Exhibit 1.1
HÖEGH LNG PARTNERS LP
4,000,000 8.75% Series A Cumulative Redeemable
Preferred Units
UNDERWRITING AGREEMENT
New York, New York
September 28, 2017
Morgan Stanley & Co. LLC
UBS Securities LLC
Stifel, Nicolaus & Company, Incorporated
As Representatives of the several Underwriters
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
c/o UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
c/o Stifel, Nicolaus & Company, Incorporated
787 7
th
Avenue, 11
th
Floor
New York, New York 10019
Ladies and Gentlemen:
Höegh LNG Partners
LP, a Marshall Islands limited partnership (the “
Partnership
”), proposes to sell to the several underwriters
named in
Schedule I
hereto (the “
Underwriters
”), for whom you are acting as the representatives (the
“
Representatives
”), an aggregate of 4,000,000 (the “
Firm Units
”) of its 8.75% Series A Cumulative
Redeemable Preferred Units representing limited partner interests in the Partnership (the “
Preferred Units
”),
pursuant to the terms of this Underwriting Agreement (this “
Agreement
”). The Partnership also proposes to grant
to the Underwriters an option to purchase up to 600,000 additional Preferred Units (the “
Option Units
”) on the
terms and for the purposes set forth in Section 2(b). The Firm Units and the Option Units are collectively referred to in this
Agreement as the “
Units
.” Certain terms used herein and not otherwise defined are defined in Section 20 hereof.
It is understood and agreed to by all parties
that as of the date hereof:
(a) Höegh
LNG GP LLC, a Marshall Islands limited liability company (the “
General Partner
”), serves as the sole general
partner of the Partnership;
(b) the
General Partner directly owns a non-economic general partner interest in the Partnership (the “
General Partner Interest
”);
(c) The
Partnership directly owns a 100% membership interest in Höegh LNG Partners Operating LLC, a Marshall Islands limited liability
company (the “
Operating Company
”);
(d) The
Operating Company owns:
(i) 50%
of SRV Joint Gas Ltd., a Cayman Islands exempted company with limited liability and the owner of the
Neptune
(“
SRV
”);
(ii) 50%
of SRV Joint Gas Two Ltd., a Cayman Islands exempted company with limited liability and the owner of the
GDF Suez Cape Ann
(“
SRV II
”);
(iii) 100%
of Hoegh LNG Lampung Pte Ltd., a company organized under the laws of Singapore (“
Höegh Lampung
”), which
owns 49% of PT Hoegh LNG Lampung, a company incorporated under the laws of the Republic of Indonesia and the owner of the
PGN
FSRU Lampung
(“
PT Hoegh
”);
(iv) 100%
of Höegh LNG FSRU III Ltd., a Cayman Islands exempted company with limited liability (“
Höegh FSRU III
”),
which owns Hoegh LNG Cyprus Limited, a Cyprus company and the owner of the
Höegh Gallant
(“
Hoegh Cyprus
”);
(v) 51%
of Höegh LNG Colombia Holding Ltd., a Cayman Islands exempted company with limited liability (“
Höegh LNG Colombia
Holding
”), which owns Höegh LNG FSRU IV Ltd., a Cayman Islands exempted company with limited liability and the owner
of the
Höegh Grace
(“
Höegh FSRU IV
”), and Höegh LNG Colombia S.A.S., a Colombian company
(“
Höegh Colombia
”); and
(vi) 100%
of Höegh LNG Services, Ltd., a company registered under the laws of England and Wales (“
Höegh UK
”).
The
Neptune
,
the
GDF Suez Cape Ann
, the
PGN FSRU Lampung
, the
Höegh Gallant
and the
Höegh Grace
are hereinafter
collectively referred to as the “
Vessels
.” SRV, SRV II, Höegh Lampung, PT Hoegh, Höegh FSRU III, Hoegh
Cyprus, Höegh LNG Colombia Holding, Höegh FSRU IV, Höegh Colombia and Höegh UK are referred to as the “
Operating
Subsidiaries
.”
On the Closing Date (as defined in Section
3), the General Partner will amend and restate the First Amended and Restated Agreement of Limited Partnership of the Partnership,
dated August 12, 2014 (the “
Original Partnership Agreement
”) to be the Second Amended and Restated Agreement
of Limited Partnership of the Partnership (the “
Amended and Restated Partnership Agreement
”) to authorize and
establish the terms of the Preferred Units. References herein to the “
Partnership Agreement
” for periods prior
to the Closing Date mean the Original Partnership Agreement and for periods on or after the Closing Date mean the Amended and Restated
Partnership Agreement.
The “
Organizational
Agreements
” shall mean (i) the Partnership Agreement, (ii) the General Partner LLC Agreement (as defined below), (iii)
the OpCo LLC Agreement (as defined below), (iv) the Second Amended and Restated Shareholders’ Agreement, among the Operating
Company, Mitsui O.S.K. Lines, Ltd, Höegh LNG Ltd. and Tokyo LNG Tanker Co., Ltd. and (v) the Shareholders’ Agreement,
dated March 13, 2013, between Höegh Lampung and PT Bahtera Daya Utama. The “
Organizational Documents
” shall
mean the Organizational Agreements and the certificates of limited partnership and formation, the certificates of incorporation
and bylaws, memorandum and articles of association, articles of amendment and other organizational documents, as applicable, of
any Partnership Entity (as defined below).
The Partnership, the
General Partner and the Operating Company are hereinafter collectively referred to as the “
Partnership Parties
,”
and together with the Operating Subsidiaries, the “
Partnership Entities
.”
Any reference herein
to the Registration Statement, the Disclosure Package or the Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 6 of Form F-3, which were filed under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of any part of the Disclosure Package or the Prospectus, as the case may be; and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Disclosure Package or the Prospectus shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the issue date of any part of the Disclosure Package or
the Prospectus, as the case may be, deemed to be incorporated therein by reference.
This is to confirm
the agreement among the Partnership Parties and the Underwriters concerning the purchase of the Units from the Partnership by the
Underwriters.
1.
Representations
and Warranties
. Each of the Partnership Parties, jointly and severally, represents and warrants to, and agrees with, each Underwriter
as set forth below in this Section 1.
(a)
Registration
.
The Partnership meets the requirements for use of Form F-3 under the Act and has prepared and filed with the Commission a
registration statement (File Number 333-213781) on Form F-3, including a related Base Prospectus, for registration under the
Act of the offering and sale of the Units. Such Registration Statement, including any amendments thereto filed prior to the Execution
Time, has become effective. The Partnership may have filed with the Commission, as part of an amendment to the Registration Statement
or pursuant to Rule 424(b), one or more preliminary prospectus supplements relating to the Units, each of which has previously
been furnished to the Representatives. The Partnership will file with the Commission a final prospectus supplement relating to
the Units in accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all information required by
the Act, and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects
in the form furnished to the Representatives prior to the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any
Preliminary Prospectus) as the Partnership has advised the Representatives, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x). The initial
Effective Date of the Registration Statement was not earlier than the date three years before the Execution Time.
(b)
No
Material Misstatements or Omissions in the Registration Statement and the Prospectus
. On each Effective Date, the Registration
Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Units are purchased, if such date is not the Closing Date (a “
settlement date
”),
the Prospectus will, comply in all material respects with the applicable requirements of the Act and the rules and regulations
thereunder; on the Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; each of the statements made by the Partnership in the Registration Statement and in any Preliminary Prospectus
provided to the Underwriters for use in connection with the public offering of the Units, and to be made in the Prospectus and
any further amendments or supplements to the Registration Statement or Prospectus within the coverage of Rule 175(b), including
(but not limited to) any statements with respect to projected results of operations, estimated available cash and future cash distributions
of the Partnership, and any statements made in support thereof or related thereto, was made or will be made with a reasonable basis
and in good faith; provided, however, that the Partnership Parties make no representations or warranties as to the information
contained in or omitted from the Registration Statement, the Preliminary Prospectus or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to the Partnership by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration Statement, the Preliminary Prospectus or the Prospectus
(or any supplement thereto), it being understood and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 8(b) hereof.
(c)
No
Material Misstatements or Omissions in the Disclosure Package
. The Disclosure Package does not, as of the Execution Time, contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Partnership
by any Underwriter through the Representatives specifically for use therein (or any supplement thereto), it being understood and
agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such
in Section 8(b) hereof.
(d)
No
Ineligible Issuer
. (i) At the time of filing the Registration Statement and (ii) as of the Execution Time (with such date being
used as the determination date for purposes of this clause (ii)), the Partnership was not and is not an Ineligible Issuer (as defined
in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that
the Partnership be considered an Ineligible Issuer.
(e)
Emerging
Growth Company Status
. As of the date hereof, the Partnership qualifies as an “emerging growth company” as defined
in Section 2(a) of the Act (an “
Emerging Growth Company
”).
(f)
Testing-the-Waters
Communication
. The Partnership (i) has not alone engaged in any Testing-the-Waters Communication and (ii) has not authorized
anyone to engage in Testing-the-Waters Communications.
(g)
Issuer
Free Writing Prospectus
. Each Issuer Free Writing Prospectus does not include any information that conflicts with the information
contained in the Registration Statement, any Preliminary Prospectus or the Prospectus. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished
to the Partnership by any Underwriter through the Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section
8(b) hereof.
(h)
Formation
and Qualification of the Partnership Entities
. Each of the Partnership Entities has been duly formed or incorporated and is
validly existing as a limited partnership, limited liability company, limited company, corporation or other entity, as applicable,
in good standing under the laws of its respective jurisdiction of formation or incorporation with all limited liability company,
limited partnership, limited company, corporate or other entity power and authority, as applicable, to own or lease and to operate
its properties currently owned or leased and to conduct its business as currently conducted or as to be conducted on the Closing
Date and any settlement date, in each case as described in the Registration Statement, the Disclosure Package and the Prospectus.
Each of the Partnership Entities is duly qualified to do business as a foreign limited partnership, limited liability company,
limited company, corporation or other entity, as applicable, and is in good standing under the laws of each jurisdiction that requires
such qualification or registration except where the failure to be so qualified or registered would not, individually or in the
aggregate, reasonably be expected to (i) have a material adverse effect on the condition (financial or otherwise), prospects, earnings,
securityholders’ equity, results of operations, business or properties of the Partnership Entities taken as a whole (a “
Material
Adverse Effect
”) or (ii) subject the limited partners of the Partnership to any material liability or disability.
(i)
Ownership
of the General Partner
. Höegh LNG Holdings Ltd. (“
Höegh LNG
”) directly owns 100% of the limited
liability company interest in the General Partner; such limited liability company interest has been duly authorized and validly
issued in accordance with the limited liability company agreement of the General Partner (as the same may be amended, the “
General
Partner LLC Agreement
”) and is fully paid (to the extent required by the General Partner LLC Agreement) and non-assessable
(except as such non-assessability may be affected by Sections 20, 31, 40 and 49 of the Republic of the Marshall Islands Limited
Liability Company Act of 1996 (the “
Marshall Islands LLC Act
”) and except as may otherwise be provided in the
General Partner LLC Agreement); and except as may otherwise be provided in the General Partner LLC Agreement, Höegh LNG owns
such limited liability company interest free and clear of all liens, encumbrances, security interests, charges, equities or other
claims (“
Liens
”).
(j)
Ownership
of the Sponsor Units and the Incentive Distribution Rights
. Höegh LNG owns (i) 2,116,060 common units representing limited
partner interests of the Partnership (“
Common Units
”) and 13,156,060 subordinated units representing limited
partner interests (“
Subordinated Units
”) (all such Common Units and Subordinated Units being collectively referred
to herein as “
Sponsor Units
”), and (ii) 100% of the Incentive Distribution Rights (as such term is defined in
the Partnership Agreement). All of the Sponsor Units and the Incentive Distribution Rights, and the limited partner interests represented
thereby, have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent
required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by Sections 30,
41, 51 and 60 of the Republic of the Marshall Islands Limited Partnership Act (the “
Marshall Islands LP Act
”)
and except as may otherwise be provided in the Partnership Agreement); and Höegh LNG owns the Sponsor Units and the Incentive
Distribution Rights free and clear of all Liens, except for restrictions on transferability contained in the Partnership Agreement.
(k)
Ownership
of the General Partner Interest
. The General Partner is, and at each applicable settlement date will be, the sole general partner
of the Partnership and owns the General Partner Interest; such General Partner Interest has been duly authorized and validly issued
in accordance with the Partnership Agreement and the General Partner owns such General Partner Interest free and clear of all Liens.
(l)
Ownership
of the Operating Company
. The Partnership owns 100% of the limited liability company interest in the Operating Company; such
limited liability company interest has been duly authorized and validly issued in accordance with the limited liability company
agreement of the Operating Company (the “
OpCo LLC Agreement
”) and is fully paid (to the extent required under
the OpCo LLC Agreement) and non-assessable (except as such non-assessability may be affected by Sections 20, 31, 40 and 49 of the
Marshall Islands LLC Act and except as may otherwise be provided in the OpCo LLC Agreement); and except as may be otherwise provided
in the OpCo LLC Agreement, the Partnership owns such limited liability company interest free and clear of all Liens.
(m)
Ownership
of the Operating Subsidiaries
. (i) The Operating Company directly owns (x) 50% of the equity interests in each of SRV and SRV
II, (y) 100% of the equity interests in Höegh Lampung and Höegh FSRU III and (z) 51% of the shares of Höegh LNG
Colombia Holding; such equity interests have been duly authorized and validly issued in accordance with the applicable Organizational
Documents and are fully paid (to the extent required under the applicable Organizational Documents) and non-assessable (except
as such non-assessability may be affected by the applicable statutes of the jurisdiction of formation of the applicable Operating
Subsidiary and the applicable Organizational Documents); and the Operating Company owns such equity interests free and clear of
all Liens other than Liens described in the Registration Statement, Disclosure Package and the Prospectus, (ii) the Operating Company
directly owns 100% of the equity interests in Höegh UK and such equity interests have been duly authorized and validly issued
in accordance with the Articles of Association of Höegh UK (the “
Höegh UK Agreement
”) and are fully
paid (to the extent required under the Höegh UK Agreement) and non-assessable (except as such non-assessability may be affected
by the applicable statutes of England and Wales and the Höegh UK Agreement); and the Operating Company owns such equity interests
free and clear of all Liens; (iii) Höegh Lampung directly owns 49% of the equity interests in PT Hoegh; such equity interests
have been duly authorized and validly issued in accordance with the PT Hoegh’s Organizational Documents and are fully paid
(to the extent required under the PT Hoegh’s Organizational Documents) and non-assessable (except as such non-assessability
may be affected by the applicable statutes of Indonesia and the PT Hoegh’s Organizational Documents); and Höegh Lampung
owns such equity interests free and clear of all Liens, other than Liens described in the Registration Statement, Disclosure Package
and the Prospectus; (iv) Höegh FSRU III directly owns 100% of the equity interests in Hoegh Cyprus; such equity interests
have been duly authorized and validly issued in accordance with Hoegh Cyprus’s Organizational Documents and are fully paid
(to the extent required under Hoegh Cyprus’s Organizational Documents) and non-assessable (except as such non-assessability
may be affected by the applicable statutes of Cyprus and Hoegh Cyprus’s Organizational Documents); and Höegh FSRU III
owns such equity interests free and clear of all Liens, other than Liens described in the Registration Statement, Disclosure Package
and the Prospectus; and (v) Höegh LNG Colombia Holding directly owns 100% of the equity interests in Höegh FSRU IV and
Höegh Colombia; such equity interests have been duly authorized and validly issued in accordance with the applicable Organizational
Documents of Höegh FSRU IV and Höegh Colombia and are fully paid (to the extent required under the applicable Organizational
Documents of Höegh FSRU IV and Höegh Colombia) and non-assessable (except as such non-assessability may be affected by
the applicable statutes of the jurisdiction of formation of the applicable Operating Subsidiary and the applicable Organizational
Documents of Höegh FSRU IV and Höegh Colombia); and Höegh LNG Colombia Holding owns such equity interests free and
clear of all Liens other than Liens described in the Registration Statement, Disclosure Package and the Prospectus.
