Ensec International Inc · 10KSB40 · For 12/31/97 · EX-10.10

Filed On 4/23/98   ·   SEC File 0-21361   ·   Accession Number 1042910-98-316

Annual Report — Small Business — [X] Reg. S-B Item 405   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB40     Annual Report                                         56    260K 
 2: EX-10.10    Material Contract                                      9     27K 
 3: EX-23.1     Consent of Experts or Counsel                          1      5K 

EX-10.10   —   Material Contract

EX-10.10
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SOFTWARE LICENSE AGREEMENT

  This Agreement is effective this 16th day of March, 1998, by and
between ENSEC, INC. (hereinafter "ENSEC"), with a place of business located at  
One World Trade Center, New York and Lockheed Martin IMS Corporation            
(hereinafter "LMIMS"), with a place of business located at 12506 Lake Underhill 
Road, Orlando, Florida 32825.                                                   

         WHEREAS, LMIMS desires to license certain application software owned by
ENSEC, and to purchase certain hardware designed by ENSEC and manufactured by   
Comtec Systems, Inc. ("Comtec"), directly from Comtec; and                      

   WHEREAS, ENSEC desires to license certain application software to
LMIMS, and to permit LMIMS to purchase certain hardware designed by ENSEC and   
manufactured by Comtec, directly from Comtec;                                   

  NOW THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:                                           

        1. The System. ENSEC agrees to license to LMIMS an integrated security
and facilities management system ("ENWORKS(TM) System") as outlined and         
described in the ENWORKS(TM) System product literature annexed hereto as Exhibit
#1, its contents expressly incorporated herein.                                 

      2. Grant. ENSEC hereby grants to LMIMS and LMIMS hereby accepts from
ENSEC a nonexclusive, irrevocable, paid-up license to use the ENWORKS(TM) System
("Software").                                                                   

       ENSEC shall provide to LMIMS all source code for the entire ENWORKSTM
System provided hereunder.                                                      

         ENSEC grants LMIMS a nonexclusive, irrevocable, paid-up license to use,
reproduce and prepare derivative works of its source code for the Software,     
subject to the confidentiality provisions of this Agreement.                    

     ENSEC grants LMIMS a royalty-bearing, nonexclusive, irrevocable and
perpetual license to make, use, sell, offer for sale, reproduce, distribute,    
prepare derivative works, disclose and import object code for the Software.     

         ENSEC grants to LMIMS a royalty-free, nonexclusive, irrevocable license
to make, use, sell, offer for sale, reproduce, distribute, prepare derivative   
works, disclose and import documentation for the Software.                      

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                 2.1 LMIMS may use the Software and documentation only for the
following purposes:                                                             

                          (1)      to develop modifications or enhancements to
                 the Software application;

                         (2)      to demonstrate the Software application to
                   potential Sublicensees; and

                   (3)      to provide training to employees and
                                   Sublicensees solely in conjunction with the
             Software application.

                2.2 LMIMS may make up to five (5) copies of the Software for
demonstration and training purposes, and an additional copy of the Software for 
archival or backup purposes. No other copies shall be made without ENSEC's prior
written consent. All titles, trademarks, and copyright and restricted rights    
notices shall be reproduced in such copies. Title to the Software shall at all  
times remain with ENSEC.                                                        

  3. Sublicensing. ENSEC hereby grants to LMIMS a nonexclusive and
irrevocable license to market and Sublicense the Software to Sublicensees       
worldwide, excluding Brazil solely through a written Sublicense agreement.      

             3.1 In consideration for the rights granted hereunder and
delivery of the Software and supporting documentation from ENSEC to LMIMS:      

                           (1)      LMIMS agrees to pay ENSEC 15% of the Current
                                    Retail Value Price of ENSEC Software version
3.2;    

                         (2)      LMIMS agrees to pay ENSEC a 15% fee on the
                               manufacturing cost of the hardware; and

                    (3)      LMIMS agrees to provide copies of the
                                 hardware Purchase Orders to ENSEC for fee
     verification.

                    (4)      LMIMS will provide ENSEC with monthly
                              reports of ENSEC related proposals and
 licenses.

                3.2 ENSEC shall be provided with a copy of any modifications
or enhancements to the Software application. ENSEC shall pay LMIMS a fee of 15% 
of the current selling price of said modifications or enhancements licensed to  
any of ENSEC's distributors, clients or other licensees.                        

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   4. Reporting Requirements. LMIMS shall provide ENSEC with a sales
projection and sales report of the commercial activities of the licensed        
Software and hardware. This information will be provided to ENSEC every month.  

     5. Term. This Agreement shall remain in full force and effect for a
term of five (5) years, with one (1) five (5) year renewal.                     

