Document:

exv10w1

Exhibit 10.1

Execution Version

BAKER HUGHES INCORPORATED

3.20% Senior Notes due 2021

REGISTRATION RIGHTS AGREEMENT

New York, New York

August 17, 2011

J.P. MORGAN SECURITIES LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

As Representatives of the Initial

Purchasers named in the attached Schedule A

c/o J.P. Morgan Securities LLC

270 Park Avenue

New York, New York 10017

Ladies and Gentlemen:

          Baker Hughes Incorporated, a corporation organized under the laws of the State of Delaware
(the “Company”), proposes to issue and sell to the several initial purchasers named in Schedule A
hereto (the “Initial Purchasers”), upon the terms set forth in a purchase agreement, dated August
10, 2011 (the “Purchase Agreement”), $750,000,000 aggregate principal amount of its 3.20% Senior
Notes due 2021 (the “Notes”) relating to the initial placement of the Notes (the “Initial
Placement”). To satisfy a condition to the obligations of the Initial Purchasers under the
Purchase Agreement, the Company hereby agrees with the Initial Purchasers for the benefit of the
holders from time to time of the Notes (including the Initial Purchasers) and the New Notes (as
defined herein) (each a “Holder” and, together, the “Holders”), as follows:

          1. Definitions. Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Registration Rights
Agreement (this “Agreement”), the following capitalized defined terms shall have the following
meanings:

          “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.

          “Advice” shall have the meaning set forth in the last paragraph of Section 5 hereof.

          “Affiliate” of any specified Person shall have the same meaning as in Rule 501(b) of
Regulation D of the Act.

 

 

          “Agreement” shall have the meaning set forth in Section 1 hereof.

          “Blackout Period” shall have the meaning set forth in Section 3(b)(ii) hereof.

          “Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

          “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New
York City.

          “Closing Date” shall mean August 17, 2011, the date on which the Notes are initially issued.

          “Commission” shall mean the Securities and Exchange Commission.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

          “Exchange Offer Registration Period” shall mean the 180-day period following the effective
date of the Exchange Offer Registration Statement, exclusive of any period during which any stop
order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement,
or such shorter period as will terminate when (i) all New Notes held by Exchanging Dealers or
Initial Purchasers have been sold pursuant thereto or (ii) Exchanging Broker-Dealers are no longer
required to deliver a Prospectus in connection with market-making or other trading activities,
whichever occurs first.

          “Exchange Offer Registration Statement” shall mean a registration statement of the Company on
an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and
supplements to such registration statement, including post-effective amendments thereto, in each
case including the Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.

          “Exchanging Dealer” shall mean any Holder (which may include any of the Initial Purchasers)
that is a Broker-Dealer and elects to exchange for New Notes any Notes that it acquired for its own
account as a result of market-making activities or other trading activities (but not directly from
the Company or any Affiliate of the Company).

          “Free Writing Prospectus” shall mean each free writing prospectus (as defined in Rule 405
under the Act) prepared by or on behalf of the Company (or any of its agents or representatives) or
used or referred to by the Company (or any of its agents or representatives) in connection with the
sale of the Notes or the New Notes.

          “Holder” shall have the meaning set forth in the preamble hereto.

          “Indemnified Holder” shall have the meaning set forth in Section 7(a) hereof.

          “Indemnified Person” shall have the meaning set forth in Section 7(d) hereof.

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          “Indemnifying Person” shall have the meaning set forth in Section 7(d) hereof.

          “Indenture” shall mean the Indenture dated as of October 28, 2008, between the Company and The
Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended by the First
Supplemental Indenture dated as of the date hereof, as the same may be further supplemented and
amended from time to time in accordance with the terms thereof.

          “Initial Placement” shall have the meaning set forth in the preamble hereto.

          “Initial Purchasers” shall have the meaning set forth in the preamble hereto.

          “Losses” shall have the meaning set forth in Section 7(a) hereof.

          “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of
Notes or New Notes, as applicable, registered under a Registration Statement.

          “Managing Underwriters” shall mean the investment banker or investment bankers and manager or
managers that shall administer an underwritten offering.

          “New Notes” or “Exchange Notes” shall mean the promissory notes of the Company that are
identical in all material respects to the Notes (except that the interest rate step-up provisions
and the transfer restrictions shall be eliminated) and to be issued under the Indenture or the New
Notes Indenture.

          “New Notes Indenture” shall mean an indenture between the Company and the New Notes Trustee,
identical in all material respects to the Indenture (except that the interest rate step-up
provisions and the transfer restrictions shall be eliminated).

          “New Notes Trustee” shall mean The Bank of New York Mellon Trust Company, N.A. or another bank
or trust company serving as trustee with respect to the New Notes under the New Notes Indenture.

          “Notes” shall have the meaning set forth in the preamble hereto.

          “Prospectus” shall mean the prospectus included in any Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Notes or the New Notes covered by such Registration Statement, and all
amendments and supplements thereto and all material incorporated by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble hereto.

          “Registration Default” shall have the meaning set forth in Section 4.

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          “Registered Exchange Offer” shall mean the proposed offer of the Company to issue and deliver
to the Holders of the Notes that are not prohibited by any law or policy of the Commission from
participating in such offer, in exchange for the Notes, a like aggregate principal amount of the
Exchange Notes.

          “Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf
Registration Statement that covers any of the Notes or the New Notes pursuant to the provisions of
this Agreement, any amendments and supplements to such registration statement, including
post-effective amendments (in each case including the Prospectus contained therein), all exhibits
thereto and all material incorporated by reference therein.

          “Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

          “Shelf Registration Period” shall have the meaning set forth in Section 3(b)(ii) hereof.

          “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company
pursuant to the provisions of Section 3 hereof which covers some or all of the Notes or New Notes,
as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.

          “Special Interest” shall have the meaning set forth in Section 4 hereof.

          “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission promulgated thereunder and any successor act, rules and
regulations.

          “Trustee” shall mean the trustee with respect to the Notes and New Notes under the Indenture.

          “Underwriter” shall mean any underwriter of Notes or New Notes in connection with an offering
thereof under a Registration Statement.

          2. Registered Exchange Offer.

          (a) Except as set forth in Section 3 below, the Company shall prepare, at its cost,
and shall file with the Commission the Exchange Offer Registration Statement. The Company
shall use its reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Act.

          (b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company
shall promptly commence the Registered Exchange Offer.

          (c) In connection with the Registered Exchange Offer, the Company shall:

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          (i) deliver to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;

          (ii) commence and use its reasonable best efforts to complete the Registered
Exchange Offer no later than August 17, 2012, and hold the Registered Exchange Offer
open for not less than 20 Business Days;

          (iii) use its reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act, supplemented and amended as required
under the Act to ensure that it is available for sales of New Notes by Exchanging
Dealers or the Initial Purchasers during the Exchange Offer Registration Period;

          (iv) utilize the services of a depositary for the Registered Exchange Offer,
which may be the Trustee, the New Notes Trustee or an Affiliate of either of them;

          (v) permit Holders to withdraw tendered Notes at any time prior to the close of
business, New York time, on the last Business Day on which the Registered Exchange
Offer is open; and

          (vi) comply in all material respects with all applicable laws.

          (d) As soon as practicable after the close of the Registered Exchange Offer, the
Company shall:

          (i) accept for exchange all Notes tendered and not validly withdrawn pursuant
to the Registered Exchange Offer;

          (ii) deliver to the Trustee for cancellation in accordance with Section 5(r)
all Notes so accepted for exchange; and

          (iii) cause the Trustee or New Notes Trustee, as the case may be, promptly to
authenticate and deliver to each Holder of Notes a principal amount of New Notes
equal to the principal amount of the Notes of such Holder so accepted for exchange.

          (e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such
Holder using the Registered Exchange Offer to participate in a distribution of the New Notes
(x) could not under Commission policy as in effect on the date of this Agreement rely on the
position of the Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991) and Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), as
interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar
no-action letters; and (y) must comply with the registration and prospectus delivery
requirements of the Act in connection with any secondary resale transaction which must be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of Regulation S-K

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under the Act if the resales are of New Notes obtained by such Holder in exchange for Notes
acquired by such Holder directly from the Company or one of its Affiliates. Accordingly,
each Holder participating in the Registered Exchange Offer shall be required to represent to
the Company that, at the time of the consummation of the Registered Exchange Offer:

          (i) any New Notes received by such Holder will be acquired in the ordinary
course of business;

          (ii) such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Notes or the New Notes within the meaning of
the Act;

          (iii) such Holder is not an Affiliate of the Company or if it is an Affiliate,
such Holder will comply with the registration and prospectus delivery requirements
of the Act to the extent applicable;

          (iv) if such Holder is not a Broker-Dealer, that it is not engaged in, and does
not intend to engage in, the distribution of the New Notes; and

          (v) if such Holder is a Broker-Dealer, that it will receive New Notes for its
own account in exchange for Notes that were acquired as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with any resale of such New Notes.

          3. Shelf Registration.

          (a) If (i) due to any change in law or applicable interpretations thereof by the
Commission’s staff, the Company determines that it is not permitted to effect the Registered
Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the Registered
Exchange Offer is not consummated by August 17, 2012; (iii) the Initial Purchasers determine
upon advice of their counsel that a Shelf Registration Statement must be filed in connection
with any public offering or sale of Notes that are not eligible to be exchanged for New
Notes in the Registered Exchange Offer and that are held by them following consummation of
the Registered Exchange Offer; or (iv) any Holder (other than the Initial Purchasers) is not
eligible to participate in the Registered Exchange Offer or does not receive freely
tradeable New Notes in the Registered Exchange Offer other than by reason of such Holder
being an Affiliate of the Company (it being understood that the requirement that a
participating Broker-Dealer deliver the Prospectus contained in the Exchange Offer
Registration Statement in connection with sales of New Notes shall not result in such New
Notes being not “freely tradeable”), and, in the case of clause (iii) or (iv), the Company
is notified in writing of such determination, non-eligibility or failure, as the case may
be, no more than 30 days after the consummation of the Registered Exchange Offer, the
Company shall effect a Shelf Registration Statement in accordance with subsection (b) below.

