Document:

exv10w2

Exhibit 10.2

LICENSE AGREEMENT

     THIS AGREEMENT made as of this 19th day of December, 2003, by and between COLT DEFENSE LLC
(“LICENSEE”), a Delaware limited liability company, with its principal place of business located at
547 New Park Avenue, West Hartford, Connecticut 06114, and NEW COLT HOLDING CORP. (“COLT”), a
Delaware corporation, with its principal place of business c/o Sciens Capital Partners, 767 Fifth
Avenue, Suite 4605, New York, New York 10153.

WITNESSETH:

     WHEREAS, LICENSEE is engaged in the business of the manufacture, distribution and sale
worldwide of firearms, spare parts and related products and other products and services to military
purchasers and of firearms other than handguns, plus spare parts and related products, to law
enforcement purchasers; and

     WHEREAS, COLT is the owner of the trademarks, both as registered marks and as common law
marks, described in Exhibit “A” attached hereto (the “COLT Trademarks”); and

     WHEREAS, in connection with its business LICENSEE desires to continue to use the COLT
Trademarks (which LICENSEE is currently using pursuant to a Sublicense Agreement dated as of
November 4, 2002, between LICENSEE and Colt’s Manufacturing Company, Inc.), and COLT is desirous of
licensing the COLT Trademarks to LICENSEE subject to the terms and conditions set forth below.

     NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter contained,
it is agreed as follows:

     1. DEFINITION

     For purposes of this Agreement the term “Products” shall mean: (i) any products or services
manufactured, marketed and sold worldwide to the officially organized and recognized armed forces
of any country, including without limitation all firearms, spare parts and related products; and
(ii) any firearms other than handguns, plus spare parts and related products, manufactured,
marketed and sold worldwide to the officially organized and recognized law enforcement agencies of
any jurisdiction. Without limiting the foregoing, the term “Products” shall be understood to refer
to the
designated products or services as sold or provided only in the designated markets and shall
not include any products or services sold or provided to or for any commercial or consumer
(wholesale or retail) customers.

     2.  TERM

     This Agreement shall become effective as of midnight, January 1, 2004 (the “Effective Date”)
and shall continue to December 31, 2023. Thereafter, LICENSEE shall have the right to extend the
term of this Agreement for successive five year periods by giving notice to COLT of LICENSEE’s
intent to extend no earlier than six months and no later than three months

 

 

prior to the expiration date of the then current term. The provisions of this Section 2 shall be
subject to Sections 8,15 and 16.

     3. GRANT OF LICENSES AND RIGHTS

     (a) Upon the terms and conditions set forth herein, COLT hereby grants to LICENSEE, and
LICENSEE hereby accepts, the exclusive, worldwide, sublicensable license (which is revocable under
certain circumstances set forth below and assignable to the extent set forth in Section 10 of this
Agreement) to use the COLT Trademarks (1) as part of its trade name “Colt Defense” (the “Trade
Name”); (ii) as part of its rollmarks for the Products; and (iii) in the manufacture, marketing,
promoting, advertising, sale and distribution of the Products. The LICENSEE shall use the COLT
Trademarks only in the precise form in which the same appear in COLT’s trademark registrations
thereof; if any, or in such other forms as may be approved in writing by COLT, shall use the COLT
Trademarks and the Trade Name only on or in relation to the marketing and sale of the Products, and
shall use the COLT Trademarks and the Trade Name only pursuant to, and in strict accordance with,
all of the terms and conditions of this Agreement.

     (b) Any sublicenses granted hereunder by LICENSEE shall be on terms consistent with the terms
of this Agreement. Without limiting the foregoing, such sublicenses shall incorporate the substance
of the provisions of paragraphs (a), (c), (d) and (e) of this Section 3 and of Sections 5, 6 and
17, and the sublicensees shall be subject to the obligations of LICENSEE as stated therein, and the
term of such sublicenses shall not exceed the term of this Agreement LICENSEE’S right to sublicense
shall not extend to the Trade Name.

     (c) LICENSEE acknowledges that no license is granted hereunder for the use of the COLT
Trademarks or the Trade Name in connection with or directly or indirectly to promote, publicize or
otherwise encourage the sale of any product or service other than the Products.

     (d) LICENSEE shall not use or permit the use of any other mark, name or identification on any
goods or services, or on any packaging, advertising or display associated with any such goods or
services, in such a manner or in such close proximity to said COLT Trademarks as might be likely to
cause confusion as to the identity or ownership of the COLT Trademarks or to weaken or dilute the
distinctive character of said COLT Trademarks.

     (e) Nothing contained in this Agreement shall be construed to confer upon LICENSEE any right
to have the Trade Name or any of the COLT Trademarks currently owned or owned hereafter by COLT or
its affiliates registered in the name of LICENSEE or otherwise vest in LICENSEE equitable or legal
title in any COLT Trademarks or the Trade Name.

