September  07,  2000

Mr.  Peter  Lippold
President,
Card  &  More,  Inc.
Card  &  More,  LP
Plastikkartenvertrieb  GmbH
Challenge  Card  Design  Plastikkarten,  GmBH
1700  Montgomery  Street  ste.  111
San  Francisco,  CA  94111

VIA  FAX:  415-339-9148

Dear  Mr.  Lippold:

     The  purpose  of  this  letter of intent ("Letter") is to set forth certain
nonbinding  understandings  and  certain  binding  agreements  between  Upgrade
International  Corporation,  a  Washington Corporation ("UPGD"), and the Cards &
More  group  ("GROUP"),  with  respect  to  an  acquisition  transaction  (the
"Acquisition")  to  be  accomplished  as  set  forth  below.

     The  numbered  paragraphs  below constitute a general guide to the material
terms  of the Acquisition, but they do not constitute a definitive agreement and
they  shall  not be enforceable unless and until the parties reach and execute a
definitive  agreement  regarding  the  Acquisition.

     1.  Transaction  Structure.  The parties contemplate that UPGD shall form a
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wholly-owned  subsidiary ("Newco"), that GROUP shall merge with and into. Owners
of  equity  interests  in  GROUP shall receive cash consideration for 60% of the
issued  and  outstanding  equity interests in the GROUP, as more fully described
below.  The parties contemplate that the Acquisition shall qualify as a tax-free
reorganization  under  the  Internal  Revenue  Code  of  1986,  as  amended.

     2.  Due  Diligence.  UPGD  shall  have  a reasonable period of time, not to
         --------------
exceed  30  days,  after  execution  of  the  definitive agreement regarding the
Acquisition, within which it shall finish its due diligence investigation of the
GROUP.  UPGD  shall  have  the  right  to  terminate  the  agreement  if, at the
conclusion  of  such  period  of  time,  it is not reasonably satisfied with the
results  of  its  investigation.  During the period prior to Closing, each party
shall  permit  the other reasonable access to its books, records, facilities and
personnel.


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     3.  Purchase Price.  Subject  to  paragraph  5, below, the "Purchase Price"
         --------------
shall be $12,000,000  for  60%  of  the  GROUP  payable  in  cash.

     4.  Financial  Condition. There shall be no decrease in GROUP's non current
         --------------------
assets,  other  than  in  connection  with normal and recurring depreciation and
amortization.  At  Closing,  GROUP's  liabilities, which shall include any GROUP
obligations to pay money (whether in connection with debt or equity securities),
shall  be  no  more  than  $100,000.

     5.  Filings  and  Approvals.  UPGD and GROUP shall cooperate to prepare and
         -----------------------
cause  to be filed a registration statement with the SEC in connection with this
acquisition. UPGD and GROUP shall further cooperate to prepare all other filings
required  to  effect  the  transaction.
Each  party  shall  bear  its  own  costs  in  connection with these filings and
approvals.

     6.  Exclusivity;  Acquisition  Proposals  and  Break-up Fee. The definitive
         -------------------------------------------------------
documentation  of  the  Acquisition shall include customary provisions regarding
the  obligation  of  GROUP  and  its  insiders  not  to solicit or encourage any
competing  acquisition  proposal,  with  appropriate flexibility left to GROUP's
Board  of  Directors  to  enable  it  to  perform  its  fiduciary  duty  to  its
shareholders,  the  violation  of  which  shall  result  in  GROUP paying UPGD a
break-up  fee  of  two  percent  (2%)  of  the  transaction  value.

     7.  Other  Terms.  The  definitive  documentation  of the Acquisition shall
         ------------
include  such  other terms and conditions, including representations, warranties
and  covenants,  customary  for  transactions  of  this type.  Additionally, the
definitive  agreement  will  include  five year (5) employment contracts for the
current  management  of  the  GROUP.

     The  following  lettered  paragraphs  constitute  the  legally  binding and
enforceable  of  agreement  of UPGD and GROUP (in recognition of the significant
costs  to  be  borne by UPGD and GROUP in pursuing the execution of a definitive
agreement  regarding  the  Acquisition),

     A.     Between  the  signing  of  this  letter  of intent and up to 30 days
thereafter,  the  GROUP  will not solicit or encourage any competing acquisition
proposal  front  any  person  other  than  UPGD,  nor  will GROUP, or any of its
stockholders, through any officer, director, agent, or otherwise, (1) solicit or
initiate,  directly  or  indirectly,  or  encourage  submission  of  inquiries,
proposals,  or offers from any potential buyer (other than UPGD) relating to the
disposition  of  the  assets  or securities of GROUP, or any part thereof (other
than sales in the ordinary course) or (2) subject to fiduciary obligations under
applicable  law as advised in writing by counsel, participate in any discussions
or negotiations regarding, or furnish to any person any information with respect
to,  the  disposition  of  assets or any securities of GROUP or any part thereof
during the pendency of negotiations between UPGD and GROUP, and neither UPGD nor
GROUP  will  unilaterally  terminate  these negotiations during the term of this
Letter  without  cause.


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     B.     For violation of the preceding paragraph  A  by  GROUP or any of its
stockholders,  through  any  officer, director, agent, or otherwise, GROUP shall
pay  UPGD  a  break-up  fee  of  2%  of  the  value  of  the  transaction.

     C.     GROUP  shall  conduct its business in the ordinary course consistent
with  prior  practices.  GROUP  will  not  make  or become obligated to make any
capital  expenditures  or  enter  or become obligated to enter into any material
contracts  outside  of  the  ordinary course of business consistent with GROUP's
prior  practice  without  GROUP's  prior written approval or engage in any other
transaction  outside  the  ordinary  course  of business consistent with GROUP's
prior  practice. GROUP will not make any payment or distribution with respect to
its  share  capital,  whether  by  way  of management fee, redemption, dividend,
bonus,  pay  increase or otherwise. The definitive agreement shall contain other
mutually  acceptable  limits  on  GROUP's  conduct of business during the period
prior  to  Closing.

