MODIFIED THIRD AMENDMENT TO LICENSE AND EQUIPMENT AGREEMENTS

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 Drexler Technology Corporation) (“LCC”), a Delaware corporation with its principal office located in 1875 N. Shoreline Blvd, Mountain View, California, 94043, 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 Coopers Tower, 188 Quay Street, Auckland 1001 New Zealand (“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 B-1, B-2, 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 G