OPTION AGREEMENT
THIS Option Agreement made the 3 day of February 1998.
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BETWEEN:
ULTRACARD, INC., a company having an address at 0000 Xxxxxxxxx Xxx, Xxxxxx,
Xxxxxxxxxx, 000000-0000.
("UltraCard")
UPGRADE INTERNATIONAL, CORP., a company incorporated under the laws of
Nevada, having an office and address at 1 0000 Xxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxxx, 00000.
("Upgrade")
WHEREAS
A. In a letter agreement dated January 30, 1998, Upgrade proposes to, or has
purchased 18.53% of the issued and outstanding share capital of UltraCard.
Upgrade desires to acquire a greater equity position in UltraCard.
B. UltraCard desires to grant to Upgrade an option to purchase Shares on the
terms and conditions set out herein.
NOW THEREFORE in consideration of the mutual promises contained herein and the
payment of $1 by each party hereto to the other and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS
In this Agreement and the recitals hereto, unless the context otherwise
requires, the following words and expressions shall have the following meanings:
(a) "Option" means the option granted to Upgrade under Section 2.1;
(b) "Option Notice" means a notice indicating that Upgrade is exercising
the Option in whole or in part;
(c) "Option Price" means US$ 2,000,0000 required to be paid to acquire all
the Optioned Shares which may be purchased by Upgrade under this
Agreement;
(d) "Optioned Shares" means 15% of the issued and outstanding Shares on
the close of the acquisition of all the Optioned Shares under this
Agreement. This percentage will be adjusted, if necessary, to result
in Upgrade holding, combined with its previous holdings, 35% of the
issued and outstanding shares of UltraCard on the close of the
acquisition of the Option Shares;
(e) "Shares" means the shares of the common stock of UltraCard as
currently constituted; and
(f) "Termination Date" means the dates as Scheduled in Section 2.4.
1.2 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings are for the convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder". and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to Articles and Sections are to Articles and Sections of this Agreement.
1.3 EXTENDED MEANINGS
Words importing the singular number only shall include the plural and
vice versa and words importing gender shall include masculine, feminine and
neuter genders.
1.4 UNITED STATES DOLLARS
Unless otherwise provided herein, all monetary amounts set forth in
this Agreement are in United States dollars.
ARTICLE 2: OPTION
2.1 UltraCard hereby grants to Upgrade the irrevocable option (the
"Option") to purchase the Optioned Shares, at the Option Price, subject to the
terms and provisions of this Agreement.
2.2 The Option may be exercised in whole or in part at any time
and from time to time up to and including the Termination Date in respect of
Optioned Shares. The Option may be exercised by Upgrade giving to UltraCard an
Option Notice accompanied by a cheque or bank draft representing the Option
Price in respect of the Optioned Shares for which the Option is being exercised.
2.3 Upgrade will receive a pro rata number of Optioned Shares on
the exercise of a part of the Option. The actual number of Optioned Shares
Upgrade will be entitled to receive will be based on the percentage of the
Option Price tendered for the Option Shares and the number of issued and
outstanding Shares at that time.
2.4 At a minimum, Upgrade must provide UltraCard notice of its
intent of exercise its right to acquire the Optioned Shares by the close of
business one day following the demonstration of the technology, currently
scheduled to be in or before Aug 31, 1998 and tender the Option Price as
follows:
(a) $ 666,667 on Demonstration plus one day.
(b) $ 666,667 on Demonstration plus 46 days.
(c) the balance of $666,66 on Demonstration plus 77 days.
On receipt of each portion of the Option Price Upgrade will be entitled to
receive 5% of the Optioned Shares from treasury.
2.5 UltraCard will at all times prior to the Termination Date
reserve and keep available such number of its Shares as will be sufficient to
satisfy the requirements of this Agreement.
2.6 Failure to tender the Option Price by the close of business on
the any of the dates Scheduled in Section 2.4 above will result in the immediate
termination of this Agreement for any and all Optioned Shares still available
under the Agreement at that time.
ARTICLE 3: FINANCING RIGHT OF FIRST REFUSAL
3.1 UltraCard agrees that if it seeks to raise additional monies
through an equity financing UltraCard will seek approval from the Board of
Directors of UltraCard as to the amount and price in the form of a private
placement document. UltraCard agrees that it will give Upgrade a first right of
refusal to finance that private placement. If Upgrade declines and UltraCard
attempts to sell or raise monies from other sources, and has to discount as a
result of not being able to finance at the level Upgrade was offered, Upgrade is
to be given the right of first refusal on any discount. UltraCard agrees
Upgrade will have the right of first refusal to finance up until UltraCard
decides to proceed with an initial public offering.
3.2 The right of first refusal given in Section 3.1 above will
terminate immediately on the termination of this Agreement for any reason.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES OF ULTRACARD
UltraCard hereby represents and warrants to Upgrade that:
4.1 UltraCard has been duly incorporated and organized and is
validly existing under the laws Nevada and has all requisite corporate power and
authority to carry out the provisions of this Agreement.
4.2 UltraCard has taken all necessary corporate action to permit
all of the Optioned Shares to be validly issued to Upgrade and recorded on the
books of UltraCard in the name of Upgrade or its nominee upon exercise of the
Option in whole or in part in accordance with the terms and conditions of this
Agreement and during the term of the Option UltraCard will maintain a sufficient
quantity of authorized but unissued Shares to satisfy any exercise of the
Option.
4.3 Except for the Optioned Shares, no person has any agreement or
option, or right or privilege (whether pre-emptive or contractual) capable of
becoming an agreement (including convertible securities, warrants or convertible
options of any nature), for the purchase, subscription, allotment or issuance of
any unissued shares, warrants of other securities of UltraCard.
