Exhibit 10.4
EXECUTION COPY
 

INTELLECTUAL PROPERTY LICENSE AGREEMENT
between
NORTHROP GRUMMAN SYSTEMS CORPORATION
and
NORTHROP GRUMMAN SHIPBUILDING, INC.
Dated as of March 29, 2011
 

 

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TABLE OF CONTENTS

              Page  
ARTICLE I DEFINITIONS
    1  
 
       
Section 1.1 Table of Definitions
    1  
Section 1.2 Certain Defined Terms
    2  
 
       
ARTICLE II GRANT OF LICENSES
    4  
 
       
Section 2.1 Grant of Licenses
    4  
Section 2.2 Have Made Rights
    5  
Section 2.3 Right to Sublicense
    5  
Section 2.4 Licensed Software
    5  
Section 2.5 Delivery of Embodiments of IP
    6  
Section 2.6 Jointly Developed Intellectual Property
    6  
Section 2.7 Use of Intellectual Property in Connection with Certain Intercompany
Arrangements
    6  
Section 2.8 License to Use Background Intellectual Property
    7  
 
       
ARTICLE III OWNERSHIP
    8  
 
       
Section 3.1 Ownership
    8  
Section 3.2 Ownership of Improvements and Derivative Works
    8  
Section 3.3 No Other License
    8  
Section 3.4 Prosecution and Maintenance
    8  
 
       
ARTICLE IV CONFIDENTIALITY
    8  
 
       
Section 4.1 Proprietary Information
    8  
Section 4.2 Confidentiality
    9  
Section 4.3 Limited Exception
    10  
Section 4.4 Unauthorized Disclosure
    10  
 
       
ARTICLE V REPRESENTATIONS; DISCLAIMER
    10  
 
       
Section 5.1 Mutual Representations
    10  
Section 5.2 Disclaimer
    11  
Section 5.3 Limitations on Liability
    11  
Section 5.4 Indemnification
    11  
 
       
ARTICLE VI TERM
    11  
 
       
Section 6.1 Term
    11  

 

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TABLE OF CONTENTS
(Continued)

              Page  
ARTICLE VII TRANSFERABILITY
    12  
 
       
Section 7.1 Assignment
    12  
 
       
ARTICLE VIII GENERAL PROVISIONS
    12  
 
       
Section 8.1 Amendment and Modification
    12  
Section 8.2 Waiver
    12  
Section 8.3 Notices
    13  
Section 8.4 Interpretation
    13  
Section 8.5 Entire Agreement
    14  
Section 8.6 No Third-Party Beneficiaries
    14  
Section 8.7 Governing Law
    14  
Section 8.8 Submission to Jurisdiction
    14  
Section 8.9 Enforcement
    15  
Section 8.10 Severability
    15  
Section 8.11 Waiver of Jury Trial
    15  
Section 8.12 Counterparts
    15  
Section 8.13 Facsimile Signature
    15  
Section 8.14 Effect if Distribution Does Not Occur
    16  

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INTELLECTUAL PROPERTY LICENSE AGREEMENT
     INTELLECTUAL PROPERTY LICENSE AGREEMENT, dated as of March 29, 2011 (this
“License Agreement”), between Northrop Grumman Systems Corporation, a Delaware
corporation (“NGSC”) and Northrop Grumman Shipbuilding, Inc., a Virginia
corporation (“NGSB”).
RECITALS
     A. NGSC, NGSB, Northrop Grumman Corporation, a Delaware corporation
(“NGC”), New P, Inc., a Delaware corporation (“New NGC”), and Huntington Ingalls
Industries, Inc., a Delaware corporation (“HII”), have entered into the
Separation and Distribution Agreement (the “Separation Agreement”), dated as of
the date hereof, pursuant to which New NGC intends to distribute to its
stockholders its entire interest in HII by way of a stock dividend (the
“Distribution”).
     B. Following the Distribution, NGSC will be a wholly owned subsidiary of
New NGC (which will be renamed “Northrop Grumman Corporation”) and NGSB will be
a wholly owned subsidiary of HII.
     C. The parties wish to set forth their agreements as to certain matters
regarding Intellectual Property (as defined below) under which each party shall
grant to the other a non-exclusive license of the Intellectual Property owned by
such party or any of its Affiliates that is used by the other party in the
conduct of their respective businesses and within the Field of Use (as defined
below).
AGREEMENT
     In consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Table of Definitions. The following terms have the meanings set
forth on the pages referenced below:

          Definition   Page  
Affiliate
    2  
Background Intellectual Property
    7  
Background IP Owner
    7  
Business Day
    2  
Designated Intellectual Property
    2  
Disclosing Party
    8  
Distribution
    1  
Field of Use
    2  
Foreground Intellectual Property
    7  

 

