PROGRAM MANAGEMENT AND SUMMARY REPORTS

TO BE DETERMINED:

EXHIBIT G
WARRANTIES

1. C-ME is a corporation duly organized, validly existing and in good standing in the State of California.

2. C-ME has all necessary rights, powers, and title to enter into this Agreement and perform its obligations hereunder.

3. C-ME will comply with all applicable laws and regulations.

4. Products and Services provided by C-ME hereunder shall not violate any laws or regulations.

EXHIBIT H
INSTALLATION, ACCEPTANCE, MAINTENANCE

1. Installation
   
   [to be determined]

2. Testing and Acceptance
   
   C-ME shall make available ISNs that are developed in connection with this Agreement for Retex's and Members' review, testing and acceptance in the following manner:

   1. Retex Testing and Acceptance
      
      Retex shall have the right to institute testing on a pilot basis, whereby Retex shall have the right to test C-ME's provision of ISN and other Products and Services to a Member selected by Retex. The pilot test shall be in accordance with the following: (i) the ISN shall be implemented on a password protected server (the "Shadow Site") and (ii) C-ME shall provide Retex with all work product, content, and any assistance needed for Retex's internal implementation, review and acceptance testing. Retex shall have 60 days to review and evaluate ISNs and other Products and Services ("Acceptance Period") and to assess whether they meet the Specifications and descriptions set forth in this Agreement. If Retex rejects the ISN and or any other Product or Service during the Acceptance Period, Retex may, in its sole discretion, elect to: (a) extend the time for C-ME to provide a revised ISN or other Products or Services for testing under this Paragraph; (b) revise the Specifications and product descriptions and negotiate an appropriate adjustment to the Commission; or (c) reject this Master Agreement IMA and any other applicable contractual agreement and be reimbursed by C-ME for any costs relating thereto.

   2. Member Testing and Acceptance
      
      C-ME shall make available ISNs that are developed in connection with this Agreement for Members' review and acceptance testing in the following manner: (i) the ISN shall be implemented on a password protected server (the "Shadow Site") and (ii) C-ME shall provide Members with all work product, content, and any assistance needed for Members' internal implementation, review and acceptance testing. Members shall have 60 days to review and evaluate ISNs and other Products and Services ("Acceptance Period") and to assess whether they meet the Specifications and descriptions set forth in this Agreement. If a Member rejects the ISN and or any other Product or Service during the Acceptance Period, the Member may, in its sole discretion, elect to: (a) extend the time for C-ME to provide a revised ISN or other Products or Services for testing under this Paragraph; (b) revise the Specifications and product descriptions and negotiate an appropriate adjustment to the Commission; or (c) reject the IMA and be reimbursed by C-ME for any costs relating thereto.

3. Maintenance

   1. Definitions
      
      Severity 1 Defect - the ISN is inoperable and the inability to use the ISN has a critical impact on Retex's or the Member's operation.
      
      Severity 2 Defect - the ISN is usable, but an essential component of the ISN is malfunctioning and substantially impacts Retex's or Member's operation.
      
      Severity 3 Defect - the ISN is usable but is not functioning in material conformance with the Specifications.

      Access to Help - C-ME shall provide Retex and Members with support services that shall include, without limitation; a) creating, maintaining and updating help and support pages accessible by Retex, Members and Manufacturers within and as a part of the ISNs including a list of frequently asked questions, and b) a C-ME help desk accessible by Retex and Members 24 hours per day, 7 days per week, provided that after C-ME's business hours, the help desk support shall be accomplished through a pager to a C-ME employee capable of addressing problems with the ISN and/or server and providing the services as contemplated therein. C-ME shall provide Retex and Members with this pager number (and employee name) as of the Effective Date and will provide updated information as applicable.

   2. Service Response Time
      
      Severity 1 Defects
      
      
      C-ME shall use best efforts to correct, within 24 hours of the time a Severity 1 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of dollars for each hour beginning one hour after the time of discovery, until the Severity 1 Defect is corrected and the performance, delivery, accessibility or availability of the ISN has been restored to be in accordance with this Agreement.
      
      
      Severity 2 Defects
      
      
      C-ME shall use best efforts to correct, within 12 hours of the time a Severity 2 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of dollars for each hour beginning one hour after the time of discovery, until the Severity 2 Defect is corrected and the performance, delivery, accessibility or availability of the ISN has been restored to be in accordance with this Agreement.
      
