Exhibit 10.1 

 

TRANSACTION AGREEMENT

 

dated as of

 

February 28, 2019

 

among

 

BAKER HUGHES, A GE COMPANY, LLC,

 

GENERAL ELECTRIC COMPANY

 

and

 

GE AERO POWER LLC

 

 

 

TABLE OF CONTENTS

 

Article I DEFINITIONS 2 Section 1.01  Definitions 2 Section 1.02  Other
Definitional and Interpretative Provisions 18 Article II CONTRIBUTIONS;
ISSUANCES OF MEMBERSHIP INTERESTS 18 Section 2.01  Contribution of NewCo
Subsidiary Interests 18 Section 2.02  BHGE Contributed Assets 18
Section 2.03  Excluded BHGE Assets 19 Section 2.04  BHGE Contributed Liabilities
21 Section 2.05  Excluded BHGE Liabilities 22 Section 2.06  GE Contributed
Assets 22 Section 2.07  Excluded GE Assets 23 Section 2.08  GE Contributed
Liabilities 25 Section 2.09  Excluded GE Liabilities 25 Section 2.10  Required
Consents; Assignment of Contracts; Wrong Pockets Provisions. 26
Section 2.11  Issuance and Acquisition of Membership Interests 27
Section 2.12  Closing 28 Section 2.13  Working Capital Adjustment 29
Section 2.14  Withholding 32 Section 2.15  Schedules 32 Article III
REPRESENTATIONS AND WARRANTIES OF BHGE 32 Section 3.01  Existence and Power 32
Section 3.02  Authorization 33 Section 3.03  Governmental Authorization 33
Section 3.04  Noncontravention 33

 

i 

 

Section 3.05  Business and Capitalization of NewCo Subsidiaries and BHKF 33
Section 3.06  Required Consents 34 Section 3.07  Undisclosed Liabilities 34
Section 3.08  Absence of Certain Changes 35 Section 3.09  Material Contracts 35
Section 3.10  Litigation 37 Section 3.11  Compliance with Laws and Court Orders
37 Section 3.12  Properties 38 Section 3.13  Intellectual Property 38
Section 3.14  Employees and Employee Plans 39 Section 3.15  Environmental
Compliance 40 Section 3.16  Tax Matters 41 Section 3.17  Finders’ Fees 43
Section 3.18  Inspections; No Other Representations 43 Article IV
REPRESENTATIONS AND WARRANTIES OF GE 44 Section 4.01  Corporate Existence and
Power 44 Section 4.02  Corporate Authorization 44 Section 4.03  Governmental
Authorization 44 Section 4.04  Company 45 Section 4.05  Noncontravention 45
Section 4.06  Required Consents 45 Section 4.07  Undisclosed Liabilities 45
Section 4.08  Absence of Certain Changes 46 Section 4.09  Material Contracts 46
Section 4.10  Litigation 48 Section 4.11  Compliance with Laws and Court Orders.
48 Section 4.12  Properties. 49

 

ii 

 

Section 4.13  Intellectual Property. 49 Section 4.14  Employees and Employee
Plans. 50 Section 4.15  Environmental Compliance 51 Section 4.16  Tax Matters 52
Section 4.17  Finders’ Fees 53 Section 4.18  Inspections; No Other
Representations 53 Article V COVENANTS OF BHGE 54 Section 5.01  Conduct of the
Business 54 Section 5.02  Confidentiality 56 Section 5.03  Access to Information
57 Section 5.04  Notices of Certain Events 57 Section 5.05  Transport of Assets
57 Section 5.06  Pre-Closing Transactions 58 Section 5.07  Update of BHGE
Business Employee List 58 Section 5.08  Intercompany Obligations 58 Article VI
COVENANTS OF GE 58 Section 6.01  Conduct of the Business 58
Section 6.02  Confidentiality 60 Section 6.03  Access to Information 61
Section 6.04  Notices of Certain Events 61 Section 6.05  Transport of Assets 62
Section 6.06  Update of GE Business Employee List 62 Section 6.07  Intercompany
Obligations 62 Article VII COVENANTS OF THE PARTIES 62
Section 7.01  Commercially Reasonable Efforts; Further Assurance 62
Section 7.02  Certain Filings 63 Section 7.03  Public Announcements 63
Section 7.04  Notices of Certain Events 64

 

iii 

 

Section 7.05  BHGE Insurance Coverage 64 Section 7.06  GE Insurance Coverage 65
Section 7.07  Replacement of Guaranties 66 Section 7.08  Confidentiality 67
Section 7.09  Intentionally Omitted. 67 Section 7.10  Open Matters; Ancillary
Agreements 67 Section 7.11  Contributed Facilities 68 Article VIII TAX MATTERS
68 Section 8.01  Tax Cooperation; Allocation of Taxes; Certain Refunds 69
Article IX EMPLOYEE MATTERS 71 Section 9.01  Employment with Company 71
Section 9.02  Inactive BHGE Business Employees 72 Section 9.03  Terms of
Employment 72 Section 9.04  Automatically Transferring Business Employees. 73
Section 9.05  Employee Communications 74 Section 9.06  No Third Party
Beneficiaries, Etc. 74 Article X CONDITIONS TO CLOSING 75
Section 10.01  Conditions to Obligations of GE, BHGE and the Company 75
Section 10.02  Conditions to Obligation of GE 75 Section 10.03  Conditions to
Obligation of BHGE 76 Article XI SURVIVAL; INDEMNIFICATION 76
Section 11.01  Survival 76 Section 11.02  Indemnification 77
Section 11.03  Third Party Claim Procedures. 79 Section 11.04  Direct Claim
Procedures 80 Section 11.05  Environmental Claim Procedures 80
Section 11.06  Calculation of Damages. 82 Section 11.07  Exclusivity 83

 

iv 

 

Section 11.08  Tax Treatment of Indemnification Payments 83 Article XII
TERMINATION 83 Section 12.01  Grounds for Termination 83 Section 12.02  Effect
of Termination 84 Article XIII MISCELLANEOUS 85 Section 13.01  Notices 85
Section 13.02  Amendments and Waivers. 87 Section 13.03  Expenses 87
Section 13.04  Successors and Assigns 87 Section 13.05  Governing Law 87
Section 13.06  Dispute Resolution 87 Section 13.07  Counterparts; Effectiveness;
Third Party Beneficiaries 88 Section 13.08  Entire Agreement 88
Section 13.09  Bulk Sales Laws 88 Section 13.10  Severability 88
Section 13.11  Disclosure Schedules 88 Section 13.12  Specific Performance 89

  

Schedules

 

Schedule A Form of Bill of Sale and Assignment and Assumption Agreement Schedule
B BHGE Transaction Accounting Principles Schedule C GE Transaction Accounting
Principles Schedule D Form of BHGE Distribution Agreement Schedule E Form of
BHGE Services Agreement Schedule F Form of ELTO Agreement Schedule G Form of GE
Distribution Agreement Schedule H Form of GE Services Agreement Schedule I Form
of Intellectual Property License Agreement Schedule J Form of Turbine
Development and Supply Agreement Schedule K Form of Post-Closing LLC Agreement
Schedule L Non-U.S. Jurisdictions and Related Antitrust/Competition Approvals
Schedule M Massa Term Sheet Schedule N Port Klang Term Sheet Schedule O
Jacintoport Term Sheet

v 

 

Schedule P Rong Term Sheet Schedule Q Designated Agreement Amendment Term Sheet

vi 

 

TRANSACTION AGREEMENT

 

THIS TRANSACTION AGREEMENT (this “Agreement”), dated as of February 28, 2019, is
entered into among Baker Hughes, a GE company, LLC, a Delaware limited liability
company (“BHGE”), General Electric Company, a New York corporation (“GE”), and
GE Aero Power LLC, a Delaware limited liability company (the “Company”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Master Agreement, dated as of November 13,
2018, among GE, Baker Hughes, a GE company and BHGE, the parties thereto agreed
to form a joint venture for their aeroderivative gas turbine businesses on the
terms set forth on a term sheet attached as an exhibit thereto;

 

WHEREAS, BHGE conducts, directly or indirectly through its Affiliates, the BHGE
Contributed Business;

 

WHEREAS, GE conducts, directly or indirectly through its Affiliates, the GE
Contributed Business;

 

WHEREAS, GE has formed the Company;

 

WHEREAS, BHGE will form the NewCo Subsidiaries and cause the applicable BHGE
Contributed Assets and BHGE Contributed Liabilities to be transferred to the
NewCo Subsidiaries immediately prior to Closing pursuant to the terms of the
Contribution, Assignment and Assumption Agreements, and BHGE will, and will
cause its Affiliates to, as applicable, contribute, or caused to be contributed,
to the Company the NewCo Subsidiary Interests;

 

WHEREAS, BHGE desires to contribute, or cause to be contributed, to the Company
the applicable BHGE Contributed Assets and BHGE Contributed Liabilities, and the
BHGE Cash Contribution (together with the contributions to the NewCo
Subsidiaries pursuant to the Pre-Closing Transactions and the contribution of
the NewCo Subsidiary Interests, the “BHGE Contribution”);

 

WHEREAS, GE desires to contribute, or cause to be contributed, to the Company
the GE Contributed Assets, the GE Contributed Liabilities and the Inventory Cash
Payment (collectively, the “GE Contribution”);

 

WHEREAS, the Company desires to accept and assume the BHGE Contribution and the
GE Contribution and, in connection therewith, (i) to issue to BHGE a number of
Membership Interests such that, immediately following the Closing, BHGE shall
own 50% of the outstanding Membership Interests, and (ii) to pay the GE Parties
the GE Cash Payment and to issue to the GE Parties a number of Membership
Interests such that, immediately following the Closing, the GE Parties shall own
50% of the outstanding Membership Interests;

 

WHEREAS, the Company shall be governed by the Post-Closing LLC Agreement as of
and following the Closing; and

 

NOW, THEREFORE, for other good and valuable consideration, each of the parties
hereto, intending to be legally bound, agrees as follows:

 

 1

 

Article I

DEFINITIONS

 

Section 1.01   Definitions. (a) As used herein, the following terms have the
following meanings:

 

“Action” means any action, suit, investigation, claim or proceeding, in each
case by or before any arbitrator or Governmental Authority.

 

“Aero Supply Agreement” means that certain Supply and Technology Development
Agreement by and among GE, acting through GE Aviation, GE on behalf of its GE
Gas Power business unit, and BHGE, dated as of November 13, 2018.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person. For purposes of this definition, “control” when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms “controlling” and “controlled” have
correlative meanings. For purposes of this Agreement, neither BHGE nor any of
its Affiliates nor GE nor any of its Affiliates shall be deemed to be an
Affiliate of the other or of the Company or of any Subsidiary of the Company.

 

“Ancillary Agreements” means the BHGE Distribution Agreement, the GE
Distribution Agreement, the BHGE Services Agreement, the GE Services Agreement,
the Post-Closing LLC Agreement, the BHGE Secondment Agreement, the GE Secondment
Agreement, the ELTO Agreement, the Turbine Development and Supply Agreement, the
BHGE Bill of Sale and Assignment and Assumption Agreement, the GE Bill of Sale
and Assignment and Assumption Agreement, the Intellectual Property License
Agreement, the Port Klang Sublease, the Massa Lease, the Jacintoport Lease, the
Rong Lease, the FieldCore Sourcing/Services Agreement, the Reverse Bill of Sale
and Assignment and Assumption Agreement, the Contribution, Assignment and
Assumption Agreements, and any instruments of transfer necessary to effect the
transfer of the NewCo Subsidiary Interests and, if any of the NewCo Subsidiary
Interests are required to be certificated, certificates evidencing such NewCo
Subsidiary Interests.

 

“Anti-Corruption Laws” means all Applicable Laws relating to bribery or
corruption, including the U.S. Foreign Corrupt Practices Act of 1977 and the UK
Bribery Act of 2010.

 

“Applicable Law” means, with respect to any Person, any transnational, domestic
or foreign federal, state, provincial or local law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority that is
binding upon or applicable to such Person, as amended unless expressly specified
otherwise.

 

 2

 

“Applicable Transfer Date” means (i) with respect to a BHGE Business Employee or
a GE Business Employee who is employed by a NewCo Subsidiary (including any such
individual whose employment is transferred to a NewCo Subsidiary between the
date hereof and the Closing Date), the Closing Date, (ii) with respect to an
Automatically Transferring Business Employee, the date on which the employment
of such BHGE Business Employee or GE Business Employee, as applicable, transfers
to the Company automatically by operation of the Regulations, and (iii) with
respect to a BHGE Business Employee or a GE Business Employee who receives an
offer pursuant to Article IX of this Agreement, the date on which such BHGE
Business Employee or GE Business Employee becomes employed by the Company or one
of its Subsidiaries.

 

“Automatically Transferring Business Employee” means an employee of BHGE or GE
or any of their respective Affiliates whose employment automatically transfers
to the Company or one of its Subsidiaries by operation of the Regulations as a
consequence of the transactions contemplated by the Agreement.

 

“BHGE Base Working Capital” means $199,000,000.

 

“BHGE Basket” means $4,000,000.

 

“BHGE Bill of Sale and Assignment and Assumption Agreement” means a bill of sale
and assignment and assumption agreement between BHGE and the Company
substantially in the form attached hereto as Schedule A.

 

“BHGE Business Employee” means (i) as of the date of this Agreement, any
individual employed by BHGE or any of its Affiliates who is identified on the
BHGE Business Employee List (an “Initial BHGE Business Employee”), and (ii) with
respect to any date after the date of this Agreement, (A) any Initial BHGE
Business Employee who remains employed by BHGE or any of its Affiliates through
such date and (B) any other individual who has been hired or transferred in
accordance with ‎Section 5.01(f).

 

“BHGE Business Employee List” means the schedule contemplated by Section 3.14(a)
which identifies (i) the BHGE Business Employees, and (ii) the vacant roles that
BHGE intends to fill to provide services in support of the BHGE Contributed
Business.

 

“BHGE Cap” means $50,000,000.

 

“BHGE Closing Working Capital Adjustment” means an amount (which may be
negative) equal to (i) the BHGE Final Closing Working Capital Amount minus
(ii) BHGE Base Working Capital.

 

“BHGE Closing Working Capital” means the Working Capital of the BHGE Contributed
Business as defined in the BHGE Transaction Accounting Principles.

 

“BHGE Contributed Business” means, collectively, the BHGE Contributed Assets and
the BHGE Contributed Liabilities.

 

 3

 

“BHGE Contributed Facilities” means, collectively, (i) the leasehold rights and
interests of the tenants under the Rong Lease and the Massa Lease and (ii) the
sublease rights and interests of the subtenant under the Port Klang Sublease.

 

“BHGE Covered Tax” means any (i) Tax for a Pre-Closing Tax Period (including any
Tax allocable to a Pre-Closing Tax Period under ‎‎Section 8.01(f)) to the extent
arising out of or relating to the BHGE Contributed Business or the BHGE
Contributed Assets or for which any Contributed Entity may otherwise be liable,
(ii) Tax arising out of any Excluded BHGE Asset, (iii) Income Tax of BHGE or any
of its Affiliates, (iv) Transfer Tax or Pre-Closing Restructuring Tax borne by
BHGE under ‎‎Section 8.01(c) and (v) Tax imposed on any Contributed Entity or
for which any Contributed Entity may otherwise be liable as a result of having
been a member of a group of entities filing Tax Returns on a combined,
consolidated, unitary or similar basis at any time on or before the Closing
Date.

 

“BHGE Distribution Agreement” means an exclusive distribution agreement between
BHGE and the Company substantially in the form attached hereto as Schedule D.

 

“BHGE Employee Plan” means any (i) “employee benefit plan” as defined in
Section 3(3) of ERISA (whether or not subject to ERISA), (ii) pension,
retirement, profit-sharing, savings, health, disability, life insurance,
welfare, bonus, incentive, commission, stock option or other equity or
equity-based, deferred compensation, severance, retention, employment, change of
control or (iii) other compensation or benefit plan, policy, program,
arrangement, contract or agreement, in each case that is maintained, sponsored,
or contributed to or required to be contributed to by BHGE or any of its
Affiliates for the benefit of any BHGE Business Employee.

 

“BHGE Excluded Inventory” means all inventory of the BHGE Contributed Business
that would otherwise be BHGE Inventory that is designed or customized
specifically for certain customers or projects and for that reason cannot be
sold to any other customer or project.

 

“BHGE Final Closing Working Capital Amount” means the BHGE Closing Working
Capital Amount (i) as shown in the Company’s calculation delivered pursuant to
‎‎Section 2.13(a) if no notice of disagreement with respect thereto is duly
delivered pursuant to ‎‎Section 2.13(b), or (ii) if such a notice of
disagreement is delivered, (A) as agreed by BHGE and GE pursuant to
‎‎Section 2.13(b) or (B) in the absence of such agreement, as shown in the
Independent Expert’s calculation delivered pursuant to ‎‎Section 2.13(c).

 

“BHGE Fundamental Reps” means the representations and warranties contained in
Sections ‎‎3.01, ‎‎3.02, ‎3.04(a), 3.05, 3.12(a), 3.12(e) and ‎ ‎Section 3.17.

 

“BHGE Insurance Policies” means all policies of or agreements for insurance and
interests in insurance pools and programs in effect prior to the Trigger Date
and acquired after the Trigger Date, in each case, in which BHGE or any of its
Affiliates is a named insured (except for any Insurance Policies insured or
reinsured by a GE Affiliate).

 

“BHGE Inventory” has the meaning specified in the BHGE Transaction Accounting
Principles.

 

 4

 

“BHGE Licensed IP” means the Intellectual Property Rights licensed by BHGE and
its Affiliates to the Company under the Intellectual Property License Agreement.

 

“BHGE Material Adverse Effect” means a material adverse effect on the financial
condition, business or results of operations of the BHGE Contributed Business,
taken as a whole, or on the ability of BHGE to consummate the Closing, in either
case, excluding any effect arising out of, resulting from or attributable to (i)
changes in, or in the interpretation of, GAAP or the regulatory accounting
requirements applicable to the BHGE Contributed Business, (ii) changes in the
general economic or political conditions in the United States or any other
jurisdiction in which the BHGE Contributed Business operates, (iii) changes
(including changes of Applicable Law) or conditions generally affecting the
industry in which the BHGE Contributed Business operates, (iv) acts of war,
sabotage or terrorism or natural disasters, (v) the announcement or consummation
of the transactions contemplated by this Agreement, or (vi) any action taken by
BHGE that is required pursuant to this Agreement; provided, however, that any
material adverse effect arising out of, resulting from or attributable to any of
the circumstances referred to in clauses (i), (ii), (iii) or (iv) may be taken
into account in determining whether there has occurred a BHGE Material Adverse
Effect to the extent, but only to the extent, that the BHGE Contributed
Business, taken as a whole, is or would reasonably be expected to be
disproportionately affected thereby as compared to other participants in the
industries or markets in which the BHGE Contributed Business operates.

 

“BHGE Names and Marks” means any and all (i) Trademarks and other source of
business identifiers of BHGE or any of its Affiliates, and (ii) names, marks and
logos derived from, confusingly similar to or including any of the foregoing.

 

“BHGE Owned IP” means that portion of the BHGE Licensed IP that is owned or
purported to be owned by BHGE or any of its Affiliates.

 

“BHGE Parties” means BHGE and each Affiliate of BHGE that is contributing any
portion of the BHGE Contribution to the Company, any of its Subsidiaries or any
of the NewCo Subsidiaries pursuant to this Agreement.

 

“BHGE Secondment Agreement” means a secondment agreement to be entered into
between BHGE and the Company at the Closing in form and substance as mutually
agreed between GE and BHGE.

 

“BHGE Services Agreement” means a services agreement between BHGE and the
Company substantially in the form attached hereto as Schedule E.

 

“BHGE Transaction Accounting Principles” means the accounting principles,
policies, procedures and methodologies set forth in Schedule B.

 

“BHKF” means Baker Hughes Klang Facility Sdn. Bhd.

 

“BHKF Interests” means all of the issued and outstanding shares, membership
interests or other equity interests of BHKF.

 

 5

 

“Business Day” means a day, other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Applicable
Law to close.

 

“Business Employees” means, collectively, BHGE Business Employees and GE
Business Employees.

 

“Closing Date” means the date of the Closing.

 

“Code” means the Internal Revenue Code of 1986.

 

“Company Employee Plan” means any (i) “employee benefit plan” as defined in
Section 3(3) of ERISA (whether or not subject to ERISA), (ii) pension,
retirement, profit-sharing, savings, health, disability, life insurance,
welfare, bonus, incentive, commission, stock option or other equity or
equity-based, deferred compensation, severance, retention, employment, change of
control or (iii) other compensation or benefit plan, policy, program,
arrangement, contract or agreement, in each case that, following the Applicable
Transfer Date, is maintained, sponsored, or contributed to or required to be
contributed to by the Company or any of its Subsidiaries for the benefit of any
Transferred Employee, other than any BHGE Employee Plan or GE Employee Plan.

 

“Contributed Assets” means, collectively, the BHGE Contributed Assets and the GE
Contributed Assets.

 

“Contributed Entities” means BHKF and the NewCo Subsidiaries.

 

“Contributed Entity Interests” means all of the issued and outstanding shares,
membership interests or other equity interests of the Contributed Entities.

 

“Contributed Facility” means, as applicable, a BHGE Contributed Facility or GE
Contributed Facility.

 

“Contributed Liabilities” means, collectively, the BHGE Contributed Liabilities
and the GE Contributed Liabilities.

 

“Contribution, Assignment and Assumption Agreements” means the Contribution,
Assignment and Assumption Agreements, by and between the applicable BHGE Parties
and the applicable NewCo Subsidiaries, each of which will be substantially in
the form of the Form of Bill of Sale and Assignment and Assumption Agreement,
with such modifications as are agreed by the parties, including those which GE’s
and BHGE’s local counsel advise and the parties mutually agree are necessary to
comply with the requirements of applicable local law.

 

“Debt” means, with respect to any Person, (a) all liabilities for the repayment
of money borrowed (including the principal amount thereof and accrued and unpaid
interest and fees thereon) whether or not evidenced by bonds, debentures, notes
or other similar instruments, and whether owing to banks, financial
institutions, on equipment leases or otherwise, (b) all liabilities under a
lease of real or personal property which is required by GAAP to be

 

 6

 

classified as a capital lease on the books and records of such Person,
(c) except as reflected in the GE Final Closing Working Capital Amount or the
BHGE Final Closing Working Capital Amount, all liabilities (including any
earn-outs) for the deferred payment of the purchase price of property, services
or assets, (d) all liabilities for letters of credit, performance bonds,
guarantees, keep-wells, or similar instruments, whether or not drawn or called,
except for the instruments which are listed in Schedule 7.07(a) or Schedule
7.07(b), (e) all liabilities for interest rate or currency swap, cap, hedges,
derivatives, forward or other arrangements designed to provide protection
against, hedge or manage changes in interest or currency rates, in each case
including any amounts payable to terminate such arrangements, (f) negative cash
balances, unpaid checks and wire transfers, (g) except as reflected in the GE
Final Closing Working Capital Amount or the BHGE Final Closing Working Capital
Amount, all liabilities for the deferred purchase price of an acquisition by or
on behalf of such Person of any business, division or product line or portion
thereof (whether by merger, sale of stock, sale of assets or otherwise), (h) all
liabilities for premiums, penalties, “make whole amounts,” breakage costs,
change of control payments, costs, expenses and other payment obligations that
would arise if all Debt referred to in the foregoing clauses (a) through (g) was
prepaid, unwound and settled in full at Closing, and (i) all guarantees or
sureties by such Person of any of the foregoing in respect of any other Person,
except for the credit support listed in Schedule 7.07(a) or Schedule 7.07(b).
The ELTO Leases are not “Debt” for purposes of this Agreement.

 

“Designated Agreement Amendment” has the meaning set forth on Schedule 4.

 

“Distribution Agreements” means, collectively, the BHGE Distribution Agreement
and the GE Distribution Agreement.

 

“ELTO Agreement” means the ELTO agreement to be entered into among BHGE, GE and
the Company substantially in the form attached hereto as Schedule F.

 

“ELTO Engines” means the aeroderivative engines that the GE Contributed Business
or BHGE Contributed Business, as applicable, loans or lends to its customers
while its customers’ engines are under repair.

 

“ELTO Leases” means the leases listed in Schedule 1 under which GE and its
Affiliates lease ELTO Engines from the owner-lessors pursuant to sale-leaseback
transactions.

 

“Employee Plan” means, as applicable, a BHGE Employee Plan, a Company Employee
Plan or a GE Employee Plan.

 

“Environmental Laws” means any Applicable Law relating to worker health or
safety (to the extent relating to exposure to Hazardous Substances), pollution
or protection of the environment or the handling, storage, generation, use,
disposal, Release or threatened Release of Hazardous Substances.

 

“Excluded Claims” means the claims listed on Schedule 2.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

 7

 

“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which is (or at any relevant time was) a member of
a “controlled group of corporations” with or under “common control” with such
Person, as defined in Sections 414(b), (c), (m) and (o) of the Code or Section
4001(b)(1) of ERISA. For purposes of the foregoing, a time shall be deemed
relevant only to the extent such Person could still have liability with respect
to the trade or business that was an ERISA Affiliate at such time.

 

“FieldCore Sourcing/Services Agreement” means a sourcing/services agreement to
be entered into between GE and the Company at the Closing in form and substance
as mutually agreed between GE and BHGE.

 

“Fixtures” means Fixtures as defined in Article 9 of the Uniform Commercial
Code.

 

“Foreign Competition Laws” means all Applicable Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening competition through merger
or acquisition and all Applicable Laws with respect to foreign investment.

 

“GAAP” means generally accepted accounting principles in the United States.

 

“GE Aviation” means the GE Aviation business unit of GE.

 

“GE Base Working Capital” means $189,000,000.

 

“GE Basket” means $4,000,000.

 

“GE Bill of Sale and Assignment and Assumption Agreement” means a bill of sale
and assignment and assumption agreement between GE and the Company substantially
in the form attached hereto as Schedule A.

 

“GE Business Employee” (i) as of the date of this Agreement, any individual
employed by GE or any of its Affiliates who is identified on the GE Business
Employee List (an “Initial GE Business Employee”), and (ii) with respect to any
date after the date of this Agreement, (A) any Initial GE Business Employee who
remains employed by GE or any of its Affiliates through such date and (B) any
other individual who has been hired or transferred in accordance with
‎Section 6.01(f).

 

“GE Business Employee List” means the schedule contemplated by Section 4.14(a)
which identifies (i) the GE Business Employees, and (ii) the vacant roles that
GE intends to fill to provide services in support of the GE Contributed
Business.

 

“GE Cap” means $50,000,000.

 

“GE Closing Working Capital Adjustment” means the Working Capital of the GE
Contributed Business as defined in the GE Transaction Accounting Principles.

 

 8

 

“GE Closing Working Capital” means the current assets minus the current
liabilities of the GE Contributed Business as of immediately prior to the
Closing, which shall be calculated in accordance with the GE Transaction
Accounting Principles.

 

“GE Contributed Business” means, collectively, the GE Contributed Assets and the
GE Contributed Liabilities.

 

“GE Contributed Facility” means the leasehold rights and interests of the tenant
under the Jacintoport Lease.

 

“GE Covered Tax” means any (i) Tax for a Pre-Closing Tax Period (including any
Tax allocable to a Pre-Closing Tax Period under ‎‎Section 8.01(f)) to the extent
arising out of or relating to the GE Contributed Business or the GE Contributed
Assets, (ii) Tax arising out of any Excluded GE Asset, (iii) Income Tax of GE or
any of its Affiliates and (iv) Transfer Tax or Pre-Closing Restructuring Tax
borne by GE under ‎Section 8.01(c).

 

“GE Distribution Agreement” means an exclusive distribution agreement between GE
and the Company substantially in the form attached hereto as Schedule G.

 

“GE Employee Plan” means any (i) “employee benefit plan” as defined in
Section 3(3) of ERISA (whether or not subject to ERISA), (ii) pension,
retirement, profit-sharing, savings, health, disability, life insurance,
welfare, bonus, incentive, commission, stock option or other equity or
equity-based, deferred compensation, severance, retention, employment, change of
control or (iii) other compensation or benefit plan, policy, program,
arrangement, contract or agreement, in each case that is maintained, sponsored
or contributed to or required to be contributed to by GE or any of its
Affiliates for the benefit of any GE Business Employee.

 

“GE Excluded Inventory” means all inventory of the GE Contributed Business that
would otherwise be GE Inventory that is (a) designed or customized specifically
for certain customers or projects and for that reason cannot be sold to any
other customer or project or (b) located in Russia.