          (b) If required pursuant to subsection (a) above,

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          (i) the Company, at its cost, shall as promptly as practicable, but in no event
later than 90 days after such obligation to file arises, file with the Commission
and use its reasonable best efforts to cause to become effective under the Act on or
prior to August 17, 2012, a Shelf Registration Statement relating to the offer and
sale of the Notes or the New Notes, as applicable, by the Holders thereof from time
to time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement; provided, however,
that no Holder (other than the Initial Purchasers) shall be entitled to have the
Notes or New Notes held by it covered by such Shelf Registration Statement unless
such Holder agrees in writing to be bound by all of the provisions of this Agreement
applicable to such Holder; and provided further, that with respect
to New Notes received by the Initial Purchasers in exchange for Notes constituting
any portion of an unsold allotment, the Company may, if permitted by current
interpretations by the Commission’s staff, file a post-effective amendment to the
Exchange Offer Registration Statement containing the information required by Item
507 or 508 of Regulation S-K, as applicable, in satisfaction of their obligations
under this subsection with respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and governed by the
provisions herein applicable to, a Shelf Registration Statement;

          (ii) the Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as required
by the Act, in order to permit the Prospectus forming part thereof to be usable by
Holders until the earliest of (A) the time when all of the Notes or New Notes, as
applicable, covered by the Shelf Registration Statement can be sold pursuant to Rule
144 without limitation by non-affiliates of the Company under clause (d) of Rule
144, (B) the date on which all the Notes or New Notes, as applicable, covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement, and (C) one year from the date the Shelf Registration Statement is
declared effective by the Commission (in any such case, such period being called
the “Shelf Registration Period”); it being understood that the Company shall be
deemed not to have used its reasonable best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any action
that would result in Holders of Notes or New Notes covered thereby not being able to
offer and sell such Notes or New Notes during that period, unless (A) such action is
required by applicable law or Commission policy; or (B) such action is taken by the
Company in good faith and for valid business reasons (not including avoidance of the
Company’s obligations hereunder), including, but not limited to, the acquisition or
divestiture of assets (the period during which the Shelf Registration Statement is
not available under clause (A) or (B), the “Blackout Period”), so long as the
Company promptly thereafter complies with the requirements of Section 5(k) hereof,
if applicable; and

          (iii) the Company shall cause the Shelf Registration Statement and the related
Prospectus and any amendment or supplement thereto, as of the

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effective date of the
Shelf Registration Statement or such amendment or supplement, to comply in all
material respects with the applicable requirements of the Act and the rules and
regulations of the Commission.

          4. Special Interest. If (a) on or prior to August 17, 2012, (x) the Registered
Exchange Offer has not been consummated and (y) a Shelf Registration Statement is not then
effective under the Securities Act, or (b) after either the Exchange Offer Registration Statement
or the Shelf Registration Statement has been become effective, such Registration Statement
thereafter ceases to be effective or usable in connection with resales of Notes or New Notes in
accordance with and during the periods specified in this Agreement, other than a Shelf Registration
Statement during any Blackout Period to the extent such Blackout Period does not exceed 60 days in
any three-month period or 90 days in any 12-month month period (each such event referred to in
clauses (a) and (b), a “Registration Default”), then, as liquidated damages, interest (“Special
Interest”) will accrue on the principal amount of the affected Notes and the New Notes (in addition
to the stated interest on the Notes and New Notes) from and including the date on which any such
Registration Default shall occur to but excluding the date on which all Registration Defaults have
been cured (such cure to include, for the avoidance of doubt, consummation of the Registered
Exchange Offer or an effective Shelf Registration Statement in the case of (x) and (y) of clause
(a) even if such consummation or effectiveness occurs after August 17, 2012). Special Interest
will accrue at a rate of 0.25% per annum. The Company will pay Special Interest on the regular
interest payment dates specified in the Indenture and in the same manner as other interest. In no
event will Special Interest accrue under more than one of the foregoing clauses (a) or (b) at any
one time or exceed 0.25% per annum in any event.

     Any Special Interest that is accrued and unpaid on any Note at the time such Note is exchanged
for a New Note shall be deemed to have accrued on such New Note.

          5. Additional Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following
provisions shall apply.

               (a) The Company shall:

               (i) furnish to the Representatives of the Initial Purchasers, if so requested,
not less than five Business Days prior to the filing thereof with the Commission, a
draft copy of any Exchange Offer Registration Statement and any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if any, to
the Prospectus included therein (including all documents incorporated by reference
in any Shelf Registration Statement) and shall use its reasonable best efforts to
reflect in each such document (excluding any documents incorporated by reference
after such filing), when so filed with the Commission, such comments as the Initial
Purchasers reasonably propose within such five Business Day period;

               (ii) include the information to the effect of that set forth in:

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          (A) Annex A and Annex B hereto in the forepart of the Prospectus
contained in the Exchange Offer Registration Statement,

          (B) Annex C hereto in the underwriting or plan of distribution section
of the Prospectus contained in the Exchange Offer Registration Statement,
and

          (C) Annex D hereto in the letter of transmittal delivered pursuant to
the Registered Exchange Offer;

               (iii) if requested by the Initial Purchasers, include the information required
by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in
the Exchange Offer Registration Statement, subject to Section 5(o); and

               (iv) in the case of a Shelf Registration Statement, include the names of the
Holders that propose to sell Notes or New Notes, as applicable, pursuant to the
Shelf Registration Statement as selling Note holders, subject to Section 5(o).

               (b) The Company shall ensure that:

               (i) any Registration Statement and any amendment thereto and any Prospectus
forming part thereof and any amendment or supplement thereto complies in all
material respects with the Act and the rules and regulations thereunder; and

               (ii) any Registration Statement and any amendment thereto does not, when it
becomes effective (within the meaning of Rule 430B under the Act), contain an untrue
statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.

               (c) The Company shall advise the Initial Purchasers in connection with a Shelf
Registration Statement and the Holders of Notes or New Notes covered by any Shelf
Registration Statement and any Exchanging Dealer under any Exchange Offer Registration
Statement that has provided in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by the Initial Purchasers or any such Holder or
Exchanging Dealer, the Company shall confirm such advice in writing (which notice pursuant
to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
Prospectus until the Company shall have remedied the basis for such suspension):

               (i) when a Registration Statement and any amendment thereto has been filed with
the Commission and when the Registration Statement or any post-effective amendment
thereto has become effective;

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               (ii) of any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for additional information;

               (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose;

               (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes or New Notes included therein for sale
in any jurisdiction or the initiation of any proceeding for such purpose; and

               (v) of the happening of any event that requires any change in the Registration
Statement or the Prospectus so that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required to be stated therein
(in the case of the Registration Statement) or necessary to make the statements
therein (in the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading.

               (d) The Company shall use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any Registration Statement or the qualification of the
Notes or New Notes therein for sale in any jurisdiction as soon as practicable.

               (e) The Company shall furnish to each Holder of Notes or New Notes covered by any
Shelf Registration Statement, without charge, if the Holder so requests, at least one copy
of such Shelf Registration Statement, any post-effective amendment thereto, all material
incorporated therein by reference and all exhibits thereto (including exhibits incorporated
by reference therein).

               (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of
Notes or New Notes covered by any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder may reasonably
request. The Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Notes or New Notes in connection with the offering
and sale of the Notes or New Notes covered by the Prospectus, or any amendment or supplement
thereto, included in the Shelf Registration Statement, subject to the last paragraph of
Section 5.

               (g) The Company shall furnish to each Exchanging Dealer and to each of the Initial
Purchasers that so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, excluding all material
incorporated by reference therein and all exhibits thereto.

               (h) The Company shall promptly deliver to the Initial Purchasers, each Exchanging
Dealer and each other Person required to deliver a Prospectus during the

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Exchange Offer Registration Period, without charge, as many copies of the Prospectus
included in such Exchange Offer Registration Statement and any amendment or supplement
thereto as any such Person may reasonably request (excluding documents incorporated by
reference). The Company consents to the use of the Prospectus or any amendment or
supplement thereto by the Initial Purchasers, any Exchanging Dealer and any such other
Person that may be required to deliver a Prospectus following the Registered Exchange Offer
in connection with the offering and sale of the New Notes covered by the Prospectus, or any
amendment or supplement thereto, included in the Exchange Offer Registration Statement,
subject to the last paragraph of Section 5.

               (i) Prior to the Registered Exchange Offer or any other offering of Notes or New Notes
pursuant to any Registration Statement, the Company shall arrange, if necessary, for the
qualification of the Notes or the New Notes for sale under the laws of such jurisdictions as
any Holder shall reasonably request and will maintain such qualification in effect so long
as required; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not then so qualified or to take any action that
would subject it to service of process in suits or taxation, other than as required in
connection with the Registered Exchange Offer, in any such jurisdiction where it is not then
so subject.

               (j) The Company shall cooperate with the Holders of Notes and New Notes to facilitate
the timely preparation and delivery of certificates representing New Notes or Notes to be
issued or sold pursuant to any Registration Statement free of any restrictive legends and in
such authorized denominations and registered in such names as Holders may request, to the
extent permitted by the Indenture or New Notes Indenture, as applicable, or otherwise in the
name of Cede & Co., as nominee for the Depositary (as defined in the Purchase Agreement) or
such other nominee.