(n)
No
Other Subsidiaries
. Except as described in Sections 1(l) and 1(m), none of the Partnership Entities own, directly or indirectly,
any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association
or other entity.
(o)
Power
and Authority to Act as General Partner of the Partnership
. The General Partner has full limited liability company power and
authority to act as the general partner of the Partnership as described in the Registration Statement, Disclosure Package and the
Prospectus.
(p)
Capitalization
.
At the Closing Date, assuming no exercise of the option provided in Section 2(b), the issued and outstanding limited partner interests
of the Partnership will consist of 19,764,904 Common Units, 13,156,060 Subordinated Units, 4,000,000 Preferred Units and the Incentive
Distribution Rights.
(q)
Valid
Issuance of the Units
. Upon execution of the Amended and Restated Partnership Agreement and at each settlement date, the Firm
Units and the Option Units, as the case may be, and the limited partner interests represented thereby have been duly authorized
by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid (to the extent required under the Amended and Restated Partnership Agreement)
and non-assessable (except as such non-assessability may be affected by Sections 30, 41, 51 and 60 of the Marshall Islands LP Act
and except as may otherwise be provided in the Partnership Agreement).
(r)
No
Preemptive Rights, Registration Rights or Options
. Except as described in the Registration Statement, the Disclosure Package
and the Prospectus or contained in the relevant Organizational Documents of the Partnership Entities, there are no (i) preemptive
rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any equity interests
in the Partnership Entities or (ii) outstanding options or warrants to purchase any securities of the Partnership Entities. Neither
the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any Preferred Units or other securities of the Partnership.
(s)
Authority
and Authorization
. Each of the Partnership Parties has all requisite power and authority to execute and deliver this Agreement
and the Amended and Restated Partnership Agreement, as applicable, and perform its obligations hereunder and thereunder. The Partnership
has all requisite limited partnership power and authority to issue, sell and deliver the Units to the Underwriters in accordance
with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement and upon the terms set forth in
the Registration Statement, Disclosure Package and the Prospectus.
(t)
Authorization,
Execution and Delivery of this Agreement
. This Agreement has been duly authorized, executed and delivered by each of the Partnership
Parties.
(u)
Authorization,
Execution, Delivery and Enforceability of Certain Agreements
. As of the date hereof:
(1) the
General Partner LLC Agreement has been duly authorized, executed and delivered by Höegh LNG and is a valid and legally binding
agreement of Höegh LNG, enforceable against Höegh LNG in accordance with its terms;
(2) the
Original Partnership Agreement has been, and, on the Closing Date, the Amended and Restated Partnership Agreement will be, duly
authorized, executed and delivered by the General Partner and Höegh LNG and a valid and legally binding agreement of the General
Partner and Höegh LNG, enforceable against each of them in accordance with its terms;
(3) the
OpCo LLC Agreement has been duly authorized, executed and delivered by the Partnership and is a valid and legally binding agreement
of the Partnership, enforceable against the Partnership in accordance with its terms; and
(4) each
of the Operating Subsidiaries’ Organizational Agreements has been duly authorized, executed and delivered by the Operating
Company or Höegh Lampung, as applicable, and each such agreement is a valid and legally binding agreement, enforceable against
the Operating Company or Höegh Lampung, as applicable, in accordance with the terms of such agreement.
provided,
however, that with respect to each agreement described in this Section 1(u), the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, winding-up, moratorium and similar laws relating to or affecting creditors’
rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law); and provided further that the indemnity, contribution and exoneration provisions with respect to violations
of federal securities laws contained in any of such agreements may be limited by applicable laws and public policy.
(v)
No
Conflicts
. None of (i) the offering, issuance and sale by the Partnership of the Units to be issued and sold to the Underwriters
pursuant to the terms of this Agreement, (ii) the execution, delivery and performance of this Agreement by the Partnership Entities
party hereto, (iii) the consummation of the transactions contemplated hereby, including the execution and delivery of the Amended
and Restated Partnership Agreement, or (iv) the application of the proceeds from the sale of the Units as described under “Use
of Proceeds” in the Disclosure Package, (A) conflicts or will conflict with or constitutes or will constitute a violation
of any Organizational Document, (B) conflicts or will conflict with or constitutes or will constitute a breach or violation of,
or a default (or an event that, with notice or lapse of time or both, would constitute such a default) under any indenture, contract,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Partnership Entities is a party
or by which any of them or any of their respective properties may be bound, (C) violates or will violate any statute, law or regulation
or any order, judgment, decree or injunction of any court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over any of the Partnership Entities or any of their properties or assets in a proceeding to which any of them
or their property is a party or (D) resulted, results or will result in the creation or imposition of any Lien upon any property
or assets of any of the Partnership Entities, which conflicts, breaches, violations, defaults or Liens, in the case of clauses
(B), (C) or (D), would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or would materially
impair the ability of the Partnership Entities to perform their obligations under this Agreement.
(w)
No
Consents
. No permit, consent, approval, authorization, order, registration, filing or qualification of or with any court, regulatory
body, administrative agency, governmental body or arbitrator having jurisdiction over any of the Partnership Entities or any of
their properties or assets is required in connection with (i) the offering or sale by the Partnership of the Units, (ii) the execution,
delivery and performance of this Agreement or the fulfillment of the terms hereof by the Partnership Entities party hereto, including
the execution and delivery of the Amended and Restated Partnership Agreement, (iii) the application of the proceeds from the sale
of the Units as described under “Use of Proceeds” in the Disclosure Package or (iv) the consummation of any other transactions
contemplated by this Agreement, except (A) for such permits, consents, approvals, filings and similar authorizations required under
the Act, the Exchange Act and state securities or “Blue Sky” laws of any jurisdiction, (B) such consents, approvals
or authorizations as may be required under the rules of the New York Stock Exchange (“
NYSE
”) or the rules of
the Financial Industry Regulatory Authority (“
FINRA
”), (C) such consents that have been, or prior to the Closing
Date will be, obtained, (D) such consents that, if not obtained, would not individually or in the aggregate, have a Material Adverse
Effect and (E) as disclosed in the Registration Statement, the Disclosure Package and the Prospectus.
(x)
No
Defaults
. None of the Partnership Entities is (i) in violation of its Organizational Documents, (ii) in violation of any statute,
law, rule or regulation or any order, judgment, decree or injunction of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over any of the Partnership Entities or any of their properties or assets or (iii) in breach,
default (or an event that, with notice or lapse of time or both, would constitute such a default) or violation in the performance
of any obligation, agreement or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its properties may be bound, which in the case of clauses (ii) and
(iii) would, if continued, reasonably be expected to have a Material Adverse Effect or materially impair the ability of any of
the Partnership Entities to perform their obligations under this Agreement.
(y)
Conformity
of Units to Description
. The Units, when issued and delivered in accordance with the terms of this Agreement and the Partnership
Agreement against payment therefor as provided herein and therein, will conform in all material respects to the description thereof
contained in the Registration Statement, Disclosure Package and the Prospectus.
(z)
No
Labor Dispute
. Except as set forth in the Registration Statement, Disclosure Package and the Prospectus, no labor problem or
dispute with the employees of any Partnership Entity exists, or, to the knowledge of the Partnership Parties, is threatened or
imminent, and none of the Partnership Parties is aware of any existing or imminent labor disturbance by the employees of any of
the Partnership Entities’ principal suppliers, contractors or customers, that, in any case, would reasonably be expected
to have a Material Adverse Effect.
(aa)
No
Material Adverse Change
. Since the date of the latest audited financial statements included in the Disclosure Package and the
Prospectus, (i) no Partnership Entity has sustained any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, investigation,
order or decree, (ii) there has not been any material change in the capitalization or material increase in the long-term debt of
the Partnership Entities or any material adverse change or any development involving or that could reasonably be expected to involve,
individually or in the aggregate, a prospective material adverse change in or affecting the general affairs, management, condition
(financial or otherwise), stockholders’ equity, partners’ equity, members’ equity, results of operations, business,
properties, assets or prospects of the Partnership Entities, taken as a whole, and (iii) none of the Partnership Entities has incurred
any liability or obligation, direct, indirect or contingent, or entered into any transactions, whether or not in the ordinary course
of business, that, individually or in the aggregate, is material to the Partnership Entities, taken as a whole, or otherwise than
as set forth or contemplated in the Registration Statement, the Disclosure Package and the Prospectus.
(bb)
Financial
Statements
. The historical financial statements included in the Preliminary Prospectus, the Prospectus and the Registration
Statement present fairly in all material respects the financial condition, results of operations and cash flows of the entities
purported to be shown thereby and on the basis stated therein, as of the dates and for the periods indicated; such financial statements
comply as to form with the applicable accounting requirements of Regulation S-X under the Act and have been prepared in conformity
with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The summary historical financial and operating information set forth in the Preliminary Prospectus,
the Prospectus and the Registration Statement under the caption “Summary—Summary Historical Financial and Operating
Data” is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited
historical financial statements, as applicable, from which it has been derived. All disclosures contained in the Registration Statement,
the Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act, to the
extent applicable. The interactive data in eXtensible Business Reporting Language (“
XBRL
”) included or incorporated
by reference in the Registration Statement, the Disclosure Package and the Prospectus fairly present the information called for
in all material respects and have been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(cc)
Independent
Registered Public Accounting Firm
. Ernst & Young AS, who has audited certain financial statements included in the Registration
Statement, the Disclosure Package and the Prospectus of the Partnership and its combined predecessors and delivered its reports
with respect thereto, is an independent registered public accounting firm with respect to such entities within the meaning of the
Act and the applicable published rules and regulations thereunder and the rules and regulations of the Public Company Accounting
Oversight Board (“
PCAOB
”).
(dd)
Absence
of Litigation
. There is no (i) action, suit or proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of any of the Partnership Parties, threatened, to which any of
the Partnership Entities is or may be a party or to which the property of any of the Partnership Entities is or may be subject
that would be required to be disclosed in the Registration Statement or that is not adequately disclosed in the Registration Statement,
the Disclosure Package and Prospectus as required, (ii) statute, rule, regulation or order that has been enacted, adopted or issued
by any governmental agency with respect to any Partnership Entity or (iii) injunction, restraining order or order of any nature
issued by a federal or state court or foreign court of competent jurisdiction, to which any of the Partnership Entities is or may
be subject, that, in the case of clauses (ii) and (iii) above, could, individually or in the aggregate, reasonably be expected
to (A) have a Material Adverse Effect, (B) prevent or result in the suspension of the offering and sale of the Units or (C) in
any manner draw into question the validity of this Agreement.
(ee)
Title
to Properties
. As of the Closing Date and each settlement date, the Partnership Entities will have good title to all personal
property described in the Registration Statement, Disclosure Package or the Prospectus to be owned by the Partnership Entities,
and each of SRV, SRV II, PT Hoegh, Hoegh Cyprus and Höegh FSRU IV directly holds the interest in the applicable Vessel set
forth opposite its name on
Exhibit A
, in each case free and clear of all Liens except (i) as described, and subject to the
limitations contained, in the Registration Statement, the Disclosure Package and the Prospectus, (ii) that arise from the indebtedness
of the Partnership Entities or (iii) as do not materially affect the value of such property, taken as a whole, and do not materially
interfere with the use of such properties, taken as a whole, as they have been used in the past and are proposed to be used in
the future, as described in the Registration Statement, the Disclosure Package and the Prospectus (the Liens described in clauses
(i) through (iii) above being “
Permitted Liens
”); provided that with respect to any interest in real property
and buildings held under lease by Partnership Entities, such real property and buildings are held under valid and subsisting and
enforceable leases (except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)).
(ff)
Vessel
Registration
. Each Vessel is duly registered under the laws of the jurisdiction set forth on
Exhibit A
in the name of
the applicable entity identified on
Exhibit A
, free and clear of all liens except Permitted Liens.
(gg)
Tax
Returns
. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, each of the Partnership
Entities has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not reasonably be expected to have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good
faith or as would not reasonably be expected to have a Material Adverse Effect.
(hh)
Insurance
.
The Partnership Entities carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in
such amounts and covering such risks as are generally maintained by companies of established repute engaged in the same or similar
business, and all such insurance is in full force and effect. The Partnership Entities have no reason to believe that they will
not be able to (i) renew their existing insurance coverage as and when such policies expire or (ii) obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct their business as now conducted and at a cost that would
not reasonably be expected to have a Material Adverse Effect.
(ii)
Distribution
Restrictions
. No subsidiary of the Partnership is currently prohibited, directly or indirectly, from paying any distributions
to the Partnership, from making any other distribution on such subsidiary’s equity interests, from repaying to the Partnership
any loans or advances to such subsidiary from the Partnership or from transferring any of such subsidiary’s property or assets
to the Partnership or any other subsidiary of the Partnership, except as described in or contemplated by the Registration Statement,
the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto), and except as provided in Section
40 of the Marshall Islands LLC Act.
(jj)
Licenses
and Permits
. Except as described in or contemplated by the Registration Statement, the Disclosure Package and the Prospectus,
and except for those that are the responsibility of the counterparties to obtain pursuant to the terms of the charter agreements
relating to the Vessels as such agreements are currently in effect (the “
Charter Agreements
”), the Partnership
Entities possess such permits, licenses, approvals, consents and other authorizations (collectively, “
Governmental Licenses
”)
issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to own or lease and operate
their properties in the manner described in the Registration Statement, Disclosure Package and the Prospectus, except where the
failure so to possess would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;
except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Partnership Entities are in compliance
with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect; and the Partnership Entities have not received any notice of proceedings relating to the revocation or modification of
any such Governmental Licenses that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect. To the knowledge of the Partnership Parties, the charter parties to the Charter Agreements
possess, or reasonably expect to possess in the ordinary course of business as necessary, the Governmental Licenses that are the
responsibility of the charter parties to obtain pursuant to the terms of the Charter Agreements.
