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. 1.18. "CompuDyne Confidential Information" is defined in Section 6.1 hereof. <br />2. Licenses and Restrictions <br />2.1. Grant of Licenses. Subject to the conditions set forth in Section 2.2 hereof, CompuDyne <br />hereby grants to the Licensee, pursuant to the terms and conditions hereof, a perpetual, nonexclusive, <br />nontransferable license: <br />(a) to use each Licensed Application and each Sublicensed Application, in Object Code <br />only, on the Authorized Server with respect thereto and at the Authorized Sites with respect thereto; <br />(b) to conduct internal training and testing on each Licensed Application and each <br />Sublicensed Application; <br />(c) to perform disaster recovery, backup, archive and restoration testing, and <br />implementation with respect to each Licensed Application and each Sublicensed Application; <br />(d) to make no more than two (2) archival copies of any Licensed Application or <br />Sublicensed Application, provided that each copy of any Licensed Application shall include <br />CompuDyne's copyright and other proprietary notices and each copy of any Sublicensed Application <br />shall include the copyright and other proprietary notices required by the developer of such <br />Sublicensed Application. <br />2.2. Conditions to Grant of Licenses. No grant of any license or right pursuant to Section 2.1 <br />hereof with respect to any Licensed Application or any Sublicensed Application shall be effective, and the <br />Licensee shall have no license or right to use such Licensed Application or such Sublicensed Application, until <br />• such Licensed Application or such Sublicensed Application has been accepted by the Licensee in accordance <br />with the acceptance terms set forth in the applicable implementation agreement and all license fees, <br />sublicense fees or royalties with respect to such Licensed Application or such Sublicensed Application have <br />been paid in full in accordance with the payment terms set forth in the applicable implementation agreement. <br />2.3. Restrictions on Use <br />(a) The Licensee agrees to use the Licensed Applications and the Sublicensed <br />Applications only for the Licensee's own use. The Licensee shall not allow use of any Licensed <br />Application or any Sublicensed Application by any parent, subsidiaries, affiliated entities, or other third <br />parties, or allow any Licensed Application or any Sublicensed Application to be used on other than on <br />the Authorized Server at the Authorized Site with respect thereto. <br />(b) Except as otherwise specifically set forth in Section 2.1 hereof, the Licensee shall have <br />no right to copy any Licensed Application or any Sublicensed Application. Any copy of any Licensed <br />Application (whether or not such copy is permitted) shall be the exclusive property of CompuDyne. Any <br />copy of any Sublicensed Application (whether or not such copy is permitted) shall be the exclusive <br />property of the developer of such Sublicensed Application. The Licensee shall not distribute or allow <br />distribution of any Licensed Application or any Sublicensed Application or any Documentation or other <br />materials relating thereto without CompuDyne's prior written consent. <br />(c) The Licensee's licenses and rights to use the Licensed Applications and the <br />Sublicensed Applications are limited to a license and right to use only the Object Code relating thereto. <br />The Licensee shall have no license or right with respect to the Source Code for any Licensed Application <br />or any Sublicensed Application. <br />• (d) The Licensee shall not, and shall not permit any other party to, make any alteration, <br />modification or enhancement to any Licensed Application or any Sublicensed Application unless, and <br />Page 3 of 10 <br />Software License Agreement <br />©2005 CompuDyne — Public Safety &Justice, Inc. <br />