     (f) The exclusivity of the license granted in Section 3(a) shall apply to COLT, meaning that
COLT shall not itself use, or license or otherwise permit any other party to use, the COLT
Trademarks on or in relation to any Products. Without limiting the foregoing, COLT further agrees
that during the term of this Agreement (i) it will not market or sell any Product, and (ii) it will
not allow COLT’s Manufacturing Company LLC. or any successor or assignee of said company to market
or sell any Product. Except as expressly provided in this Section 3(f), nothing contained in this
Agreement shall restrict or restrain COLT from the free, unrestricted and

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unqualified right to use or grant licenses to any other licensees of the COLT Trademarks currently
owned or owned hereafter by COLT, on or in relation to the use, sale, promotion and distribution of
any goods or services, or otherwise to market or sell any goods or services.

     (g) COLT represents and warrants that it owns all right, title and interest in and to the COLT
Trademarks; that as of the date of this Agreement it has no knowledge of any claim that any of the
COLT Trademarks, or the use thereof on any Product pursuant to the terms of this Agreement,
infringes or will infringe on the rights of any other party, and that it has all power and
authority necessary to grant the license described in this Agreement.

     (h) COLT acknowledges that LICENSEE is the owner of the trademarks described on Exhibit A as
property of LICENSEE and that COLT has no right to use said trademarks in such form, without
prejudice to COLT’s ownership of and rights to use the COLT Trademarks that contain said trademarks
subject to the terms of this Agreement. This Agreement shall not limit or restrict the use by
LICENSEE of said trademarks, provided that LICENSEE does not violate the terms of this Agreement or
infringe on any rights of COLT.

     (i) Because it is possible that distributor sales of Match Target rifles will not always be
consistent with the provisions of Sections 3(a) and 3(f), to the extent it proves necessary the
parties will in good faith negotiate procedures for an allocation and assignment of revenues from
the sale of Match Target rifles to fairly reflect as far as may be reasonably practical the results
that would have been obtained if such distributors had in all such sales acted consistently with
such provisions.

     (j) COLT acknowledges that the COLT Trademarks are the only trademarks owned by COLT that
LICENSEE is using in its business as of the date of this Agreement.

     4. ARTWORK

     (a) Upon reasonable request by LICENSEE, COLT shall supply LICENSEE -with reasonable amounts
of artwork comprising the COLT standard
licensing package, to the extent it has already been created, depicting the COLT Trademarks
for use in connection with the Products. The cost of providing copies of such artwork, and the cost
of both producing and providing copies of artwork, which is specifically prepared for LICENSEE or
the reproduction thereof, shall be paid by LICENSEE.

     (b) LICENSEE may produce, directly or, at its specific request and direction, by any other
person approved by COLT, any artwork LICENSEE needs in connection with this Agreement, and subject
to obtaining COLT approval, pursuant to Section 5 may reproduce and use such artwork for the
purposes set forth in and subject to the limitations and requirements imposed by this Agreement.

     5. APPROVALS AND QUALITY PROGRAM

     (a) LICENSEE shall, before disseminating any materials or Product containing or displaying or
otherwise using the COLT Trademarks or the Trade Name, obtain COLT’s written approval of such
materials and the use of the COLT Trademarks on the Product (which approval shall not be
unreasonably withheld or delayed). LICENSEE shall furnish COLT, free

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of cost, two (2) samples of each of the materials and two (2) sets of the Product or, when the
latter is not practicable, shall make Product examples or models available to COLT for inspection.
All Products shall conform to the quality and workmanship of prototypes and/or designs, and any
upgrades or new versions thereof, previously reviewed by COLT and approved by it.
LICENSEE shall cause to be used the best industry standard quality control procedures, or if
applicable the relevant official government specifications, to ensure that the Products will
consistently comply with the approved product quality standards. Under no circumstances shall
LICENSEE be permitted to sell, distribute, give away or otherwise deal in any Product that bears a
distortion of the COLT Trademarks, or that does not comply with the highest quality standards and
specifications or government laws, regulations, ordinances or enactments. Quality standards may not
be reduced except upon written request by LICENSEE and upon written consent of COLT. The parties
shall agree on reasonable procedures for applying the provisions of this Section 5(a) and of
Section 5(b) so as to avoid the unlawful use or disclosure of government classified or other
government confidential information.

     (b) After the approval of COLT has been obtained, the materials and the Products produced and
distributed by or on behalf of LICENSEE and its sublicensees may deviate from the samples or
prototypes, provided that all Products shall at all times be of a quality and standard not
materially less than that of the approved sample or prototype. In the event there is a decline in
quality from the approved sample or prototype in the Products made or distributed by LICENSEE, COLT
shall have the right to take all actions which it deems necessary to ensure that Products
manufactured or sold using the COLT Trademarks are consistent with the reputation and prestige of
the COLT Trademarks as a designation for quality products, including the right in the reasonable
exercise of its sole discretion to withdraw its approval of such Product and/or terminate this
License Agreement pursuant to Section 16.