               (k) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v)
above, the Company shall promptly (subject to permitted Blackout Periods in the case of any
Shelf Registration Statement) prepare a post-effective amendment to the applicable
Registration Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to the Initial Purchasers or
Exchanging Dealers, the Prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. In such circumstances, the
period of effectiveness of the Exchange Offer Registration Statement provided for in Section
2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended
by the number of days from and including the date of the giving of a notice of suspension
pursuant to Section 5(c) to and including the date when the Initial Purchasers, the Holders
of the Notes or New Notes and any known Exchanging Dealer shall have received the Advice or
such amended or supplemented Prospectus pursuant to this Section.

               (l) Not later than the effective date of any Registration Statement, the Company shall
provide a CUSIP number for the New Notes.

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               (m) The Company shall comply in all material respects with all applicable rules and
regulations of the Commission and shall make generally available to the Holders of Notes or
New Notes as soon as practicable after the effective date of the applicable Registration
Statement an earnings statement satisfying the provisions of Section 11(a) of the Act.

               (n) The Company shall cause the Indenture or the New Notes Indenture, as the case may
be, to be qualified under the Trust Indenture Act in a timely manner.

               (o) The Company may require each Holder of Notes or New Notes to be sold pursuant to
any Shelf Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of such Notes as the Company may from time to time reasonably
require for inclusion in such Registration Statement. The Company may exclude from such
Shelf Registration Statement the Notes or New Notes of any Holder that fails to furnish such
information within a reasonable time after receiving such request.

               (p) In the case of any Shelf Registration Statement, the Company shall enter into such
customary agreements and take all other appropriate actions reasonably requested (including
if requested an underwriting agreement in customary form) in order to expedite or facilitate
the registration or the disposition of the Notes or New Notes, and in connection therewith,
if an underwriting agreement is entered into, use its reasonable best efforts to cause the
same to contain indemnification provisions and procedures no less favorable than those set
forth in Section 7 with respect to the selling Holders (or such other provisions and
procedures acceptable to a majority in aggregate principal amount of Notes or New Notes, as
applicable, held by Holders selling securities pursuant to such offering and the Managing
Underwriters, if any).

               (q) In the case of any Shelf Registration Statement, the Company shall use its
reasonable best efforts to, if requested by a selling Holder or the Managing Underwriters,
if any:

               (i) make reasonably available for inspection by the Holders of Notes or New
Notes to be registered thereunder, any Underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such Underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the time
such information is made available for inspection shall be kept confidential by the
Holders or any such Underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third party
without an accompanying obligation of confidentiality;

               (ii) cause the Company’s officers, directors and employees to supply all
relevant information reasonably requested by the Holders or any such

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Underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in
writing by the Company, in good faith, as confidential at the time of delivery of
such information shall be kept confidential by the Holders or any such Underwriter,
attorney, accountant or agent, unless such disclosure is made in connection with a
court proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality;

               (iii) make such representations and warranties to the Holders of Notes or New
Notes registered thereunder and the Underwriters, if any, in form, substance and
scope as are customarily made by issuers to Underwriters in primary underwritten
offerings;

               (iv) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to the Managing Underwriters, if any) addressed to each selling Holder and the
Underwriters, if any, covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such Holders and Underwriters;

               (v) obtain “cold comfort” letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial data
are, or are required to be, included in the Shelf Registration Statement), addressed
to each selling Holder of Notes or New Notes registered thereunder and the
Underwriters, if any, in customary form and covering matters of the type customarily
covered in “cold comfort” letters in connection with primary underwritten offerings,
provided that to be an addressee of the comfort letter, if requested by the
applicable accountant, each Underwriter and selling Holder may be required to
confirm that it is in the category of person to whom a comfort letter may be
delivered in accordance with applicable accounting literature; and

               (vi) deliver such documents and certificates as may be reasonably requested by
the Majority Holders and the Managing Underwriters, if any, including those to
evidence compliance with Section 5(k) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company .

The actions set forth in clauses (iii), (iv), (v) and (vi) of this clause (q) shall be performed at
(A) the effectiveness of such Shelf Registration Statement and each post-effective amendment
thereto or, if later, at the time of any “take-down” under such Shelf Registration Statement, to
the extent reasonably requested by a selling Holder or the Managing Underwriters, if any; and (B)

13

 

each closing under any underwriting or similar agreement as and to the extent required thereunder.

               (r) If a Registered Exchange Offer is to be consummated, upon delivery of the Notes by
Holders to the Company (or to such other Person as directed by the Company) in exchange for
the New Notes, the Company shall mark, or caused to be marked, on the Notes so exchanged
that such Notes are being canceled in exchange for the New Notes. In no event shall the
Notes be marked as paid or otherwise satisfied.

               (s) If any Broker-Dealer shall underwrite any Notes or New Notes or participate as a
member of an underwriting syndicate or selling group or “assist in the distribution” (within
the meaning of the Rules of Fair Practice and the By-Laws of the Financial Industry
Regulatory Authority, Inc.) thereof, whether as a Holder of such Notes or New Notes or as an
Underwriter, a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, will assist such Broker-Dealer in complying with the requirements of such Rules
and By-Laws, including, without limitation, by:

               (i) if such Rules or By-Laws shall so require, engaging a “qualified
independent underwriter” (as defined in such Rules) to participate in the
preparation of the Registration Statement, to exercise usual standards of due
diligence with respect thereto and, if any portion of the offering contemplated by
such Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Notes or New Notes;

               (ii) indemnifying any such qualified independent underwriter to the extent of
the indemnification of Underwriters provided in Section 7 hereof; and

               (iii) providing such information to such Broker-Dealer as may be required in
order for such Broker-Dealer to comply with the requirements of such Rules.

               (t) The Company shall use its reasonable best efforts to take all other steps necessary
to effect the registration of the Notes or the New Notes, as the case may be, covered by a
Registration Statement.

          Each Holder agrees by acquisition of a Note that, upon receipt of any notice from the Company
of the existence of any fact of the kind described in Section 5(c)(ii)-(v) or any Blackout Period,
such Holder will forthwith discontinue disposition of Notes or New Notes pursuant to the applicable
Registration Statement until such Holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5 hereof, or until it is advised in writing (the “Advice”) by
the Company that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company in writing, each Holder will deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Holder’s possession, of the
Prospectus covering such Notes or New Notes that was current at the time of receipt of such notice.

14

 

          6. Registration Expenses. The Company shall bear all expenses incurred in connection
with the performance of its obligations under Sections 2, 3 and 5 hereof and, in the event of any
Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements
of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, but excluding fees and expenses of counsel to the Initial Purchasers or the
Holders, all agency fees and commissions, underwriting discounts and commissions and transfer taxes
attributable to the sale or disposition of Notes or New Notes by a Holder.

          7. Indemnification and Contribution.

          (a) The Company agrees to indemnify and hold harmless (i) the Initial Purchasers, (ii)
each Holder of Notes or New Notes, as the case may be, covered by any Registration Statement
(including with respect to any Prospectus delivery as contemplated in Section 5(h) hereof,
each Exchanging Dealer, but subject in all cases to the first sentence of the last paragraph
of Section 5), (iii) each Person, if any, who controls (within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act) any of the foregoing (any of the Persons
referred to in this clause (iii) being hereinafter referred to as a “controlling person”),
and (iv) the respective officers, directors, partners, employees, representatives and agents
of the Initial Purchasers or the Holders (including predecessor Holders) (any person
referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
“Indemnified Holder”), from and against any and all losses, claims, damages and liabilities,
including, without limitation, reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted (collectively
“Losses”), caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary Prospectus, Prospectus, Free Writing
Prospectus or any “issuer information” (as defined in Rule 433 of the Act) filed or required
to be filed pursuant to Rule 433(d) under the Act, or any amendment or supplement thereto,
or caused by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, except insofar
as such Losses are caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to any
Indemnified Holder furnished to the Company in writing by such Indemnified Holder expressly
for use therein.

          (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each controlling person and each of the Company’s officers and directors to the
same extent as the foregoing indemnity from the Company to each Holder, but only with
reference to such Losses that are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with information
relating to a Holder furnished to the Company in writing by such Holder expressly for use in
any Registration Statement, preliminary Prospectus, Prospectus, Free Writing Prospectus or
any “issuer information” (as defined in Rule 433 of the Act) filed or required to be filed
pursuant to Rule 433(d) under the Act, or any amendment or supplement thereto. This
indemnity agreement will be in addition to any liability which any such Holder may otherwise
have.

15

 

          (c) Each of the Initial Purchasers, severally and not jointly, agrees to indemnify and
hold harmless the Company, each controlling person and each of the Company’s officers and
directors to the same extent as the foregoing indemnity from the Company to the Initial
Purchasers, but only with reference to such Losses that are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to the Company in writing by
the Initial Purchasers expressly for use in any Registration Statement, preliminary
Prospectus, Prospectus, Free Writing Prospectus or any “issuer information” (as defined in
Rule 433 of the Act) filed or required to be filed pursuant to Rule 433(d) under the Act, or
any amendment or supplement thereto. This indemnity agreement will be in addition to any
liability which the Initial Purchasers may otherwise have.