4.4 There is no action, proceeding or investigation pending or, to
the knowledge of UltraCard and its directors and officers, threatened which
questions the validity of the issuance of the Optioned Shares, or any action
taken or to be taken against UltraCard pursuant to or in connection with this
Agreement.
4.5 UltraCard is not in default or breach of, and the execution
and delivery of this Agreement by UltraCard, the performance and compliance with
the terms of this Agreement, the sale of the Optioned Shares by UltraCard, will
not result in any breach of, or be in conflict with or constitute a default
under, or create a state of facts which after notice or lapse of time, or both,
would constitute a default under, any term or provision of the constating
documents, by-laws or resolutions of UltraCard or any mortgage, note, indenture,
contract, agreement (written or oral), instrument, lease or other document to
which UltraCard is a party or any judgment, decree or order, or any term or
provision thereof, which materially adversely affects the business, operations
or condition (financial or otherwise) of UltraCard or its property or assets.
4.6 There is no person, firm or corporation acting or purporting
to act for UltraCard entitled to any brokerage or finder's fee in connection
with this Agreement or any of the transactions contemplated in this Agreement.
5.7 This Agreement has been duly authorized, executed and
delivered on behalf of UltraCard and is a valid and binding obligation of
UltraCard enforceable in accordance with its terms except that rights to
indemnity hereunder may be limited by applicable laws and except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
enforcement of creditor's rights.
ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF UPGRADE
Upgrade hereby represents and warrants to UltraCard that:
5.1 Upgrade has been duly incorporated and organized and is
validly existing under the laws Florida and has all requisite corporate power
and authority to carry out the provisions of this Agreement.
5.2 There is no action, proceeding or investigation pending or, to
the knowledge of Upgrade and its directors and officers, threatened which
questions the validity of the acquisition of the Optioned Shares, or any action
taken or to be taken by against Upgrade pursuant to or in connection with this
Agreement;
5.3 Upgrade is not in default or breach of, and the execution and
delivery of this Agreement by Upgrade, the performance and compliance with the
terms of this Option Agreement, the acquisition of the Optioned Shares by
Upgrade, will not result in any breach of. or be in conflict with or constitute
a default under, or create a state of facts which after notice or lapse of time,
or both, would constitute a default under, any term or provision of the
constating documents, by-laws or resolutions of Upgrade or any mortgage, note,
indenture, contract, agreement (written or oral), instrument, lease or other
document to which Upgrade is a party or any judgment, decree or order, or any
term or provision thereof, which materially adversely affects the business,
operations or condition (financial or otherwise) of Upgrade or its property or
assets.
5.4 Upgrade has full corporate power and authority to acquire the
Optioned Shares, and all necessary corporate action has been taken by Upgrade to
acquire the Optioned Shares.
5.5 There is no person, firm or corporation acting or purporting
to act for Upgrade entitled to any brokerage or finder's fee in connection with
this Agreement or any of the transactions contemplated in this Agreement.
5.6 This Agreement has been duly authorized, executed and
delivered on behalf of Upgrade and is a valid and binding obligation of Upgrade
enforceable in accordance with its terms except that rights to indemnity
hereunder may be limited by applicable laws and except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws affecting
enforcement of creditor's rights.
ARTICLE 6: GENERAL
6.1 AMENDMENTS AND WAIVERS
No modification, variation, amendment or termination by mutual consent
of this Agreement and no waiver of the performance of any of the
responsibilities of any of the parties hereto shall be effected unless such
action is taken in writing and is signed by all parties. No amendment to this
Agreement shall be valid or binding unless set forth in writing and duly
executed by all of the parties hereto. No waiver of any breach of any provision
of this Agreement shall be effective or binding unless made in writing and
signed by the party purporting to give the same and, unless otherwise provided
in the written waiver, shall be limited to the specific breach waived.
6.2 SEVERABILITY
Each of the covenants, provisions, Articles, Sections, subsections and
other subdivisions hereof is severable from every other covenant, provision,
Article, Section, subsection and the invalidity or unenforceability of any one
or more covenants, provisions, Articles, Sections, subsections or subdivisions
of this Agreement shall not affect the validity or enforceability of the
remaining covenants, provisions, Articles, Sections, subsections and
subdivisions hereof.
6.3 TIME OF ESSENCE
Time shall be of the essence in this Agreement.
6.4 NOTICE
(1) Any notice or other written communication required or permitted
hereunder shall be in writing and:
(a) delivered personally to the party or, if the party is a corporation,
an officer of the party to whom it is directed;
(b) sent by registered mail, postage prepaid, return receipt requested
(provided that such notice or other written communication shall not be
forwarded by mail if on the date of mailing the party sending such
communication knows or ought reasonably to know of any difficulties
with the postal system which might affect the delivery of mail,
including the existence of an actual or imminent postal service
disruption in the city from which such communication is to be mailed
or in which the address of the recipient is found); or
(c) Sent by facsimile or telex with all necessary charges fully prepaid,
confirmation of delivery requested.
(2) All such notices shall be addressed to the party to whom it is
directed at the following addresses:
To the Upgrade: Upgrade International Corp.
0000 Xxxxxxxxx Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx Fax: (000) 000-0000
To the Corporation: UltraCard, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx
00000
Attention: Xxxxxx Xxxxx Fax: (000) 000-0000
(3) Any party may at any time change its address hereunder by giving
notice of such change of address to the other party or parties in the manner
specified in this section. Any such notice or other written communication shall,
if mailed or given by telegram, be effective on the day it is first attempted to
be delivered to such party at such address (whether or not such delivery takes
place), and if given by personal delivery, shall be effective on the day of
actual delivery.
