INDEMNIFICATION AGREEMENT

 

 

THIS INDEMNIFICATION AGREEMENT is made and entered into as of September 29, 2010 (the “Effective Date”) by CAPTERRA FINANCIAL GROUP, INC., a Colorado corporation (the “Company”) and BOCO INVESTMENTS, LLC, a Colorado limited liability company (“BOCO”), and GDBA INVESTMENTS, LLC, a Colorado limited liability company, (BOCO and GDBA each an “Indemnitor,” and, collectively, the “Indemnitors”).

 

 

WHEREAS, Indemnitors are shareholders of the Company; and

 

WHEREAS, the Company has entered into an Interest Purchase Agreement (the “Agreement”) dated September 29, 2010, with NexCore Group LP, a Delaware limited partnership and its partners (“NexCore”), pursuant to which NexCore partners will contribute equity interests to the Company in exchange for the Company issuing shares of its common stock to NexCore partners; and

 

WHEREAS, one of the premises of the Agreement is that the Indemnitors, as significant pre-Closing owners of the Company, shall be responsible for pre-Closing liabilities of Company and indemnify the Company in accordance with the terms of this Agreement.

 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company and Indemnitors hereby agree as follows:

 

1.           Subject and Purpose.  As a condition to NexCore entering into the Agreement, NexCore requires that Indemnitors indemnify the Company from and against damages or liabilities that may arise relating to the Company and accruing prior to the closing of the Agreement (“Closing”), including any lawsuits state, or federal agency action, fees, fines, or recoupments, and Indemnitors agree to provide such indemnity in accordance with the terms and conditions of this Indemnification Agreement.  The purpose of this Indemnification Agreement is to set forth the agreement of the parties as to this indemnification provided to the Company.

 

2.           Indemnification.

 

(a)           Up to an aggregate total of One Million Dollars ($1,000,000) (the “Cap”), Indemnitors, jointly and severally, hereby agree to indemnify and hold harmless the Company from and against any lawsuit, claims, liabilities, damages, fines, penalties, recoupments, and any other causes of action (including all reasonable and necessary costs, expenses, and fees incurred as a result of such) against the Company that arise from events occurring prior to the Closing (hereinafter “Claims”); provided, however, that this Indemnification is secondary and excess to any applicable insurance coverage or third-party reimbursements.  In addition, Indemnitors shall not be responsible to inde mnify the Company for any actions of the Company which occur subsequent to the Closing.

 

(b)           The Parties are also parties to an Asset Indemnification Agreement of even date herewith (the “Asset Indemnification Agreement”), pursuant to which the Indemnitors will indemnify the Company for Liabilities (as defined in the Asset Indemnification Agreement).  Any amounts paid pursuant to the Asset Indemnification

 

Agreement shall not be taken into account when determining whether the Cap has been satisfied.

 

3.           Term.  This Indemnification Agreement shall terminate and expire on March 31, 2013 (the “Expiration Date”).  Any Claim upon which notice has been provided to the Indemnitors, pursuant to the terms hereof, prior to the Expiration Date shall be fully indemnifiable pursuant to the terms of this Agreement even if such Claim is not fully resolved until after the Expiration Date.

 

4.           Settlement.  The Company shall not admit or assume any liability, enter into any settlement agreement, stipulate to any judgment, compromise or prejudice any claim or defense of the Company, or incur any costs, expenses or fees for which it may seek reimbursement under this Indemnification Agreement without the prior written consent of the Indemnitors, which shall not be unreasonably withheld, delayed or conditioned.  Only those liabilities, settlements, stipulated judgments, costs, expenses, and fees which have been consented to, in writing, by the Indemnitors shall be recoverable under this Indemnification.  For the avoidance of doubt, a final judgment by a court, arbitrat or or similar body does not need to be consented to by the Indemnitors to be recoverable under this Indemnification.  Without the prior written consent of the Company, which shall not be unreasonably withheld, delayed or conditioned, the Indemnitors shall not admit or assume any liability, enter into any settlement agreement, stipulate to any judgment, compromise or prejudice any claim or defense of the Company, if such action (i) is likely to exceed the Cap, (ii) involves equitable relief, (iii) involves any tax position taken by the Company that is reasonably likely to affect post-Closing periods or (iv) is reasonably likely to affect the ongoing operations or results of operations after the Closing.

 

5.           Counsel.  Indemnitors shall have the right to select the Company’s legal counsel with respect to any Claims, subject to the reasonable approval of the Company.  Costs, expenses and fees incurred through legal counsel who has not been selected by Indemnitors and approved by the Company, in writing, shall not be recoverable under this Indemnification.

 

6.           Notice.  In order for a Claim to be subject to this Indemnification, the Company shall provide the Indemnitors with written notice of the possible claim or the Indemnitors must otherwise have knowledge of the possible claim.  Such notice shall be provided to the Indemnitors once the Company reasonably believes that the circumstances may give rise to a claim under this Indemnification.

 

7.           Insurance.  For so long as this Indemnification remains in effect, the Company shall maintain its insurance coverage, with at least the same policy limits as currently in effect, for such Claims that could be subject to this Indemnification.

 

8.           General Provisions.

 

(a)           Assignment.  The rights and obligations of a party shall not be assignable or delegable without the prior written consent of the other party, and any such assignment in the absence of such written consent shall, for all purposes, be deemed null and void.

 

(b)           Expenses.  Indemnitors shall pay all reasonable and necessary expenses incurred after the Effective Date by or on behalf of Indemnitors and Company in

 

 

 

(c)           Further Assurances.  The parties shall, upon written request, execute, acknowledge, and deliver such other instruments and documents and take such further action as may be reasonably necessary to carry out the intent of this Indemnification Agreement.