 

“GE Final Closing Working Capital Amount” means the GE Closing Working Capital
Amount (i) as shown in the Company’s calculation delivered pursuant to
‎‎Section 2.13(a) if no notice of disagreement with respect thereto is duly
delivered pursuant to ‎‎Section 2.13(b), or (ii) if such a notice of
disagreement is delivered, (A) as agreed by BHGE and GE pursuant to
‎‎Section 2.13(b) or (B) in the absence of such agreement, as shown in the
Independent Expert’s calculation delivered pursuant to ‎‎Section 2.13(c).

 

“GE Fundamental Reps” means the representations and warranties contained in
Sections ‎‎4.01, ‎‎4.02, ‎‎4.04, ‎4.05(a), 4.12(a), 4.12(f) and ‎4.17.

 

“GE Insurance Policies” means all policies of or agreements for insurance and
interests in insurance pools and programs held in the name of GE or any of its
Affiliates (in each case including self-insurance and insurance and reinsurance
from Affiliates) and any rights thereunder as set forth in Section 7.06.

 

 9

 

“GE Inventory” has the meaning specified in the GE Transaction Accounting
Principles.

 

“GE Licensed IP” means the Intellectual Property Rights licensed by GE and its
Affiliates to the Company under the Intellectual Property License Agreement.

 

“GE Material Adverse Effect” means a material adverse effect on the financial
condition, business or results of operations of the GE Contributed Business,
taken as a whole, or on the ability of GE to consummate the Closing, in either
case, excluding any effect resulting from (i) changes in, or in the
interpretation of, GAAP or the regulatory accounting requirements applicable to
the GE Contributed Business, (ii) changes in the general economic or political
conditions in the United States or any other jurisdiction in which the GE
Contributed Business operates, (iii) changes (including changes of Applicable
Law) or conditions generally affecting the industry in which the GE Contributed
Business operates, (iv) acts of war, sabotage or terrorism or natural disasters,
(v) the announcement or consummation of the transactions contemplated by this
Agreement, or (vi) any action taken by GE that is required pursuant to this
Agreement; provided, however, that any material adverse effect arising out of,
resulting from or attributable to any of the circumstances referred to in
clauses (i), (ii), (iii) or (iv) may be taken into account in determining
whether there has occurred a GE Material Adverse Effect to the extent, but only
to the extent, that the GE Contributed Business, taken as a whole, is or would
reasonably be expected to be disproportionately affected thereby as compared to
other participants in the industries or markets in which the GE Contributed
Business operates.

 

“GE Names and Marks” means any and all (i) Trademarks and other source of
business identifiers of GE or any of its Affiliates, and (ii) names, marks and
logos derived from, confusingly similar to or including any of the foregoing.

 

“GE Owned IP” means that portion of the GE Licensed IP that is owned or
purported to be owned by GE or any of its Affiliates.

 

“GE Parties” means GE and each Affiliate of GE that is contributing any portion
of the GE Contribution to the Company pursuant to this Agreement.

 

“GE Secondment Agreement” means a secondment agreement to be entered into
between GE and the Company at the Closing in form and substance as mutually
agreed between GE and BHGE.

 

“GE Services Agreement” means a services agreement between GE and the Company
substantially in the form attached hereto as Schedule H.

 

“GE Transaction Accounting Principles” means the accounting principles,
policies, procedures and methodologies set forth in Schedule C.

 

“Governmental Authority” means any transnational, domestic or foreign federal,
state, provincial, territorial or local governmental, regulatory or
administrative authority, department, court, agency or official, including any
political subdivision thereof or arbitral tribunal (public or private).

 

 10

 

“Hazardous Substance” means any substance, waste or material listed, defined or
classified as a pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste or words of similar import or regulatory effect, or for which
liability or standards of conduct may be imposed, under any law pertaining to
the environment, including petroleum, polychlorinated biphenyls and asbestos.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

“Income Taxes” means all Taxes based upon, measured by, or calculated with
respect to net income or profits (including any capital gains, franchise,
minimum taxes, but excluding sales, use, real property gains, real or personal
property, gross or net receipts, Transfer Taxes or other similar Taxes),
including any such Taxes that are imposed through withholding.

 

“Intellectual Property License Agreement” means an Intellectual Property License
Agreement among the Company, BHGE and GE substantially in the form attached
hereto as Schedule I.

 

“Intellectual Property Rights” means any and all intellectual property or
similar proprietary rights in any and all jurisdictions of the world, including
(i) patents and patent applications (including all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations thereof)
issued, registered or applied for, and all improvements to the inventions
disclosed in each such patent or patent application, (ii) trademarks, service
marks, trade dress, logos, domain names, trade names, corporate names and all
other designations of commercial source or origin (whether or not registered),
including all registrations and applications for registration of the foregoing
and all goodwill associated therewith (“Trademarks”), (iii) works of authorship,
copyrights (whether or not registered) and registrations and applications for
registration thereof, including all derivative works, moral rights, renewals,
extensions, reversions or restorations associated with such copyrights, now or
hereafter provided by law, regardless of the medium of fixation or means of
expression, (iv) computer software (including source code, object code,
firmware, operating systems and specifications), (v) trade secrets, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
manufacturing and production processes and techniques, specifications, designs,
formulas, and, whether or not confidential, business information (including
pricing and cost information, business and marketing plans and customer and
supplier lists) research and development information and know-how, (vi) data,
databases and data collections, (vii) rights of publicity, privacy and
endorsement, (viii) industrial designs and registrations and applications for
registration thereof throughout the world and (ix) all rights to sue or recover
and retain damages and costs and attorneys’ fees for past, present and future
infringement or misappropriation of any of the foregoing.

 

“Inventory Taking” has the meaning specified in the GE Transaction Accounting
Principles.

 

“Jacintoport Lease” means the lease to be entered at Closing between GE Packaged
Power, as lessor, and the Company or a Subsidiary thereof, as lessee, with
respect to the portion of the property used by the GE Contributed Business (such
portion, the “Jacintoport Leasehold Site”), substantially including the terms
set forth in the term sheet attached hereto as Schedule O (the “Jacintoport Term
Sheet”).

 

 11

 

“JV Transaction Expenses” means, without duplication, all liabilities (except
for any Taxes) incurred by any party hereto and their Affiliates for fees,
expenses, costs or charges as a result of (i) the organization and setting up of
the Company, including any fees and expenses of consultants, investment bankers,
brokers, financial advisors, attorneys, accountants or other advisors, and any
fees payable by such parties to Governmental Authorities or other third parties
and (ii) filing fees with respect to the notifications required under the HSR
Act; provided, that BHGE and GE shall be responsible for any fees and expenses
of investment bankers, attorneys, accountants or other advisors incurred by it
in connection with contributing assets and liabilities to the Company in
accordance with the terms hereof.

 

“knowledge of BHGE,” “BHGE’s knowledge” or any other similar knowledge
qualification in this Agreement means to the actual knowledge of Stefaan
Verbanck, Alfredo Gebbia, Ed Jamison, Blaise Baudry, George Bernhardt, Luca
Marcuzzi, Al Riddle and Ishbel Inkster after reasonable inquiry.

 

“knowledge of GE,” “GE’s knowledge” or any other similar knowledge qualification
in this Agreement means to the actual knowledge of Joseph Hart, Nabil Talhaoui,
Damian Foti, Rogers Drew, Karen Simons, Frank Landgraff, Griffin Fulmer and
Barbara Beckmann after reasonable inquiry.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, easement, transfer restriction, right of first refusal or
first offer, preemptive right, lien (statutory or otherwise), charge or adverse
claim of any kind. For the purposes of this Agreement, a Person shall be deemed
to own subject to a Lien any property or asset which it acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset.

 

“Massa Lease” means the lease to be entered at Closing between Nuovo Pignone
S.r.l., as lessor, and the Company or a Subsidiary thereof, as lessee, with
respect to the portion of the property used in the BHGE Contributed Business
(such portion, the “Massa Leasehold Site”), substantially including the terms
set forth in the term sheet attached hereto as Schedule M (“Massa Term Sheet”).

 

“Membership Interest” means a limited liability company interest in the Company.

 

“Netherlands Inventory” means the GE Inventory located in GE’s Amsterdam
warehouse.

 

“NewCo Subsidiary” means each of the legal entities formed in compliance with
and as set forth on Schedule 3.

 

“NewCo Subsidiary Interests” means all of the issued and outstanding shares,
membership interests or other equity interests of the NewCo Subsidiaries.

 

“Non-U.S. Jurisdictions” means the jurisdictions specified on Schedule L.

 

 12

 

“Permitted Liens” means (i) mechanics, materialmen’s, workman’s, carrier’s,
repairer’s, warehouseman and other similar Liens incurred in the ordinary course
of business with respect to any amounts not yet due and payable as of the
Closing Date or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in the BHGE
Final Closing Working Capital Amount or GE Final Closing Working Capital Amount
(as applicable), (ii) Liens for Taxes not yet due and payable as of the Closing
Date or which are being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in the BHGE Final Closing
Working Capital Amount or GE Final Closing Working Capital Amount (as
applicable), (iii) Liens securing rental payments under capital lease
agreements, (iv) with respect to a Contributed Facility, Liens on such
Contributed Facility that (A) are matters of public record and (B) do not
materially interfere, individually or in the aggregate, with the present use or
operation of such Contributed Facility, (v) to the extent terminated in
connection with the Closing, Liens securing payment, or any other obligations,
as applicable, (vi) with respect to a Contributed Facility, Liens described in
Section 3.12(b) of the BHGE Disclosure Schedule or Section 4.12(b) of the GE
Disclosure Schedule, as applicable, constituting a lease, sublease or occupancy
agreement that gives any party any right to use or occupy any portion of such
Contributed Facility, (vii) non-exclusive licenses granted in the ordinary
course of business with respect to Intellectual Property Rights, (viii) Liens
arising in the ordinary course of business and not incurred in connection with
the borrowing of money which do not materially interfere, individually or in the
aggregate, with the present use or operation of a Contributed Facility, (ix)
Liens described in the BHGE Disclosure Schedule or GE Disclosure Schedule, as
applicable, (x) with respect to a Contributed Facility, zoning, building and
other generally applicable land use restrictions imposed by Applicable Law that
do not, individually or in the aggregate, materially interfere with the present
use or operation of such Contributed Facility; (xii) with respect to any
Contributed Facility, Liens that have been placed on the fee title of such
Contributed Facility that do not, individually or in the aggregate, materially
interfere with the present use or operation of such Contributed Facility; and
(xiii) with respect to any Contributed Facility, other Liens, if any, that would
not be material to the BHGE Contributed Business or GE Contributed Business, as
applicable, in each case taken as a whole; provided, however, that no Lien
arising under the provisions of ERISA or the parallel provisions of the Code
shall be a Permitted Lien.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.

 

“Port Klang Sublease” means the sublease to be entered at Closing between Baker
Hughes (M) Sdn. Bhd., as sublessor, and the Company or a Subsidiary thereof, as
sublessee, with respect to the property used in the BHGE Contributed Business
(the “Port Klang Sublease Site”), substantially including the terms set forth in
the term sheet attached hereto as Schedule N (“Port Klang Term Sheet”).

 

“Post-Closing LLC Agreement” means an amended and restated limited liability
company agreement of the Company substantially in the form attached hereto as
Schedule K.

 

“Pre-Closing Transactions” means the transactions contemplated by Schedule 3.

 

 13

 

“Pre-Closing Tax Period” means (i) any Tax period ending on or before the
Closing Date and (ii) with respect to a Straddle Period, the portion of such
Straddle Period up to and including the Closing Date.

 

“Prepayment Credits” means prepayment credits held by BHGE from GE Aviation;
provided, that the amount of the Prepayment Credits may be verified by GE to its
reasonable satisfaction.

 

“Qualifying Offer” means an offer of employment made by the Company or one of
its Subsidiaries to a BHGE Business Employee or a GE Business Employee that
provides for the terms of employment set forth in ‎‎Article IX.

 

“Regulations” means (i) the Acquired Rights Directive 77/187/EC, 98/50/EC and
2001/23/EC and all national legislation enacted to give effect to the Acquired
Rights Directive 77/187/EC, 98/50/EC and 2001/23/EC in each member state of the
European Economic Area in which one or more BHGE Business Employees or GE
Business Employees, as applicable, are based or carry out their work from time
to time, and (ii) all other national or provincial legislation which effects the
automatic transfer of employees on the sale or transfer or continuation of a
business.

 

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous
Substances.

 

“Remedial Actions” means all actions required pursuant to Environmental Law or
Governmental Authority to (i) clean up, remove, remediate, treat or in any other
way address any Release in the indoor or outdoor environment, (ii) prevent or
minimize any Release so that a Hazardous Substance does not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment or (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care with respect to any Release.

 

“Reverse Bill of Sale and Assignment and Assumption Agreement” means a bill of
sale and assignment and assumption agreement to be entered into between BHKF and
BHGE or one of its Subsidiaries at Closing in form and substance as mutually
agreed between GE and BHGE, whereby BHKF shall assign any assets or liabilities
of BHKF that are Excluded BHGE Assets or Excluded BHGE Liabilities to BHGE or
such Subsidiary, and BHGE or such Subsidiary shall assume all such Excluded BHGE
Assets and Excluded BHGE Liabilities.

 

“Rong Lease” means the lease to be entered at Closing between Vetco Gray
Scandinavia AS, as lessor, and the Company or a Subsidiary thereof, as lessee,
with respect to the property used in the BHGE Contributed Business (“Rong
Leasehold Site”), substantially including the terms set forth in the term sheet
attached hereto as Schedule P (“Rong Term Sheet”).

 

“Straddle Period” means any Tax period beginning on or before and ending after
the Closing Date.

 

 14

 

“Stockholders Agreement” means that certain Amended and Restated Stockholders
Agreement between BHGE and GE, dated as of November 13, 2018.

 

“Subsidiary” means, with respect to any specified Person, (a) any other Person
of which such first Person owns (either directly or through one or more other
Subsidiaries) a majority of the outstanding equity securities or securities
carrying a majority of the voting power in the election of the board of
directors or other governing body of such Person and with respect to which
entity such first Person is not otherwise prohibited contractually or by other
legally binding authority from exercising control or (b) any other Person with
respect to which such first Person acts as the sole general partner, manager,
managing member or trustee (or Persons performing similar functions).

 

“Tax” means (i) any federal, state, local, foreign or other tax (including
income, profits, premium, disability, alternative minimum, stamp, value added,
goods and services, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
employment, employer health, unemployment compensation, payroll-related and
property taxes), import duties, unclaimed or abandoned property liabilities,
governmental fee or other like assessment or charge of any kind whatsoever
(including withholding on amounts paid to or by any Person), together with any
interest, penalty, addition to tax or additional amount imposed by any
Governmental Authority (a “Taxing Authority”) responsible for the imposition,
administration or collection of any of the foregoing, or (ii) liability for the
payment of any amounts of the type described in (i) as a result of being a
transferee, successor or party to any agreement or any express or implied
obligation to indemnify any other Person.

 

“Tax Contest” means any audit, examination, administrative inquiry,
investigation, judicial proceeding or other dispute or similar proceeding
involving a Governmental Authority with respect to any Tax Return or Taxes.

 

“Tax Return” means any federal, state, local, foreign or other applicable
return, declaration, report, claim for refund, information return or statement
or other document (including any related or supporting schedules, statements or
information) with respect to any Tax filed or required to be filed with the
U.S. Internal Revenue Service or any other Taxing Authority in connection with
the determination, assessment or collection of any Tax of any party or the
administration of any laws, regulations or administrative requirements relating
to any Tax.

 

“Tax Sharing Agreement” means, with respect to any Person, any written agreement
entered into prior to the Closing binding such Person that provides for the
allocation, apportionment, sharing or assignment of any Tax Liability or
benefit, or the transfer or assignment of income, revenues, receipts, or gains
for the purpose of determining any other Person’s Tax Liability, other than such
agreements with customers, vendors, lessors or the like entered into in the
ordinary course of business and other customary Tax indemnifications contained
in any agreements the primary purpose of which does not relate to Taxes.

 

“Transaction Expenses” means, without duplication, all liabilities (except for
any Taxes) incurred by any party hereto and their Affiliates for fees, expenses,
costs or charges as a result of the contemplation, negotiation, efforts to
consummate or consummation of the

 

 15

 

transactions contemplated by this Agreement, including any fees and expenses of
consultants, investment bankers, brokers, financial advisors, attorneys,
accountants or other advisors, and any fees payable by such parties to
Governmental Authorities or other third parties, in each case, in connection
with the consummation of the transactions contemplated by this Agreement,
including fees and expenses incurred in obtaining consents from third parties in
connection with the contributions of assets and liabilities to the Company
hereunder. For the avoidance of doubt, Transaction Expenses shall not include JV
Transaction Expenses.

 

“Treasury Regulations” means the regulations promulgated under the Code as such
regulations may be amended from time to time (including corresponding provisions
of succeeding, temporary, proposed and final regulations).

 

“Trigger Date” has the meaning ascribed to it in the Stockholders Agreement.

 

“Turbine Development and Supply Agreement” means an agreement regarding LM9000
and LM2500 G-5 engines to be entered into among the Company (and/or its
Subsidiaries), and BHGE and GE (and/or their respective Subsidiaries)
substantially in the form attached hereto as Schedule J.

 

“Uniform Commercial Code” means the Uniform Commercial Code adopted and enacted
by the State of New York, as the same may be amended from time to time.

 

“WARN Act” means the Worker Adjustment Retraining Notification Act of 1988 and
any similar Applicable Law.

 

(b)  Each of the following terms is defined in the Section set forth opposite
such term:

 

Term Section Agreement Preamble BHGE Preamble BHGE Authorized Service Provider
Agreements ‎2.02(d) BHGE Available Insurance Policies 7.05(a) BHGE Cash
Contribution 2.12(g) BHGE Contributed Assets 2.02 BHGE Contributed Business
1.01(a) BHGE Contributed Contracts ‎2.02(d) BHGE Contributed Facilities 1.01(a)
BHGE Contributed Liabilities 2.04 BHGE Contribution Recitals BHGE Cure Period
‎12.01(d) BHGE Disclosure Schedule ‎13.11 BHGE Indemnified Parties ‎11.02(c)(i)
BHGE Required Consents ‎3.06 BHGE Transferred Employee ‎9.01(i) BHGE Warranty
Breach ‎‎11.02(a)(i)(A) Closing ‎2.12

 16

 

Company Preamble Company Indemnified Parties ‎11.02(a)(i) Damages ‎11.02(a)(i)
Dispute Notice ‎2.13(b) e-mail ‎13.01 Environmental Claims 11.05 Excluded BHGE
Assets ‎2.03 Excluded BHGE Liabilities ‎2.05 Excluded GE Assets ‎2.07 Excluded
GE Liabilities ‎2.09 GE Preamble GE Authorized Service Provider Agreements
‎2.06(d) GE Available Insurance Policies ‎7.06(a) GE Cash Payment 2.12(h) GE
Contributed Assets ‎2.06 GE Contributed Business 1.01(a) GE Contributed
Contracts ‎2.06(d) GE Contributed Facility 1.01(a) GE Contributed Liabilities
2.08 GE Contribution Recitals GE Cure Period ‎12.01(e) GE Disclosure Schedule
‎13.11 GE Indemnified Parties ‎11.02(c)(ii) GE Required Consents ‎4.06 GE
Transferred Employee ‎9.01(ii) GE Warranty Breach ‎11.02(b)(i)(A) Indemnified
Party ‎11.03(a) Indemnifying Party ‎11.03(a) Independent Expert 2.13(c) Initial
BHGE Business Employee 1.01(a) Initial GE Business Employee 1.01(a) Inventory
Cash Payment 2.12(j) Leases 7.10(b) Membership Interest Issuances 2.11(c) Open
Matters 7.10(a) Open Matters Ancillary Agreement 7.10(a) Post-Closing Statement
‎2.13(a) Pre-Closing Restructuring Taxes 8.01(c) Rules of Arbitration 13.06
Rules of Mediation 13.06 Surety 7.07 Surety Bond 7.07 Tax Benefit ‎11.06(a)(ii)
Tax Treatment ‎8.01(g) Taxing Authority ‎‎1.01 Terminating BHGE Breach ‎12.01(d)

 17

 

Terminating GE Breach ‎12.01(e) Termination Date ‎12.01(b) Third Party Claim
‎11.03(a) Transfer Taxes 8.01(c)(i) Transferred Employee ‎9.01(ii)

 

Section 1.02   Other Definitional and Interpretative Provisions. The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections and Schedules are to Articles, Sections
and Schedules of this Agreement unless otherwise specified. All Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement. Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”, whether or not they are
in fact followed by those words or words of like import. “Writing”, “written”
and comparable terms refer to printing, typing and other means of reproducing
words (including electronic media) in a visible form. References to “dollars” or
“$” shall mean United States dollars. References to any statute shall be deemed
to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder. References to any agreement or contract are
to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of that Person. References from or
through any date mean, unless otherwise specified, from and including or through
and including, respectively. References to “law”, “laws” or to a particular
statute or law shall be deemed also to include any and all Applicable Law.

 

Article II

CONTRIBUTIONS; ISSUANCES OF MEMBERSHIP INTERESTS

 

Section 2.01   Contribution of NewCo Subsidiary Interests. On the terms and
subject to the conditions set forth in this Agreement, at the Closing, BHGE
shall, or shall cause its applicable Affiliate, to contribute, convey, transfer,
assign and/or deliver, or to cause to be contributed, conveyed, transferred,
assigned and/or delivered, to the Company, and the Company agrees to accept from
BHGE, or such Affiliate, all right, title and interest in and to the NewCo
Subsidiary Interests, free and clear of all Liens, except restrictions on
transfer imposed by applicable securities laws.

 

Section 2.02   BHGE Contributed Assets. Except as otherwise provided herein,
upon the terms and subject to the conditions of this Agreement, BHGE agrees to
contribute, convey, transfer, assign and deliver, or to cause to be contributed,
conveyed, transferred, assigned and delivered, to the Company, and the Company
agrees to accept, at

 

 18

 

the Closing, free and clear of all Liens, other than Permitted Liens, all of the
BHGE Parties’ right, title and interest in, to and under the following
(collectively, with any such assets that are owned by BHKF and including any
such assets contributed to the NewCo Subsidiaries pursuant to the Pre-Closing
Transactions, the “BHGE Contributed Assets”), except to the extent that (i) such
BHGE Contributed Assets are owned by BHKF or (ii) the BHGE Parties have
contributed such BHGE Contributed Assets to the NewCo Subsidiaries pursuant to
the Pre-Closing Transactions (in each such case, which BHGE Contributed Assets
will be beneficially owned by the Company following the contribution of the
NewCo Subsidiary Interests to the Company pursuant to Section 2.01):

 

(a)   the BHGE Contributed Facilities;

 

(b)   all tangible personal property, including plants, equipment, tools,
machinery and facilities, ELTO Engines (but not any customer contracts for the
loan or rental of aeroderivative engines, including any payment or other
obligations thereunder), and interests therein, exclusively related to the BHGE
Contributed Facilities, including such tangible personal property listed on
Schedule 2.02(b)(x) but excluding, in all cases, Fixtures;

 

(c)   all BHGE Inventory, including the Prepayment Credits;

 

(d)   all transferable right, title and interest under the agreements listed on
‎Schedule ‎2.02(d) (agreements listed under the heading “Authorized Service
Provider Agreements” on such schedule, the “BHGE Authorized Service Provider
Agreements” and all of the agreements listed on such schedule, including the
BHGE Authorized Service Provider Agreements and purchase orders of the BHGE
Contributed Business entered into in accordance with ‎Section 5.01 from the date
hereof until the Closing Date, collectively, the “BHGE Contributed Contracts”);

 

(e)   assets to the extent reflected in the BHGE Final Closing Working Capital
Amount;

 

(f)   to the extent exclusively related to the operation of the BHGE Contributed
Assets, any insurance proceeds received or the rights to proceeds to be or that
may be received as a result of insurance claims made for all periods from the
date hereof through the Closing Date, during the period from the date hereof
until the Closing Date;

 

(g)   to the extent permitted by Applicable Law, the personnel records
(including all human resources and other records) of the BHGE Transferred
Employees; and

 

(h)   any assets expressly transferred pursuant to Article IX.

 

Section 2.03   Excluded BHGE Assets. GE and the Company expressly understand and
agree that all assets that are not BHGE Contributed Assets shall be excluded
from the BHGE Contribution (collectively, the “Excluded BHGE Assets”), including
the following assets and properties of BHGE or its Affiliates (or any of their
predecessors):

 

 19

 

(a)   all of the BHGE Parties’ cash and cash equivalents on hand and in banks;

 

(b)   all current assets (other than such assets described in ‎‎Section 2.02(c)
or ‎‎Section 2.02(e)), including accounts, notes and other receivables, of BHGE
or any of its Affiliates;

 

(c)   other than the BHGE Contributed Contracts, all contracts, agreements,
leases, licenses, commitments, sales and purchase orders and other instruments
of the BHGE Parties or any of their Affiliates;

 

(d)   other than to the extent expressly provided in Section 7.05, all BHGE
Insurance Policies and all rights of any nature with respect to any BHGE
Insurance Policy, including any recoveries thereunder and any rights to assert
claims seeking any such recoveries;

 

(e)   all Intellectual Property Rights owned by or licensed to the BHGE Parties
or any of their Affiliates (including the BHGE Names and Marks);

 

(f)   all books, records, files and papers, whether in hard copy or computer
format, prepared in connection with this Agreement or the transactions
contemplated hereby and all minute books and corporate records of the BHGE
Parties and their Affiliates;

 

(g)   all causes of action against third parties to the extent relating
primarily to the Excluded BHGE Assets or the Excluded BHGE Liabilities and all
causes of action relating to the Excluded Claims;

 

(h)   all rights of BHGE arising under this Agreement or the transactions
contemplated hereby;

 

(i)   all claims for Tax refunds and all rights to Tax refunds, credits or
similar benefits associated with BHKF or the BHGE Contributed Business, in each
case attributable to a Pre-Closing Tax Period;

 

(j)   all Tax Returns of the BHGE Parties and their Affiliates and all other
Tax-related documents of the BHGE Parties and their Affiliates, including any
consolidated, combined, affiliated or unitary Tax Return that includes the BHGE
Parties or any of their Affiliates;

 

(k)   the personnel records (including all human resources and other records) of
BHGE and its Affiliates relating to employees of BHGE and its Affiliates, other
than the BHGE Transferred Employees;

 

(l)   except to the extent expressly set forth in Article IX, the BHGE Employee
Plans and all other benefit or compensation plans, programs, agreements,
contracts, policies or arrangements at any time maintained, sponsored or
contributed or required to be contributed to by BHGE or any of its Affiliates or
with respect to which BHGE

 

 20

 

or any of its Affiliates has any current or contingent liability or obligation
and, in any case, all assets related thereto;

 

(m)   any BHGE Contributed Assets sold or otherwise disposed of in the ordinary
course of business prior to the date hereof or during the period from the date
hereof until the Closing Date in accordance with ‎Section 5.01(b);

 

(n)   except for the BHGE Contributed Facilities, any real property or facility
currently or formerly owned, leased, operated, occupied or used by BHGE or its
Affiliates (or any of their predecessors) (including with respect to the BHGE
Contributed Business), or at which BHGE or its Affiliates (or any of their
predecessors) formerly provided any services (including with respect to the BHGE
Contributed Business), including all improvements, Fixtures, and appurtenances
thereto and rights in respect thereof;

 

(o)   all BHGE Excluded Inventory; and

 

(p)   any assets or properties of BHKF that will be transferred to BHGE or its
applicable Subsidiary pursuant to the Reverse Bill of Sale and Assignment and
Assumption Agreement.

