LETTER OF UNDERSTANDING FOR CONSULTANT COMPENSATION
This letter of Agreement confirms the understanding between
Infotopia, Inc. ("The Company") and First Equity Capital, Inc., a
New York Corporation, P.O. Box 2, P.A.C.C., New York City, NY
10129 ("Consultant") and sets forth the terms under which
Consultant shall render its consulting services to the Company.
In consideration of the foregoing, and the covenants contained
herein, and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties
desire to reflect their agreement as to such consulting services
as set forth below.
Consultant's services shall include the following:
(a) The Consultant will use its best efforts to introduce the
Company to parties which can complete a proposed private offering
of the Company's common stock for a total of $2 million in
financing to the Company;
(b) review the Company's managerial and financial requirements;
(c) review budgets and business plans;
(d) analyze and assess alternatives for the Company, presented
by the Company, for raising capital, including public or private
offerings of the Company's securities;
(e) advised will regard to shareholder relations and public
relations matters, including the discrimination of financial
documents to certain of the Consultant's clients and other
members of the financial community (as determined by the
Consultant);
(f) identify and introduce to the Company potential inventors or
products to the Company.
The Consultant agrees to use its best efforts in the furnishing
of advice and recommendations, and for this purpose the
Consultant shall at all times maintain or keep available an
adequate organization of personnel or a network of outside
professionals for the performance of its obligations under this
Agreement. In order to allow the Consultant to be kept current
with the corporate affairs of the Company, at the Consultant's
request, the Company will provide such updating information to
the "due diligence" materials which shall be supplied by the
Company to the Consultant. Prior to the identification of a
managing underwriter, the Company will provide "due diligence"
presentations to potential underwriters or placement agents. The
dates and locations of the presentations will be mutually agreed
upon between the Company and the Consultant.
For said services, Consultant shall receive certain compensation
as detailed herein.
The total compensation under this agreement which shall be due
Consultant is the following:
Said compensation is to be paid in the following manner:
Offering
First Equity Capital will receive immediately 360,000 shares of
Infotopia Common Stock for services rendered.
Compensation
Upon receipt by the company of every $100,000 from "the $100,000
promissory note offering" obtained through the consultants
efforts 120,000 of the company shares will be issued to
consultant, also 50,000 warrants at $0.15 and 50,000 warrants at
$0.25. All stock and warrants shall carry piggyback rights
warrants shall carry a 5-year expiration.
For any fifteen day period beginning July 15th the company is in
receipt of $500,000 First Equity Capital will receive an
additional 200,000 shares of Infotopia stock. If any fifteen day
period that the company is in receipt of $250,000 First Equity
Capital will receive an additional 100,000 shares of Infotopia
stock. If by the date of September 1, 2000 the Company is in
receipt of 1.5 million First Equity Capital will receive 300,000
shares of Infotopia stock. If by the date of September 15, 2000
the Company is in receipt of 2 million dollars First Equity
Capital will receive an additional 600,000 shares of Infotopia
stock.
Upon signing this agreement First Equity Capital will receive 360
thousand shares of Infotopia stock for services rendered.
Non-Compete
The compensation agreed to herein for Consultant shall be
guaranteed to Consultant upon services rendered (i.e. the
arranging of financing of 2 million dollars through the $100,000
Promissory Note offering). Under no circumstances shall
Consultant be denied said compensation, provided Consultant has
rendered the services contemplated herein to the Company. The
Company hereby guarantees not to pay any other person or entity
any compensation or runumeration in cash, stocks, option or
warrant form, in connection with the raising of capital for the
$100,000 Promissory Note offering contemplated herein.
Indemnification
The Company agrees to indemnify and hold harmless the Consultant
and its affiliates, the respective directors, officers, partners,
agents and employees and each other person, if any, controlling
the Consultant or any of its affiliates (collectively the
"Consultant Parties"), to the full extent lawfull, from and
against all losses, claims, damages, liabilities and expenses
incurred by them (including attorney's fees and disbursements)
that result from actions taken or omitted to be taken (including
any untrue statements made or any statements omitted to be made)
by the Company, its agents or employees. The Consultant will
indemnify and hold harmless the Company, and the respective
directors, officers, agents and employees of the Company and each
other person, if any, controlling the Company or any of its
affiliates (the "Company Parties") from and against all losses,
claims, damages liabilities and expenses that result from bad
faith, gross negligence, or unauthorized representations of the
Consultant. Each person or entity seeking indemnification
hereunder shall promptly notify the Company, or the Consultant as
applicable, if any loss, claim, damage or expense for which the
Company or the consultant as applicable, may become liable
pursuant to this Section, shall nor pay, settle or acknowledge
liability under any such claim without consent of the party
liable for indemnification, and shall permit the Company or
Consultant as applicable a reasonable opportunity to cure any
underlying problem or to mitigate actual or potential damages.
The scope of the indemnification between the Consultant and the
Company shall be limited to, and pertain only to transactions
contemplated or entered into pursuant to the Agreement.
The Company or the Consultant, as applicable, shall have the
opportunity to defend any claim for which it may be liable
hereunder, provided it notifies the party claiming the right to
indemnification within 15 days of notice of the claim.
The rights stated pursuant to the preceding two paragraphs shall
be in addition to any rights that the Consultant, the Company or
any other person entitled to indemnification may have in common
low or otherwise, including but not limited to, any right to
contribution.
Miscellaneous
The parties agree that this Letter of Agreement and all questions
relating to its validity, interpretation, performance and
enforcement, shall be governed and construed in accordance with
the laws of the State of Nevada without application to the
principles of conflict laws.
This Agreement shall be binding upon and inure to the benefits of
the parties hereto and their, respective heirs, personal
representatives, successors and assigns, except that no party may
assign or transfer its rights under this Agreement without the
prior written consent of the other party hereto.
This Agreement constitutes the entire agreement among the parties
and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, that
may related in any way to the subject matter hereof. This
Agreement may not be amended, supplemented or modified in whole
or in part except by an instrument in writing signed by both
parties.
Infotopia, Inc. First Equity Capital
By: By:
Title: Title:
Date: Date:
