YIFAN COMMUNICATIONS INC
AGREEMENT RESPECTING FUTURE LEGAL SERVICES
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<TYPE>EX-10.5
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>AGREEMENT RESPECTING FUTURE LEGAL SERVICES
<TEXT>






                                  July 3, 2000

Mr. Yifan He, President
Yifan.com, Inc.
41-60 Main Street, Suite 210
Flushing, Queens, New York 11355

      Re:   Agreement Respecting Future Legal Services

Dear Mr. He,

      This  letter will  confirm  that the law firm of Petersen & Fefer has been
engaged to serve as general counsel to Yifan.com,  Inc., a New York  Corporation
("Yifan").  We are aware  that  Yifan is  presently  negotiating  a  transaction
whereby the  stockholders  of Yifan will  exchange  their Yifan shares for newly
issued  shares of Smart  Games  Interactive,  Inc.,  an  inactive  public  shell
controlled by Capston Network Company ("Capston").

      As you know, our firm has  represented  Capston for several years. We have
also served as general  counsel for Smart Games since April 2000. As counsel for
Capston and Smart Games, we have assisted in the  negotiation and  documentation
of the  transactions  that gave Capston control over the affairs of Smart Games.
We have also  assisted in  subsequent  settlement  negotiations  with the former
creditors of Smart  Games.  Lastly,  we have borne  primary  responsibility  for
drafting various  corporate and regulatory  filings for Smart Games and assisted
Capston in its preliminary negotiations with Yifan.

      In our  discussions  over the last several weeks, it has become clear that
Yifan will require the services of competent  commercial and securities  counsel
in connection with the completion of the business  combination with Smart Games.
You will also  require  the  services of  competent  commercial  and  securities
counsel in connection  with the future  activities of Yifan. It is expected that
such services will include, but not be limited to:

o     preparation  of all  required  reports  to the SEC under the  Securities
   Exchange Act of 1934;

o     preparation of all necessary contracts;

o     assistance in  negotiations  with respect to  acquisitions of additional
   properties;

o     assistance in negotiations with respect to strategic relationships;

o     assistance in negotiations with respect to additional financing;

o     preparation  of  documents   associated   with  property   acquisitions,
   strategic relationships and financing;

o     assistance with respect to strategic planning; and

o     general legal services in areas other than litigation and patent law.

     At your  request,  I have  discussed the future needs of Yifan with Capston
and  advised  Capston  that Yifan would like to hire our law firm as its general
counsel. I have also discussed the following issues with Capston:

o     Our desire to continue as legal counsel for Capston in  connection  with
   other matters;

o     Our desire to withdraw as legal counsel for Capston in  connection  with
   the Yifan transaction;

o     Our desire to  continue as legal  counsel for Smart Games in  connection
   with the Yifan transaction

o     Our  desire to  assume  the role of  general  counsel  for the  combined
   Yifan/Smart Games companies;

o     Our obligation to protect the  confidences  of Capston,  Smart Games and
   Yifan; and

o     Our  obligation  to  diligently  pursue the best  interests  of Capston,
   Smart Games and Yifan;

Based on these discussions, we are willing to assume the role as general counsel
for  Yifan  and  the  combined  Yifan/Smart  Games  companies  on the  following
conditions:

o  The effective  date of our  engagement  as general  counsel for Yifan and the
   combined Yifan/Smart Games companies will be July 1, 2000.

o  It is  understood  that we cannot be  involved  in  negotiations  to alter or
   change the fundamental  terms of the proposed  Yifan/Smart  Games transaction
   after this date.

o  Our activities on behalf of Capston will be kept in strict  confidence to the
   extent that they relate to projects  other than the Smart Games  takeover and
   the Yifan/Smart Games transaction.

o  Capston will waive all rights to  confidentiality  on matters relating to the
   Smart  Games  takeover,  negotiations  with Smart  Games'  creditors  and the
   Yifan/Smart Games transaction.

o  In connection with the  documentation  and closing of the  Yifan/Smart  Games
   transaction  we will  continue to bear  primary  responsibility  for document
   preparation,  but  Capston  will have all such  documents  reviewed  by other
   attorneys.