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          Definition   Page  
Foreground IP Owner
    7  
Governmental Authority
    3  
HII
    1  
Improved Software
    5  
Indemnifying Party
    11  
Intellectual Property
    3  
License Agreement
    1  
Licensed Intellectual Property
    3  
Licensee
    3  
Licensor
    3  
Licensor Indemnitees
    11  
Line of Business
    3  
New NGC
    1  
NGC
    1  
NGSB
    1  
NGSC
    1  
Person
    3  
Proprietary Information
    8  
Receiving Party
    8  
Relevant Usage Period
    4  
Separation Agreement
    1  
Software
    4  
Subsidiary
    4  

     Section 1.2 Certain Defined Terms. For the purposes of this License
Agreement:
          “Affiliate” of any Person means a Person that controls, is controlled
by, or is under common control with such Person; provided, however, that for
purposes of this License Agreement, none of the New NGC Entities (as defined in
the Separation Agreement) shall be deemed to be an Affiliate of any HII Entity
(as defined in the Separation Agreement) and none of the HII Entities shall be
deemed to be an Affiliate of any New NGC Entity. As used herein, “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or otherwise.
          “Business Day” means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close.
          “Designated Intellectual Property” means the Intellectual Property
identified on Schedule C.
          “Field of Use” means, (a) as to any Licensed Intellectual Property
other than the Designated Intellectual Property, the use of such Intellectual
Property that the Licensee

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has made in the ordinary course of its business in the Relevant Usage Period
prior to and including the Distribution, including the general manner and scope
of such use in the Line of Business for which the Intellectual Property has been
used during such Relevant Usage Period and (b) as to any Designated Intellectual
Property, the applicable field of use specified on Schedule C. In the event of a
dispute between the parties as to whether a particular use by a Licensee of
Licensed Intellectual Property licensed to such Licensee is within the
applicable Field of Use, the Licensee will have the burden of proof by a
preponderance of the evidence. For the avoidance of doubt, the general manner
and scope of such use shall include broad uses of the Intellectual Property,
such as use in customer proposals.
          “Governmental Authority” means any United States or non-United States
federal, state, local, territorial, tribal or international court, government,
department, commission, board, bureau, agency, official or other legislative,
judicial, regulatory, administrative or governmental authority.
          “Intellectual Property” or “IP” means all of the following
intellectual property rights, whether arising under the laws of the United
States or the laws of any other jurisdiction: (a) patents, (b) copyrights,
(c) trade secrets, know-how and other confidential and proprietary information,
and (d) all registrations and applications for registration of any of the
foregoing, but excluding (e) trademarks, service marks, domain names and similar
rights.
          “Licensed Intellectual Property” means (a) all Intellectual Property
owned by a party or any of its Affiliates as of the Distribution that, in the
Relevant Usage Period prior to or at the time of the Distribution, has been or
is being used by the other party or any of its Affiliates in the ordinary course
of such other party’s or any of its Affiliate’s businesses, excluding any such
Intellectual Property that prior to the Distribution, has been or is being used
by the other party or any of the other party’s Affiliates solely in connection
with such other party or such other party’s Affiliate performing as a party to
an intercompany teaming agreement, intercompany work order or similar
intercompany agreement with such party or any of its Affiliates and (b) the
Designated Intellectual Property.
          “Licensee” means, collectively, a party and its Affiliates in their
capacity as licensees to which a license of Licensed Intellectual Property is
granted by Licensor hereunder.
          “Licensor” means, collectively, a party and its Affiliates in their
capacity as licensors of Licensed Intellectual Property that is licensed to
Licensee hereunder.
          “Line of Business” means a set of one or more highly related products
which service a particular business need.
          “Person” means an individual, corporation, partnership, limited
liability company, limited liability partnership, syndicate, person, trust,
association, organization or

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other entity, including any Governmental Authority, and including any successor,
by merger or otherwise, of any of the foregoing.
          “Relevant Usage Period” means the 12-month period prior to the
Distribution.
          “Software” means computer software and databases, together with, as
applicable, object code, source code, firmware and embedded versions thereof and
documentation related thereto.
          “Subsidiary” of any Person means any corporation or other
organization, whether incorporated or unincorporated, of which at least a
majority of the securities or interests having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries; provided, however, that no Person that is not directly or
indirectly wholly owned by any other Person shall be a Subsidiary of such other
Person unless such other Person controls, or has the right, power or ability to
control, that Person.
ARTICLE II
GRANT OF LICENSES
     Section 2.1 Grant of Licenses.
          (a) Subject to the terms and conditions of this License Agreement,
each Licensor hereby grants to the respective Licensee a non-exclusive,
worldwide, fully paid, non-transferable (except as expressly provided in
Article VII), irrevocable and perpetual license, solely within such Licensee’s
Field of Use, to:
               (i) make (including the right to use any apparatus and practice
any method in making), have made, make improvements on, use, import, offer for
sale, lease, sell and/or otherwise transfer products and provide services under
the patents included in such Licensor’s Licensed Intellectual Property
(including any patents that hereafter issue on patent applications that are
pending as of the Distribution);
               (ii) use, reproduce, distribute, prepare derivative works of, and
publicly perform and publicly display any original works of authorship (or any
derivative works based thereon) that are the subject of any of the copyrights
included in such Licensor’s Licensed Intellectual Property; and
               (iii) use and exploit any know-how or other trade secrets or
proprietary information included in such Licensor’s Licensed Intellectual
Property, subject to compliance with the confidentiality obligations set forth
in Article IV.
          (b) Each party shall cause its Affiliates to grant the licenses
contemplated to be granted by such Affiliates hereunder and to perform all of
their