      
      Severity 3 Defects
      
      
      C-ME shall use best efforts to correct, within 6 hours of the time a Severity 3 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of dollars for each hour beginning one hour after the time of discovery, until the Severity 3 Defect is corrected and the performance, delivery, accessibility or availability of the ISN has been restored to be in accordance with this Agreement.

INDIVIDUAL MEMBER AGREEMENT

BY AND BETWEEN:

                                     

[Retex Member]

AND

AND CYBER MERCHANTS EXCHANGE, INC.

THIS INDIVIDUAL MEMBER AGREEMENT (this "Agreement") is made on the           day of                  , 2000 (the "Effective Date"), by and between [               ], with offices located at                , on behalf of itself and its Affiliates ("Member"), and Cyber Merchants Exchange, Inc., a California corporation, d/b/a C-ME.com ("C-ME"), with offices at 600 South Lake Avenue, Suite 405, Pasadena, California 91106.

RECITALS

WHEREAS, C-ME has developed technology, and desires to engage in the business of providing a service which utilizes such technology, defined as Internet Sourcing Network ("ISN") - a private extranet built and maintained by the Company according to each Retex member's specifications. These web-based turnkey systems automate the front-end merchandise sourcing activities of members at no cost, and provide tremendous time and cost savings; and

WHEREAS, C-ME and Retex Cooperative, Inc. ("Retex") a California Company, with offices at 350 5th Ave., Suite 1514, New York, New York 10118, have entered into an agreement ("Master Service Agreement") which sets forth certain rights of Retex, its members and patrons, to obtain services from C-ME under terms and conditions set forth in the Master Services Agreement; and

WHEREAS, Member is a member or patron of Retex in accordance with Retex's bylaws; and

WHEREAS, C-ME and Member desire Member to become a ISN User under the terms set forth below and in accordance with the Master Services Agreement;

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises contained herein, the parties agree as follows:

ARTICLE I
DEFINITIONS

Terms in this Agreement which are capitalized shall have the meanings set forth below or defined elsewhere in this Agreement:

1.1

"Additional Service Fee" shall mean the fee payable to C-ME for any consulting services C-ME is requested to provide in connection with the installation, hosting or maintenance of the hardware and software required for the EDI

1.2

"Affiliate" shall mean Member and any corporation, partnership or joint venture, which directly or indirectly is controlled by, or is under common control with Member. As used herein "control" is defined as directly or indirectly beneficially controlling, owning or holding of record more than 50% of all classes of voting securities of a corporation, or, in the case of an entity which is not a corporation, more than 50% of the equity interest.

1.3

"Base Internet Sourcing Network" shall mean the first ISN chosen by a Manufacturer in which the Manufacturer agrees to have C-ME include promotional data with respect to fifteen (15) of the Manufacturer's products and/or services.

1.4

"Base Subscription Fee" shall mean the monthly fee payable to C-ME by Manufacturers for C-ME's operation of the Manufacturer's Base ISN.

1.5

"Base ISN Set-Up Fee" shall mean the initial set-up fee payable to C-ME by a Manufacturer in connection with the establishment of such Manufacturer's Base ISN.

1.6

"Basic Products and Services" shall mean the products and services listed on Exhibit A.

1.7

"C-ME Software" means software required for Member's, Retex's and Manufacturer's usage, data design, data storage and transmission to and from the Member ISN.

1.8

"Change Fees" shall mean the fees payable to C-ME by any Manufacturer for changes including, but not limited to, additions, deletions, or modifications made by C-ME to such Manufacturer's product information and/or product images.

1.9

"Dynamic End-User Portfolio System" or "DEPS" shall mean the proprietary technology developed by C-ME, and more fully described in the Specifications, whereby ISN Users can: (i) independently manipulate information contained within their databases including, but not limited to, selectively deleting, restoring, and archiving information, without affecting the databases created by other ISN Users, and (ii) receive notifications of new information transmitted to their databases.

1.10

"Domestic" means a Manufacturer that is organized under the laws of and having offices in any state in the United States or any United States territory.

1.11

"EDI" shall mean the electronic data interchange which provides the capability to exchange business documents and transfer funds over the Internet.

1.12

"Excess Hosting Fee" shall mean the monthly fee payable to C-ME by Manufacturers for the display of any products in excess of the fifteen (15) products and services included in the Base ISN or additional ISN.

1.13

"FOCASTING" shall mean the proprietary technology developed by C-ME, and more fully described in the Specifications, whereby ISN Users can create their own private web pages by selecting categories and product lines which fall within their specific areas of interest to be pushed and broadcast to such web pages.