(kk)
Environmental
Laws
. Each Partnership Entity (i) is in compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to pollution or the protection of the environment, or imposing liability or standards of conduct concerning
the use, handling, storage or management of any Hazardous Materials (as defined herein) (“
Environmental Laws
”),
(ii) has received all permits required of it under applicable Environmental Laws to conduct their respective businesses as presently
conducted (“
Environmental Permits
”) except for any such Environmental Permits that are the responsibility of
the charter parties under the Charter Agreements and that the Partnership Parties reasonably expect such charter parties to obtain,
(iii) is in compliance with all terms and conditions of any such permits and (iv) does not have any liability in connection with
any known or threatened release into the environment of any Hazardous Material, except in the case of each of clauses (i), (ii),
(iii) and (iv) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The term
“
Hazardous Material
” means (A) any “hazardous substance” as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (B) any “hazardous waste” as defined in the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any
hazardous, toxic chemical, material, waste or substance regulated under or within the meaning of any applicable Environmental
Law. In the ordinary course of business, the Partnership Entities periodically review the effect of Environmental Laws on their
business, operations and properties, in the course of which they identify and evaluate costs and liabilities that they believe
are reasonably likely to be incurred pursuant to such Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review,
the Partnership Entities have reasonably concluded that such associated costs and liabilities relating to the Vessels would not,
individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Partnership Parties, the parties to
the Charter Agreements possess, or reasonably expect to possess in the ordinary course as necessary, the Environmental Permits
that are the responsibility of the charter parties to obtain pursuant to the terms of the Charter Agreements.
(ll)
Intellectual
Property
. Except as would not result in a Material Adverse Effect, (i) the Partnership Entities own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, “
Intellectual Property
”) necessary to carry on their business
in the manner described in the Registration Statement, Disclosure Package and the Prospectus, and (ii) the Partnership Entities
have not received any written notice of any infringement of or conflict with asserted rights of others with respect to any Intellectual
Property.
(mm)
Certain
Relationships and Related Transactions
. No relationship, direct or indirect, exists between or among any Partnership Entity,
on the one hand, and the directors, officers, stockholders, affiliates, customers or suppliers of any Partnership Entity, on the
other hand, that is required to be described in the Registration Statement, Disclosure Package or the Prospectus but is not so
described.
(nn)
Description
of Legal Proceedings and Contracts; Filing of Exhibits
. There are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement, the Disclosure Package or the Registration Statement or to be
filed as an exhibit to the Registration Statement that are not described or filed as required by the Act. The statements included
in the Registration Statement, the Disclosure Package and the Prospectus, insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate summaries of such legal matters, agreements, documents or proceedings
in all material respects.
(oo)
Sarbanes-Oxley
Act of 2002
. Except as described in the Registration Statement, the Disclosure Package or the Prospectus, on the Closing Date
and any settlement date, the Partnership will be in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley
Act of 2002, the rules and regulations promulgated in connection therewith and the rules and regulations of the NYSE that are effective
and applicable to the Partnership.
(pp)
Investment
Company
. None of the Partnership Entities is, and after giving effect to the offering and sale of the Units and the application
of the proceeds therefrom as described in the Registration Statement, the Disclosure Package and the Prospectus, none of the Partnership
Entities will be, an “investment company” or a company “controlled by” an “investment company,”
each as defined in the Investment Company Act of 1940, as amended (the “
Investment Company Act
”).
(qq)
Passive
Foreign Investment Company
. Based on its current and projected method of operations, and an opinion of its U.S. counsel, the
Partnership should not be a Passive Foreign Investment Company (“
PFIC
”) within the meaning of Section 1297 of
the United States Internal Revenue Code of 1986, as amended (the “
Code
”), for the taxable year ending December
31, 2017, and the Partnership reasonably expects that it will not be treated as a PFIC for any future tax year.
(rr)
Tax
Status
. The Partnership has properly elected to be classified as an association taxable as a corporation for United States
federal income tax purposes. Each Partnership Entity other than the Partnership has properly elected to be classified as a partnership
or disregarded as an entity separate from its owner for United States federal income tax purposes.
(ss)
Books
and Records
. Each Partnership Entity maintains a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles
and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals,
and appropriate action is taken with respect to any differences.
(tt)
Market
Stabilization
. None of the Partnership Entities has taken, directly or indirectly, any action designed to or that would constitute
or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Partnership
to facilitate the sale or resale of the Units.
(uu)
Foreign
Corrupt Practices Act
. No Partnership Entity nor any director, officer, nor to the knowledge of the Partnership Parties, any
agent, employee or affiliate of any Partnership Entity, is aware of or has taken any action, directly or indirectly, that would
result in a violation by such Persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder
(collectively, the “
FCPA
”), or other anti-corruption and anti-bribery laws of any jurisdiction applicable to
such Partnership Entity (whether by virtue of such entity’s jurisdiction of formation or its conduct of business operations)
(collectively, “
Applicable Anti-Corruption Laws
”) in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in order to obtain or retain business or otherwise secure an improper business advantage.
Partnership Entities and, to the knowledge of the Partnership Parties, their affiliates have conducted their businesses in compliance
with the FCPA and other Applicable Anti-Corruption Laws and have instituted and maintain policies and procedures that are reasonably
designed to ensure continued compliance therewith.
(vv)
Anti-Money
Laundering Laws
. The operations of the Partnership Entities are and have been conducted at all times in compliance with, in
each case to the extent applicable, financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the anti-money laundering statutes of all applicable jurisdictions (defined by virtue of such
entity’s jurisdiction of formation or its conduct of business operations), the rules and regulations thereunder and any related
or similar rules or regulations, issued, administered or enforced by any governmental agency (collectively, the “
Anti-Money
Laundering Laws
”) and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving any of the Partnership Entities with respect to the Anti-Money Laundering Laws is pending or, to the
knowledge of the Partnership Parties, threatened.
(ww)
Office
of Foreign Assets Control
. None of the Partnership Entities, nor, to the knowledge of the Partnership Parties, any director,
officer, agent, employee or affiliate of a Partnership Entity is currently the subject of or engaged in any activities in violation
of any sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the United Nations
Securities Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, the
“
Sanctions
”), nor is the Partnership located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions; and the Partnership will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing any activities of or with any person or entity, or in any country or territory that, at the time of
such financing, is the subject of a Sanction or in any other manner that would result in a violation of Sanctions by any person
or entity participating in the offering, either as an underwriter, advisor, investor or otherwise.
(xx)
Statistical
Data
. Any statistical and market-related data included in the Registration Statement, the Disclosure Package or the Prospectus
are based on or derived from sources that the Partnership believes to be reliable and accurate.
(yy)
No
Distribution of Other Offering Materials
. None of the Partnership Entities has distributed or, prior to the later to occur
of the Closing Date or any settlement date and completion of the distribution of the Units, will distribute any offering material
in connection with the offering and sale of the Units other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus to which the Representatives have consented in accordance with this Agreement or any other materials, if any, permitted
by the Act, including Rule 134 thereunder.
(zz)
Internal
Controls
. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Partnership maintains
a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that complies
with the requirements of the Exchange Act applicable to the Partnership and has been designed by the Partnership’s principal
executive officer and principal financial officer, or under his supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP (it being understood
that this subsection shall not require the Partnership to comply with Section 404 of the Sarbanes-Oxley Act of 2002 as of an earlier
date than it would otherwise be required to so comply under applicable law). Except as disclosed in the Registration Statement,
the Disclosure Package and the Prospectus, the Partnership is not aware of any material weaknesses in its internal control over
financial reporting.
(aaa)
Disclosure
Controls
. (i) The Partnership has established and maintains “disclosure controls and procedures” (to the extent
required by and as such term is defined in Rule 13a-15(e) under the Exchange Act); (ii) such disclosure controls and procedures
are designed to ensure that the information required to be disclosed by the Partnership in the reports it files or will file or
submit under the Exchange Act, as applicable, is accumulated and communicated to management of the Partnership to allow timely
decisions regarding required disclosure to be made and (iii) other than as set forth in the Registration Statement, the Disclosure
Package or the Prospectus, such disclosure controls and procedures are effective in all material respects to perform the functions
for which they were established to the extent required by Rule 13a-15 of the Exchange Act.
(bbb)
Stamp
Taxes
. No stamp or other issuance or transfer taxes are payable by or on behalf of the Underwriters in connection with (A)
the delivery of the Firm Units in the manner contemplated herein or (B) the sale and delivery by the Underwriters of the Units
as contemplated herein.
(ccc)
Broker
.
There are no contracts, arrangements or understandings between any Partnership Entity and any person that would give rise to a
valid claim against any Partnership Entity or any Underwriter for a brokerage commission, finder’s fee or other like payment
in connection with the offering of the Units.
Any certificate signed
by any officer of any Partnership Entity and delivered to the Representatives or counsel for the Underwriters in connection with
this offering shall be deemed a representation and warranty by such Partnership Entity, as to matters covered thereby, to each
Underwriter.
2.
Purchase
and Sale
.
(a) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Partnership agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Partnership, at a purchase
price of $24.2125 per Unit, the number of Firm Units set forth opposite such Underwriter’s name in
Schedule I
hereto.
(b) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Partnership hereby grants
an option to the several Underwriters to purchase, severally and not jointly, the Option Units at the same purchase price per Unit
as the Underwriters shall pay for the Firm Units, less an amount per Unit equal to any dividends or distributions declared by the
Partnership and payable on the Firm Units but not payable on the Option Units. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Prospectus upon written, electronic or telegraphic notice by the Representatives
to the Partnership setting forth the number of Option Units as to which the several Underwriters are exercising the option and
the settlement date. The number of Option Units to be purchased by each Underwriter shall be the same percentage of the total number
of Option Units to be purchased by the several Underwriters as such Underwriter is purchasing of Firm Units, subject to such adjustments
as the Representatives, in their absolute discretion, shall make to eliminate any fractional Units.
3.
Delivery
and Payment
. Delivery of and payment for the Firm Units and the Option Units (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the second Business Day immediately preceding the Closing Date) shall be made at the offices
of Vinson & Elkins L.L.P., 2200 Pennsylvania Avenue NW, Suite 500 West, Washington, DC 20037-1701 at 10:00 a.m., New York City
time, on October 5, 2017, or at such time on such later date not more than three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be postponed by agreement among the Representatives and the Partnership
or as provided in Section 9 hereof (such date and time of delivery and payment for the Units being herein called the “
Closing
Date
”). Delivery of the Units shall be made to the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the respective aggregate purchase price of the Units
being sold by the Partnership to or upon the order of the Partnership by wire transfer payable in same-day funds to the accounts
specified by the Partnership. Delivery of the Units shall be made through the facilities of The Depository Trust Company (“
DTC
”)
unless the Representatives shall otherwise instruct.
If the option provided
for in Section 2(b) hereof is exercised after the second Business Day immediately preceding the Closing Date, the Partnership
will deliver the Option Units (at the expense of the Partnership) to the Representatives, at the offices of Vinson & Elkins
L.L.P., 2200 Pennsylvania Avenue NW, Suite 500 West, Washington, DC 20037-1701, on the date specified by the Representatives (which
shall be within two Business Days after exercise of said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Partnership
by wire transfer payable in same-day funds to the accounts specified by the Partnership. If settlement for the Option Units occurs
after the Closing Date, the Partnership will deliver to the Representatives on the settlement date for the Option Units, and the
obligation of the Underwriters to purchase the Option Units shall be conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6
hereof.
4.
Offering
by Underwriters
. It is understood that the several Underwriters propose to offer the Units for sale to the public as set forth
in the Prospectus.
5.
Agreements
.
Each of the Partnership Parties, jointly and severally, agrees with the several Underwriters that:
(a)
Preparation
of Prospectus and Registration Statement
. Prior to the termination of the offering of the Units, the Partnership will not file
any amendment to the Registration Statement or supplement (including any Preliminary Prospectus or the Prospectus) to the Base
Prospectus or any Rule 462(b) Registration Statement unless the Partnership has furnished the Representatives a copy for their
review prior to filing and will not file any such proposed amendment or supplement to which the Representatives reasonably object.
The Partnership will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely filing. The Partnership will promptly advise the Representatives
(i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b)
or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (ii) when, prior to termination of the
offering of the Units, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request
by the Commission or its staff for any amendment to the Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Partnership of any notification with respect to the suspension of the
qualification of the Units for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The
Partnership will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension
or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as
soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing
an amendment to the Registration Statement or a new registration statement and using its reasonable best efforts to have such amendment
or new registration statement declared effective as soon as practicable.
(b)
Amendment
or Supplement of Disclosure Package and Issuer Free Writing Prospectus
. If, at any time prior to the filing of the Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package as of the Execution Time or any Issuer Free
Writing Prospectus as of its date would include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under which they were made or the circumstances prevailing at
such time not misleading, or any Issuer Free Writing Prospectus would conflict with the information in the Registration Statement,
the Preliminary Prospectus or the Prospectus, the Partnership will (i) promptly notify the Representatives so that any use of the
Disclosure Package or the Issuer Free Writing Prospectus, as the case may be, may cease until the Disclosure Package or such Issuer
Free Writing Prospectus is amended or supplemented; (ii) amend or supplement the Disclosure Package or the Issuer Free Writing
Prospectus, as the case may be, to correct such statement, omission or conflict; and (iii) supply any amendment or supplement to
the Representatives in such quantities as they may reasonably request.
(c)
Amendment
to Registration Statement or Supplement of Prospectus
. If, at any time when a prospectus relating to the Units is required
to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event
occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at
such time not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, including in connection with the use or delivery of the Prospectus,
the Partnership promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission, subject
to the second sentence of paragraph (a)(i) of this Section 5, an amendment, supplement or new registration statement that will
correct such statement or omission or effect such compliance; (iii) use its best efforts to have any amendment to the Registration
Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in the use of
the Prospectus; and (iv) supply any supplemented Prospectus to the Representatives in such quantities as they may reasonably request.
(d)
Reports
to Unitholders
. As soon as practicable, the Partnership will make generally available to its unitholders and to the Representatives
an earnings statement or statements of the Partnership and its subsidiaries that will satisfy the provisions of Section 11(a) of
the Act and Rule 158.
(e)
Signed
Copies of the Registration Statement and Copies of the Prospectus
. The Partnership will furnish to the Representatives and
counsel for the Underwriters, without charge, photocopies of signed copies of the Registration Statement (including exhibits thereto)
and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172), as many copies of each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as the Representatives may reasonably request.
(f)
Qualification
of Units
. The Partnership will arrange, if necessary, for the qualification of the Units for sale under the laws of such jurisdictions
as the Representatives may reasonably designate and will maintain such qualifications in effect so long as reasonably required
for the distribution of the Units; provided, however, that in no event shall the Partnership be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Units, in any jurisdiction where it is not now so subject.
(g)
Lock-Up
Period
. The Partnership Parties will not, without the prior written consent of Morgan Stanley & Co. LLC, UBS Securities
LLC and Stifel, Nicolaus & Company, Incorporated, offer, sell, contract to sell, pledge, or otherwise dispose of or enter into
any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise) by any of the Partnership Parties or any person in privity
with the Partnership Parties or any of their affiliates, directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position (within the meaning of Section 16 of the Exchange Act) in any Units or any securities that
are substantially similar to the Units (excluding the Common Units); or publicly announce an intention to effect any such transaction,
for a period of 30 days after the date of this Agreement (the “
Lock-Up Period
”).