6.4 ENTIRE AGREEMENT
This Agreement constitutes and contains the entire and only agreement
among the parties relating to the matters described herein and supersedes and
cancels any and all previous agreements and understandings between all or any of
the parties relative hereto. Any and all prior and contemporaneous
negotiations, memoranda of understanding or position, and preliminary drafts and
prior versions of this Agreement, whether signed or unsigned, between the
parties leading up to the execution hereof shall not be used by any party to
construe the terms or affect the validity of this Agreement. There are no
representations, inducements, promises, understandings, conditions or warranties
express, implied or statutory, between the parties other than as expressly set
forth in this Agreement.
6.5 APPLICATION OF AGREEMENT
This Agreement shall be binding upon and ensure to the benefit of the
parties hereto and their respective heirs, administrators, executors, successors
and permitted assigns. Except as hereinafter provided, neither of the parties
hereto may assign its rights or obligations under this Agreement without the
prior written consent of the other party hereto. Upgrade may assign its rights
hereunder to any person to whom it is permitted to transfer some or all of its
Shares, whether such permitted transferability is expressly provided for in the
Shareholders Agreement or otherwise consented to and approved in accordance with
the Shareholders Agreement.
6.6 SUBDIVISION OR CONSOLIDATION OF SHARES
If the Shares are changed by way of being classified or reclassified,
subdivided, consolidated or converted into a different number or class of shares
or otherwise, or if UltraCard amalgamates, the Option Price and the type of
security to be delivered to Upgrade upon exercise of the Option in whole or in
part shall be adjusted accordingly, in all cases so that Upgrade shall receive
the same number and type of securities as would have resulted from such change
if the Option or the remaining part thereof had been exercised before the date
of the change.
6.7 REGISTRATION AND QUALIFICATION
UltraCard will register the Option with all applicable government
authorities. If UltraCard makes a public offering of Shares during the term of
this Option it will register the Optioned Shares with the appropriate regulatory
authorities so that the Optioned Shares once converted may be freely tradable.
6.7 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada and the laws of United States applicable therein.
6.8 EXECUTION
This Agreement may be executed in several counterparts, each of which, when
so executed, shall be deemed to be an original, and such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this as of the 3rd day
of FEBRUARY, 1998.
ULTRACARD, INC. UPGRADE INTERNATIONAL, INC.
/s/ Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxx, Pres.
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AMENDING AGREEMENT
This Amending Agreement made the 12th day of February, 1998.
BETWEEN :
ULTRACARD INC, a company having an address at 0000 Xxxxxxxxx Xxx,
Xxxxxx Xxxxxxxxxx, 000000-0000.
("UltraCard")
UPGRADE INTERNATIONAL, CORP., a company incorporated under the laws of
Nevada, having an office and address I 0000 Xxxxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000.
("Upgrade")
WHEREAS
A. in a letter Agreement dated January 30, 1998 ("Letter
Agreement"), Upgrade proposes to purchase 18.53% of the issued and outstanding
share capital of UltraCard.
B. UltraCard and Upgrade have agreed to amend certain terms of
the Letter Agreement on as set out in this Amending Agreement.
NOW THEREFORE in consideration of the mutual promise's continued herein and the
payment of 51 by each party hereto to the other and for other good and valuable
consideration. The receipt and efficiency of which are acknowledged, the parties
hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS
Word with an initial capital which are not otherwise defined in this
amending agreement have the meaning given to those words in the letter agreement
as amended by this Amending Agreement
1.2 SECTIONS AND HEADINGS
The division of this Agreement in to Articles and Sections and the
insertion of headings are further convenience of reference only and shall not
effect the construction or interpretation of this Agreement. The terms "this
Agreement", "there off", "there under" and similar expressions prefer to this
agreement and not to any particular article, section or other portion here off
and include any agreement or instrument supplemental or ancillary hereto unless
some things in the subject matter or context is in consistent therewith,
references herein to Articles and sections are too Articles and Sections of this
Agreement.
1.3 EXTENDED MEANING
Words importing the singular number only shall include the plural and
vice versa and words importing gender shall include masculine, feinting and
neuter genders.
1.3 UNITED STATES DOLLARS
Unless otherwise provided herein, all monetary amounts set forth in
this Agreement are in United States Dollars.
ARTICLE 2: AMENDMENT TO LETTER AGREEMENT
Except as provided in Article 3 below all of the terms and conditions
confide in the Letter Agreement will continue to apply unmanned for and during
the terms of the Letter Agreement.
ARTICLE 3: BASIC TERMS
3.1 PARAGRAPH 1(2) OF LETTER AGREEMENT
Paragraph 1(2) of the Letter Agreement is replaced with the
following paragraph:
"(2) The Corporation received partial payment of US$25,000 for
the Shares on January 28,1998. The reminder of the purchase price
for the Shares will be made by of on behalf of upgrade wire
transfer to the Corporation as follows:
a $ 40,000 by the close of business (PST) on Friday,
February 6,1998;
b $ 50,000 by the close of business (PST) on Wednesday,
February 11,1998; and
c $ 335,000, by the close of business (PST) on Tuesday,
February 17,1998;
If Upgrade should fail to tender the aggregate purchase price of
$ 450,000 by the close of business on Tuesday, February 17, 1998,
the per share purchase price will change from S0.4444 per share
to $1.00 per share. In other words, the Corporation will issue
one share for each dollar actually received by the Corporation."