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obligations imposed hereunder, including the confidentiality obligations set
forth in Article IV.
          (c) Each Licensee will, and will cause its Affiliates to, comply with
the Field of Use and all other limitations or restrictions imposed under this
License Agreement with respect to its and its Affiliates’ use of the Licensed
Intellectual Property licensed to it and its Affiliates hereunder.
     Section 2.2 Have Made Rights. The licenses granted in Sections 2.1(a)(i) by
the applicable Licensor to the applicable Licensee to have products made by a
third party or to import products: (a) apply only when the specifications for
such Licensee’s products were created by or specifically for Licensee (either
solely or jointly with one or more third parties), (b) extend only to those
claims of Licensor’s licensed patents, the infringement of which would be
necessitated by compliance with such specifications and (c) do not apply to any
methods used, or any products in substantially the same form manufactured or
marketed, by such third party, prior to Licensee’s furnishing of such
specifications.
     Section 2.3 Right to Sublicense. Except as otherwise provided on Schedule C
with respect to the Designated Intellectual Property, each Licensee shall have
the right to sublicense freely the rights and licenses granted by the applicable
Licensor pursuant to Section 2.1(a) to Licensee’s contractors, sub-contractors
and agents for use solely in connection with the operation of Licensee’s
business and within the Field of Use. Each Licensee shall ensure that all such
permitted sublicensees shall abide by the terms and conditions of this License
Agreement, to the extent applicable, and all such grants of sublicenses shall be
made in writing and executed by all parties thereto.
     Section 2.4 Licensed Software. The parties agree and acknowledge that any
Software that is licensed under this License Agreement shall be licensed only in
the form in which it is being used by the Licensee in the ordinary course of its
business in the Relevant Usage Period prior to and including the Distribution;
provided that, in the case of any Software included in the Designated
Intellectual Property, such Software will be licensed in the form specified on
Schedule C. Accordingly, in the case of Software that is not included in the
Designated Intellectual Property, if a Licensee is using any source code of any
Software licensed to it hereunder by the Licensor in the ordinary course of its
business in the Relevant Usage Period prior to and including the Distribution,
such Licensee will be permitted to retain such source code and the licenses
granted under Section 2.1(a) to such Licensee shall extend to such source code.
Notwithstanding the foregoing, for the Software identified on Schedule B hereto
that is undergoing improvement or as to which a derivative work is being
prepared (“Improved Software”), the parties agree and acknowledge that any such
Improved Software that is licensed under this License Agreement shall be
licensed in such form existing immediately after successful completion of
testing of the improvement and/or derivative works that is in process of being
made or prepared as of the Distribution, even if such form comes into existence
after the Distribution. The respective Licensor hereby agrees to deliver such
Improved Software in the licensed form, as soon as practicable after successful
completion of testing of the improvement and/or derivative work. Thereafter, the
Licensor shall have no further obligation to deliver any improvements or
derivative works of such Improved