(h)
DTC
.
The Partnership Parties will use their commercially reasonable efforts to cause the Units to be eligible for clearance, settlement
and trading through the facilities of DTC.
(i)
NYSE
Listing
. The Partnership Parties will prepare and file any proper notification regarding the listing of the Units on the NYSE
within 30 days after the Closing Date and make commercially reasonable efforts to effect listing of the Units on the NYSE within
30 days of the Closing Date. Upon such listing, the Partnership Parties will use commercially reasonable efforts to maintain such
listing and satisfy the requirements for such continued listing.
(j)
Exchange
Act Registration Statement.
The Partnership Parties will prepare and file, in accordance with Section 12 of the Exchange Act,
a registration statement on Form 8-A to register the class of securities consisting of the Preferred Units under the Exchange Act.
(k)
Price
Manipulation
. The Partnership Parties will not take, directly or indirectly, any action designed to or that would constitute
or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Partnership to facilitate the sale or resale of the Units.
(l)
Expenses
.
The Partnership agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all amendments
or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of
the Units; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Units, including any
stamp or transfer taxes in connection with the execution of this Agreement or the original issuance and sale of the Units; (iv)
the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Units; (v) the registration of the Units under the Exchange
Act and the listing of the Units on the NYSE; (vi) any registration or qualification of the Units for offer and sale under the
securities or blue sky laws of the several states (including filing fees and legal fees and expenses of counsel for the underwriters
relating to such filings), provided that the Partnership’s obligations under this clause (vi) shall not exceed $20,000; (vii)
any filings required to be made with the FINRA (including filing fees and legal fees and expenses of counsel for the underwriters
relating to such filings), provided that the Partnership’s obligations under this clause (vii) shall not exceed $20,000;
(viii) the transportation and other expenses incurred by or on behalf of Partnership representatives in connection with presentations
to prospective purchasers of the Units; (ix) the fees and expenses of the Partnership’s accountants and the fees and expenses
of counsel (including local and special counsel) for the Partnership; and (x) all other costs and expenses incident to the performance
by the Partnership Parties of their obligations hereunder.
(m)
Free
Writing Prospectus
. The Partnership agrees that, unless it has obtained or shall have obtained the prior written consent of
the Representatives, and each Underwriter, severally and not jointly, agrees with the Partnership that, unless it has obtained
or shall have obtained, as the case may be, the prior written consent of the Partnership and the Representatives, it has not made
and will not make any offer relating to the Units that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a Free Writing Prospectus required to be filed by the Partnership with the Commission or retained by the Partnership
under Rule 433; provided, however, that the prior written consent of the parties hereto shall be deemed to have been given in respect
of each Free Writing Prospectus included in
Schedule II
hereto and any bona fide electronic road show within the meaning
of Rule 433. Any such free writing prospectus consented to by the Representatives or the Partnership is hereinafter referred to
as a “
Permitted Free Writing Prospectus
.” The Partnership agrees that (i) it has treated and will treat, as
the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will
comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including
in respect of timely filing with the Commission, legending and record keeping.
(n)
Term
Sheet
. The Partnership will prepare a final term sheet (the “
Final Term Sheet
”) containing only a description
of the final terms of the Units and their offering, in a form approved by the Representatives and attached as
Schedule III
hereto, which Final Term Sheet shall be an Issuer Free Writing Prospectus and shall comply with the related obligations set forth
in Section 5(m), and will furnish to each Underwriter, without charge, copies of the Final Term Sheet promptly upon its completion.
(o)
Rule
463
. The Partnership will file with the Commission such information in Form 20-F as may be required by Rule 463 under the Act.
(p)
Investment
Company Act; PFIC
. As of the Closing Date, no Partnership Entity will be deemed an “investment company” as defined
in the Investment Company Act. For a period of five years after the later of the Closing Date and any settlement date, the Partnership
will use its reasonable best efforts to ensure that no Partnership Entity, or any subsidiary thereof, shall become an “investment
company” as defined in the Investment Company Act. Unless there has occurred a material change in the nature of the operations
of the Partnership, for a period of five years after the later of the Closing Date and any settlement date, the Partnership will
use commercially reasonable efforts to ensure that the Partnership shall not become a PFIC.
(q)
Sanctions
Laws and Regulations
. The Partnership will not take, and will cause each subsidiary not to take, directly or indirectly, any
action that would reasonably be expected to result in a violation by any U.S. person participating in the offering contemplated
by this Agreement of the Sanction Laws and Regulations with respect to the sale of the Units hereunder.
(r)
Emerging
Growth Company Status
. The Partnership will promptly notify the Representatives if the Partnership ceases to be an Emerging
Growth Company at any time prior to the later of (i) completion of the distribution of the Units within the meaning of the Act
and (ii) completion of the Lock-Up Period referred to in Section 5(g) hereof.
(s)
Written
Testing-the-Waters Communication
. If at any time following the distribution of any Written Testing-the-Waters Communication,
any event occurs as a result of which such Written Testing-the-Waters Communication would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which
they were made at such time not misleading, the Partnership will (i) promptly notify the Representatives so that use of the Written
Testing-the-Waters Communication may cease until it is amended or supplemented; (ii) amend or supplement the Written Testing-the-Waters
Communication to correct such statement or omission; and (iii) supply any amendment or supplement to the Representatives in such
quantities as may be reasonably requested.
6.
Conditions
to the Obligations of the Underwriters
. The obligations of the Underwriters to purchase the Firm Units and the Option Units,
as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Partnership Parties
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to the accuracy
of the statements of the Partnership Parties made in any certificates pursuant to the provisions hereof, to the performance by
the Partnership Parties of their respective obligations hereunder and to the following additional conditions:
(a) The
Prospectus, and any supplement thereto, has been filed in the manner and within the time period required by Rule 424(b); any material
required to be filed by the Partnership pursuant to Rule 433(d) under the Act shall have been filed with the Commission within
the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The
Partnership shall have requested and caused Watson Farley & Williams LLP, special counsel for the Partnership Entities regarding
Marshall Islands law matters, to have furnished to the Representatives their written opinion, dated the Closing Date and any settlement
date, as applicable, and addressed to the Representatives, in form and substance satisfactory to the Representatives.
(c) The
Partnership shall have requested and caused Vinson & Elkins L.L.P., U.S. counsel to the Partnership Parties, to have furnished
to the Representatives their written opinion, dated the Closing Date and any settlement date, as applicable, and addressed to the
Representatives, in form and substance reasonably satisfactory to the Representatives.
(d) The
Partnership shall have requested and caused Advokatfirmaet Thommessen AS, Norwegian counsel to the Partnership Parties, to have
furnished to the Representatives their written opinion, dated the Closing Date and any settlement date, as applicable, and addressed
to the Representatives, in form and substance satisfactory to the Representatives.
(e) The
Partnership shall have requested and caused Vinson & Elkins R.L.L.P., special United Kingdom counsel to the Partnership Parties,
to have furnished to the Representatives their written opinion, dated the Closing Date and any settlement date, as applicable,
and addressed to the Representatives, in form and substance satisfactory to the Representatives.
(f) The
Partnership shall have requested and caused Appleby (Cayman) Ltd., special Cayman Islands counsel to the Partnership Parties, to
have furnished to the Representatives their written opinion, dated the Closing Date and any settlement date, as applicable, and
addressed to the Representatives, in form and substance satisfactory to the Representatives.
(g) The
Partnership shall have requested and caused Adnan Kelana Haryanto & Hermanto, special Indonesian counsel to the Partnership
Parties, to have furnished to the Representatives their written opinion, dated the Closing Date and any settlement date, as applicable,
and addressed to the Representatives, in form and substance satisfactory to the Representatives.
(h) Camilla
Nyhus-Møller, the Senior Vice President, Legal Compliance of Höegh LNG shall have furnished to the Representatives
her legal opinion, dated the Closing Date and any settlement date, as applicable, and addressed to the Representatives, in form
and substance satisfactory to the Representatives.
(i) The
Representatives shall have received from Baker Botts L.L.P., counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and any settlement date, as applicable, and addressed to the Representatives, with respect to the sale of the Units,
the Registration Statement, the Disclosure Package, the Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Partnership Entities shall have furnished to such counsel such documents
as they reasonably request for the purpose of enabling them to pass upon such matters.
(j) The
Partnership shall have furnished to the Representatives a certificate signed on behalf of the Partnership, by the Chief Executive
Officer and the Chief Financial Officer of the Partnership, dated the Closing Date and any settlement date, as applicable, to the
effect that the signer of such certificate has carefully examined the Registration Statement, the Disclosure Package, the Prospectus,
any Issuer Free Writing Prospectus and any amendment or supplement thereto, and this Agreement and that:
(i) the
representations and warranties of the Partnership Parties in this Agreement are true and correct on and as of the Closing Date
and any settlement date, as applicable, with the same effect as if made on the Closing Date and any settlement date, as applicable,
and each of the Partnership Parties has complied with all of the agreements and satisfied all of the conditions on its part to
be performed or satisfied at or prior to the Closing Date and any settlement date, as applicable;
(ii) no
stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no
proceedings for that purpose have been instituted or, to the Partnership’s knowledge, threatened; and
(iii) since
the date of the most recent financial statements included in the Disclosure Package and the Prospectus (exclusive of any supplement
thereto), there has been no Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(k) The
Partnership Parties shall have requested and caused Ernst & Young AS to have furnished to the Representatives at the Execution
Time and at the Closing Date and any settlement date, as applicable, letters, dated respectively as of the Execution Time and as
of the Closing Date and any settlement date, as applicable, in form and substance satisfactory to the Representatives, (i) confirming
that they are an independent registered public accounting firm within the meaning of the Act and the Exchange Act and the applicable
rules and regulations thereunder, adopted by the Commission and the PCAOB, and (ii) stating their conclusions and findings with
respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to
underwriters in connection with registered public offerings in the United States.
(l) On
the Closing Date, the General Partner shall have executed and delivered the Amended and Restated Partnership Agreement in form
and substance reasonably satisfactory to the Underwriters.
(m) Subsequent
to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (k) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the
Partnership Entities, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Units as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment
or supplement thereto).
(n) Prior
to the Closing Date, the Partnership Parties shall have furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(o) Subsequent
to the Execution Time, there shall not have been any decrease in the rating of any of the Partnership Entities’ debt or preferred
equity securities, if any, by any “nationally recognized statistical rating organization” (as defined in Section 3(a)(62)
under the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the possible change.
If any of the conditions
specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled
at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Partnership
in writing or by telephone or facsimile confirmed in writing.
The documents required
to be delivered by this Section 6 shall be delivered at the office of Vinson & Elkins L.L.P., counsel for the Partnership,
at 2200 Pennsylvania Avenue NW, Suite 500 West, Washington, DC 20037-1701, on the Closing Date.
7.
Reimbursement
of Underwriters’ Expenses
. If the sale of the Units provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section
10(i) hereof or because of any refusal, inability or failure on the part of the Partnership Parties to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Partnership Parties will
reimburse the Underwriters severally through the Representatives on demand for all reasonable and documented out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Units.
8.
Indemnification
and Contribution
.
(a) Each
of the Partnership Parties, jointly and severally agrees, to (i) indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter, affiliates of the Underwriters who have participated in the distribution of the Units
and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (A) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement for the registration of the Units as originally filed or in any amendment thereof,
or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, or (B) any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus,
any Preliminary Prospectus, any Issuer Free Writing Prospectus or in any Prospectus, or in any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (ii) reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Partnership Parties will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Partnership
Parties by or on behalf of any Underwriter through the Representatives specifically for inclusion therein, which information consists
solely of the information set forth in the last sentence of Section 8(b). This indemnity agreement will be in addition to any liability
that the Partnership Parties may otherwise have.
(b) Each
Underwriter severally and not jointly agrees to indemnify and hold harmless each of the Partnership Parties, each of their respective
directors, each of the officers who signs the Registration Statement, and each person who controls any Partnership Party within
the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Partnership Parties to
each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Partnership Parties
by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. Each
Partnership Party acknowledges that the statements set forth (i) in the last paragraph of the cover page regarding delivery of
the Units and, under the heading “Underwriting,” (ii) the list of Underwriters, (iii) the sentences related to concessions
and reallowances and (iv) the paragraphs related to stabilization, syndicate covering transactions and short sales in any Preliminary
Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters
for inclusion in any Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectus.
(c) Promptly
after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph
(a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying
party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ one separate counsel (in addition to local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action
or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and
does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) In
the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Partnership Parties, jointly and severally, agree and the Underwriters severally,
but not jointly, agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) (collectively “
Losses
”) to which the
Partnership Parties and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Partnership Parties on the one hand and by the Underwriters on the other from the offering of the Units;
provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating
to the offering of the Units) be responsible for any amount in excess of the underwriting discount or commission applicable to
the Units purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Partnership Parties, jointly and severally, and the Underwriters severally, but not jointly, shall contribute
in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Partnership
Parties on the one hand and of the Underwriters on the other in connection with the statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. Benefits received by the Partnership Parties shall be deemed to
be equal to the total net proceeds from the offering (before deducting expenses) received by the Partnership, and benefits received
by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth
on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue
or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
provided by the Partnership Parties on the one hand or the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Partnership Parties
and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any
other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls
the Partnership Parties within the meaning of either the Act or the Exchange Act, each officer of any of the Partnership Parties
who shall have signed the Registration Statement and each director of the Partnership Parties shall have the same rights to contribution
as the Partnership Parties, subject in each case to the applicable terms and conditions of this paragraph (d).
9.
Default
by an Underwriter
. If any one or more Underwriters shall fail to purchase and pay for any of the Units agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its
or their obligations under this Agreement, the remaining Underwriters shall be obligated severally, but not jointly, to take up
and pay for (in the respective proportions which the number of Units set forth opposite their names in
Schedule I
hereto
bears to the aggregate number of Units set forth opposite the names of all of the remaining Underwriters) the Units that the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate number of Units
that the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate number of Units
set forth in
Schedule I
hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Units, and if such nondefaulting Underwriters do not purchase all the Units, this Agreement
will terminate without liability to any nondefaulting Underwriter or the Partnership Parties. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days,
as the Representatives shall determine in order that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter
of its liability, if any, to the Partnership Parties and any nondefaulting Underwriter for damages occasioned by its default hereunder.
10.
Termination
.
This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Partnership
prior to delivery of and payment for the Units, if at any time prior to such delivery and payment (i) trading in any securities
of the Partnership shall have been suspended by the Commission or the NYSE, (ii) trading in securities generally on the NYSE or
the NASDAQ National Market shall have been suspended or limited or minimum prices shall have been established on such exchange,
(iii) a banking moratorium shall have been declared by either U.S. Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity
or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical
or inadvisable to proceed with the offering or delivery of the Units as contemplated by the Preliminary Prospectus and the Prospectus
(exclusive of any amendment or supplement thereto).
11.