     (c) LICENSEE warrants that (i) each Product shall be in compliance with all applicable
federal, state and local laws and regulations and will be fit in the ordinary purposes for which it
is intended to be used and will conform to all promises or affirmations of fact made on the
container or label for such Product; (ii) there will be no design defect with respect to any of the
Products; and (iii) all of the Products to the extent applicable, will contain adequate warnings
presented in a reasonably prominent manner, in accordance with applicable laws and industry
practice with respect to its contents and use. The foregoing is not to be construed to expand,
nullify or contradict any limited warranty, exclusion or disclaimer made by LICENSEE to its
customers or other third parties, and is for the sole benefit of COLT.

     (d) COLT shall at all times continue to use the Trade Name, and use and cause any other
licensees to use the COLT Trademarks, in a manner, and on or in relation to products, consistent
with the reputation and quality heretofore associated with the Trade Name, the COLT Trademarks and
the Products.

     6. PROPRIETARY RIGHTS MARKINGS

     LICENSEE shall cause to appear on all Products produced hereunder, and on associated tags,
packaging and the like and on related promotional materials such legends, markings and notices as
COLT may reasonably request to evidence COLT’s ownership of the COLT Trademarks. Without limiting
the foregoing, where Products or such materials bear COLT

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Trademarks which are U.S. registered marks, such COLT Trademarks shall be displayed with ® adjacent
to the trademark

     7. GOODWILL

     (a) LICENSEE recognizes the great value of the good will
associated with
the world famous COLT Trademarks and acknowledges (A) that all intellectual property rights
therein (including trademark and copyright) and good will attached thereto belong exclusively to
COLT, and (B) that the COLT Trademarks have acquired secondary meaning in the minds of the public.
LICENSEE agrees that any and all uses and sales by LICENSEE of the COLT Trademarks under this
Agreement shall inure to the benefit of COLT and that neither such uses or sales nor anything
contained in this Agreement shall give or assign to LICENSEE or any other person or entity any
right, title or interest in the COLT Trademarks, or in any properties owned by COLT, which are not
licensed hereunder, except the right to use the COLT Trademarks specifically in accordance with the
provisions in this Agreement. LICENSEE agrees that it will not, during the term of this Agreement
or thereafter, challenge (i) COLT’s exclusive intellectual property rights, in and to the COLT
Trademarks, (ii) the validity of the COLT Trademarks and any registrations thereof, or (iii) the
validity of this Agreement or the licenses or rights granted herein, by way of claims, threats,
litigation or otherwise.

     (b) LICENSEE shall, at COLT’s reasonable expense, cooperate fully and in good faith with COLT
for the purpose of COLT’s securing and preserving COLT’s rights in and to the COLT Trademarks.
LICENSEE shall cooperate fully with and assist COLT in the prosecution of any copyright, trademark
or service mark applications concerning the COLT Trademarks that COLT may desire to file, and for
that purpose, LICENSEE shall, upon request, supply to COLT enough samples of the
Products or other material as may be required in connection with any such application.
LICENSEE shall execute any instrument COLT shall reasonably deem necessary to record or cancel
LICENSEE as a registered user of the trademarks of COLT included in the COLT Trademarks, it being
understood that LICENSEE’s right to use the COLT Trademarks in any country for which the filing of
a registered user application is required, or is requested by COLT, shall commence only upon the
filing of such registered user application, and shall continue only so long as this Agreement is in
effect. LICENSEE shall execute any instruments requested by COLT to accomplish or confirm the
foregoing and hereby irrevocably appoints COLT as its attorney-in-fact to execute such instruments
if LICENSEE does not do so.

     8. LICENSEE FEES

     (a) In payment for the initial twenty-year term of this Agreement LICENSEE has provided COLT
with certain payments and other consideration as separately agreed by the parties, and COLT
acknowledges the receipt and sufficiency thereof.

     (b) With each notice of extension of the term of this Agreement as described in Section 2,
LICENSEE agrees to pay COLT $250,000, which shall constitute payment in full for such extension.

     (c) Other than the foregoing consideration, the licenses granted hereunder shall be
royalty-free.

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     9.  CONFIDENTIALITY

     The terms and conditions of this Agreement are of a confidential nature and, unless the other
party gives its prior written approval therefor, neither party shall make any oral or written
disclosure of such information either during or after the term of this Agreement, except to each
party’s financial and legal advisors, secured creditors and other parties who have undertaken to
maintain the confidentiality of such information or except as required by law. This restriction
does not apply to information that is or becomes publicly available without fault of a party
hereto.

     10. ASSIGNABILITY

     (a) Except as provided in Section 10(b), this Agreement may not be assigned by either party
without the prior written consent of the other and any such purported assignment shall be
ineffective.

     (b) Either party may assign this Agreement without the other’s consent in connection with any
sale or other disposition of all or substantially all of its assets and business.

     (c) Any permitted assignment by either party shall not be effective unless the assignee or
successor has explicitly agreed to be bound by and assume the applicable obligations of this
Agreement.