3.2 SCHEDULES
Schedule "A" in the Letter Agreement is no longer relevant and is removed
in its entirety.
ARTICLE 4: GENERAL
4.1 FULL FORCE AND EFFECT
The Letter Agreement remains in full force and effect as expressly amended
by this Amending Agreement.
4.2 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the States Nevada and the laws of United States applicable therein.
4.3 EXECUTION
This Agreement may be executed in several counterparts, each of which,
when so executed, shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this so of the
13-day of February, 1998.
ULTRACARD, INC. UPGRADE INTERNATIONAL, INC.
/s/ Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxx Pres.
------------------------ -----------------------------------
AMENDING AGREEMENT NO. 2
This Amending Agreement is made this 4th day of August, 1998, by and
----
between ULTRACARD, INC. ("UltraCard"), a Nevada corporation, 0000 Xxxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and UPGRADE INTERNATIONAL CORP. ("Upgrade"), a
Florida corporation, 000 Xxxxxx Xx., xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, UltraCard and Upgrade have entered into a letter agreement dated
January 30, 1998, and a subsequent Amending Agreement dated February 12, 1998,
pursuant to which Upgrade purchased 18.5% of the outstanding shares of the
capital stock of UltraCard; and
WHEREAS, UltraCard and Upgrade also entered into an Option Agreement dated
February 3, 1998, pursuant to which UltraCard granted to Upgrade an option to
purchase an additional 15% of the outstanding shares of stock of UltraCard; and
WHEREAS, UltraCard and Upgrade have agreed to amend certain terms of the
aforesaid Option Agreement to provide Upgrade with an option to acquire fifty
percent (50%) of the issued and outstanding shares of stock of UltraCard on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and the payment of $1.00 by each party to the other, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS. Capitalized words and terms which are not otherwise defined
in this Amending Agreement shall have the meaning given to those words and terms
in the Option Agreement as amended by this Amending Agreement.
1.2 SECTIONS AND HEADINGS. The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference
only, and shall not affect the construction or interpretation of this Agreement.
The terms "this Agreement", "hereof", "hereunder" and similar expressions refer
to this Amending Agreement No 2 and not to any particular Article, Section, or
other portion hereof, and include any agreement or instrument supplemental or
ancillary hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections of this Agreement.
1.3 EXTENDED MEANINGS. Words importing the singular number only shall
include the plural and vice versa and words importing gender shall include
masculine, feminine and neuter genders.
1.4 UNITED STATES DOLLARS. Unless otherwise provided herein, all monetary
amounts set forth in this Agreement are in United States dollars.
ARTICLE 2: AMENDMENT TO OPTION AGREEMENT
Except as otherwise provided in Article 3 below, all of the terms and
conditions contained in the Option Agreement shall continue to apply without
change or amendment.
ARTICLE 3: AMENDED TERMS
3.1 OPTION PRICE. Article 1, Paragraph 1.1(c) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(c) "Option Price" means US $7,500,000 required to be paid to acquire
all of the Optioned Shares which may be purchased by Upgrade under
this Agreement;"
3.2 OPTIONED SHARES. Article 1, Paragraph 1.1(d) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(d) "Optioned Shares" means approximately thirty-one and one-half
percent (31.5%) of the issued and outstanding Shares on the close of
the acquisition of all the Optioned Shares under this Agreement. This
percentage shall be adjusted, if necessary, in order to guarantee and
insure that Upgrade will own, on the close of the acquisition of all
the Optioned Shares, a total of fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard, including the Shares
currently owned by Upgrade."
3.3 DEMONSTRATION DATE. A new paragraph shall be added to Article 1,
Paragraph 1.l (g), to define the term "Demonstration Date" as follows:
"(g) "Demonstration Date" means the date on which all of the following
events have occurred: (i) UltraCard has provided Upgrade with proof of
concept which shall consist of a demonstration of the read/write and
storage technology, and (ii) Upgrade has received written confirmation
satisfactory to Upgrade that the technology is viable both conditions
of which shall be satisfied on or before August 5, 1998. Further,
Upgrade acknowledges it has observed and reviewed the demonstration
proof of concept provided by UltraCard on July 24-25, 1998.
3.4 PAYMENT OF OPTION PRICE. Article 2, Paragraph 2.4 of the Option
Agreement is hereby amended and replaced with the following paragraph:
"2.4 Upgrade shall acquire the optioned shares of UltraCard and tender
the option price to UltraCard in accordance with the following
schedule:
(a) $150,000.00 on or before August 14, 1998;
(b) $516,667.00 on or before August 17, 1998.
(c) $1,500,000.00 on or before September 21, 1998;
(d) $5,333,333.00 on or before October 21, 1998.
Upgrade shall be entitled to receive optioned shares equal to
approximately five and one half percent (5.5%) for each $666,667.000
of Option Price payments up to a total of $2,000,000 in option price
payments for approximately sixteen and one half percent (16.5%). Upon
final remittance of the Option Price payments in excess of Two Million
Dollars ($2,000,000) specified in subparagraphs (a)-(d) above Upgrade
shall be entitled to receive Optioned Shares equal to fifteen percent
(15%) of the issued and outstanding Shares of UltraCard."
3.5 FAILURE TO TENDER BY TERMINATION DATE. Article 2, Paragraph 2.6 of the
Option Agreement is hereby amended and replaced with the following paragraph:
"2.6 Failure to tender the specified amount of the Option Price by the
close of business on any of the dates scheduled in subparagraphs
2.4(a), (b), (c) or (d) above will result in the immediate termination
of this Agreement for any Optioned Shares still remaining under this
Agreement at that time.