          (d) If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person in respect
of which indemnity may be sought pursuant to either of the three preceding paragraphs, such
Person (the “Indemnified Person”) shall promptly notify the Person or Persons against whom
such indemnity may be sought (each an “Indemnifying Person”) in writing, and such
Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others
entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding. In any such proceeding, the Indemnifying Person shall be able to
participate in such proceeding and, to the extent that it so elects, jointly with any other
similarly situated Indemnifying Person, to assume the defense thereof, subject to the right
of the Indemnified Person to be separately represented and to direct its own defense if the
named parties to any such proceeding include both the Indemnified Person and the
Indemnifying Person and the Indemnified Person has been advised by counsel that
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) such Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary or (ii) the named parties
in any such proceeding (including any impleaded parties) include an Indemnifying Person and
an Indemnified Person and the Indemnified Person shall have reasonably concluded that
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that an Indemnifying Person
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Indemnified Persons, and that all such reasonable
fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the
Indemnified Holders shall be designated in writing by the Holders of the majority in
aggregate principal amount of Notes and New Notes offered in the Prospectus to which the
claim relates, and any such separate firm for the Company, its directors, officers and such
control Persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding effected
without its

16

 

written consent, but if settled with such consent or if there be a final judgment for
the plaintiff, such Indemnifying Person agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. No Indemnifying
Person shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of such
proceeding.

          (e) If the indemnification provided for in the first, second and third paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any
Losses referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Person on the one
hand and the Indemnified Person on the other hand pursuant to the Purchase Agreement or from
the offering of the Notes or New Notes pursuant to any Registration Statement that resulted
in such Losses or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Indemnifying
Person on the one hand and the Indemnified Person on the other in connection with the
statements or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the one hand and
any Indemnified Holder on the other shall be deemed to be in the same proportion as the
total net proceeds from the Initial Placement received by the Company bear to the total net
proceeds received by such Indemnified Holder from sales of Notes or New Notes giving rise to
such obligations. The relative fault of the parties shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company or such Indemnified Holder and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. Each
director, officer, employee and agent of an Initial Purchaser or a Holder and each person,
if any, who controls an Initial Purchaser or a Holder within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such Indemnified
Holder, and each director of the Company, each officer of the Company, and each person, if
any, who controls the Company within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company.

          (f) Each of the Company and the Initial Purchasers agrees that it would not be just and
equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Person as a result of the Losses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses incurred by such Indemnified

17

 

Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall any Holder of any Notes
or New Notes be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder from the sale of the Note pursuant to a Registration
Statement or New Note exceeds the amount of damages which such Holder would have otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          (g) The remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any indemnified party at law or in
equity.

          (h) The indemnity and contribution agreements contained in this Section 7 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Holder or any Person controlling any
Holder or by or on behalf of the Company, its officers or directors or any other Person
controlling the Company and (iii) acceptance of and payment for any of the Notes or New
Notes.

          8. Underwritten Registrations.

          (a) If any of the Notes or New Notes, as the case may be, covered by any Shelf
Registration Statement is to be sold in an underwritten offering, the Managing Underwriters
shall be selected by the Majority Holders and shall be reasonably satisfactory to the
Company.

          (b) No Person may participate in any underwritten offering pursuant to any Shelf
Registration Statement, unless such Person (i) agrees to sell such Person’s Notes or New
Notes, as the case may be, on the basis reasonably provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting arrangements.

          9. No Inconsistent Agreements. The Company has not, as of the date hereof, entered
into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its
Notes that is inconsistent with the rights granted to the Holders herein or otherwise conflicts
with the provisions hereof.

          10. Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be given, unless the Company has
obtained the consent of the Majority Holders (or, after the consummation of any Registered Exchange
Offer in accordance with Section 2 hereof, of New Notes); provided, however, that,
with respect to any matter that directly or indirectly affects the rights of the Initial

18

 

Purchasers hereunder, the Company shall obtain the written consent of the Representatives of
the Initial Purchasers. Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that relates exclusively
to the rights of Holders whose Notes or New Notes, as the case may be, are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the rights of other Holders
may be given by the Majority Holders, determined on the basis of Notes or New Notes, as the case
may be, being sold rather than registered under such Registration Statement.

          11. Notices. All notices and other communications (including without limitation any
notices or other communications to a Holder) provided for or permitted hereunder shall be made in
writing by hand-delivery, registered first-class mail, next-day air courier or facsimile:

     (1) if to a Holder, at the most current address of such Holder set forth on the records
of the registrar under the Indenture;

     (2) if to the Initial Purchasers:

J.P. Morgan Securities LLC

Merrill Lynch, Pierce, Fenner & Smith Incorporated

As Representatives of the Initial Purchasers named on Schedule A

attached to the Registration Rights Agreement

c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Attention: High Grade Syndicate Desk

Facsimile No.: (212) 834-6081

          with copies (which shall not constitute notice) to:

Vinson & Elkins L.L.P.

First City Tower

1001 Fannin Street, Suite 2500

Houston, Texas 77002-6760

Attention: Stephen M. Gill

Facsimile No.: (713) 615-5956; and

          (3) if to the Company, at the addresses as follows:

Baker Hughes Incorporated

2929 Allen Parkway, Suite 2100

Houston, Texas 77019

Attention: William D. Marsh

Facsimile No.: (713) 439-8472

          with copies (which shall not constitute notice) to:

19

 

Baker Hughes Incorporated

2929 Allen Parkway, Suite 2100

Houston, Texas 77019

Attention: Will Marsh

Facsimile No.: (713) 439-8472

Akin Gump Strauss Hauer & Feld LLP

1111 Louisiana, 44th Floor

Houston, Texas 77002

Attention: Christine B. LaFollette

Facsimile No.: (713) 236-0822

          All such notices and communications shall be deemed to have been duly given: when delivered by
hand, if personally delivered; five Business Days after being deposited in the U.S. mail, postage
prepaid, if mailed; one Business Day after being timely delivered to a next-day air courier; and
when the addressor receives facsimile confirmation, if sent by facsimile.

          The Initial Purchasers or the Company by notice to the other parties may designate additional
or different addresses for subsequent notices or communications.

          12. Successors. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, including, without the need for an express
assignment or any consent by the Company thereto, subsequent Holders of Notes or New Notes. The
Company hereby agrees to extend the benefits of this Agreement to any Holder of Notes and the New
Notes, and any such Holder may specifically enforce the provisions of this Agreement as if an
original party hereto so long as such Holder complies with its obligations hereunder.

          13. Counterparts. This Agreement may be executed (including by facsimile) in any
number of counterparts and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement.

          14. Headings. The headings used herein are for convenience only and shall not affect
the construction hereof.

          15. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN
THE STATE OF NEW YORK.

          16. Severability. If any one of more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

20

 

          17. No Fiduciary Duty. The Company hereby acknowledges that (a) the Initial Purchasers
are acting as principal and not as an agent or fiduciary of the Company and (b) the Company’s
engagement of the Initial Purchasers in connection with the offering and the process leading up to
the offering pursuant to the Purchase Agreement is as independent contractors and not in any other
capacity. Furthermore, the Company agrees that it is solely responsible for making its own
judgments in connection with the Initial Placement, the Registered Exchange Offer or a Shelf
Registration (irrespective of whether any of the Initial Purchasers has advised or is currently
advising the Company on related or other matters). The Company agrees that it will not claim that
the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency,
fiduciary or similar duty to the Company, in connection with such transaction or the process
leading thereto.

[Remainder Of This Page Is Intentionally Left Blank]

21

 

     If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall
represent a binding agreement among the Company and you.

	 	 	 	 	 
	 	Very truly yours,

BAKER HUGHES INCORPORATED

 	 
	 	By:  	/s/ Peter A. Ragauss
 	 
	 	 	Name:  	Peter A. Ragauss 	 
	 	 	Title:  	Senior Vice President and

Chief Financial Officer 	 
	 

	 	 	 	 	 
	The foregoing Agreement is hereby

confirmed and accepted as of the

date first above written

J.P. MORGAN SECURITIES LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

Acting as Representative of the

Several Initial Purchasers named in

the attached Schedule A.

 	 	 
	By:  	J.P. Morgan Securities LLC
 	 	 
	 	 	 
	By:  	/s/ Maria Sramek
 	 	 
	 	Name:  	Maria Sramek
	 	 
	 	Title:  	
Executive Director 	 	 
	 
	By:  	Merrill Lynch, Pierce, Fenner & Smith Incorporated
 	 	 
	 	 	 
	By:  	/s/ Joseph A. Crowley
 	 	 
	 	Name:  	Joseph A. Crowley 	 	 
	 	Title:  	Director 	 	 

Signature Page to Registration Rights Agreement

 

	 	 	 	 	 

SCHEDULE A

Initial Purchasers

J.P. Morgan Securities LLC

Merrill Lynch, Pierce, Fenner & Smith Incorporated

HSBC Securities (USA) Inc.

Wells Fargo Securities, LLC

Barclays Capital Inc.

Citigroup Global Markets

Goldman, Sachs & Co.

Mitsubishi UFJ Securities (USA), Inc.

RBS Securities Inc.

UBS Securities LLC

Banco Bilbao Vizcaya Argentaria, S.A.

Commerz Markets LLC

Credit Agricole Securities (USA) Inc.

Deutsche Bank Securities Inc.

DnB NOR Markets, Inc.

RBC Capital Markets, LLC

Standard Chartered Bank

UniCredit Capital Markets LLC

U.S. Bancorp Investments, Inc.

 

 

ANNEX A

          Each broker or dealer that receives new notes for its own account in exchange for old notes
that were acquired as a result of market-making or other trading activities must acknowledge that
it will comply with the registration and prospectus delivery requirements of the Act in connection
with any offer, resale, or other transfer of the new notes issued in the exchange offer, including
information with respect to any selling holder required by the Act in connection with any resale of
the new notes.