     11. RELEASE AND INDEMNIFICATION

     (a) LICENSEE, for itself, its successors and assignees, agrees to and hereby does release COLT
from any and all claims and liability for damage to property, property loss or personal injury or
death which may be sustained by LICENSEE and which in any way arises from or is connected with
performance of this Agreement or the sale of any Products.
LICENSEE shall indemnify and hold COLT harmless from and against any and all foreseen and
unforeseen liabilities to third parties, including any claim, damage, loss, expense or other injury
(including reasonable attorney’s fees and other fees and costs), arising during or after the term
of this Agreement in anyway arising out of LICENSEE’s activities hereunder, including without
limitation any actual or alleged: (i) breach or
violation by LICENSEE of this Agreement; (ii) other act of commission or omission outside the scope
of LICENSEE’s authority, (iii) defect in the Product or other products permitted hereunder or their
packaging, whether latent or patent including failure of said articles or their packaging,
distribution, promotion, sale or exploitation to meet any Federal, state or local laws or
standards; (iv) claim by any and all employees or subcontractors permitted by LICENSEE to produce
or participate in the production of such articles; and (v) improper reproduction or use of the COLT
Trademarks or of any copyright, service mark, patent, confidential information and privacy,
publicity or other rights. In the case of a legal or other proceeding by a third person against
LICENSEE and COLT, notwithstanding LICENSEE’s obligation hereunder, COLT shall have the right, in
its discretion, to control all aspects of such proceeding (including choice of attorney and
settlement) and LICENSEE shall assist and fully cooperate with COLT in connection with such
proceeding provided that LICENSEE, at its own expense, shall have the right of appearance by
counsel of its own selection.

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     (b) COLT, for itself, its successors and assignees, agrees to indemnify and hold LICENSEE
harmless from and against any and all foreseen and unforeseen liabilities to third parties,
including any claim, damage, loss, expense or other injury (including reasonable attorney’s fees
and other fees and costs), arising during or after the term of this Agreement in any way arising
out of or connected with a claim that LICENSEE’s use of the Trade Name or the COLT Trademarks
infringes on the rights of any other party, provided that this indemnity obligation shall not
extend to any claim relating to a use by LICENSEE of the Trade Name or any COLT Trademark in
violation of the terms of this Agreement. In the case of such a legal or other proceeding by a
third person against LICENSEE and COLT, notwithstanding COLT’s obligation hereunder, LICENSEE shall
have the right, in its discretion, to control all aspects of such proceeding (including choice of
attorney and settlement) and COLT shall assist and fully cooperate with LICENSEE in connection with
such proceeding provided that COLT, at its own expense, shall have the right of appearance by
counsel of its own selection.

     12. CLAIMS AND INFRINGEMENT

     (a) LICENSEE shall immediately notify COLT in writing of any infringement or imitation of, or
any other event or claim adverse to or in violation of COLT rights or interests in, the Trade Name
or the COLT Trademarks that comes to LICENSEE’s attention, including claims of ownership of, or the
right to use, the Trade Name or the COLT Trademarks or colorable imitations or variations thereof.
Whether or not notified by LICENSEE, COLT shall subject to Section 12(b) and Section 12(c) have
sole discretion to decide whether any communication or legal action is undertaken with respect to
such events or claims and to control all aspects of such communication and action (including choice
of attorney and settlement). LICENSEE shall not take any steps with respect to such events or
claims, including any oral or written communication with the offending or adverse person, without
the prior written specific instructions of COLT. LICENSEE shall at COLT’s reasonable expense,
assist and fully cooperate with COLT in connection with any such communications and actions, and in
connection therewith, LICENSEE will execute and deliver any and all documents and perform any and
all acts related thereto.

     (b) If COLT, having received the notice from LICENSEE described in Section 12(a), declines or
fails in a reasonably timely manner to take any action with respect to such infringement and fails
upon the request of LICENSEE to provide an explanation of such failure or refusal that is
reasonably acceptable to LICENSEE, then LICENSEE shall have the right to the extent permitted by
law to take such action at its expense subject to Section 12(c). In such event, LICENSEE shall
control all aspects of such action, COLT shall provide reasonable cooperation to LICENSEE at COLT’s
expense.

     (c) Notwithstanding the provisions of Sections 12(a) and 12(b), neither COLT nor LICENSEE
shall agree to any settlement of such an infringement dispute without the consent of the other,
which shall not be unreasonably withheld. If damages or other compensation are received by either
COLT or LICENSEE as a result of
any such proceeding or settlement, COLT and LICENSEE shall in good faith negotiate a
commercially reasonable division of such funds between them, taking into account all relevant
factors including the relative harm incurred by each.