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Software to each Licensee under this License Agreement. Accordingly, for such
Improved Software that has been used by the Licensee in source code form in the
ordinary course of its business in the Relevant Usage Period prior to and
including the Distribution, such Licensee will be permitted to obtain such
source code in the form existing immediately after such successful completion of
testing and the licenses granted under Section 2.1(a) to such Licensee shall
extend to such source code. For the avoidance of doubt, this License Agreement
provides for the licensing of Intellectual Property that is owned by a party or
an Affiliate thereof and nothing in this License Agreement provides for any
sublicensing of Software or any other Intellectual Property that is owned by a
third party or any assignment of any license of Software or any other
Intellectual Property that is owned by a third party.
     Section 2.5 Delivery of Embodiments of IP. To the extent that a Licensee is
not in possession as of the Distribution of any embodiment of Licensed
Intellectual Property licensed to such Licensee hereunder, the respective
Licensor hereby agrees to deliver to such Licensee upon request, as soon as
practicable after the Distribution, copies of all such embodiments of such
Licensed Intellectual Property. Thereafter, each Licensor shall have no further
obligation to deliver any Licensed Intellectual Property, or copies thereof, to
each Licensee under this License Agreement. Each Licensor shall have no further
access to, or any obligation to maintain or service, any electronic copies of
such Licensed Intellectual Property that is delivered to the Licensee.
     Section 2.6 Jointly Developed Intellectual Property. If either party or any
of its Affiliates materially contributed to the development of any Intellectual
Property that is owned by the other party or any of the other party’s Affiliates
as of the Distribution, and such Intellectual Property does not constitute
Licensed Intellectual Property that is licensed to such party and such party’s
Affiliates hereunder, the other party agrees that, if such party requests that
it and its Affiliates be granted a license to use such Intellectual Property
within the scope of their Lines of Business existing as of the Distribution, the
other party will consider in good faith granting such requested license.
     Section 2.7 Use of Intellectual Property in Connection with Certain
Intercompany Arrangements. Any Intellectual Property that, at the time of the
Distribution, (a) is owned by any member of the New NGC Group (as defined in the
Separation Agreement), but is in the possession of, or is being used by, a
member of the HII Group (as defined in the Separation Agreement) in connection
with such member of the HII Group performing as a party to an intercompany
teaming agreement, intercompany work order or similar intercompany agreement
with a member of the New NGC Group, shall be licensed by such member of the New
NGC Group to such member of the HII Group pursuant to the terms of any
intellectual property license granted to such member of the HII Group in the
applicable intercompany agreement or, if the applicable intercompany agreement
does not set forth the terms of such intellectual property license, then
pursuant to the terms of an intellectual property license that such member of
the New NGC Group and such member of the HII Group shall negotiate in good faith
promptly after the Distribution, or (b) is owned by any member of the HII Group,
but is in the possession of, or is being used by, a member of the New NGC Group
in connection with such member of the New NGC Group performing as a party to an
intercompany teaming agreement,

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intercompany work order or similar intercompany agreement with a member of the
HII Group, shall be licensed by such member of the HII Group to such member of
the New NGC Group pursuant to the terms of any intellectual property license
granted to such member of the New NGC Group in the applicable intercompany
agreement or, if the applicable intercompany agreement does not set forth the
terms of such intellectual property license, then pursuant to the terms of an
intellectual property license that such member of the HII Group and such member
of the New NGC Group shall negotiate in good faith promptly after the
Distribution.
     Section 2.8 License to Use Background Intellectual Property.
          (a) “Background Intellectual Property” means, with respect to an
Intellectual Property asset owned by one party or any of its Affiliates
(“Foreground Intellectual Property”), Intellectual Property that was owned by
the other party or any of the other party’s Affiliates prior to the creation or
development of such Foreground Intellectual Property, and that is essential to
the effective use or practice of such Foreground Intellectual Property.
          (b) “Background IP Owner” means the party or any of its Affiliates
that owns the Background Intellectual Property.
          (c) “Foreground IP Owner” means the party or its Affiliates that owns
or has been licensed the Foreground Intellectual Property.
          (d) The Background IP Owner hereby grants to the Foreground IP Owner a
non-exclusive, worldwide, fully paid, irrevocable and perpetual license to use
or practice and have had practiced such Background Intellectual Property of the
Background IP Owner that is essential to the effective use or practice of the
Foreground Intellectual Property.
          (e) The licenses granted in Section 2.8(d) shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Notwithstanding any other provisions in this License
Agreement, the Foreground IP Owner shall not assign (in whole or in part) or
sublicense any licensed Background Intellectual Property to any known competitor
of the Background IP Owner in the technical field of such Background
Intellectual Property.
          (f) As a further limitation on the provisions of Section 4.2(a), in
the case of licensed Background Intellectual Property, in maintaining the
confidentiality of Proprietary Information of the Disclosing Party related to
such Background Intellectual Property, the Foreground IP Owner shall not
disclose or give access to any such Proprietary Information to any known
competitor of the Background IP Owner in the technical field of such Background
Intellectual Property.