     D.     Subject  to  the  terms  set  forth  in paragraph G below respecting
confidentiality  and  certain  other matters, each party will afford the other's
employees,  auditors,  legal  counsel,  and other authorized representatives all
reasonable  opportunity  and  access  during  normal  business hours to inspect,
investigate,  and  audit  their  respective  businesses.  Such  inspection,
investigation  and audit shall be conducted m a reasonable manner during regular
business  hours.

     E.     UPGD  and  GROUP  will  negotiate  in  good faith and use their best
efforts  to  arrive  at a mutually acceptable definitive agreement for approval,
execution,  and delivery on earliest reasonably practicable date. UPGD and GROUP
will  thereupon use their best efforts to effect the Closing and to proceed with
the  transactions  contemplated  by  the  definitive agreement as promptly as is
reasonably  practicable.

     F.     Each  of  the  undersigned  represents  and warrants that he has all
necessary  authority  to  execute  this  Letter  and create a binding obligation
enforceable  according  to its terms against the party on whose behalf he signs.

     G.     Each  party agrees to treat all nonpublic information concerning the
other furnished, or to be furnished, by or on behalf of the other (collectively,
the  "Information")  in accordance with the provisions of this paragraph, and to
take,  or  abstain from taking, other actions set forth herein, Each party shall
use  the  Information  of  the  other  solely  for the purpose of evaluating the
Acquisition,  and  it  will be kept confidential by such party on a need to know
basis;  provided  that  (i)  any  of  such  Information may be disclosed to such
party's  officers,  directors,  employees, representatives, agents, and advisors
who need to know such Information for the purpose of evaluating the Acquisition,
(ii)  any disclosure of such Information may be made to which the other consents
in writing and (iii) such Information may be disclosed if so required by law. If
the  Acquisition  is  not  consummated  each  party will return to the other all
material  containing  or  reflecting  the  Information  and  will not retain any
copies,  extracts,  or  other  reproductions  thereof.  The  provisions  of this
paragraph  G  shall  survive  the  termination  of  this  Letter.


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<PAGE>
     H.     Before executing the definitive agreement, neither Buyer nor  Seller
Shall make any public release of information regarding the matters  contemplated
Herein except  as  mutually  agreed  or  as  required  by  law,

     I.     Each  party  shall bear its own costs in connection with all matters
relating  to  the  negotiation  and  execution of this Letter and the definitive
agreement.  However,  in  the  event  that  the  parties enter into a definitive
agreement and the acquisition is not completed as a result of Upgrade failing to
fund  the  acquisition,  Upgrade  will  reimburse  up  to $100,000 of legal fees
incurred  by  the  GROUP.

     J.     Except  with respect to the enforcement of paragraphs A, B and G, if
the  definitive  agreement  is not signed on or before Oct 7, 2000, either party
(if  not in material breach of any of the binding provisions of this Letter) may
terminate  this Letter and thereafter this Letter shall have no force and effect
and  the  parties  shall  have  no  further  obligations  hereunder.

     Please sign and date this Letter in the space provided below to confirm our
mutual  understandings  and  agreements as set forth in this Letter and return a
signed  copy  to  the  undersigned. This letter may be signed in counterparts by
facsimile,  all  of  which  taken together shall be considered a single executed
original  document.  If  we  do  not  receive a signed copy of this letter on or
before  Sept  08,  2000, we will assume you have no further interest in pursuing
this  matter.


Very  truly  yours,

UPGRADE  INTERNATIONAL  CORPORATION


/s/  Daniel  Bland

By   Daniel  Bland
     Its  President

Acknowledged  and  agreed  to:

Cards  &  More,  Inc.

By  Peter  Lippold                           ----------------
     Its  President                               Date


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<PAGE>
     H.     Before  executing the definitive agreement, neither Buyer nor Seller
shall  make any public release of information regarding the matters contemplated
herein  except  as  mutually  agreed  or  as  required  by  law,

     I.     Each  party  shall bear its own costs in connection with all matters
relating  to  the  negotiation  and  execution of this Letter and the definitive
agreement.  However,  in  the  event  that  the  parties enter into a definitive
agreement and the acquisition is not completed as a result of Upgrade failing to
fund  the  acquisition,  Upgrade  will  reimburse  up  to $100,000 of legal fees
incurred  by  the  GROUP.

     J.     Except  with respect to the enforcement of paragraphs A, B and G, if
the  definitive  agreement  is not signed on or before Oct 7, 2000, either party
(if  not in material breach of any of the binding provisions of this Letter) may
terminate  this Letter and thereafter this Letter shall have no force and effect
and  the  parties  shall  have  no  further  obligations  hereunder.

     Please sign and date this Letter in the space provided below to confirm our
mutual  understandings  and  agreements as set forth in this Letter and return a
signed  copy  to  the  undersigned. This letter may be signed in counterparts by
facsimile,  all  of  which  taken together shall be considered a single executed
original  document.  If  we  do  not  receive a signed copy of this letter on or
before  Sept  08,  2000, we will assume you have no further interest in pursuing
this  matter.


Very  truly  yours,

UPGRADE  INTERNATIONAL  CORPORATION


/s/  Daniel  Bland

By   Daniel  Bland
     Its  President

Acknowledged  and  agreed  to:

Cards  &  More,  Inc.

/s/  Peter  Lippold
By  Peter  Lippold                              Sept.  07,  2000
                                                --------------------
     Its  President                                      Date


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