          Furthermore, any broker-dealer that acquired any of its old notes directly from us:

	 	•	 	may not rely on the applicable interpretation of the staff of the Commission’s
position contained in Exxon Capital Holdings Corporation (pub. avail. May 13,
1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as interpreted in
the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar
no-action letters; and
	 
	 	•	 	must also be named as a selling noteholder in connection with the registration
and prospectus delivery requirements of the Act relating to any resale transaction.
See “Plan of Distribution” and “The Exchange Offer —Purpose and Effect of Exchange
Offer Registration Rights.”

 

 

ANNEX B

          Each broker-dealer that receives new notes for its own account in exchange for old notes,
where such old notes were acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will comply with the registration and prospectus
delivery requirements of the Act in connection with any offer, resale or other transfer of such new
notes, including information with respect to any selling holder required by the Act in connection
with the resale of the new notes. We have agreed that for a period of 180 days after the effective
date of the registration statement of which this prospectus is a part (or for such shorter period
during which broker-dealers are required by law to deliver such prospectus), we will make this
prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of
Distribution.”

 

 

ANNEX C

PLAN OF DISTRIBUTION

          Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes.
This prospectus, as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for Notes where such
Notes were acquired as a result of market-making activities or other trading activities. We have
agreed that, starting on the effective date of the registration statement of which this prospectus
is a part and ending on the close of business 180-days after such date or such shorter period as
will terminate when all New Notes held by Exchanging Dealers or Initial Purchasers have been sold
pursuant hereto (or for such shorter period during which broker-dealers are required by law to
deliver such prospectus), we will make this prospectus, as amended or supplemented, available to
any broker-dealer for use in connection with any such resale. In
addition, until
            ,
20     ,
all dealers effecting transactions in the New Notes may be required to deliver a prospectus.

          We will not receive any proceeds from any sale of New Notes by brokers-dealers. New Notes
received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer or the purchasers of any such New Notes. Any broker-dealer that
resells New Notes that were received by it for its own account pursuant to the Exchange Offer and
any broker or dealer that participates in a distribution of such New Notes may be deemed to be an
“underwriter” within the meaning of the Act and any profit of any such resale of New Notes and any
commissions or concessions received by any such Persons may be deemed to be underwriting
compensation under the Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an
“underwriter” within the meaning of the Act.

          Furthermore, any broker-dealer that acquired any of the old notes directly from us:

	 	•	 	may not rely on the applicable interpretation of the staff of the SEC’s position
contained in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988),
Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), ), as interpreted
in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar
no-action letters; and
	 
	 	•	 	must also be named as a selling noteholder in connection with the registration
and prospectus delivery requirements of the Act relating to any resale transaction.

 

 

          For a period of 180-days after the effective date of the registration statement of which this
prospectus is a part or such shorter period as will terminate when all New Notes held by Exchanging
Dealers or Initial Purchasers have been sold pursuant hereto (or for such shorter period during
which broker-dealers are required by law to deliver such prospectus), we will promptly send
additional copies of this prospectus and any amendment or supplement to this prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. We have agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of
the Notes) other than commissions or concessions of any brokers or dealers and will indemnify the
holders of the Notes (including any broker-dealers) against certain liabilities, including
liabilities under the Act.

          [If applicable, add information required by Regulation S-K Items 507 or 508.]

 

 

ANNEX D

o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10

ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS

OR SUPPLEMENTS THERETO.

	 	 	 	 	 

	 

	 	Name:	 	 
	 

	 	Address:	 	 
	 

	 	 
	 	 

If the undersigned is not a broker-dealer, the undersigned represents that it acquired the New
Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage
in, a distribution of New Notes and it has no arrangements or understandings with any Person to
participate in a distribution of the New Notes. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Notes, it represents that the Notes to be
exchanged for New Notes were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus in connection with any resale
of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an “underwriter” within the meaning of the Act.exh10-1.htm

Exhibit 10.1

SHARE EXCHANGE AGREEMENT

 

This Share Exchange Agreement, dated as of August 16, 2011 (this “Agreement”) by and among GroveWare Technologies Ltd., a Delaware corporation (“GroveWare”), the sole stockholder of GroveWare set forth on Schedule I hereto (the “GroveWare Shareholder”), Great Wall Builders Ltd., a Texas corporation (“GWBU”), and the majority stockholder of GWBU set forth on Schedule II hereto (the “GWBU Controlling Stockholder”).

 

WHEREAS, the GroveWare Shareholder owns 100% of the issued and outstanding ordinary shares of GroveWare (such shares being hereinafter referred to as the “GroveWare Shares”); and

 

WHEREAS, (i) the GroveWare Shareholder and GroveWare believe it is in their respective best interests for the GroveWare Shareholder to exchange one hundred (100) GroveWare Shares for seven million five hundred thousand (7,500,000) newly-issued shares of common stock, $0.0001 par value per share, of GWBU (the “Common Stock”), which, at the time of this Agreement, prior to any financing, shall constitute 77.32% of the issued and outstanding shares of GWBU Common Stock immediately after the closing of the transactions contemplated herein, and (ii) GWBU believes it is in its best interest and the best interest of its stockholders to acquire the GroveWare Shares in exchange for the GWBU Shares, all upon the terms and subject to the conditions set forth in this Agreement (the “Share Exchange”); and

 

WHEREAS, it is the intention of the parties that: (i) the Share Exchange shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) the Share Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement (the “Securities Act”); and

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows:

 

ARTICLE I

 

EXCHANGE OF GROVEWARE SHARES FOR GWBU SHARES

 

Section 1.1  Agreement to Exchange GroveWare Shares for GWBU Shares. On the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement, the GroveWare Shareholder shall assign, transfer, convey and deliver the GroveWare Shares to GWBU.  In consideration and exchange for the GroveWare Shares, GWBU shall issue, transfer, convey and deliver the GWBU Shares to the GroveWare Shareholder.

  

Section 1.2  Closing and Actions at Closing. The closing of the Share Exchange (the “Closing”) shall take place remotely via the exchange of documents and signatures at 10:00 a.m. Pacific Time on the day the conditions to closing set forth in Articles V and VI herein have been satisfied or waived, or at such other time and date as the parties hereto shall agree in writing (the “Closing Date”).

 

Section 1.3  Directors of GWBU at Closing Date. On the Closing Date, Peter Evan Bell, the current director of GWBU, shall resign from the board of directors of GWBU (the “GWBU Board”) and the appointment of Hrair Achkarian and W. Scott Boyes to the GWBU Board shall become effective.

 

Section 1.4  Officers of GWBU at Closing Date. On the Closing Date, Peter Evan Bell shall resign from each officer position held at GWBU and immediately thereafter, the GWBU Board shall appoint Hrair Achkarian to serve as President and Chief Executive Officer; W. Scott Boyes to serve as Chief Financial Officer and Treasurer; and W. Scott Boyes to serve as Secretary, with the Board of Directors comprised of the following members: Hrair Achkarian and W. Scott Boyes.

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF GWBU

  

  

  

GWBU represents, warrants and agrees that all of the statements in the following subsections of this Article II are true and complete as of the date hereof.

 

Section 2.1  Corporate Organization

 

A.     GWBU is a corporation duly organized, validly existing and in good standing under the laws of Texas, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of GWBU. “Material Adverse Effect” means, when used with respect to GWBU, any event, occurrence, fact, condition, change or effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of GWBU, or materially impair the ability of GWBU to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, or (ii) changes in the United States securities markets generally.

 

B.            Copies of the Articles of Incorporation and Bylaws of GWBU with all amendments thereto, as of the date hereof (the “GWBU Charter Documents”), have been furnished to the GroveWare Shareholder and to GroveWare, and such copies are accurate and complete as of the date hereof. The minute books of GWBU are current as required by law, contain the minutes of all meetings of the GWBU Board and stockholders of GWBU from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the GWBU Board and stockholders of GWBU. GWBU is not in violation of any of the provisions of the GWBU Charter Documents.

 

Section 2.2  Capitalization of GWBU.

 

A.            The authorized capital stock of GWBU consists of 918,816,988 shares authorized as Common Stock, par value $0.0001, and 98,989,886 shares authorized as Preferred Stock, par value $0.0001, of which 4,800,000 shares of common stock are issued and outstanding, immediately prior to this Share Exchange.  There are no preferred shares issued and outstanding.

 

B.            All of the issued and outstanding shares of Common Stock of GWBU immediately prior to this Share Exchange are, and all shares of Common Stock of GWBU when issued in accordance with the terms hereof will be, duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with all applicable U.S. federal and state securities laws and state corporate laws, and have been issued free of preemptive rights of any security holder. Except with respect to securities to be issued in connection with the Share Exchange and to the GroveWare Shareholder pursuant to the terms hereof, as of the date of this Agreement there are no outstanding or authorized options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire or receive any shares of GWBU’s capital stock, nor are there or will there be any outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights, pre-emptive rights or rights of first refusal with respect to GWBU or any Common Stock, or any voting trusts, proxies or other agreements, understandings or restrictions with respect to the voting of GWBU’s capital stock. There are no registration or anti-dilution rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which GWBU is a party or by which it is bound with respect to any equity security of any class of GWBU. GWBU is not a party to, and it has no knowledge of, any agreement restricting the transfer of any shares of the capital stock of GWBU.  The issuance of all of the shares of GWBU described in this Section 2.2 have been, or will be, as applicable, in compliance with U.S. federal and state securities laws and state corporate laws and no stockholder of GWBU has any right to rescind or bring any other claim against GWBU for failure to comply with the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws.

 

C.            There are no outstanding contractual obligations (contingent or otherwise) of GWBU to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, GWBU or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other person.