1.14

"Manufacturer" shall mean those Domestic and Non-Domestic suppliers of goods and services from which C-ME obtains information for the purpose of making such information available to Member via the internet pursuant to this Agreement.

1.15

"Member ISN" shall mean the Internet Sourcing Network created and maintained by C-ME for Member's exclusive use.

1.16

"Non-Domestic" means other than a Domestic Manufacturer.

1.17

"Products and Services" shall mean all those products and services provided by C-ME to Member under this Agreement and under the Master Services Agreement.

1.18

"Special Products and Services" shall mean services provided by C-ME upon Member's request at mutually agreed upon rates that are not Basic Products and Services.

1.19

"Specifications" shall mean those specifications, user manuals, training manuals, related documents and promotional materials as set forth in Exhibit B, attached hereto and incorporated herein.

ARTICLE 2
RIGHTS AND OBLIGATIONS OF C-ME

2.1

Create Member ISN and Provide Other Products and Services. C-ME shall: (a) create a Member ISN consisting of promotional materials provided by Manufacturers who have agreed to join the ISN, with the assistance of Member and for its exclusive use; (b) provide all Basic Products and Services set forth in Exhibit A; and (c) provide Special Products and Services in accordance with this Agreement. C-ME shall operate and maintain the Member ISN in accordance with the Performance Standards, set forth in Exhibit C, attached hereto and incorporated herein, and allow Member unlimited access thereto, 24 hours per day, 7 days per week, free of charge.

2.2

Special Consulting for EDI Connection. C-ME may charge a reasonable consulting fee, which shall be agreed upon in advance by Member, to facilitate the connection of the Member Web Site to Member's existing mainframe and network for use of the EDI, if C-ME's assistance is requested by Member.

2.3

New Products and Services. C-ME shall make available to Member each new product, service, enhancement or additional feature of the Member ISN as soon as the same shall become available, provided however, that nothing contained herein shall obligate C-ME to develop any such additional features, products or services.

2.4

C-ME Software License. C-ME hereby grants Member, for the duration of the term of this Agreement and for a period of 90 days subsequent to its termination for any reason, a royalty-free license to use, solely in connection with the Member ISN, the C-ME Software, including all updates thereof.

2.5

Indemnification for Intellectual Property and Use of Products and Services. C-ME agrees to indemnify, defend and hold Members, Affiliates and their respective directors, officers, agents and employees ("Indemnified Parties") harmless from and against any claim or cause of action for: patent and/or copyright infringement; unlawful disclosure or use or misappropriation of a trademark, servicemark, trade secret or other intellectual property right; defamation; of violation of applicable laws pertaining to privacy; inappropriate use of content included in the ISN, ("Indemnifiable Claim") asserted against any of the Indemnified Parties by virtue of Members' use of Products or Services. Retex or Member may participate in the defense of the claims by counsel of its own choosing, at their respective cost and expense.

Each party shall give prompt notice of any such claim to the other. C-ME shall have the right to control and direct the investigation, defense and settlement of each such claim. Member shall reasonably cooperate with C-ME in connection with the foregoing at C-ME's expense. Should the Products or Services as used by Member become, or in C-ME's opinion be likely to become, the subject of an Indemnifiable Claim, C-ME shall at its option and sole expense either: (i) procure for the Member the right to continue to use Products and Services as contemplated under this Agreement, or (ii) modify Products and Services to eliminate any Indemnifiable Claim which might result from use hereunder, provided that the performance of Products and Services must remain the same as provided in the applicable specifications thereof, or (iii) replace Products and Services with an equally suitable, compatible and functionally equivalent non-infringing Product or Service at no additional charge to either Retex or Member. This Section 2.5 shall survive the termination of this Agreement.

2.6

License to Use Transmitted Content. With respect to transmissions received, directly or indirectly, by Member from Manufacturers through the Member ISN, C-ME hereby grants to Member a non-exclusive license to capture, copy, reproduce, display, and any other such data supplied by Manufacturers. C-ME shall require each Manufacturer to supply C-ME such images and data for use by Member.

2.7

List of Manufacturers. C-ME shall provide to Member a list of all Member's Manufacturers upon request. C-ME shall provide Member with its proposed agreement for use with prospective Manufacturers, which shall be subject to Member's approval, which approval shall not be unreasonably withheld. The list of Manufacturers as of the Effective Date is set forth in Exhibit D, which Exhibit shall be revised as new Manufacturers are added and existing ones are deleted. C-ME will provide Members with prompt notice of all such revisions to Exhibit D.

