Item 1.01. Entry into a Material Definitive Agreement
On December 29, 2022, Baker Hughes Company ("Baker Hughes", "the Company", "we",
or "our"), its operating subsidiary, Baker Hughes Holdings LLC ("BHH LLC"),
General Electric Company ("GE") and EHHC NewCo LLC, Delaware limited liability
company and a wholly owned subsidiary of Baker Hughes ("NewCo LLC" and
collectively, the "Parties") entered into a binding term sheet (the "Term
Sheet"). The Term Sheet sets forth the terms under which the Parties have agreed
(i) that GE will cause its affiliates to deliver notice of exchange of all units
it holds in BHH LLC, eliminating its ownership in BHH LLC, (ii) to settle
certain disputes under that Tax Matters Agreement dated as of July 3, 2017,
between GE, Baker Hughes, BHH LLC and NewCo LLC, as amended (the "TMA"), (iii)
to terminate the TMA, (iv) to provide certain going-forward rights and
obligations with respect to each of the Parties effective upon execution of the
Term Sheet, and (v) to work together to enter into definitive agreements
consistent with the Term Sheet.
The Term Sheet provides that from the date of execution of the Term Sheet, the
Parties shall work expeditiously and in good faith toward finalizing definitive
agreements implementing the terms of the Term Sheet and reflecting those
arrangements associated with such terms on or before February 15, 2023. Once
executed, the definitive agreements shall have an effective date as of the date
of the Term Sheet. Except as otherwise provided in the Term Sheet, the TMA and
any rights or obligations under the TMA terminated effective as of the date of
the Term Sheet. In connection with the execution of the Term Sheet, NewCo LLC
made a non-refundable payment of $21 million to GE as a net settlement of claims
asserted by the Parties under the TMA. The Term Sheet also provides that any
dispute arising under the Term Sheet or under any definitive agreement shall be
settled as described under the dispute resolution procedures set forth in the
Term Sheet.
The foregoing description of the Term Sheet does not purport to be complete and
is qualified in its entirety by reference to the full text of the Term Sheet. A
copy of the Term Sheet is expected to be filed as an exhibit to the Company's
Annual Report on the Form 10-K for the period ending December 31, 2022.
Item 1.02. Termination of a Material Definitive Agreement
The disclosures above under Item 1.01 of this Current Report on Form 8-K
regarding the termination of the TMA are also responsive to Item 1.02 of this
Current Report on Form 8-K and are hereby incorporated by reference into this
Item 1.02.
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