  

  

  

 

Section 2.3 Subsidiaries and Equity Investments. GWBU does not directly or indirectly own any capital stock or other securities of, or any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any corporation, limited liability company, partnership, limited partnership, joint venture or other company, person or other entity.

 

Section 2.4 Authorization, Validity and Enforceability of Agreements. GWBU has all corporate power and authority to execute and deliver this Agreement and all agreements, instruments and other documents to be executed and delivered in connection with the transactions contemplated by this Agreement to perform its obligations hereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by GWBU and the consummation by GWBU of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of GWBU, and no other corporate proceedings on the part of GWBU are necessary to authorize this Agreement or to consummate the transactions contemplated hereby and thereby. This Agreement constitutes the valid and legally binding obligation of GWBU and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. GWBU does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other person in order for it to consummate the transactions contemplated by this Agreement, other than filings that may be required or permitted under states securities laws, the Securities Act and/or the Exchange Act resulting from the issuance of the GWBU Shares or securities in connection with the Share Exchange.

Section 2.5  No Conflict or Violation. Neither the execution and delivery of this Agreement by GWBU, nor the consummation by GWBU of the transactions contemplated hereby will: (i) contravene, conflict with, or violate any provision of the GWBU Charter Documents; (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which GWBU is subject, (iii) conflict with, result in a breach of, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which GWBU is a party or by which it is bound, or to which any of its assets or properties are subject; or (iv) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of GWBU’s assets, including without limitation the GWBU Shares.

 

Section 2.6  Agreements. Except as disclosed on documents filed with the Securities and Exchange Commission (the “Commission”), GWBU is not a party to or bound by any contracts, including, but not limited to, any:

 

A.           employment, advisory or consulting contract;

 

B.            plan providing for employee benefits of any nature, including any severance payments;

 

C.            lease with respect to any property or equipment;

 

D.            contract, agreement, understanding or commitment for any future expenditure in excess of $5,000 in the aggregate;

 

E.            contract or commitment pursuant to which it has assumed, guaranteed, endorsed, or otherwise become liable for any obligation of any other person, entity or organization; or

 

F.            agreement with any person relating to the dividend, purchase or sale of securities, that has not been settled by the delivery or payment of securities when due, and which remains unsettled upon the date of this Agreement, except with respect to the GWBU Shares or the securities to be issued pursuant to this Agreement.

 

GWBU has provided to GroveWare and the GroveWare Shareholder, prior to the date of this Agreement, true, correct and complete copies of each contract (whether written or oral), including each amendment, supplement and modification thereto (the “GWBU Contracts”).  GWBU shall satisfy all liabilities due under the GWBU

  

  

  

 

Contracts as of the date of Closing.  All such liabilities shall be satisfied or released at or prior to Closing.  Any amounts accrued post-Closing shall be the sole responsibility of GroveWare.

 

Section 2.7  Litigation. There is no action, suit, proceeding or investigation (“Action”) pending or, to the knowledge of GWBU, currently threatened against GWBU or any of its affiliates, that may affect the validity of this Agreement or the right of GWBU to enter into this Agreement or to consummate the transactions contemplated hereby or thereby. There is no Action pending or, to the knowledge of GWBU, currently threatened against GWBU or any of its affiliates, before any court or by or before any governmental body or any arbitration board or tribunal, nor is there any judgment, decree, injunction or order of any court, governmental department, commission, agency, instrumentality or arbitrator against GWBU or any of its affiliates. Neither GWBU nor any of its affiliates is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no Action by GWBU or any of its affiliates relating to GWBU currently pending or which GWBU or any of its affiliates intends to initiate.

Section 2.8  Compliance with Laws. GWBU has been and is in compliance with, and has not received any notice of any violation of any, applicable law, order, ordinance, regulation or rule of any kind whatsoever, including without limitation the Securities Act, the Exchange Act, the applicable rules and regulations of the SEC or the applicable securities laws and rules and regulations of any state.

 

Section 2.9  Financial Statements; SEC Filings.

 

A.            GWBU’s financial statements (the “Financial Statements”) contained in its periodic reports filed with the SEC have been prepared in accordance with generally accepted accounting principles applicable in the United States of America (“U.S. GAAP”) applied on a consistent basis throughout the periods indicated, except that those Financial Statements that are not audited do not contain all footnotes required by U.S. GAAP. The Financial Statements fairly present the financial condition and operating results of GWBU as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. GWBU has no material liabilities (contingent or otherwise). GWBU is not a guarantor or indemnitor of any indebtedness of any other person, entity or organization. GWBU maintains a standard system of accounting established and administered in accordance with U.S. GAAP.

 

B.            GWBU has timely made all filings with the SEC that it has been required to make under the Securities Act and the Exchange Act (the “Public Reports”). Each of the Public Reports has complied in all material respects with the applicable provisions of the Securities Act, the Exchange Act, and the Sarbanes/Oxley Act of 2002 (the “Sarbanes/Oxley Act”) and/or regulations promulgated thereunder. None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading. There is no event, fact or circumstance that would cause any certification signed by any officer of GWBU in connection with any Public Report pursuant to the Sarbanes/Oxley Act to be untrue, inaccurate or incorrect in any respect. There is no revocation order, suspension order, injunction or other proceeding or law affecting the trading of GWBU’s Common Stock, it being acknowledged that none of GWBU’s securities are approved or listed for trading on any exchange or quotation system.

 

Section 2.10  Books, Financial Records and Internal Controls. All the accounts, books, registers, ledgers, GWBU Board minutes and financial and other records of whatsoever kind of GWBU have been fully, properly and accurately kept and completed; there are no material inaccuracies or discrepancies of any kind contained or reflected therein; and they give and reflect a true and fair view of the financial, contractual and legal position of GWBU. GWBU maintains a system of internal accounting controls sufficient, in the judgment of GWBU, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.

 

Section 2.11  Employee Benefit Plans. GWBU does not have any “Employee Benefit Plan” as defined in the U.S. Employee Retirement Income Security Act of 1974 or similar plans under any applicable laws.

 

  

  

  

 

Section 2.12  Tax Returns, Payments and Elections. GWBU has filed all Tax (as defined below) returns, statements, reports, declarations and other forms and documents (including, without limitation, estimated tax returns and reports and material information returns and reports) (“Tax Returns”) required pursuant to applicable law to be filed with any Tax Authority (as defined below). All such Tax Returns are accurate, complete and correct in all material respects, and GWBU has timely paid all Taxes due and adequate provisions have been and are reflected in GWBU’s Financial Statements for all current taxes and other charges to which GWBU is subject and which are not currently due and payable. None of GWBU’s federal income tax returns have been audited by the Internal Revenue Service. GWBU has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened against GWBU for any period, nor of any basis for any such assessment, adjustment or contingency. GWBU has withheld or collected from each payment made to each of its employees, if applicable, the amount of all Taxes (including, but not limited to, United States income taxes and other foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority. For purposes of this Agreement, the following terms have the following meanings: “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any and all taxes including, without limitation, (x) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, local or foreign governmental authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a “Tax Authority”), (y) any liability for the payment of any amounts of the type described in (x) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or successor thereof, and (z) any liability for the payment of any amounts of the type described in (x) or (y) as a result of any express or implied obligation to indemnify any other person.

 

Section 2.13  No Debt Obligations. Upon the Closing Date, GWBU will have no debt, obligations or liabilities of any kind whatsoever other than with respect to the transactions contemplated hereby. GWBU is not a guarantor of any indebtedness of any other person, entity or corporation.

 

Section 2.14  No Broker Fees. No brokers, finders or financial advisory fees or commissions will be payable by or to GWBU or any of their affiliates with respect to the transactions contemplated by this Agreement.

 

Section 2.15  No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or anticipated by GWBU to arise, between GWBU and any accountants and/or lawyers formerly or presently engaged by GWBU. GWBU is current with respect to fees owed to its accountants and lawyers.

 

Section 2.16 Disclosure. This Agreement and any certificate attached hereto or delivered in accordance with the terms hereby by or on behalf of GWBU in connection with the transactions contemplated by this Agreement do not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements contained herein and/or therein not misleading.

 

Section 2.17 Absence of Undisclosed Liabilities. Since the date of the filing of its Amended Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2011, except as specifically disclosed in the Public Reports: (A) there has been no event, occurrence or development that has resulted in or could result in a Material Adverse Effect; (B) GWBU has not incurred any liabilities, obligations, claims or losses, contingent or otherwise, including debt obligations, other than professional fees; (C) GWBU has not declared or made any dividend or distribution of cash or property to its shareholders, purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, or issued any equity securities other than with respect to transactions contemplated hereby; (D) GWBU has not made any loan, advance or capital contribution to or investment in any person or entity; (E) GWBU has not discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business; (F) GWBU has not suffered any substantial losses or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business; and (G) except for the Share Exchange, GWBU has not entered into any other transaction other than in the ordinary course of business, or entered into any other material transaction, whether or not in the ordinary course of business.

 

  

  

  

 

Section 2.18  No Integrated Offering. GWBU does not have any registration statement pending before the Commission or currently under the Commission’s review and since the Closing Date, except as contemplated under this Agreement, GWBU has not offered or sold any of its equity securities or debt securities convertible into shares of Common Stock.

 

Section 2.19  Employees.

 

A.            GWBU has one employee, Peter Evan Bell.

 

B.            Other than Peter Evan Bell, GWBU does not have any officers or directors. No director or officer of GWBU is a party to, or is otherwise bound by, any contract (including any confidentiality, non-competition or proprietary rights agreement) with any other person that in any way adversely affects or will materially affect (a) the performance of his or her duties as a director or officer of GWBU or (b) the ability of GWBU to conduct its business.