 

Section 2.04   BHGE Contributed Liabilities. Upon the terms and subject to the
conditions of this Agreement, the Company agrees, effective at the Closing,
except to the extent that (i) such BHGE Contributed Liabilities are binding on
BHKF or (ii) the BHGE Parties have contributed such BHGE Contributed Liabilities
to the NewCo Subsidiaries pursuant to the Pre-Closing Transactions, to assume
all debts, obligations and liabilities of the BHGE Parties (or any predecessor
of the BHGE Parties or any prior owner of all or part of their businesses and
assets) of any kind, character or description (whether known or unknown,
accrued, absolute, contingent or otherwise and whether arising before, on or
after the Closing) to the extent relating to or arising out of the BHGE
Contributed Assets and that are not Excluded BHGE Liabilities (collectively,
with any such liabilities binding on BHKF and including any such liabilities
transferred to the NewCo Subsidiaries pursuant to the Pre-Closing Transactions,
the “BHGE Contributed Liabilities”), including the following:

 

(a)   all liabilities to the extent included in the BHGE Final Closing Working
Capital Amount;

 

(b)   all liabilities and obligations of the BHGE Parties or any of their
Affiliates arising under the BHGE Contributed Contracts;

 

(c)   all liabilities and obligations arising under or relating to any repairs
performed and parts or other products provided or sold in connection therewith
on or prior to the Closing Date by the BHGE Contributed Business, including
warranty obligations;

 

(d)   all liabilities and obligations arising out of any action, suit,
investigation or proceeding to the extent relating to or arising out of the
conduct of BHGE Contributed Business to the extent relating to the BHGE
Contributed Assets before any arbitrator or any Governmental Authority; and

 

 21

 

(e)   all liabilities and obligations with respect to (i) each BHGE Transferred
Employee and (ii) each BHGE Employee Plan, in each case that are expressly
assumed by the Company pursuant to ‎‎Article IX.

 

Section 2.05   Excluded BHGE Liabilities. Notwithstanding any provision in this
Agreement or any other writing to the contrary, the Company is assuming from the
BHGE Parties only the BHGE Contributed Liabilities and is not assuming any other
liability or obligation of the BHGE Parties of whatever nature, whether
presently in existence or arising hereafter. All such other liabilities and
obligations shall be retained by and remain obligations and liabilities of the
BHGE Parties (all such liabilities and obligations not being assumed being
herein referred to as the “Excluded BHGE Liabilities”). Notwithstanding any
provision in this Agreement or any other writing to the contrary, Excluded BHGE
Liabilities (which shall not be assumed by the Company) include:

 

(a)   any liability or obligation for BHGE Covered Taxes;

 

(b)   all liabilities and obligations with respect to (i) each employee of BHGE
or its Affiliates (including the BHGE Transferred Employees) arising on or
before, or relating to any circumstance occurring or existing on or before, the
Closing Date and (ii) each BHGE Employee Plan, in each case other than any such
liabilities or obligations expressly assumed by the Company pursuant to
‎‎Article IX;

 

(c)   all liabilities and obligations of the BHGE Parties (or any predecessor of
the BHGE Parties or any prior owner of all or part of their businesses and
assets) of any kind, character or description (whether known or unknown,
accrued, absolute, contingent or otherwise and whether arising before, on or
after the Closing) to the extent (i) relating to facts, conditions, or
occurrences existing or occurring on or prior to the Closing and (ii) both
relating to or arising out of the BHGE Contributed Assets and arising under or
relating to any Environmental Law, including any liabilities or obligations
relating to or arising out of (A) a Release of a Hazardous Substance at, on or
from any of the BHGE Contributed Facilities or (B) exposure of any Person to
Hazardous Substances;

 

(d)   any liability or obligation relating to or arising out of the Excluded
BHGE Assets;

 

(e)   all Debt of any BHGE Party;

 

(f)   Transaction Expenses and JV Transaction Expenses of BHGE and its
Affiliates, including any Transaction Expenses incurred in connection with
obtaining and executing the Designated Agreement Amendment; and

 

(g)   any liability or obligation transferred to BHGE or its applicable
Subsidiary pursuant to the Reverse Bill of Sale and Assignment and Assumption
Agreement.

 

Section 2.06   GE Contributed Assets. Except as otherwise provided herein, upon
the terms and subject to the conditions of this Agreement, GE agrees to
contribute, convey, transfer, assign and deliver, or to cause to be contributed,
conveyed, transferred,

 

 22

 

assigned and delivered, to the Company, and the Company agrees to accept, at the
Closing, free and clear of all Liens, other than Permitted Liens, all of the GE
Parties’ right, title and interest in, to and under the following (collectively,
the “GE Contributed Assets”):

 

(a)   the GE Contributed Facility;

 

(b)   all tangible personal property, including plants, equipment, tools,
machinery and facilities, ELTO Engines (but not any customer contracts for the
loan or rental of aeroderivative engines, including any payment or other
obligations thereunder, other than the obligations under the ELTO Leases), and
interests therein, exclusively related to the GE Contributed Facility, including
such tangible personal property listed on ‎Schedule 2.06(b)(x) (whether or not
located in the GE Contributed Facility) but excluding, in all cases, (x) such
tangible personal property listed on ‎Schedule 2.06(b)(y) and (y) Fixtures;

 

(c)   all GE Inventory, including the Netherlands Inventory and the GE Inventory
listed on Schedule 2.06(c);

 

(d)   all transferable right, title and interest under the ELTO Leases and the
agreements listed on ‎Schedule ‎2.06(d) (agreements listed under the heading
“Authorized Service Provider Agreements” on such schedule, the “GE Authorized
Service Provider Agreements” and ELTO Leases and all of the agreements listed on
such schedule, including the GE Authorized Service Provider Agreements and
purchase orders of the GE Contributed Business entered into in accordance with
‎Section 6.01 from the date hereof until the Closing Date, collectively, the “GE
Contributed Contracts”);

 

(e)   assets to the extent reflected in the GE Final Closing Working Capital
Amount;

 

(f)   to the extent exclusively related to the operation of the GE Contributed
Assets, any insurance proceeds received or the rights to proceeds to be or that
may be received as a result of insurance claims made for all periods from the
date hereof through the Closing Date, during the period from the date hereof
until the Closing Date;

 

(g)   to the extent permitted by Applicable Law, the personnel records
(including all human resources and other records) of the GE Transferred
Employees; and

 

(h)   any assets expressly transferred pursuant to Article IX.

 

Section 2.07   Excluded GE Assets. BHGE and the Company expressly understand and
agree that all assets that are not GE Contributed Assets shall be excluded from
the GE Contribution (collectively, the “Excluded GE Assets”), including the
following assets and properties of GE or its Affiliates (or any of their
predecessors):

 

(a)   all of the GE Parties’ cash and cash equivalents on hand and in banks;

 

 23

 

(b)   all current assets (other than such assets described in ‎Section 2.06(c)
or ‎‎Section 2.06(e)), including accounts, notes and other receivables, of GE or
any of its Affiliates;

 

(c)   other than the GE Contributed Contracts, all contracts, agreements,
leases, licenses, commitments, sales and purchase orders and other instruments
of the GE Parties or any of their Affiliates;

 

(d)   other than to the extent expressly provided in ‎Section 7.06, all GE
Insurance Policies and all rights of any nature with respect to any GE Insurance
Policy, including any recoveries thereunder and any rights to assert claims
seeking any such recoveries;

 

(e)   all Intellectual Property Rights owned by or licensed to the GE Parties or
any of their Affiliates (including the GE Names and Marks);

 

(f)   all books, records, files and papers, whether in hard copy or computer
format, prepared in connection with this Agreement or the transactions
contemplated hereby and all minute books and corporate records of the GE Parties
and their Affiliates;

 

(g)   all causes of action against third parties to the extent relating
primarily to the Excluded GE Assets or the Excluded GE Liabilities;

 

(h)   all rights of GE arising under this Agreement or the transactions
contemplated hereby;

 

(i)   all claims for Tax refunds and all rights to Tax refunds, credits or
similar benefits associated with the GE Contributed Business attributable to a
Pre-Closing Tax Period;

 

(j)   all Tax Returns of the GE Parties and their Affiliates and all other
Tax-related documents of the GE Parties and their Affiliates including any
consolidated, combined, affiliated or unitary Tax Return that includes the GE
Parties or any of their Affiliates;

 

(k)   the personnel records (including all human resources and other records) of
GE and its Affiliates relating to employees of GE and its Affiliates, other than
the GE Transferred Employees;

 

(l)   except to the extent expressly set forth in Article IX, the GE Employee
Plans and all other benefit or compensation plans, programs, agreements,
contracts, policies or arrangements at any time maintained, sponsored or
contributed or required to be contributed to by GE or any of its Affiliates or
with respect to which GE or any of its Affiliates has any current or contingent
liability or obligation and, in any case, all assets related thereto;

 

 24

 

(m)   any GE Contributed Assets sold or otherwise disposed of in the ordinary
course of business prior to the date hereof or during the period from the date
hereof until the Closing Date in accordance with ‎‎Section 6.01(b);

 

(n)   except for the GE Contributed Facility, any real property or facility
currently or formerly owned, leased, operated, occupied or used by GE or its
Affiliates (or any of their predecessors) (including with respect to the GE
Contributed Business), or at which GE or its Affiliates (or any of their
predecessors) formerly provided any services (including with respect to the GE
Contributed Business), including all improvements, Fixtures, and appurtenances
thereto and rights in respect thereof; and

 

(o)   all GE Excluded Inventory.

 

Section 2.08   GE Contributed Liabilities. Upon the terms and subject to the
conditions of this Agreement, the Company agrees, effective at the Closing, to
assume all debts, obligations and liabilities of the GE Parties (or any
predecessor of the GE Parties or any prior owner of all or part of their
businesses and assets) of any kind, character or description (whether known or
unknown, accrued, absolute, contingent or otherwise and whether arising before,
on or after the Closing) to the extent relating to or arising out of the GE
Contributed Assets and that are not Excluded GE Liabilities (the “GE Contributed
Liabilities”), including the following:

 

(a)   all liabilities to the extent included in the GE Final Closing Working
Capital Amount;

 

(b)   all liabilities and obligations of the GE Parties or any of their
Affiliates arising under the GE Contributed Contracts;

 

(c)   all liabilities and obligations arising under or relating to any repairs
performed and parts or other products provided or sold in connection therewith
on or prior to the Closing Date by the GE Contributed Business, including
warranty obligations;

 

(d)   all liabilities and obligations arising out of any action, suit,
investigation or proceeding to the extent relating to or arising out of the
conduct of the GE Contributed Business to the extent relating to the GE
Contributed Assets before any arbitrator or any Governmental Authority; and

 

(e)   all liabilities and obligations with respect to (i) each GE Transferred
Employee and (ii) each GE Employee Plan, in each case that are expressly assumed
by the Company pursuant to ‎‎Article IX.

 

Section 2.09   Excluded GE Liabilities. Notwithstanding any provision in this
Agreement or any other writing to the contrary, the Company is assuming from the
GE Parties only the GE Contributed Liabilities and is not assuming any other
liability or obligation of the GE Parties of whatever nature, whether presently
in existence or arising hereafter. All such other liabilities and obligations
shall be retained by and remain obligations and liabilities of the GE Parties
(all such liabilities and obligations not being

 

 25

 

assumed being herein referred to as the “Excluded GE Liabilities”).
Notwithstanding any provision in this Agreement or any other writing to the
contrary, Excluded GE Liabilities (which shall not be assumed by the Company)
include:

 

(a)   any liability or obligation for GE Covered Taxes;

 

(b)   all liabilities and obligations with respect to (i) each employee of GE or
its Affiliates (including the GE Transferred Employees) arising on or before, or
relating to any circumstance occurring or existing on or before, the Closing
Date and (ii) each GE Employee Plan, in each case other than any such
liabilities or obligations expressly assumed by the Company pursuant to ‎Article
IX;

 

(c)   all liabilities and obligations of the GE Parties (or any predecessor of
the GE Parties or any prior owner of all or part of their businesses and assets)
of any kind, character or description (whether known or unknown, accrued,
absolute, contingent or otherwise and whether arising before, on or after the
Closing) to the extent (i) relating to facts, conditions, or occurrences
existing or occurring on or prior to the Closing and (ii) both relating to or
arising out of the GE Contributed Assets and arising under or relating to any
Environmental Law, including any liabilities or obligations relating to or
arising out of (A) a Release of a Hazardous Substance at, on or from the GE
Contributed Facility or (B) exposure of any Person to Hazardous Substances;

 

(d)   any liability or obligation relating to or arising out of the Excluded GE
Assets;

 

(e)   all Debt of any GE Party;

 

(f)   any liability or obligation arising out of or with respect to the matters
set forth on Schedule 5; and

 

(g)   Transaction Expenses and JV Transaction Expenses of GE and its Affiliates,
including any Transaction Expenses incurred in connection with ‎Section 2.12(j).

 

Section 2.10   Required Consents; Assignment of Contracts; Wrong Pockets
Provisions.

 

(a)   Prior to the Closing, each of BHGE and GE shall, and shall cause each of
its respective Affiliates to, use its commercially reasonable efforts to obtain
the BHGE Required Consents and the GE Required Consents, respectively, and GE
and BHGE shall cooperate with one another in connection therewith; provided,
that any costs or expenses incurred in connection with obtaining any BHGE
Required Consents or GE Required Consents shall be borne solely by BHGE and GE,
respectively. Notwithstanding the foregoing or anything else in this Agreement
to the contrary, this Agreement shall not constitute an agreement to assign,
sublease, contribute or otherwise transfer without the corresponding third party
consent any BHGE Contributed Asset or GE Contributed Asset, or any right
thereunder, the assignment, sublease or transfer or attempted assignment,
sublease or transfer of which, without the consent of a third party (including
any Governmental

 

 26

 

Authority) would constitute a breach or other contravention thereof or of the
underlying lease or a violation of Applicable Law or would, in any way,
adversely affect the rights of the BHGE Parties, the GE Parties or the Company,
as applicable, thereto or thereunder. In such case, if such required third party
consent is not obtained, then the corresponding Contributed Asset or right
thereunder will not be assigned, subleased or transferred to the Company or any
of its Subsidiaries hereunder, and BHGE, GE and the Company will cooperate in a
mutually agreeable arrangement under which the Company would obtain the benefits
and assume the obligations thereunder in accordance with this Agreement with no
additional cost to the Company.

 

(b)   If, after the Closing, BHGE or GE becomes aware that any BHGE Contributed
Asset or GE Contributed Asset which should have been contributed to, or any BHGE
Contributed Liability or GE Contributed Liability which should have been assumed
by, the Company pursuant to the terms of this Agreement was not contributed to
or assumed by the Company as contemplated by this Agreement, then (i) BHGE or
GE, as applicable, shall (or shall cause the applicable BHGE Party or GE Party
to) promptly transfer such BHGE Contributed Asset or GE Contributed Asset (if
applicable) and (ii) the Company shall (or shall cause its applicable Subsidiary
to) promptly assume such BHGE Contributed Liability or GE Contributed Liability
(if applicable), in each case, for no consideration, at the Company’s expense
and subject to the terms and conditions of this Agreement.

 

(c)   If, after the Closing, BHGE or GE becomes aware that any Excluded BHGE
Asset or Excluded GE Asset which should have been retained by, or any Excluded
BHGE Liability or Excluded GE Liability which should have been retained by, BHGE
or GE, as applicable, pursuant to the terms of this Agreement was contributed to
or assumed by the Company, then (i) the Company shall (or shall cause its
applicable Subsidiary to) promptly transfer such Excluded BHGE Asset or Excluded
GE Asset (if applicable) to BHGE or GE, as applicable, and (ii) BHGE or GE, as
applicable, shall (or shall cause the applicable BHGE Party or GE Party to)
promptly assume such Excluded BHGE Liability or Excluded GE Liability (if
applicable), in each case, for no consideration, at the Company’s expense and
subject to the terms and conditions of this Agreement.

 

(d)   From time to time following the Closing, each of the Company, BHGE and GE
shall deliver such additional deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in the NewCo Subsidiaries all right, title and
interest in, to and under the BHGE Contributed Assets and BHGE Contributed
Liabilities.

 

Section 2.11   Issuance and Acquisition of Membership Interests.

 

(a)   In exchange for the BHGE Contribution and the commitments in favor of the
GE Parties pursuant to the Turbine Development and Supply Agreement, the Company
shall, as provided in Section 2.12, issue Membership Interests to BHGE (and/or,
at its election, one or more of its wholly-owned Subsidiaries).

 

 27

 

(b)   In exchange for the GE Contribution to the Company, and taking into
account the commitments in favor of the GE Parties pursuant to the Turbine
Development and Supply Agreement, the Company shall, as provided in Section
2.12, issue the Membership Interests to GE (and/or, at its election, one or more
of its wholly-owned Subsidiaries) and transfer the GE Cash Payment to GE
(and/or, at its election, one or more of its wholly-owned Subsidiaries).

 

(c)   The Membership Interest issuances described in this Section 2.11 are
hereinafter referred to as the “Membership Interest Issuances”). Immediately
after the Membership Interest Issuances (and after any adjustments pursuant to
‎Section 2.13(e)), BHGE (and/or its applicable wholly owned Subsidiaries) will
own 50% of the outstanding Membership Interests and GE (and/or its applicable
wholly owned Subsidiaries) will own 50% of the outstanding Membership Interests.

 

Section 2.12   Closing. The closing (the “Closing”) of the BHGE Contribution,
the GE Contribution, and the Membership Interest Issuances hereunder shall take
place at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New
York, New York, on the first Business Day of the month following the month
during which the conditions set forth in ‎Article X (other than such conditions
which, by their nature, are to be satisfied at the Closing, but subject to the
satisfaction or, to the extent permissible, waiver of such conditions at the
Closing) are satisfied or, to the extent permissible, waived by the party
entitled to the benefit of, such conditions set forth therein; provided, that,
if the date of such satisfaction or waiver is within 10 Business Days of the end
of any month, then either party hereto shall have the right to defer the Closing
to the first Business Day of the second month following the month during which
such date occurs; provided, further, that the Closing shall not occur prior to
the Trigger Date without the prior written consent of BHGE and GE. The Closing
shall be effective at 12:01am Eastern Time on the Closing Date. At the Closing:

 

(a)   BHGE shall deliver to each of the Company and GE a statement, signed under
penalties of perjury and dated no more than 30 days prior to the Closing Date,
that satisfies the requirements of Treasury Regulation Section 1.1445-2(b)(2)
and confirms that BHGE is not a “foreign person” as defined in Section 1445 of
the Code.

 

(b)   GE shall deliver to each of the Company and BHGE a statement, signed under
penalties of perjury and dated no more than 30 days prior to the Closing Date,
that satisfies the requirements of Treasury Regulation Section 1.1445-2(b)(2)
and confirms that GE is not a “foreign person” as defined in Section 1445 of the
Code.

 

(c)   BHGE shall deliver to the Company and GE a duly executed counterpart or
duly executed counterparts (as applicable) of each Ancillary Agreement (other
than any Ancillary Agreement that is not yet in definitive form, pursuant to
‎Section 7.10) to which BHGE (or any of its Affiliates or the NewCo
Subsidiaries) is a party and to GE the certificate to be delivered pursuant to
‎Section 10.02;

 

(d)   GE shall deliver to the Company and BHGE a duly executed counterpart or
duly executed counterparts (as applicable) of each Ancillary Agreement (other
than any Ancillary Agreement that is not yet in definitive form, pursuant to
‎Section 7.10) to

 

 28

 

which GE (or any of its Affiliates, other than the Company) is a party and to
BHGE the certificate to be delivered pursuant to ‎Section 10.03;

 

(e)   The Company shall deliver to BHGE and GE a duly executed counterpart of
each Ancillary Agreement (other than any Ancillary Agreement that is not yet in
definitive form, pursuant to ‎Section 7.10) to which the Company or a Subsidiary
thereof is a party;

 

(f)   The Company shall deliver to BHGE and GE a duly executed joinder to the
Aero Supply Agreement, substantially in the form attached as Schedule 1 thereto;

 

(g)   BHGE shall deliver to the Company $60,000,000 in immediately available
funds by wire transfer (the “BHGE Cash Contribution”);

 

(h)   The Company shall deliver to the GE Parties $60,000,000 in immediately
available funds (the “GE Cash Payment”) by wire transfer to an account of GE or
one of its Affiliates designated by GE by notice to the Company, which notice
shall be delivered not later than two Business Days prior to the Closing Date
(or, if not so designated, then by certified or official bank check payable in
immediately available funds to the order of GE in such amount);

 

(i)   The Membership Interest Issuances pursuant to ‎‎Section 2.11 shall be duly
reflected by the Company in its books and records in the manner contemplated by
the Post-Closing LLC Agreement, as applicable; and

 

(j)   GE shall cause the contribution of the Netherlands Inventory to an
Affiliate of the Company as follows: GE shall deliver to the Company an amount
in cash equal to the value of the Netherlands Inventory in immediately available
funds by wire transfer (the “Inventory Cash Payment”), whereupon the Company
shall, immediately thereafter and following the contribution of BV NewCo (as
defined in Schedule 3) to the Company, deliver to BV NewCo an amount in cash
equal to the Inventory Cash Payment and cause BV NewCo to use such cash to
purchase the Netherlands Inventory from GE Power Netherlands B.V. pursuant to an
agreement in the form of the Form of Bill of Sale and Assignment and Assumption
Agreement, with such modifications which GE’s and BHGE’s local counsel advise
and the parties mutually agree are necessary to comply with the requirements of
applicable local law.

 

Section 2.13   Working Capital Adjustment.

 

(a)   As promptly as practicable, but no later than 90 days after completion of
the Inventory Taking, the Company will cause to be prepared and delivered to
each of BHGE and GE a statement (the “Post-Closing Statement”) setting forth the
Company’s good-faith calculation of the BHGE Closing Working Capital, the BHGE
Closing Working Capital Adjustment, the GE Closing Working Capital and the GE
Closing Working Capital Adjustment. Together with the delivery of the
Post-Closing Statement, the Company shall provide such schedules and data as may
be reasonably appropriate to support the calculations of the BHGE Closing
Working Capital, the BHGE Closing Working Capital Adjustment, the

 

 29

 

GE Closing Working Capital and the GE Closing Working Capital Adjustment set
forth therein. The Company shall prepare the Post-Closing Statement in
accordance with the BHGE Transaction Accounting Principles and the GE
Transaction Accounting Principles.

 

(b)   Each of BHGE and GE shall have a period of 60 days following delivery of
the Post-Closing Statement delivered pursuant to ‎‎Section 2.13(a) to review the
computations set forth therein. During such 60-day period, the Company shall
provide to BHGE and GE reasonable access to all work papers, documentation and
data prepared or used by the Company in connection with preparation of the
Post-Closing Statement (subject, in the case of work papers of independent
accountants, to BHGE or GE, as applicable, signing a customary access letter
relating to access to work papers in form and substance reasonably acceptable to
such independent accountants). If BHGE or GE disagrees with the Company’s
calculation of any of the items set forth in the Post-Closing Statement
delivered pursuant to ‎‎Section 2.13(a), then BHGE or GE, as applicable, shall,
within such 60-day period, deliver a written notice to the other disagreeing
with such calculation and which specifies BHGE’s or GE’s, as applicable,
calculation of such amount and the resulting calculation of the BHGE Closing
Working Capital, the BHGE Closing Working Capital Adjustment, the GE Closing
Working Capital and the GE Closing Working Capital Adjustment, as applicable
(“Dispute Notice”), and, in reasonable detail, the objecting party’s grounds for
such disagreement. Any Dispute Notice shall specify those items or amounts as to
which the objecting party disagrees, and the objecting party shall be deemed to
have agreed with all other items and amounts contained in the Post-Closing
Statement delivered pursuant to ‎‎Section 2.13(a) to which it does not object in
the Dispute Notice.

 

(c)   In the event that BHGE and GE are unable to agree in writing on the
resolution of all items disputed in any Dispute Notice duly delivered pursuant
to ‎‎Section 2.13(b) within 30 days following delivery and receipt of such
Dispute Notices, the unresolved dispute items may thereafter be referred by
either BHGE or GE for final, binding resolution by an internationally recognized
independent public accountant that is mutually agreeable to BHGE and GE (the
“Independent Expert”). The Independent Expert shall determine, based solely on
presentations and written submissions by BHGE and GE, without ex parte
communications, and not by independent review, only those items or amounts in
the Post-Closing Statement that BHGE and GE were unable to resolve. In making
its determination, the Independent Expert shall (i) be bound by the terms and
conditions of this Agreement, including the BHGE Transaction Accounting
Principles, the GE Transaction Accounting Principles, the definitions of BHGE
Closing Working Capital, BHGE Closing Working Capital Adjustment, GE Closing
Working Capital and GE Closing Working Capital Adjustment and the terms of this
‎ ‎Section 2.13(c), and (ii) may not assign any value with respect to a disputed
amount that is greater than the highest value for such amount claimed by either
BHGE or GE or that is less than the lowest value for such amount claimed by
either BHGE or GE. The Independent Expert shall deliver to BHGE and GE, as
promptly as practicable, but in any event within 60 days of its engagement
pursuant to this ‎Section 2.13(c), a report setting forth its calculations,
which report shall be final and binding upon BHGE and GE. The fees and expenses
of the Independent Expert shall be borne by BHGE or GE in inverse proportion to
the value of the disputed amounts resolved in favor of each such Person.

 

 30

 

(d)   GE and BHGE agree that they will, and agree to cause the Company and their
respective independent accountants to, reasonably cooperate and assist in the
preparation of the Post-Closing Statement, and in the conduct of the reviews
referred to in this ‎‎Section 2.13(d), including the making available to the
extent reasonably necessary of books, records, work papers and personnel
(subject to reasonable confidentiality restrictions and to providing such
assurances, releases, indemnities or other agreements as accountants may
customarily require in such circumstances).

 

(e)   If:

 

(i)   each of the BHGE Closing Working Capital Adjustment and the GE Closing
Working Capital Adjustment is positive, and the BHGE Closing Working Capital
Adjustment is greater than the GE Closing Working Capital Adjustment, then GE
shall pay to BHGE an amount equal to one-half of an amount equal to the BHGE
Closing Working Capital Adjustment minus the GE Closing Working Capital
Adjustment;

 

(ii)   each of the BHGE Closing Working Capital Adjustment and the GE Closing
Working Capital Adjustment is positive, and the GE Closing Working Capital
Adjustment is greater than the BHGE Closing Working Capital Adjustment, then
BHGE shall pay to GE an amount equal to one-half of an amount equal to the GE
Closing Working Capital Adjustment minus the BHGE Closing Working Capital
Adjustment;

 

(iii)   each of the BHGE Closing Working Capital Adjustment and the GE Closing
Working Capital Adjustment is negative, and the BHGE Closing Working Capital
Adjustment is greater than the GE Closing Working Capital Adjustment on an
absolute value basis, then BHGE shall pay to GE an amount equal to one-half of
an amount equal to the absolute value of the BHGE Closing Working Capital
Adjustment minus the absolute value of the GE Closing Working Capital
Adjustment;

 

(iv)   each of the BHGE Closing Working Capital Adjustment and the GE Closing
Working Capital Adjustment is negative, and the GE Closing Working Capital
Adjustment is greater than the BHGE Closing Working Capital Adjustment on an
absolute value basis, then GE shall pay to BHGE an amount equal to one-half of
an amount equal to the absolute value of the GE Closing Working Capital
Adjustment minus the absolute value of the BHGE Closing Working Capital
Adjustment;

 

(v)   the BHGE Closing Working Capital Adjustment is a positive amount and the
GE Closing Working Capital Adjustment is a negative amount, then GE shall pay to
BHGE an amount equal to one-half of an amount equal to the BHGE Closing Working
Capital Adjustment minus the GE Closing Working Capital Adjustment; and

 

 31

 

(vi)   the GE Closing Working Capital Adjustment is a positive amount and the
BHGE Closing Working Capital Adjustment is a negative amount, then BHGE shall
pay to GE an amount equal to one half of an amount equal to the GE Closing
Working Capital Adjustment minus the BHGE Closing Working Capital Adjustment.

 

(f)   Any payment pursuant to ‎‎Section 2.13(e) shall be made at a mutually
convenient time and place within two Business Days after the applicable payment
amount has been finally determined, by delivery by BHGE or GE, as the case may
be, of cash by wire transfer of immediately available funds to the bank account
designated by the party entitled to such payment, which notice shall be
delivered no later than two Business Days prior to the date such payment is to
be made (or if not so designated, then by certified or official bank check
payable in immediately available funds to the order of the party entitled to
such payment in such amount).

 

(g)   Any payment made by (i) BHGE pursuant to ‎‎Section 2.13(e) shall be
treated as an increase to each of the BHGE Cash Contribution and the GE Cash
Payment and (ii) GE pursuant to ‎‎Section 2.13(e) shall be treated as a decrease
to each of the BHGE Cash Contribution and the GE Cash Payment, in each case for
U.S. federal income tax purposes.

 

Section 2.14   Withholding. GE or BHGE, as applicable, shall be entitled to
deduct and withhold (without duplication) from any and all payments made under
this Agreement to the extent that such amounts are required to be deducted and
withheld under the Code, or any provisions of state, local or foreign Tax law.
To the extent that such amounts are so withheld and paid over to the proper
Governmental Authority, such withheld and deducted amounts will be treated for
all purposes of this Agreement as having been paid to the Person in respect of
which such deduction or withholding was made. GE and BHGE will reasonably
cooperate with one another to avoid the imposition or minimize the amount of any
such withholding Tax to the extent permitted by Applicable Law.