ARTICLE 3
RIGHTS AND OBLIGATIONS OF MEMBER

3.1

Member Vendor List. Member shall provide to C-ME a list ("Member Vendor List") of Manufacturers to be included in the Member ISN and other potential participants in the Member ISN. Member may amend and or supplement the Member Vendor List from time to time with supplemental lists of vendors, contractors, suppliers and other parties.

3.2

Marketing and Promotion. Member shall assist C-ME in marketing and promoting the Member ISN to potential Manufacturers, as follows:

1. Member shall assign a project leader to assist C-ME personnel in setting up and implementing the Member ISN, to give input on the development of an EDI system on the Member ISN as well as assist in marketing efforts;

2. Member shall send mailings to potential Manufacturers encouraging and requesting participation by such vendors in the Member ISN and follow-up said mailings with telephone calls by appropriate Member employees and/or agents;

3. after the EDI system on the Member ISN has been fully developed, successfully tested, and is fully operational, encourage and request vendor use of such system;

4. Member shall hold meetings with vendors (in the form of seminars, breakfast meetings, and the like) in order to market and promote the Member ISN; and

5. Member shall issue a joint press release with C-ME to market and promote the Member ISN.

3.3

Assist C-ME. Member shall provide C-ME with those specifications and data for the creation of the Member ISN that are listed in Exhibit E. In addition, Member will give reasonable assistance to C-ME with respect to C-ME's design of the Member ISN. Reasonable assistance shall include, but not necessarily be limited to providing C-ME with copies of reasonably requested materials.

3.4

No Unauthorized Use of Member's Name. Neither C-ME nor any other person shall be authorized to mention or use Member's name in connection with the encouragement of any prospective Manufacturer to become a Manufacturer hereunder, without Member's prior written approval.

3.5

Necessary Hardware and Software. Member shall acquire, install and maintain the hardware and software in accordance with the specifications set forth in Exhibit F which are necessary for Member to participate in the Member ISN and the EDI.

3.6

EDI Function. Once the EDI capabilities are implemented with respect to the Retex Member, Member may develop and implement a system, (with the assistance of C-ME to ensure conformity throughout its ISN), to (a) transmit orders from Member buyers and other related personnel to each of its Manufacturers, (b) issue invoices for merchandise sold via the Member and (c) facilitate and track the shipping of merchandise between Manufacturers and Member.

3.7

Indemnification for Disputes Between Member and Manufacturer. Member shall indemnify, defend, save and hold C-ME harmless from and against any claim of any Manufacturer arising as a result of Member's failure to perform its obligations under a contract with that Manufacturer, unless such failure is related to C-ME's negligent acts or omissions or its breach of any provision of this Agreement.

3.8

Use of ISN. Member shall use the C-ME Software and Member ISN provided by C-ME.

3.9

Permission to Promote Member. Member grants C-ME permission, for the duration of this Agreement, to include Member's promotional data provided by Member which is contained in the Member ISN, on ISNs developed by C-ME including, but not limited to http//www.c-me.com, provided such ISNs: (i) do not contain any defamatory or sexually explicit content; (ii) do not violate any applicable privacy laws; (iii) do not infringe on the intellectual property rights of others, such as those rights obtained through copyright, patents, trademarks and servicemarks; (iv) are created and operated in compliance with all applicable laws.

ARTICLE 4
TESTING AND ACCEPTANCE

C-ME shall make available ISNs that are developed in connection with this Agreement for Member's review and acceptance testing in the following manner: (i) the ISN shall be implemented on a password protected server (the "Shadow Site") and (ii) C-ME shall provide Member with all work product, content, and any assistance needed for Member's internal implementation, review and acceptance testing. Member shall have 60 days to review and evaluate ISN and other Products and Services ("Acceptance Period") and to assess whether they meet the Specifications and descriptions set forth in this Agreement. If Member rejects the ISN and or any other Product or Service during the Acceptance Period, Member may, in its sole discretion, elect to: (a) extend the time for C-ME to provide a revised ISN or other Products or Services for testing under this Paragraph; (b) revise the Specifications and product descriptions and negotiate an appropriate adjustment to the Commission; or (c) reject this Agreement and any other applicable agreement relating hereto, and be reimbursed by C-ME for any reasonable costs relating thereto.

ARTICLE 5
PAYMENT

5.1

Basic Products and Services. Basic Products and Services are provided by C-ME free of charge to Member.

5.2

Special Products and Services. Special Products and Services will be provided by C-ME to Member and billed on a time and materials basis. Rates will be in accordance with C-ME's then current rate schedule. Member will receive a 15% invoice discounts for these services, and the discount will be noted on the invoice as a "Retex Value Added Discount".