3.6 REPRESENTATIONS AND WARRANTIES OF ULTRACARD. Two additional paragraphs,
Paragraphs 4.8 and 4.9, shall be added to Article 4 as follows:
"4.8 UltraCard shall reserve and set aside no more than One Million
(1,000,000) authorized but unissued Shares of the corporation, which
Shares shall be part of and subject to a combined incentive and or a
stock plan to be adopted and implemented by UltraCard."
"4.9 UltraCard warrants that from the date Upgrade acquires all of the
Optioned Shares under this Agreement until the date of any initial
public offering of the Shares of UltraCard, UltraCard shall not take
any action or in any way allow or cause Upgrade's ownership of the
issued and outstanding shares of UltraCard to become diluted so as to
result in Upgrade owning less than fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard. In the event that
UltraCard requires additional financing prior to an initial public
offering of UltraCard, Inc. shares, Upgrade agrees to provide
sufficient debt financing on mutually agreeable terms. Both parties
agree that repayment of any debt financing will be paid out of an
initial public offering of UltraCard, Inc. shares.
ARTICLE 4: GENERAL
4.1 FULL FORCE AND EFFECT. Except as expressly amended by this Agreement,
all of the terms, conditions, and provisions of the Option Agreement shall
remain in full force and effect.
4.2 EXECUTION. This Agreement may be executed in several counterparts, each
of which, when so executed, shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amending
Agreement as of the day and year set forth above.
ULTRACARD, INC. UPGRADE INTERNATIONAL, INC.
By Xxxxxx Xxxxx By Xxxxxx X. Xxxxx
------------------- --------------------------------
Its President Its President
--------- -------------------------------
AMENDING AGREEMENT NO. 2
This Amending Agreement is made this 4th day of August, 1998, by and
---
between ULTRACARD, INC. ("UltraCard"), a Nevada corporation, 0000 Xxxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and UPGRADE INTERNATIONAL CORP. ("Upgrade"), a
Florida corporation, 000 Xxxxxx Xx., xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, UltraCard and Upgrade have entered into a letter agreement dated
January 30, 1998, and a subsequent Amending Agreement dated February 12, 1998,
pursuant to which Upgrade purchased 18.5% of the outstanding shares of the
capital stock of UltraCard; and
WHEREAS, UltraCard and Upgrade also entered into an Option Agreement dated
February 3, 1998, pursuant to which UltraCard granted to Upgrade an option to
purchase an additional 15% of the outstanding shares of stock of UltraCard; and
WHEREAS, UltraCard and Upgrade have agreed to amend certain terms of the
aforesaid Option Agreement to provide Upgrade with an option to acquire fifty
percent (50%) of the issued and outstanding shares of stock of UltraCard on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and the payment of $1.00 by each party to the other, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS. Capitalized words and terms which are not otherwise defined
in this Amending Agreement shall have the meaning given to those words and terms
in the Option Agreement as amended by this Amending Agreement.
1.2 SECTIONS AND HEADINGS. The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference
only, and shall not affect the construction or interpretation of this Agreement.
The terms "this Agreement", "hereof", "hereunder" and similar expressions refer
to this Amending Agreement No 2 and not to any particular Article, Section, or
other portion hereof, and include any agreement or instrument supplemental or
ancillary hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections of this Agreement.
1.3 EXTENDED MEANINGS. Words importing the singular number only shall
include the plural and vice versa and words importing gender shall include
masculine, feminine and neuter genders.
1.4 UNITED STATES DOLLARS. Unless otherwise provided herein, all monetary
amounts set forth in this Agreement are in United States dollars.
ARTICLE 2: AMENDMENT TO OPTION AGREEMENT
Except as otherwise provided in Article 3 below, all of the terms and
conditions contained in the Option Agreement shall continue to apply without
change or amendment.
ARTICLE 3: AMENDED TERMS
3.1 OPTION PRICE. Article 1, Paragraph 1.1(c) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(c) "Option Price" means US $7,500,000 required to be paid to acquire
all of the Optioned Shares which may be purchased by Upgrade under
this Agreement;"
3.2 OPTIONED SHARES. Article 1, Paragraph 1.1(d) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(d) "Optioned Shares" means approximately thirty-one and one-half
percent (31.5%) of the issued and outstanding Shares on the close of
the acquisition of all the Optioned Shares under this Agreement. This
percentage shall be adjusted, if necessary, in order to guarantee and
insure that Upgrade will own, on the close of the acquisition of all
the Optioned Shares, a total of fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard, including the Shares
currently owned by Upgrade."
3.3 DEMONSTRATION DATE. A new paragraph shall be added to Article 1,
Paragraph 1.l (g), to define the term "Demonstration Date" as follows:
"(g) "Demonstration Date" means the date on which all of the following
events have occurred: (i) UltraCard has provided Upgrade with proof of
concept which shall consist of a demonstration of the read/write and
storage technology, and (ii) Upgrade has received written confirmation
satisfactory to Upgrade that the technology is viable both conditions
of which shall be satisfied on or before August 5, 1998. Further,
Upgrade acknowledges it has observed and reviewed the demonstration
proof of concept provided by UltraCard on July 24-25, 1998.
3.4 PAYMENT OF OPTION PRICE. Article 2, Paragraph 2.4 of the Option
Agreement is hereby amended and replaced with the following paragraph:
"2.4 Upgrade shall acquire the optioned shares of UltraCard and tender
the option price to UltraCard in accordance with the following
schedule:
(a) $290,000.00 which UltraCard acknowledges the receipt of
(b) $110,000.00 on or before October 16, 1998
(c) $1,000,000.00 on or before October 21, 1988
(d) $1,000,000.00 no later than 2 weeks from the signing of an
underwriting Agreement initiated by Upgrade but in nay event
no later than November 30, 1998
(f) $5,100,000.00 on or before January 31, 1998
Upgrade shall be entitled to receive optioned shares on a rata data
basis equal to approximately sixteen and one half percent (16.5%) of
the issued and outstanding shears for each $666,667.000 of Option
Price payments up to a total of $2,000,000 in option price payments
for approximately sixteen and one half percent (16.5%). Upon final
remittance of the Option Price payments in excess of Two Million
Dollars ($2,000,000) specified in subparagraphs (a)-(d) above Upgrade
shall be entitled to receive Optioned Shares equal to fifteen percent
(15%) of the issued and outstanding Shares of UltraCard."
3.5 FAILURE TO TENDER BY TERMINATION DATE. Article 2, Paragraph 2.6 of the
Option Agreement is hereby amended and replaced with the following paragraph:
"2.6 Failure to tender the specified amount of the Option Price by the
close of business on any of the dates scheduled in subparagraphs
2.4(a), (b), (c) or (d) above will result in the immediate termination
of this Agreement for any Optioned Shares still remaining under this
Agreement at that time.
3.6 REPRESENTATIONS AND WARRANTIES OF ULTRACARD. Two additional paragraphs,
Paragraphs 4.8 and 4.9, shall be added to Article 4 as follows:
"4.8 UltraCard shall reserve and set aside no more than One Million
(1,000,000) authorized but unissued Shares of the corporation, which
Shares shall be part of and subject to a combined incentive and or a
stock plan to be adopted and implemented by UltraCard."
"4.9 UltraCard warrants that from the date Upgrade acquires all of the
Optioned Shares under this Agreement until the date of any initial
public offering of the Shares of UltraCard, UltraCard shall not take
any action or in any way allow or cause Upgrade's ownership of the
issued and outstanding shares of UltraCard to become diluted so as to
result in Upgrade owning less than fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard. In the event that
UltraCard requires additional financing prior to an initial public
event that UltraCard requires additional financing prior to an initial
offering of UltraCard, Inc. shares, Upgrade agrees to provide
sufficient debt financing on mutually agreeable terms. Both parties
agree that repayment of any debt financing will be paid out of an
initial public offering of UltraCard, Inc. shares.
ARTICLE 4: GENERAL
4.1 FULL FORCE AND EFFECT. Except as expressly amended by this Agreement,
all of the terms, conditions, and provisions of the Option Agreement shall
remain in full force and effect.
4.2 EXECUTION. This Agreement may be executed in several counterparts, each
of which, when so executed, shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amending
Agreement as of the day and year set forth above.
ULTRACARD, INC. UPGRADE INTERNATIONAL, INC.
By By
----------------------- -----------------------------
Its Its
----------------------- ----------------------------
Ultracard, Inc.
0000 XXXXX XXXXXX, XXXXXXX XXXXX, XX 00000, XXX
TEL: (000) 000-0000 FAX: (000) 000-0000
Xx. Xxxxxx Xxxxx
Upgrade International, Corp.
0000 Xxxxxxxxx Xxx
Xxxxxx, XX. 00000
Xx. Xxxxxx Xxxxx
Upgrade International, Corp.
000 Xxxxxx Xx. Xxx. 0000
Xxxxxx, XX. 00000 December 3, 1998
via facsimile: 000-000-0000; and, 000-000-0000
Dear Xx. Xxxxx:
Pursuant to article 3.5 of the Amending Agreement No. 2 between UltraCard, Inc.
and Upgrade International, Corp. dated August 4, 1998, UltraCard, Inc. hereby
notifies Upgrade International, Corp. that this agreement is terminated.
Sincerely,
/s/ Xxxxxx Xxxxx
-------------------------
President
AMENDING AGREEMENT NO. 3
This Amending Agreement is made second day of February, 1999, by and
between ULTRACARD, INC. ("UltraCard"), a Nevada corporation, 0000 Xxxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and UPGRADE INTERNATIONAL CORP. ("Upgrade"), a
Florida corporation, 000 Xxxxxx Xx., xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, UltraCard and Upgrade have entered into a letter agreement dated
January 30, 1998, and a subsequent Amending Agreement dated February 12, 1998.
pursuant to which Upgrade purchased 18.5% of the outstanding shares of the
capital stock of UltraCard; and
WHEREAS, UltraCard and Upgrade also entered into an Option Agreement dated
February 3, 1998, pursuant to which UltraCard granted to Upgrade an option to
purchase an additional 15% of the outstanding shares of stock of UltraCard; and
WHEREAS, UltraCard and Upgrade have agreed to amend certain terms of the
aforesaid Option Agreement to provide Upgrade with an option to acquire fifty
percent (50%) of the issued and outstanding shares of stock of UltraCard on the
terms and conditions set forth herein;
NOW, THEREFORE in consideration of the mutual promises contained herein and
the payment of $1.00 by each party to the other, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS. Capitalized words and terms which are not otherwise defined
in this Amending Agreement shall have the meaning given to those words and terms
in the Option Agreement as amended by this Amending Agreement.
1.2 SECTIONS AND HEADINGS, The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference
only, and shall not affect the construction or interpretation of this Agreement.
The terms "this Agreement", "hereof", "hereunder" and similar expressions refer
to this Amending Agreement No. 2 and not to any particular Article, Section, or
other portion hereof and include any agreement or instrument supplemental or
ancillary hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections or this Agreement.