 

(d)           Modification.  No provision of this Indemnification Agreement may be modified, amended, or waived except by written agreement signed by the party to be bound thereby.

 

(e)           Binding Effect and Benefit.  This Indemnification Agreement shall inure to the benefit of, and shall be binding upon, the heirs, assigns, personal representatives, and successors of the parties hereto.

 

(f)           Headings and Captions.  Subject headings and captions are included for purposes of convenience only and shall not affect the interpretation of this Indemnification Agreement.

 

(g)           Notice.  All notices, requests, demands, and other communications permitted or required herein shall be in writing, and either delivered in person; sent by express mail or other overnight delivery service providing receipt of delivery; or mailed by certified or registered mail, postage prepaid, return receipt requested, restricted delivery to the relevant party.  All such notices and other communications, unless otherwise designated in writing, shall be sent to the following persons:

 

The Company

Capterra Financial Group, Inc.

1621 Eighteenth Street, Suite 250

Denver, CO 80202

Facsimile:  303-

Attention:  Chief Executive Officer

with a copy to:

David Wagner & Associates, P.C.

8400 East Prentice Ave.

Penthouse Suite

Greenwood Village, Colorado 80111

Attention: David J. Wagner, Esq.

Telephone: (303) 793-0304

Facsimile: (303) 794-3393

and

Kutak Rock LLP

1650 Farnam Street

Omaha, NE  68102 Attn: Jay Gilbert, Esq.           James C. Creigh, Esq.

Telephone:   ###-###-####

Facsimile:   ###-###-####

The Investors:

BOCO Investments, LLC

103 West Mountain Ave.

Fort Collins, Colorado 80524

Facsimile:   ###-###-####

Attention:  Chief Executive Officer

GDBA Investments, LLLP

1440 Blake Street, Suite 310

Denver, CO 80202

Facsimile:   ###-###-####

Attention:  Chief Executive Officer

with copy to:

Davis & Ceriani P.C.

Suite 400, Market Center

1350 Seventeenth Street

Denver, CO 80202

Facsimile:   ###-###-####

Attention:  Patrick J. Kanouff, Esq.

(h)           Severability.  Each provision of this Indemnification Agreement is severable from all other provisions.  If any provision is declared invalid or unenforceable, such provision shall be deemed modified to the extent necessary to render it valid and enforceable.  If any court of competent jurisdiction determines that any such provision is invalid or unenforceable for any reason, all remaining provisions shall remain in full force and effect.

 

(i)           Time for Performance.  Time is of the essence.

 

(j)           Waiver.  Either party to this Indemnification Agreement may, by written notice to the other party, extend the time for the performance of any obligation by the other party; waive any inaccuracies in this Indemnification Agreement caused by the other party; and waive compliance with any of the covenants of the other party in this Indemnification Agreement.  No waiver of a breach of any provision of this Indemnification Agreement shall operate or be construed as a waiver of any subsequent

 

breach or limit or restrict any right or remedy otherwise available.  Any waiver of any provision shall be in writing and signed by the party to be bound thereby.

 

(k)           Rights and Remedies Cumulative.  The rights and remedies expressed in this Indemnification Agreement are cumulative and not exclusive of any rights and remedies otherwise available.

 

(l)           Governing Law.  This Indemnification Agreement shall be subject to and governed by Colorado law, without giving effect to its choice of laws provisions.

 

(m)           Counterparts.  This Indemnification Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(n)           Third-Party Beneficiaries.  Except as provided in this Indemnification Agreement, the parties do not intend to create any rights for the benefit of any third party.

 

(o)           Composition of Agreement.  The parties hereto represent that they have each read this Indemnification Agreement and each has sought and received competent legal counsel prior to its execution.  The parties assume joint responsibility for the form and composition of each provision of this Indemnification Agreement and each acknowledge that this Indemnification Agreement shall be interpreted as though they shared equally in its preparation.

 

(p)           Conflict in Instruments.  To the extent that there is an irreconcilable conflict between the provisions of this Indemnification Agreement and any document delivered in connection herewith, the provisions of this Indemnification Agreement shall prevail.

 

(q)           Arbitration.  Any dispute or claim arising under or with respect to this Indemnification will be resolved by arbitration in Denver, Colorado, conducted in accordance with the Rules for Commercial Arbitration of the American Arbitration Association (“AAA”) before a panel of three (3) arbitrators, one appointed by Indemnitors, one appointed by the Company, and the third selected by the AAA.  The decision or award of the arbitrators will be final and binding upon the parties.

 

(r)           Entire Agreement.  This Indemnification Agreement contains the entire agreement of all parties on the subject matter hereof, and no other oral or written agreements shall be binding upon the parties hereto.  The parties acknowledge that they have neither been influenced to enter into this Indemnification Agreement by any party, nor relied on any representation of any party except for those representations set forth in this Indemnification Agreement.  This Indemnification Agreement supersedes all prior agreements, contracts, and understandings of any kind on the subject matter hereof, either oral or written.

 

EXECUTED and DELIVERED as of the date set forth above.

 

By:              /s/ Gregory C. Venn                                                        

Name:              Gregory Venn                                                        

Title:              Chief Executive Officer                                                        

By:              /s/ Joseph Zimlich                                                        

Name:              Joseph Zimlich                                                        

Title:              President and Managing Member                                                        

By:              /s/ G. Brent Backman                                                        

Name:              G. Brent Backman                                                        

Title: