Exhibit 10.16
EXECUTION COPY
INTELLECTUAL PROPERTY LICENSE AGREEMENT
THIS INTELLECTUAL PROPERTY LICENSE AGREEMENT (as the same may be
amended from time to time, the "Agreement"), dated as of February 10, 2003 (the
"Effective Date"), is between Hughes Electronics Corporation, a Delaware
corporation with its principal place of business at 200 North Sepulveda
Boulevard, El Segundo, CA 90245 ("HUGHES") and DIRECTV Enterprises, LLC, a
Delaware limited liability company with its principal place of business at 2230
East Imperial Highway, El Segundo, CA 90245, on behalf of itself and its
Subsidiaries (collectively, "LICENSEE"). HUGHES and LICENSEE are referred to
herein individually as "Party" and collectively as the "Parties".
WITNESSETH
WHEREAS, HUGHES, pursuant to its corporate policy, owns title to and
is licensed under certain Intellectual Property conceived, developed or
originated by or for itself or its Subsidiaries;
WHEREAS, LICENSEE is currently a wholly owned Subsidiary of HUGHES;
WHEREAS, HUGHES has as a matter of corporate policy, permitted each of
its Subsidiaries, including LICENSEE, to practice under Intellectual Property
owned by HUGHES as necessary for such Subsidiaries to conduct their respective
businesses, without the payment of royalties;
WHEREAS, the Parties hereto desire to enter into this Agreement in
order to confirm the aforementioned arrangement;
NOW, THEREFORE, in consideration of the promises set forth herein and
for other valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Intellectual Property" shall mean any and all domestic
and foreign patents and patent applications, together with all
continuations, continuations-in-part or divisional applications
thereof, and all patents issuing thereon (including reissues,
renewals and re-examinations of the foregoing); invention
disclosures; mask works; net lists; copyrights, and copyright
applications and registrations; trademarks, service marks,
service names, trade names, and trade dress, in each case
together with all applications and registrations therefor and
all appurtenant goodwill relating thereto; trade secrets,
commercial and technical information, know-how, proprietary or
confidential information, including engineering, production and
other
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designs, notebooks, processes, drawings, specifications,
formulae, and technology; computer and electronic data
processing programs and software (object and source code), data
bases and documentation thereof; customer lists, inventions
(whether patented or not); domain names; and all other
intellectual property under the laws of any country throughout
the world.
1.2 "HUGHES Intellectual Property" shall mean the
Intellectual Property owned or controlled by HUGHES, or licensed
to HUGHES with the right to grant sublicenses, whether such
Intellectual Property is currently held or is acquired after the
Effective Date. HUGHES Intellectual Property shall only include
Intellectual Property that is in existence while LICENSEE is a
Subsidiary of HUGHES. For the avoidance of doubt, HUGHES
Intellectual Property shall include all registered Intellectual
Property, including without limitation patents, which issues
after LICENSEE ceases to be a Subsidiary of HUGHES, however,
only to the extent (i) the Intellectual Property represented by
such registrations was created, invented, discovered, conceived
or reduced to practice while LICENSEE was a Subsidiary of HUGHES
and (ii) LICENSEE does not take title to such Intellectual
Property.
1.3 "Licensed Field" shall mean (i) the provision of
products and services for direct to home satellite television
applications in the United States and (ii) any other business
(in any country or jurisdiction) in which LICENSEE is engaged
immediately prior to such time as it ceases to be a Subsidiary
of HUGHES, excluding, with respect to subsection (ii), any
business in which another Subsidiary of HUGHES was engaged
before LICENSEE.
1.4 "HUGHES DTV Intellectual Property" shall mean (i) all of
the HUGHES Intellectual Property that originated from or was
created, invented or developed by or in the business of LICENSEE
or DIRECTV Holdings LLC and (ii) any other HUGHES Intellectual
Property that is material to any part of the business of
LICENSEE or DIRECTV Holdings LLC and that is related to the
Licensed Field.
1.5 "Subsidiary" of any Party shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such
Party directly or indirectly through Subsidiaries and (ii) any
partnership, association, joint venture or other entity in which
such Party directly or indirectly through Subsidiaries, has more
than a 50% equity interest at the time.
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ARTICLE 2
LICENSE
2.1 License Grant by HUGHES. Subject to Section 2.4and all
pre-existing licenses and pre-existing limitations and
restrictions and to the extent of its lawful right to do so,
HUGHES hereby grants to LICENSEE a worldwide, non-exclusive,
non-transferable (subject to Section 6.3 below), royalty-free
license, irrevocable except in the event this Agreement is
terminated under Section 5.2, under the HUGHES Intellectual
Property to exploit and use the HUGHES Intellectual Property in
the Licensed Field to make, have made, use, sell or offer to
sell, display, perform, make derivative works from, lease or
offer to lease and/or import products and perform or have
performed services. Unless otherwise agreed to in writing by
HUGHES, the foregoing license shall exclude any license under
any HUGHES Intellectual Property which is not HUGHES DTV
Intellectual Property and which consists of (i) foreign
(non-U.S.) trademarks or foreign (non-U.S.) service marks; (ii)
non-patent HUGHES Intellectual Property developed by or for a
Subsidiary of HUGHES and used exclusively by a Subsidiary of
HUGHES other than LICENSEE; or (iii) trademarks, service marks,
domain names, service names or trade names that contain the term
"HUGHES" or the "HUGHES" logo or any terms or logos confusingly
similar thereto.