Representations
and Indemnities to Survive
. The respective agreements, representations, warranties, indemnities and other statements of the
Partnership Parties or their respective officers and of the Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Partnership Parties or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Units. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12.
Notices
.
All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to Morgan Stanley & Co. LLC, 1585 Broadway, 29
th
Floor, New York, New York 10036, Attention:
Investment Banking Division (Fax : (212) 507-8999), UBS Securities LLC, 1285 Avenue of the Americas, New York, New York 10019,
Attention Fixed Income Syndicate (Fax: (203) 719-0495), and Stifel, Nicolaus & Company, Incorporated, 787 7
th
Avenue,
11
th
Floor, New York, New York 10019, Attention: General Counsel (Fax: (212) 682-1766; or, if sent to the Partnership,
will be mailed, delivered or telefaxed to Höegh LNG Partners LP, Suite 616, 48 Par-la-ville Road, Hamilton, HM11 Bermuda,
Attention: Chief Executive Officer (fax no.: +441 295-6101), with a copy to Höegh LNG, Canon’s Court, 22 Victoria Street,
Hamilton, HM 12, Bermuda, Attention: Chief Executive Officer.
13.
Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right
or obligation hereunder.
14.
No
Fiduciary Duty
. Each of the Partnership Parties hereby acknowledges that (a) the purchase and sale of the Units pursuant to
this Agreement is an arm’s-length commercial transaction between the Partnership, on the one hand, and the Underwriters and
any affiliate through which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or
fiduciary of the Partnership Parties and (c) the engagement of the Underwriters in connection with the offering and the process
leading up to the offering is as independent contractors and not in any other capacity. Furthermore, each of the Partnership Parties
agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any
of the Underwriters has advised or is currently advising the Partnership Parties on related or other matters). Each of the Partnership
Parties agrees that it will not claim that any of the Underwriters have rendered advisory services of any nature or respect, or
owe an agency, fiduciary or similar duty to the Partnership Parties, in connection with the transactions contemplated by this Agreement
or the process leading thereto.
15.
Integration
.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Partnership Parties and
the Underwriters, or any of them, with respect to the subject matter hereof.
16.
Applicable
Law
. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
17.
Judicial
Proceedings
.
(a) Each
of the Partnership Parties and the Representatives irrevocably agree that any legal suit, action or proceeding against the Partnership
Parties arising out of or based upon this Agreement, the transactions contemplated hereby or alleged violations of the securities
laws of the United States or any state in the United States will be instituted in any New York court. The Partnership Parties irrevocably
(i) waive, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue
of any such proceeding in any New York court and (ii) submit to the exclusive jurisdiction of such courts in any such suit, action
or proceeding. Each of the Partnership Parties has appointed Puglisi & Associates, Newark, Delaware, as its authorized agent
(the “
Authorized Agent
”), upon whom process may be served in any such action arising out of or based on this
Agreement, the transactions contemplated hereby or any alleged violation of the securities laws of the United States or any state
in the United States which may be instituted in any New York court, expressly consent to the jurisdiction of any such court in
respect of any such action, and waive any other requirements of or objections to personal jurisdiction with respect thereto. Such
appointment shall be irrevocable by the Partnership Parties. The Partnership Parties represent and warrant that the Authorized
Agent has agreed to act as such agent for service of process. Service of process upon the Authorized Agent and written notice of
such service to the Partnership Parties shall be deemed, in every respect, effective service of process upon the Partnership Parties.
(b) If
for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than
United States dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange
used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars
with such other currency in the City of New York on the Business Day proceeding that on which final judgment is given. The obligations
of the Partnership Parties in respect of any sum due from it to the Underwriters shall, notwithstanding any judgment in a currency
other than United States dollars, not be discharged until the first Business Day, following receipt by the Underwriters of any
sum adjudged to be so due in such other currency, on which (and only to the extent that) the Underwriters may in accordance with
normal banking procedures purchase United States dollars with such other currency; if the United States dollars so purchased are
less than the sum originally due to the Underwriters hereunder, the Partnership Parties agree, as a separate obligation and notwithstanding
any such judgment, that the party responsible for such judgment shall indemnify the Underwriters against such loss. If the United
States dollars so purchased are greater than the sum originally due to the Underwriters hereunder, the Underwriters agree to pay
to the Partnership Parties an amount equal to the excess of the dollars so purchased over the sum originally due to the Underwriters
hereunder.
18.
Counterparts
.
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together
shall constitute one and the same agreement.
19.
Headings.
The section headings used herein are for convenience only and shall not affect the construction hereof.
20.
Definitions.
The terms that follow, when used in this Agreement, shall have the meanings indicated.
“
Act
” shall mean the Securities
Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“
Base Prospectus
” shall
mean the base prospectus referred to in Section 1(a) hereof contained in the Registration Statement at the Execution Time.
“
Business Day
” shall mean
any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
“
Commission
” shall mean
the Securities and Exchange Commission.
“
Disclosure Package
” shall
mean (i) the Base Prospectus, (ii) the Preliminary Prospectus, dated September 28, 2017 and (iii) the Issuer Free Writing Prospectuses
identified in
Schedule II
hereto.
“
Effective Date
” shall
mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b)
Registration Statement became or becomes effective.
“
Exchange Act
” shall mean
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“
Execution Time
” shall
mean 2:30 p.m. New York City Time on the date hereof.
“
Free Writing
Prospectus
” shall mean a free writing prospectus, as defined in Rule 405.
“
Issuer Free Writing Prospectus
”
shall mean an issuer free writing prospectus, as defined in Rule 433.
“
Preliminary Prospectus
”
shall mean any preliminary prospectus supplement to the Base Prospectus referred to in Section 1(a) hereof that is used prior
to the filing of the Prospectus.
“
Prospectus
” shall mean
the prospectus relating to the Units that is first filed pursuant to Rule 424(b) after the Execution Time, together with the
Base Prospectus.
“
Registration Statement
”
shall mean the registration statement referred to in Section 1(a) above including exhibits and financial statements and any prospectus
supplement relating to the Units that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration
statement pursuant to Rule 430B, as amended at the Execution Time and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as
so amended or such Rule 462(b) Registration Statement, as the case may be.
“
Rule 158
”, “
Rule
172
”, “
Rule 175
”, “
Rule 405
”, “
Rule 415
”, “
Rule 424
”,
“
Rule 430B
”, “
Rule 433
” and “
Rule 462
” refer to such rules under the Act.
“
Rule 462(b) Registration Statement
”
shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered
by the registration statement referred to in Section 1(a) hereof.
“
Testing-the-Waters Communication
”
shall mean any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
“
Written Testing-the-Waters Communication
”
shall mean any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance
shall represent a binding agreement among the Partnership Parties and the several Underwriters.
|
|
Very truly yours,
|
|
|
|
|
|
HÖEGH LNG PARTNERS LP
|
|
|
|
|
|
|
By:
|
/s/ Richard Tyrrell
|
|
|
Name: Richard Tyrrell
|
|
|
Title: Chief Executive Officer and Chief Financial Officer
|
|
|
|
|
|
|
HÖEGH LNG GP LLC
|
|
|
|
|
|
|
By:
|
/s/ Sveinung Støhle
|
|
|
Name: Sveinung Støhle
|
|
|
Title: Director
|
|
|
|
|
|
|
HÖEGH LNG PARTNERS OPERATING LLC
|
|
|
|
|
|
|
By:
|
/s/ Richard Tyrrell
|
|
|
Name: Richard Tyrrell
|
|
|
Title: Chief Executive Officer and Chief Financial Officer
|
|
The foregoing Agreement is hereby
|
|
|
confirmed and accepted as of the
|
|
|
date first above written.
|
|
|
|
|
|
MORGAN STANLEY & CO. LLC
|
|
|
|
|
|
|
By:
|
/s/ Yurij Slyz
|
|
|
|
Name: Yurij Slyz
|
|
|
|
Title: Executive Director
|
|
|
|
|
|
UBS SECURITIES LLC
|
|
|
|
|
|
|
By:
|
/s/ Mark Spadaccini
|
|
|
|
Name: Mark Spadaccini
|
|
|
|
Title: Executive Director
|
|
|
|
|
|
|
By:
|
/s/ Prath Reddy
|
|
|
|
Name: Prath Reddy
|
|
|
|
Title: Director
|
|
|
|
|
|
|
STIFEL, NICOLAUS & COMPANY, INCORPORATED
|
|
|
|
|
|
|
By:
|
/s/ Chris Weyers
|
|
|
|
Name: Chris Weyers
|
|
|
|
Title: Managing Director
|
|
|
|
|
|
For themselves and the other
|
|
|
several Underwriters named in
|
|
|
Schedule I
to the foregoing
|
|
|
Agreement.
|
|
SCHEDULE I
|
Underwriters
|
|
Number of Firm Units
to be Purchased
|
|
|
Morgan Stanley & Co. LLC
|
|
|
1,660,000
|
|
|
UBS Securities LLC
|
|
|
1,660,000
|
|
|
Stifel, Nicolaus & Company, Incorporated
|
|
|
600,000
|
|
|
ABN AMRO Securities (USA) LLC
|
|
|
80,000
|
|
|
Total
|
|
|
4,000,000
|
|
SCHEDULE II
Schedule of Free Writing Prospectuses included
in the Disclosure Package
Final Term Sheet substantially in the form set forth in
Schedule
III
.
SCHEDULE III
FREE WRITING PROSPECTUS
Filed pursuant to Rule 433
Registration Statement No. 333-213781
Relating to Preliminary Prospectus Supplement
Dated September 28, 2017
PRICING TERM SHEET
HÖEGH LNG PARTNERS LP
8.75% Series A Cumulative Redeemable
Preferred Units
(Liquidation Preference $25.00 per unit)
|
Issuer:
|
|
Höegh LNG Partners LP
|
|
|
|
|
|
Securities Offered
:
|
|
8.75% Series A Cumulative Redeemable Preferred Units (the “Series A Preferred Units”).
|
|
|
|
|
|
Number of Units
:
|
|
4,000,000 Series A Preferred Units.
|
|
|
|
|
|
Number of Option Units
:
|
|
600,000 Series A Preferred Units.
|
|
|
|
|
|
Public Offering Price
:
|
|
$25.00 per unit; $100,000,000.00 total (assuming no exercise of the underwriters’ option to purchase additional units).
|
|
|
|
|
|
Underwriting Discounts
:
|
|
$0.7875 per unit; $3,150,000.00 total (assuming no exercise of the underwriters’ option to purchase additional units).
|
|
|
|
|
|
Maturity Date
:
|
|
Perpetual (unless redeemed by the issuer on or after October 5, 2022).
|
|
|
|
|
|
Ratings
:
|
|
The Series A Preferred Units will not be rated.
|
|
|
|
|
|
Trade Date
:
|
|
September 28, 2017
|
|
|
|
|
|
Settlement Date
:
|
|
October 5, 2017 (T+5)
|
|
|
|
|
|
Liquidation Preference
:
|
|
$25.00 per Series A Preferred Unit, plus accumulated and unpaid distributions.
|
|
|
|
|
|
Distribution Rate
:
|
|
8.75% per annum of the $25.00 per unit liquidation preference (equivalent to $2.1875 per annum per unit).
|
|
|
|
|
|
Distribution Payment Dates:
|
|
Quarterly on the 15th day of February, May, August and November, of each year. The initial distribution on the Series A Preferred Units will be payable on February 15, 2018 in an amount equal to $0.78993 per unit.
|
|
|
|
|
|
Optional Redemption:
|
|
At any time on or after October 5, 2022, the issuer may redeem, in whole or in part, out of amounts legally available therefor, the Series A Preferred Units at a redemption price of $25.00 per unit plus an amount equal to all accumulated and unpaid distributions thereon to the date of redemption, whether or not declared.
|
|
|
|
|
|
CUSIP/ISIN:
|
|
Y3262R 118 / MHY3262R1181
|
|
|
|
|
|
Joint Bookrunners:
|
|
Morgan Stanley & Co. LLC
UBS Securities LLC
Stifel, Nicolaus & Company, Incorporated
|
|
Co-Manager:
|
|
ABN AMRO Securities (USA) LLC
|
|
|
|
|
|
Listing:
|
|
The issuer intends to file an application to list the Series A Preferred Units on the NYSE under the symbol “HMLP PRA” If the application is approved, trading of the Series A Preferred Units on the NYSE is expected to commence within 30 days after their original issue date.
|
ADDITIONAL INFORMATION:
All information (including financial information) presented
in the Preliminary Prospectus Supplement is deemed to have changed to the extent affected by the changes described herein.
This communication is intended for the sole use of the person
to whom it is provided by us. This communication does not constitute an offer to sell the Series A Preferred Units and is not soliciting
an offer to buy the Series A Preferred Units in any jurisdiction where the offer or sale is not permitted.
The issuer has filed a registration statement (including a prospectus)
with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before
you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC
for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the
SEC web site at www.sec.gov. Alternatively, the issuer, any underwriters or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling or contacting Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor,
New York, NY 10014, telephone (866) 718-1649; Attn: Prospectus Department; UBS Securities LLC, 1285 Avenue of the Americas, New
York, NY 10019, Attn: Prospectus Department, telephone (888) 827-7275; or Stifel, Nicolaus & Company, Incorporated, One South
Street, 15th Floor, Baltimore, MD 21202, Attn: Syndicate Department, telephone (855) 300-7136.
