Document:

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                           SANDS BROTHERS & CO., LTD.
                               INVESTMENT BANKERS
                                   MEMBER NYSE
                      90 PARK AVENUE, NEW YORK, N.Y. 10016
           (212) 697-5200 Toll Free (800) 866-6116 Fax (212) 697-9090

                                                                  August 3, 2000

Constellation 3D, Inc.
230 Park Avenue, Suite 453
New York, NY 10169

Attn: Eugene Levich
          President and CEO

Dear Dr. Levich:

                  The parties hereto, Constellation 3D, Inc. (f/k/a C3D Inc.), a
Florida corporation (the "Company") and Sands Brothers & Co., Ltd., a Delaware
corporation ("Sands Brothers") have entered into (A) that certain placement
agency agreement (hereinafter the "Agency Agreement") dated as of December 1,
1999, as amended December 22, 1999, March 7, 2000, March 23, 2000, April 17,
2000, May 31, 2000, June 28, 2000 and July 13, and as supplemented by that
certain letter agreement dated February 8, 2000 (hereinafter the "Agency
Agreement") and (B) that certain Warrant Agreement dated as of December 1, 1999
as amended on March 23, 2000, April 17, 2000, May 31, 2000, June 28, 2000 and
July 13, 2000 (the "Warrant Agreement"). Capitalized terms used herein not
otherwise defined shall have the meanings ascribed to them in the Agency
Agreement.

                  In connection therewith, the parties hereto agree as follows:

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Constellation 3D, Inc.
August 3, 2000
Page 2

                  1. In connection with any financing by Protocol, Hartford
Financial Group, Inc., and/or their respective affiliates, related parties and
financing sources (collectively the "Sands Group"), or any financing by any
other party introduced directly or indirectly by Sands Brothers on terms at
least as favorable as those that were proposed by Protocol and/or Hartford
Financial Group, Inc., should such funding be consummated by no later than 90
days from the date hereof and provided that the Hartford Financial Group, Inc.
financing is consummated by August 11, 2000 (which, for the purposes of this
letter shall include financing source(s) having good and immediately available
funds for the Company, but the Company not accepting such financing), then Sands
Brothers shall be entitled to receive Warrants on the following basis: on the
first $25 million of financing, Sands Brothers shall receive 300,000 Warrants
for each $1 million of financing; and on a further $50 million of financing,
Sands Brothers shall receive 150,000 Warrants for each $1 million of financing.
The exercise price of such Warrants shall be $10.34 per share; provided,
however, in the event that at least $75 million of financing is available from
financing sources having good and immediately available funds for the Company,
then the exercise price on all of such Warrants shall be reduced to $8.25 per
share. Anything contained in the Warrant Agreement to the contrary
notwithstanding, the first 2.4 million of such Warrants shall contain "cashless"
exercise provisions, but any Warrants issued in addition to such first 2.4
million Warrants shall not contain "cashless" exercise provisions. Furthermore,
after the issuance of 12.6 million Warrants hereto, the parties hereto agree to
the cancellation of the Sands Brothers Warrant Certificate No. SB-2 for 2.4
million Warrants dated December 1, 1999, on a pro-rata basis up to an aggregate
of 15 million Warrants to be issued hereto. In addition, the Warrants issued
pursuant to Certificate No. SB-2 shall be amended to not have "cashless"
exercise provisions on a pro-rata basis upon issuance of the first 2.4 million
Warrants issued pursuant to this letter agreement.

                  2. Except as set forth herein, the Agency Agreement and the
Warrant Agreement, each as amended, shall remain in full force and effect.

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Constellation 3D, Inc.
August 3, 2000
Page 3

                  IN WITNESS WHEREOF, the Company and Sands Brothers have caused
this Agreement to be executed by its duly authorized representative.

CONSTELLATION 3D, INC.                       SANDS BROTHERS & CO., LTD.

By: /s/ E. Levich                            By: /s/ Mark Hollo
    ---------------------------                  -------------------------------
    Name:                                        Name:
    Title:                                       Title:<PAGE>

                                 PROMISSORY NOTE

$ 250,000.00                                                        May 1, 2000

         FOR VALUE RECEIVED INC.UBATOR CAPITAL, INC. with an office at 9777
Wilshire Boulevard, Suite 718, Beverly Hills, CA 90212 ("Payor"), promises to
pay to the order of EXETER PARTNERS, LLC. with an office at 964 3rd Avenue, 7th
Floor, New York, NY 92008 ("Payee") the total principal amount of Two Hundred
and Fifty Thousand ($250,000.00) dollars with interest at the rate of eight
percent (8%) per annum from the date first set forth above (collectively the
"Obligations"), on and subject to the terms and conditions set forth herein. All
outstanding principal, together with accrued interest, shall be due on demand.

         1. Payment. All payments of principal and interest in respect of this
Promissory Note (the "Note") shall be made in lawful money of the United States
of America at the office of Payee or at such other place as shall be designated
by Payee in writing for such purpose. There shall be no penalty for prepayment
of this Note.