5.3

C-ME's Payment to Retex. The parties hereto acknowledge the Master Service Agreement, which provides that C-ME pays Retex a commission.

5.4

Retex's Payment to Member.Member acknowledges that it shall enter into an agreement with Retex (generally referred to by Retex as a "Program Agreement") under which Member shall receive rebates from Retex which relate to this Agreement and the Master Service Agreement.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES

6.1

Member represents and warrants to C-ME that:

1. Member is a corporation duly organized, validly existing and in good standing under the laws of [_______________].

2. Member has full corporate authority and power to enter into this Agreement and to perform its obligations under this Agreement.

3. Member will not sell to, purchase from, provide or exchange with any third party any Manufacturer information identified as confidential information in the agreement for services between C-ME and each such Manufacturer. Notwithstanding the above, no such information shall be deemed confidential to the extent it is otherwise in the possession of Member without any obligation of confidentiality, is now or hereafter in public domain, is lawfully obtained from a third-party, or is required to be disclosed by law.

4. Member's performance of this Agreement will not violate any applicable law or regulation or any agreement to which Member may now or hereafter be bound.

5. This Agreement represents a valid obligation of Member and is fully enforceable against Member according to its terms.

6.2

C-ME represents and warrants to Member that:

1. C-ME is a corporation duly organized, validly existing and in good standing under the laws of the State of California.

2. C-ME has full corporate authority and power to enter into this Agreement and is otherwise in all respects capable of entering into this Agreement without violation of any statutes, regulations, contractual or common laws.

3. C-ME's performance of this Agreement will not violate any applicable law or regulation, common law, or any agreement to which C-ME may now or hereafter be bound.

4. This Agreement represents a valid obligation of C-ME and is fully enforceable against C-ME according to its terms.

5. The Products and Services shall be completed in a workmanlike manner and shall substantially conform to the Specifications.

6. C-ME does not represent or warrant that the Products and Services will be uninterrupted or error free.

7. C-ME does not represent or warrant that information provided by the Manufacturers will be accurate or error free.

8. Products and Services will not contain any viruses, Trojan horses, worms, time bombs or other computer programming devices which are intended to damage Member's system or data or prevent Member from using same.

9. The list of specifications and data to be provided by Member for creation of ISN set forth in Exhibit E is accurate and complete.

10. Member's hardware and software requirements set forth in Exhibit F are accurate and complete, and are necessary and appropriate for Member to participate in the Member ISN, and Member's ISN will operate efficiently if Member's hardware and software comply with such specifications.

11. THE WARRANTIES SET FORTH ABOVE CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO THE PRODUCTS AND SERVICES AND ARE IN LIEU OF ANY OTHER WARRANTIES WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE 7
TERM AND TERMINATION

7.1

This Agreement shall be for a term of ____ year(s), which shall automatically renew for successive one year terms, unless either party gives 60 days notice of non-renewal prior to the expiration of a term.

7.2

This Agreement may be terminated by the non defaulting party upon the occurrence of any of the following events of default:

1. either party fails to make payment as required under this Agreement, and such failure continues for a period of fifteen (15) business days after notice has been sent to the non-paying party;

2. a party (i) files for bankruptcy, receivership, insolvency, reorganization, dissolution, liquidation or any similar proceedings, as applicable, or (ii) has a proceeding instituted against it and such proceeding is not dismissed within sixty (60) days; and

3. a party fails to observe any material obligation specified in this Agreement and such failure is not cured within thirty (30) days of a notice specifying the breach.

7.3

This Agreement may be terminated by either party upon 60 days written notice by the terminating party to the other party.

7.4

This Agreement may be terminated by Member pursuant to Article 4.

7.5

Upon termination of this Agreement for any reason, all data contained within Member's ISN shall remain the property of Member and the C-ME Software shall remain the property of C-ME. C-ME shall deliver all such property to Member in a format reasonably requested by Member, within 30 days of the termination. Additionally, C-ME shall provide Member with reasonable assistance with respect to Members' reasonable efforts to find substitutes for Products and Services. Such cooperation continue for at least 90 days subsequent to the termination and shall include but not be limited to providing reasonable access to C-ME's records, agreements, employees, independent contractors which relate to this Agreement. Upon C-ME's reasonable request, Retex and Members shall maintain confidentiality with respect to information obtained through C-ME's cooperation required under this provision.

ARTICLE 8
GENERAL INDEMNIFICATION

8.1

Member will indemnify, defend and hold C-ME harmless from and against any and all obligations, charges, liabilities, costs, fees, increased taxes or expenses, including without limitation, court costs and reasonable attorneys' fees (including allocated costs of internal counsel, if applicable), which C-ME may incur as a result of negligent acts or negligent omissions of Member, its employees or agents relating to the exercise of, or the failure to exercise, Member's obligations under this Agreement.

8.2

C-ME will indemnify, defend and hold Member and Retex harmless from and against any and all obligations, charges, liabilities, costs, fees, increased taxes or expenses, including without limitation, court costs and reasonable attorneys' fees (including allocated costs of internal counsel, if applicable), which Member may incur as a result of negligent acts or negligent omissions of C-ME, its directors, officers, employees or agents relating to the exercise of, or the failure to exercise, C-ME's obligations under this Agreement.

8.3

Sections under Article 8 will survive termination of this Agreement.

ARTICLE 9
CONFIDENTIALITY

9.1

Both parties agree that each will reveal Confidential Information only to those of its directors, officers, agents or employees with a need to know. "Confidential Information" means all confidential or proprietary information about any other party, including but not limited to software, customer and vendor names, addresses and account numbers, retail locations, sales volume(s), merchandise mix or other information of the business affairs of either party or Manufacturer, its parent company or its affiliated and subsidiary companies, which that party reasonably considers confidential and/or proprietary. Confidential Information will not include information in the public domain, information already known by the party receiving the information prior to commencing the discussions that led to this Agreement, information lawfully obtained from a third party, and information required to be disclosed by law.

9.2

Each party agrees not to use Confidential Information nor to disclose Confidential Information to any third-party, except as may be necessary for that party to perform its obligations pursuant to this Agreement, unless otherwise agreed upon by the parties or required by law. If either party should disclose Confidential Information to a third-party, such party will cause the third-party to agree to the confidentiality provisions set forth in this Section. The provisions of this Section will survive the termination of this Agreement.

9.3

Each party agrees that any violation in breach of the provisions of this Article shall result in irreparable harm to the party to which the Confidential Information belongs and such party shall be entitled to such injunctive relief from any court of competent jurisdiction without the necessity of any undertaking, bond or proof of evidence of injury or damage. Such remedy shall be in addition to, and not in lieu of, any other right or remedy available to each party under law or equity.

ARTICLE 10
MISCELLANEOUS

10.1

Notice. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex, cable or telecopy, or sent, postage prepaid, by registered, certified or express mail, or reputable overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled, or telecopied, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service), to the address of the party for whom intended at such address as is set forth at the beginning of this Agreement, Attention: President, or at such other address as such party may hereafter specify by written notice to the other party.

10.2

Unenforceable Provisions. In the event that any provision (or any portion of any provision) of this Agreement shall be held to be void or unenforceable, the remaining provisions of this Agreement (and the remaining portion of any provision found void or unenforceable in part only) shall continue in full force and effect. Additionally, in the event this Agreement or any provision or portion thereof shall be held to violate any rule against perpetuities or any other rule limiting the duration of the term of this Agreement, then this Agreement or any such provision or portion thereof shall be automatically amended (and any court of competent jurisdiction is hereby requested to amend it) so as to extend for the longest period possible, including extension, which shall not be in violation of any such rule, it being the intent of the parties to provide the longest term possible.

10.3

Entire Agreement. This Agreement, the Exhibits attached hereto and documents and materials incorporated herein, constitute the entire understanding and contract among the parties with respect to the subject matter hereof, supersedes all prior agreements and understanding between them, written or oral, and may not be modified, amended or terminated orally.

10.4

Waiver. A waiver of any breach or violation of any term, provision, agreement, covenant or condition herein contained shall not be deemed to be a continuing waiver or a waiver of any future or past breach or violation.

10.5

Assignment. This Agreement may not be assigned by any party without the prior written consent of the other party, which consent may not be unreasonably withheld.

10.6

Benefit of Agreement. This Agreement shall be binding upon and shall inure to the benefit of all representatives, nominees, transferees, successors and assigns. None of the agreements, representations or other provisions contained herein shall be for the benefit of any person or entity not a party to this Agreement except that: (i) Retex is an intended third party beneficiary of this Agreement; and (ii) the provisions of Sections 2.5 shall inure to the benefit of the Indemnified Parties.

10.7

Disputes. The following procedure will be adhered to in all disputes that arise under this Agreement, except in circumstances in which a party seeks injunctive relief to protect its trademarks or other intellectual property and its Confidential Information. Either party to this Agreement must notify the other party of the nature of the dispute with as much detail as possible about the deficient performance of the other party. Each party shall have a representative who is knowledgeable of the services and empowered to represent the respective party in dispute negotiations ("Project Manager"). The Project Managers shall meet telephonically or in person as soon as possible, but no later than thirty (30) days after the date of the written notification, to reach an agreement about the nature of the deficiency and the corrective action to be taken by the respective parties. The Project Managers shall within fifteen (15) days after such meeting produce a report about the nature of the dispute in detail to their respective management. If the Project Managers are unable to agree on corrective action, the respective managers to whom the Project Managers report or their successors ("Management", if different than the Project Manager) shall meet telephonically or in person to facilitate an agreement as soon as possible, but no later than fifteen (15) days after the date of the report. If Management cannot resolve the dispute with a written plan of corrective action as soon as possible, but no later than sixty (60) days after their initial meeting, or if the agreed upon completion dates in the written plan of corrective action are exceeded, either party may proceed with its respective rights under this Agreement.

In the event of any dispute, claim, question or disagreement between the parties arising out of or relating to the Agreement, the parties shall use their best efforts to settle such dispute, claims, questions or disagreements. To this effect, they shall consult and negotiate with each other and in good faith and recognizing their mutual interest, attempt to reach a just and equitable solution satisfactory to the parties.

10.8

Compliance with Laws. Each party hereto shall comply with all applicable laws and regulations governing this Agreement.

10.9

Governing Law. This Agreement shall be governed by the laws of [________________________].

10.10

Headings. Section headings are used for convenience only and shall in no way affect the construction of this Agreement.

10.11

Counterparts. This Agreement may be executed in counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the Effective Date.

CYBER MERCHANTS EXCHANGE,INC.

/s/ Frank S. Yuan
By: Frank S. Yuan
Its: Chairman & CEO

_________________
[Date]

[RETEX MEMBER]

/s/
By:
Its:

_________________
[Date]

Exhibit A
Basic Products and Services

1. Internet Sourcing Network ("ISN")

   The cornerstone of C-ME's services is Internet Sourcing Networks ("ISNs"). An ISN is a private extranet built and maintained by C-ME according to each Retex Member's specifications. These web-based turnkey systems automate merchandise sourcing (front-end) activities for retailers in an efficient manner at no cost to them.

   ISNs allow retailers and vendors to conduct business using any internet connection without investing in expensive hardware, software or training. Retex Members create personalized profiles, and get product information on only the products they want to buy. After paying to join a retailer's ISN, small and large vendors can get instant feedback about purchasing needs and decisions, and make product changes and additions instantly. Vendors who join an ISN can update product listings and photographs any time from any computer with an Internet connection.

2. Virtual Trade Show

   This centralized product showcase features vendors' products, allows buyers to freely search or customize searches, and allows vendors to directly reach a wider universe of buyrs.

3. Wholesale Auction Center

   This auction provides a vertical marketplace for retailers to buy odd lots and closeouts with dynamic pricing, and allows vendors to liquidate odd lots and closeouts in bulk quantity. C-ME is currently pursuing patent protection for the auction process, which is designed to eliminate fraudulent transactions. C-ME expects to launch this service in the year 2000.

4. Factory Outlet Mall

   This forum allows vendors to sell products directly to consumers. It is C-ME.com's only business-to-consumer segment, and is a complete e-commerce package consisting of secure credit card transactions, shopping cart functions and automatic calculation of sales tax and freight charges. C-ME plans to launch this service in the year 2000.

5. Template Web Design and Web Site Hosting

   Many vendors do not have an Internet commerce strategy and most do not have a web presence. C-ME provides cutting-edge web design and hosting services to meet these needs.

6. Dynamic End-User Portfolio System (as defined in the Agreement)

7. Member ISN (as defined in the Agreement)

8. FOCASTING (as defined in the Agreement)

9. C-ME Software (as defined in the Agreement)

10. Training and Instructional Materials.

    C-ME will provide, upon Members reasonable request, training and up-to-date instructional materials for the use of all C-ME Software and all other aspects of the Member ISN.

11. Installation

    Since ISN is a web based application, Retex's member can use C- ME's ISN without installation of software.

12. Maintenance

    1. Definitions

       Severity 1 Defect - the ISN is inoperable and the inability to use the ISN has a critical impact on Retex's or the Member's operation.

       Severity 2 Defect - the ISN is usable, but an essential component of the ISN is malfunctioning and substantially impacts Retex's or Member's operation.

       Severity 3 Defect - the ISN is usable but is not functioning in material conformance with the Specifications.