 

Section 2.15   Schedules. The parties (a) acknowledge that there may be
inadvertent omissions or inclusions in the Schedules relating to this ‎‎Article
II and (b) agree to cooperate in good faith prior to the Closing to identify any
such inadvertent omissions or inclusions and, with the consent of all parties
(which consent will not be unreasonably withheld, conditioned or delayed), to
update the applicable Schedules to correct any such errors.

 

Article III

REPRESENTATIONS AND WARRANTIES OF BHGE

 

Except as set forth in the BHGE Disclosure Schedule (subject to ‎
‎Section 13.11), BHGE represents and warrants to GE and the Company as of the
date hereof and as of the Closing Date that:

 

Section 3.01   Existence and Power. BHGE is, and, as of the Closing Date, each
Affiliate of BHGE that will execute and deliver an Ancillary Agreement will be,
a

 

 32

 

limited liability company or other legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of formation or
organization and has all limited liability company or other powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
have a BHGE Material Adverse Effect.

 

Section 3.02   Authorization. The execution, delivery and performance by BHGE
and each applicable Affiliate of BHGE of this Agreement and the Ancillary
Agreements to which each is a party and the consummation of the transactions
contemplated hereby and thereby are within BHGE’s and each such Affiliate’s
limited liability company or other legal entity powers and have been duly
authorized by all necessary corporate action on the part of BHGE and each such
Affiliate. This Agreement constitutes a valid and binding agreement of BHGE and
each Ancillary Agreement to which BHGE or any such Affiliate is a party, when
executed, will constitute a valid and binding agreement of BHGE or such
Affiliate, as applicable, in each case enforceable against BHGE or such
Affiliate, as applicable, in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws affecting creditors’ rights generally and general principles of
equity).

 

Section 3.03   Governmental Authorization. The execution, delivery and
performance by BHGE and each applicable Affiliate of BHGE of this Agreement and
the Ancillary Agreements to which each is a party and the consummation of the
transactions contemplated hereby and thereby require no action by or in respect
of, or filing with, any Governmental Authority other than (a) compliance with
any applicable requirements of the HSR Act and under Foreign Competition Laws,
(b) the actions and filings set forth on ‎Section 3.03 of the BHGE Disclosure
Schedule and (c) any action or filing as to which the failure to make or obtain
would not have a BHGE Material Adverse Effect.

 

Section 3.04   Noncontravention. The execution, delivery and performance by BHGE
and each applicable Affiliate of BHGE of this Agreement and the Ancillary
Agreements to which each is a party and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) violate the certificate
of formation or limited liability company agreement of BHGE or the formation and
governing documents of any such Affiliate, (b) assuming compliance with the
matters referred to in ‎Section 3.03, violate any Applicable Law, (c) assuming
the obtaining of all BHGE Required Consents, constitute a default under or give
rise to any right of termination, cancellation or acceleration of any right or
obligation or to a loss of any benefit relating to the BHGE Contributed Business
or (d) result in the creation or imposition of any Lien on any BHGE Contributed
Asset, except for Permitted Liens, with such exceptions, in the case of each of
clauses ‎(c) and ‎(d), as would not have, individually or in the aggregate, a
BHGE Material Adverse Effect.

 

Section 3.05   Business and Capitalization of NewCo Subsidiaries and BHKF. (a)
Each NewCo Subsidiary will be formed solely for the purposes set out in this
Agreement. All of the issued and outstanding NewCo Subsidiary Interests of each
NewCo Subsidiary and the BHKF Interests will be owned by BHGE or a direct or
indirect wholly owned Subsidiary of BHGE as of immediately prior to the Closing.
Prior to the Closing, each NewCo

 

 33

 

Subsidiary will not have conducted any business and will have no assets,
liabilities or obligations of any nature other than (i) those incident to its
formation, (ii) those transferred to it by BHGE pursuant to this Agreement and
the applicable Contribution Agreement, Assignment and Assumption Agreement and
(iii) governmental licenses, authorizations, permits, consents and approvals
related to the operation of the BHGE Contributed Business.

 

(b)   As of the Closing Date, BHGE will have made available to GE true and
complete copies of the organizational documents of each NewCo Subsidiary and
BHKF and such organizational documents will be in full force and effect. As of
the date of issuance and as of the Closing Date, the NewCo Subsidiary Interests
and the BHKF Interests will have been duly authorized and validly issued, will
have been fully paid and nonassessable and will not have been issued in
violation of any preemptive rights. As of the Closing Date, there will be no
restrictions upon the voting or transfer of any shares or other equity interests
in each NewCo Subsidiary or BHKF pursuant to the respective NewCo Subsidiary’s
or BHKF’s organizational documents or any agreement to which BHGE or any of its
Affiliates is a party, other than this Agreement. As of the Closing Date, the
owners of each NewCo Subsidiary and BHKF as set forth on Section 3.05(b) of the
BHGE Disclosure Schedule, which will be delivered by BHGE by the Closing Date,
will be the sole owners of the NewCo Subsidiary Interests of such NewCo
Subsidiary and the BHKF Interests, free and clear of all Liens. Other than as a
result of the transactions contemplated by this Agreement, as of the Closing
Date, no NewCo Subsidiary or BHKF will own, directly or indirectly, any stock
of, or any other equity interest in, any Person. As of the Closing Date, there
will be no Debt of any NewCo Subsidiary or BHKF outstanding, nor will any NewCo
Subsidiary or BHKF have guaranteed any Debt of any other Person.

 

(c)   There are no additional equity interests in, or any options, warrants or
rights of conversion or exchange, “phantom” stock rights, stock appreciation
rights, stock-based performance units or other rights, agreements, arrangements
or commitments of any kind obligating BHKF to repurchase, issue, deliver or
sell, or cause to be repurchased, issued, delivered or sold, any of its equity
interests, or securities convertible into or exchangeable for its equity
interests. There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the BHKF
Interests. BHKF does not carry on, and has not carried on, any business
operations or other activity, other than as related to the BHGE Contributed
Business.

 

Section 3.06   Required Consents. Section 3.06 of the BHGE Disclosure Schedule
sets forth each agreement or other instrument binding upon the BHGE Parties or
BHKF requiring a consent or other action by any Person as a result of the
execution, delivery and performance of this Agreement, except such agreements or
instruments which are not, individually or in the aggregate, material to the
BHGE Contributed Business taken as a whole (the agreements or other instruments
that are or should have been listed on Section 3.06 of the BHGE Disclosure
Schedule, the “BHGE Required Consents”).

 

Section 3.07   Undisclosed Liabilities. Except as set forth on ‎‎Section 3.07 of
the BHGE Disclosure Schedules, there is no liability, debt or obligation of the
BHGE Contributed Business of a type required to be reflected or reserved for on
a balance sheet prepared in accordance with GAAP, except for liabilities and
obligations which are not,

 

 34

 

individually or in the aggregate, material to the BHGE Contributed Business
taken as a whole.

 

Section 3.08   Absence of Certain Changes. (a) Since December 31, 2018, the BHGE
Contributed Business has been conducted in the ordinary course consistent with
past practices and there has not been any event, occurrence, development or
state of circumstances or facts that has had or would reasonably be expected to
have, individually or in the aggregate, a BHGE Material Adverse Effect.

 

(b)   From December 31, 2018 until the date hereof, except as expressly
contemplated by this Agreement, no BHGE Party nor BHKF has:

 

(i)   suffered any damage, destruction or other casualty loss, in each case not
covered by insurance, material to the BHGE Contributed Business taken as a
whole;

 

(ii)   taken any action described in ‎‎Section 5.01 that would require the prior
consent of GE; or

 

(iii)   agreed or committed to do any of the foregoing.

 

Section 3.09   Material Contracts. (a) Other than as set forth in
‎Section 3.09(a) of the BHGE Disclosure Schedules or any BHGE Employee Plan,
with respect to the BHGE Contributed Business, no BHGE Party nor BHKF as of the
date hereof is a party to or bound by:

 

(i)   any lease (whether of real or personal property) (A) providing for annual
rentals of $300,000 or more that cannot be terminated on not more than 60 days’
notice without payment by a BHGE Party or BHKF of any material penalty or
(B) under which it is a lessor of or permits any third party to hold or operate
any property owned by it;

 

(ii)   any agreement for the purchase of materials, supplies, goods, services,
equipment or other assets providing for either (A) annual payments by the BHGE
Parties or BHKF of $300,000 or more or (B) aggregate payments by the BHGE
Parties or BHKF of $300,000 or more, in each case that cannot be terminated on
not more than 60 days’ notice without payment by the BHGE Parties or BHKF of any
material penalty;

 

(iii)   any sales, distribution or other similar agreement providing for the
sale by the BHGE Parties or BHKF of materials, supplies, goods, services,
equipment or other assets that provides for annual payments to the BHGE Parties
or BHKF of $300,000 or more;

 

(iv)   any material partnership, joint venture or other similar agreement or
arrangement;

 

 35

 

(v)   any agreement relating to the acquisition or disposition of any material
business (whether by merger, sale of stock, sale of assets or otherwise);

 

(vi)   any agreement relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case, whether incurred, assumed,
guaranteed or secured by any asset), except any such agreement (A) with an
aggregate outstanding principal amount not exceeding $300,000 or (B) entered
into subsequent to the date of this Agreement as permitted by ‎‎Section 5.01;

 

(vii)   any material agreement that limits or restricts the freedom of the BHGE
Parties or BHKF (or the Company, any of its Subsidiaries, or any direct or
indirect members of the Company after the Closing) to compete in any line of
business or with any Person or in any area;

 

(viii)   any material agreement with or for the benefit of any Affiliate of BHGE
or the Company;

 

(ix)   any material agreement with independent contractors, distributors,
dealers, franchisers, manufacturers’ representatives, sales agencies or
franchisees;

 

(x)   any profit sharing, stock appreciation, deferred compensation, severance
or other similar plan or arrangement for the benefits of its current or former
managers, members, officers or employees;

 

(xi)   any collective bargaining agreement or other contract to or with any
labor union or other employee representative of a group of employees;

 

(xii)   any settlement, conciliation or similar agreement with any Governmental
Authority, or that will require a BHGE Party or BHKF to pay consideration after
the date hereof in excess of $300,000;

 

(xiii)   any agreement relating to the licensing of material BHGE Licensed IP by
any BHGE Party or BHKF to any Person or by any Person to any BHGE Party or BHKF
(other than non-exclusive licenses granted in the ordinary course of business);
and

 

(xiv)   any contract for employment or engagement or any other individual
agreement providing severance or other termination payments or benefits or
relating to loans, in each case, for any officer, individual employee, or other
person or entity with a salary grade of SPB or higher (or who would have such
salary grade if an employee).

 

(b)   BHGE has made available to GE true and complete copies of the BHGE
Contributed Contracts, other than purchase orders of the BHGE Contributed
Business, in each case, as amended or otherwise modified and in effect as of the
date hereof. Each BHGE Contributed Contract is in full force and effect, subject
to applicable bankruptcy,

 

 36

 

insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity and represents the valid and binding obligations of
BHGE or one of its Affiliates party thereto and, to the knowledge of BHGE,
represents the valid and binding obligations of the other parties thereto.
Neither BHGE nor any of its Affiliates has received written notice of
cancellation of any BHGE Contributed Contract, the cancellation of which would
be, individually or in the aggregate, material to the BHGE Contributed Business.
Except, in each case, where the occurrence of such breach or default would not
reasonably be expected to be, individually or in the aggregate, material to the
BHGE Contributed Business taken as a whole, (i) neither BHGE, any of its
Affiliates nor, to the knowledge of BHGE, any other party thereto is in breach
of or default under any such BHGE Contributed Contract and (ii) as of the date
of this Agreement, neither BHGE nor any of its Affiliates has received any
written claim or written notice of material breach of or material default under
any such BHGE Contributed Contract.

 

Section 3.10   Litigation. There is no action, suit, investigation or proceeding
pending, or, to the knowledge of BHGE, threatened against or affecting, the BHGE
Contributed Business or BHKF before any arbitrator or any Governmental Authority
which is reasonably likely to be material to the BHGE Contributed Business taken
as a whole or which in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the transactions contemplated by this Agreement or any of
the Ancillary Agreements.

 

Section 3.11   Compliance with Laws and Court Orders. (a) Neither BHGE nor BHKF
is in violation of any Applicable Law relating to the BHGE Contributed Assets or
the conduct of the BHGE Contributed Business, except for violations that are not
and would not reasonably be expected to be, individually or in the aggregate,
material to the BHGE Contributed Business taken as a whole. Neither BHGE nor
BHKF has received any written notice from any Governmental Authority of a
material violation of any Applicable Law with respect to the BHGE Contributed
Business at any time during the past two years that would reasonably be expected
to be, individually or in the aggregate, material to the BHGE Contributed
Business taken as a whole.

 

(b)   No BHGE Party nor any of their Affiliates, or any director, officer,
employee or, to the knowledge of BHGE, agent or other Person acting on behalf or
at the direction of, any such Person, has, directly or indirectly, given or
agreed to give any gift or similar benefit, taken any action in furtherance of
an offer, payment, promise to pay, or authorization or approval of the payment
or giving of any money, property, gift or anything else of value to any
“government official” (including any officer or employee of a government or
government-owned or controlled entity of a public international organization, or
any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office) in order to influence official action, or to any customer, or supplier
who is or may be in a position to help or hinder the BHGE Contributed Business
(or assist any BHGE Party or BHKF in connection with any actual or proposed
transaction relating to the BHGE Contributed Business) in violation of any
applicable Anti-Corruption Law. BHGE and its Affiliates have conducted the BHGE
Contributed Business in compliance with all applicable Anti-Corruption Laws and
have

 

 37

 

instituted and maintain policies and procedures designed to promote and achieve
compliance with all such Applicable Laws. The BHGE Contributed Business has
been, and is now, in compliance in all material respects with all applicable
export control Applicable Laws and economic sanctions Applicable Laws.

 

Section 3.12   Properties. (a) The BHGE Parties and BHKF have good title to, or,
in the case of any tangible personal property, have valid leasehold interests
in, all property (whether tangible or intangible) and assets that constitute the
BHGE Contributed Assets, except for properties and assets sold since December
31, 2018 in the ordinary course of business consistent with past practices or
where the failure to have such good title or valid leasehold interests would not
be material to the BHGE Contributed Business taken as a whole. The BHGE Parties’
or BHKF’s, as applicable, title or leasehold interest, as applicable, in each
BHGE Contributed Asset is not subject to any Lien, except for Permitted Liens.
The representations and warranties made in this Section 3.12(a) do not apply to
the BHGE Contributed Facilities.

 

(b)   Except as set forth on Section 3.12(b) of the BHGE Disclosure Schedule,
none of the BHGE Parties nor BHKF has granted any Person the right to use or
occupy all or any portion of the BHGE Contributed Facilities pursuant to any
lease, sublease, license or other occupancy agreement.

 

(c)   To BHGE’s knowledge, there are no pending or threatened condemnation
proceedings with respect to all or any portion of the BHGE Contributed
Facilities.

 

(d)   To BHGE’s knowledge, except as set forth on Section 3.12(d) of the BHGE
Disclosure Schedule, the BHGE Contributed Facilities are in operating condition
(except for reasonable and customary wear and tear) with no material defects.

 

(e)   The applicable BHGE Party has (i) a valid interest as a lessee under the
head/prime lease comprising the Port Klang Sublease Site, and (ii) good and
valid title to the Massa Leasehold Site and Rong Leasehold Site, in each case,
free and clear of all Liens other than Permitted Liens. 

 

(f)   To BHGE’s knowledge, except as set forth on Section 3.12(f) of the BHGE
Disclosure Schedule, no BHGE Contributed Facility or portion thereof is subject
to any option, right of first refusal or other contractual right to sell,
dispose of or lease, as applicable, the BHGE Contributed Facilities.

 

(g)   Except as set forth on Section 3.12(g) of the BHGE Disclosure Schedule,
the applicable BHGE Party is not in material breach or in material default under
the principal lease agreement related to the Port Klang Sublease Site to which
it is a party.

 

Section 3.13   Intellectual Property. (a) BHGE and its Affiliates are the sole
and exclusive owners of all BHGE Owned IP and hold all of their right, title and
interest, as applicable, in and to all BHGE Licensed IP free and clear of any
Lien other than Permitted Liens. With respect to the BHGE Owned IP: (i) there
exist no material restrictions on the

 

 38

 

disclosure, use, license or transfer of the BHGE Owned IP, (ii) none of the BHGE
Owned IP has been adjudged invalid or unenforceable in whole or part, and
(iii) to the knowledge of BHGE, all such BHGE Owned IP is valid and enforceable.
Except as set forth in ‎ ‎Section 3.13(a) of the BHGE Disclosure Schedule, the
BHGE Licensed IP and the rights provided to the Company under the BHGE Services
Agreement constitute all of the Intellectual Property Rights necessary to
conduct the BHGE Contributed Business as currently conducted in all material
respects. Except as set forth in ‎‎Section 3.13(a) of the BHGE Disclosure
Schedule, and other than non-exclusive licenses granted in the ordinary course
of business, none of the BHGE Owned IP has been licensed to any other Person for
use in the aero-derivative gas turbine business. BHGE and its Affiliates have
all rights and licenses necessary to grant the right and licenses granted by
them with respect to the BHGE Licensed IP under the Intellectual Property
License Agreement.

 

(b)   To the knowledge of BHGE, the conduct of the BHGE Contributed Business as
currently conducted (including the use of the BHGE Licensed IP therein) is not
infringing, misappropriating, or otherwise violating, and has not in the last
two years infringed, misappropriated, or otherwise violated, any Intellectual
Property Right of any third party in any material respect. There are no adverse
third party actions, claims, orders, judgments or decrees pending or, to the
knowledge of BHGE, threatened against BHGE or any of its Affiliates by any third
party in any court, arbitration or by or before any Governmental Authority, in
any such case alleging that the operation or conduct of the BHGE Contributed
Business (or the use of the BHGE Licensed IP therein), is infringing,
misappropriating, or otherwise violating the Intellectual Property Rights of
such third party.

 

(c)   The BHGE Parties and BHKF have taken commercially reasonable steps under
the circumstances to protect their respective rights in any trade secrets
included in the BHGE Owned IP. To the knowledge of BHGE, the BHGE Parties and
BHKF have not experienced any material cybersecurity breach or loss of
confidential information or other data misappropriation with respect to the BHGE
Contributed Business. To the knowledge of BHGE and except as would not have a
material effect, each current and former employee, consultant, and contractor
who has contributed to the creation, conception, or development of any BHGE
Owned IP has executed and delivered to a BHGE Party or BHKF a written agreement
(i) containing a present assignment to a BHGE Party or BHKF of all BHGE Owned IP
arising out of such individual’s employment by, engagement by, or agreement with
a BHGE Party or BHKF, and (ii) providing for the non-disclosure by such
individual of any trade secrets or other confidential information of the BHGE
Parties or BHKF. To the knowledge of BHGE, each current and former employee,
consultant, and contractor is in material compliance with such agreement.

 

Section 3.14   Employees and Employee Plans. (a) BHGE has provided to GE the
BHGE Business Employee List in an anonymized format that includes, with respect
to each BHGE Business Employee, such individual’s title, hire date, location,
whether active or on leave (and, if on leave, the nature of the leave), base
salary or wage rate and bonus opportunity as of the date of this Agreement. Each
BHGE Employee provides services primarily related to the BHGE Contributed
Business. Neither BHGE nor any of its ERISA Affiliates has any current or
contingent liability or obligation under or with respect to a

 

 39

 

“multiemployer plan” (as defined in Section 3(37) of ERISA) or a plan that is or
was subject to Title IV of ERISA or Section 412 of the Code, in each case that
would reasonably be expected to become a liability or obligation of the Company.

 

(b)   With respect to the BHGE Contributed Business, BHGE has complied in all
material respects with all employment-related contracts and policies to which it
is a party or by which it is bound, except for instances of non-compliance that
would not, individually or in the aggregate, be material to the Company taken as
a whole. Except as would not reasonably be expected to result in material
liability to the Company, (i) BHGE has paid or appropriately accrued (x) all
wages, salaries, bonuses, commissions, wage premiums, fees and other
compensation that has or will become due and payable to each employee and other
service provider of the BHGE Contributed Business and (y) all payments,
contributions or premiums required to be remitted or paid in respect of the BHGE
Employee Plans and in respect of employment insurance, employer health tax,
workers’ compensation, pursuant to Applicable Law, contract, or employment
policy and (ii) BHGE is in material compliance with Applicable Law respecting
employment and employment practices (including employment standards, labor
relations, occupational health and safety, human rights, privacy, workers’
compensation, employment insurance, employer health tax and pay equity) and to
the knowledge of BHGE, there are no pending or threatened proceedings before any
Governmental Authority with respect to any of the foregoing. The BHGE
Contributed Business has no material liability or obligation under any
Applicable Law arising out of the misclassification of any employee working as
an employee, consultant, independent contractor or temporary employee, as
applicable.

 

(c)   Neither BHGE nor any of its Affiliates is a party to or subject to any
collective bargaining agreement or employee association agreement or bargaining
relationship that covers any BHGE Business Employee. To the knowledge of BHGE,
no union organizing or decertification activities are underway or threatened
with respect to the BHGE Contributed Business and no such activities have
occurred in the past three years. To the knowledge of BHGE, there is no labor
strike, slowdown, walkout, lockout, work stoppage or other material labor
dispute pending or threatened against or affecting the BHGE Contributed
Business, and, to the knowledge of BHGE, no such material dispute has occurred
in the past three years.

 

(d)   Except as would not reasonably be expected to result in material liability
to the Company, with respect to the BHGE Contributed Business, BHGE has no
outstanding material liability under the WARN Act concerning employee layoffs
implemented in the last two years. No employee layoff, facility closures, or
similar reduction in force is currently contemplated, planned or announced that
could materially and adversely affect BHGE Business Employees (for clarity,
except as expressly provided by ‎Article IX).

 

Section 3.15   Environmental Compliance. Except as to matters that would not
reasonably be expected to have a BHGE Material Adverse Effect:

 

(a)   Except as set forth on ‎Section 3.15(a) of the BHGE Disclosure Schedules,
(i) no written notice, order, request for information, complaint or penalty has
been received by BHGE, and (ii) there are no judicial, administrative or other
actions, suits or

 

 40

 

proceedings pending or threatened, in the case of each of (i) and (ii), which
allege a violation of, or liability under, any Environmental Law and relate to
the BHGE Contributed Business or BHGE Contributed Assets;

 

(b)   Except as set forth on ‎‎Section 3.15(b) of the BHGE Disclosure Schedules,
to the knowledge of BHGE, BHGE (i) has obtained or caused to be obtained all
permits, licenses or other authorizations necessary for the ownership or
operation of the BHGE Contributed Business to comply with all applicable
Environmental Laws (as in effect on or prior to the dates this representation is
made) and BHGE is in compliance with the terms of such permits, licenses and
other authorizations and, with respect to the ownership or operation of the BHGE
Contributed Business, with all other applicable Environmental Laws (as in effect
on or prior to the dates this representation is made); and (ii) with respect to
the BHGE Contributed Business, has not assumed or become subject to any material
liability of any other Person pursuant to Environmental Laws;

 

(c)   Except as set forth on ‎‎Section 3.15(c) of the BHGE Disclosure Schedules,
there has been no Release, treatment, storage, handling, transportation or
arrangement for the disposal or transportation of, or exposure of any Person to,
any Hazardous Substances on, at, under or from the BHGE Contributed Facilities,
or from or in connection with the operations of the BHGE Contributed Business,
in each case in a manner that could give rise to any liabilities (including any
remedial or corrective action obligations) pursuant to Environmental Laws;

 

(d)   Except as set forth on ‎‎Section 3.15(d) of the BHGE Disclosure Schedules,
to the knowledge of BHGE, BHGE, solely with respect to the BHGE Contributed
Business, has not designed, manufactured, sold, marketed, installed, repaired or
distributed products or other items containing asbestos or other Hazardous
Substances so as to give rise to any liabilities under Environmental Laws; and

 

(e)   BHGE has furnished to the Company all Phase I reports, assessments or
audits relating to Environmental Laws in its possession or under its control
relating to the BHGE Contributed Business.

 

Section 3.16   Tax Matters. Except as set forth in ‎Section 3.16 of the BHGE
Disclosure Schedule:

 

(a)   To the knowledge of BHGE:

 

(i)   BHGE has timely filed, or caused to be timely filed, all material Tax
Returns required to be filed with respect to any Contributed Entity, the BHGE
Contributed Business or any BHGE Contributed Asset and all such Tax Returns are
true, correct and complete in all material respects.

 

(ii)   BHGE has timely paid all material Taxes required to be paid on or prior
to the date hereof with respect to any Contributed Entity, the BHGE Contributed
Business or any BHGE Contributed Asset.

 

 41

 

(iii)   BHGE has established in accordance with GAAP applied on a basis
consistent with that of preceding periods, adequate reserves for the payment of,
and will timely pay, or cause to be paid, all material Taxes which arise from or
with respect to any Contributed Entity or the BHGE Contributed Business and are
incurred in or attributable to the Pre-Closing Tax Period.

 

(iv)   There is not in force any extension (i) of the statute of limitations in
respect of the collection or assessment of any material Taxes or (ii) of time
within which to file any material Tax Return, in each case of, or with respect
to, any Contributed Entity, the BHGE Contributed Business or any BHGE
Contributed Asset.

 

(v)   There are no pending, active or, to the knowledge of BHGE, threatened
audits, assessments or reassessments or legal proceedings involving or relating
to any material Taxes or material Tax Returns of, or with respect to, any
Contributed Entity, the BHGE Contributed Business or any BHGE Contributed Asset.

 

(vi)   No claim has been made in the last three years by a Taxing Authority in a
jurisdiction where BHGE or any Contributed Entity does not file Tax Returns that
BHGE or such Contributed Entity is or may be subject to taxation in that
jurisdiction (in the case of BHGE, with respect to the BHGE Contributed Business
or any BHGE Contributed Asset).

 

(vii)   All withholding Tax requirements of any Contributed Entity or relating
to the BHGE Contributed Business or any BHGE Contributed Asset have been timely
satisfied in all material respects.

 

(viii)   Where required under Applicable Law, all of the BHGE Contributed Assets
have been properly listed and described on the property tax rolls for all
periods prior to and including the Closing Date, and no portion of the BHGE
Contributed Assets constitutes omitted property for property tax purposes.

 

(ix)   BHGE and each Contributed Entity is duly registered under all Applicable
Laws related to Taxes and has duly and timely collected all amounts on account
of any sales or transfer taxes, including goods and services, state or
territorial sales taxes, to the extent that such Taxes are owed by such
Contributed Entity or related to the BHGE Contributed Business or any BHGE
Contributed Asset and are required by Applicable Law to be collected by BHGE or
such Contributed Entity, and BHGE and each Contributed Entity has, in all
respects, duly and timely remitted to the appropriate Governmental Authority any
such amounts required by Applicable Law to be remitted by it.

 

(x)   Other than any Permitted Liens, there are no Liens for Taxes on any of the
BHGE Contributed Assets.

 

 42

 

(xi)   All material Tax deficiencies asserted or assessments made as a result of
any examination of the Tax Returns required to be filed by or with respect to
BHKF have been paid in full or otherwise finally resolved.

 

(xii)   There are no Tax rulings, requests for rulings, or closing agreements
with respect to Taxes for which BHKF may be liable.

 

(xiii)   BHKF has not (A) been a member of any group of entities filing Tax
Returns on a combined, consolidated, unitary or similar basis or (B) had any
direct or indirect ownership interest in any corporation, partnership, joint
venture or other entity.

 

(xiv)   BHKF has not engaged in a “listed transaction” within the meaning of
Section 6707A of the Code and Treasury Regulation Section 1.6011-4(b).

 

(xv)   As of the date of this Agreement, (A) BHKF is treated as a corporation
for U.S. federal income tax purposes and (B) no election under Treasury
Regulations Section 301.7701-3 with respect to the federal income tax
classification of BHKF has been made.

 

(b)   Each NewCo Subsidiary is and at all times since its formation has been
treated as a disregarded entity or partnership for U.S. federal income tax
purposes.

 

(c)   BHKF will not be required to include any material item of income in, or
exclude any material item of deduction from, taxable income in any taxable
period (or portion thereof) after Closing, as a result of any change in method
of accounting, closing agreement, installment sale, or the receipt of any
prepaid amount, in each case, made or entered into prior to the Closing.