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     13. INSURANCE

     LICENSEE shall maintain in full force and effect at its own expense during the term of this
Agreement general liability insurance including advertising, blanket contractual, product liability
and completed operations liability coverage from a responsible insurance company having a Best’s
Rating of no less than “A” providing adequate protection at least in the amount of $5,000,000, or
such other amount as to which the parties shall agree, single aggregate for products liability and
contractual liability, personal bodily injury and property damage arising out of alleged defects
with respect to the Product and other products permitted hereunder. This insurance shall name COLT
and its affiliates as additional insureds (to the extent permitted by the insurers), be primary and
non-contributory with respect to any insurance carried by COLT; will contain a statement that such
insurance is primary and that any insurance carried by COLT is neither primary nor contributory and
also will contain a provision negating the “other insurance clause” therein. As proof of such
insurance, a certificate of insurance naming COLT and its affiliates as insured parties will be
submitted to COLT by LICENSEE before any of the Product and other products permitted hereunder are
distributed or sold. COLT shall be entitled during the term of this Agreement to a certificate of
insurance evidencing coverage, which shall be furnished to COLT by LICENSEE. The term “COLT” shall
also include the affiliates, agents, employees, assignees, any sponsors, any advertising agency,
and their respective officers, directors, agents and employees.

     14. NATURE OF RELATIONSHIP

     In the performance of this Agreement LICENSEE is acting solely as an independent contractor,
and nothing in this Agreement shall be construed or applied to create a relationship of partners,
agency, joint venturers or of employer and employee between LICENSEE and COLT.

     15. CESSATION OF BUSINESS

     This Agreement shall terminate forthwith in the event that LICENSEE ceases to carry on its
business, or ceases to sell Products, or ceases to use the COLT Trademarks.

     16. TERMINATION FOR CAUSE

     (a) In the event of any material breach of this Agreement by LICENSEE, COLT shall have the
right to terminate this Agreement unless LICENSEE cures such breach within ninety (90) days of
notice thereof.

     (b) The provisions of Sections 7(a), 9, 11, 17 and 18 shall survive the expiration or
termination of this Agreement.

     17. OBLIGATIONS ON EXPIRATION OR TERMINATION

     (a) Immediately upon the expiration or termination of this Agreement, all the rights granted
to LICENSEE hereunder shall cease and revert to COLT, which shall be free to license others to use
any or all of the rights granted herein effective on and after such date of expiration or
termination. Subject to the provisions of Section 18, upon and after such expiration

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or termination of this Agreement for whatever reasons, LICENSEE will immediately cease the further
use of the COLT Trademarks or the Trade Name, or any further reference to them direct or indirect,
as well as any trade name, trademarks, characters, symbols, designs, likenesses or visual
representations of “Colt” as might be likely to cause confusion or deceive purchasers or
prospective purchasers or dilute the COLT Trademarks. This includes the use of “Colt” as part of
LICENSEE’S business name.

     (b) Upon termination or expiration of this Agreement for any reason whatsoever, LICENSEE shall
return to COLT all artwork depicting the COLT Trademarks, including but not limited to, all
reproductions and all artwork specially produced for LICENSEE by COLT or others, whether or not
paid for by LICENSEE.

     (c) LICENSEE agrees that the COLT Trademarks and the Trade Name are distinctive and possesses
special unique and extraordinary characteristics which would make difficult the assessment of the
monetary damage which COLT would sustain by unauthorized use. Upon termination or expiration,
should LICENSEE fail to cease use of the Trade Name or the COLT Trademarks or any element or
portion thereof, such failure will result in immediate and irreparable injury to COLT, and, in
addition to any provable damages and the right to the costs and expenses of any litigation, COLT
shall be entitled to equitable relief by way of temporary and permanent restraining orders and
injunctions and such other further relief as any court with jurisdiction may deem just and proper
without necessity of posting a bond.

     18. DISPOSAL OF INVENTORY

     Within twelve (12) months of the expiration or termination of this Agreement. LICENSEE shall
delete all COLT Trademarks from all Product inventory, or to the extent that such deletion is
impractical, shall destroy all inventory of Product, that was on hand or in process at the time of
expiration or termination, and shall destroy all advertising, promotional and display materials
using, and all molds, plates, engravings, and/or mechanicals used to affix, the COLT Trademarks and
the Trade Name. LICENSEE shall promptly furnish COLT with a certificate of destruction executed by
LICENSEE to certify the destruction of same.

     19. NOTICES

     Notices and other communications required hereunder, except as provided below, shall be in
writing and shall be deemed to have been properly given if delivered personally with receipt
acknowledged or if mailed by certified mail, return receipt requested, or if transmitted by telex,
telecopy, electronic mail or other like method with confirmation of receipt, to the addresses set
forth in the fast paragraph of this Agreement. Either party may change the address for notices by
giving appropriate notice under this Section. If notice is given to LICENSEE, such notice shall be
made to the attention of Colt Defense LLC, 547 New Park Avenue, West Hartford, Connecticut 06110,
Attention: Carlton S. Chen, Esq., Phone: (860) 244-1315, Fax: (860) 244-1475, E-Mail:
cchen@colt.com. If notice is given to COLT, such notice shall be made to the attention of
New Colt Holding Corp., c/o Sciens Capital Partners, 767 Fifth Avenue, Suite 4605, New York,
New York 10153., Attention: John P. Rigas, Phone: (212) 935-9797, Fax: (212) 6884621, E-Mail:
rigas@scienscapital.com. Notice shall be deemed given at the

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time of personal delivery, delivery to a common carrier, deposit in the mail or at time of giving
by electronic means.