ANY DISCLAIMER OR OTHER NOTICES
THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED, SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
EXHIBIT A
Vessels
|
Vessel
|
|
Owner (Ownership Interest)
|
|
Jurisdiction of Registration
|
|
Neptune
|
|
SRV Joint Gas Ltd. (100%)
|
|
Norway
|
|
|
|
|
|
|
|
GDF Suez Cape Ann
|
|
SRV Joint Gas Two Ltd. (100%)
|
|
Norway
|
|
|
|
|
|
|
|
PGN FSRU Lampung
|
|
PT Hoegh LNG Lampung (100%)
|
|
Indonesia
|
|
|
|
|
|
|
|
Höegh Gallant
|
|
Hoegh LNG Cyprus Limited (100%)
|
|
Norway
|
|
|
|
|
|
|
|
Höegh Grace
|
|
Höegh LNG FSRU IV Ltd. (100%)
|
|
Marshall Islands
|
Exhibit 4.1
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HÖEGH LNG PARTNERS LP
TABLE OF CONTENTS
|
Article I
|
|
Definitions and Construction
|
|
|
|
|
|
Section 1.1
|
Definitions
|
1
|
|
Section 1.2
|
Construction
|
21
|
|
|
|
|
|
Article II
|
|
ORGANIZATION
|
|
|
|
|
|
Section 2.1
|
Formation
|
21
|
|
Section 2.2
|
Name
|
22
|
|
Section 2.3
|
Registered Office; Registered Agent; Principal Office; Other Offices
|
22
|
|
Section 2.4
|
Purpose and Business
|
22
|
|
Section 2.5
|
Powers
|
22
|
|
Section 2.6
|
Term
|
23
|
|
Section 2.7
|
Title to Partnership Assets
|
23
|
|
|
|
|
|
Article III
|
|
RIGHTS OF LIMITED PARTNERS
|
|
|
|
|
|
Section 3.1
|
Limitation of Liability
|
23
|
|
Section 3.2
|
Management of Business
|
23
|
|
Section 3.3
|
Outside Activities of the Limited Partners
|
24
|
|
Section 3.4
|
Rights of Limited Partners
|
24
|
|
|
|
|
|
Article IV
|
|
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS
|
|
|
|
|
|
Section 4.1
|
Certificates
|
25
|
|
Section 4.2
|
Mutilated, Destroyed, Lost or Stolen Certificates
|
25
|
|
Section 4.3
|
Record Holders
|
26
|
|
Section 4.4
|
Transfer Generally
|
26
|
|
Section 4.5
|
Registration and Transfer of Limited Partner Interests
|
27
|
|
Section 4.6
|
Transfer of the General Partner’s General Partner Interest
|
28
|
|
Section 4.7
|
Transfer of Incentive Distribution Rights
|
29
|
|
Section 4.8
|
Restrictions on Transfers
|
29
|
|
|
|
|
|
Article V
|
|
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
|
|
|
|
|
|
Section 5.1
|
Contributions Prior to the Closing Date
|
29
|
|
Section 5.2
|
Initial Unit Issuances; Tax Election
|
30
|
|
Section 5.3
|
Interest and Withdrawal
|
30
|
|
Section 5.4
|
Issuances of Additional Partnership Interests
|
30
|
|
Section 5.5
|
Limitations on Issuance of Additional Partnership Interests
|
31
|
|
Section 5.6
|
Conversion of Subordinated Units to Common Units
|
31
|
|
Section 5.7
|
Limited Preemptive Right
|
32
|
|
Section 5.8
|
Splits and Combinations
|
32
|
|
Section 5.9
|
Fully Paid and Non-Assessable Nature of Limited Partner Interests
|
33
|
|
Section 5.10
|
Issuance of Common Units in Connection with Reset of Incentive Distribution Rights
|
33
|
|
Section 5.11
|
Capital Accounts
|
34
|
|
|
|
|
|
Article VI
|
|
DISTRIBUTIONS
|
|
|
|
|
|
Section 6.1
|
Requirement and Characterization of Distributions; Distributions to Record Holders
|
35
|
|
Section 6.2
|
Distributions of Available Cash from Operating Surplus
|
35
|
|
Section 6.3
|
Distributions of Available Cash from Capital Surplus
|
37
|
|
Section 6.4
|
Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
|
37
|
|
Section 6.5
|
Special Provisions Relating to the Holders of Subordinated Units
|
38
|
|
Section 6.6
|
Special Provisions Relating to the Holders of Incentive Distribution Rights
|
38
|
|
|
|
|
|
Article VII
|
|
MANAGEMENT AND OPERATION OF BUSINESS
|
|
|
|
|
|
Section 7.1
|
Management
|
38
|
|
Section 7.2
|
The Board of Directors; Election and Appointment; Term; Manner of Acting
|
39
|
|
Section 7.3
|
Nominations of Elected Directors
|
40
|
|
Section 7.4
|
Removal of Members of Board of Directors
|
41
|
|
Section 7.5
|
Resignations of Members of the Board of Directors
|
41
|
|
Section 7.6
|
Vacancies on the Board of Directors
|
41
|
|
Section 7.7
|
Meetings; Committees; Chairman
|
42
|
|
Section 7.8
|
Officers
|
43
|
|
Section 7.9
|
Compensation of Directors
|
44
|
|
Section 7.10
|
Certificate of Limited Partnership
|
44
|
|
Section 7.11
|
Restrictions on the Authority of the Board of Directors and the General Partner
|
44
|
|
Section 7.12
|
Reimbursement of the General Partner
|
45
|
|
Section 7.13
|
Outside Activities
|
46
|
|
Section 7.14
|
Indemnification
|
47
|
|
Section 7.15
|
Liability of Indemnitees
|
49
|
|
Section 7.16
|
Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties
|
50
|
|
Section 7.17
|
Other Matters Concerning the General Partner and the Board of Directors
|
52
|
|
Section 7.18
|
Purchase or Sale of Partnership Interests
|
52
|
|
Section 7.19
|
Registration Rights of the General Partner and its Affiliates
|
53
|
|
Section 7.20
|
Reliance by Third Parties
|
55
|
|
|
|
|
|
Article VIII
|
|
BOOKS, RECORDS, ACCOUNTING AND REPORTS
|
|
|
|
|
|
Section 8.1
|
Records and Accounting
|
56
|
|
Section 8.2
|
Fiscal Year
|
56
|
|
Section 8.3
|
Reports
|
56
|
|
|
|
|
|
Article IX
|
|
TAX MATTERS
|
|
|
|
|
|
Section 9.1
|
Tax Elections and Information
|
57
|
|
Section 9.2
|
Tax Withholding
|
57
|
|
Section 9.3
|
Conduct of Operations
|
57
|
|
|
|
|
|
Article X
|
|
ADMISSION OF PARTNERS
|
|
|
|
|
|
Section 10.1
|
Admission of Initial Limited Partners
|
57
|
|
Section 10.2
|
Admission of Additional Limited Partners
|
58
|
|
Section 10.3
|
Admission of Successor General Partner
|
58
|
|
Section 10.4
|
Amendment of Agreement and Certificate of Limited Partnership
|
59
|
|
|
|
|
|
Article XI
|
|
WITHDRAWAL OR REMOVAL OF PARTNERS
|
|
|
|
|
|
Section 11.1
|
Withdrawal of the General Partner
|
59
|
|
Section 11.2
|
Removal of the General Partner
|
61
|
|
Section 11.3
|
Interest of Departing General Partner and Successor General Partner
|
62
|
|
Section 11.4
|
Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages
|
63
|
|
Section 11.5
|
Withdrawal of Limited Partners
|
63
|
|
|
|
|
|
Article XII
|
|
DISSOLUTION AND LIQUIDATION
|
|
|
|
|
|
Section 12.1
|
Dissolution
|
64
|
|
Section 12.2
|
Continuation of the Business of the Partnership After Dissolution
|
64
|
|
Section 12.3
|
Liquidating Trustee
|
65
|
|
Section 12.4
|
Liquidation
|
65
|
|
Section 12.5
|
Cancellation of Certificate of Limited Partnership
|
67
|
|
Section 12.6
|
Return of Contributions
|
67
|
|
Section 12.7
|
Waiver of Partition
|
67
|
|
|
|
|
|
Article XIII
|
|
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
|
|
|
|
|
|
Section 13.1
|
Amendments to be Adopted Without Approval of the Limited Partners or the General Partner
|
67
|
|
Section 13.2
|
Amendment Procedures
|
69
|
|
Section 13.3
|
Amendment Requirements
|
70
|
|
Section 13.4
|
Special Meetings
|
71
|
|
Section 13.5
|
Notice of a Meeting
|
71
|
|
Section 13.6
|
Record Date
|
71
|
|
Section 13.7
|
Adjournment
|
72
|
|
Section 13.8
|
Waiver of Notice; Approval of Meeting; Approval of Minutes
|
72
|
|
Section 13.9
|
Quorum and Voting
|
72
|
|
Section 13.10
|
Conduct of a Meeting
|
73
|
|
Section 13.11
|
Action Without a Meeting
|
73
|
|
Section 13.12
|
Right to Vote and Related Matters
|
74
|
|
|
|
|
|
Article XIV
|
|
MERGER, CONSOLIDATION OR CONVERSION
|
|
|
|
|
|
Section 14.1
|
Authority
|
74
|
|
Section 14.2
|
Procedure for Merger, Consolidation or Conversion
|
74
|
|
Section 14.3
|
Approval by Limited Partners of Merger, Consolidation or Conversion
|
76
|
|
Section 14.4
|
Certificate of Merger or Conversion
|
77
|
|
Section 14.5
|
Amendment of Partnership Agreement
|
78
|
|
Section 14.6
|
Effect of Merger, Consolidation or Conversion
|
78
|
|
|
|
|
|
Article XV
|
|
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
|
|
|
|
|
|
Section 15.1
|
Right to Acquire Limited Partner Interests
|
79
|
|
|
|
|
|
Article XVI
|
|
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS
|
|
|
|
|
|
Section 16.1
|
Designation
|
80
|
|
Section 16.2
|
Units
|
81
|
|
Section 16.3
|
Distributions
|
81
|
|
Section 16.4
|
Liquidation Rights
|
82
|
|
Section 16.5
|
Voting Rights
|
83
|
|
Section 16.6
|
Optional Redemption
|
84
|
|
Section 16.7
|
Rank
|
86
|
|
Section 16.8
|
No Sinking Fund
|
87
|
|
Section 16.9
|
Record Holders
|
87
|
|
Section 16.10
|
Notices
|
87
|
|
Section 16.11
|
Other Rights; Fiduciary Duties
|
87
|
|
|
|
|
|
Article XVII
|
|
GENERAL PROVISIONS
|
|
|
|
|
|
Section 17.1
|
Addresses and Notices
|
88
|
|
Section 17.2
|
Further Action
|
89
|
|
Section 17.3
|
Binding Effect
|
89
|
|
Section 17.4
|
Integration
|
89
|
|
Section 17.5
|
Creditors
|
89
|
|
Section 17.6
|
Waiver
|
89
|
|
Section 17.7
|
Counterparts
|
89
|
|
Section 17.8
|
Applicable Law; Forum, Venue and Jurisdiction
|
89
|
|
Section 17.9
|
Invalidity of Provisions
|
90
|
|
Section 17.10
|
Consent of Partners
|
91
|
|
Section 17.11
|
Facsimile Signatures
|
91
|
|
Section 17.12
|
Third-Party Beneficiaries
|
91
|
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
HÖEGH LNG PARTNERS LP
THIS SECOND AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF HÖEGH LNG PARTNERS LP, dated as of October 5, 2017, is entered
into by and between Höegh LNG GP LLC, a Marshall Islands limited liability company, as the General Partner, and Höegh
LNG Holdings Ltd., a Bermuda company, together with any other Persons who become Partners in the Partnership or parties hereto
as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties agree as follows:
Article I
Definitions and Construction
Section 1.1
Definitions
.
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms
used in this Agreement.
“
Acquisition
”
means any transaction in which any Group Member acquires (through an asset acquisition, merger, stock acquisition or other form
of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing
the operating capacity and/or asset base of the Partnership Group from the operating capacity and/or asset base of the Partnership
Group existing immediately prior to such transaction;
provided
,
however
, that any acquisition of properties or assets
of another Person that is made solely for investment purposes shall not constitute an Acquisition under this Agreement.
“
Adjusted
Operating Surplus
” means, with respect to any period, Operating Surplus generated with respect to such period (a) less
(i) the amount of any net increase in Working Capital Borrowings (or the Partnership’s proportionate share of any net
increase in Working Capital Borrowings in the case of Subsidiaries that are not wholly-owned) with respect to such period and (ii) the
amount of any net decrease in cash reserves for Operating Expenditures (or the Partnership’s proportionate share of any net
decrease in cash reserves for Operating Expenditures in the case of Subsidiaries that are not wholly-owned) over such period to
the extent such reduction does not relate to an Operating Expenditure made with respect to such period, and (b) plus (i) the
amount of any net decrease in Working Capital Borrowings (or the Partnership’s proportionate share of any net decrease in
Working Capital Borrowings in the case of Subsidiaries that are not wholly-owned) with respect to such period; (ii) the amount
of any net increase in cash reserves (or the Partnership’s proportionate share of any net increase in cash reserves in the
case of Subsidiaries that are not wholly-owned) for Operating Expenditures over such period to the extent such reserve is required
by any debt instrument for the repayment of principal, interest or premium; and (iii) the amount of any net decrease made
in subsequent periods in cash reserves for Operating Expenditures initially established with respect to such period to the extent
such decrease results in a reduction in Adjusted Operating Surplus in subsequent periods pursuant to
clause (a)(ii)
above.
“
Affiliate
”
or “
Affiliates
” means, with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein,
the term “
control
” means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“
Aggregate
Quantity of IDR Reset Common Units
” has the meaning set forth in
Section 5.10(a)
.
“
Agreed
Value
” means the fair market value of the applicable property or other consideration at the time of contribution
or distribution, as the case may be, as determined by the Board of Directors.
“
Agreement
”
means this Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP, as it may be amended,
supplemented or restated from time to time.
“
Annual
Meeting
” means the meeting of Limited Partners to be held every year, commencing in 2014, to elect the Elected Directors
as provided in
Section 7.2
and to vote on any other matters brought before the meeting in accordance with this Agreement.
“
Appointed
Directors
” means the members of the Board of Directors appointed by the General Partner in accordance with the provisions
of
Article VII
.
“
Arrears
”
means, with respect to Series A Distributions for any quarter period, that the full cumulative Series A Distributions
through the most recent Series A Distribution Payment Date have not been paid on all Outstanding Series A Preferred Units.
“
Associate
”
means, when used to indicate a relationship with any Person: (a) any corporation or organization of which such Person is a
director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class
of voting stock or other voting interest entitled to vote generally in the election of directors or other governing body as such
entity; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such
spouse, who has the same principal residence as such Person.
“
Audit
Committee
” means a committee of the Board of Directors which, within one year of the effective date of the Registration
Statement, will be composed of a minimum of three members of the Board of Directors then serving who meet the independence standards
required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act, and the
rules and regulations of the Commission thereunder and meet the standards for audit committee composition established by the National
Securities Exchange on which the Common Units are listed or admitted to trading.
“
Available
Cash
” means, with respect to any Quarter ending prior to the Liquidation Date:
(a)
the
sum of (i) all cash and cash equivalents of the Partnership Group (or the Partnership’s proportionate share of cash
and cash equivalents in the case of Subsidiaries that are not wholly-owned) on hand at the end of such Quarter, (ii) if the
Board of Directors so determines, all or any portion of additional cash and cash equivalents of the Partnership Group (or the Partnership’s
proportionate share of cash and cash equivalents in the case of Subsidiaries that are not wholly-owned) on hand on the date of
determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end
of such Quarter, and (iii) all cash and cash equivalents on hand on the date of determination of Available Cash resulting
from cash distributions received after the end of such Quarter from any Group Member’s equity interest in any Person (other
than a Subsidiary), which distributions are paid by such Person in respect of operations conducted by such Person during such Quarter,
less
(b)
the
amount of any cash reserves (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are
not wholly-owned) established by the Board of Directors to (i) provide for the proper conduct of the business of the Partnership
Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent
to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject, (iii) provide
funds for Series A Payments or (iv) provide funds for distributions under
Section 6.2
or
Section 6.3
in respect of any one or more of the next four Quarters; provided, however, that the Board of Directors may not establish cash
reserves pursuant to (iv) above if the effect of establishing such reserves would be that the Partnership is unable to distribute
the Minimum Quarterly Distribution on all Common Units, plus any Cumulative Common Unit Arrearages on all Common Units, with respect
to such Quarter; provided further, that disbursements made by a Group Member or cash reserves established, increased or reduced
after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be
deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if
the Board of Directors so determines.