     6. Termination. LMIMS may terminate this Agreement upon thirty (30)
days written notice to ENSEC.                                                   

       7. Maintenance Support. LMIMS, at its option, may elect to have ENSEC
provide maintenance support for the Software.                                   

       8. Warranty. ENSEC warrants, for the term of this Agreement, that the
Software supplied hereunder will meet its published functional specifications.  
Should Software fail to meet specifications, or be otherwise defective, ENSEC   
shall promptly correct errors or nonconformities.                               

     9. Rights and Indemnification. ENSEC warrants that it possesses all
rights and interests necessary to enter into this Agreement, and shall indemnify
and hold harmless LMIMS, its agents and employees, from any loss, damage or     
liability for infringement of any patent right, trademark, copyright or other   
intellectual property right wit respect to the use of the Software delivered    
hereunder; provided that LMIMS permits ENSEC to defend, compromise or otherwise 
settle said claim or infringement and gives ENSEC all available information,    
assistance, and authority to enable ENSEC to do so.                             

        ENSEC shall indemnify, defend and hold LMIMS harmless from and against
all claims losses damages, and costs arising from ENSEC's breach of the         
warranties contained in this Agreement. This indemnification shall survive      
termination of this or any other agreement between the Parties hereto, unless   
otherwise amended by both Parties. LMIMS shall indemnify, defend and hold ENSEC 
harmless from and against all claims, losses, damages and costs arising from    
LMIMS breach of its promises and covenants in this Agreement. This              
indemnification shall survive termination of this or any other agreement between
the Parties hereto, unless otherwise amended by both Parties.                   

      10. Third-Party Software. ENSEC does not claim an ownership right or
interest in any Third-Party Software incorporated into the Software. ENSEC      
warrants that, to the best of its knowledge, any such Third-Party Software that 
may have been incorporated into the Software is fully enumerated and described  
in Exhibit #2 of this Agreement, and that if to the best of ENSEC's knowledge,  
no such Third-Party Software is included in the Software, ENSEC shall so certify
in Exhibit #2.                                                                  

         11. Warranty of 21st Century Compliant Software. ENSEC warrants that it
will deliver, in conjunction with its regular Software maintenance, as an Update
at no                                                                           

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extra cost to LMIMS, 21st century compliant software. "21st Century Compliant   
Software" shall be defined as software that (i) correctly processes date fields 
and internal date field dependent logic to accurately process and utilize dates 
beyond December 31, 1999; and (ii) stores and represents dates in a manner which
enables LMIMS to easily identify or use the century portion of any date herds   
without any special processing. ENSEC hereby indemnifies LMIMS for any loss,    
cost, or liability incurred by LMIMS arising from a failure to provide such     
Update as required in this Agreement.                                           

          12. Bankruptcy. Should ENSEC commence proceedings for bankruptcy under
Chapter 11 of the U.S. Code, 11 U.S.C., and should ENSEC's bankruptcy trustee   
reject the license Agreement pertaining to the ENWORKS(TM) System (pursuant to  
11 U.S.C. ss. 365(n)(1)), then LMIMS as licensee of the ENWORKS(TM) System, may 
elect to retain its rights to use the Software under this Agreement as they     
existed before the bankruptcy case commenced, pursuant to 11 U.S.C. ss.         
365(n)(1)(B), for the duration of this license Agreement.                       

     13. Modifications. LMIMS shall be free to modify Software. If LMIMS
chooses to modify Software, ENSEC's warranty obligation shall not apply to the  
portion of the Software that is modified.                                       

         14. Documentation. ENSEC shall supply documentation necessary for LMIMS
to use the Software effectively. Documentation may include, but shall not be    
limited to, functions specifications, user manuals, flow diagrams and file      
descriptions.                                                                   

         15. Equipment. ENSEC shall permit LMIMS to purchase the hardware listed
in Exhibit #3 attached hereto (the Equipment") directly from Comtec. LMIMS shall
be invoiced for said Equipment by Comtec and payment shall be made directly to  
Comtec, pursuant to terms and conditions established between LMIMS and Comtec.  

      In the event that Comtec is no longer able or willing to manufacture
the equipment pursuant to the designs provided by ENSEC, LMIMS shall have the   
option to purchase the equipment from an alternate manufacturer.                

16. Patent Indemnity. ENSEC shall defend or settle any suit or
proceeding brought against LMIMS based on a claim that any unit of Equipment, or
part thereof, constitutes an infringement of any existing U.S. patent right,    
copyright, trade secret or other proprietary right provided ENSEC is notified   
promptly in writing and is given complete authority and information required for
the defense, and ENSEC shall pay all damages and costs awarded therein against  
LMIMS, but shall not be responsible for any cost, expense or compromise incurred
or made by LMIMS without ENSEC's prior written consent.                         