     20.  ENTIRE AGREEMENT

     This Agreement contains the entire agreement among the parties with respect to the subject
matter hereof, and as of the Effective Date supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for herein, including without
limitation the Sublicense Agreement dated as of November 4, 2002, between LICENSEE and Colt’s
Manufacturing Company, Inc.

     21. GOVERNING LAW

     This Agreement, the rights and obligations of the parties and any claims or disputes relating
thereto shall be governed by and construed in accordance with the laws of the State of Connecticut.

     22. BINDING EFFECT

     This Agreement shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns.

     23. SEVERABILITY

     If any provision herein is found to be unenforceable, invalid or illegal, such provision shall
be deemed deleted from this Agreement, and the remainder of this Agreement shall not be affected or
impaired thereby.

     24. AMENDMENT

     This Agreement may be amended or modified only by written agreement referencing this Agreement
and executed by the parties hereto.

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     IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of the date and year
first above written.

	 	 	 	 	 	 	 

	 	 	NEW COLT HOLDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Keys	 	 
	 

	 	 	 	 

Name: William M. Keys
	 	 
	 

	 	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	COLT DEFENSE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Keys	 	 
	 

	 	 	 	 

Name: William M. Keys
	 	 
	 

	 	 	 	Title: President	 	 

Agreed to with respect to the provisions of Section 3(f):

	 	 	 	 	 	 	 

	 

	 	COLT’S MANUFACTURING COMPANY LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Keys	 	 
	 

	 	 	 	 

Name: William M. Keys
	 	 
	 

	 	 	 	Title: President	 	 

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EXHIBIT “A”

COLT Trademarks

For purposes of this Agreement, the term “COLT Trademarks” shall mean:

          COLT

          COLT (Stylized “C”)

          RAMPANT COLT (Design)

	 	 	 
	Trademark No.	 	Description
	827,453

	 	COLT AR-1 S
	830,862

	 	COLT AR-15 AND DESIGN
	241,299

	 	COLT M203 (EU)
	241,240

	 	COLT M4 (EU)
	241,273

	 	COLT M16 (EU)
	1,506,634

	 	COLT AR-15 (FR)

LICENSEE agrees to use the symbol “TM” or “®”, at COLT’s direction, to indicate the
common law or registered status of the COLT Trademarks used and further agrees to use notices in
all literature accompanying the Product and other permitted products to disclose that the COLT
Trademarks are used under license by COLT.

   

 

EXHIBIT “A”

COLT Trademarks

For purposes of this Agreement, the term “COLT Trademarks” shall mean:

          COLT

          COLT (Stylized “C”)

          RAMPANT COLT (Design)

	 	 	 
	Trademark No.	 	Description
	827,453

	 	COLT AR 15
	830,862

	 	COLT AR-15 AND DESIGN
	241,299

	 	COLT M203 (RU)
	241,240

	 	COLT M4 (EU)
	241,273

	 	COLT M16 (EU)
	1,506,634

	 	COLT AR-15 (FR)

LICENSEE agrees to use the symbol “TM” or “®”, at COLT’s direction, to indicate the common law or
registered status of the COLT Trademarks used and further agrees to use notices in all literature
accompanying the Product and other permitted products to disclose that the COLT Trademarks are used
under license by COLT.

COLT acknowledges that LICENSEE owns the common law and registered marks “AR-15,” “M4,” “M16” and
“M203” when used other than as part of any COLT Trademark.exv10w4

Exhibit 10.4

FIRST AMENDED AND RESTATED SUBLEASE AGREEMENT

     THIS FIRST AMENDED AND RESTATED SUBLEASE AGREEMENT (this “First Amended Sublease”) is entered
into as of October 26, 2005, between COLT’S MANUFACTURING COMPANY LLC (“Colt’s” and also referred
to herein as “Subtenant”), a Delaware limited liability company, with its principal place of
business located at 545 New Park Avenue, West Hartford, Connecticut 06110, and COLT DEFENSE LLC
(“Colt Defense” and also referred to herein as “Lessee”), a Delaware limited liability company,
with its principal place of business located at 547 New Park Avenue, West Hartford, Connecticut
06110.

W I T N E S S E T H:

     WHEREAS, Colt’s, as lessee, entered into a certain Agreement of Lease, dated as of March 22,
1990, and amended as of August 16, 1994, (the “Lease, as Amended”) with Colt Industries Inc. a/k/a
Coltec Industries Inc. (“Coltec”), as lessor, for the lease of certain premises located at 545 New
Park Avenue, West Hartford, Connecticut 06110 (the “Leased Premises” as further defined below);

     WHEREAS, on November 4, 2002, Colt’s assigned the Lease, as Amended, to Colt Defense and Colt
Defense, as lessee, entered into a sublease (“Sublease”), dated as of November 4, 2002, with
Colt’s, as subtenant, to sublease a portion of the Leased Premises;

