MODIFIED THIRD AMENDMENT TO LICENSE AND EQUIPMENT AGREEMENTS
Exhibit
10.11
MODIFIED
THIRD AMENDMENT TO
This
Modified Third Amendment to License and Equipment Agreements (this “Third
Amendment”) is made and entered into as of October 27, 2006, by and between
LASERCARD CORPORATION (formerly Xxxxxxx Technology Corporation) (“LCC”), a
Delaware corporation with its principal office located in 0000 X. Xxxxxxxxx
Xxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx, 00000, U.S.A., and GLOBAL INVESTMENTS GROUP,
a
corporation organized under the laws of New Zealand with its principal office
located in level 27, Price Waterhouse Xxxxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxxxx
0000 Xxx Xxxxxxx (“GIG”). This Third Amendment supersedes the preliminary Third
Amendment between the same parties that was signed October 18, 2006, with the
knowledge and intent that the parties would negotiate modifications proposed
by
GIG during the subsequent week or two, which modifications have been implemented
by this Third Amendment. This Third Amendment is being entered into for the
purpose of amending certain terms of the Amended and Restated Master License
and
Manufacturing Agreement between LCC and GIG dated May 25, 2004 (effective date
April 3, 2004) (the “License Agreement”) together with the related equipment
sales agreements comprising Appendices X-0, X-0, and B-3 to the License
Agreement (the “Equipment Agreements”). The License and Equipment Agreements
have been previously amended by the “License and Equipment License Amendment”
dated June 29, 2006 (the “Second Amendment”) by and between LCC and GIG. The
License and Equipment Agreements, as amended by the Second Amendment, but not
by
this Third Amendment, are referred to as the “Current Agreement”.
Additionally,
Prevent LOK, as a partner of GIG, will agree and acknowledge this Third
Amendment and the new payment schedules and terms by signing below.
1. EFFECT
OF AMENDMENT.
Except
as amended by this Third Amendment, all terms and conditions of the Current
Agreement remain in full force and effect. If a provision or provisions of
this
Third Amendment conflict with a provision or provisions of the Current
Agreement, this Third Amendment controls. This Third Amendment remains in effect
until expiration or termination of the License Agreement. Capitalized terms
not
defined in this Third Amendment have the meanings specified in the License
Agreement.
2. ACKNOWLEDGEMENT.
The
parties acknowledge that GIG is in default under the Current Agreement since
GIG
has not yet paid the $5,053,500 U.S. Dollars, which was due in three
installments on or before September 30, 2006, per the Second Amendment, and
that
Section 5 of the Second Amendment, and the schedule it sets forth, is therefore
terminated and inapplicable. LCC would like to assist GIG in reactivating the
License and Equipment Agreements under the revised terms provided in this Third
Amendment. In these regards, provided that the training of GIG’s staff at LCC’s
facility in the operation and maintenance of the card manufacturing equipment
purchased and sold under the Equipment Agreements, including its assembly and
disassembly, occurs prior to January 31, 2007, then LCC will schedule such
equipment for delivery to GIG’s card manufacturing facility in Slovenia for no
later than May 31, 2007, except that the E-beam laminator shall not be
disassembled for shipment prior to the Ready Date of the GIG facility as defined
in Section 3b below. Any equipment shipped by LCC before GIG has notified LCC
of
the address of its Slovenian facility will be shipped to such address as GIG
provides.
3. FINANCIAL
TERMS.
The
parties agree to amend the Current Agreement as follows:
a.
