Exhibit 99.1
INDEMNITY DEPOSIT
AGREEMENT
This INDEMNITY DEPOSIT AGREEMENT
(the “ Agreement ”) is entered into effective as
of March 29, 2007 (the “ Effective Date ”) by
and between Jocott Enterprises, Inc., a California corporation
(“ Jocott ”), Woodridge Labs, Inc., a Delaware
corporation (“ Woodridge ”) and Nextera
Enterprises, Inc., a Delaware corporation (“ Nextera
” and together with Woodridge, the “ Buyer
Parties ”).
WHEREAS, Jocott and the Buyer
Parties are parties to an Asset Purchase Agreement dated as of
March 9, 2006 (the “ Purchase Agreement ”);
and
WHEREAS, pursuant to the Purchase
Agreement, Jocott is required to indemnify the Buyer Parties for
certain liabilities, costs and expenses incurred by the Buyer
Parties; and
WHEREAS, the Buyer Parties may have
certain claims for indemnification under the Purchase Agreement
relating to a recall of certain DermaFreeze365™ products sold
by Woodridge (the “ Recall ”); and
WHEREAS, notwithstanding that Jocott
is making no admission with respect to any liability it may have
for indemnification under the Purchase Agreement with respect to
the Recall and may in fact dispute any or all such claims made by
the Buyer Parties in connection therewith, Jocott desires to pay
certain amounts to the Buyer Parties as a deposit in the event that
it is finally determined that Jocott is in fact obligated to
indemnify the Buyer Parties for Damages in connection with the
Recall.
In consideration of the mutual
covenants and promises contained herein, the parties hereto agree
as follows:
1.
Definitions . All capitalized terms used but not
defined in this Agreement shall have the meanings set forth in the
Purchase Agreement, unless the context in which such terms appear
herein clearly requires a different interpretation.
2.
Deposit . Jocott agrees to pay as a deposit an amount
equal to Five Hundred Thousand Dollars ($500,000) (the “
Deposit ”) to the Buyer Parties. The Deposit
shall be made by withdrawing such amount from the Escrow Account
established pursuant to the Escrow Agreement (“ Escrow
Agreement ”), effective as of March 9, 2006, by and among
City National Bank (“ Escrow Agent ”), the Buyer
Parties and Jocott. Such withdrawal shall be accomplished by
delivering a joint instruction letter in the form attached hereto
as Exhibit “A” (the “ Joint Instruction
Letter ”) to the Escrow Agent.
3.
Terms of Deposit . Jocott acknowledges and agrees that
the Deposit shall not bear interest and the Buyer Parties may use
the Deposit funds to satisfy any liabilities, obligations or other
requirements of either or both of the Buyer Parties, whether or not
related to the Recall. At such time that any Claims asserted
by the Buyer Parties related to the Recall are finally resolved,
whether by settlement or compromise, negotiation, final judgment
(including all appeals) in accordance with the procedures set forth
in Section 9.4 of the Purchase Agreement (collectively, a “
Final Resolution ”) (or at such earlier time that it
is determined that the Buyer Parties will not
make a Claim related to the Recall
whether by reason of the parties’ settlement of liability
issues relating to the Recall outside the scope of the Purchase
Agreement or otherwise), the Deposit shall be applied and/or paid
as follows: (a) if Jocott’s liability for Damages under
Section 9.4 of the Purchase Agreement relating to the Recall (the
“ Recall Liability ”) is determined pursuant to
a Final Resolution to be $500,000 or less, then the Recall
Liability shall be deemed paid by way of set off against the
Deposit and the difference between $500,000 and the amount of the
Recall Liability shall