Notwithstanding the
foregoing, “
Available Cash
” with respect to the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero.
“
Board
of Directors
” means the board of directors of the Partnership, composed of Appointed Directors and Elected Directors
appointed or elected, as the case may be, in accordance with the provisions of
Article VII
and, in the event of a Series
A Trigger Event,
Section 16.5(b)
and a majority of whom are not United States citizens or residents, which, pursuant
to
Section 7.1
, and subject to
Section 7.11
, oversees and directs the operations, management and policies
of the Partnership. The Board of Directors shall constitute a committee within the meaning of Section 30(2)(g) of the Marshall
Islands Act.
“
Business
Day
” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of
the United States of America or the State of New York shall not be regarded as a Business Day.
“
Capital
Contribution
” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes
to the Partnership or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case
of an underwritten offering of Units, the amount of any underwriting discounts or commissions).
“
Capital
Improvement
” means any (a) addition or improvement to the capital assets owned by any Group Member, (b) acquisition
of existing, construction of new or improvement or replacement of existing, capital assets by any Group Member or (c) capital
contribution by a Group Member to a Person that is not a Subsidiary, in which a Group Member has, or after such capital contribution
will have, an equity interest, to fund the Group Member’s pro rata share of the cost of the addition or improvement to or
the acquisition of existing, or the construction of new, or the improvement or replacement of existing, capital assets by such
Person, in each case if such addition, improvement, replacement, acquisition or construction is made to increase the operating
capacity and/or asset base of the Partnership Group from the operating capacity and/or asset base of the Partnership Group or such
Person, as the case may be, existing immediately prior to such addition, improvement, replacement, acquisition or construction;
provided, however
, that any such addition, improvement, acquisition or construction that is made solely for investment purposes
shall not constitute a Capital Improvement.
“
Capital
Surplus
” has the meaning assigned to such term in
Section 6.1(a)
.
“
Cause
”
means a court of competent jurisdiction has entered a final, non-appealable judgment finding a Person liable to the Partnership
or any Limited Partner for actual fraud or willful misconduct in its capacity as a general partner of the Partnership or as a member
of the Board of Directors, as the case may be.
“
Certificate
”
means a certificate (a) substantially in the form of
Exhibit A
to this Agreement with respect to Common Units,
or
Exhibit B
to this Agreement with respect to Series A Preferred Units, (b) issued in global or book entry
form in accordance with the rules and regulations of the Depositary or (c) in such other form as may be adopted by the Board
of Directors, issued by the Partnership evidencing ownership of one or more Common Units or Series A Preferred Units or a certificate,
in such form as may be adopted by the Board of Directors, issued by the Partnership evidencing ownership of one or more other Partnership
Interests.
“
Certificate
of Limited Partnership
” means the Certificate of Limited Partnership of the Partnership filed with the Registrar
of Corporations of the Marshall Islands as referenced in
Section 7.10
as such Certificate of Limited Partnership may
be amended, supplemented or restated from time to time.
“
claim
”
(as used in
Section 7.19(c)
) has the meaning assigned to such term in
Section 7.19(c)
.
“
Closing
Date
” means the first date on which Common Units are sold by the Partnership to the Underwriters pursuant to the
provisions of the Underwriting Agreement.
“
Closing
Price
” means, in respect of any class or series of Limited Partner Interests, as of the date of determination, the
last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked
prices on such day, regular way, as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal National Securities Exchange on which the respective Limited Partner Interests are
listed or admitted to trading or, if such Limited Partner Interests are not listed or admitted to trading on any National Securities
Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day
in the over-the-counter market, as reported by any quotation system then in use with respect to such Limited Partner Interests,
or, if on any such day such Limited Partner Interests of such class or series are not quoted by any such system, the average
of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner
Interests of such class or series selected by the Board of Directors, or if on any such day no market maker is making a market
in such Limited Partner Interests of such class or series, the fair value of such Limited Partner Interests on such day as determined
by the Board of Directors.
“
Code
”
means the United States Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
“
Combined
Interest
” has the meaning assigned to such term in
Section 11.3(a)
.
“
Commences
Commercial Service
” and “
Commenced Commercial Service
” shall mean the date a Capital Improvement
is first put into commercial service by a Group Member (or other Person that is not a subsidiary of a Group Member, as contemplated
in the definition of “Capital Improvement”) following, if applicable, completion of construction, acquisition, development
and testing.
“
Commission
”
means the United States Securities and Exchange Commission.
“
Common
Unit
” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners,
and having the rights and obligations specified with respect to Common Units in this Agreement. The term “
Common Unit
”
does not refer to a Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.
“
Common
Unit Arrearage
” means, with respect to any Common Unit, whenever issued, as to any Quarter within the Subordination
Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter
over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to
Section 6.2(a)(i)
.
“
Conflicts
Committee
” means a committee of the Board of Directors composed entirely of two or more directors who are not any
of the following: (a) security holders, officers or employees of the General Partner, (b) officers, directors or employees
of any Affiliate of the General Partner or (c) holders of any ownership interest in the Partnership Group (other than Common
Units or awards granted to such director under any long-term incentive plan of any Group Member) or in the General Partner or any
Affiliate of the General Partner and who also meet the independence standards required of directors who serve on an audit committee
of a board of directors established by the Securities Exchange Act, and the rules and regulations of the Commission thereunder
and by the National Securities Exchange on which the Common Units are listed or admitted to trading.
“
Contributed
Property
” means each property or other asset, in such form as may be permitted by the Marshall Islands Act, but excluding
cash, contributed to the Partnership.
“
Contribution
Agreement
” means that certain Contribution, Purchase and Sale Agreement, dated as of August 8, 2014, among the General
Partner, the Partnership, the Operating Company, Höegh LNG and Höegh LNG Ltd., together with the additional conveyance
documents and instruments contemplated or referenced thereunder or entered into in connection therewith.
“
Cumulative
Common Unit Arrearage
” means, with respect to any Common Unit, whenever issued, and as of the end of any Quarter,
the excess, if any, of (a) the sum of the Common Unit Arrearage with respect to an Initial Common Unit for each of the Quarters
within the Subordination Period ending on or before the last day of such Quarter over (b) the sum of any distributions theretofore
made pursuant to
Section 6.2(a)(ii)
and the second sentence of
Section 6.3
with respect to an Initial Common
Unit (including any distributions to be made in respect of the last of such Quarters).
“
Current
Market Price
” means, in respect of any class or series of Limited Partner Interests, as of the date of determination,
the average of the daily Closing Prices per Limited Partner Interest of such class for the 20 consecutive Trading Days immediately
prior to such date.
“
Deferred
Issuance and Distribution
” means both (a) the issuance by the Partnership of additional Common Units that is
equal to the excess, if any, of (x) 1,440,000 minus (y) the aggregate number, if any, of Common Units actually purchased
by and issued to the Underwriters pursuant to the Over-Allotment Option on the Option Closing Date(s), and (b) distributions
of cash pursuant to the Contribution Agreement in an amount equal to the total amount of cash contributed by the Underwriters to
the Partnership on or in connection with any Option Closing Date with respect to Common Units issued by the Partnership upon the
applicable exercise of the Over-Allotment Option in accordance with
Section 5.2
.
“
Departing
General Partner
” means a former General Partner from and after the effective date of any withdrawal or removal of
such former General Partner pursuant to
Section 11.1
or
Section 11.2
.
“
Depositary
”
means, with respect to any Units issued in global form, The Depository Trust Company and its successors and permitted assigns.
“
Elected
Directors
” means the members of the Board of Directors who are elected as such in accordance with the provisions
of
Article VII
and at least three (3) of whom are not: (a) security holders, officers or employees of the General
Partner, (b) officers or employees of any Affiliate of the General Partner, (c) holders of any ownership interest in
the Partnership Group (other than Common Units or awards granted to such director under any long-term incentive plan of any Group
Member) and who also meet the independence standards required of directors who serve on an audit committee of a board of directors
established by the Securities Exchange Act, and the rules and regulations of the Commission thereunder and by the National Securities
Exchange on which the Common Units are listed or admitted to trading or (d) United States citizens or residents.
“
Estimated
Maintenance Capital Expenditures
” means an estimate made in good faith by the Board of Directors (with the concurrence
of the Conflicts Committee) of the average quarterly Maintenance Capital Expenditures that the Partnership will need to incur to
maintain over the long term the operating capacity and asset base of the Partnership Group (including the Partnership’s proportionate
share of the average quarterly Maintenance Capital Expenditures of its Subsidiaries that are not wholly-owned) existing at the
time the estimate is made. The Board of Directors (with the concurrence of the Conflicts Committee) will be permitted to make such
estimate in any manner it determines reasonable. The estimate will be made at least annually and whenever an event occurs that
is likely to result in a material adjustment to the amount of Maintenance Capital Expenditures on a long-term basis. The Partnership
shall disclose to its Partners any change in the amount of Estimated Maintenance Capital Expenditures in its reports made in accordance
with
Section 8.3
to the extent not previously disclosed. Any adjustments to Estimated Maintenance Capital Expenditures
shall be prospective only.
“
Event
of Withdrawal
” has the meaning assigned to such term in
Section 11.1(a)
.
“
Expansion
Capital Expenditures
” means cash expenditures for Acquisitions or Capital Improvements. Expansion Capital Expenditures
shall not include Maintenance Capital Expenditures or Investment Capital Expenditures. Expansion Capital Expenditures shall include
interest payments (and related fees) on debt incurred and distributions on equity issued, in each case, to fund the construction
of a Capital Improvement and paid in respect of the period beginning on the date that a Group Member enters into a binding obligation
to commence construction of the Capital Improvement and ending on the earlier to occur of the date that such Capital Improvement
Commences Commercial Service or the date that such Capital Improvement is abandoned or disposed of. Debt incurred or equity issued
to fund any such construction period interest payments, or such construction period distributions on equity paid in respect of
such period shall also be deemed to be debt incurred or equity issued, as the case may be, to fund the construction of a Capital
Improvement, and the Incremental Incentive Distributions paid in respect of such newly issued equity shall be deemed to be distributions
paid on equity issued to finance the construction of a Capital Improvement.
“
First
Target Distribution
” means $0.388125 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.388125 multiplied by a fraction of which the numerator is the
number of days in such period, and of which the denominator is the total number of days in the Quarter in which the Closing Date
occurs), subject to adjustment in accordance with
Section 5.10
and
Section 6.4
.
“
Fully
Diluted Weighted Average Basis
” means, when calculating the number of Outstanding Units for any period, a basis that
includes (a) the weighted average number of Outstanding Units plus (b) all Partnership Interests and options, rights,
warrants and appreciation rights relating to an equity interest in the Partnership (i) that are convertible into or exercisable
or exchangeable for Units or for which Units are issuable, in each case, that are senior to or
pari passu
with the Subordinated
Units, (ii) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation,
(iii) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter immediately following
the end of the period for which the calculation is being made without the satisfaction of any contingency beyond the control of
the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion,
exercise or exchange and (iv) that were not converted into or exercised or exchanged for such Units during the period for
which the calculation is being made;
provided, however
, that for purposes of determining the number of Outstanding Units
on a Fully Diluted Weighted Average Basis when calculating whether the Subordination Period has ended, such Partnership Interests,
options, rights, warrants and appreciation rights shall be deemed to have been Outstanding Units only for the four Quarters that
comprise the last four Quarters of the measurement period; and
provided, further
, that if consideration will be paid to
any Group Member in connection with such conversion, exercise or exchange, the number of Units to be included in such calculation
shall be that number equal to the difference between (y) the number of Units issuable upon such conversion, exercise or exchange
and (z) the number of Units that such consideration would purchase at the Current Market Price.
“
General
Partner
” means Höegh LNG GP LLC, a Marshall Islands limited liability company, and its successors and permitted
assigns that are admitted to the Partnership as general partner of the Partnership, in its capacity as general partner of the Partnership
(except as the context otherwise requires).
“
General
Partner Interest
” means the non-economic ownership interest of the General Partner in the Partnership (in its capacity
as a general partner and without reference to any Limited Partner Interest held by it), which includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply
with the terms and provisions of this Agreement.
“
Group
”
means a Person that with or through any of its Affiliates or Associates has any agreement, arrangement, understanding or relationship
for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response
to a proxy or consent solicitation made to 10 or more Persons), exercising investment power over or disposing of any Partnership
Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly,
Partnership Interests.
“
Group
Member
” means a member of the Partnership Group.
“
Group
Member Agreement
” means the partnership agreement of any Group Member, other than the Partnership, that is a limited
or general partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate
of incorporation and bylaws (or similar organizational documents) of any Group Member that is a corporation, the joint venture
agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar
documents of any other Group Member that is a Person other than a limited or general partnership, limited liability company, corporation
or joint venture, in each case as such may be amended, supplemented or restated from time to time.
“
Hedge
Contract
” means any exchange, swap, forward, future, cap, floor, collar or other similar agreement or arrangement
entered into for the purpose of hedging the Partnership Group’s exposure to fluctuations in the price of interest rates,
currencies or commodities in their operations and not for speculative purposes.
“
Höegh
LNG
” means Höegh LNG Holdings Ltd.
“
Holder
”
has the meaning assigned to such term in
Section 7.19(a)
.
“
Holders’
Nominee
” has the meaning set forth in
Section 16.5(b)
.
“
IDR Reset
Common Units
” has the meaning set forth in
Section 5.10(a)
.
“
IDR Reset
Election
” has the meaning set forth in
Section 5.10(a)
.
“
Incentive
Distribution Right
” means a non-voting Limited Partner Interest, which Partnership Interest will confer upon the
holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights
(and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything
in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution
Right on any Partnership matter except as may otherwise be required by law.
“
Incentive
Distributions
” means any amount of cash distributed to the holders of the Incentive Distribution Rights pursuant
to
Section 6.2
.
“
Incremental
Incentive Distributions
” means, with respect to any newly issued equity securities of the Partnership, the incremental
amount of any Incentive Distributions payable under
Section 6.2
based solely upon the amount of distributions paid
in respect of such newly issued equity securities.
“
Indemnified
Persons
” has the meaning assigned to such term in
Section 7.19(c)
.
“
Indemnitee
”
means (a) the General Partner, (b) any Departing General Partner, (c) any Person who is or was an Affiliate of the
General Partner or any Departing General Partner, (d) any Person who is or was a manager, managing member, general partner,
director, officer, fiduciary or trustee of any Person which any of the preceding clauses of this definition describes, (e) any
Person who is or was serving at the request of the General Partner or any Departing General Partner or any Affiliate of the General
Partner or any Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another Person (
provided,
however
, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or
custodial services), (f) the members of the Board of Directors, (g) the Officers, and (h) any other Person the Board
of Directors designates as an “
Indemnitee
” for purposes of this Agreement because such Person’s service,
status or relationship exposes such Person to potential claims, demands, actions, suits or proceedings relating to the Partnership
Group’s business and affairs.
“
Initial
Common Units
” means the Common Units sold in the Initial Offering.