2.2 Sublicenses. Subject to Section 2.4, the license granted
in Section 2.1 shall include the right to grant sublicenses in
accordance with LICENSEE's corporate policies in effect at the
time of such sublicense. LICENSEE shall provide HUGHES with at
least thirty (30) days prior written notice of each sublicense;
provided that if LICENSEE at any time ceases to be a Subsidiary
of HUGHES, then no prior written notice shall be required to the
extent such sublicense involves only HUGHES DTV Intellectual
Property.
2.3 Restrictions on HUGHES Licensing of Certain HUGHES
Intellectual Property. Unless otherwise agreed to in writing by
LICENSEE, HUGHES shall grant no licenses in the Licensed Field
to a competitor of LICENSEE (or to create or enable a competing
business) under any HUGHES DTV Intellectual Property except to
Subsidiaries of HUGHES. If LICENSEE ceases to be a Subsidiary of
HUGHES, HUGHES and its Subsidiaries shall not use the HUGHES DTV
Intellectual Property to compete with LICENSEE in the Licensed
Field, provided that HUGHES and its Subsidiaries may continue to
exploit and use only the patents included within HUGHES DTV
Intellectual Property and the non-patent HUGHES Intellectual
Property included within HUGHES DTV Intellectual Property that
was originated, conceived or developed by or for HUGHES or any
Subsidiary of HUGHES other than LICENSEE (provided that such
non-patent HUGHES Intellectual Property was not created by or
for LICENSEE
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or DIRECTV Holdings LLC and the development of such non-patent
HUGHES Intellectual Property was not funded by LICENSEE or
DIRECTV Holdings LLC) to make, have made, use, sell or offer to
sell, display, perform, make derivative works from, lease or
offer to lease and/or import set-top receiver products.
2.4 Restrictions on License and Sublicense Rights.
Notwithstanding the foregoing, the license and sublicense rights
in Section 2.1 and 2.2 shall exclude any right to practice under
any HUGHES Intellectual Property so as to compete with the
business of HUGHES or its Subsidiaries outside of the Licensed
Field. This restriction shall not apply to any HUGHES DTV
Intellectual Property.
2.5 Reservation of Rights. All rights not expressly granted
by HUGHES hereunder are reserved to HUGHES. Without limiting the
generality of the foregoing, the Parties expressly acknowledge
that nothing contained herein shall be construed or interpreted
as a grant, by implication or otherwise, of any licenses other
than the licenses specified in Section 2.1 and 2.2 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations. LICENSEE may, if necessary for the
business of LICENSEE, represent that it is licensed hereunder.
3.2 HUGHES Warranties. HUGHES represents and warrants that
it is authorized to enter into this Agreement and grant the
licenses set forth herein.
ARTICLE 4
PROTECTION OF HUGHES INTELLECTUAL PROPERTY;
COMPLIANCE WITH CORPORATE PRACTICES
4.1 Intellectual Property Protection. As long as LICENSEE is
a Subsidiary of HUGHES, LICENSEE acknowledges and agrees that it
shall comply with all applicable requirements of law and those
HUGHES written standard corporate practices and policies,
generally applicable to HUGHES and all of its Subsidiaries,
relating to Intellectual Property. If LICENSEE is no longer a
Subsidiary of HUGHES, LICENSEE shall comply with such written
practices and policies which are customary and necessary to
maintain and/or obtain the benefit of protection under law for
the HUGHES Intellectual Property, including, but not limited to,
all requirements relating to markings and quality control.
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ARTICLE 5
TERMINATION
5.1 This Agreement may not be terminated at any time or for
any reason by HUGHES or LICENSEE if such termination is
prohibited by the terms of any indebtedness to which LICENSEE or
DIRECTV Holdings LLC is a party and which is underwritten or
arranged, in whole or in part, by Deutsche Bank Trust Company
Americas or Bank of America, N.A. or any of their respective
affiliates.
5.2 If the restrictions of Section 5.1 are no longer in
effect and LICENSEE and DIRECTV Holdings LLC are no longer a
party to the terms of any such indebtedness and provided that in
no event shall any termination of this Agreement take place
until at least ninety (90) days after the repayment of all of
the indebtedness referenced in Section 5.1, then this Agreement
may be terminated:
5.2.1 by either Party, subject to Section 5.2.2,
solely in the event of a material breach of this
Agreement by the other Party in the event such material
breach is not cured by the breaching Party within ninety
(90) days of the receipt of written notice of the
alleged breach from the non-breaching Party; or
5.2.2 by HUGHES if a successor in interest to all or
substantially all of the assets or stock of LICENSEE
files bankruptcy or becomes insolvent.
