Exhibit 10.8
LICENSE AGREEMENT
This License Agreement (the "Agreement") is made this 20th day of October,
1998, between Gargoyles, Inc. ("Gargoyles" or "Licensor"), a Washington
corporation having a principal place of business at 0000 Xxxxx 000xx Xxxxxx,
Xxxx, Xxxxxxxxxx 00000, and Aearo Company ("Aearo" or "Licensee"), a Delaware
corporation having a principal place of business at 0000 Xxxx 00xx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000.
WHEREAS, Gargoyles is the owner of United States Patent No. 4,741,611 (the
"'611 Patent") and the United States Design Patent No. 270,165 (the "`165
Patent") (together, the "Patents").
WHEREAS, it is the intent of the parties that Aearo be permitted to
continue to sell licensed products (as herein defined) in the markets in which
it currently sells protective eyewear and not to drastically interfere with
Aearo's sales in such markets nor expand such markets except as expressly
described herein.
NOW THEREFORE, the parties agree as follows:
1. Gargoyles hereby grants to Aearo and its manufacturer representatives,
manufacturers, assemblers, and makers a world-wide, paid-up, perpetual,
non-cancelable, non-exclusive license ("License") to make, have made, use, sell,
and offer for sale any product currently marketed by Aearo that may be covered
by the patents, and all name changes, variations and minor product improvements
("the Licensed Products").
2. Aearo will pay Gargoyles a one-time, lump sum royalty in the amount of
$1.2 million for any past and future sales of the Licensed Products, payable in
full on October 20, 1998.
3. Notwithstanding paragraph 1, Aearo agrees that, during the life of the
`611 Patent, it will not market, sell or distribute the Licensed Products to
sunglass specialty stores (including but not limited to Sunglass Hut and
comparables stores), NASCAR and related track-side sales locations, other
automotive stores (such as NAPA and Snap-On stores), country-western stores, and
rodeos. As to all other sales under paragraph 1, during the life of the `611
Patent, Aearo will position Licensed Products as safety eyewear at Aearo's
current range of safety eyewear prices by industry or product segments (plus
inflation), although nothing in this License shall be construed to affect
Aearo's right to emphasize the fashionable aspects of the Licensed Products.
4. In the event any sale by Aearo of any Licensed Products to the United
States military would displace a royalty to Gargoyles that Gargoyles is
receiving as a result of Gargoyles, Inc. v. United States, Aearo agrees not to
make such sale unless Aearo and Gargoyles can agree on alternative arrangements.
5. All points of purchase materials, packaging and other marketing
materials used by Aearo with respect to the Licensed Products will reflect the
positioning of the Licensed Products as safety eyewear.
6. Neither parties' marketing materials or product promotions reflecting
Licensed Products or any eyewear covered by the `611 Patent or the `165 Patent
will refer to the other party's products or compare the other party's products
to its own.
7. Any dispute arising under this Agreement shall be resolved by
arbitration in Boston, Massachusetts pursuant to the rules of the American
Arbitration Association, provided, however, that no arbitration shall be
initiated until the following has been complied with: any party who believes the
other is in default of this Agreement shall notify the other party in writing
describing the default and demanding that the party cure the default. If, within
60 days, the party cures the default, then no arbitration shall be brought. If,
however, after 60 days, the party does not cure the default or the parties
cannot otherwise resolve the dispute, then and only then can arbitration be
instituted. The arbitrator may award the prevailing party the costs of bringing
the arbitration, including attorneys' fees, if and only if the other party's
position was not substantially justified. Nothing in this paragraph shall affect
the right or either party to seek instructive relief provided that no such
relief shall be sought until after the expiration of the 60-day cure period and
provided further that, after the party's motion for such relief is decided upon
by the trial court, the parties proceed to arbitration as provided herein.
8. This Agreement is effective as of October 20th, 1998.
9. This License shall not be transferred by Aearo to any third party,
except that any rights to this License may be transferred to Cabot Safety
Intermediate Corp. ("Cabot") and Cabot may in turn sublicense such rights solely
to Aearo. For purposes of this paragraph, a transfer shall not include any
merger, reorganization, or sale of all, or substantially all, of the assets or
stock of Aearo.
Gargoyles, Inc.: Aearo Company:
/s/ Xxx Xxxxxxxxxxx /s/ Xxxxxxx X. XxXxxx
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Xxx Xxxxxxxxxxx Xxxxxxx X. XxXxxx
CEO and CFO President and CEO