         2. Event of Default by Payor. For purposes of this Note, the occurrence
or existence of any one or more of the following events or conditions
(regardless of the reasons therefor) shall constitute an "Event of Default"
hereunder:

                  (a) Failure to Make Payment. Payor shall fail to make any
payment of principal of, or interest on, or any other amount owing in respect of
this Note when due and payable or declared due and payable pursuant to the terms
hereof.

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                  (b) Bankruptcy or Insolvency Proceedings. A case or proceeding
shall have been commenced by or against, or consented to by, Payor in a court of
competent jurisdiction seeking a decree or order in respect of Payor (i) under
any applicable foreign, federal or state bankruptcy or other similar law, or
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of Payor, and such case or proceeding shall
remain unstayed or undismissed for a period of sixty (60) consecutive days or
such court shall enter a decree or order granting the relief sought in such case
or proceeding.

                  (c) Repudiation of Obligations. This Note shall be repudiated,
revoked or terminated by Payor, or by operation of law.

         3. Remedies of Payee on Default. Upon the occurrence of an Event of
Default, Payee shall have the following remedies: (a) all or any portion of the
Obligations shall, at the option of Payee and without notice, demand or legal
process, become immediately due and payable; and (b) in addition to all other
rights and remedies available hereunder, Payee shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code of the State of
New York.

         4. Representations and Warranties of Payor. Payor hereby represents and
warrants to Payee as follows: (a) it has full legal capacity to execute and
perform this Note, which shall be the legal, valid and binding obligation of
Payor, enforceable in accordance with its terms, subject to bankruptcy laws and
equitable principles; and (b) no consent of any person or entity is required for
Payor to enter into or perform under this Note.

         5. Liability of Payor for Expenses and Attorneys' Fees of Payee. Payor
shall be liable to Payee for any and all reasonable sums, costs and expenses
which Payee may pay or incur pursuant to the provisions of this Note or in
enforcing payment of the Obligations or otherwise, including without limitation
all taxes, levies and reasonable attorneys' fees and accountants' fees. All
damages for breach of warranty or covenant by Payor shall be part of the
Obligations and shall be payable on demand.

         6. Limitation of Interest Payments. Nothing contained in this Note or
in any other agreement between Payor and Payee requires Payor to pay or Payee to
accept interest in an amount which would subject Payee to any penalty or
forfeiture under applicable law. In no event shall the total of all charges
payable hereunder, whether of interest or of such other charges which may or
might be characterized as interest, exceed the maximum rate permitted to be
charged under the laws of the State of New York or the State of California.
Should Payee receive any payment that is or would be in excess of that permitted
to be charged under such laws, such payment shall have been and shall be deemed
to have been made in error and shall automatically be applied to reduce the
principal outstanding on this Note.
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         7.       Miscellaneous.

                  (a) Waiver. Any failure or delay by Payee to require strict
performance by Payor of any of the provisions, warranties, terms or conditions
contained herein shall not affect Payee's right to demand strict compliance
therewith and performance thereof, and any waiver of any default shall not waive
or affect any other default, whether prior or subsequent thereto, and whether of
the same or of a different type. No waiver shall be effective except by an
instrument in writing signed by Payee.

                  (b) Notice. Any notice, demand, consent, approval, disapproval
or statement required or permitted to be given by the terms and provisions of
this Note, or by any law or governmental regulation, shall be in writing and ,
unless otherwise required by such law or regulation, shall be personally
delivered or sent by United States mail, postage prepaid, as registered or
certified mail, or by nationally recognized overnight courier service, to the
address of the recipient as follows:

         If to Payor:               Inc.ubator Capital, Inc.
                                    #1530-625 Howe Street
                                    Vancouver, B.C. V6C 2T6.

                                    Attention:  Michael Bodnar

         If to Payee:               Exeter Partners, LLC
                                    964 3rd Avenue, 7th Floor
                                    New York, NY 92008

                                    Attention:  Derek M. Galanis

All notices shall be deemed given as of the date of delivery as indicated by
affidavit in the case of personal delivery; in the case of mailing, on the fifth
day after mailing; in the case of courier delivery, the next business day after
dispatch where overnight delivery is guaranteed.

                  (c) Severability. Each provision of this Note shall be
interpreted in a manner so as to be effective and valid under applicable law. If
any provision of this Note shall be held to be prohibited by or invalid under
applicable law, such provisions shall be ineffective only to the extent of such
provision and the remaining provisions of this Note shall remain unaffected and
in full force and effect.

                  (d) Successors and Assigns. This Note shall be binding upon
the Payor, its respective successors, assigns and transferees, and shall inure
to the benefit of and be enforceable by the Payee, its successors and assigns.

                  (e) Governing Law. The validity, interpretation and effect of
this Note shall be governed by the laws of the State of New York, without regard
to the choice of law principles thereof.

                  (f) Waiver. This Note (i) may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

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         IN WITNESS WHEREOF, the Payor has caused this Note to be duly executed
and delivered as of the date at the place first written above.

INC.UBATOR CAPITAL, INC

Jason W. Galanis, President

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