5.3 The Parties hereby acknowledge and agree that in the
event that this Agreement is held by a court of competent
jurisdiction to be an executory contract, the provisions of 11
U.S.C. Section 365(n) shall apply to this Agreement.
ARTICLE 6
MISCELLANEOUS
6.1 Notices. All notices or other communications hereunder
shall be in writing, signed by the Party providing such notice,
and shall be considered properly given or made and shall be
deemed to have been duly given on the date of delivery, when
delivered personally or transmitted and received by
telecopier/facsimile transmitter, receipt acknowledged or
confirmed during normal business hours, or in the case of
registered or certified mail, return receipt requested, postage
prepaid, on the date shown on such receipt.
Any notices to HUGHES shall be sent as follows (or to
such other address as HUGHES may specify in writing to
LICENSEE):
Hughes Electronics Corporation
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P. O. Box 956
El Segundo, CA 90245-0956
Attention: Patents and Licensing
Vice President and Assistant General
Counsel
Facsimile No: (310)416-1216
Any notices to LICENSEE shall be sent as follows (or to
such other address as LICENSEE may specify in writing to
HUGHES):
DIRECTV, INC.
2230 East Imperial Highway
El Segundo, CA 90245
Attention: General Counsel
cc: Intellectual Property Counsel
Facsimile No: (310)726-4991
6.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware
regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable hereto.
6.3 Assignment. LICENSEE may not assign this Agreement, in
whole or in part, except with the prior written approval of
HUGHES. HUGHES may assign this Agreement with thirty (30) days
prior written notice to LICENSEE provided that (i) the assignee
assumes all obligations and responsibilities of HUGHES under
this Agreement, and (ii) the assignee has the right and ability
to maintain and provide to LICENSEE all of the rights under the
HUGHES Intellectual Property. Notwithstanding the foregoing or
any other provision of this Agreement, with thirty (30) days
prior written notice to HUGHES, (a) this Agreement may be
assigned by LICENSEE without prior written approval of HUGHES to
a successor in interest to all or substantially all of the
assets or business of LICENSEE, and (b) LICENSEE, without any
prior written approval, may assign its rights and interests
hereunder for the purpose of securing any financing transactions
entered into by LICENSEE or DIRECTV Holdings LLC, including
without limitation, in connection with the exercise by the
secured party (or its successors or assigns) of its rights and
remedies under the documents governing such financing
transactions.
6.4 Entire Agreement; Amendments. This Agreement constitutes
the entire agreement of the Parties, confirms and restates the
existing agreements of the Parties, and supersedes all
conflicting pre-existing agreements, with respect to the matters
expressly provided for in this Agreement. This Agreement may be
amended or modified only by mutual agreement of the Parties in
writing signed by authorized representatives of both Parties.
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6.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
6.6 Descriptive Headings and Interpretation. The section and
clause headings in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement. If any term, covenant, or provision of this Agreement
or the application thereof to any person or circumstance shall
to any extent be held invalid or unenforceable, the remainder of
this Agreement or the application of such term or provision to
any person or circumstance other than those to which it is held
invalid or unenforceable shall not be affected thereby, and each
other term, covenant or provision of this Agreement shall be
valid and shall be enforced to the fullest extent provided by
law.
6.7 Disputes. Any dispute, claim or controversy between the
Parties arising under this Agreement shall be resolved by
management of HUGHES and LICENSEE. In the event LICENSEE is not
a Subsidiary of HUGHES and such a dispute cannot be resolved by
the Parties within ten (10) business days after receipt of
written notice of said dispute from a Party, either Party may
submit the dispute to the courts (both State and Federal)
located in the State of California, County of Los Angeles. The
Parties hereby waive any objection they may have in any such
action based on lack of personal jurisdiction, improper venue or
inconvenient forum. The Parties further agree that service of
any process, summons, notice or document by U.S. registered mail
to its respective address as set forth above shall be effective
legal service for any litigation brought in such courts.
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IN WITNESS WHEREOF, HUGHES and LICENSEE have each caused this
Agreement to be duly signed and delivered to the other Party.
HUGHES ELECTRONICS CORPORATION
By:
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Name
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Title
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Date: 2003
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DIRECTV ENTERPRISES, LLC
By: /s/ John Crook
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Name: JOHN CROOK
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Title: VP-Asst Genl. Counsel
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Date: Feb. 10 2003
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IN WITNESS WHEREOF, HUGHES and LICENSEE have each caused this
Agreement to be duly signed and delivered to the other Party.
HUGHES ELECTRONICS CORPORATION
By: /s/ Michael W Sales
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Name Michael W Sales
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Title VP and Asst Gen
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Date: February 10 2003
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DIRECTV ENTERPRISES, LLC
By:
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Name:
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Title:
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Date: 2003
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