 

Section 3.17   Finders’ Fees. Except as set forth on ‎ ‎Section 3.17 of the BHGE
Disclosure Schedules, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
BHGE who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement that would give rise to a valid
claim against GE, the Company or any of their respective Affiliates (other than
BHGE).

 

Section 3.18   Inspections; No Other Representations. BHGE is an informed and
sophisticated entity, and has engaged expert advisors, experienced in the
evaluation of property and assets such as the GE Contributed Assets as
contemplated hereunder. BHGE has undertaken such investigation and has been
provided with and has evaluated such documents and information as it has deemed
necessary to enable it to make an informed and intelligent decision with respect
to the execution, delivery and performance of this Agreement and each Ancillary
Agreement to which it is a party. Except as expressly set forth in this
Agreement, BHGE acknowledges and agrees that the GE Contributed Assets are
contributed “as is” and BHGE agrees to accept the GE Contributed Business in the
condition it is in on the Closing Date based on its own inspection, examination
and determination with respect to all matters. Without limiting the generality
of the foregoing, BHGE acknowledges

 

 43

 

that GE makes no representation or warranty with respect to any projections,
estimates or budgets delivered to or made available to BHGE of future revenues,
future results of operations (or any component thereof), future cash flows or
future financial condition (or any component thereof) of the GE Contributed
Business or the future business and operations of the GE Contributed Business
or, except as expressly set forth in this Agreement, any other information or
documents made available to BHGE or its counsel, accountants or advisors with
respect to the GE Contributed Business.

 

Article IV

REPRESENTATIONS AND WARRANTIES OF GE

 

Except as set forth in the GE Disclosure Schedule (subject to ‎ ‎Section 13.11),
GE represents and warrants to BHGE and the Company as of the date hereof and as
of the Closing Date that:

 

Section 4.01   Corporate Existence and Power. GE and each Affiliate of GE that
will execute and deliver an Ancillary Agreement is a corporation or other legal
entity duly incorporated or organized, validly existing and in good standing
under the laws of New York or its respective other jurisdiction of formation or
organization and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not have a GE Material Adverse
Effect.

 

Section 4.02   Corporate Authorization. The execution, delivery and performance
by GE and each applicable Affiliate of GE of this Agreement and the Ancillary
Agreements to which each is a party and the consummation of the transactions
contemplated hereby and thereby are within GE’s and each such Affiliate’s
corporate powers and have been duly authorized by all necessary corporate action
on the part of GE and each such Affiliate. This Agreement constitutes a valid
and binding agreement of GE and each Ancillary Agreement to which GE or any such
Affiliate is a party, when executed, will constitute a valid and binding
agreement of GE or such Affiliate, as applicable, in each case, enforceable
against GE or such Affiliate, as applicable, in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally
and general principles of equity).

 

Section 4.03   Governmental Authorization. The execution, delivery and
performance by GE and each applicable Affiliate of GE of this Agreement and the
Ancillary Agreements to which each is a party and the consummation of the
transactions contemplated hereby and thereby require no action by or in respect
of, or filing with, any Governmental Authority other than (a) compliance with
any applicable requirements of the HSR Act and under Foreign Competition Laws,
(b) the actions and filings set forth on ‎‎Section 4.03 of the GE Disclosure
Schedule, and (c) any action or filing as to which the failure to make or obtain
would not have a GE Material Adverse Effect.

 

 44

 

Section 4.04   Company. (a) The Company has been formed solely for the purposes
set out in this Agreement. All of the issued and outstanding Membership
Interests of the Company are owned by GE or a direct or indirect wholly owned
Subsidiary of GE. The Company has not conducted any business and has no assets,
liabilities or obligations of any nature other than (i) those incident to its
formation, (ii) those transferred to it by GE pursuant to this Agreement or the
Ancillary Agreements and the transactions contemplated hereby and thereby and
(iii) governmental licenses, authorizations, permits, consents and approvals
related to the operation of the GE Contributed Business.

 

(b)   GE has made available to BHGE true and complete copies of the
organizational documents of the Company and such organizational documents are in
full force and effect. The Membership Interests have been duly authorized and
validly issued, have been fully paid and nonassessable and have not been issued
in violation of any preemptive rights. GE or one of its wholly-owned Affiliates
is the sole owner of the Membership Interests, free and clear of all Liens.
There are no restrictions upon the voting or transfer of any shares or other
equity interests in the Company pursuant to the Company’s organizational
documents or any agreement to which GE or any of its Affiliates is a party,
other than this Agreement. Other than as a result of the transactions
contemplated by this Agreement, the Company does not own, directly or
indirectly, any stock of, or any other equity interest in, any Person. There is
no Debt of the Company outstanding, nor has the Company guaranteed any Debt of
any other Person.

 

Section 4.05   Noncontravention. The execution, delivery and performance by GE
and each applicable Affiliate of GE of this Agreement and the Ancillary
Agreements to which each is a party, and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) violate the certificate
of incorporation or bylaws of GE or the formation and governing documents of any
such Affiliate, (b) assuming compliance with the matters referred to in
‎Section 4.03, violate any Applicable Law, (c) assuming the obtaining of all GE
Required Consents, constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation or to a
loss of any benefit relating to the GE Contributed Business or (d) result in the
creation or imposition of any Lien on any GE Contributed Asset, except for
Permitted Liens, with such exceptions, in the case of each of clauses ‎(c) and
‎(d), as would not have, individually or in the aggregate, a GE Material Adverse
Effect.

 

Section 4.06   Required Consents. ‎Section 4.06 of the GE Disclosure Schedule
sets forth each agreement or other instrument binding upon the GE Parties
requiring a consent or other action by any Person as a result of the execution,
delivery and performance of this Agreement, except such agreements or
instruments which are not, individually or in the aggregate, material to the GE
Contributed Business taken as a whole (the agreements or other instruments that
are or should have been listed on Section 4.06 of the GE Disclosure Schedule,
the “GE Required Consents”).

 

Section 4.07   Undisclosed Liabilities. Except as set forth on ‎‎Section 4.07 of
the GE Disclosure Schedules, there is no liability, debt or obligation of the GE
Contributed Business of a type required to be reflected or reserved for on a
balance sheet prepared in

 

 45

 

accordance with GAAP, except for liabilities and obligations which are not,
individually or in the aggregate, material to the GE Contributed Business taken
as a whole.

 

Section 4.08   Absence of Certain Changes. (a) Since December 31, 2018, the GE
Contributed Business has been conducted in the ordinary course consistent with
past practices and there has not been any event, occurrence, development or
state of circumstances or facts that has had or would reasonably be expected to
have, individually or in the aggregate, a GE Material Adverse Effect.

 

(b)   From December 31, 2018 until the date hereof, except as expressly
contemplated by this Agreement, no GE Party has:

 

(i)   suffered any damage, destruction or other casualty loss, in each case not
covered by insurance, material to the GE Contributed Business taken as a whole;

 

(ii)   taken any action described in ‎‎Section 6.01 that would require the prior
consent of BHGE; or

 

(iii)   agreed or committed to do any of the foregoing.

 

Section 4.09   Material Contracts. (a) Other than as set forth on
‎Section 4.09(a) of the GE Disclosure Schedule or any GE Employee Plan, with
respect to the GE Contributed Business, no GE Party as of the date hereof is a
party to or bound by:

 

(i)   any lease (whether of real or personal property) (A) providing for annual
rentals of $300,000 or more that cannot be terminated on not more than 60 days’
notice without payment by a GE Party of any material penalty or (B) under which
it is a lessor of or permits any third party to hold or operate any property
owned by it;

 

(ii)   any agreement for the purchase of materials, supplies, goods, services,
equipment or other assets providing for either (A) annual payments by the GE
Parties of $300,000 or more or (B) aggregate payments by the GE Parties of
$300,000 or more, in each case that cannot be terminated on not more than 60
days’ notice without payment by the GE Parties of any material penalty;

 

(iii)   any sales, distribution or other similar agreement providing for the
sale by the GE Parties of materials, supplies, goods, services, equipment or
other assets that provides for annual payments to the GE Parties of $300,000 or
more;

 

(iv)   any material partnership, joint venture or other similar agreement or
arrangement;

 

(v)   any agreement relating to the acquisition or disposition of any material
business (whether by merger, sale of stock, sale of assets or otherwise);

 

 46

 

(vi)   any agreement relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case, whether incurred, assumed,
guaranteed or secured by any asset), except any such agreement (A) with an
aggregate outstanding principal amount not exceeding $300,000 or (B) entered
into subsequent to the date of this Agreement as permitted by ‎Section 6.01;

 

(vii)   any material agreement that limits or restricts the freedom of the GE
Parties (or the Company, any of its Subsidiaries, or any direct or indirect
members of the Company after the Closing) to compete in any line of business or
with any Person or in any area;

 

(viii)   any material agreement with or for the benefit of any Affiliate of GE;

 

(ix)   any material agreement with independent contractors, distributors,
dealers, franchisers, manufacturers’ representatives, sales agencies or
franchisees;

 

(x)   any profit sharing, stock appreciation, deferred compensation, severance
or other similar plan or arrangement for the benefits of its current or former
managers, members, officers or employees;

 

(xi)   any collective bargaining agreement or other contract to or with any
labor union or other employee representative of a group of employees;

 

(xii)   any settlement, conciliation or similar agreement with any Governmental
Authority, or that will require a GE Party to pay consideration after the date
hereof in excess of $300,000;

 

(xiii)   any agreement relating to the licensing of material GE Owned IP and/or
GE Licensed IP by any GE Party to any Person or by any Person to any GE Party
(other than non-exclusive licenses granted in the ordinary course of business);
and

 

(xiv)   any contract for employment, engagement or of any other individual
agreement providing severance or other termination payments or benefits or
relating to loans, in each case, for any officer, individual employee, or other
person or entity with a salary grade of SPB or higher (or who would have such
salary grade if an employee).

 

(b)   GE has made available to BHGE true and complete copies of the GE
Contributed Contracts, other than purchase orders of the GE Contributed
Business, in each case as amended or otherwise modified and in effect as of the
date hereof. Each GE Contributed Contract is in full force and effect, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights generally and subject,
as to enforceability, to general principles of equity and represents the valid
and binding obligations of GE or one of its Affiliates party thereto and, to

 

 47

 

the knowledge of GE, represents the valid and binding obligations of the other
parties thereto. Neither GE nor any of its Affiliates has received written
notice of cancellation of any GE Contributed Contract, the cancellation of which
would be, individually or in the aggregate, material to the GE Contributed
Business. Except, in each case, where the occurrence of such breach or default
would not reasonably be expected to be, individually or in the aggregate,
material to the GE Contributed Business taken as a whole, (i) neither GE, any of
its Affiliates nor, to the knowledge of GE, any other party thereto is in breach
of or default under any such GE Contributed Contract and (ii) as of the date of
this Agreement, neither GE nor any of its Affiliates has received any written
claim or written notice of material breach of or material default under any such
GE Contributed Contract.

 

Section 4.10   Litigation. There is no action, suit, investigation or proceeding
pending, or, to the knowledge of GE, threatened against or affecting, the GE
Contributed Business before any arbitrator or any Governmental Authority which
is reasonably likely to be material to the GE Contributed Business taken as a
whole or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement or any of the
Ancillary Agreements.

 

Section 4.11   Compliance with Laws and Court Orders.

 

(a)   GE is not in violation of any Applicable Law relating to the GE
Contributed Assets or the conduct of the GE Contributed Business, except for
violations that are not and would not reasonably be expected to be, individually
or in the aggregate, material to the GE Contributed Business taken as a whole.
GE has not received any written notice from any Governmental Authority of a
material violation of any Applicable Law with respect to the GE Contributed
Business at any time during the past two years that would reasonably be expected
to be, individually or in the aggregate, material to the GE Contributed Business
taken as a whole.

 

(b)   No GE Party nor any of their Affiliates, or any director, officer,
employee or, to the knowledge of GE, agent or other Person acting on behalf or
at the direction of, any such Person, has, directly or indirectly, given or
agreed to give any gift or similar benefit, taken any action in furtherance of
an offer, payment, promise to pay, or authorization or approval of the payment
or giving of any money, property, gift or anything else of value to any
“government official” (including any officer or employee of a government or
government-owned or controlled entity of a public international organization, or
any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office) in order to influence official action, or to any customer, or supplier
who is or may be in a position to help or hinder the GE Contributed Business (or
assist any GE Party in connection with any actual or proposed transaction
relating to the GE Contributed Business) in violation of any applicable
Anti-Corruption Law. GE and its Affiliates have conducted the GE Contributed
Business in compliance with all applicable Anti-Corruption Laws and have
instituted and maintain policies and procedures designed to promote and achieve
compliance with all such Applicable Laws. The GE Contributed Business has been,
and is now, in compliance in all material respects with all applicable export
control Applicable Laws and economic sanctions Applicable Laws.

 

 48

 

Section 4.12   Properties.

 

(a)   The GE Parties have good title to, or in the case of any tangible personal
property has valid leasehold interests in, all property (whether tangible or
intangible) and assets that constitute the GE Contributed Assets, except for
properties and assets sold since December 31, 2018 in the ordinary course of
business consistent with past practices or where the failure to have such good
title or valid leasehold interests would not be material to the GE Contributed
Business taken as a whole. The GE Parties’ title or leasehold interest, as
applicable, in each GE Contributed Asset is not subject to any Lien, except for
Permitted Liens. The representations and warranties made in this Section 4.12(a)
do not apply to the GE Contributed Facility.

 

(b)   Except as set forth on Section 4.12(b) of the GE Disclosure Schedule, none
of the GE Parties has granted any Person the right to use or occupy all or any
portion of the GE Contributed Facility pursuant to any lease, sublease, license
or other occupancy agreement.

 

(c)   To GE’s knowledge, there are no pending or threatened condemnation
proceedings with respect to all or any portion of the Jacintoport Leasehold
Site.

 

(d)   To GE’s knowledge, except as set forth on ‎Section 4.12(d) of the GE
Disclosure Schedule, the Jacintoport Leasehold Site is in operating condition
(except for reasonable and customary wear and tear) with no material defects.

 

(e)   To GE’s knowledge, the GE Contributed Facility or any portion thereof is
not subject to any option, right of first refusal or other contractual right to
sell, dispose of or lease the GE Contributed Facility.

 

(f)   The applicable GE Party has good and valid title to the Jacintoport
Leasehold Site, free and clear of all Liens, other than Permitted Liens.

 

Section 4.13   Intellectual Property.

 

(a)   GE and its Affiliates are the sole and exclusive owners of all GE Owned IP
and hold all of their right, title and interest, as applicable, in and to all GE
Licensed IP free and clear of any Lien other than Permitted Liens. With respect
to the GE Owned IP: (i) there exist no material restrictions on the disclosure,
use, license or transfer of the GE Owned IP, (ii) none of the GE Owned IP has
been adjudged invalid or unenforceable in whole or part, and (iii) to the
knowledge of GE, all such GE Owned IP is valid and enforceable. Except as set
forth in ‎‎Section 4.13(a) of the GE Disclosure Schedule, the GE Licensed IP and
the rights provided to the Company under the GE Services Agreement constitute
all of the Intellectual Property Rights necessary to conduct the GE Contributed
Business as currently conducted in all material respects. Except as set forth in
‎‎‎Section 4.13(a) of the GE Disclosure Schedule, and other than non-exclusive
licenses granted in the ordinary course of business, none of the GE Owned IP has
been licensed to any other Person for use in the aero-derivative gas turbine
business. GE and its Affiliates have all

 

 49

 

rights and licenses necessary to grant the right and licenses granted by them
with respect to the GE Licensed IP under the Intellectual Property License
Agreement.

 

(b)   To the knowledge of GE, the conduct of the GE Contributed Business as
currently conducted (including the use of the GE Licensed IP therein) is not
infringing, misappropriating, or otherwise violating, and has not in the last
two years infringed, misappropriated, or otherwise violated, any Intellectual
Property Right of any third party in any material respect. There are no adverse
third party actions, claims, orders, judgments or decrees pending or, to the
knowledge of GE, threatened against GE or any of its Affiliates by any third
party in any court, arbitration or by or before any Governmental Authority, in
any such case alleging that the operation or conduct of the GE Contributed
Business (or the use of the GE Licensed IP therein), is infringing,
misappropriating, or otherwise violating the Intellectual Property Rights of
such third party.

 

(c)   The GE Parties have taken commercially reasonable steps under the
circumstances to protect their respective rights in any trade secrets included
in the GE Owned IP. To the knowledge of GE, the GE Parties have not experienced
any material cybersecurity breach or loss of confidential information or other
data misappropriation with respect to the GE Contributed Business. To the
knowledge of GE and except as would not have a material effect, each current and
former employee, consultant, and contractor who has contributed to the creation,
conception, or development of any GE Owned IP has executed and delivered to a GE
Party a written agreement (i) containing a present assignment to a GE Party of
all GE Owned IP arising out of such individual’s employment by, engagement by,
or agreement with a GE Party, and (ii) providing for the non-disclosure by such
individual of any trade secrets or other confidential information of the GE
Parties. To the knowledge of GE, each current and former employee, consultant,
and contractor is in material compliance with such agreement.

 

Section 4.14   Employees and Employee Plans.

 

(a)   GE has provided to BHGE the GE Business Employee List in an anonymized
format that includes, with respect to each GE Business Employee, such
individual’s title, hire date, location, whether active or on leave (and, if on
leave, the nature of the leave), base salary or wage rate and bonus opportunity
as of the date of this Agreement. Each GE Business Employee provides services
primarily related to the GE Contributed Business. Neither GE nor any of its
ERISA Affiliates has any current or contingent liability or obligation under or
with respect to a “multiemployer plan” (as defined in Section 3(37) of ERISA) or
a plan that is or was subject to Title IV of ERISA or Section 412 of the Code,
in each case that would reasonably be expected to become a liability or
obligation of the Company.

 

(b)   With respect to the GE Contributed Business, GE has complied in all
material respects with all employment-related contracts and policies to which it
is a party or by which it is bound, except for instances of non-compliance that
would not, individually or in the aggregate, be material to the Company taken as
a whole. Except as would not reasonably be expected to result in material
liability to the Company, (i) GE has paid or appropriately accrued (x) all
wages, salaries, bonuses, commissions, wage premiums, fees

 

 50

 

and other compensation that has or will become due and payable to each employee
and other service provider of the GE Contributed Business and (y) all payments,
contributions or premiums required to be remitted or paid in respect of the GE
Employee Plans and in respect of employment insurance, employer health tax,
workers’ compensation, pursuant to Applicable Law, contract, or employment
policy, and (ii) GE is in material compliance with Applicable Law respecting
employment and employment practices (including employment standards, labor
relations, occupational health and safety, human rights, privacy, workers’
compensation, employment insurance, employer health tax and pay equity) and to
the knowledge of GE, there are no pending or threatened proceedings before any
Governmental Authority with respect to any of the foregoing. The GE Contributed
Business has no material liability or obligation under any Applicable Law
arising out of the misclassification of any employee working as an employee,
consultant, independent contractor or temporary employee, as applicable.

 

(c)   Neither GE nor any of its Affiliates is a party to or subject to any
collective bargaining agreement or employee association agreement or bargaining
relationship that covers any GE Business Employee. To the knowledge of GE, no
union organizing or decertification activities are underway or threatened with
respect to the GE Contributed Business and no such activities have occurred in
the past three years. To the knowledge of GE, there is no labor strike,
slowdown, walkout, lockout, work stoppage or other material labor dispute
pending or threatened against or affecting the GE Contributed Business, and, to
the knowledge of GE, no such material dispute has occurred in the past three
years.

 

(d)   Except as would not reasonably be expected to result in material liability
to the Company, with respect to the GE Contributed Business, GE has no
outstanding material liability under the WARN Act concerning employee layoffs
implemented in the last two years. No employee layoff, facility closures, or
similar reduction in force is currently contemplated, planned or announced that
could materially and adversely affect GE Business Employees (for clarity, except
as expressly provided by ‎Article IX).

 

Section 4.15   Environmental Compliance . Except as to matters that would not
reasonably be expected to have a GE Material Adverse Effect:

 

(a)   Except as set forth on ‎Section 4.15(a) of the GE Disclosure Schedules,
(i) no written notice, order, request for information, complaint or penalty has
been received by GE, and (ii) there are no judicial, administrative or other
actions, suits or proceedings pending or threatened, in the case of each of (i)
and (ii), which allege a violation of, or liability under, any Environmental Law
and relate to the GE Contributed Business or GE Contributed Assets;

 

(b)   Except as set forth on ‎‎Section 4.15(b) of the GE Disclosure Schedules,
to the knowledge of GE, GE (i) has obtained or caused to be obtained all
permits, licenses or other authorizations necessary for the ownership or
operation of the GE Contributed Business to comply with all applicable
Environmental Laws (as in effect on or prior to the dates this representation is
made) and GE is in compliance with the terms of such permits, licenses and other
authorizations and, with respect to the ownership or operation of the GE
Contributed

 

 51

 

Business, with all other applicable Environmental Laws (as in effect on or prior
to the dates this representation is made); and (ii) with respect to the GE
Contributed Business, has not assumed or become subject to any material
liability of any other Person pursuant to Environmental Laws;

 

(c)   Except as set forth on ‎Section 4.15(c) of the GE Disclosure Schedules,
there has been no Release, treatment, storage, handling, transportation or
arrangement for the disposal or transportation of, or exposure of any Person to,
any Hazardous Substances on, at, under or from the GE Contributed Facility, or
from or in connection with the operations of the GE Contributed Business, in
each case in a manner that could give rise to any liabilities (including any
remedial or corrective action obligations) pursuant to Environmental Laws;

 

(d)   Except as set forth on ‎Section 4.15(d) of the GE Disclosure Schedules, to
the knowledge of GE, GE, solely with respect to the GE Contributed Business, has
not designed, manufactured, sold, marketed, installed, repaired or distributed
products or other items containing asbestos or other Hazardous Substances so as
to give rise to any liabilities under Environmental Laws; and

 

(e)   GE has furnished to the Company all Phase I reports, assessments or audits
relating to Environmental Laws in its possession or under its control relating
to the GE Contributed Business.

 

Section 4.16   Tax Matters. To the knowledge of GE, except as set forth in
‎Section 4.16 of the GE Disclosure Schedule:

 

(a)   GE has timely filed, or caused to be timely filed, all material Tax
Returns required to be filed with respect to the GE Contributed Business or any
GE Contributed Asset and all such Tax Returns are true, correct and complete in
all material respects.

 

(b)   GE has timely paid all material Taxes required to be paid on or prior to
the date hereof with respect to the GE Contributed Business or any GE
Contributed Asset.

 

(c)   GE has established, in accordance with GAAP applied on a basis consistent
with that of preceding periods, adequate reserves for the payment of, and will
timely pay, or cause to be paid, all material Taxes which arise from or with
respect to the operation of the GE Contributed Business and are incurred in or
attributable to the Pre-Closing Tax Period.

 

(d)   There is not in force any extension (i) of the statute of limitations in
respect of the collection or assessment of any material Taxes or (ii) of time
within which to file any material Tax Return, in each case of, or with respect
to, the GE Contributed Business or any GE Contributed Asset.

 

(e)   There are no pending, active or, to the knowledge of GE, threatened
audits, assessments or reassessments or legal proceedings involving or relating
to any

 

 52

 

material Taxes or material Tax Returns of, or with respect to, the GE
Contributed Business or any GE Contributed Asset.

 

(f)   No claim has been made in the last three years by a Taxing Authority in a
jurisdiction where GE does not file Tax Returns that it is or may be subject to
taxation in that jurisdiction with respect to the GE Contributed Business or any
GE Contributed Asset.

 

(g)   All withholding Tax requirements relating to the GE Contributed Business
or any GE Contributed Asset have been timely satisfied in all material respects.

 

(h)   Where required under Applicable Law, all of the GE Contributed Assets have
been properly listed and described on the property tax rolls for all periods
prior to and including the Closing Date, and no portion of the GE Contributed
Assets constitutes omitted property for property tax purposes.

 

(i)   GE is duly registered under all Applicable Laws related to Taxes and has
duly and timely collected all amounts on account of any sales or transfer taxes,
including goods and services, state or territorial sales taxes, to the extent
that such Taxes are related to the GE Contributed Business or any GE Contributed
Asset and are required by Applicable Law to be collected by GE, and GE has, in
all respects, duly and timely remitted to the appropriate Governmental Authority
any such amounts required by Applicable Law to be remitted by it.

 

(j)   Other than any Permitted Liens, there are no Liens for taxes on any of the
GE Contributed Assets.

 

Section 4.17   Finders’ Fees. Except as set forth on ‎Section 4.17 of the GE
Disclosure Schedules, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of GE
who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement that would give rise to a valid
claim against BHGE, the Company or any of their respective Affiliates (other
than GE).

 

Section 4.18   Inspections; No Other Representations. GE is an informed and
sophisticated entity, and has engaged expert advisors, experienced in the
evaluation of property and assets such as the BHGE Contributed Assets as
contemplated hereunder. GE has undertaken such investigation and has been
provided with and has evaluated such documents and information as it has deemed
necessary to enable it to make an informed and intelligent decision with respect
to the execution, delivery and performance of this Agreement and each Ancillary
Agreement to which it is a party. Except as expressly set forth in this
Agreement, GE acknowledges and agrees that the BHGE Contributed Assets are
contributed “as is” and GE agrees to accept the BHGE Contributed Business in the
condition it is in on the Closing Date based on its own inspection, examination
and determination with respect to all matters. Without limiting the generality
of the foregoing, GE acknowledges that BHGE makes no representation or warranty
with respect to any projections, estimates or budgets delivered to or made
available to GE of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition (or any

 

 53

 

component thereof) of the BHGE Contributed Business or the future business and
operations of the BHGE Contributed Business or, except as expressly set forth in
this Agreement, any other information or documents made available to GE or its
counsel, accountants or advisors with respect to the BHGE Contributed Business.