1.3 EXTENDED MEANINGS. Words importing the singular number only shall
include the and vice and words importing gender shall include masculine,
feminine and neuter genders.
1.4 UNITED STATES DOLLARS. Unless otherwise provided herein, all monetary
amounts set forth in this Agreement are in United States dollars.
ARTICLE 2: AMENDMENT TO OPTION AGREEMENT
Except as otherwise provided in Article 3 below, all of the terms and
conditions contained in the Option Agreement shall continue to apply without
change or amendment.
ARTICLE 3: AMENDED TERMS
3.1 OPTION PRICE. Article 1, Paragraph 1.1(c) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(c) "Option Price" means US $7,500,000 required to be paid to acquire
all of the Optioned Shares which may be purchased by Upgrade under
this Agreement;"
3.2 OPTIONED SHARES. Article 1, Paragraph 1.l (d) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(d) "Optioned Shares" means approximately thirty-one and one-half
percent (31.5%) of the issued and outstanding Shares on the close of
the acquisition of all the Optioned Shares under this Agreement. This
percentage shall be adjusted, if necessary, in order to guarantee and
insure that Upgrade will own, on the close of the acquisition of all
the Optioned Shares, a total of fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard, including the Shares
currently owned by Upgrade." Until UltraCard completes an IPO Upgrade
agrees that it will maintain no more than one board seat on the board
of directors of UltraCard Inc.
3.3 DEMONSTRATION DATE. A new paragraph shall be added to Article 1,
Paragraph 1.1 (g), to define the term "Demonstration Date" as follows:
"(g) "Demonstration Date" means the date on which all of the following
events have occurred: (i) UltraCard has provided Upgrade with proof of
concept which shall consist of a demonstration of the read/write and
storage technology. Upgrade acknowledges it has observed and reviewed
the demonstration proof of concept provided by UltraCard on July
24-25, 1998.
3.4 PAYMENT OF OPTION PRICE. Article 2, Paragraph 2.4 of the Option
Agreement is hereby amended and replaced with the following paragraph:
"2.4 Upgrade shall acquire the optioned shares of UltraCard and tender
the option price to UltraCard in accordance with the following
schedule:
(a) $434,900.00 which UltraCard acknowledges receipt of;
(b) $50,000.00 on or before February 01, 1999:
(c) $300,000.00 on or before February 05,1999;
(d) $300,000.00 on or before February 12, 1999;
(e) $300,000.00 on or before February 19, 1999;
(f) $600,000.00 on or before March 25, 1999;
(g) $2,669,000.00 on or before May 10, 1999;
(h) $3,000,000.00 on or before May 30, 1999;
Upgrade shall be issued optioned shares at a price of 1.90 per share
of UltraCard for payments specified in subparagraph (a)-(g). Upon
final remittance of the Option Price payment specified in subparagraph
(h), Upgrade shall have been issued Shares equal to 30% of the issued
and outstanding Shares of UltraCard."
3.5 FAILURE TO TENDER BY TERMINATION DATE. Article 2, Paragraph 2.6 of the
Option Agreement is hereby amended and replaced with the following paragraph:
"2.6 Failure to tender the specified amount of the Option Price by the
close of business forty eight hours from any of the dates scheduled in
subparagraphs 2.4(a), (b), (c), (d), (e), (f). (g), (h) or (I) above
will result in the immediate termination of this Agreement for any
Optioned Shares still remaining under this Agreement at that time.
3.6 REPRESENTATIONS AND WARRANTIES OF ULTRACARD. Two additional paragraphs,
Paragraphs 4.8 and 4.9. shall be added to Article 4 as follows:
"4.8 UltraCard shall reserve and set aside no more than One Million
(l,000,000) authorized but unissued Shares of the corporation, which
Shares shall be part of and subject to a combined incentive and or a
stock plan to be adopted and implemented by UltraCard."
"4.9 UltraCard warrants that from the date Upgrade acquires all of the
Optioned Shares under this Agreement until the date of any initial
public offering of the Shares of UltraCard, UltraCard shall not take
any action or in any way allow or cause Upgrade's ownership of the
issued and outstanding shares of UltraCard to become diluted so as to
result in Upgrade owning less than fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard. In the event that
UltraCard requires additional financing prior to an initial public
offering of UltraCard, Inc. shares, Upgrade agrees to provide
sufficient debt financing on mutually agreeable terms. Both parties
agree that repayment of any debt financing will be paid out of an
initial public offering of UltraCard, Inc. shares.
ARTICLE 4: GENERAL
4.1 FULL FORCE AND EFFECT. Except as expressly amended by this Agreement,
all of the terms, conditions, and provisions of the Option Agreement shall
remain in full force and effect.
4.2 EXECUTION. This Agreement may be executed in several counterparts, each
of which, when so executed, shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amending
Agreement as of the day and year set forth above.
ULTRACARD, INC. UPGRADE INTERNATIONAL, INC.
By Xxxxxx Xxxxx By Xxxxxx X. Xxxxx
------------------- -------------------------------
Its President Its President
------------------- ------------------------------
AMENDING AGREEMENT NO. 3
This Amending Agreement is made 30th day of December, 1998, by and
between ULTRACARD, INC. ("UltraCard"), a Nevada corporation, 0000 Xxxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and UPGRADE INTERNATIONAL CORP. ("Upgrade"), a
Florida corporation, 000 Xxxxxx Xx., xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, UltraCard and Upgrade have entered into a letter agreement dated
January 30, 1998, and a subsequent Amending Agreement dated February 12, 1998.