    2. Access to Help

       C-ME shall provide Retex and Members with support services that shall include, without limitation; a) creating, maintaining and updating help and support pages accessible by Retex, Members and Manufacturers within and as a part of the ISNs including a list of frequently asked questions, and b) a C-ME help desk accessible by Retex and Members 24 hours per day, 7 days per week, provided that after C-ME's business hours, the help desk support shall be accomplished through a pager to a C-ME employee and/or contractor capable of addressing problems with the ISN and/or server and providing the services as contemplated therein. C-ME shall provide Retex and Members with this pager number (and employee name) as of the Effective Date and will provide updated information as applicable.

Exhibit B

Specifications, User Manuals, Training Manuals, Related Documents and Promotional Materials

• End User (Buyer) Profile set-up instructions
• End User (Buyer) merchandise daily operational instructions for ISN use.

Exhibit C

Performance Standards

1. Service Response Time

   Severity 1 Defects

   C-ME shall use best efforts to correct, within 24 hours of the time a Severity 1 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of __________ dollars for each hour beginning one hour after the time of discovery, until the Severity 1 Defect is corrected and the performance, delivery, accessibility or availability of the ISN has been restored to be in accordance with this Agreement.

   Severity 2 Defects

   C-ME shall use best efforts to correct, within 12 hours of the time a Severity 2 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of _______ dollars for each hour beginning one hour after the time of discovery, until the Severity 2 Defect is corrected and the performance, delivery, accessibility or availability of the Web Site has been restored to be in accordance with this Agreement.

   Severity 3 Defects

   C-ME shall use best efforts to correct, within 6 hours of the time a Severity 3 Defect is discovered. In the event C-ME is unable to comply with the requirements set forth in the foregoing sentence, Member shall be entitled to a credit of ________ dollars for each hour beginning one hour after the time of discovery, until the Severity 3 Defect is corrected and the performance, delivery, accessibility or availability of the ISN has been restored to be in accordance with this Agreement.

2. ISN Standards

   1. Availability. ISN created and/or operated in connection with this Agreement, directly or indirectly by C-ME or its agents or independent contractors shall be available to Members and Manufacturers a minimum of 99.9 % of the time during any 24 hour period, 99.9 % of the time during any 7 day period, and 99.9% of the time during any 30 day period; and there will be no period of interruption that exceeds 24 continuous hours.

   2. Response Time. The mean response time for server response to all accesses to the ISN shall not exceed 10 seconds during any 1 hour period.

   3. Security. C-ME shall prevent unauthorized access to ISN, other restricted areas of the ISN and any databases or other sensitive material generated from or used in conjunction with the ISN, and C-ME shall immediately notify Retex of any known security breaches or holes.

   4. Backup. C-ME shall, at its expense, make, or cause to be made, a complete backup of the ISN every day which shall be stored at a secure, off-site location. On the first day of every month, and at any other time as reasonably requested by Retex or Member, C-ME shall, at its expense, deliver to Retex or Member, whichever applies, a complete electronic copy of the Member's ISN (excluding developers tools and source code).

   5. Interruptions. C-ME shall maintain, at its expense, a complete current copy of the ISN on a server located at a remote location. In the event that service is interrupted to a ISN, the remote server shall be immediately activated so that Member and Manufacturer access to the ISN continues without interruption.

Exhibit D
Manufacturers

[to be provided by C-ME]

Exhibit E
Specifications and Data to be Provided by Member for Creation of ISN

1. Member's address, Company's logo, and contact information
   
   
2. Member's Merchandise Mix and each buyer and their management's buying category
   
   
3. Each member's needs for their own product information
   
   
4. Each Buyer's name and E-Mail addresses

Exhibit F
Member's Hardware and Software Requirements Necessary for Internet Sourcing Network.

In order to access and utilize the Internet Sourcing Network, each retailer must have the following:

• Pentium II or III 350 or faster running Microsoft Windows 95, 98 or NT
  
• 64 MB Ram or more
  
• 4 GB or larger hard drive
  
• 56 K or faster Internet connection
  
• Video card capable of displaying thousands of colors
  
• 17 inch color monitor

Cyber Merchants Exchange, Inc.
Pasadena, California

We consent to the incorporation by reference to the Registration Statement on Form S-3 (SEC file no. 333-42548) of our report dated September 5, 2000 with respect to the financial statements of Cyber Merchants Exchange, Inc. included in this Annual Report on Form 10-K for the year ended June 30, 2000.

/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP

September 5 , 2000
Los Angeles, California