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 17. Release For Past Infringement. ENSEC releases LMIMS and its
customers, direct and indirect, from all liability for past infringement of     
ENSEC's Software or hardware/equipment designs.                                 

        18. Confidential Information. By virtue of this Agreement, the parties
may have access to information that is confidential to one another              
("Confidential Information"). Confidential Information shall be limited to the  
computer software and information related thereto all other information clearly 
marked as confidential, and other items as agreed by the parties in writing.    

        19. Nondisclosure. During the term of this Agreement, and for a period
of three years from the expiration or termination of this Agreement, LMIMS and  
ENSEC each agree to hold in strictest confidence any information and material   
that is related to either Party's business or is designated as proprietary and  
confidential, herein or otherwise, by either Party in connection with the       
transaction contemplated by this Agreement. Each Party agrees not to make use of
such designated information and material other than for the performance of the  
Agreement. Proprietary and Confidential Information includes information related
to research, development, system design or operation, pricing, trade secrets,   
customer lists, salaries or business affairs of the Parties to this Agreement.  

         20. Enforceability. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality and enforceability 
of the remaining provisions shall in no way be affected or impaired thereby.    

        21. Force Majeure. The Parties hereto shall not be responsible for any
failures or delay in the performance of any obligations hereunder caused by Acts
of God, flood, fire, strike, war or public enemy or other similar causes        
reasonably beyond a Party's control.                                            

       22. Notices and Requests. All notices and requests in connection with
this Agreement shall be given or made upon the respective Parties in writing and
by depositing in the U.S. mails, postage prepaid, certified, certified or       
registered, return receipt requested, addressed, to the Parties as follows:     

(a)      If to LMIMS:                       

Mr. Chuck Thomas          
           Director, Electronic Security Systems
Lockheed Martin IMS Corp. 
12506 Lake Underhill Road 
Mailpoint 817             
Orlando, FL 32825         

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With a copy to:           

General Counsel           
Lockheed Martin IMS Corp. 
Glenpointe Centre East    
300 Frank W. Burr. Blvd.  
Teaneck, NJ 07666         
Phone: (201)996-7000      
Fax: (201) 836-4466       

(b)      If to ENSEC:                       

Mr. Charles Finkel        
President                 
ENSEC, Inc.               
One World Trade Center    
33rd Floor                
New York, NY 10048        

or to such other address as a Party so designates to receive the notice or      
request by written notice. All notices and requests shall be deemed as given as 
of the day of receipt by the respective Party.                                  

      23. Governing Law. This Agreement and performance hereunder shall be
governed by and construed in accordance with the laws of the State of New       
Jersey.                                                                         

        24. Waiver. The failure of either Party to exercise in any respect any
right provided for herein shall not be deemed a waiver of any right hereunder.  

    25. Assignment. This Agreement and the rights and duties hereunder
shall not be assigned by the Parties hereto except upon written consent of the  
other.                                                                          

        26. Entire Agreement. The terms and conditions of this Agreement shall
constitute the complete and exclusive statement of understanding between the    
Parties which supersedes all previous agreements, written or oral, and all      
communications between the Parties relating to the subject matter of this       
Agreement. This Agreement may not be modified or altered except by a written    
instrument duly executed by both Parties.                                       

    Both Parties have caused this Agreement to be signed by their duly
authorized officers on the date(s) set forth below with an Effective Date of    
March 16th, 1998.                                                               

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               FOR ENSEC, INC.

                      By: /s/ Charles Finkel
                                          ------------------------------------
                                   Charles Finkel, President

                     Dated: March 16, 1998

                                  FOR LOCKHEED MARTIN IMS CORPORATION:

                   By: /s/ Chapman Cox
                                          ------------------------------------
                                            Chapman Cox, Senior Vice President
                               and Managing Director
                                   Criminal Justice Services

                     Dated: March 10, 1998

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EXHIBIT #1

 ENWORKStm System Product Literature

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Exhibit #2

Third-Party Software Assurance

       As provided by paragraph 8 of this agreement, this Exhibit contains a
true and complete listing of all Third-Party Software incorporated in whole or  
in part into the software or any portioN of the software provided to LMIMS by   
ENSEC under this Agreement. Third-Party Software is any software in which ENSEC 
has no title to or ownership of, or software in which ENSEC has no property     
rights.                                                                         

    ENSEC provides the following assurances regarding such Third-Party
Software:                                                     

ENWORKStm SYSTEM                                              

QNX Software (Company Brochure Is Attached)                   

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10KSB40 Filing		Date		First		Last			Other Filings
For The Period Ended		12/31/97							NT 10-K
		3/10/98		7
		3/16/98		7
Filed On / Filed As Of		4/23/98
		12/31/99		4
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