     WHEREAS, on the date first written above, Coltec transferred, conveyed and assigned to NPA
Hartford LLC (the “Landlord”) all legal right, title and interest to the Leased Premises and early
terminated the Lease, as Amended, which latter event triggered the Sublease to automatically early
terminate in accordance with Section 9 of the Sublease;

     WHEREAS, Colt Defense entered into a certain Net Lease, on the date first written above (“Net
Lease”), with the Landlord to lease the Leased Premises;

     WHEREAS, Colt Defense desires to continue to sublet to Colt’s a portion of the Leased
Premises, and Colt’s desires to sublet from Colt Defense that portion of the Leased Premises;

     NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth
below, the parties hereto agree as follows:

     1. REVIVAL. Upon the parties’ execution and delivery of this First Amended Sublease, the
Sublease shall be revived in its entirety retroactive to its date of early termination, this First
Amended Sublease shall amend and restate the Sublease, and Colt’s shall waive notice of termination
of the Sublease.

     2. PREMISES. Colt Defense, as Lessee, hereby sublets to Colt’s, as Subtenant, that interior
portion of certain buildings within the Leased Premises which consist of floor space of the Knudsen
plant building, the administration building and ammunition bunker, all of the foregoing building
interior areas of which are collectively referred to herein as the “Subleased Premises,” to be
demarcated in a written plant, office and storage layout that delineates the configuration of the
Subleased Premises, together with certain surrounding common areas consisting of land and
improvements. The parties may modify such layout from time to time by mutual agreement. Colt’s
acknowledges receipt of a copy of the Net Lease, which is incorporated by reference and made a part
hereof. Colt’s further acknowledges that the Leased Premises, including the common areas, is as
described in the Net Lease, including, but not limited to, Exhibits “A” and “B” thereto.

 

 

     3. TERM. The term (the “Term”) of this First Amended Sublease for the Subleased Premises shall
commence on October 26, 2005 (the “Commencement Date”) and shall expire on October 25, 2012 (the
“Expiration Date”), unless earlier terminated as provided herein. Upon the expiration or early
termination of this First Amended Sublease, Subtenant shall, at Subtenant’s sole cost and expense,
remove its property from the Subleased Premises and surrender the Subleased Premises in the same
order and condition the Subleased Premises was found in as of November 4, 2002.

     4. RENT. The rent for the Term of the Sublease shall be One Hundred Sixty Thousand Seven
Hundred Forty-Six and 00/100 Dollars ($160,746.00) for each twelve (12)-month period, subject to
adjustment. Subtenant shall pay to Lessee as rent the amount of Thirteen Thousand Four Hundred and
00/100 Dollars ($13,400.00) per calendar month (the “Basic Monthly Rent”), in advance on the first
day of each month of the Term hereof. Rent for any period during the Term that is for less than one
(1) calendar month shall be a pro rata portion of the monthly installment. Rent shall be payable
without notice or demand and without deduction, offset, or abatement, in lawful money of the United
States of America to Lessee at such address and to such person as Lessee may designate in writing.

     5. ADJUSTMENTS TO RENT. Lessee may charge or credit Subtenant for an amount (“Adjustment”) to
pass along any increases or decreases in charges to property insurance or property taxes assessed
on the Subleased Premises for the 12-month period immediately preceding the Commencement Date. If
Lessee desires to make an Adjustment, Lessee shall submit to Subtenant a statement of the
calculations for making such Adjustment to the Basic Monthly Rent, and Subtenant shall pay the
adjusted amount of Basic Monthly Rent in accordance with Section 3 above.

     6. USE OF SUBLEASED PREMISES. Subtenant warrants and covenants that it, its employees, and
agents shall only use the Subleased Premises consistent with and as specifically described in
Article 4 of the Net Lease and shall repair and maintain the Subleased Premises in accordance with
Article 5 of the Net Lease. Further, Subtenant agrees to comply with all other applicable
provisions of the Net Lease, and shall not do anything that would constitute a violation on the
part of Lessee of any part or condition of the Net Lease, including, but not limited to, making
alterations or improvements to the buildings without the prior consent of Lessee and Landlord.
Subtenant hereby acknowledges and agrees that Landlord is a third-party beneficiary to Subtenant’s
undertakings under this Section 6.

     7. SERVICES. Subtenant shall promptly report general maintenance, repair and service issues to
the Lessee in connection with the Net Lease.

     8. SUBLETTING. The Subtenant shall not assign, transfer, or further sublet the Subleased
Premises or any part thereof.

     9. INDEMNIFICATION. Subtenant shall indemnify, defend and hold Lessee, Landlord and any
Mortgagee (as defined in the Net Lease) harmless and assume the risk of loss for any and all Costs,
Claims and Environmental Damages (as defined in the Net Lease and including, but not limited to,
attorneys’ fees) for any bodily injury, including death, or property damage, sustained by any
person or persons which arises out of, is occasioned by or is in any way attributable to the
Subleased Premises or common areas or the use and occupancy of the Subleased Premises or common
areas, whether or not arising from the acts or omissions of Subtenant or its agents, employees,
contractors, clients, invitees or subtenants, in the same scope, manner and degree as if Subtenant
were Lessee and Lessee were a party of Landlord in Article 9 of the Net Lease.