 

Section 2.20  No Undisclosed Events or Circumstances. No event or circumstance has occurred or exists with respect to GWBU or its respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by GWBU but which has not been so publicly announced or disclosed. GWBU has not provided to GroveWare, or the GroveWare Shareholder, any material non-public information or other information which, according to applicable law, rule or regulation, was required to have been disclosed publicly by GWBU but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement and/or the Share Exchange.

 

Section 2.21 Disclosure. This Agreement and any certificate attached hereto or delivered in accordance with the terms hereof by or on behalf of GWBU or the GWBU Controlling Stockholder in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained herein and/or therein not misleading.

Section 2.22  No Assets or Real Property. Except as set forth on the most recent Financial Statements, GWBU does not have any assets of any kind.  GWBU does not own or lease any real property.

 

Section 2.23  Interested Party Transactions.  Except as disclosed on Schedule 2.23 and in Commission filings, no officer, director or shareholder of GWBU or any affiliate or “associate” (as such term is defined in Rule 405 of the Commission under the Securities Act) of any such person or entity, has or has had, either directly or indirectly, (a) an interest in any person or entity which (i) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by GWBU, or (ii) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish GWBU any goods or services; or (b) a beneficial interest in any contract or agreement to which GWBU is a party or by which it may be bound or affected.

 

Section 2.24   Intellectual Property. Except as in documents filed with the Commission, GWBU does not own, use or license any intellectual property in its business as presently conducted.

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF GROVEWARE

 

GroveWare represents, warrants and agrees that all of the statements in the following subsections of this Article III, pertaining to GroveWare, are true and complete as of the date hereof.

 

Section 3.1  Incorporation.  GroveWare is a company duly incorporated, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of GroveWare’s Certificate of Incorporation or Bylaws.  GroveWare has taken all actions required by law, its Certificate of Incorporation or Bylaws, or otherwise to authorize the execution and delivery of this Agreement.  GroveWare has full power, authority, and legal capacity

  

  

  

 

and has taken all action required by law, its Certificate of Incorporation or Bylaws, and otherwise to consummate the transactions herein contemplated.

 

Section 3.2  Authorized Shares.  The number of shares which GroveWare is authorized to issue consists of shares of Common Stock, consisting of one thousand five hundred (1,500) shares of common stock, par value of $1.00 per share.  There are one hundred (100) shares of common stock issued and outstanding.  The issued and outstanding shares are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

 

Section 3.3  Subsidiaries and Predecessor Corporations.   GroveWare does not have any subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.

 

Section 3.4  Financial Statements. GroveWare has kept all books and records since inception and such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The balance sheets are true and accurate and present fairly as of their respective dates the financial condition of GroveWare.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, GroveWare had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of GroveWare, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

 

GroveWare has duly and punctually paid all Governmental fees and taxation which it has become liable to pay and has duly allowed for all taxation reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental fees or taxation and GroveWare has made any and all proper declarations and returns for taxation purposes and all information contained in such declarations and returns is true and complete and full provision or reserves have been made in its financial statements for all Governmental fees and taxation.

 

The books and records, financial and otherwise, of GroveWare are, in all material aspects, complete and correct and have been maintained in accordance with good business and accounting practices.

 

All of GroveWare’s assets are reflected on its financial statements, and GroveWare has no material liabilities, direct or indirect, matured or unmatured, contingent or otherwise.

 

Section 3.5  Information. The information concerning GroveWare set forth in this Agreement is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 3.6  Absence of Certain Changes or Events. Since June 30, 2011, (a) there has not been any material adverse change in the business, operations, properties, assets, or condition (financial or otherwise) of GroveWare; and (b) GroveWare has not (i) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its shares; (ii) made any material change in its method of management, operation or accounting, (iii) entered into any other material transaction other than sales in the ordinary course of its business; or (iv) made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; and

 

Section 3.7  Litigation and Proceedings. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of GroveWare after reasonable investigation, threatened by or against  GroveWare or affecting GroveWare or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind.  GroveWare does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances

  

  

  

 

Section 3.8  No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or instrument to which GroveWare is a party or to which any of its assets, properties or operations are subject.

 

Section 3.9  Compliance With Laws and Regulations. To the best of its knowledge, GroveWare has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets, or condition of GroveWare or except to the extent that noncompliance would not result in the occurrence of any material liability for GroveWare.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

 

Section 3.10  Approval of Agreement. The Board of Directors of GroveWare has authorized the execution and delivery of this Agreement by GroveWare and has approved this Agreement and the transactions contemplated hereby.

 

Section 3.11 Valid Obligation. This Agreement and all agreements and other documents executed by GroveWare in connection herewith constitute the valid and binding obligation of GroveWare, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF GROVEWARE SHAREHOLDER

 

The GroveWare Shareholder hereby represents and warrants to GWBU:

 

Section 4.1 Authority. The GroveWare Shareholder has the right, power, authority and capacity to execute and deliver this Agreement to which the GroveWare Shareholder is a party, to consummate the transactions contemplated by this Agreement to which the GroveWare Shareholder is a party, and to perform the GroveWare Shareholder’s obligations under this Agreement to which the GroveWare Shareholder is a party. This Agreement has been duly and validly authorized and approved, executed and delivered by the GroveWare Shareholder. Assuming this Agreement has been duly and validly authorized, executed and delivered by the parties thereto other than the GroveWare Shareholder, this Agreement is duly authorized, executed and delivered by the GroveWare Shareholder and constitutes the legal, valid and binding obligation of the GroveWare Shareholder, enforceable against the GroveWare Shareholder in accordance with their respective terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors rights generally.

 

Section 4.2  No Conflict. Neither the execution or delivery by the GroveWare Shareholder of this Agreement to which the GroveWare Shareholder is a party nor the consummation or performance by the GroveWare Shareholder of the transactions contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the organizational documents of the GroveWare Shareholder (if the GroveWare Shareholder is not a natural person); (b) contravene, conflict with, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, any agreement or instrument to which the GroveWare Shareholder is a party or by which the properties or assets of the GroveWare Shareholder is bound; or (c) contravene, conflict with, or result in a violation of, any Law or Order to which the GroveWare Shareholder, or any of the properties or assets of the GroveWare Shareholder, may be subject.

 

Section 4.3  Litigation. There is no pending Action against the GroveWare Shareholder that involves the GroveWare Shares or that challenges, or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement or the business of GroveWare and, to the

  

  

  

 

knowledge of the GroveWare Shareholder, no such Action has been threatened, and no event or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Action.

 

Section 4.4  Acknowledgment. The GroveWare Shareholder understands and agrees that the GWBU Shares to be issued pursuant to this Agreement have not been registered under the Securities Act or the securities laws of any state of the U.S. and that the issuance of the GWBU Shares is being effected in reliance upon an exemption from registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering or Regulation D promulgated thereunder or Regulation S for offers and sales of securities outside the U.S.

 

Section 4.5  Stock Legends. The GroveWare Shareholder hereby agrees with GWBU as follows:

 

A.            Securities Act Legend Accredited Investors. The certificates evidencing the GWBU Shares issued to the GroveWare Shareholder will bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR (3) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED.

 

B.            Other Legends. The certificates representing such GWBU Shares, and each certificate issued in transfer thereof, will also bear any other legend required under any applicable law, including, without limitation, any U.S. state corporate and state securities law, or contract.

 

C.            Opinion. The GroveWare Shareholder shall not transfer any or all of the GWBU Shares pursuant to Rule 144, under the Securities Act, Regulation S or absent an effective registration statement under the Securities Act and applicable state securities law covering the disposition of the GWBU Shares, without first providing GWBU with an opinion of counsel (which counsel and opinion are reasonably satisfactory to the GWBU) to the effect that such transfer will be made in compliance with Rule 144, under the Securities Act, Regulation S or will be exempt from the registration and the prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable U.S. state securities laws.

 

Section 4.6  Ownership of Shares. The GroveWare Shareholder is both the record and beneficial owner of the GroveWare Shares. The GroveWare Shareholder is not the record or beneficial owner of any other shares of GroveWare. The GroveWare Shareholder has and shall transfer at the Closing, good and marketable title to the GroveWare Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever, excepting only restrictions on future transfers imposed by applicable law.

 

Section 4.7  Pre-emptive Rights. Subject at Closing, the GroveWare Shareholder has no pre-emptive rights or any other rights to acquire any shares of GroveWare that have not been waived or exercised.

 

  

  

  

 

Section 4.8 Accredited Investor.  The GroveWare Shareholder receiving shares of GWBU pursuant to this Agreement is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act.

 

ARTICLE V

 

CONDITIONS TO OBLIGATIONS OF GROVEWARE AND THE GROVEWARE SHAREHOLDER

 

The obligations of GroveWare and the GroveWare Shareholder to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by GroveWare and the GroveWare Shareholder at their sole discretion:

 

Section 5.1  Representations and Warranties of GWBU. All representations and warranties made by GWBU in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except insofar as the representations and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

 

Section 5.2  Agreements and Covenants. GWBU shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

 

Section 5.3  Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall be in full force and effect on the Closing Date.

 

Section 5.4  No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of GWBU shall be in effect; and no action or proceeding before any court or governmental or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Section 5.5  Other Closing Documents. GroveWare shall have received such certificates, instruments and documents in confirmation of the representations and warranties of GWBU, GWBU’s performance of its obligations hereunder, and/or in furtherance of the transactions contemplated by this Agreement as the GroveWare Shareholder and/or its counsel may reasonably request.