 

Article V

COVENANTS OF BHGE

 

BHGE agrees that:

 

Section 5.01   Conduct of the Business. From the date hereof until the Closing
Date, except as would constitute a violation of Applicable Law, as set forth on
Schedule 5.01, as contemplated by this Agreement (including the Pre-Closing
Transactions) or as consented to by GE in writing (which consent shall not be
unreasonably conditioned, withheld or delayed), BHGE shall use its commercially
reasonable efforts to conduct the BHGE Contributed Business in the ordinary
course consistent with past practice. Without limiting the generality of the
foregoing, from the date hereof until the Closing Date, except as would
constitute a violation of Applicable Law, as set forth on Schedule 5.01, as
contemplated by this Agreement or as consented to by GE in writing (which
consent shall not be unreasonably conditioned, withheld or delayed), BHGE will
not and will cause the BHGE Parties and BHFK not to (in each case, with respect
to the BHGE Contributed Business):

 

(a)   incur capital expenditures in excess of $1,000,000 in the aggregate,
except in accordance with the capital expenditures plan set forth on Schedule
5.01(a), and BHGE will comply in all material respects with such capital
expenditures plan;

 

(b)   subject to Section 2.10(d), sell, lease, license or otherwise dispose of
or fail to maintain, enforce or protect any material BHGE Contributed Assets
(for the avoidance of doubt, other than dispositions of consumables and BHGE
Inventory in the ordinary course of business);

 

(c)   increase the compensation or benefits of any BHGE Business Employee other
than (i) in the ordinary course of business, (ii) as required by Applicable Law
or the terms of any BHGE Employee Plan or collective bargaining agreement, or
(iii) for changes that are applicable to the employees of the BHGE Contributed
Business and other employees of BHGE generally;

 

(d)   enter into any retention arrangement with any BHGE Business Employee;

 

(e)   settle any material employment-related claims with respect to any BHGE
Business Employee;

 

(f)   other than to fill a vacant role listed on the BHGE Business Employee List
or to replace a BHGE Business Employee whose employment with BHGE and its

 

 54

 

Affiliates has terminated, hire or designate any new individual to provide
services primarily in support of the BHGE Contributed Business;

 

(g)   terminate any BHGE Business Employees other than for cause or otherwise
remove an individual from the BHGE Business Employee List;

 

(h)   implement any employee layoffs implicating the WARN Act with respect to
any BHGE Business Employees;

 

(i)   create, incur, assume or otherwise become liable with respect to any
indebtedness for borrowed money with respect to the BHGE Contributed Business or
guarantees thereof, except for trade credit or trade payables incurred in the
ordinary course of business consistent with past practice and guarantees of
indebtedness incurred under existing credit facilities, which guarantees will be
terminated prior to or as of the Closing;

 

(j)   enter into any agreement that limits or restricts the conduct of the BHGE
Contributed Business or that could, after the Closing Date, limit or restrict
the Company (or any of its Subsidiaries) or any direct or indirect members of
the Company (excluding BHGE and its Affiliates) from engaging or competing in
any line of business, in any location or with any Person or enter into, amend or
modify in any material respect or terminate any BHGE Contributed Contract or
otherwise waive, release or assign any material rights, claims or benefits of
the BHGE Contributed Business under any BHGE Contributed Contract, except for
commercially reasonable agreements with new customers made at arm’s length and
for amendments, terminations or non-renewals in the ordinary course of business
consistent with past practices or, if not consistent with past practices, in a
fashion that is intended to improve the long term profitability of the
relationship, including but not limited to improving the prospects for retaining
the relationship for a longer period of time;

 

(k)   settle any material litigation, investigation, arbitration, proceeding or
other claim involving or against the BHGE Contributed Business other than
settlements involving only monetary payment in an amount not to exceed
$1,000,000 individually or $2,000,000 in the aggregate, or any litigation,
arbitration, proceeding or dispute that relates to the transactions contemplated
hereby or by any Ancillary Agreement;

 

(l)   allow any insurance policies covering the BHGE Contributed Assets to lapse
unless replaced with insurance policies providing substantially similar
coverage;

 

(m)   with respect to any NewCo Subsidiary and except as otherwise contemplated
by this Agreement (including Schedule 3): (A) prepare or file any Tax Return in
a manner that is inconsistent with past practice or on such Tax Returns take any
position, make any election or adopt any method that is inconsistent with
positions taken, elections made or methods used in preparing and filing similar
Tax Returns in prior periods (including positions, elections or methods that
would have the effect of deferring income to periods ending after the Closing
Date or accelerating deductions to periods ending on or before the Closing
Date), unless such change in position, election or method is required by
Applicable Law, (B) file any amended Tax Return, (C) settle or otherwise
compromise any claim relating to Taxes, (D) enter into any closing agreement or
similar agreement relating to Taxes,

 

 55

 

otherwise settle any dispute relating to Taxes, surrender any right to claim a
Tax refund, offset or other reduction in Tax liability, or (E) request any
ruling or similar guidance with respect to Taxes

 

(n)   with respect to BHKF And except as otherwise contemplated by this
Agreement (including Schedule 3): (A) prepare or file any Tax Return in a manner
that is inconsistent with past practice or on such Tax Returns take any
position, make any election or adopt any method that is inconsistent with
positions taken, elections made or methods used in preparing and filing similar
Tax Returns in prior periods (including positions, elections or methods that
would have the effect of deferring income to periods ending after the Closing
Date or accelerating deductions to periods ending on or before the Closing
Date), unless such change in position, election or method is required by
Applicable Law, (B) file any income or other material amended Tax Return, (C)
make any other material Tax election, (D) settle or otherwise compromise any
claim relating to income or other material Taxes, (E) enter into any closing
agreement or similar agreement relating to income or other material Taxes, (F)
surrender any right to claim a material Tax refund, offset or other reduction in
income or other material Tax Liability, or (G) request any ruling or similar
guidance with respect to income or other material Taxes;

 

(o)   amend or terminate any BHGE Contributed Contract (other than any
amendments or terminations of any purchase orders in the ordinary course of
business);

 

(p)   sell, issue, lease, exclusively license, grant, pledge or otherwise
transfer, or create or incur any Lien on, any shares or other interests of the
NewCo Subsidiaries; or

 

(q)   agree or commit to do any of the foregoing.

 

Section 5.02   Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, BHGE and its Affiliates will hold, and will use
their best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
GE Contributed Business or GE furnished to BHGE or its Affiliates in connection
with the transactions contemplated by this Agreement, except to the extent that
such information can be shown to have been previously known on a nonconfidential
basis by BHGE, in the public domain through no fault of BHGE or later lawfully
acquired by BHGE from sources other than GE; provided, that BHGE may disclose
such information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement, so long as such Persons are informed by BHGE of
the confidential nature of such information and are directed by BHGE to treat
such information confidentially. BHGE shall be responsible for any failure to
treat such information confidentially by such Persons. The obligation of BHGE
and its Affiliates to hold any such information in confidence shall be satisfied
if they exercise the same care with respect to such information as they would
take to preserve the confidentiality of their own similar information. If this
Agreement is terminated, BHGE and its Affiliates will, and will use their best
efforts to cause their respective officers,

 

 56

 

directors, employees, accountants, counsel, consultants, advisors and agents to,
either (at BHGE’s election) destroy or deliver to GE, upon written request, all
documents and other materials, and all copies thereof, obtained by BHGE or its
Affiliates or on their behalf from GE in connection with this Agreement that are
subject to such confidence.

 

Section 5.03   Access to Information. (a) From the date hereof until the Closing
Date, BHGE will, upon reasonable advanced written notice, (i) give GE, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records of BHGE relating
to the BHGE Contributed Business, (ii) furnish to GE, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information relating to the BHGE Contributed Business
as such Persons may reasonably request and (iii) instruct the employees, counsel
and financial advisors of BHGE to cooperate with GE in its investigation of the
BHGE Contributed Business. Any investigation pursuant to this Section shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of BHGE. Notwithstanding the foregoing, GE shall not have (A)
access to personnel records of BHGE relating to individual performance or
evaluation records, medical histories or other information which, in BHGE’s good
faith opinion, is sensitive or the disclosure of which could subject BHGE to
risk of liability, (B) access to BHGE systems nor (C) the right to conduct
subsurface or invasive environmental sampling on any of the properties owned or
operated by BHGE, including the BHGE Contributed Facilities. BHGE shall have no
obligation under this ‎Section 5.03(a) to provide financial information that is
not produced in the ordinary course of business. Any request for information by
GE shall be made for purposes of achieving the Closing and post-Closing
integration, and no such requests shall be for due diligence purposes.

 

(b)   On and after the Closing Date, BHGE will afford promptly to the Company
and its respective agents reasonable access to its books of account, financial
and other records (including accountant’s work papers), information, employees
and auditors to the extent necessary or useful for the Company in connection
with any audit, investigation, dispute or litigation or any other reasonable
business purpose relating to the BHGE Contributed Business; provided, that any
such access by the Company shall not unreasonably interfere with the conduct of
the business of BHGE. The Company shall bear all of the out-of-pocket costs and
expenses (including attorneys’ fees, but excluding reimbursement for general
overhead, salaries and employee benefits) reasonably incurred in connection with
the foregoing.

 

Section 5.04   Notices of Certain Events. BHGE shall promptly notify GE of any
actions, suits, claims, investigations or proceedings commenced relating to BHGE
or the BHGE Contributed Business that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to ‎Section 3.10.

 

Section 5.05   Transport of Assets. Prior to and following the Closing Date,
BHGE shall use commercially reasonable efforts to remove any asset (other than
Fixtures or other assets that cannot be removed without materially interfering
with the operations at the property) that is located at a BHGE Contributed
Facility that is not a BHGE Contributed

 

 57

 

Asset and cause to be delivered any BHGE Contributed Asset that is not located
at any BHGE Contributed Facility to a BHGE Contributed Facility.

 

Section 5.06   Pre-Closing Transactions. At or prior to the Closing, BHGE shall,
and shall cause its Affiliates to, take the steps necessary to effect and carry
out the Pre-Closing Transactions with respect to BHGE as set forth in Schedule
3, including causing each NewCo Subsidiary to be formed in its respective
jurisdiction and contributing to each NewCo Subsidiary the applicable BHGE
Contributed Assets, BHGE Contributed Liabilities and BHKF Interests pursuant to
the Contribution, Assignment and Assumption Agreements. BHGE shall permit GE to
review, comment on and approve (such approval not to be unreasonably withheld,
delayed or conditioned) each document executed by BHGE or an Affiliate thereof
to consummate the Pre-Closing Transactions (which includes the organizational
and governing documents for each NewCo Subsidiary and such other documents that
will be executed for purposes of the Pre-Closing Transactions).

 

Section 5.07   Update of BHGE Business Employee List. BHGE shall periodically
update the BHGE Business Employee List to reflect the hiring or designation of
any new individual pursuant to Section 5.01(f) or the termination of a BHGE
Business Employee’s employment with BHGE and its Affiliates; provided, however,
for the avoidance of doubt, BHGE shall not be required to provide an updated
version of the BHGE Business Employee List except as set forth in the last
sentence of this Section 5.07. At least seven Business Days prior to the Closing
Date, BHGE will provide GE with an updated version of the BHGE Business Employee
List that will include each BHGE Business Employee’s name; provided, that, in
connection with providing such updated list, any BHGE Business Employee who BHGE
and GE agree will provide services under the BHGE Secondment Agreement will be
designated a “secondee” on such updated list.

 

Section 5.08   Intercompany Obligations. BHGE shall, and shall cause the BHGE
Parties and BHKF to, take such actions and make such payments as may be
necessary so that, as of the Closing, except as set forth on Schedule 5.08,
there shall be no intercompany obligations to which any BHGE Party is a party
and (a) to which the Company, BHKF or any NewCo Subsidiary is also a party or is
otherwise bound or (b) is binding on any of the BHGE Contributed Assets.

 

Article VI

COVENANTS OF GE

 

GE agrees that:

 

Section 6.01   Conduct of the Business. From the date hereof until the Closing
Date, except as would constitute a violation of Applicable Law, as set forth on
‎Section 6.01, as contemplated by this Agreement (including the Pre-Closing
Transactions) or as consented to by BHGE in writing (which consent shall not be
unreasonably conditioned, withheld or delayed), GE shall use its commercially
reasonable efforts to conduct the GE Contributed Business in the ordinary course
consistent with past practice. Without limiting the generality of the foregoing,
from the date hereof until the Closing Date, except as would

 

 58

 

constitute a violation of Applicable Law, as set forth on ‎Section 6.01, as
contemplated by this Agreement or as consented to by BHGE in writing (which
consent shall not be unreasonably conditioned, withheld or delayed), GE will not
and will cause the GE Parties not to (in each case, with respect to the GE
Contributed Business or the Company):

 

(a)   incur capital expenditures in excess of $1,000,000 in the aggregate,
except in accordance with the capital expenditures plan set forth on ‎Schedule
6.01(a), and GE will comply in all material respects with such capital
expenditures plan;

 

(b)   sell, lease, license or otherwise dispose of or fail to maintain, enforce
or protect any material GE Contributed Assets (other than (x) dispositions of
consumables and GE Inventory in the ordinary course of business and (y) any
disposition of an ELTO Engine in the ordinary course of business to a third
party; provided, that the proceeds from such ELTO Engine disposition are (i)
used to acquire another ELTO Engine that is contributed to the Company pursuant
to the terms of this Agreement or (ii) contributed to the Company);

 

(c)   increase the compensation or benefits of any GE Business Employee other
than (i) in the ordinary course of business, (ii) as required by Applicable Law
or the terms of any GE Employee Plan or collective bargaining agreement, or
(iii) for changes that are applicable to the employees of the GE Contributed
Business and other employees of GE generally;

 

(d)   enter into any retention arrangement with any GE Business Employee;

 

(e)   settle any material employment-related claims with respect to any GE
Business Employee;

 

(f)   other than to fill a vacant role listed on the GE Business Employee List
or to replace a GE Business Employee whose employment with GE and its Affiliates
has terminated, hire or designate any new individual to provide services
primarily in support of the GE Contributed Business;

 

(g)   terminate any GE Business Employees other than for cause or otherwise
remove an individual from the GE Business Employee List;

 

(h)   implement any employee layoffs implicating the WARN Act with respect to
any GE Business Employees;

 

(i)   sell, issue, lease, exclusively license, grant, pledge or otherwise
transfer, or create or incur any Lien on, any shares or other interests of the
Company or any of its Subsidiaries;

 

(j)   create, incur, assume or otherwise become liable with respect to any
indebtedness for borrowed money with respect to the GE Contributed Business or
guarantees thereof, except for trade credit or trade payables incurred in the
ordinary course of business

 

 59

 

consistent with past practice and guarantees of indebtedness incurred under
existing credit facilities, which guarantees will be terminated prior to or as
of the Closing;

 

(k)   enter into any agreement that limits or restricts the conduct of the GE
Contributed Business or that could, after the Closing Date, limit or restrict
the Company (or any of its Subsidiaries) or any direct or indirect members of
the Company (excluding GE and its Affiliates) from engaging or competing in any
line of business, in any location or with any Person or enter into, amend or
modify in any material respect or terminate any GE Contributed Contract or
otherwise waive, release or assign any material rights, claims or benefits of
the GE Contributed Business under any GE Contributed Contract, except for
commercially reasonable agreements with new customers made at arm’s length and
for amendments, terminations or non-renewals in the ordinary course of business
consistent with past practices or, if not consistent with past practices, in a
fashion that is intended to improve the long term profitability of the
relationship, including but not limited to improving the prospects for retaining
the relationship for a longer period of time;

 

(l)   settle any material litigation, investigation, arbitration, proceeding or
other claim involving or against the GE Contributed Business other than
settlements involving only monetary payment in an amount not to exceed
$1,000,000 individually or $2,000,000 in the aggregate, or any litigation,
arbitration, proceeding or dispute that relates to the transactions contemplated
hereby or by any Ancillary Agreement;

 

(m)   allow any insurance policies covering the GE Contributed Assets to lapse
unless replaced with insurance policies providing substantially similar
coverage;

 

(n)   amend or terminate any GE Contributed Contract (other than any amendments
or terminations of any purchase orders in the ordinary course of business); or

 

(o)   agree or commit to do any of the foregoing.

 

Section 6.02   Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, GE and its Affiliates (including, for this
purpose, the Company) will hold, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning the BHGE Contributed Business
or BHGE furnished to GE or its Affiliates (including, for this purpose, the
Company) in connection with the transactions contemplated by this Agreement,
except to the extent that such information can be shown to have been previously
known on a nonconfidential basis by GE, in the public domain through no fault of
GE or later lawfully acquired by GE from sources other than BHGE; provided, that
GE may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such Persons are informed
by GE of the confidential nature of such information and are directed by GE to
treat such information confidentially. GE shall be responsible for any failure
to treat such information confidentially by such Persons. The obligation of GE
and its Affiliates (including, for this purpose, the Company) to hold any such
information in

 

 60

 

confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their own
similar information. If this Agreement is terminated, GE and its Affiliates
will, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to,
either (at GE’s election) destroy or deliver to BHGE, upon written request, all
documents and other materials, and all copies thereof, obtained by GE or its
Affiliates or on their behalf from BHGE in connection with this Agreement that
are subject to such confidence.

 

Section 6.03   Access to Information. (a) From the date hereof until the Closing
Date, GE will, upon reasonable advanced written notice, (i) give BHGE, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records of GE relating
to the GE Contributed Business, (ii) furnish to BHGE, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information relating to the GE Contributed Business as
such Persons may reasonably request and (iii) instruct the employees, counsel
and financial advisors of GE to cooperate with BHGE in its investigation of the
GE Contributed Business. Any investigation pursuant to this Section shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of GE. Notwithstanding the foregoing, BHGE shall not have (A)
access to personnel records of GE relating to individual performance or
evaluation records, medical histories or other information which, in GE’s good
faith opinion, is sensitive or the disclosure of which could subject GE to risk
of liability, (B) access to GE systems nor (C) the right to conduct subsurface
or invasive environmental sampling on any of the properties owned or operated by
GE, including the GE Contributed Facility. GE shall have no obligation under
this ‎Section 6.03(a) to provide financial information that is not produced in
the ordinary course of business. Any request for information by BHGE shall be
made for purposes of achieving the Closing and post-Closing integration, and no
such requests shall be for due diligence purposes.

 

(b)   On and after the Closing Date, GE will afford promptly to the Company and
its respective agents reasonable access to its books of account, financial and
other records (including accountant’s work papers), information, employees and
auditors to the extent necessary or useful for the Company in connection with
any audit, investigation, dispute or litigation or any other reasonable business
purpose relating to the GE Contributed Business; provided, that any such access
by the Company shall not unreasonably interfere with the conduct of the business
of GE. The Company shall bear all of the out-of-pocket costs and expenses
(including attorneys’ fees, but excluding reimbursement for general overhead,
salaries and employee benefits) reasonably incurred in connection with the
foregoing.

 

Section 6.04   Notices of Certain Events. GE shall promptly notify BHGE of any
actions, suits, claims, investigations or proceedings commenced relating to GE
or the GE Contributed Business that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to ‎Section 4.10.

 

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Section 6.05   Transport of Assets. Prior to and following the Closing Date, GE
shall use commercially reasonable efforts to remove any asset (other than
Fixtures or other assets that cannot be removed without materially interfering
with the operations at the property) that is located at a GE Contributed
Facility that is not a GE Contributed Asset and cause to be delivered any GE
Contributed Asset that is not located at a GE Contributed Facility to a GE
Contributed Facility.

 

Section 6.06   Update of GE Business Employee List. GE shall periodically update
the GE Business Employee List to reflect the hiring or designation of any new
individual pursuant to ‎Section 6.01(f), or the termination of a GE Business
Employee’s employment with GE and its Affiliates; provided, however, for the
avoidance of doubt, GE shall not be required to provide an updated version of
the GE Business Employee list except as set forth in the last sentence of this
‎Section 6.06. At least seven Business Days prior to the Closing Date, GE will
provide BHGE with an updated version of the GE Business Employee List that will
include each GE Business Employee’s name; provided, that, in connection with
providing such updated list, any GE Business Employee who GE and BHGE agree will
provide services under the GE Secondment Agreement will be designated a
“secondee” on such updated list.

 

Section 6.07   Intercompany Obligations. GE shall, and shall cause the GE
Parties to, take such action and make such payments as may be necessary so that,
as of the Closing, except as set forth on Schedule 6.07, there shall be no
intercompany obligations to which any GE Party is a party and (a) to which the
Company is also a party or is otherwise bound or (b) is binding on any of the GE
Contributed Assets.

 

Article VII

COVENANTS OF THE PARTIES

 

The parties hereto agree that:

 

Section 7.01   Commercially Reasonable Efforts; Further Assurance. (a) Subject
to the terms and conditions of this Agreement, the parties hereto shall use
their respective commercially reasonable efforts to cooperate with one another
in taking, or causing to be taken, all actions, and to do, or cause to be done,
all things necessary or appropriate under Applicable Law to consummate the
transactions contemplated by this Agreement and the Ancillary Agreements as soon
as practicable, including preparing and timely filing with any Governmental
Authority or other third party all documentation to effect all necessary or
appropriate filings, notices, petitions, statements, registrations, submissions
of information, applications and other documents and obtaining and maintaining
all approvals, consents, registrations, permits, authorizations and other
confirmations required or considered advisable to be obtained from any
Governmental Authority or other third party that are necessary or appropriate to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements as soon as practicable. The parties hereto agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or appropriate in order to
consummate or

 

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implement expeditiously the transactions contemplated by this Agreement. The
parties hereto agree to provide relevant information to one another in respect
of the foregoing.

 

(b)   In furtherance and not in limitation of the foregoing, and to the extent
required by Applicable Law, each of the parties hereto shall, as promptly as
practicable and in any event within 10 Business Days of the date hereof,
(i) make an appropriate filing of a Notification and Report Form pursuant to the
HSR Act with respect to the transactions contemplated hereby, and (ii) shall
supply as promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and to take all other
actions necessary to cause the expiration or termination of the applicable
waiting periods under the HSR Act as soon as practicable.

 

(c)   In furtherance and not in limitation of the foregoing, and to the extent
required by Applicable Law (or considered advisable by the parties hereto), each
of the parties hereto shall, as promptly as reasonably practicable, (i) make an
appropriate filing pursuant to the Applicable Laws of any non-U.S. jurisdictions
with respect to the transactions contemplated hereby, and (ii) shall supply as
promptly as practicable any additional information and documentary material that
may be requested pursuant to the Applicable Laws of such non-U.S. jurisdictions
and to take all other actions necessary to cause the expiration or termination
of the applicable waiting periods, or to obtain the requisite approvals, under
the Applicable Laws of such non-U.S. jurisdictions as soon as practicable.

 

(d)   If any objections are asserted with respect to the transactions
contemplated by this Agreement or any Ancillary Agreement under the HSR Act or
any other similar Applicable Law, including the Applicable Laws of the non-U.S.
jurisdictions, or if any Action is instituted or threatened by any Governmental
Authority or any private party challenging any of the transactions contemplated
by this Agreement or any Ancillary Agreement as violative of the HSR Act or any
other similar Applicable Law, including the Applicable Laws of the non-U.S.
jurisdictions, each of BHGE and GE shall, and shall cause their Subsidiaries and
Affiliates to, use their commercially reasonable efforts to promptly resolve
such objections.

 

Section 7.02   Certain Filings. The parties hereto shall use their reasonable
best efforts to cooperate with one another in determining whether any action by
or in respect of, or filing with, any Governmental Authority is required (or
considered advisable by the parties hereto), or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements and in timely taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.
BHGE and GE shall have responsibility for their respective filing fees
associated with any other required filings, except that BHGE and GE shall have
equal responsibility for the filing fees associated with the HSR Act filing.

 

Section 7.03   Public Announcements. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
for any press releases and

 

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public statements the making of which may be required by Applicable Law or any
listing agreement with any national securities exchange, will not issue any such
press release or make any such public statement prior to such consultation.
Notwithstanding the foregoing, each of the parties may make any public
statements in response to questions by the press, analysts, investors or those
attending industry conferences or analyst or investor conference calls, so long
as such statements are not inconsistent with previous statements made jointly by
the parties.

 

Section 7.04   Notices of Certain Events. Each party hereto shall promptly
notify the other parties hereto of:

 

(a)   any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement; and

 

(b)   any notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement.

 

Section 7.05   BHGE Insurance Coverage. (a) From and after the Closing Date, the
BHGE Contributed Business shall cease to be in any manner insured by, entitled
to any benefits or coverage under or entitled to seek benefits or coverage from
or under any BHGE Insurance Policies other than (i) any BHGE Insurance Policy
issued exclusively in the name and for the benefit of the BHGE Contributed
Business; (ii), with respect to any matters covered by a BHGE Insurance Policy
that are properly reported to the relevant insurers prior to the Closing Date;
or (iii) for claims brought within a one-year period concluding on the first
anniversary of the Closing Date, solely under the BHGE Insurance Policies listed
on Schedule 7.05(a) (the “BHGE Available Insurance Policies”), for any claim,
occurrence or loss that occurred or existed prior to the Closing Date, in each
case, under clauses (i) through (iii) above, subject to the terms and conditions
of the relevant BHGE Insurance Policies and this Agreement, except to the extent
otherwise mandated by Applicable Law.

 

(b)   The rights of the BHGE Contributed Business under clauses (a)(ii) and
(iii) above are subject to and conditioned upon the following:

 

(i)   The Company, on behalf of the BHGE Contributed Business, shall be solely
responsible for notifying any and all insurance companies of such claims and
complying with all policy terms and conditions for pursuit and collection of
such claims. The Company shall not, without the written consent of BHGE, amend,
modify or waive any rights of BHGE or other insureds under any such insurance
policies and programs. The Company shall exclusively bear and be liable (and
BHGE shall have no obligation to repay or reimburse the Company) for all
uninsured, uncovered, unavailable or uncollectible amounts relating to or
associated with all such claims; and

 

(ii)   With respect to coverage claims or requests for benefits asserted by the
Company under the BHGE Available Insurance Policies, BHGE shall have the right
but not the duty to monitor and/or associate with such claims. The

 

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Company shall be liable for any fees, costs and expenses incurred by BHGE
directly or indirectly through the insurers or reinsurers of the BHGE Available
Insurance Policies relating to any unsuccessful coverage claims. The Company
shall not assign any BHGE Available Insurance Policies or any rights or claims
under the BHGE Available Insurance Policies.

 

(c)   Notwithstanding anything contained in this Agreement, (i) nothing in this
Agreement shall limit, waive or abrogate in any manner any rights of BHGE to
insurance coverage for any matter, whether relating to the BHGE Contributed
Business or otherwise, and (ii) BHGE shall retain the exclusive right to control
the BHGE Available Insurance Policies and all of the other BHGE Insurance
Policies, including the right to exhaust, settle, release, commute, buy-back or
otherwise resolve disputes with respect to any of the BHGE Insurance Policies
and to amend, modify or waive any rights under any such BHGE Insurance Policies,
notwithstanding whether any such BHGE Insurance Policies apply to any
liabilities or losses as to which the Company has made, or could, in the future,
make, a claim for coverage; provided, however, that the Company shall cooperate
with BHGE with respect to coverage claims and requests for benefits and sharing
such information as is reasonably necessary in order to permit BHGE to manage
and conduct its insurance matters as BHGE deems appropriate.

 

(d)   Any payments, costs and adjustments required to be made pursuant to this
or any other provisions of this ‎Section 7.05 shall be billed quarterly and
payable within 30 days from receipt of an invoice.

 

(e)   Nothing in this ‎Section 7.05 shall limit, modify or in any way affect the
rights and obligations of the parties under ‎Article XI; provided, however, that
any insurance proceeds actually collected with respect to a particular Damage
shall be taken into account under and to the extent required by
‎Section 11.06(a). No payments due under this ‎Section 7.05 shall affect, be
affected by, or be subject to set off against, any adjustment to the Purchase
Price.

 

Section 7.06   GE Insurance Coverage. (a) From and after the Closing Date, the
GE Contributed Business shall cease to be in any manner insured by, entitled to
any benefits or coverage under or entitled to seek benefits or coverage from or
under any GE Insurance Policies other than (i) any GE Insurance Policy issued
exclusively in the name and for the benefit of the GE Contributed Business; (ii)
with respect to any matters covered by a GE Insurance Policy that are properly
reported to the relevant insurers prior to the Closing Date; or (iii) for claims
brought within a one-year period concluding on the first anniversary of the
Closing Date, solely under the GE Insurance Policies listed on Schedule 7.06(a)
(the “GE Available Insurance Policies”), for any claim, occurrence or loss that
occurred or existed prior to the Closing Date, in each case, under clauses (i)
through (iii) above, subject to the terms and conditions of the relevant GE
Insurance Policies and this Agreement, except to the extent otherwise mandated
by Applicable Law.

 

(b)   The rights of the GE Contributed Business under clauses (a)(ii) and (iii)
above are subject to and conditioned upon the following:

 

 65

 

(i)   The Company, on behalf of the GE Contributed Business, shall be solely
responsible for notifying any and all insurance companies of such claims and
complying with all policy terms and conditions for pursuit and collection of
such claims. The Company shall not, without the written consent of GE, amend,
modify or waive any rights of GE or other insureds under any such insurance
policies and programs. The Company shall exclusively bear and be liable (and GE
shall have no obligation to repay or reimburse the Company) for all uninsured,
uncovered, unavailable or uncollectible amounts relating to or associated with
all such claims; and

 

(ii)   With respect to coverage claims or requests for benefits asserted by the
Company under the GE Available Insurance Policies, GE shall have the right but
not the duty to monitor and/or associate with such claims. The Company shall be
liable for any fees, costs and expenses incurred by GE directly or indirectly
through the insurers or reinsurers of the GE Available Insurance Policies
relating to any unsuccessful coverage claims. The Company shall not assign any
GE Available Insurance Policies or any rights or claims under the GE Available
Insurance Policies.

 

(c)   Notwithstanding anything contained in this Agreement, (i) nothing in this
Agreement shall limit, waive or abrogate in any manner any rights of GE to
insurance coverage for any matter, whether relating to the GE Contributed
Business or otherwise, and (ii) GE shall retain the exclusive right to control
the GE Available Insurance Policies and all of its other GE Insurance Policies,
including the right to exhaust, settle, release, commute, buy-back or otherwise
resolve disputes with respect to any of the GE Insurance Policies and to amend,
modify or waive any rights under any such GE Insurance Policies, notwithstanding
whether any such GE Insurance Policies apply to any liabilities or losses as to
which the Company has made, or could, in the future, make, a claim for coverage;
provided, however, that the Company shall cooperate with GE with respect to
coverage claims and requests for benefits and sharing such information as is
reasonably necessary in order to permit GE to manage and conduct its insurance
matters as GE deems appropriate.

 

(d)   Any payments, costs and adjustments required to be made pursuant to this
or any other provisions of this ‎Section 7.06 shall be billed quarterly and
payable within 30 days from receipt of an invoice.

