EX-10.29 Indemnification Obligation Confirmation L



 





EXHIBIT 10.29




June 6, 2005




Bolle, Inc.

c/o Bushnell Performance Optics

9200 Cody

Overland Park, Kansas 66214

Attention: B. Joseph Messner, CEO




Re: Confirmation of Indemnification Obligation




Dear Mr. Messner:




     Reference is made to that certain Stock Purchase Agreement dated as of November 13, 1996
between BEC Group, Inc. and Foster Grant Group, L.P., Foster Grant Holdings, Inc. and Accessories
Associates, Inc. (the “Original SPA”). Reference is further made to that certain Agreement of
Amendment, Termination and Modification dated as of June 24, 1998 between Bolle, Inc. (“Bolle”), as
assignee of BEC Group, Inc., and Foster Grant Group, L.P., Foster Grant Holdings, Inc. and
AAi.FosterGrant, Inc. (“AAIFG”) (the Original SPA, as so modified, being the “SPA”). Pursuant to
the SPA, Bolle agreed to indemnify Foster Grant Group, L.P., Foster Grant Holdings, Inc., The
Bonneau Company and AAIFG for the Patent Infringement Litigation Liabilities (as defined below)
(the “Indemnification Obligation”). For purposes of
this Letter Agreement, Patent Infringement
Litigation Liabilities shall mean any and all obligations and liabilities arising out of that
certain action titled Magnivision, Inc. v. The Bonneau Company and Foster Grant Group, LP Case No.
CV91-2167DT(JGx), CV92-7553DT(JGx), and CV97- 8351DT(JGx) (the “California Case”) and any
appeals therefrom, and any judgment rendered in any enforcement or collection action brought to
enforce or collect upon any judgment or settlement arising from any of the forgoing specifically
referenced cases but only to the extent of the judgment entered or settlement reached in the
foregoing specifically referenced cases (the “Patent Infringement Litigation” and “Patent
Infringement Litigation Liabilities”).



     As you are aware, Final Judgment was entered on March 14, 2005 in Magnivision, Inc. v. The
Bonneau Company and Foster Grant Group, LP Case No. CV91-2167DT(JGx), CV92- 7553DT(JGx), and
CV97-8351DT(JGx) in the amount of eleven million dollars ($11,000,000.00) (the “Judgment”).
Further, on April 28, 2005, the Court entered an Order of Partial Satisfaction of Judgment (the
"April 28 Order”) crediting two million dollars ($2,000,000.00) previously paid by or on behalf of
AAIFG against the $11,000,000 judgment. As you may also be aware, on May 18, 2005, the Court
entered an (In Chambers) Order Re Defendants’ Ex Parte Application to Enjoin Magnivision From
Pursuing Collection Actions in Rhode Island State and Federal Courts, to Enjoin the Rhode Island
Courts, and for Sanctions (the “May 18 Order”). The May 18 Order specified that the remaining
$9,000,000 judgment amount was to be paid by The Bonneau Company and Foster Grant Group, L.P. to
Nyman, Inc. (“Nyman”) monthly in 36 equal monthly installments with interest at 6% per annum (1/2% per month) to accrue on the unpaid balance, with the first such payment being due on July 1, 2005
(the first day of the 36 consecutive months (commencing on July 1, 2005) being a “Payment Date").
The May 18 Order further specified that interest of 1/2% per month should accrue on the unpaid balance
from February 3, 2005 to July 1, 2005 (the “Post-judgment Interest”).



 










 





June 6, 2005

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	 	 	The parties hereto agree as follows:
	 
	1.	 	Bolle represents that it is the successor in interest to certain obligations of BEC Group,
Inc., including, without limitation, the Patent Infringement Litigation Liabilities and the
Attorneys’ Fees (as defined below).
	 
	2.	 	AAIFG represents that it is the successor in interest to certain obligations of Accessories
Associates, Inc., Foster Grant Group, L.P., Foster Grant Holdings, Inc. and The Bonneau
Company, including, without limitation, the Patent Infringement Litigation Liabilities and the
Attorneys’ Fees (as defined below).
	 