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ARTICLE III
OWNERSHIP
     Section 3.1 Ownership. Each Licensee acknowledges that, as between the
parties, each Licensor owns all right, title and interest in and to its Licensed
Intellectual Property. Each Licensee agrees that it shall not, directly or
indirectly, challenge the validity, enforceability or ownership of the
respective Licensor’s Licensed Intellectual Property.
     Section 3.2 Ownership of Improvements and Derivative Works. Each party or
its applicable Affiliate will own exclusively all improvements and derivative
works created or developed by such party or its Affiliate that are derived from
or based on any Licensed Intellectual Property licensed from the other party
hereunder, subject to the other party’s retained ownership of the Licensed
Intellectual Property on which such improvements and derivative works are based
or from which they are derived. Other than for Improved Software as provided in
Section 2.4, neither party (nor any Affiliate thereof) shall have any obligation
to disclose or license any such improvements or derivative works to the other
party.
     Section 3.3 No Other License. Except as expressly provided in this License
Agreement, nothing herein shall be construed as granting to a party any license
or other rights under any other Intellectual Property rights of the other party
whether by implication or estoppel. Nothing herein shall grant either party, in
selling or promoting the sale of products or services, the right to directly or
indirectly use or refer to the trademarks or trademark type rights of the other
party or trademarks or other marks and names similar thereto.
     Section 3.4 Prosecution and Maintenance. Each Licensor shall have the sole
and exclusive right, but not the obligation, at its sole cost and expense:
(a) to file, prosecute, obtain and maintain, throughout the world, any patents,
patent applications and other registrations or applications for registration
included in the Licensed Intellectual Property owned by such Licensor, and
(b) to conduct or participate, throughout the world, in any interference,
reexaminaton, opposition, cancellation, nullification and other interpartes, ex
partes or other types of proceedings before the U.S. Patent & Trademark Office
and similar authorities, registries or agencies, and all appeals thereof
(regardless of forum) involving or relating to such Licensed Intellectual
Property. The manner in which any such filing, prosecution, maintenance or any
other action is conducted by such Licensor under this Section 3.4 shall be in
such Licensor’s sole control and discretion.
ARTICLE IV
CONFIDENTIALITY
     Section 4.1 Proprietary Information. For the purposes hereof, “Proprietary
Information” of a party (the “Disclosing Party”) means all business sensitive
and/or proprietary information of the Disclosing Party disclosed to, or in the
possession of, the other party (the “Receiving Party”), whether disclosed
orally, verbally, visually, electronically, in tangible form or otherwise, and
regardless of whether marked, denoted or

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otherwise indicated as “business sensitive,” “proprietary,” “private” or words
of similar import. Proprietary Information of Licensor shall include trade
secrets and other business sensitive and proprietary information included in the
Licensed Intellectual Property, as well as any business and/or sensitive
information that has been made available by a Party or any of its Affiliates to
the other party or any of the other party’s Affiliates in connection with such
other party or such other party’s Affiliate performing as a party to an
intercompany teaming agreement, intercompany work order or similar intercompany
agreement.
     Section 4.2 Confidentiality.
          (a) In maintaining the confidentiality of Proprietary Information of
the Disclosing Party, the Receiving Party shall exercise the same degree of care
that it exercises with its own Proprietary Information, but in no event less
than a reasonable degree of care. Without limiting any of the foregoing, the
Receiving Party shall not disclose or give access to any such Proprietary
Information to any third party, other than its personnel, sublicensees or
customers pursuant to contract requirements, without the prior written consent
of the Disclosing Party. The Receiving Party shall restrict access to such
Proprietary Information to those of its personnel and sublicensees having a
strict need for access thereto, and shall use commercially reasonable efforts to
ensure that each of its personnel and sublicensees holds in confidence the
Proprietary Information of the Disclosing Party in accordance with the terms and
conditions hereof. The Receiving Party shall, and shall cause its personnel and
sublicensees to, make no use, directly or indirectly, of any Proprietary
Information of the Disclosing Party for any purpose other than as authorized
hereunder. The Receiving Party shall not copy or reproduce the Proprietary
Information or any portion thereof, or remove any tangible copies of the
Proprietary Information or any portion thereof from the Receiving Party’s
facilities except as reasonably required in connection with exercising the
rights licensed hereunder or as expressly permitted by the Disclosing Party.
          (b) As a further limitation on the provisions of Section 4.2(a), in
the case of assets listed as Designated Intellectual Property, if Schedule C
includes sublicensing limitations for an asset and such sublicensing limitations
prohibit sublicensing of such asset to known competitors except under strict
non-disclosure agreement, then in maintaining the confidentiality of Proprietary
Information of the Disclosing Party related to such asset, the Receiving Party
shall ensure that the strict non-disclosure agreement meets the non-disclosure
requirements set forth at the end of Schedule C.
          (c) The confidentiality obligations contained in Section 4.2(a) and
(b) and Section 2.8(f) shall not apply to any information that contemporaneous
written records of the Receiving Party demonstrate (a) was lawfully disclosed to
the Receiving Party without restriction by an unrelated third party who does not
have any obligations of confidentiality to the Disclosing Party, (b) the
Receiving Party independently developed such information prior to the
Distribution without any use of or reference to the Proprietary Information of
the Disclosing Party or (c) is or becomes part of the public domain through no
fault of the Receiving Party, it being understood that if only a portion of any
such information is or becomes part of the public domain (including by way of
issued patents or