 

(e)   Nothing in this ‎Section 7.06 shall limit, modify or in any way affect the
rights and obligations of the parties under ‎Article XI; provided, however, that
any insurance proceeds actually collected with respect to a particular Damage
shall be taken into account under and to the extent required by
‎Section 11.06(a). No payments due under this ‎Section 7.06 shall affect, be
affected by, or be subject to set off against, any adjustment to the Purchase
Price.

 

Section 7.07   Replacement of Guaranties. On or prior to Closing, BHGE and GE
shall use their commercially reasonable efforts to cause the Company to replace,
effective as of the Closing, of (a) letters of credit, guaranties, financial
assurances, performance bonds and other contractual obligations, and (b) surety
bonds, undertakings or other instruments of guarantee issued by sureties,
insurers or reinsurers (such issuer, a “Surety”, and such

 

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instrument, a “Surety Bond”), entered into by or on behalf of BHGE or any of its
Affiliates or GE or any of its Affiliates in connection with the BHGE
Contributed Business or the GE Contributed Business, respectively, which are
listed in ‎Section 7.07(a) and Schedule 7.07(b); provided, that if any such
letter of credit, guaranty, financial assurance, surety bond, performance bond
or other contractual obligation is not replaced effective as of the Closing, the
Company shall indemnify BHGE and its Affiliates or GE and its Affiliates, as
applicable, against, and hold each of them harmless from, any and all Damages
incurred or suffered by BHGE or any of its Affiliates or GE or any of its
Affiliates, as applicable, related to or arising out of the same. In connection
with the foregoing, BHGE shall not cause the Company to provide replacement
letters of credit, guaranties, financial assurances, surety bonds, performance
bonds or other contractual obligations without the prior written consent of GE.
In addition, to the extent that the Company does not arrange for substitute
Surety Bonds or satisfactorily novate the obligations of GE or BHGE, as
applicable, to a Surety, the Company shall (i) promptly pay directly to that
Surety any and all obligations of GE or BHGE, as applicable, after receipt from
GE or BHGE, as applicable, of a written demand from such Surety, and/or (ii)
advance such loss amounts to GE or BHGE, as applicable prior to its requirement
to pay that Surety.

 

Section 7.08   Confidentiality. On and after the Closing Date, each party hereto
will hold, and will use its best efforts to cause its respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of Applicable Law, all confidential documents
and information concerning the other parties hereto provided to it pursuant to
‎Section 5.03, ‎Section 6.03 or otherwise in connection herewith.

 

Section 7.09   Intentionally Omitted.

 

Section 7.10   Open Matters; Ancillary Agreements. (a) Between the date hereof
and the Closing, the parties shall each use commercially reasonable efforts to
negotiate in good faith the terms and conditions that are indicated as being
subject to negotiation (the “Open Matters”) in the Post-Closing LLC Agreement,
BHGE Services Agreement, GE Services Agreement, the ELTO Agreement, GE
Distribution Agreement, BHGE Distribution Agreement and the Turbine Development
and Supply Agreement (the “Open Matters Ancillary Agreements”). Prior to
Closing, the parties shall amend the forms of the Open Matters Ancillary
Agreements to reflect their agreement on the Open Matters; provided, however,
that the Closing shall not be conditioned upon resolving any Open Matter or
amending the forms of any Open Matters Ancillary Agreements (and the failure to
do so shall not constitute the failure of any condition to be satisfied on the
Closing Date), and the parties agree that each Open Matters Ancillary Agreement
contains all material terms necessary for such agreement to be binding on the
applicable parties from and after the Closing. If at the Closing, any Open
Matters remain open, the parties shall each continue to use commercially
reasonable efforts to negotiate in good faith the Open Matters until they have
reached agreement with respect thereto and shall amend the Open Matters
Ancillary Agreements as appropriate to reflect such agreements.

 

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(b)   Between the date hereof and the Closing, the parties shall each use
commercially reasonable efforts to negotiate in good faith the terms and
conditions of the Massa Lease, the Rong Lease, the Port Klang Sublease and the
Jacintoport Lease (collectively, the “Leases”); provided, however, that the
Closing shall not be conditioned upon the entry into any Lease (and the failure
to do so shall not constitute the failure of any condition to be satisfied on
the Closing Date), and the parties agree that the Massa Term Sheet, the Rong
Term Sheet, the Port Klang Term Sheet and the Jacintoport Term Sheet each
contain all material terms necessary to the transactions contemplated by each
such term sheet and each such term sheet shall be binding on the applicable
parties from and after the Closing, and all such references to the agreement
with respect thereto shall instead be deemed to be references to such term sheet
(with such other deemed changes to such references and their context in the
Transaction and the Ancillary Agreements as are necessary to give effect to this
proviso), in each case unless and until such agreement has been executed and
delivered in accordance with this Agreement.

 

(c)   Between the date hereof and the Closing, the parties shall use
commercially reasonable efforts to negotiate in good faith the definitive forms
of the FieldCore Sourcing/Services Agreement, BHGE Secondment Agreement and GE
Secondment Agreement; provided, however, that the Closing shall not be
conditioned upon reaching agreement on the definitive forms of the FieldCore
Sourcing/Services Agreement, BHGE Secondment Agreement or GE Secondment
Agreement (and the failure to do so shall not constitute the failure of any
condition to be satisfied on the Closing Date). If at the Closing, the FieldCore
Sourcing/Services Agreement, BHGE Secondment Agreement or GE Secondment
Agreement is not yet finalized, the parties shall each continue to use
commercially reasonable efforts to negotiate in good faith each such agreement
not so finalized until they have reached agreement with respect to the
definitive forms thereof. To the extent the FieldCore Sourcing/Services
Agreement, BHGE Secondment Agreement or GE Secondment Agreement is finalized
prior to the Closing, GE and the Company shall deliver duly executed
counterparts thereto in accordance with Section 2.12. To the extent the
FieldCore Sourcing/Services Agreement, BHGE Secondment Agreement or GE
Secondment Agreement is finalized after the Closing, GE and the Company shall
deliver duly executed counterparts thereto promptly after so finalizing the
FieldCore Sourcing/Services Agreement, BHGE Secondment Agreement or GE
Secondment Agreement, as applicable.

 

(d)   Between the date hereof and the Closing, the parties shall use
commercially reasonable efforts to take the actions set forth on Schedule Q.

 

Section 7.11   Contributed Facilities. Each of the parties hereto shall deliver
(or, in the case of the BHGE Parties and GE Parties, shall cause their
respective Affiliates to deliver) such other documents, affidavits and
instruments as are reasonably necessary or otherwise customarily or statutorily
required in the jurisdiction in which the Contributed Facility is located to
effectuate the lease or sublease of such Contributed Facility.

 

Article VIII

TAX MATTERS

 

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Section 8.01   Tax Cooperation; Allocation of Taxes; Certain Refunds. (a) The
Company and BHGE agree to furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information and assistance relating to
each Contributed Entity and the BHGE Contributed Business (including access to
books and records) as is reasonably necessary for the filing of all Tax Returns,
the making of any election relating to Taxes, the preparation for any audit by
any Taxing Authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax; provided, that notwithstanding anything to the
contrary in this Agreement, in no event shall any party or any of its respective
Affiliates be entitled to any information relating to, or a copy of, any
consolidated, combined, affiliated or unitary Tax Return that includes BHGE or
any of its Affiliates (other than pro forma information relating solely to the
BHGE Contributed Business). The Company and BHGE shall retain all books and
records with respect to Taxes pertaining to the BHGE Contributed Assets until at
least 60 days following the expiration of the applicable statute of limitations
(taking into account any extensions thereof). Subject to ‎Section 8.02, the
Company and BHGE shall cooperate with each other in the conduct of any audit or
other proceeding relating to Taxes involving the BHGE Contributed Business.

 

(b)   The Company and GE agree to furnish or cause to be furnished to each
other, upon request, as promptly as practicable, such information and assistance
relating to the GE Contributed Business (including access to books and records)
as is reasonably necessary for the filing of all Tax Returns, the making of any
election relating to Taxes, the preparation for any audit by any Taxing
Authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax; provided, that notwithstanding anything to the contrary in
this Agreement, in no event shall any party or any of its respective Affiliates
be entitled to any information relating to, or a copy of, any consolidated,
combined, affiliated or unitary Tax Return that includes GE or any of its
Affiliates (other than pro forma information relating solely to the GE
Contributed Business). The Company and GE shall retain all books and records
with respect to Taxes pertaining to the GE Contributed Assets until at least
60 days following the expiration of the applicable statute of limitations
(taking into account any extensions thereof). The Company and GE shall cooperate
with each other in the conduct of any audit or other proceeding relating to
Taxes involving the GE Contributed Assets or the GE Contributed Business.

 

(c)   (i) Any sales, use, value added, registration stamp, recording,
documentary, conveyancing, franchise, property, transfer and similar Taxes,
levies, charges and fees (collectively, “Transfer Taxes”) incurred in connection
with the BHGE Contribution and the GE Contribution and (ii) any Taxes imposed
solely as result of any other restructuring or similar transaction undertaken by
the BHGE Parties or GE Parties prior to Closing (“Pre-Closing Restructuring
Taxes”), in each case, shall be borne by the BHGE Parties or GE Parties,
respectively. Each of the Company, GE Parties and BHGE Parties shall cooperate
in providing each other with any appropriate resale exemption certifications and
other similar documentation. Transfer Taxes shall be timely paid, and all
applicable filings, reports and Tax Returns in respect of Transfer Taxes shall
be timely filed, as provided by Applicable Law.

 

 69

 

(d)   The Company shall promptly pay to BHGE an amount equal to any refund or
credit (including any interest paid or credited with respect thereto) received
by the Company or any of its Affiliates in connection with BHKF or the BHGE
Contributed Business, in each case that constitutes an Excluded BHGE Asset. The
Company shall, if requested by BHGE and at BHGE’s expense, file (or cause the
relevant entity to file) for, and take such other actions as may be necessary to
obtain, any refund or credit which would give rise to a payment under this
‎Section 8.01(d).

 

(e)   The Company shall promptly pay to GE an amount equal to any refund or
credit (including any interest paid or credited with respect thereto) received
by the Company or any of its Affiliates in connection with the GE Contributed
Business that constitutes an Excluded GE Asset. The Company shall, if requested
by GE and at GE’s expense, file (or cause the relevant entity to file) for, and
take such other actions as may be necessary to obtain, any refund or credit
which would give rise to a payment under this ‎Section 8.01(e).

 

(f)   In the case of any Taxes that are payable with respect to a Straddle
Period, for purposes of determining whether and to what extent a liability for
Taxes is allocable to a Pre-Closing Tax Period (i) Taxes that are based upon or
related to income and any gross receipts, sales or use Taxes shall be allocated
between the Pre-Closing Tax Period and the portion of such Straddle Period
beginning after the Closing Date based on an interim closing of the books as of
the end of the day on the Closing Date and (ii) Taxes not described in
clause ‎(i) above shall be allocated between the Pre-Closing Tax Period and the
portion of such Straddle Period beginning after the Closing Date by prorating
each such Tax based on the number of days in the Pre-Closing Tax Period, on the
one hand, and the number of days in such Straddle Period that occur after the
Closing Date, on the other hand.

 

(g)   The parties agree to treat the GE Cash Payment, as adjusted pursuant to
‎‎Section 2.13(e), as consideration for the sale by the GE Parties to the
Company of an undivided interest in the GE Contributed Assets pursuant to
Section 707(a) of the Code for U.S. Federal, state and local income tax purposes
(the “Tax Treatment”) unless otherwise required by a determination within the
meaning of Section 1313(a) of the Code; provided, that upon a determination
requiring that any party hereto treat the transactions contemplated hereunder in
a manner inconsistent with the Tax Treatment, BHGE shall be permitted to file or
amend any Tax Return previously filed, or otherwise assume a position in a Tax
audit, proceeding or other contest or dispute, in a manner inconsistent with the
Tax Treatment.

 

(h)   All Tax Sharing Arrangements between BHGE or any of its Affiliates, on the
one hand, and BHKF, on the other hand (other than this Agreement and that
certain Tax Matters Agreement, dated as of July 3, 2017, between GE, BHGE, Baker
Hughes, a GE Company. and the other parties thereto), will terminate as to BHKF
prior to the Closing Date and BHKF will not have any liability thereunder on or
after the Closing Date ; provided, however, that notwithstanding anything to the
contrary in this Agreement, in the event of a conflict between this Agreement
and the Tax Matters Agreement, dated as of July 3, 2017, between GE, BHGE LLC,
BHGE Parent and the other parties thereto, the provisions of this Agreement
shall control.

 

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(i)   From and after the Closing Date, and notwithstanding anything to the
contrary in the Post-Closing LLC Agreement, the Company shall not, and shall not
permit any of its Affiliates (including BHKF) to, make any Tax election, amend
any Tax Return, initiate any voluntary disclosure with respect to Taxes or waive
or extend any statute of limitations for the assessment or collection of any
Tax, in each case with respect to BHKF in respect of a Pre-Closing Tax Period or
Straddle Period, without the prior written consent of BHGE (such consent not to
be unreasonably withheld, conditioned or delayed).

 

Section 8.02   Certain Tax Contests.

 

(a)   If the Company, GE or any of their respective Affiliates receives notice
of the commencement or existence of a Tax Contest relating to BHGE Covered Taxes
with respect to BHKF (a “Klang Tax Contest”), such recipient shall within three
Business Days from such receipt provide to BHGE written notice of such Klang Tax
Contest, but failure to give such notice shall not relieve BHGE of any liability
hereunder except to the extent, if any, that the rights of BHGE or any of its
Affiliates with respect to such claim are actually prejudiced.

 

(b)   In the event of any Klang Tax Contest (i) solely in respect of BHGE
Covered Taxes or (ii) in respect of both BHGE Covered Taxes and no more than a
de minimis amount of Taxes that are not BHGE Covered Taxes, BHGE shall control
the defense of such Tax Contest (a “BHGE-Controlled Tax Contest”); provided,
that (x) BHGE shall reasonably and in good faith keep the Company and GE
notified concerning any material development with respect to such Klang Tax
Contest, (y) the Company and GE shall be permitted, at their respective expense,
to be present at, and participate in, any such Klang Tax Contest and (z) without
the prior written consent of GE, which consent shall not be unreasonably
withheld, conditioned or delayed, BHGE shall not settle any such Klang Tax
Contest if doing so would reasonably be expected to increase the Tax Liability
of GE, the Company or BHKF for Taxes that are not BHGE Covered Taxes by more
than a de minimis amount.

 

Article IX

EMPLOYEE MATTERS

 

Section 9.01   Employment with Company. The Company shall, or shall cause its
Subsidiaries to, (a) continue to employ any BHGE Business Employee or GE
Business Employee in a NewCo Subsidiary, (b) accept the automatic transfer of
each Automatically Transferring Business Employee and (c) not later than five
days prior to the Closing Date (or such later date provided for in
‎Section 9.02), make a Qualifying Offer to all of (i) the BHGE Business
Employees (each employee of BHGE or its Affiliates who commences employment with
the Company or one of its Subsidiaries in accordance with this ‎Section 9.01, a
“BHGE Transferred Employee”), and (ii) the GE Business Employees (each employee
of GE or its Affiliates who commences employment with the Company or one of its
Subsidiaries in accordance with this ‎Section 9.01, a “GE Transferred
Employee”); provided, however, that no such offers of employment shall be made
to any employee of a NewCo Subsidiary, any Automatically Transferring Business
Employee or any

 

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Business Employee indicated as a secondee on the BHGE Business Employee List or
GE Business Employee List, as applicable. The BHGE Transferred Employees and the
GE Transferred Employees are referred to herein collectively as the “Transferred
Employees.”

 

Section 9.02   Inactive BHGE Business Employees. Notwithstanding the foregoing
or anything in this Agreement to the contrary, any BHGE Business Employee who is
primarily employed in the United States and who is on a leave of absence and has
a right of re-instatement per the policy of BHGE, GE or their respective
Affiliates, as applicable (including long-term or short-term disability leave,
FMLA leave and parental leave or similar leave, but excluding vacation or sick
leave, jury duty leave, bereavement leave or similar leave), as of the Closing
Date shall, to the extent allowable under applicable Law, be transferred to BHGE
or one of its Affiliates (other than a NewCo Subsidiary), as applicable, and
shall not become a BHGE Transferred Employee, in either case, unless such
employee is able to (and does) return to work within six months after the
Closing Date (in which case, he or she shall become a BHGE Transferred Employee
following his or her return from absence as of his or her Applicable Transfer
Date). The Company shall reimburse BHGE promptly for any costs incurred by BHGE
on or after the Closing Date and prior to the earlier of (x) such inactive BHGE
Business Employee’s Applicable Transfer Date and (y) the date on which such
inactive BHGE Business Employee’s employment with BHGE and its Affiliates (other
than the Company and its Subsidiaries) terminates, but only to the extent the
Company or its Subsidiaries would have been responsible for such costs had such
inactive BHGE Business Employee been employed by the Company or its Subsidiaries
on such date. Upon receiving notice of the pending return to work of any such
BHGE Business Employee, BHGE will notify the Company and the Company will (or
will cause its Subsidiaries to), within five days after receiving such notice,
make a Qualifying Offer to such individual.

 

Section 9.03   Terms of Employment. (a) Effective as of the Applicable Transfer
Date, the Company will (or will cause its Subsidiaries to) assume or retain, as
the case may be, (i) all obligations of BHGE or GE and any of their Affiliates,
as applicable, to each Transferred Employee pursuant to any cash incentive or
bonus plans maintained by BHGE or GE, as applicable, in which such Transferred
Employee participated as of immediately prior to the Applicable Transfer Date,
(ii) all obligations of BHGE or GE and any of their Affiliates, as applicable,
for the accrued, unused vacation and paid time off for Transferred Employees to
the extent consistent with applicable Law and (iii) any individual retention
arrangement entered into by BHGE or GE, as applicable, with any such Transferred
Employee. The Company will (or will cause its Subsidiaries to) pay Transferred
Employees cash incentives or bonuses for the applicable performance measurement
period which includes the Closing Date at the time and in the manner such
payments would have been made under the applicable plans maintained by BHGE or
GE, as applicable.

 

(b)   During the one-year period beginning on the Closing Date, the Company will
(or will cause its Subsidiaries to) provide each Transferred Employee with at
least the same salary or wages, cash incentive compensation opportunities and
cash bonus opportunities as were provided to such Transferred Employee
immediately prior to the Closing Date

 

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(c)   From the Applicable Transfer Date, each Transferred Employee will (x)
continue to participate in GE Employee Plans (other than cash incentive or
equity compensation plans), as applicable, and/or (y) commence participation in
GE Employee Plans (other than cash incentive or equity compensation plans) or
Company Employee Plans, and the parties will work together in good faith to
determine which Employee Plans will cover which Transferred Employees.

 

(d)   If, at any time during the one-year period beginning on the Closing Date,
any Transferred Employee participates in any Company Employee Plans, and if the
aggregate value of the benefits provided to such Transferred Employee during
such period under such Company Employee Plans is less than the aggregate value
of the benefits that would have been provided to such Transferred Employee under
the corresponding Employee Plans in which such Transferred Employee participated
as of immediately prior to the Closing Date (including the cost of any defined
benefit pension benefits provided under any GE Employee Plan), then for such
period, the Company will provide such Transferred Employee with cash payments in
an aggregate amount equal to such deficit.

 

(e)   If, at any time during the one-year period beginning on the Closing Date,
the Company terminates the employment of any Transferred Employee without cause,
the Company shall provide such employee with severance payments and benefits no
less favorable in the aggregate than the greater of the amount of the severance
payments and benefits that (i) would have been provided to such Transferred
Employee under the applicable BHGE Employee Plan or GE Employee Plan in which
such Transferred Employee participated as of immediately prior to the Closing
Date (taking into account service rendered by such Transferred Employee for the
Company and its Subsidiaries from the Applicable Transfer Date and any changes
in compensation implemented following the Applicable Transfer Date) or
(ii) would be provided to similarly situated Transferred Employees at the
Company.

 

(f)   For purposes of eligibility to participate, vesting and determination of
level of paid time off benefits under any Company Employee Plan, the Company
shall grant service credit to each Transferred Employee to the same extent that
service was credited under the applicable Employee Plan in which such
Transferred Employee participated as of immediately prior to the Applicable
Transfer Date; provided, that such service will not be recognized to the extent
that such recognition would result in a duplication of benefits.

 

Section 9.04   Automatically Transferring Business Employees.

 

(a)   The parties confirm that it is their intention that the contracts of
employment of the Automatically Transferring Business Employees in jurisdictions
in which the Regulations apply (including any rights, powers, duties and
liabilities under or in connection with their contracts) shall, to the extent
required by the Regulations, transfer by operation of Applicable Law to the
Company or its Subsidiaries with effect from such employee’s Applicable Transfer
Date.

 

(b)   If any contract of employment (including any rights, powers, duties and
liabilities under or in connection with that contract) of any person who was
intended to

 

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be an Automatically Transferring Business Employee is found or alleged to
continue with BHGE or GE or their respective Affiliates, as applicable, after
such individual’s intended transfer date, the parties agree that: (i) the
Company or its Subsidiaries shall within fourteen (14) days of discovering such
a finding or allegation make to that person an offer in writing to employ him or
her under a new contract of employment to take effect upon the termination
referred to below; (ii) such offer of employment will satisfy the obligations
set forth in Section 9.03 except as otherwise provided in this Section 9.04; and
(iii) upon that offer being made by the Company or its Subsidiaries, or on the
expiry of the fourteen (14)-day period from the date of discovery of such a
finding or allegation, BHGE or GE or their respective Affiliates, as applicable,
will terminate the employment of such employee.

 

(c)   If any contract of employment (including any rights, powers, duties and
liabilities under or in connection with that contract) of any person who is not
listed as a BHGE Business Employee or GE Business Employee, as applicable, is
found or alleged to transfer to the Company or its Subsidiaries on or after the
Closing Date, the parties agree that: (i) BHGE, GE or their respective Affiliate
that employed such BHGE Business Employee or GE Business Employee shall within
fourteen (14) days of discovering such a finding or allegation make to that
person an offer in writing to employ him or her under a new contract of
employment to take effect upon the termination referred to below; (ii) upon that
offer being made by such party, or on the expiry of the fourteen (14)-day period
from the date of discovery of such a finding or allegation, the Company or its
Subsidiaries will terminate the employment of such person; and (iii) such party
will indemnify the other party against any Losses of any kind suffered or
incurred by the Company and its Subsidiaries as a direct or indirect result of
the employment or termination of employment of that person.

 

Section 9.05   Employee Communications. The parties hereto shall reasonably
cooperate in communications with BHGE Business Employees and GE Business
Employees with respect to Employee Plans and other matters arising in connection
with the transactions contemplated by this Agreement.

 

Section 9.06   No Third Party Beneficiaries, Etc. Without limiting the
generality of the last sentence of ‎Section 13.07, nothing in this ‎Article IX,
express or implied, is intended to or shall confer upon any Person other than
the parties hereto, including any BHGE Business Employee, GE Business Employee,
or legal representative or beneficiary thereof, any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement, including any
third-party beneficiary rights, or any right to employment or continued
employment or any term or condition of employment, shall establish, or
constitute an amendment, termination or modification of, or an undertaking to
amend, establish, terminate or modify, any Employee Plan, shall alter or limit
the ability of BHGE, the Company, GE or any respective Affiliates from amending,
modifying or terminating any Employee Plan at any time following the Applicable
Transfer Date, or shall create any obligation on the part of BHGE, the Company,
GE or any of their respective Affiliates to employ any BHGE Business Employee or
GE Business Employee for any period following the Applicable Transfer Date or
shall limit the ability of BHGE, the Company, GE or any of their respective
Affiliates to terminate the employment of any employee (including any

 

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BHGE Business Employee or GE Business Employee) following the Applicable
Transfer Date at any time and for any or no reason.

 

Article X

CONDITIONS TO CLOSING

 

Section 10.01   Conditions to Obligations of GE, BHGE and the Company. The
obligations of the parties hereto to consummate the Closing are subject to the
satisfaction of the following conditions:

 

(a)   (i) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated and (ii),
as appropriate, all applicable waiting and other time periods under the
Applicable Law of the Non-U.S. Jurisdictions shall have expired, lapsed or been
terminated and all regulatory clearances shall have been obtained under the
Applicable Law of the Non-U.S. Jurisdictions.

 

(b)   No Applicable Law or order of any Governmental Authority shall prohibit
the consummation of the Closing.

 

Section 10.02   Conditions to Obligation of GE. The obligation of GE to
consummate the Closing is subject to the satisfaction (or waiver by GE) of the
following further conditions:

 

(a)   BHGE shall have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Closing Date;

 

(b)   (i) the representations and warranties of BHGE (other than the BHGE
Fundamental Reps (other than Section 3.12(a)) contained in this Agreement shall
be true and correct (without giving effect to any limitation as to “materiality”
or “BHGE Material Adverse Effect” or similar qualification therein, except with
respect to Section 3.08(a)) at and as of the Closing Date as if made at and as
of such time (except that any representations and warranties made as of a
specific date shall be true and correct as of such specified date), with only
such exceptions as would not reasonably be expected to have, individually or in
the aggregate, a BHGE Material Adverse Effect; (ii) the representations and
warranties of BHGE contained in Section 3.12(e) shall be true and correct
(without giving effect to any limitation as to “materiality” or “BHGE Material
Adverse Effect” or similar qualification therein) at and as of the Closing Date
as if made at and as of such time (except that any representations and
warranties made as of a specific date shall be true and correct as of such
specified date), with only such exceptions as would not reasonably be expected
to be material to the BHGE Contributed Business; (iii) the BHGE Fundamental Reps
(other than Section 3.12(a) and 3.12(e)) shall be true and correct (without
giving effect to any limitation as to “materiality” or “BHGE Material Adverse
Effect” or similar qualification therein) as if made at and as of such time
(except that any representations and warranties made as of a specific date shall
be true and correct as of such specified date), with only such exceptions as
would be de minimis in the context of a transaction of this magnitude; and

 

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(c)   GE shall have received a certificate signed by a duly authorized officer
of BHGE to the foregoing effect.

 

Section 10.03   Conditions to Obligation of BHGE. The obligation of BHGE to
consummate the Closing is subject to the satisfaction (or waiver by BHGE) of the
following further conditions:

 

(a)   GE shall have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Closing Date;

 

(b)   (i) the representations and warranties of GE (other than the GE
Fundamental Reps (other than Section 4.12(a)) contained in this Agreement shall
be true and correct (without giving effect to any limitation as to “materiality”
or “GE Material Adverse Effect” or similar qualification therein, except with
respect to ‎Section 4.08(a)) at and as of the Closing Date as if made at and as
of such time (except that any representations and warranties made as of a
specific date shall be true and correct as of such specified date), with only
such exceptions as would not reasonably be expected to have, individually or in
the aggregate, a GE Material Adverse Effect; (ii) the representations and
warranties of GE contained in Section 4.12(f) shall be true and correct (without
giving effect to any limitation as to “materiality” or “GE Material Adverse
Effect” or similar qualification therein) at and as of the Closing Date as if
made at and as of such time (except that any representations and warranties made
as of a specific date shall be true and correct as of such specified date), with
only such excepts as would not reasonably be expected to be material to the GE
Contributed Business; (iii) the GE Fundamental Reps (other than Sections 4.12(a)
and 4.12(f)) shall be true and correct (without giving effect to any limitation
as to “materiality” or “GE Material Adverse Effect” or similar qualification
therein) as if made at and as of such time (except that any representations and
warranties made as of a specific date shall be true and correct as of such
specified date), with only such exceptions as would be de minimis in the context
of a transaction of this magnitude; and

 

(c)   BHGE shall have received a certificate signed by a duly authorized officer
of GE to the foregoing effect.

 

Article XI

SURVIVAL; INDEMNIFICATION

 

Section 11.01   Survival. The representations and warranties of the parties
hereto contained in this Agreement (other than the representations and
warranties contained in Sections ‎‎3.16(a)(i) through (ix) and ‎‎4.16(a) through
(i), which shall not survive the Closing), shall survive the Closing until the
first anniversary of the Closing Date; provided, that the representations and
warranties contained in Sections ‎‎3.15, 3.16(a)(x), 3.16(b) and ‎‎4.15, and
4.16(j) shall survive until the third anniversary of the Closing Date; provided,
further, that the BHGE Fundamental Reps and the GE Fundamental Reps shall
survive indefinitely or until the latest date permitted by law. The covenants
and agreements of the parties hereto contained in this Agreement to be performed
before the Closing shall survive the Closing until the first anniversary of the
Closing Date and with respect to all other

 

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covenants and agreements, survive the Closing indefinitely or for the shorter
period explicitly specified therein, except that for such covenants and
agreements that survive for such shorter period, breaches thereof shall survive
indefinitely or until the latest date permitted by law. Notwithstanding the
preceding sentences, any breach of covenant, agreement, representation or
warranty in respect of which indemnity may be sought or any other
indemnification right set forth in ‎Section 11.02 that contemplates a defined
indemnification period under this Agreement shall survive the time at which it
would otherwise terminate pursuant to the preceding sentences or shall survive
following the indicated period in ‎Section 11.02, if notice of the inaccuracy
thereof giving rise to such right of indemnity or a claim for indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time.