o  In  connection  with future  negotiations  between  Capston,  Smart Games and
   Yifan,  we will  represent the best  interests of Smart Games and Yifan,  and
   Capston  acknowledges  that we are not acting as legal counsel for Capston in
   connection with such negotiations.

o  We will be permitted to issue  opinions on behalf of Yifan and Smart Games in
   connection with the closing of the Yifan/Smart Games transaction, but Capston
   will have all such opinions reviewed by other attorneys.

o  After the effective date of our  engagement as general  counsel for Yifan and
   the combined  Yifan/Smart  Games companies,  Yifan will be entitled to all of
   the client protections and privileges of the Code of Professional Conduct.

o  In the event a dispute  arises  between Yifan and Capston that relates in any
   way to the  Yifan/Smart  Games  transaction,  we will  refrain from acting as
   legal counsel for either party in  connection  with the dispute and cooperate
   fully with both parties in the resolution of the dispute.

     Subject to the foregoing, the law firm of Petersen & Fefer agrees to become
general counsel for Yifan.com,  Inc. and Smart Games Interactive,  Inc effective
July 1, 2000.  Yifan and Smart Games are  collectively  referred to from time to
time  as  the  "Yifan   Companies."  Our   representation  and  assistance  will
specifically include the following:

      (1) We will assist the Yifan  Companies  in the  development  of a holding
company  structure  whereby  Smart  Games  Interactive  will  acquire all of the
outstanding stock of Yifan.com, Inc. and the stockholders of Yifan.com, Inc., as
a group,  will acquire an equity  interest in Smart Games equal to not less than
92%.  We shall,  also  assist the Yifan  Companies  in any  "corporate  cleanup"
activities  necessary to complete the proposed business  combination,  including
the preparation of the necessary directors resolutions and other documents.

      (2) In connection  with the business  combination we will assist the Yifan
Companies in the preparation of such regulatory reports,  contracts,  minutes of
meetings and other  documents as may be  necessary,  convenient  or desirable to
enable the Yifan  Companies to complete the business  combination  in accordance
with the requirements of the Securities Act of 1933 (the "Securities  Act"), the
Securities  Exchange  Act  of  1934  (the  "Exchange  Act")  and  Delaware  law.
Subsequently, we will assist in the preparation of the following SEC filings:

o     Current  Report  on  Form  8-K  relating  to  the  business  combination
   transaction

o     Information Statement Pursuant to Section 14(f) of the Exchange Act;

o     Information Statement Pursuant to Section 14(c) of the Exchange Act;

o     All required  Quarterly and Annual  Reports and Proxy  Statements  under
   the Exchange Act;

o     All required registration statements under the Securities Act;

o     Miscellaneous filings under the Securities Act and the Exchange Act

In connection  with each such SEC filing,  we will assist in the  preparation of
such  contracts,  minutes of meetings as other  documents  as may be  necessary,
convenient  or desirable to enable the Yifan  Companies to lawfully  maintain an
active trading market on the NASD's Electronic  Bulletin Board, the Nasdaq Stock
Market or an  appropriate  regional  or  national  securities  exchange,  all in
accordance with the requirements of the Exchange Act.

      (3) In connection with the future  corporate  financing  activities of the
Yifan  Companies we will explain to  responsible  officers and  directors of the
Yifan Companies their  responsibilities under the applicable provisions of state
and Federal  securities laws and regulations  including,  in general terms,  the
possible  civil and criminal  consequences  associated  with a failure to comply
with such  requirements.  The  appropriate  officers and  directors of the Yifan
Companies must devote adequate time and attention to the review of any documents
prepared  by  us  because  the  applicable   securities  laws  place  upon  them
responsibility  for assuring  that all  necessary  disclosure  documents are not
materially false, misleading or incomplete.  They should further understand that
we, as lawyers, cannot relieve the Yifan Companies or their officers,  directors
and principal  stockholders of their individual  responsibilities  under the law
although we can assist them in fulfilling  them. All information  respecting the
Yifan Companies,  and all biographical information on the officers and directors
of the  Yifan  Companies,  shall  be  furnished  to us in  writing.  We shall be
entitled to rely on the accuracy  and  truthfulness  of all written  information
furnished by the Yifan  Companies and their  respective  officers and directors,
and the the Yifan  Companies and their  respective  officers and directors shall
jointly  and  severally  indemnify  and hold the law  firm of  Petersen  & Fefer
harmless from and against all claims  arising out of or resulting  from material
misrepresentations  or  omissions  contained  in such  written  information.  In
addition to (and not as a limitation to) the foregoing,  the Yifan Companies and
their respective officers and directors shall execute a Representation Agreement
which  will be  supplied  by us prior to the  closing  of any  future  financing
transaction.