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     10. INSURANCE.

          (a) Lessee shall procure and maintain throughout the Term a policy or policies of property
insurance insuring the Leased Premises for its full replacement value. Subtenant shall procure and
maintain throughout the Term at its own cost and expense a policy or policies of property insurance
for the full replacement value all of its own property, including but not limited to Subtenant’s
machinery and equipment, inventory and works in process, raw materials, trade fixtures, furniture,
signs, decorations, furnishings, and all other items of personal property of Subtenant located on
or within the Subleased Premises. Moreover, Subtenant for its operations and business on the
Subleased Premises shall procure and maintain throughout the Term at its own cost and expense a
policy or policies of liability, worker’s compensation and employer’s liability insurance at the
levels and types described in Article 10 of the Net Lease. As used in this First Amended Sublease,
“replacement value” means the cost to replace without deduction for depreciation.

          (b) Notwithstanding any other provision of this First Amended Sublease to the contrary, Colt
Defense and Colt’s each hereby waives any rights of recovery against the other for injury or loss
on account of hazards covered by property insurance required to be carried under this First Amended
Sublease (whether or not self-insured) to the extent of the amount of insurance proceeds that party
would have received under that insurance if that party had maintained all insurance it is required
to maintain under this First Amended Sublease; provided, however, that this release shall not be
applicable to the portion of any damage which is not reimbursed by the damaged party’s insurer
because of the “deductible” permitted hereunder in the damaged party’s insurance coverage.

          (c) All policies of property insurance required to be carried by either party for the Leased
Premises, the Subleased Premises, personal property or fixtures therein or thereon, and occurrences
on the Leased Premises or Subleased Premises shall include a clause or endorsement denying to the
insurer rights by way of subrogation against the other party to the extent rights have been waived
by the insured before the occurrence of injury or loss.

          (d) Subtenant shall furnish Lessee with a certificate of insurance evidencing the issuance and
continuation of policies providing such insurance coverage on or before the commencement date of
this First Amended Sublease and at least thirty (30) days prior to the expiration date of such
policies of insurance.

     11. TERMINATION. This First Amended Sublease shall automatically terminate upon the
expiration, termination or cancellation of the Not Lease, provided, however, that Lessee shall
provide timely prior notice to Subtenant of any termination or cancellation of the Net Lease, it
being understood by the Subtenant that the Net Lease expires on October 25, 2012, without any
provision for extension. Upon the expiration, termination, or cancellation of the Net Lease or this
First Amended Sublease, all obligations hereunder of the parties hereto shall be extinguished. Any
improvements remaining on the Subleased Premises upon termination shall revert to the Lessee or the
Landlord, as provided under the Net Lease and shall be free of any encumbrance at the time of such
reversion.

     12. NOTICES. Except as otherwise specifically provided herein, any notice required or
permitted to be given under this First Amended Sublease shall be given in writing and shall be
deemed given (A) on the delivery date, via First Class U.S. Mail, postage prepaid; or (B) delivered
by hand, in any case addressed to the parties as follows:

To Lessee: Colt Defense LLC, 547 New Park Avenue, West Hartford,

Connecticut 06110, Attention: President & CEO

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To Subtenant: Colt’s Manufacturing Company LLC, 545 New Park Avenue, 
West Hartford,
Connecticut 06110, Attention: President & CEO

or to other persons or entities as may be provided by Lessee of Subtenant, in writing and in
accordance with this paragraph.

     13. APPLICABLE LAW. This First Amended Sublease shall be construed, interpreted, and governed
by the laws of the State of Connecticut.

     14. BINDING AGREEMENT. This First Amended Sublease shall not be valid and binding on Landlord
and Lessee unless and until it has been completely executed by and delivered to both parties.

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     IN WITNESS WHEREOF, the undersigned parties have duly executed this First Amended Sublease as
of the day and year first above written.

	 	 	 	 	 	 	 

	LESSEE:	 	COLT DEFENSE LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Keys	 	 
	 

	 	 	 	 

Name: LtGen Wm M. Keys, USMC (ret.)
	 	 
	 

	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	October 26,
2005	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	SUBTENANT	 	COLT’S MANUFACTURING COMPANY LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Keys	 	 
	 

	 	 	 	 

Name: LtGen Wm M. Keys, USMC (ret.)
	 	 
	 

	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	October 26,
2005	 	 
	 

	 	 	 	 

	 	 

CONSENT TO THIS FIRST AMENDED AND

RESTATED SUBLEASE GIVEN THIS 26TH DAY

OF OCTOBER 2005.

LANDLORD:

NPA HARTFORD LLC

			
	By:	 	NPA Management LLC

Its Managing Member

	 	 	 	 	 	 	 

	 

	 	By:	 	/s/ Daniel J. Standen	 	 
	 

	 	 	 	 

Name: Daniel J. Standen
	 	 
	 

	 	 	 	Title: Authorized Member	 	 

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