Exhibit 10.7

 

 

ISSUED PATENT LICENSE AND ROYALTY AGREEMENT

 

Effective as of September 11, 2017 (“Effective Date”), Chaya Coleena Hendrick,
an individual having a place of residence at 145 East Harmon Avenue, Apt 19620,
Las Vegas, Nevada 89109, United States (“HENDRICK”), and SmartMetric. Inc., a
Nevada corporation having a principal place of business at 3960 Howard Hughes
Parkway, Suite 500, Las Vegas, Nevada, 89169 United States (“LICENSEE”), agree
as follows:

 

WHEREAS, HENDRICK is the inventor and owns all right, title and interest in and
to the Invention and the Licensed Issued Patent(s), which Invention is in the
field of fingerprint biometric activated cards.

 

WHEREAS, HENDRICK desires to have the Invention perfected and marketed at the
earliest possible time in order that products resulting therefrom may be
available for public use and benefit.

 

WHEREAS, LICENSEE desires a license under said Invention and/or Licensed Issued
Patent(s) to develop, manufacture, use, and sell the Licensed Products and
Related Services in the Licensed Field of Use.

 

WHEREAS, HENDRICK is willing to grant an exclusive license under the License
Patent in accordance with the terms and conditions set forth in this Agreement.

 

WHEREAS, LICENSEE is willing to pay to HENDRICK a Patent Royalty in accordance
with the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises, terms and conditions
hereinafter set forth, the parties hereby agree as follows:

 

1. DEFINITIONS

 

“Agreement” means this Issued Patent License and Royalty Agreement.

 

“Invention” means the system and methods defined in the Licensed Issued
Patent(s).

 

“Licensed Field of Use” means all fields of use.

 

“Licensed Patent” means Letters Patent issued to HENDRICK named and known as,
“Smart card, Smart card with a chip and finger-print sensor, Smart card with a
chip and finger-print sensor”, Smart card with a fingerprint sensor, Issued
Patent Numbers D776,664 D786,355 D788,847 D791,772 by the United States Patent
and Trademark Office and including any divisions, continuations, or reissue
thereof.

 

“Licensed Products and Related Services” means any product and/or service, or
part thereof, in the Licensed Field of Use, the manufacture, use, offer for
sale, sale, or import of which: (a) is covered by a valid claim of an issued,
unexpired Licensed Patent directed to the Invention. A claim of an issued,
unexpired Licensed Patent shall be presumed to be valid unless and until it has
been held to be invalid by a final judgment of a court of competent jurisdiction
from which no appeal can be or is taken.

 

“LICENSEE” means LICENSEE and its Affiliates. “Affiliate” means any person,
corporation, or other business entity which controls, is controlled by, or is
under common control with LICENSEE; and for this purpose, “control” of a
corporation means the direct or indirect ownership of more than fifty percent
(50%) of its voting stock, and “control” of any other business entity means the
direct or indirect ownership of greater than a fifty percent (50%) interest in
the income of such entity.

 

 

 

2. LICENSE GRANT

 

HENDRICK hereby grants to LICENSEE exclusive rights to the Licensed Issued
Patent(s), in the Licensed Field of Use, to make, have made, use, offer for
sale, sell, lease, rent and export Licensed Products and Related Services for a
term commencing as of Effective Date and ending on the expiration of the last to
expire of the Licensed Patents(s).

 

Transfer or sublicensing of the Licensed Issued Patent(s) by LICENSEE is
prohibited under the terms of this Agreement, except where HENDRICK has
approved, in her sole discretion, such transfer or sublicensing by separate
written agreement.

 

Future Expenses – All future expenses in respect of the Licensed Patent shall be
paid by LICENSEE during the term of this Agreement.

 

Patent Maintenance Fees - All maintenance costs for issued Licensed Patents
shall be paid by LICENSEE during the term of this Agreement. LICENSEE shall have
the right to notify HENDRICK that it has no further interest in any particular
patent requiring prosecution or maintenance payments, and HENDRICK may then
elect to make the maintenance payments himself or abandon the patent.

 

3. COMMERCIAL APPLICATION (DILIGENCE)

 

LICENSEE agrees to use all reasonable efforts and diligence to proceed with the
development, manufacture, and or sublicensing of the Licensed Products and
Related Services, and to diligently develop markets for the Licensed Products
and Related Services.

 

4. PATENT LICENSE FEE, ROYALTIES AND QUARTERLY REPORTS

 

Patent License: For the issuance of 200,000 Series B preferred shares of the
Company (“Series B Shares”) to the Executive or her nominee, the Executive
hereby grants the Company a perpetual license subject to the terms and
conditions of this agreement, to the patent aforementioned as “licensed patent”.

 

Patent Royalty: As further consideration for the grant of exclusive rights to
the Licensed Patent, LICENSEE will pay to HENDRICK or her nominee five (5)
percent of the gross revenues derived from the use, offer for sale, sell, lease,
rent and export of Licensed Products and Related Services (the “Patent
Royalty”).