      (4) We will discuss  with the  appropriate  officers and  directors of the
Yifan  Companies  their  need to create  procedures  which will  enable  them to
develop the  information  reasonably  necessary to meet the  requirements of the
Securities  Act and the Exchange  Act, and to create a reasonable  timetable and
assignment of  responsibilities  for developing such information.  In each case,
the  officers and  directors of the Yifan  Companies  shall be  responsible  for
assigning responsibility for developing particular types of information to those
persons most knowledgeable  about such matters.  Particularly,  all officers and
directors  should  be  given  a  timely  opportunity  to  review  the  necessary
disclosure  documents  and  discuss  them with those  persons  who are  directly
involved  in their  preparation  and to whom the  officers  and  directors  have
assigned responsibility.

      (5) We will  perform  legal  review and  analysis of matters  which may be
required to be passed upon by us in  connection  with any opinion  which must be
given  because it is  required  by law,  requested  by a party to a  transaction
involving the Yifan  Companies,  or has been  requested by the Yifan  Companies.
This would include for example, a check of due formation of Yifan.com,  Inc. and
Smart Games,  the valid  authorization  of the securities being issued and other
securities  of the same  class  and the  revision  of any  documents  which  may
directly  affect the proposed  transaction.  Our review and analysis  might also
include  in our  discretion  inquiry  concerning  titles,  important  contracts,
pending  litigation  and the impact of laws having a special effect on the Yifan
Companies.  To the extent we deem it prudent to  consult  with  counsel  for the
Yifan  Companies  for advice or opinions on matters  pertaining  to  litigation,
patent law or other matters outside of our area of expertise,  we are authorized
to do so with the prior approval of the Yifan  Companies.  All fees and expenses
of such  counsel  shall be the  sole  and  direct  responsibility  of the  Yifan
Companies.

      (6) We will  assist  the  Yifan  Companies  on the  basis  of  information
furnished to us by the Yifan Companies.  The  responsibility for decisions as to
whether a fact is  material  or whether  there is a material  inaccuracy  in any
statement  shall remain with the officers and directors of the Yifan  Companies.
We are not obligated to search all the files and records of the Yifan  Companies
to discover, for example, all material contracts or other documents but shall be
entitled to rely,  outside of certain legal matters,  on  interrogations  of and
reports  and  compilations  prepared  by others,  including  auditors  and other
lawyers.  In  particular,  we are not being  retained to furnish  accounting  or
economic advice.

      (7) We will  assist the Yifan  Companies  in the  drafting  of the various
documents that will be filed with the Securities and Exchange  Commission by the
Yifan Companies to the end that in his opinion, these documents reflect what the
Yifan  Companies  intend  them to say,  are not  ambiguous  and are written in a
manner  that is designed to protect  the Yifan  Companies  from later  claims of
overstatement,  misleading implications,  omissions or other deficiencies due to
the manner in which the documents in question have been  written.  However,  you
are cautioned  merely because we have assisted you in this  endeavor,  this will
not insure such documents will be free from all misleading, unclear or ambiguous
statements.  However,  all information properly furnished to us will be provided
in the in the format required.  Again, the ability to determine the substance or
context  of any  document  filed  with  the SEC  rests  solely  with  the  Yifan
Companies.