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published patent applications), the confidentiality obligations of the Receiving
Party with respect to the rest of the Proprietary Information shall remain
intact without modification.
     Section 4.3 Limited Exception. The obligation of confidentiality and
non-disclosure contained in this License Agreement shall not apply to the extent
that the Receiving Party is required to disclose any Proprietary Information of
the Disclosing Party by a valid subpoena, order or regulation of a governmental
agency or a court of competent jurisdiction having jurisdiction over the
Receiving Party; provided, however, that the Receiving Party shall not
intentionally make any such disclosure without (a) first notifying the
Disclosing Party and allowing the Disclosing Party a reasonable opportunity to
prevent or limit such disclosure (either by challenging or quashing any such
subpoena, order or regulation or obtaining injunctive relief from, or a
protective order with respect to, the obligation to make such disclosure), and
(b) reasonably cooperating, at Disclosing Party’s expense, with the Disclosing
Party’s efforts to prevent or limit such disclosure.
     Section 4.4 Unauthorized Disclosure. The Receiving Party acknowledges and
confirms that the Proprietary Information of the Disclosing Party constitutes
proprietary information and trade secrets valuable to the Disclosing Party, and
that the unauthorized use, loss or outside disclosure of such Proprietary
Information shall cause irreparable injury to the Disclosing Party. The
Receiving Party shall notify the Disclosing Party immediately upon discovery of
any unauthorized use or disclosure of such Proprietary Information, and will
cooperate with the Disclosing Party in every reasonable way to help regain
possession of such Proprietary Information and to prevent its further
unauthorized use. The Receiving Party acknowledges and agrees that monetary
damages may not be a sufficient remedy for unauthorized disclosure of
Proprietary Information of the Disclosing Party and that the Disclosing Party
shall be entitled, without waiving other rights or remedies, to such injunctive
or equitable relief as may be deemed proper by a court of competent
jurisdiction. The prevailing party shall be entitled to recover reasonable
attorney’s fees incurred by it in connection with any action commenced by the
Disclosing Party against the Receiving Party arising out of or relating to any
alleged disclosure of Proprietary Information of the Disclosing Party by the
Receiving Party in breach of this License Agreement.
ARTICLE V
REPRESENTATIONS; DISCLAIMER
     Section 5.1 Mutual Representations. Each party represents and warrants that
(a) it has the power and authority to enter into this License Agreement and has
taken all necessary corporate action to authorize its performance under this
License Agreement; (b) this License Agreement, when executed and delivered, will
constitute a legal, valid and binding obligation of each such party, enforceable
in accordance with its terms; (c) no consent or authorization of, filing with,
or notice to any governmental authority is required in connection with its
performance under this License Agreement; and (d) its entering into this License
Agreement or performance by it hereunder will not violate any federal, state or
local licensing or other statute, rule or regulation, or any contractual
obligation of such party. Each party agrees to comply with all applicable Laws,
rules and regulations in connection with its activities under this License
Agreement.

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     Section 5.2 Disclaimer. Except as expressly set forth in this License
Agreement, each of the licenses of Licensed Intellectual Property granted by a
Licensor hereunder are made “as-is” and “where-is.” Each Licensor hereby
disclaims all representations or warranties of any kind, either express or
implied, including any warranty of merchantability, fitness for a particular
purpose, non-infringement or any other matter with respect to any Licensed
Intellectual Property licensed by such Licensor, whether used alone or combined
with other products or services.
     Section 5.3 Limitations on Liability. Except for any willful breach of
Articles III and IV, under no circumstances shall either party be liable to the
other party for indirect, incidental, consequential, punitive or exemplary
damages (even if such other party has been advised of the possibility of such
damages) arising from a claim for breach of any provision of this License
Agreement. Notwithstanding the foregoing, the provisions of this Section 5.3
shall not limit an Indemnifying Party’s indemnification obligations with respect
to any Liability that any Licensor Indemnitee may have to any third party that
is not an Affiliate of any party.
     Section 5.4 Indemnification. Following the Distribution, each Licensee (an
“Indemnifying Party”) shall indemnify, defend and hold harmless the respective
Licensor and such Licensor’s Affiliates and its and their respective current,
former and future directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“Licensor Indemnitees”), from and against any and all (a) Third Party Claims (as
defined in the Separation Agreement) asserted or brought against any of the
Licensor Indemnitees based on or relating to the exercise by the Indemnifying
Party or any of its Affiliates of the license to use the Licensed Intellectual
Property that is granted to such Licensee or any such Affiliates hereunder or
otherwise relating to the Indemnifying Party’s or any of its Affiliates’ use of
the Licensed Intellectual Property licensed hereunder and (b) all Liabilities
relating to, arising out of or resulting from any such Third Party Claims. The
notice and other indemnification procedures set forth in Sections 5.4, 5.5
(other than Section 5.5(b)), 5.6, 5.7 and 5.8 of the Separation Agreement that
apply to indemnification claims arising under Article V of the Separation
Agreement are hereby incorporated by reference and shall apply to any
indemnification claims arising under this Section 5.4.
ARTICLE VI
TERM
     Section 6.1 Term. The rights granted to each party under this License
Agreement shall be irrevocable and perpetual and shall not be terminable by
either party, and such rights shall continue in full force and effect
notwithstanding any breach by the other party hereunder; provided that, if any
Licensee breaches any limitations or restrictions imposed on it in Sections 2.1,
2.2, 2.3 or 2.8 with respect to its use of any Intellectual Property licensed to
it hereunder, or materially breaches any confidentiality obligations set forth
in Article IV with respect to its use of any Intellectual Property licensed to
it hereunder, then, effective upon 30 days’ prior written notice by the Licensor
to the Licensee, such Intellectual Property thereafter shall be excluded from
the Intellectual Property licensed to the Licensee hereunder and, upon the
expiration of such 30-day