Pursuant to which Upgrade purchased 18.5% of the outstanding shares of the
capital stock of UltraCard; and
WHEREAS, UltraCard and Upgrade also entered into an Option Agreement dated
February 3, 1998, pursuant to which UltraCard granted to Upgrade an option to
purchase An additional 15% of the outstanding shares of stock of UltraCard; and
WHEREAS, UltraCard and Upgrade have agreed to amend certain terms of the
aforesaid Option Agreement to provide Upgrade with an option to acquire fifty
percent (50%) of the issued and outstanding shares of stock of UltraCard on the
terms and conditions set forth herein;
NOW, THEREFORE in consideration of the mutual promises contained herein and the
payment of $1.00 by each party to the other, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1: INTERPRETATION
1.1 DEFINITIONS. Capitalized words and terms which are not otherwise defined
in this Amending Agreement shall have the meaning given to those words and terms
in the Option Agreement as amended by this Amending Agreement.
1.2 SECTIONS AND HEADINGS, The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference
only, and shall not affect the construction or interpretation of this Agreement.
The terms "this Agreement", "hereof", "hereunder" and similar expressions refer
to this Amending Agreement No. 2 and not to any particular Article, Section, or
other portion hereof and include any agreement or instrument supplemental or
ancillary hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections or this Agreement.
1.3 EXTENDED MEANINGS. Words importing the singular number only shall
include the and vice and words importing gender shall include masculine,
feminine and neuter genders.
1.4 UNITED STATES DOLLARS. Unless otherwise provided herein, all monetary
amounts set forth in this Agreement are in United States dollars.
ARTICLE 2: AMENDMENT TO OPTION AGREEMENT
Except as otherwise provided in Article 3 below, all of the terms and
conditions contained in the Option Agreement shall continue to apply without
change or amendment.
ARTICLE 3: AMENDED TERMS
3.1 OPTION PRICE. Article 1, Paragraph 1.1(c) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(c) "Option Price" means US $7,500,000 required to be paid to acquire
all of the Optioned Shares which may be purchased by Upgrade under
this Agreement;"
3.2 OPTIONED SHARES. Article 1, Paragraph 1.l (d) of the Option Agreement is
hereby amended and replaced with the following paragraph:
"(d) "Optioned Shares" means approximately thirty-one and one-half
percent (31.5%) of the issued and outstanding Shares on the close of
the acquisition of all the Optioned Shares under this Agreement. This
percentage shall be adjusted, if necessary, in order to guarantee and
insure that Upgrade will own, on the close of the acquisition of all
the Optioned Shares, a total of fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard, including the Shares
currently owned by Upgrade."
3.3 DEMONSTRATION DATE. A new paragraph shall be added to Article 1,
Paragraph 1.1 (g), to define the term "Demonstration Date" as follows:
"(g) "Demonstration Date" means the date on which all of the following
events have occurred: (i) UltraCard has provided Upgrade with proof of
concept which shall consist of a demonstration of the read/write and
storage technology, and (ii) Upgrade has received written confirmation
satisfactory to Upgrade that the technology is viable both conditions
of which shall be satisfied on or before August 5, 1998. Further,
Upgrade acknowledges it has observed and reviewed the demonstration
proof of concept provided by UltraCard on July 24-25, 1998.
3.4 PAYMENT OF OPTION PRICE. Article 2, Paragraph 2.4 of the Option
Agreement is hereby amended and replaced with the following paragraph:
"2.4 Upgrade shall acquire the optioned shares of UltraCard and tender
the option price to UltraCard in accordance with the following
schedule:
(a) $4,34,900.00 which UltraCard acknowledges receipt of;
(b) $50,000.00 on or before February 01, 1999:
(c) $300,000.00 on or before February 05, 1999;
(d) $300,000.00 on or before February 12, 1999;
(e) $300,000.00 on or before February 19, 1999;
(f) $600,000.00 on or before March 25, 1999;
(g) $2,669,000.00 on or before May 10, 1999;
(h) $3,000,000.00 on or before May 30, 1999;
Upgrade shall be issued optioned shares at a price of 1.90 per share
of UltraCard for payments specified in subparagraph (a)-(g). Upon
final remittance of the Option Price payment specified in subparagraph
(h), Upgrade shall have been issued Shares equal to 30% of the issued
and outstanding Shares of UltraCard."
3.5 FAILURE TO TENDER BY TERMINATION DATE. Article 2, Paragraph 2.6 of the
Option Agreement is hereby amended and replaced with the following paragraph:
"2.6 Failure to tender the specified amount of the Option Price by the
close if business forty eight hours from any of the dates scheduled in
subparagraphs 2.4(a), (b), (c), (d), (e), (f). (g), (h) or (I) above
will result in the immediate termination of this Agreement for any
Optioned Shares still remaining under this Agreement at that time.
3.6 REPRESENTATIONS AND WARRANTIES OF ULTRACARD. Two additional paragraphs,
Paragraphs 4.8 and 4.9. shall be added to Article 4 as follows:
"4.8 UltraCard shall reserve and set aside no more than One Million
(l,000,000) authorized but unissued Shares of the corporation, which
Shares shall be part of and subject to a combined incentive and or a
stock plan to be adopted and implemented by UltraCard."
"4.9 UltraCard warrants that from the date Upgrade acquires all of the
Optioned Shares under this Agreement until the date of any initial
public offering of the Shares of UltraCard, UltraCard shall not take
any action or in any way allow or cause Upgrade's ownership of the
issued and outstanding shares of UltraCard to become diluted so as to
result in Upgrade owning less than fifty percent (50%) of all of the
issued and outstanding Shares of UltraCard. In the event that
UltraCard requires additional financing prior to an initial public