 

Section 5.6  Documents. GWBU must have caused the following documents to be delivered to GroveWare and the GroveWare Shareholder:

A.           share certificates evidencing the GWBU Shares registered in the name of the GroveWare Shareholder;

B.            a Secretary’s Certificate, dated the Closing Date, certifying attached copies of (A) the GWBU Charter Documents, (B) the resolutions of the GWBU Board approving this Agreement and the transactions contemplated hereby and thereby; and (C) the incumbency of each authorized officer of GWBU signing this Agreement to which GWBU is a party;

C.            an Officer’s Certificate, dated the Closing Date, certifying as to Sections 5.1, 5.2, 5.3, 5.4, 5.7, and 5.8.

 

  

  

  

 

D.            a Certificate of Good Standing of GWBU, dated as of a date not more than five business days prior to the Closing Date;

 

E.            this Agreement duly executed;

 

F.            the resignation of Peter Evan Bell as officer and director of GWBU as of the Closing Date;

 

G.            the amendment of the Articles of Incorporation to change its name to GroveWare Corporation; and

H.            such other documents as GroveWare or the GroveWare Shareholder may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of GWBU, (B) evidencing the performance of, or compliance by GWBU with any covenant or obligation required to be performed or complied with by GWBU, (C) evidencing the satisfaction of any condition referred to in this Article V, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

Section 5.7  Cancellation of Shares.  Of the two million eight hundred forty six thousand and five hundred (2,846,500) shares of GWBU Common Stock owned by Peter Evan Bell, two million six hundred thousand (2,600,000) shares shall be irrevocably cancelled immediately following the issuance of the shares of Common Stock to the GroveWare Shareholder.  Evidence of such cancellation shall be delivered to GroveWare.

 

Section 5.8  No Material Adverse Effect.  There shall not have been any event, occurrence or development that has resulted in or could result in a Material Adverse Effect on or with respect to GWBU.

  

ARTICLE VI

 

CONDITIONS TO OBLIGATIONS OF GWBU

 

The obligations of GWBU to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by GWBU in its sole discretion:

 

Section 6.1  Representations and Warranties of GroveWare and the GroveWare Shareholder. All representations and warranties made by GroveWare and the GroveWare Shareholder on behalf of themselves individually in this Agreement shall be true and correct on and as of the Closing Date except insofar as the representation and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

 

Section 6.2  Agreements and Covenants. GroveWare and the GroveWare Shareholder shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by each of them on or prior to the Closing Date.

 

Section 6.3  Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date.

 

Section 6.4  No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of GroveWare shall be in effect; and no action or proceeding before any court or government or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which

  

  

  

 

seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 6.5  Other Closing Documents. GWBU shall have received such certificates, instruments and documents in confirmation of the representations and warranties of GroveWare and the GroveWare Shareholder, the performance of GroveWare and the GroveWare Shareholder’s respective obligations hereunder and/or in furtherance of the transactions contemplated by this Agreement as GWBU or its counsel may reasonably request.

 

Section 6.6  Documents. GroveWare and the GroveWare Shareholder must deliver to GWBU at the Closing:

 

A.           share certificates evidencing the number of GroveWare Shares, along with executed share transfer forms transferring such GroveWare Shares to GWBU;

 

B.            this Agreement to which the GroveWare and the GroveWare Shareholder are a party, duly executed;

 

C.            such other documents as GWBU may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of the GroveWare and the GroveWare Shareholder, (B) evidencing the performance of, or compliance by GroveWare and the GroveWare Shareholder with, any covenant or obligation required to be performed or complied with by GroveWare and the GroveWare Shareholder, as the case may be, (C) evidencing the satisfaction of any condition referred to in this Article VI, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

 

Section 6.7  No Claim Regarding Stock Ownership or Consideration. There must not have been made or threatened by any Person, any claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the GroveWare Shares, or any other stock, voting, equity, or ownership interest in, GroveWare, or (b) is entitled to all or any portion of the GWBU Shares.

 

ARTICLE VII

 

POST-CLOSING AGREEMENTS

 

Section 7.1  SEC Documents. From and after the Closing Date, in the event the SEC notifies GWBU of its intent to review any Public Report filed prior to the Closing Date or GWBU receives any oral or written comments from the SEC with respect to any Public Report filed prior to the Closing Date, GWBU shall promptly notify the GWBU Controlling Stockholder and the GWBU Controlling Stockholder shall reasonably cooperate with GWBU in responding to any such oral or written comments.

 

ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1 Survival of Provisions. The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall expire on the first day of the one-year anniversary of the Closing Date (the “Survival Period”). The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants, and obligations.

 

Section 8.2  Indemnification.

 

  

  

  

 

A.      Indemnification Obligations in favor of the Controlling Stockholder of GWBU. From and after the Closing Date until the expiration of the Survival Period, GroveWare shall reimburse and hold harmless the GWBU Controlling Stockholder (such person and his heirs, executors, administrators, agents, successors and assigns is referred to herein as a “GWBU Indemnified Party”) against and in respect of any and all damages, losses, settlement payments, in respect of deficiencies, liabilities, costs, expenses and claims suffered, sustained, incurred or required to be paid by any GWBU Indemnified Party, and any and all actions, suits, claims, or legal, administrative, arbitration, governmental or other procedures or investigation against any GWBU Indemnified Party, which arises or results from a third-party claim brought against a GWBU Indemnified Party to the extent based on a breach of the representations and warranties with respect to the business, operations or assets of GroveWare. All claims of GWBU pursuant to this Section 8.2 shall be brought by the GWBU Controlling Stockholder on behalf of GWBU and those Persons who were stockholders of GWBU Company immediately prior to the Closing Date.  In no event shall any such indemnification payments exceed $100,000 in the aggregate from GroveWare.   No claim for indemnification may be brought under this Section 8.2(A) unless all claims for indemnification, in the aggregate, total more than $10,000.

B.       Indemnification in favor of GroveWare and the GroveWare Shareholder. From and after the Closing Date until the expiration of the Survival Period, the GWBU Controlling Stockholder will indemnify and hold harmless GroveWare, the GroveWare Shareholder, and their respective officers, directors, agents, attorneys and employees, and each person, if any, who controls or may “control” (within the meaning of the Securities Act) any of the forgoing persons or entities (hereinafter referred to individually as a “GroveWare Indemnified Person”) from and against any and all losses, costs, damages, liabilities and expenses arising from claims, demands, actions, causes of action, including, without limitation, legal fees, (collectively, “Damages”) arising out of any (i) any breach of representation or warranty made by GWBU or the GWBU Controlling Stockholder in this Agreement, and in any certificate delivered by GWBU or the GWBU Controlling Stockholder pursuant to this Agreement, (ii) any breach by GWBU or the GWBU Controlling Stockholder of any covenant, obligation or other agreement made by GWBU or the GWBU Controlling Stockholder in this Agreement, and (iii) a third-party claim based on any acts or omissions by GWBU or the GWBU Controlling Stockholder. In no event shall any such indemnification payments exceed $100,000 in the aggregate from the GWBU Controlling Stockholder.  No claim for indemnification may be brought under this Section 8.2(B) unless all claims for indemnification, in the aggregate, total more than $10,000.

 

ARTICLE IX

 

MISCELLANEOUS PROVISIONS

 

Section 9.1  Publicity. No party shall cause the publication of any press release or other announcement with respect to this Agreement or the transactions contemplated hereby without the consent of the other parties, unless a press release or announcement is required by law. If any such announcement or other disclosure is required by law, the disclosing party agrees to give the non-disclosing parties prior notice and an opportunity to comment on the proposed disclosure.

 

Section 9.2  Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

 

Section 9.3  Fees and Expenses. Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs or expenses.

 

Section 9.4  Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or sent by registered or certified mail (postage prepaid, return receipt requested)or facsimile to the parties at the following addresses:

If to GroveWare or the GroveWare Shareholder, to:

GroveWare Technologies Ltd.

  

  

  

 

20 Eglinton Ave. W. Suite 1006

P.O. Box 2007

Toronto, Ontario M4R 1K8

Attn: Hrair Achkarian, Chief Executive Officer

With a copy to (which copy shall not constitute notice):

Lexcor Business Lawyers LLP

629 Wellington Street, London, ON N6A 3R8

Attn:  Larry Crossan

If to GWBU or the GWBU Controlling Stockholder, to:

Great Wall Builders Ltd.

2620 Fountainview #115B

Houston, Texas 77057

Attn: Peter Evan Bell, Chief Executive Officer

 

With a copy to (which copy shall not constitute notice):

The Law Office of Conrad C. Lysiak, P.S.

601 W. First Avenue, Suite 903

Spokane, Washington 99201

Attn:  Conrad C. Lysiak

or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this Section 9.4 are concerned unless such changed address is located in the United States of America and notice of such change shall have been given to such other party hereto as provided in this Section 9.4.

 

Section 9.5  Entire Agreement. This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement.

 

Section 9.6  Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

 

Section 9.7  Titles and Headings. The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Section 9.8  Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Fax and PDF copies shall be considered originals for all purposes.

 

Section 9.9  Convenience of Forum; Consent to Jurisdiction. The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby

  

  

  

 

expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of Texas, and/or the United States District Court for California, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 9.4.

 

Section 9.10  Enforcement of the Agreement. The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereto, this being in addition to any other remedy to which they are entitled at law or in equity.

 

Section 9.11  Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Texas without giving effect to the choice of law provisions thereof.

 

Section 9.12  Amendments and Waivers. Except as otherwise provided herein, no amendment or waiver of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such prior or subsequent occurrence.

 

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SCHEDULE I

 

GROVEWARE SHAREHOLDER

 

	
1)     

	
GroveWare Holdings Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

SCHEDULE II

 

GWBU CONTROLLING STOCKHOLDER

	
1)     

	
Peter Evan Bell

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