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period, Licensee shall cease any and all use of such Intellectual Property
unless, prior to expiration of such 30-day period, Licensee has fully cured such
breach.
ARTICLE VII
TRANSFERABILITY
     Section 7.1 Assignment. This License Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither party may assign this License Agreement without the
prior written consent of the other party. Notwithstanding the foregoing, either
party may assign or otherwise transfer this License Agreement or its rights
hereunder, in whole or in part, to any of its Affiliates or to a third party in
connection with the sale of all or substantially all of the assets of such party
or any of its Affiliates to which this License Agreement pertains or in
connection with a merger, consolidation, corporate reorganization or any change
of control of such party or any of its Affiliates or a sale or divestiture of
any of the product lines, operating units or business divisions of such party or
any of its Affiliates; provided that (a) the assigning party shall provide
written notice to the other party of any such assignment, and (b) such assignee
shall agree to assume all applicable obligations of the assigning party
hereunder, and to be subject to the terms of this License Agreement. For the
avoidance of doubt, any permitted assignee of any license granted under
Article II of this License Agreement is subject to the Field of Use and all
other limitations or restrictions imposed under this License Agreement with
respect to such license, including in particular the Field of Use limitation
that limits use of Licensed Intellectual Property to use by and in the Line of
Business where and as the Licensed Intellectual Property was used during the
Relevant Usage Period prior to the Distribution; provided further that, in the
case of Designated Intellectual Property, the applicable Field of Use limitation
and the applicable Sublicensing Limitations will continue to be as specified on
Schedule C.
ARTICLE VIII
GENERAL PROVISIONS
     Section 8.1 Amendment and Modification. This License Agreement may not be
amended, modified or supplemented in any manner, whether by course of conduct or
otherwise, except by an instrument in writing specifically designated as an
amendment hereto, signed on behalf of each party.
     Section 8.2 Waiver. No failure or delay of any party in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, or any course of
conduct, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have hereunder. Any agreement on the part of any party to any such
waiver shall be valid only if set forth in a written instrument executed and
delivered by a duly authorized officer on behalf of such party.

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     Section 8.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or if by facsimile, upon written confirmation of receipt
by facsimile, e-mail or otherwise, (b) on the first Business Day following the
date of dispatch if delivered utilizing a next-day service by a recognized
next-day courier or (c) on the earlier of confirmed receipt or the fifth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:

         
 
  (i)   if to NGSC prior to the date on which New NGC relocates its corporate
headquarters, to:
 
       
 
      c/o Northrop Grumman Corporation
 
      1840 Century Park East
 
      Los Angeles, CA 90067-2199
 
      Attention: General Counsel
 
      Facsimile: (310) 556-4910
 
       
 
  (ii)   if to NGSC after the date on which New NGC relocates its corporate
headquarters, to:
 
       
 
      c/o Northrop Grumman Corporation
 
      2980 Fairview Park Drive
 
      Falls Church, VA 22042
 
      Attention: General Counsel
 
      Facsimile: (703) 875-1852
 
       
 
  (iii)   if to NGSB, to:
 
       
 
      c/o Huntington Ingalls Industries, Inc.
 
      4101 Washington Avenue
 
      Newport News, VA 23607
 
      Attention: General Counsel
 
      Facsimile: (757) 688-1408

     Section 8.4 Interpretation. When a reference is made in this License
Agreement to a Section, Article or Exhibit such reference shall be to a Section,
Article or Exhibit of this License Agreement unless otherwise indicated. The
table of contents and headings contained in this License Agreement or in any
Exhibit are for convenience of reference purposes only and shall not affect in
any way the meaning or interpretation of this License Agreement. All words used
in this License Agreement will be construed to be of such gender or number as
the circumstances require. Any capitalized terms used in any Exhibit but not
otherwise defined therein shall have the meaning as defined in this License
Agreement. All Exhibits annexed hereto or referred to herein are hereby
incorporated in and made a part of this License Agreement as if set forth
herein. The word “including” and words of similar import when used in this
License Agreement shall mean “including, without limitation,” unless otherwise
specified. Where either party’s consent is required