      (8) We will not be required to nor will we make statements that could give
a mistaken  impression we have passed upon matters which we have not nor that we
take  responsibility  for the accuracy and completeness of any document prepared
on  behalf of the Yifan  Companies.  We will  advise  the Yifan  Companies  with
respect to certain  matters under the Federal  securities law that may arise and
not relate  directly to the  preparation  of any  offering  document,  report or
regulatory  filing.  We will advise the Yifan Companies as to the procedures and
requirements  involved in the processing and distribution of regulatory reports,
proxy statements,  news releases and other investor relations material.  We will
also  assist the Yifan  Companies  in the  preparation  of any  notices or other
applications which may be required to be filed with the National  Association of
Securities Dealers, any Stock Exchanges upon which the Yifan Companies will seek
to  list  their  securities  and  the  securities  regulatory  authority  of the
applicable  states and will advise and assist the Yifan  Companies in responding
to any comments from such authorities.

      (9) We will advise  Yifan  Companies  in the  preparation  of any notices,
forms,  qualifications  and other  documents that may be necessary to notify the
Securities and Exchange Commission,  the securities  regulatory authority of any
states,  and any other  person or  regulatory  authority  of any of the proposed
transactions,  will  advise and assist  Yifan  Companies  in  responding  to any
comments from such regulatory authorities.

      (10) We will advise the Yifan Companies in the negotiation and preparation
of any contracts  that are  necessary or desirable for the future  operations of
the Yifan Companies including,  but not limited to, employment contracts,  stock
incentive   plans,   contracts  for  the   acquisition  of  tangible   property,
intellectual   property  and  other  intangible  property,   contracts  for  the
acquisition  of business  activities  or assets,  contracts  for the creation of
strategic  relationships  and  contracts  associated  with the future  financing
activities of the Yifan Companies.

      The  foregoing  undertakings  are  contingent  upon  the  Yifan  Companies
promptly advancing,  upon request,  all costs and expenses and fees when due and
owing.  Costs and expenses  include,  but are not limited to, travel,  printing,
filing  fees,  photocopy,  telephone,  document  preparation  charges,  courier,
Federal  Express,  postage  and  other  expenses.  The Yifan  Companies  further
acknowledge  that we may be required to resign this engagement if our failure to
do so would result in a violation of the Code of Professional Responsibility, or
any Disciplinary Rule promulgated thereunder,  such as those prohibiting counsel
from  knowingly  advising  or  assisting  his  client to engage in an illegal or
fraudulent act.

      In  recognition  of the fact  that the  financial  resources  of the Yifan
Companies are currently  limited and the Yifan Companies  intend to aggressively
control  their future  out-of-pocket  costs,  we have agreed to serve as general
counsel  under a  compensation  structure  that  is  equity-based,  rather  than
fee-based.  As  compensation  for the services to be rendered in connection with
the business combination and all required regulatory filings for a period of one
year  thereafter,  we shall receive a fee  consisting  of 360,000  shares of the
$0.008 par value common stock of the combined Yifan/Smart Games companies.  This
equity position will represent approximately 2.7% of the post-transaction equity
of the combined  Yifan/Smart Games companies.  These shares will be fully earned
upon the execution of the  reorganization  documents relating to the Yifan/Smart
Games business combination and shall have an agreed value of $0.89 per share, an
amount which is equal to the price paid by the last person to purchase shares of
Yifan.com,  Inc.  for  cash.  These  shares  will be  issuable  to us  upon  the
effectiveness of an amendment to the Company's Certificate of Incorporation that
authorizes the issuance of such $0.008 par value common stock.

     The Yifan  Companies  will have the right to terminate  our  engagement  as
general  counsel  at any time.  In the event that the Yifan  Companies  elect to
retain  another firm of lawyers to serve as counsel at any time during the first
year of our  engagement,  we shall be obligated to reimburse the Yifan Companies
for one-half of the total billings  rendered by such other firm, but only to the
extent such billings  specifically  relate to services  that would  otherwise be
covered by this agreement.  Notwithstanding the generality of the foregoing, our
maximum  liability  to the Yifan  Companies  with respect to the fees charged by
successor  legal counsel  shall not exceed  one-half of the fair market value of
the 360,000  shares  received by us. For purposes of this  limitation,  the fair
market value of the shares will be determined  based on the average  closing bid
price of the Yifan Companies common stock during the 30 day period commencing 90
days after completion of the business combination transaction.