 

Section 11.02   Indemnification. (a) Effective at and after the Closing, BHGE
hereby indemnifies:

 

(i)   the Company, any direct or indirect member of the Company, its and their
respective successors and assigns and its and their respective directors,
officers and employees (collectively, the “Company Indemnified Parties”), other
than the BHGE Indemnified Parties, against, and agrees to hold each of them
harmless from, any and all out-of-pocket damages, losses, Taxes, liabilities and
expenses (including reasonable expenses of investigation and reasonable
attorneys’ fees and expenses in connection with any action, suit or proceeding
whether involving a third party claim or a claim solely between the parties
hereto), excluding any consequential, special, exemplary, punitive or other
similar damages (except to the extent payable by an Indemnified Party in
connection with a third party claim); provided, however, that any damages that
are reasonably foreseeable in light of the nature of the transactions
contemplated hereby and the Indemnified Party shall not be considered
“consequential” damages for purposes of this Agreement (“Damages”), incurred or
suffered by any Company Indemnified Party (other than the BHGE Indemnified
Parties) (including as a result of their direct or indirect ownership of equity
interests of the Company, including with respect to Damages incurred or suffered
by the Company) arising out of (A) any misrepresentation or breach of warranty
by BHGE in this Agreement (other than the representations and warranties
contained in ‎Section 3.16) (each such misrepresentation and breach of warranty
a “BHGE Warranty Breach”) or (B) any breach of covenant or agreement made or to
be performed by BHGE pursuant to this Agreement; and

 

(ii)   for an indefinite period following the Closing Date, the Company
Indemnified Parties (other than the BHGE Indemnified Parties) against, and
agrees to hold each of them harmless from, any and all Damages incurred or
suffered by any such Company Indemnified Party arising out of any Excluded BHGE
Asset or Excluded BHGE Liability;

 

provided, that (1) BHGE shall not be liable for any BHGE Warranty Breach (other
than breaches of BHGE Fundamental Reps) unless such BHGE Warranty Breach
involves Damages in excess of $250,000, and no such Damage in an amount below
$250,000 shall be counted towards the BHGE Basket, (2) BHGE shall not be liable
for any BHGE Warranty Breach (other than breaches of BHGE Fundamental Reps)
unless the aggregate amount of

 

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Damages with respect to all such BHGE Warranty Breaches exceeds the BHGE Basket
and then only to the extent of such excess and (3) BHGE’s maximum liability for
any and all BHGE Warranty Breaches (other than breaches of BHGE Fundamental
Reps) shall not exceed the BHGE Cap.

 

(b)   Effective at and after the Closing, GE hereby indemnifies:

 

(i)   the Company Indemnified Parties (other than the GE Indemnified Parties)
against and agrees to hold each of them harmless from any and all Damages
incurred or suffered by any Company Indemnified Party (other than the GE
Indemnified Parties) (including as a result of their direct or indirect
ownership of equity interests of the Company, including with respect to Damages
incurred or suffered by the Company) arising out of (A) any misrepresentation or
breach of warranty by GE in this Agreement (other than the representations and
warranties contained in ‎‎Section 4.16) (each such misrepresentation and breach
of warranty a “GE Warranty Breach”) or (B) any breach of covenant or agreement
made or to be performed by GE pursuant to this Agreement; and

 

(ii)   for an indefinite period following the Closing Date, the Company
Indemnified Parties (other than the GE Indemnified Parties) against, and agrees
to hold each of them harmless from, any and all Damages incurred or suffered by
any such Company Indemnified Party arising out of any Excluded GE Asset or
Excluded GE Liability or resulting from or attributable to BHGE having filed Tax
Returns consistent with the Tax Treatment;

 

provided, that (1) GE shall not be liable for any GE Warranty Breach (other than
breaches of GE Fundamental Reps) unless such GE Warranty Breach involves Damages
in excess of $250,000, and no such Damage in an amount below $250,000 shall be
counted towards the GE Basket, (2) GE shall not be liable for any GE Warranty
Breach (other than breaches of GE Fundamental Reps) unless the aggregate amount
of Damages with respect to all such GE Warranty Breaches exceeds the GE Basket
and then only to the extent of such excess and (3) GE’s maximum liability for
any and all GE Warranty Breaches (other than breaches of GE Fundamental Reps)
shall not exceed the GE Cap.

 

(c)   Without limiting the foregoing and, for the avoidance of doubt, other than
to the extent indemnification is owed to any Company Indemnified Party pursuant
to Sections ‎‎11.02(a) and ‎‎11.02(b), effective at and after the Closing, the
Company hereby indemnifies for an indefinite period following the Closing Date:

 

(i)   BHGE, its Affiliates, its and their respective successors and assigns and
its and their respective directors, officers and employees (“BHGE Indemnified
Parties”) against and agrees to hold each of them harmless from any and all
Damages incurred or suffered by any BHGE Indemnified Party arising out of the
BHGE Contributed Assets or BHGE Contributed Liabilities;

 

(ii)   GE, its Affiliates, its and their respective successors and assigns and
its and their respective directors, officers and employees (“GE

 

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Indemnified Parties”) against and agrees to hold each of them harmless from any
and all Damages incurred or suffered by any GE Indemnified Party arising out of
the GE Contributed Assets or GE Contributed Liabilities; and

 

(iii)   Company Indemnified Parties against and agrees to hold each of them
harmless from any and all Damages incurred or suffered by such parties arising
out of any breach of covenant or agreement made or to be performed by the
Company following the Closing pursuant to this Agreement.

 

(d)   For purposes of this ‎‎Article XI (including for determining whether or
not any BHGE Warranty Breach or GE Warranty Breach has occurred and for
determining the amount of Damages), each representation and warranty contained
in this Agreement (other than the representations and warranties contained in
Sections ‎3.08(a), ‎3.09(a), ‎4.08(a) and ‎4.09(a)) shall be read without regard
to any materiality, BHGE Material Adverse Effect or GE Material Adverse Effect
qualifier or exception contained therein.

 

Section 11.03   Third Party Claim Procedures.

 

(a)   The party seeking indemnification under ‎Section 11.02 (the “Indemnified
Party”) agrees to give prompt notice in writing to the party against whom
indemnity is to be sought (the “Indemnifying Party”) of the assertion of any
claim or the commencement of any suit, action or proceeding by any third party
(“Third Party Claim”) in respect of which indemnity may be sought under such
Section. Such notice shall set forth in reasonable detail such Third Party Claim
and the basis for indemnification (taking into account the information then
available to the Indemnified Party). The failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Party of its obligations hereunder,
except to the extent such failure shall have adversely prejudiced the
Indemnifying Party.

 

(b)   The Indemnifying Party shall be entitled to participate in the defense of
any Third Party Claim and, subject to the limitations set forth in this Section,
shall be entitled to control and appoint lead counsel for such defense, in each
case at its own expense.

 

(c)   If the Indemnifying Party shall assume the control of the defense of any
Third Party Claim in accordance with the provisions of this ‎‎Section 11.03,
(i) the Indemnifying Party shall obtain the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld) before entering
into any settlement of such Third Party Claim, if the settlement does not
expressly unconditionally release the Indemnified Party and its Affiliates from
all liabilities and obligations with respect to such Third Party Claim or the
settlement imposes injunctive or other equitable relief against the Indemnified
Party or any of its Affiliates and (ii) the Indemnified Party shall be entitled
to participate in the defense of any Third Party Claim and to employ separate
counsel of its choice for such purpose. The fees and expenses of such separate
counsel shall be paid by the Indemnified Party.

 

(d)   Each party shall cooperate, and cause their respective Affiliates to
cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences,

 

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discovery proceedings, hearings, trials or appeals, as may be reasonably
requested in connection therewith.

 

Section 11.04   Direct Claim Procedures. In the event an Indemnified Party has a
claim for indemnity under ‎Section 11.02 against an Indemnifying Party that does
not involve a Third Party Claim, the Indemnified Party agrees to give prompt
notice in writing of such claim to the Indemnifying Party. Such notice shall set
forth in reasonable detail such claim and the basis for indemnification (taking
into account the information then available to the Indemnified Party). The
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder, except to the extent such failure shall have
materially and adversely prejudiced the Indemnifying Party.

 

Section 11.05   Environmental Claim Procedures. With respect to BHGE’s
indemnification of the Company Indemnified Parties under Section 11.02(a)(ii)
for any BHGE Excluded Liability within the scope of Section 2.05(c) or GE’s
indemnification of the Company Indemnified Parties under Section 11.02(b)(ii)
for any GE Excluded Liability within the scope of Section 2.09(c) (the
“Environmental Claims”), the following provisions apply:

 

(a)   The Indemnified Party shall provide prompt written notice to the
Indemnifying Party upon becoming aware of a pending or threatened Action or
event that the Indemnified Party has determined has given or would reasonably be
expected to give rise to an Environmental Claim, and shall provide such notice
prior to engaging with any Governmental Authority in respect of such matter
except where immediate notification to a Governmental Authority or immediate
action under Environmental Law is required, in which case notice to the
Indemnifying Party shall be made simultaneously or as promptly as is reasonably
possible thereafter and the Indemnifying Party shall not be responsible for
Losses to the extent any delay in the Indemnified Party’s providing such notice
materially increases the Indemnifying Party’s costs in connection with such
Environmental Claim. The failure to so notify the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations hereunder, except to the
extent that such failure shall have actually prejudiced the Indemnifying Party.

 

(b)   The Indemnifying Party shall have the right to assume the defense or
control of or settle any Environmental Claim, or undertake any associated
Remedial Action, with counsel, consultants or contractors of recognized standing
and competence selected by the Indemnifying Party and reasonably acceptable to
the Indemnified Party. The Indemnified Party shall not independently contact any
Governmental Authority in respect of the scope of any Remedial Action controlled
by the Indemnifying Party pursuant to this Section 11.05 or engage in any direct
discussions or negotiations with a Governmental Authority regarding such
Remedial Action; provided, that, if the Indemnified Party is required to do so
by such Governmental Authority or in order to comply with Environmental Laws,
the Indemnified Party shall first notify the Indemnifying Party of such
obligation and allow the Indemnifying Party to participate and provide
reasonable comments regarding such communication (and the Indemnifying Party to
make itself reasonably available and without delay as to same), it being agreed
between the Indemnifying Party and the Indemnified Party that approval and/or

 

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acceptance by the relevant Governmental Authority of the scope of any Remedial
Action shall be determinative.

 

(c)   The Indemnifying Party shall have the right to request in writing that the
Indemnified Party assume responsibility for the management of an Environmental
Claim or Remedial Action that is the subject of an Environmental Claim. Upon
receipt of such a request, the Indemnified Party shall or shall cause its
designated Affiliate to assume the management and performance of such Remedial
Action, engaging counsel, consultants or contractors of recognized standing and
competence reasonably acceptable to the Indemnifying Party. The Indemnified
Party or its Affiliate shall not enter into a settlement or otherwise compromise
such Environmental Claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld, conditioned or delayed.
The Indemnifying Party shall not independently contact any Governmental
Authority in respect of the scope of any Remedial Action controlled by the
Indemnified Party pursuant to this Section 11.05(c) or engage in any direct
discussions or negotiations with a Governmental Authority regarding such
Remedial Action; provided, that, if the Indemnifying Party is required to do so
by such Governmental Authority or in order to comply with Environmental Laws,
the Indemnifying Party shall first notify the Indemnified Party of such
obligation and allow the Indemnified Party to participate and provide reasonable
comments regarding such communication (and the Indemnified Party to make itself
reasonably available and without delay as to same), it being agreed between the
Indemnifying Party and the Indemnified Party that approval and/or acceptance by
the relevant Governmental Authority of the scope of any Remedial Action shall be
determinative.

 

(d)   For all Environmental Claims, the Indemnifying Party and the Indemnified
Party agree to reasonably cooperate regarding resolution of any Environmental
Claim or Remedial Action and neither party shall interfere with, impede or
hinder in any material way, in each case, the other party’s management of any
Environmental Claim or Remedial Action, or otherwise adversely affect, in any
material way the subject matter of any such Environmental Claim or Remedial
Action.

 

(e)   BHGE shall have no obligation for any Environmental Claim to the extent
that the Loss for which the Company or its successors or assigns is seeking
indemnification directly or indirectly relates to, arises out of or results
from: (i) any invasive environmental sampling or testing by or at the direction
of the Company of soil, subsurface strata, surface water, groundwater, sediments
or ambient air at, on, under or within any portion of the BHGE Contributed
Facilities unless in response to an immediate, imminent and substantial threat
to human health or the environment as required under applicable Environmental
Law or where ordered by a Governmental Authority under Environmental Law (which
order was not initiated or provoked by or on behalf of the Company), (ii) the
closure, transfer or sale or termination of a lease (other than any lease with
the Company) for or at any of the BHGE Contributed Facilities after the Closing
Date, (iii) any material change in the use of all or part of any of the BHGE
Contributed Facilities after the Closing Date, (iv) any cleanup, remedial or
similar activity other than as required to comply with the minimum applicable
standards acceptable to the relevant Governmental Authority under Environmental
Law in effect and enforceable as of the Closing Date for continued industrial
use of the

 

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affected BHGE Contributed Facility or (v) any exacerbation of the Environmental
Claim by acts or omissions of or on behalf of the Company on or after the
Closing.

 

(f)   GE shall have no obligation for any Environmental Claim to the extent that
the Loss for which the Company or its successors or assigns is seeking
indemnification directly or indirectly relates to, arises out of or results
from: (i) any invasive environmental sampling or testing by or at the direction
of the Company of soil, subsurface strata, surface water, groundwater, sediments
or ambient air at, on, under or within any portion of the GE Contributed
Facility unless in response to an immediate, imminent and substantial threat to
human health or the environment as required under applicable Environmental Law
or where ordered by a Governmental Authority under Environmental Law (which
order was not initiated or provoked by or on behalf of the Company), (ii) the
closure, transfer, sale or termination of a lease (other than any lease with the
Company) for or at the GE Contributed Facility after the Closing Date, (iii) any
material change in the use of all or part of the GE Contributed Facility after
the Closing Date, (iv) any cleanup, remedial or similar activity other than as
required to comply with the minimum applicable standards acceptable to the
relevant Governmental Authority under Environmental Law in effect and
enforceable as of the Closing Date for continued industrial use of the affected
GE Contributed Facility or (v) any exacerbation of the Environmental Claim by
acts or omissions of or on behalf of the Company on or after the Closing.

 

Section 11.06   Calculation of Damages.

 

(a)   The amount of any Damages payable under this ‎Article XI by the
Indemnifying Party shall be net of any (i) amounts recovered by the Indemnified
Party under applicable insurance policies, or from any other Person alleged to
be responsible therefor and (ii) the net Tax benefit actually realized by the
Indemnified Party and its Affiliates as a result of the incurrence or payment of
such Damages by the Indemnified Party, determined on a “with-and-without basis”
(a “Tax Benefit”). If the Indemnified Party or any of its Affiliates receive any
Tax Benefits subsequent to an indemnification payment by the Indemnifying Party,
then such Indemnified Party shall promptly pay to the Indemnifying Party the
amount of such Tax Benefits. If the Indemnified Party receives any amounts under
applicable insurance policies, or from any other Person alleged to be
responsible for any Damages, subsequent to an indemnification payment by the
Indemnifying Party, then, to the extent that such recoveries exceed the
Indemnified Party’s Damages for such matter, such Indemnified Party shall
promptly reimburse the Indemnifying Party for any payment made or expense
incurred by such Indemnifying Party in connection with providing such
indemnification payment up to the amount received by the Indemnified Party that
exceeds its Damages, net of any expenses incurred by such Indemnified Party in
collecting such amount. The Indemnified Party shall use commercially reasonable
efforts to make claims for recovery under applicable insurance policies and from
any other Person alleged to be responsible for any Damages and for Tax credits
or refunds to the extent such Tax credits or refunds would give rise to a Tax
Benefit.

 

(b)   Each Indemnified Party shall use commercially reasonable efforts to
mitigate in accordance with Applicable Law any loss for which such Indemnified
Party seeks indemnification under this Agreement.

 

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(c)   Each Indemnified Party shall use reasonable efforts to collect any amounts
available under insurance coverage, or from any other Person alleged to be
responsible, for any Damages payable under ‎Section 11.02.

 

Section 11.07   Exclusivity. Except as specifically set forth in this Agreement,
effective as of the Closing each party waives any rights and claims such party
may have against each other party, whether in law or in equity, relating to the
BHGE Contributed Business, the GE Contributed Business or the transactions
contemplated hereby. The rights and claims waived by each party include claims
arising under or relating to Environmental Laws (whether now or hereinafter in
effect), claims for breach of contract, breach of representation or warranty,
negligent misrepresentation and all other claims for breach of duty. After the
Closing, except for claims arising out of fraud or willful misconduct, Sections
‎‎11.02 and ‎‎13.12 will provide the exclusive remedy for any misrepresentation,
breach of warranty, covenant or other agreement (other than those contained in
Sections ‎‎5.02 and ‎‎7.08) or other claim arising out of this Agreement or the
transactions contemplated hereby.

 

Section 11.08   Tax Treatment of Indemnification Payments. Unless otherwise
required by the appropriate Taxing Authority, the parties agree to treat for all
Tax purposes any amounts paid by an Indemnifying Party in respect of Damages
described in Sections ‎11.02(a)(ii) or ‎‎11.02(b)(ii), as the reimbursement of a
payment made by the Indemnified Party as agent for the Indemnifying Party. The
parties shall cooperate in good faith to agree on the Tax treatment of any other
payment in respect of Damages described in Sections ‎11.02(a) or ‎‎11.02(b).

 

Article XII

TERMINATION

 

Section 12.01   Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing:

 

(a)   by mutual written agreement of BHGE and GE;

 

(b)   by either BHGE or GE if the Closing shall not have been consummated on or
before the one year anniversary of the Trigger Date (such date or such later
date, if any, as is provided in the proviso of this ‎Section 12.01(b), the
“Termination Date”); provided, however, that, if, on the Termination Date, all
conditions set forth in Article X have been satisfied (other than the conditions
set forth in Section 10.01 and those conditions that by their terms are to be
satisfied at the Closing), then (i) the Termination Date shall be automatically
extended by an additional 90 days, (ii) the Termination Date shall be deemed for
all purposes to be such later date, and (iii) during such 90 day period, the
parties shall, without limiting their obligations hereunder, including under
‎Section 7.01, consult in good faith in an effort to agree to a mutually
agreeable solution for the cause of the failure of the applicable conditions
that have not been, as of such date, satisfied;

 

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(c)   by either BHGE or GE if consummation of the transactions contemplated
hereby would violate any nonappealable final order, decree or judgment of any
Governmental Authority having competent jurisdiction;

 

(d)   by GE if there is any breach of any representation, warranty, covenant or
agreement on the part of BHGE set forth in this Agreement, such that the
conditions specified in ‎‎Section 10.02 would not be satisfied at the Closing (a
“Terminating BHGE Breach”), except that, if such Terminating BHGE Breach is
curable by BHGE through the exercise of its reasonable best efforts, then, for a
period of up to 30 days after receipt by BHGE of notice from GE of such breach
(the “BHGE Cure Period”) such termination shall not be effective and the
Termination Date shall be automatically extended until the first Business Day
following the end of the BHGE Cure Period, and such termination shall become
effective only if the Terminating BHGE Breach is not cured within the BHGE Cure
Period; or

 

(e)   by BHGE if there is any breach of any representation, warranty, covenant
or agreement on the part of GE set forth in this Agreement, such that the
conditions specified in ‎‎Section 10.03 would not be satisfied at the Closing (a
“Terminating GE Breach”), except that, if any such Terminating GE Breach is
curable by GE through the exercise of its reasonable best efforts, then, for a
period of up to 30 days after receipt by GE of notice from BHGE of such breach
(the “GE Cure Period”) such termination shall not be effective and the
Termination Date shall automatically be extended until the first Business Day
following the end of the GE Cure Period, and such termination shall become
effective only if the Terminating GE Breach is not cured within the GE Cure
Period.

 

The party desiring to terminate this Agreement pursuant to Section ‎‎12.01(b),
‎‎12.01(c), ‎‎12.01(d) or ‎‎12.01(e) shall give notice of such termination to
the other parties hereto.

 

Notwithstanding anything else contained in this Agreement, the right to
terminate this Agreement under ‎‎Section 12.01(b), ‎‎Section 12.01(d) or
‎Section 12.01(e), shall not be available to any party (i) that is in material
breach of its obligations hereunder or (ii) whose failure to fulfil its
obligations or to comply with its covenants under this Agreement has been the
cause of, or resulted in, the failure to satisfy any condition to the
obligations of either party hereunder.

 

Section 12.02   Effect of Termination. If this Agreement is terminated as
permitted by ‎Section 12.01, such termination shall be without liability of any
party (or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties to this Agreement; provided,
if such termination shall result from the willful failure of any party to
fulfill a condition to the performance of the obligations of the other parties,
failure to perform a covenant of this Agreement or breach by any party hereto of
any representation or warranty or agreement contained herein, such party shall
be fully liable for any and all Damages incurred or suffered by the other
parties as a result of such failure or breach. Sections ‎‎5.02 and ‎6.02, this
‎12.02 and ‎‎Article XIII shall survive any termination hereof pursuant to
‎Section 12.01.

 

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Article XIII

MISCELLANEOUS

 

Section 13.01   Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission and
electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is
requested and received) and shall be given,

 

if to the Company, to:

GE Aero Power LLC 

c/o GE Gas Power

Building 40-558 

One River Road

Schenectady, NY 12345 

  Attention:   Michael W. Gregory     Martin O’Neill   E-mail:  
michael.gregory@ge.com     martin.o'neill@ge.com

 

and

 

GE Aero Power LLC

c/o Baker Hughes, a GE Company, LLC 

17021 Aldine Westfield Road

Houston, Texas 77073 

  Attention: William D. Marsh   Facsimile No.: (281) 275-7320

E-mail:Will.Marsh@bhge.com

 

with a copy to:

 

Sidley Austin LLP

787 7th Avenue 

New York, NY 10019

  Attention: Christopher M. Barbuto   Facsimile: (212) 839 5599

E-mail:cbarbuto@sidley.com

 

and

 

Davis Polk & Wardwell LLP 

450 Lexington Avenue

New York, New York 10017 

  Attention: George R. Bason, Jr.     Michael Davis

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  Facsimile No.: 212-450-5590     212-450-5745   E-mail:
george.bason@davispolk.com     michael.davis@davispolk.com

 

if to GE, to:

 

GE Gas Power 

Building 40-558

One River Road 

Schenectady, NY 12345

  Attention:   Michael W. Gregory   E-mail:   michael.gregory@ge.com

 

with a copy to:

 

Sidley Austin LLP 

787 7th Avenue

New York, NY 10019 

Attention:Christopher M. Barbuto

Facsimile:(212) 839 5599

E-mail:cbarbuto@sidley.com

 

if to BHGE, to:

 

Baker Hughes, a GE company, LLC

17021 Aldine Westfield Road 

Houston, Texas 77073

  Attention: William D. Marsh   Facsimile No.: (281) 275-7320   E-mail:
Will.Marsh@bhge.com

 

with a copy to:

 

Davis Polk & Wardwell LLP 

450 Lexington Avenue

New York, New York 10017 

  Attention: George R. Bason, Jr.     Michael Davis   Facsimile No.:
212-450-5590     212-450-5745   E-mail: george.bason@davispolk.com    
michael.davis@davispolk.com

 

or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to

 

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5:00 p.m. in the place of receipt and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.

 

Section 13.02   Amendments and Waivers.

 

(a)   Any provision of this Agreement may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.

 

(b)   No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Except as otherwise provided
herein, the rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

Section 13.03   Expenses. Except as otherwise provided herein, all Transaction
Expenses shall be paid by the party incurring such Transaction Expenses (and the
Company shall have no obligation with respect to any Transaction Expenses);
provided, that BHGE and GE each shall bear 50% of the JV Transaction Expenses.

 

Section 13.04   Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto.

 

Section 13.05   Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of laws that would make the laws of another state
applicable.

 

Section 13.06   Dispute Resolution. Except as otherwise provided in
‎‎Section 2.13, in the event of any dispute arising out of or in connection with
this Agreement, any of the Ancillary Agreements or the transactions contemplated
hereby or thereby, the Parties shall first refer the dispute to proceedings
under the International Chamber of Commerce (ICC) Mediation Rules (the “Rules of
Mediation”), without prejudice to either party’s right to seek emergency or
conservatory measures of protection at any time. If any such dispute has not
been settled pursuant to the Rules of Mediation within 60 days following the
filing of a Request for Mediation (or within such other period that the Parties
may agree in writing or which may be shortened due to the appointment of an
emergency arbitrator), such dispute shall thereafter be finally settled under
the Rules of Arbitration of the International Chamber of Commerce (the “Rules of
Arbitration”) by one or more arbitrators appointed in accordance with the Rules
of Arbitration. The seat, or legal place, of arbitration shall be New York, New
York.

 

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Section 13.07   Counterparts; Effectiveness; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other parties
hereto. Until and unless each party has received a counterpart hereof signed by
the other party hereto, this Agreement shall have no effect and no party shall
have any right or obligation hereunder (whether by virtue of any other oral or
written agreement or other communication). No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations, or liabilities
hereunder upon any Person other than the parties hereto, the GE Indemnified
Parties, the Company Indemnified Parties and the BHGE Indemnified Parties, and
their respective successors and assigns.

 

Section 13.08   Entire Agreement. This Agreement and the Ancillary Agreements
constitute the entire agreement among the parties with respect to the subject
matter of this Agreement and supersede all prior agreements and understandings,
both oral and written, among the parties with respect to the subject matter of
this Agreement. The Term Sheet, dated as of November 13, 2018 and attached as
Exhibit A to the Master Agreement among BHGE Parent, BHGE LLC and GE, and the
obligations with respect to that Term Sheet under Sections 5.01 and 5.04(a) of
the Master Agreement, are hereby terminated, effective immediately.

 

Section 13.09   Bulk Sales Laws. The parties hereto each hereby waive compliance
by each other party with the provisions of the “bulk sales,” “bulk transfer” or
similar laws of any state.

 

Section 13.10   Severability. If any term, provision, covenant or restriction of
this Agreement or any Ancillary Agreement is held by a court of competent
jurisdiction or other Governmental Authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement or the Ancillary Agreement, as applicable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement or the Ancillary Agreement, as applicable, so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby or by the Ancillary
Agreement, as applicable, be consummated as originally contemplated to the
fullest extent possible.

 

Section 13.11   Disclosure Schedules. The parties have each set forth
information on their respective disclosure schedules (with respect to the BHGE,
the “BHGE Disclosure Schedule” and with respect to the GE, the “GE Disclosure
Schedule”) in a section thereof that corresponds to the section of this
Agreement to which it relates. A matter set forth in one section of a disclosure
schedule need not be set forth in any other section so long as its relevance to
such other section of the disclosure schedule or section of the Agreement is
reasonably apparent on the face of the information disclosed therein. The
parties acknowledge and agree that the BHGE Disclosure Schedule and the GE
Disclosure

 

 88

 

Schedule may include certain items and information solely for informational
purposes for the convenience of the parties and the disclosure by a party of any
matter in the BHGE Disclosure Schedule or the GE Disclosure Schedule, as
applicable, shall not be deemed to constitute an acknowledgment by such party
that the matter is required to be disclosed by the terms of this Agreement or
that the matter is material.

 

Section 13.12   Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof, in addition to
any other remedy to which they are entitled at law or in equity.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  BAKER HUGHES, A GE COMPANY, LLC           By: /s/ Lee Whitley       Name: Lee
Whitley       Title: Corporate Secretary                         GENERAL
ELECTRIC COMPANY           By: /s/ Robert Duffy       Name: Robert Duffy      
Title: Vice President - Development                         GE AERO POWER LLC  
        By: /s/ Kent Shoemaker       Name: Kent Shoemaker       Title: Secretary