ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit
99.1
This
Assignment and Assumption Agreement (this “Agreement”)
is made as of December 11, 2009, by and among SmartMetric, Inc., a
Nevada corporation (“Assignee”),
and Applied
Cryptology, Inc., a Nevada corporation (“Assignor”).
W
I T N E S S E T H:
WHEREAS, the Assignor is the
owner of certain technology which is the subject of a Patent Cooperation Treaty
Application filed on February 18, 2000 with the United States Patent and
Trademark Office, and originally the subject of an application filed on February
18, 1999 with the Australian Patent and Trademark Office, a copy of which is
annexed hereto and made a part hereof as Exhibit A, and the recipient of a
patent from the United States Patent and Trademark office, dated December 4,
2001, a copy of which is annexed hereto and made a part hereof as Exhibit B,
including adaptations, derivatives of, and current and future technological
developments thereto (the “Patent”); and
WHEREAS, pursuant to the terms
of that certain Patent License Agreement, dated August 1, 2004 (the “License
Agreement”), the Assignor licensed certain rights to use the Patent to the
Assignee, and the Assignee accepted such rights to use from the Assignor;
and
WHEREAS, Assignor desires to
assign to Assignee all of Assignor’s rights, title and interest to the Patent
and Assignee is willing to accept assignment of such rights and
obligations.
NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which the parties acknowledge, Assignor and
Assignee, intending to be legally bound, hereby agree as follows:
1. Defined Terms;
Interpretation. Except as otherwise set forth herein, capitalized terms
used herein have the meanings assigned to them in the License
Agreement.
2. Assignment and
Assumption. Effective as of the date hereof, (a) Assignor hereby conveys,
assigns, and transfers to Assignee, its successors and permitted assigns, all of
Assignor’s rights, title and interest in and to the Patent and delegates to
Assignee all of its duties and obligations to be performed, or arising on or
after the date hereof under the Patent, and (b) Assignee hereby accepts the
above assignment of all of Assignor’s rights, title and interest to the Patent
and the rights and delegation of duties and obligations and agrees to be bound
by and to assume such duties and obligations. Assignee’s representatives shall
be responsible for preparing any documents that Assignee records to perfect its
right, title and interest in the Patent in any jurisdiction. Not later than
ninety (90) days after the date of this Agreement, Assignee shall provide
Assignor with any documents requiring Assignor’s signature suitable for
recording.
3. Consideration. In
consideration for the assignment of the Patent as set forth in Section 2, the
Assignee shall issue the Assignor 200,000 shares of the Assignee’s Series B
Preferred Stock (the “Shares”), the receipt and sufficiency of which the parties
acknowledge.
4. Option
Agreement. Simultaneously with the execution of this
Agreement, the parties will enter into an option agreement, substantially in the
form annexed hereto as Exhibit C, wherein Assignor shall have the option to buy
back the Patent from Assignee for 100,000 shares Series B Preferred Stock, only
in the event that Assignee fails to generate at least $1,000,000 in revenues
attributable to the Patent at the conclusion of 24 months from the date of this
Agreement.
5. Representations
and Warranties of Assignor. Assignor represents and warrants to Assignee
as of the date hereof and as of the Closing Date that:
a. Assignor
has the legal right and requisite power and authority to make and enter into
this Agreement, and to perform its obligations hereunder and to comply with the
provisions hereof. The execution, delivery and performance of this Agreement by
Assignor has been duly authorized by all necessary Assignee action on its part.
The execution, delivery and performance of this Agreement by Assignor does not
and will not contravene the charter, bylaws or other organizational documents of
Assignor. This Agreement has been duly executed and delivered by Assignor and
constitute the valid and binding obligation of Assignor enforceable against it
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.
b. The
execution, delivery and performance of this Agreement by Assignor and the
compliance by Assignor with the provisions hereof, do not and will not (with or
without notice or lapse of time, or both) conflict with, or result in any
violation of, or default under, or give rise to any right of termination,
cancellation or acceleration of any obligation under any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Assignor or any of its
properties or assets, other than any such conflicts, violations, defaults, or
other effects which, individually or in the aggregate, do not and will not
prevent, restrict or impede Assignor’s performance of its obligations under and
compliance with the provisions of this Agreement and the other transaction
documents executed in connection herewith.
c. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental or regulatory authority or any other person or
entity (other than any of the foregoing which have been obtained and, at the
date in question, are then in effect) is required under existing laws as a
condition to the execution, delivery or performance of this Agreement by
Assignor.
d. Assignor
understands that the Shares are “restricted securities” and have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”)
or any applicable state securities law and is acquiring the Shares as principal
for its own account and not with a view to or for distributing or reselling such
Shares or any part thereof in violation of the Securities Act or any applicable
state securities law, has no present intention of distributing any of such
Securities in violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Shares (this
representation and warranty not limiting such Purchaser’s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law. Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its
business
e. Assignor,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Shares, and has so evaluated the merits and risks of such
investment.
f. Assignor,
as of the date hereof, is, and on each date on which it converts Shares it will
be either: (i) an “accredited investor” as defined in Rule 501(a) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.
6. Representations
and Warranties of Assignee. Assignee represents and warrants to Assignor
as of the date hereof and as of the Closing Date that:
a. Assignee
has the legal right and requisite power and authority to make and enter into
this Agreement, and to perform its obligations hereunder and to comply with the
provisions hereof. The execution, delivery and performance of this Agreement by
Assignee have been duly authorized by all necessary corporate action on its
part. The execution, delivery and performance of this Agreement by Assignee does
not and will not contravene the charter, bylaws or other organizational
documents of Assignee. This Agreement has been duly executed and delivered by
Assignee and constitutes the valid and binding obligation of Assignee
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the rights of creditors generally and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought.
b. The
execution, delivery and performance of this Agreement by Assignee and the
compliance by Assignee with the provisions hereof and thereof, do not and will
not (with or without notice or lapse of time, or both) conflict with, or result
in any violation of, or default under, or give rise to any right of termination,
cancellation or acceleration of any obligation under any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Assignee or any of its
properties or assets, other than any such conflicts, violations, defaults, or
other effects which, individually or in the aggregate, do not and will not
prevent, restrict or impede Assignee’s performance of its obligations under and
compliance with the provisions of this Agreement and the other transaction
documents executed in connection herewith.
c. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental or regulatory authority or any other person or
entity (other than any of the foregoing which have been obtained and, at the
date in question, are then in effect) is required under existing laws as a
condition to the execution, delivery or performance of this Agreement and the
Station Purchase Agreement by Assignee.
7. Further
Assurances. Each party to this Agreement agrees to execute, acknowledge,
deliver, file and record, and to cause to be executed, acknowledged, delivered,
filed and recorded, such further certificates, instruments, and documents and to
do, and cause to be done, all such other acts and things, as may be required by
law, or as may, in the reasonable opinion of the other party hereto, be
necessary or advisable to carry out the purposes of this Agreement.
8. Binding Effect;
Amendments. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns. No modification, amendment or waiver of any provision
of, or consent or approval required by, this Agreement, nor any consent to or
approval of any departure herefrom, shall be effective unless it is in writing
and signed by the party against whom enforcement of any such modification,
amendment, waiver, consent or approval is sought.
9. Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in New York County, New York for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery). Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of the documents contemplated herein, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
10. Assignment. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
Assignee without the prior written consent of Assignor, such consent to be in
its sole and absolute discretion. Without the consent of Assignee, Assignor may
assign its rights and obligations under this Agreement to any other party or
parties; provided that
Assignor shall not thereby be released of its obligations
hereunder.
11. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
12. Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 6:30 p.m. (New York City time) on a Business
Day, (ii) the Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Agreement later than 6:30 p.m. (New York City time) on any
date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given.
13. Entire
Agreement. The Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules
14. Survival. The
representations, warranties, agreements and covenants contained herein shall
survive the Closing.
15. No
Waiver. The waiver by any party of the breach of any of
the terms and conditions of, or any right under, this Agreement shall not be
deemed to constitute the waiver of any other breach of the same or any other
term or condition or of any similar right. No such waiver shall be
binding or effective unless expressed in writing and signed by the party giving
such waiver.
16. Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
[Remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
| ASSIGNOR: | |||
| APPLIED CRYPTOLOGY, INC. | |||
|
|
By:
|
/s/ | |
| Name | |||
| Title | |||
| ASSIGNEE: | |||
| SMARTMETRIC, INC. | |||
|
|
By:
|
/s/ | |
| Name: Xxxxx Xxxxxxxx | |||
| Title: Chief Executive Officer | |||