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hereunder, except as otherwise specified herein, such party’s consent may be
granted or withheld in such party’s sole and absolute discretion. The word “day”
when used in this License Agreement shall mean “calendar day,” unless otherwise
specified.
     Section 8.5 Entire Agreement. This License Agreement, the Separation
Agreement and the Exhibits, Schedules and Appendices hereto and thereto
constitute the entire agreement, and supersedes all prior written agreements,
arrangements, communications and understandings and all prior and
contemporaneous oral agreements, arrangements, communications and understandings
among the parties with respect to the subject matter hereof. This License
Agreement shall not be deemed to contain or imply any restriction, covenant,
representation, warranty, agreement or undertaking of any party with respect to
the transactions contemplated hereby other than those expressly set forth herein
or in any document required to be delivered hereunder. Notwithstanding any oral
agreement or course of action of the parties or their representatives to the
contrary, no party to this License Agreement shall be under any legal obligation
to enter into or complete the transactions contemplated hereby unless and until
this License Agreement shall have been executed and delivered by each of the
parties.
     Section 8.6 No Third-Party Beneficiaries. Nothing in this License
Agreement, express or implied, is intended to or shall confer upon any Person
other than the parties and their respective successors and permitted assigns any
legal or equitable right, benefit or remedy of any nature under or by reason of
this License Agreement.
     Section 8.7 Governing Law. This License Agreement and all disputes or
controversies arising out of or relating to this License Agreement or the
transactions contemplated hereby shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
the laws of any other jurisdiction that might be applied because of the
conflicts of laws principles of the State of New York (other than Section 5-1401
of the New York General Obligations Law).
     Section 8.8 Submission to Jurisdiction. Each of the parties irrevocably
agrees that any legal action or proceeding arising out of or relating to this
License Agreement brought by any other party or its successors or assigns shall
be brought and determined in any federal court sitting in the Borough of
Manhattan in the City of New York (or, if such court lacks subject matter
jurisdiction, in any appropriate New York State or federal court), and each of
the parties hereby irrevocably submits to the exclusive jurisdiction of the
aforesaid courts for itself and with respect to its property, generally and
unconditionally, with regard to any such action or proceeding arising out of or
relating to this License Agreement and the transactions contemplated hereby.
Each of the parties agrees not to commence any action, suit or proceeding
relating thereto except in the courts described above in New York, other than
actions in any court of competent jurisdiction to enforce any judgment, decree
or award rendered by any such court in New York as described herein. Each of the
parties further agrees that notice as provided in Section 8.3 shall constitute
sufficient service of process and the parties further waive any argument that
such service is insufficient. Each of the parties hereby irrevocably and
unconditionally waives, and agrees not to assert, by way of motion or as a
defense, counterclaim or otherwise, in any action or proceeding arising out of
or relating to this License Agreement or the

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transactions contemplated hereby, (a) any claim that it is not personally
subject to the jurisdiction of the courts in New York as described herein,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) and (c) that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum,
(ii) the venue of such suit, action or proceeding is improper or (iii) this
License Agreement, or the subject matter hereof, may not be enforced in or by
such courts.
     Section 8.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this License Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, each of the parties shall be entitled to specific performance of
the terms hereof, including an injunction or injunctions to prevent breaches of
this License Agreement and to enforce specifically the terms and provisions of
this License Agreement in any federal court sitting in the Borough of Manhattan
in the City of New York (or, if such court lacks subject matter jurisdiction, in
any appropriate New York State or federal court), this being in addition to any
other remedy to which such party is entitled at law or in equity. Each of the
parties hereby further waives (a) any defense in any action for specific
performance that a remedy at law would be adequate and (b) any requirement under
any law to post security as a prerequisite to obtaining equitable relief.
     Section 8.10 Severability. Whenever possible, each provision or portion of
any provision of this License Agreement shall be interpreted in such manner as
to be effective and valid under applicable Law, but if any provision or portion
of any provision of this License Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or portion of any provision in such jurisdiction, and this
License Agreement shall be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
     Section 8.11 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS LICENSE
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS LICENSE AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
     Section 8.12 Counterparts. This License Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same instrument
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
     Section 8.13 Facsimile Signature. This License Agreement may be executed by
facsimile signature and a facsimile signature shall constitute an original for
all purposes.

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     Section 8.14 Effect if Distribution Does Not Occur. If the Distribution
does not occur, then this License Agreement shall automatically be terminated
and all actions and events that are, under this License Agreement, to be taken
or occur effective as of the Distribution, or otherwise in connection with the
Distribution shall not be taken or occur except to the extent specifically
agreed by the parties.
[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

            NORTHROP GRUMMAN SYSTEMS CORPORATION
      By:   /s/ Mark Rabinowitz         Name:   Mark Rabinowitz        Title:  
President and Treasurer        NORTHROP GRUMMAN SHIPBUILDING, INC.
      By:   /s/ C. Michael Petters         Name:   C. Michael Petters       
Title:   President and Chief Executive Officer     

[Signature Page to Intellectual Property License Agreement]