 

Annual Minimum Patent Royalty Amounts - The grant of exclusive rights to the
Licensed Patent is subject to an “Annual Minimum Patent Royalty Payment” of
$50,000 for the initial one (1) year period commencing upon the issuance of a
United States patent in respect of HENDRICK’s United States issued Patents,
“Smart card, Smart card with a chip and finger-print sensor, Smart card with a
chip and finger-print sensor, Smart card with a fingerprint sensor”, Issued
Patent Numbers D776,664 D786,355 D788,847 D791,772 (the “Initial Term”). The
Annual Minimum Patent Royalty Payment in subsequent years shall increase by one
hundred (100) percent from the previous one (1) year period. For greater
certainty, the Annual Minimum Patent Royalty Payment in the 2nd year will be $
100,000. LICENSEE shall, at the commencement of the Initial Term and each
subsequent one (1) year renewal term (if applicable), make the Annual Minimum
Patent Royalty Payment to HENDRICK. HENDRICK shall draw against the Annual
Minimum Patent Royalty Payment for any and all Patent Royalties due to HENDRICK
for the period for which the Annual Minimum Patent Royalty Payment was made.

 

 

 

 

 

Quarterly Patent Royalty Reports – LICENSEE agrees to provide HENDRICK, within
thirty (30) days after the end of each calendar quarter and within ten (10) days
after the expiration or termination of this Agreement, a report of the gross
revenues derived from the use, offer for sale, sell, lease, rent and export of
Licensed Products and Related Services, by country (if applicable) (“Quarterly
Patent Royalty Reports”). LICENSEE shall commence providing HENDRICK such
Quarterly Patent Royalty Reports within thirty (30) days following the end of
the first calendar quarter in the Initial Term. The Quarterly Patent Royalty
Reports will quantify the gross revenues derived from the use, offer for sale,
sell, lease, rent and export of Licensed Products and Related Services, by
country (if applicable), accrued during the previous quarter explaining the
basis for such calculations. In the calendar quarter in which LICENSEE has
exhausted the Annual Minimum Patent Royalty Payment, LICENSEE shall include with
the Quarterly Patent Royalty Report payment for all Patent Royalties accrued for
the immediately preceding quarter that are in excess of the Annual Minimum
Patent Royalty Payment. Unless otherwise instructed by HENDRICK, these payments
will be made by check directly to HENDRICK or her nominee at the address set out
in Section 8.

 

Auditable Records – LICENSEE shall keep true, accurate and consistent records
containing regular entries relating to the gross revenues derived from the use,
offer for sale, sell, lease, rent and export of Licensed Products and Related
Services, by country (if applicable). These records shall be available for
examination during normal business hours by accountants representing HENDRICK,
who shall be entitled to perform an audit and to make copies and extracts and to
receive any explanations that may reasonably be requested. HENDRICK is
responsible for payment of the accountant’s fee, except that LICENSEE shall be
responsible for such fees in the event an examination discloses a discrepancy in
HENDRICK’s favor of more than five (5) percent of the payment of total fees due
under this Agreement.

 

5. NEGATION OF WARRANTIES

 

Nothing in this Agreement is or shall be construed as:

 

●A warranty or representation by HENDRICK as to the validity or scope of any
Licensed Patent;

 

●A warranty or representation that anything made, used, sold, or otherwise
disposed of under any license granted in this Agreement, is or will be free from
infringement of patents, copyrights, and other rights of third parties;

 

●An obligation to bring or prosecute actions or suits against third parties for
infringement;

 

●Granting by implication, estoppel, or otherwise any licenses or rights under
patents or other rights of HENDRICK or other persons other than Licensed
Patents, regardless of whether such patents or other rights are dominant or
subordinate to any Licensed Patent; or

 

●An obligation to furnish any technology or technological information other than
the Licensed Patent.

 

Except as expressly set forth in this Agreement, HENDRICK MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCTS
AND/OR RELATED SERVICES WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR
OTHER RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

 

 

 

6. INDEMNITY

 

LICENSEE agrees to indemnify, hold harmless, and defend HENDRICK against any and
all claims for death, illness, personal injury, property damage, and improper
business practices arising out of the manufacture, use, sale, or other
disposition of the Invention, the Licensed Patent, or the Licensed Product and
Related Services by LICENSEE.

 

NEITHER PARTY SHALL BE LIABLE TO THE OTHER, ITS CUSTOMERS, THE USERS OF ANY
LICENSED PRODUCTS AND RELATED SERVICES, OR ANY THIRD PARTIES FOR ANY DIRECT,
CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR SPECIAL DAMAGES WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, ANY DAMAGE OR INJURY TO BUSINESS EARNINGS,
PROFITS OR GOODWILL SUFFERED BY ANY PERSON ARISING FROM ANY USE OF THE LICENSED
PATENTS, LICENSED PRODUCTS AND RELATED SERVICES, REGARDLESS OF WHETHER SUCH
LIABILITY IS BASED ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, BREACH OF
WARRANTIES, INFRINGEMENT OF INTELLECTUAL PROPERTY, FAILURE OF ESSENTIAL PURPOSE
OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

7. TERMINATION

 

LICENSEE may terminate this Agreement by giving HENDRICK notice in writing at
least thirty (30) days in advance of the Effective Date of termination selected
by LICENSEE.