      In addition to the fixed fee set forth in the  preceding  paragraph  which
relates solely to services  rendered as general counsel to the Yifan  Companies,
we shall be  entitled  to  receive  the  following  contingent  compensation  on
specific  transactions  effected by the Yifan  Companies  during the term of our
engagement.

o     If we serve as legal counsel for the Yifan  Companies in connection with
      the acquisition of additional properties,  assets or businesses, our fee
      for serving as counsel for the Yifan  Companies in  connection  with the
      transaction  will  be  2.7% of the  consideration  actually  paid by the
      Yifan   Companies   in   connection   with  the   transaction.   If  the
      consideration  to be  received by the other  parties to the  transaction
      consists  of equity  securities  of the Yifan  Companies  or deferred or
      contingent  payments,   our  fees  shall  likewise  be  paid  in  equity
      securities of the Yifan  Companies or deferred or  contingent  payments.
      The  Yifan  Companies  shall  have no duty to use our firm as its  legal
      counsel in connection with any acquisition transaction.

o     If we serve as legal  counsel  for the Yifan  Companies  in  connection  a
      future financing transaction, our fee for serving as counsel for the Yifan
      Companies  in  connection  with  the  transaction  will be  1.35% of gross
      proceeds   received  by  the  Yifan   Companies  in  connection  with  the
      transaction. The Yifan Companies shall have no duty to use our firm as its
      legal counsel in connection with any financing transaction.

All shares issuable  pursuant to this agreement shall be issuable 50% to John L.
Petersen and 50% to Rachel A. Fefer.  To the extent they may lawfully do so, the
Yifan  Companies  shall file a Registration  Statement  under the Securities Act
with respect to all shares issuable to us as compensation, but only if the Yifan
Companies are then eligible to file a short form Registration  Statement on Form
S-8. If the Yifan  Companies  are not  eligible to file a Form S-8  Registration
Statement, then such shares shall be issued pursuant to SEC Regulation D.

      We hereby agree that (a) the shares  provided for herein will be issued to
us compensation  for bona fide legal services  rendered to the Yifan  Companies,
(b) this  agreement  relates  solely to  day-to-day  legal  services  as general
counsel for the Yifan  Companies and our  compensation  for any future  "capital
raising  transactions"  will be established  by a separate  transaction-specific
retainer agreement (c) we have paid no cash consideration to the Yifan Companies
for the shares  that will be issued to us  pursuant  to the terms of this letter
and no portion of the  proceeds  from any resale of such shares will be remitted
to the Yifan  Companies or used  directly or  indirectly  for the payment of any
expenses of the Yifan Companies or any of their  affiliates,  (d) we will not be
involved,  except as  securities  counsel,  in any  activity  that  promotes  or
otherwise  maintains a market for the securities of the Yifan Companies,  (e) as
long as we are the beneficial owner of any securities of the Yifan Companies, we
will not engage in "buy-side" trading activities,  hedging transactions or other
activities  that could  reasonably  be expected to influence the market price of
such  securities,  (f) we will not  sell any  shares  in a  transaction  that is
effected  at a price  lower than the quoted bid price of the  securities  at the
time of sale,  (g) if we  engage  in  multiple  sales  in any  five  consecutive
business days, we will not sell any shares in a transaction  that is effected at
a price lower than the last price  received by us for the same  securities,  and
(h) we will not sell more than 10% of the  shares  issued to us in any  calendar
month.

      If the foregoing terms meet with your approval, please execute one copy of
this  letter in the space  provided  below and return  the  signed  copy at your
earliest  convenience.  We appreciate  this  opportunity to serve your needs and
look forward to a long and productive relationship.  Please call if you have any
questions or comments regarding the terms set forth above.

                                                Very truly yours,
                                                Petersen & Fefer

                                                        /s/

                                                By John L. Petersen

      Accepted and agreed to this 3rd day of July 1999.

Yifan.com, Inc.                               Smart Games Interactive, Inc.


By:           /s/                            By:           /s/
    --------------------------                   -------------
    Its President                                     Its President

Capston Network Company

By:           /s/
    -------------
    Its President

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