	3.	 	The parties hereto acknowledge that the infringement claimed in the Patent Infringement
Litigation is alleged to have occurred both before and after consummation of the transactions
contemplated by the Original SPA. As such, the parties previously agreed that Bolle’s
Indemnification Obligation relates only to any Patent Infringement Litigation Liabilities
resulting from any infringement claimed in the Patent Infringement Litigation that occurred
before the consummation of the transactions contemplated by the Original SPA, and AAIFG is
responsible for any Patent Infringement Litigation Liabilities resulting from any infringement
claimed in the Patent Infringement Litigation that occurred from and after the consummation of
the transactions contemplated by the Original SPA.
	 
	4.	 	The parties also previously agreed (based on a calculation of the allegedly infringing sales
occurring prior to and following the consummation of the transactions contemplated by the SPA,
which both parties acknowledge is an estimate but agree to be bound), that they would split
certain attorneys’ fees and costs incurred in connection with the Patent Infringement
Litigation (the “Attorneys’ Fees”) as follows: Bolle will pay seventy two percent (72%) of the
Attorneys’ Fees, and AAIFG will pay twenty eight percent (28%) of the Attorneys’ Fees, in each
case, when, as and if such amounts are incurred and become due (the “Attorneys’ Fees Split”).
The parties agree and acknowledge that attorneys fees and costs incurred to defend the cases
filed by Magnivision, Inc. against the defendants in the California Case and certain of their
affiliates in the courts sitting in Rhode Island and Texas are subject to the Attorneys’ Fees
Split. Notwithstanding the foregoing, however, the parties agree that the Attorneys’ Fees Split
shall not apply to attorneys’ fees or costs incurred by Greenberg Traurig, P.A., Sachnoff &
Weaver, Ltd., or any other counsel separately retained by one party, unless, by agreement of
the parties, such counsel serves as lead counsel in any portion of the Patent Infringement
Litigation; and, the parties confirm that to date, neither firm has had that role. The
parties consent to the retention of Finnegan, Hendersen, Farabow, Garrett & Dunner, LLP and
Edwards & Angels for the pending Rhode Island proceedings, and Akin, Gump, Strauss, Hauer &
Feld, LLP and Finnegan, Hendersen, Farabow, Garrett & Dunner, LLP for the pending Texas
proceeding.
	 
	5.	 	By means of this Letter Agreement and notwithstanding anything to the contrary contained in
any other agreement, the parties hereby confirm their further agreement that they will split
the Patent Infringement Litigation Liabilities as follows: Bolle will pay seventy two percent
(72%) of the Patent Infringement Litigation Liabilities, and AAIFG




 









 











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	 	 	will pay twenty eight percent (28%) of the Patent Infringement Litigation Liabilities, in
each case, when, as and if such amounts become due (the “Patent infringement Litigation
Liabilities Split”).
	 
	6.	 	Based upon the aforesaid agreements and acknowledgements (and assuming no reversal, vacation
or modification of the Judgment and Orders referenced above, and no entry of a new judgment),
by our calculations, (1) AAIFG was originally responsible for three million, eighty thousand
dollars ($3,080,000.00) of the $11,000,000 amount of the judgment; (2) after applying the
credit AAIFG remains responsible for the payment of one million eighty thousand dollars
($1,080,000.00); and (3) Bolle will be responsible for the payment of seven million nine
hundred twenty thousand dollars ($7,920,000.00).
	 
	7.	 	In addition to the payment obligations outlined in paragraph 6 above, the parties hereto
acknowledge that if the amount of the judgment remains $11,000,000 (i) AAIFG shall be
responsible for 12% of the Post-judgment Interest attributable to the Judgment and (ii) Bolle
shall be responsible for 88% of the Post-judgment Interest attributable to the Judgment.
	 