 

HENDRICK may terminate this Agreement immediately in the event LICENSEE is in
breach of Sections 2 or 4, specifically in respect of the payment of the Annual
Minimum Patent Royalty Payment, any Patent Royalties or other expenses in
respect of the Licensed Patent.

 

HENDRICK may terminate this Agreement effective upon written notice to LICENSEE
in the event LICENSEE materially breaches this Agreement and such breach remains
uncured for thirty (30) days following written notice of such breach, unless
such breach is incurable in which event termination shall be immediate upon
receipt of written notice.

 

HENDRICK may terminate this Agreement by written notice if LICENSEE: (a) becomes
insolvent; (b) files a petition, or has a petition filed against it, under any
laws relating to insolvency, and the related insolvency proceedings are not
dismissed within sixty (60) days after the filing of such petition; (c) enters
into any voluntary arrangement for the benefit of its creditors; (d) appoints,
or has appointed on its behalf, a receiver, liquidator or trustee of any of such
party’s property or assets; or (e) ceases to carry on business in the ordinary
course.

 

The effect of termination or expiration of this Agreement is that the license
granted under Section 2 shall revert back to HENDRICK.

 

Surviving any termination or expiration are any cause of action or claim of
LICENSEE or HENDRICK, accrued or to accrue, because of any breach or default by
the other party; and the provisions of Sections 4, 5 and 6; and any other
provisions that by their nature are intended to survive.

 

8. SEVERABILITY

 

If any provision of this Agreement or the application thereof is held invalid,
the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.

 

 

 

9. MISCELLANEOUS

 

Marking – Prior to the issuance of patents on the Invention, LICENSEE agrees,
when practical and consistent with LICENSEE’s practices, to mark the Licensed
Products and Related Services (or their containers or labels) made, sold, or
otherwise disposed of by it under the license granted in this Agreement with the
words “Patent Pending”, and following the issuance of one or more patents, with
the numbers of the Licensed Patent.

 

Names and Marks – Each party agrees not to identify the other party in any
promotional advertising or other promotional materials to be disseminated to the
public or any portion thereof, without the other party’s prior written consent.
Either party may disclose the existence of this Agreement.

 

Infringement by Others: Protection of Patents – LICENSEE shall promptly inform
HENDRICK of any suspected infringement of any Licensed Patent by a third party.

 

Sublicense – LICENSEE may not grant sublicenses.

 

Assignment – LICENSEE may not assign this Agreement.

 

Dispute Resolution – The parties hereto agree to resolve any dispute or
disagreements, excluding any dispute relating to patent validity or
infringement, which may arise during the course of this Agreement as follows:

 

●First, HENDRICK and LICENSEE’s senior management will meet to attempt in good
faith to resolve such dispute or disagreement;

 

●If no resolution is reached, either party may request a one-day meeting with a
mediator;

 

●If no resolution is reached by mediation, such dispute or disagreement will be
submitted for binding arbitration pursuant to the rules of Arbitration in the
State of Nevada

 

Notices – Notices will be given by (a) certified mail (b) fax, (c) courier
service, or (d) electronic mail (e-mail). Certified mail or courier service
notice is effective on the earlier of 5 days from being deposited for delivery
or the date on the mail or courier receipt. Fax and e-mail notice are effective
when the sender receives confirmation that the fax was sent or the e-mail
received. A party will send notice to the following mail or e-mail address or
another address about which the party gives thirty (30) days prior written
notice:

 

TO HENDRICK:

 

Attention: CHAYA HENDRICK
145 East Harmon Avenue, Apt. 19620
Las Vegas, Nevada, 89109 USA
Email: chaya@smartmetric.com

 

TO LICENSE:

 

Attention: Jay Needelman
3960 Howard Hughes Parkway, Suite 500
Las Vegas, Nevada, 89169 USA
Email: jay@smartmetric.com

 

 

 

Scope of Agreement – This Agreement constitutes the entire Agreement between the
parties pertaining to the subject matter hereof. No representative of HENDRICK
or LICENSEE has been authorized to make any representation, warranty, or promise
not contained herein.

 

Applicable Law – This Agreement shall be governed by the laws of the State of
Nevada, USA.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written and resolved and consented as a majority of the Board
of Directors of SmartMetric, Inc.

 

LICENSEE

    Jay Needelman,   Board Member/Director & CFO   SmartMetric, Inc.  

 

  Elizabeth Nightingale   Board Member/Director   SmartMetric, Inc.  

 

  Chaya Coleena Hendrick,   Board Member/Director/CEO   SmartMetric, Inc.  

 

PATANTEE / HENDRICK

 

  Chaya Coleena Hendrick,   Patentee   Letters Patent Inventor