Previously Due Payments:
GIG
shall pay LCC the $5,053,500 U.S. Dollars due pursuant to Section 2 of the
Second Amendment on or before November 10, 2006, in lieu of per the Schedule
set
forth in Section 2 of the Second Amendment. The Current Agreement, as amended
by
this Third Amendment, will terminate upon notice from LCC to GIG in the event
that LCC has not received such payment on or before November 10, 2006. Once
GIG
makes such payment, then GIG will have paid in full the Two Million U.S. Dollars
($2,000,000 U.S.) due under Section 4.1(a) of the License Agreement, the first
Twelve Million U.S. Dollars ($12,000,000 U.S.) due under Section 4.1(b)(i)
of
the License Agreement, and the purchase price for the equipment under the
Equipment Agreements; provided, however that the Twelve Million U.S. Dollars
($12,000,000 U.S.) of payments under Section 4.1(b)(i) shall be the
consideration for Management Support for the first four (4) years under the
Current Agreement, ending March 31, 2008, instead of for the first five (5)
years.
b.
Additional
Payments: GIG
agrees to pay LCC Fifty Thousand U.S. Dollars ($50,000 US) on the last day
of
each month until the “Ready Date” as defined below, with the first payment due
October 31, 2006. When GIG believes that its card manufacturing building is
fully ready to have the card production equipment installed, including having
the requisite electrical and other utility hook-ups in place and operative,
GIG
shall so notify LCC providing a certificate of its CEO. The date that GIG so
notifies LCC is the “Ready Date”.
c.
Management
Support Fees: The
last
paragraph of Section 4(b)(i) of the License Agreement and the entirety of
Section 4.1(b)(ii) of the License Agreement are replaced with the following:
(ii)
As
consideration for Management Support during the three-year period of April
1,
2008 through March 31, 2011, GIG shall pay LCC Three million U.S. Dollars
($3,000,000 US) in twelve quarterly installments of Two Hundred Fifty Thousand
U.S. Dollars ($250,000 US). The payments are due three (3) months in
advance of the start of each quarter, meaning that the first payment is due
on
or before December 31, 2007. GIG will then have the option for each of the
next
thirteen (13) years to require that LCC provide Management Support for the
upcoming April 1 to March 31 one-year period in exchange for GIG’s payment of
One Million U.S. Dollars ($1,000,000 US). GIG must provide LCC with notice
of
its exercise of such option at least three (3) months in advance of each
option year, otherwise GIG’s option for that year, and for all future years,
will terminate. Such election must be in writing and accompanied by payment
in
full of the One Million U.S. Dollars ($1,000,000 US) charge. GIG’s choosing not
to exercise any such option shall not have any impact on its licenses and other
rights and obligations under the License Agreement.
4. MANAGEMENT
SUPPORT.
During
the period prior to the Facility becoming operational, Management Support shall
also include, upon request by GIG, LCC providing input to GIG concerning the
appropriate background and qualifications for the person who GIG would hire
to
operate the Facility. Upon request from GIG, LCC would participate in the
screening of resumes and interview process of a handful of prospective
candidates and would advise GIG of LCC’s views as to such candidates. GIG shall
be the ultimate decision-maker and shall be solely responsible for whom it
hires
and may consider or not consider LCC’s input as it sees fit, with LCC having no
responsibility for whether such person ultimately was or was not a good choice.
5. MISCELLANEOUS. The
Current Agreement as amended by this Third Amendment constitutes the entire
agreement of the parties, and supersedes all prior and contemporaneous
understandings and agreements between the parties, with respect to its subject
matter, and may be modified only by a writing signed by each party’s duly
authorized representative.
Authorized
Signatures
In
order
to bind the parties to this Third Amendment, their duly authorized officers
have
signed their names below on the dates indicated.
LASERCARD
CORPORATION
GLOBAL
INVESTMENTS GROUP
By
/s/
XXXXXXX XXXXXXX By
/s/
ANTON KUHAR________
Name
Xxxxxxx
Xxxxxxx Name
Xxxxx
Xxxxx
Title
CEO
Title
President
Date
Executed October
27,
2006 Date
Executed October
30, 2006
Acknowledged
and Agreed:
Prevent
LOK
By
/s/
JOZE
KOZMUS
Name
Joze
Kozmus
Title
__________________________
Date
Executed October
30, 2006