	8.	 	We understand and agree that the dollar amounts and percentages set forth in paragraphs 6 and
7 above would have to be revised (either upward or downward, as the facts may dictate) if
there were any reversal, vacation, or modification in the Judgment and/or the Orders, or if
there were entry of a new judgment, which changes the amount of the Patent Infringement
Litigation Liabilities. However, we understand and agree regardless of any such modifications
in the Judgment and/or Orders, (1) AAIFG will pay twenty eight percent (28%) of any Patent
Infringement Litigation Liabilities and Bolle will pay seventy two percent (72%) of any Patent
infringement Litigation Liabilities, in each case, when, as and if the Patent Infringement
Litigation Liabilities shall be due, and (2) AAIFG will be granted full credit for the two
million dollars ($2,000,000.00) previously paid by it towards any Patent Infringement
Litigation Liabilities which may ultimately be determined to be payable by it pursuant to the
immediately preceding clause (1) and the amount of post-judgment interest for which AAIFG is
responsible will be recalculated accordingly.
	 
	9.	 	The provisions in this paragraph being subject to adjustment pursuant to paragraph 8 above,
AAIFG agrees to fund the first $1,080,000 of principal payments owing to Nyman under the May
18 Order (currently anticipated to be payments of $250,000 due on each of July 1, 2005, August
1, 2005, September 1, 2005 and October 1, 2005 and $80,000 of the principal payment due on
November 1, 2005). On each Payment Date, each of AAIFG and Bolle shall pay their pro rata
share (based on each party’s proportionate responsibility for payment of the remaining
principal amount of the Judgment) of the interest due on the Judgment pursuant to the May 18
Order.
	 
	10.	 	To the extent that AAIFG or Berggruen Holdings, Inc. or any of their respective affiliates,
on behalf of AAIFG, pays or has paid any amount in excess of that for which AAIFG is obligated
to pay under this Letter Agreement on account of Attorneys’ Fees and Patent Infringement
Litigation Liabilities based upon the Attorneys’ Fees Split and




 









 











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	 	 	the Patent Infringement Litigation Liabilities Split, then Bolle shall reimburse AAIFG or
Berggruen Holdings, Inc., as the case may be, for such amount.
	 
	11.	 	To the extent that Bolle, or Bushnell or Wind Point or any of their respective affiliates on
behalf of Bolle, pays or has paid any amount in excess of that for which Bolle is obligated to
pay under this Letter Agreement on account of Attorneys’ Fees and Patent Infringement
Litigation Liabilities based upon the Attorneys’ Fees Split and the Patent Infringement
Litigation liabilities Split, then AAIFG shall reimburse Bolle, Bushnell, or Wind Point, as the
case maybe, for such amount.
	 
	12.	 	In the event that Wind Point Partners or any investment fund or portfolio company controlled
by Wind Point Partners delivers a guaranty to Nyman with respect to the payment of any Patent
Infringement Litigation Liabilities (for which it has no current obligation to do), that fund
controlled by Wind Point Partners agrees to deliver a similar guaranty to AAIFG.
	 
	13.	 	This agreement includes all of the rights and obligations of the parties with respect to the
Indemnification Obligation concerning the Patent Infringement Litigation liabilities and if
there is any conflict between the provisions of this agreement and any other agreement, this
agreement shall control.





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     To signify your acceptance, please execute this letter in the spaces indicated below, and
return to us by facsimile with a hard copy to follow.



	 	 	 	 	 
	 	Sincerely,


AAi.FosterGrant, Inc.





 	 
	 	/s/ Brian Lagarto
 	 
	 	Brian Lagarto, 	 
	 	Chief Financial Officer 	 
	 
	 	Berggruen Holdings, Inc.





 	 
	 	/s/ Jared Bluestein
 	 
	 	Jared Bluestein 	 
	 	Chief Operating Officer 	 
	 



ACKNOWLEDGED AND AGREED 




BOLLE, INC.




	 	 	 	 	 
	 	 
	By:  	                       /s/ David C. Broadbent
 	 
	 	Name:  	David C. Broadbent 	 
	 	Title:  	CFO 	 
	 



Only to the extent of the specific obligations set forth in Section 12 hereof:




WIND POINT PARTNERS




	 	 	 	 	 
	 	 
	By:  	                        /s/ Salam Chandhary
 	 
	 	Name:  	Salam Chandhary 	 
	 	Title:  	Principal