“
Initial
Limited Partners
” means Höegh LNG and the Underwriters, in each case upon being admitted as Partners to the
Partnership in accordance with
Section 10.1
.
“
Initial
Offering
” means the initial public offering and sale of Common Units to the public, as described in the Registration
Statement, including any Common Units sold pursuant to the exercise of the Over-Allotment Option.
“
Initial
Unit Price
” means (a) with respect to the Common Units and the Subordinated Units, the initial public offering
price per Common Unit at which the Underwriters first offered the Common Units to the public for sale as set forth on the cover
page of the prospectus included as part of the Registration Statement and first issued at or after the time the Registration Statement
first became effective or (b) with respect to any other class or series of Units, the price per Unit at which such class or
series of Units is initially sold by the Partnership, as determined by the Board of Directors, in each case adjusted as the Board
of Directors determines to be appropriate to give effect to any distribution, subdivision or combination of Units.
“
Interim
Capital Transactions
” means the following transactions if they occur prior to the Liquidation Date: (a) borrowings,
refinancings or refundings of indebtedness (other than Working Capital Borrowings and other than for items purchased on open account
in the ordinary course of business) by any Group Member and sales of debt securities of any Group Member; (b) sales of equity
interests of any Group Member (including the Common Units sold to the Underwriters in the Initial Offering or pursuant to the exercise
of the Over-Allotment Option); (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member
(including assets acquired using Investment Capital Expenditures) other than (i) sales or other dispositions of inventory,
accounts receivable and other assets in the ordinary course of business and (ii) sales or other dispositions of assets as
part of normal retirements or replacements; (d) capital contributions received; and (e) corporate reorganizations or
restructurings.
“
Investment
Capital Expenditures
” means capital expenditures other than Maintenance Capital Expenditures and Expansion Capital
Expenditures.
“
Junior
Securities
” has the meaning set forth in
Section 16.7
.
“
Limited
Partner
” means, unless the context otherwise requires, the Organizational Limited Partner, each Initial Limited Partner,
each additional Person that becomes a Limited Partner pursuant to the terms of this Agreement and any Departing General Partner
upon the change of its status from General Partner to Limited Partner pursuant to
Section 11.3
, in each case, in such
Person’s capacity as a limited partner of the Partnership;
provided, however
, that when the term “
Limited
Partner
” is used herein in the context of any vote or other approval, including
Articles XIII
and
XIV
,
such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right (solely with respect to its
Incentive Distribution Rights and not with respect to any other Limited Partner Interest held by such Person) except as may otherwise
be required by law. Limited Partners may include custodians, nominees or any other individual or entity in its own or any representative
capacity.
“
Limited
Partner Interest
” means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by
Common Units, Subordinated Units, Preferred Units, Incentive Distribution Rights or other Partnership Interests or a combination
thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in this Agreement,
together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement;
provided, however
,
that when the term “
Limited Partner Interest
” is used herein in the context of any vote or other approval, including
Articles XIII
and
XIV
, such term shall not, solely for such purpose, include any Incentive Distribution Right
except as may otherwise be required by law.
“
Liquidation
Date
” means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described
in clauses
(a)
and
(b)
of the first sentence of
Section 12.2
, the date on which the applicable time period
during which the holders of Outstanding Units have the right to elect to continue the business of the Partnership has expired without
such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the
date on which such event occurs.
“
Liquidation
Event
” means the occurrence of a dissolution or liquidation of the Partnership, whether voluntary or involuntary;
provided
,
however
, that a Liquidation Event shall not precede the Liquidation Date. Neither the sale of all or substantially
all of the property or business of the Partnership nor the consolidation or merger of the Partnership with or into any other Person,
individually or in a series of transactions, shall be deemed a Liquidation Event.
“
Liquidation
Preference
” means, in connection with any distribution in connection with a Liquidation Event pursuant to
Section 12.4
and with respect to any holder of any class or series of Partnership Securities, the amount otherwise payable to such holder in
such distribution with respect to such class or series of Partnership Securities (assuming no limitation on the assets of the Partnership
available for such distribution), including an amount equal to any accrued but unpaid distributions thereon to the date fixed for
such payment, whether or not declared (if the terms of the applicable class or series of Partnership Securities so provide). For
avoidance of doubt, for the foregoing purposes the Series A Liquidation Preference is the Liquidation Preference with respect
to the Series A Preferred Units.
“
Liquidating
Trustee
” means one or more Persons selected by the Board of Directors to perform the functions described in
Section 12.4
.
“
Maintenance
Capital Expenditures
” means cash expenditures (including expenditures for the addition or improvement to, or the
replacement of, the capital assets owned by any Group Member or for the acquisition of existing, or the construction or development
of new, capital assets) if such expenditure is made to maintain, including over the long term, the operating capacity and/or asset
base of the Partnership Group. Maintenance Capital Expenditures shall not include Expansion Capital Expenditures or Investment
Capital Expenditures. Maintenance Capital Expenditures shall include interest payments (and related fees) on debt incurred and
distributions in respect of equity issued, in each case, to finance the construction or development of a replacement asset and
paid in respect of the period beginning on the date that the Group Member enters into a binding obligation to commence constructing
or developing a replacement asset and ending on the earlier to occur of the date that such replacement asset Commences Commercial
Service or the date that such replacement asset is abandoned or disposed of. Debt incurred to pay or equity issued to fund the
construction or development period interest payments, or such construction or development period distributions on equity shall
also be deemed to be debt incurred or equity issued, as the case may be, to finance the construction or development of a replacement
asset, and the Incremental Incentive Distributions paid in respect of such newly issued equity shall be deemed to be distributions
paid on equity issued to finance the construction or development of a replacement asset.
“
Marshall
Islands Act
” means the Limited Partnership Act of the Republic of the Marshall Islands, as amended, supplemented
or restated from time to time, and any successor to such statute.
“
Merger
Agreement
” has the meaning assigned to such term in
Section 14.1
.
“
Minimum
Quarterly Distribution
” means $0.3375 per Unit per Quarter (or with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.3375 multiplied by a fraction of which the numerator is the number
of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing Date occurs),
subject to adjustment in accordance with
Section 5.10
and
Section 6.4
.
“
National
Securities Exchange
” means an exchange registered with the Commission under Section 6(a) of the Securities Exchange
Act, supplemented or restated from time to time, and any successor to such statute.
“
Net Agreed
Value
” means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any
liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and
(b) in the case of any property distributed to a Partner by the Partnership, the Agreed Value of such property, reduced by
any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution.
“
Notice
of Election to Purchase
” has the meaning assigned to such term in
Section 15.1(b)
.
“
Officers
”
has the meaning assigned to such term in
Section 7.8(a)
.
“
Omnibus
Agreement
” means that Omnibus Agreement, dated as of the Closing Date, among the Partnership, the General Partner,
the Operating Company and Höegh LNG.
“
Operating
Company
” means Höegh LNG Partners Operating LLC, a Marshall Islands limited liability company, and any successors
thereto.
“
Operating
Expenditures
” means all Partnership Group cash expenditures (or the Partnership’s proportionate share of expenditures
in the case of Subsidiaries that are not wholly-owned), including taxes, employee and director compensation, reimbursements of
expenses of the General Partner, repayment of Working Capital Borrowings, debt service payments, capital expenditures, Series A
Distributions and payments made in the ordinary course of business under any Hedge Contracts (
provided,
(y) with respect
to amounts paid in connection with the initial purchase of any Hedge Contract, such amounts shall be amortized over the life of
the Hedge Contract and (z) that payments made in connection with the termination of any Hedge Contract prior to the expiration
of its stipulated settlement or termination date shall be included in Operating Expenditures in equal quarterly installments over
the remaining scheduled life of such Hedge Contract), subject to the following:
(a)
deemed
repayments of Working Capital Borrowings deducted from Operating Surplus pursuant to
clause (b)(iii)
of the definition
of Operating Surplus shall not constitute Operating Expenditures when actually repaid;
(b)
payments
(including prepayments and prepayment penalties) of principal of and premium on indebtedness other than Working Capital Borrowings
shall not constitute Operating Expenditures; and
(c)
Operating
Expenditures shall not include any of (i) Expansion Capital Expenditures, Investment Capital Expenditures or actual Maintenance
Capital Expenditures, but shall include Estimated Maintenance Capital Expenditures, (ii) payment of transaction expenses (including
taxes) relating to Interim Capital Transactions, (iii) Series A Redemption Payments, (iv) payments made to Series A
Holders to purchase or otherwise acquire Series A Preferred Units, (v) distributions to Partners (other than Series A
Distributions) or (vi) repurchases of Partnership Interests, other than repurchases of Partnership Interests by the Partnership
to satisfy obligations under employee benefit plans,
where capital expenditures consist of both
(y) Maintenance Capital Expenditures and (z) Expansion Capital Expenditures and/or Investment Capital Expenditures, the
Board of Directors shall determine the allocation between the amounts paid for each.
“
Operating
Surplus
” means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without
duplication:
(a)
the
sum of (i) $25.0 million, (ii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share
of cash receipts in the case of Subsidiaries that are not wholly-owned) for the period beginning on the Closing Date and ending
on the last day of such period, other than cash receipts from Interim Capital Transactions (excluding return on capital from Investment
Capital Expenditures);
provided
, that cash receipts from the termination of a Hedge Contract prior to its specified termination
date shall be included in Operating Surplus in equal quarterly installments over the remaining scheduled life of such Hedge Contract,
(iii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case
of Subsidiaries that are not wholly-owned) after the end of such period but on or before the date of determination of Operating
Surplus with respect to such period resulting from Working Capital Borrowings and (iv) the amount of cash distributions paid
on equity issued (including Incremental Incentive Distributions) in connection with the construction of a Capital Improvement or
replacement of a capital asset and paid in respect of the period beginning on the date that the Group Member enters into a binding
obligation to commence the construction of such Capital Improvement or replacement of such capital asset and ending on the earlier
to occur of the date that such Capital Improvement or replacement capital asset Commences Commercial Service or the date that it
is abandoned or disposed of (equity issued to fund the construction period interest payments on debt incurred (including periodic
net payments under related Hedge Contracts), or construction period distributions on equity issued (including Incremental Incentive
Distributions), to finance the construction of a Capital Improvement or replacement of a capital asset shall also be deemed to
be equity issued to finance the construction of a Capital Improvement or replacement of such capital asset for purposes of this
clause (iv)
), less
(b)
the
sum of (i) Operating Expenditures for the period beginning immediately after the Closing Date and ending on the last day of
such period, (ii) the amount of cash reserves (or the Partnership’s proportionate share of cash reserves in the case
of Subsidiaries that are not wholly-owned) established by the Board of Directors to provide funds for future Operating Expenditures,
(iii) all Working Capital Borrowings not repaid within 12 months after having been incurred or repaid within such 12-month
period with the proceeds of additional Working Capital Borrowings and (iv) any cash loss realized on disposition of an Investment
Capital Expenditure;
provided, however
, that disbursements made (including contributions to a Group Member or disbursements
on behalf of a Group Member), cash received or cash reserves established, increased or reduced after the end of such period but
on or before the date on which cash or cash equivalents will be distributed with respect to such period shall be deemed to have
been made, received, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the
Board of Directors so determines.
Notwithstanding the
foregoing, “
Operating Surplus
” with respect to the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero. Cash receipts from Investment Capital Expenditures shall be treated as cash receipts only to the extent
they are a return on capital, but in no event shall a return of capital be treated as cash receipts.
“
Opinion
of Counsel
” means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner
or any of its Affiliates) acceptable to the Board of Directors.
“
Option
Closing Date
” means the date or dates on which any Common Units are sold by the Partnership to the Underwriters upon
the exercise of the Over-Allotment Option.
“
Organizational
Limited Partner
” means Höegh LNG, in its capacity as the organizational limited partner of the Partnership.
“
Outstanding
”
means, with respect to Partnership Interests, all Partnership Interests that are issued by the Partnership and reflected as outstanding
on the Partnership’s books and records as of the date of determination;
provided, however
, that if at any time any
Person or Group beneficially owns more than 4.9% of the Outstanding Partnership Interests of any class or series then Outstanding
(or would own such percentage in the event this limitation were applied to other Persons or Groups), all Partnership Interests
owned by such Person or Group in excess of such limitation shall not be voted on any matter and shall not be considered to be Outstanding
when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required
votes (except for purposes of nominating a Person for election to the Board of Directors pursuant to
Section 7.3
),
determining the presence of a quorum or for other similar purposes under this Agreement, except that Partnership Interests so owned
shall be considered to be Outstanding for purposes of
Section 11.1(b)(iv)
(such Partnership Interests shall not, however,
be treated as a separate class or series of Partnership Interests for purposes of this Agreement);
provided, further
, that
the foregoing limitation shall not apply to (a) the General Partner or its Affiliates, or (b) any Person or Group who
acquired more than 4.9% of any Partnership Interests with the prior approval of the Board of Directors after considering the potential
effects of such approval on the Partnership, except, in each case, such limitation shall remain applicable with respect to the
voting of Common Units in the election of the Elected Directors as provided in
Section 7.2(a)(ii)
.
“
Over-Allotment
Option
” means the over-allotment option granted to the Underwriters pursuant to the Underwriting Agreement.
“
Parity
Securities
” has the meaning set forth in
Section 16.7(b)
.
“
Partners
”
means the General Partner and the Limited Partners.
“
Partnership
”
means Höegh LNG Partners LP, a Marshall Islands limited partnership, and any successors thereto.
“
Partnership
Group
” means the Partnership and its Subsidiaries, including the Operating Company, treated as a single consolidated
entity.
“
Partnership
Interest
” means any class or series of equity interest in the Partnership, which shall include any Limited Partner
Interests and the General Partner Interest but shall exclude any options, rights, warrants, restricted units and appreciation rights
relating to an equity interest in the Partnership.
“
Paying
Agent
” means Computershare, acting in its capacity as paying agent for the Series A Preferred Units, and its
respective successors and assigns or any other payment agent appointed by the Board of Directors;
provided
,
however
,
that if no Paying Agent is specifically designated for the Series A Preferred Units, the Partnership shall act in such capacity.
“
Percentage
Interest
” means (a) as of any date of determination as to any Unitholder with respect to Units (other than Series A
Preferred Units), the product obtained by multiplying (i) 100% less the percentage applicable to
clause (b)
below
by (ii) the quotient obtained by dividing (A) the number of Units (other than Series A Preferred Units) held by
such Unitholder by (B) the total number of all Outstanding Units (other than Series A Preferred Units), and (b) as
to the holders of other Partnership Interests issued by the Partnership in accordance with
Section 5.4
, the percentage
established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right and to a Series A
Preferred Unit shall at all times be zero.
“
Person
”
means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, governmental agency or political subdivision thereof or other entity.
“
Plan of
Conversion
” has the meaning assigned to such term in
Section 14.1
.
“
Preferred
Units
” means a Partnership Security, designated as a “
Preferred Unit
,” which entitles the holder
thereof to a preference with respect to distributions, or as to the distribution of assets upon any Liquidation Event, over Common
Units and Subordinated Units, including the Series A Preferred Units.
“
Prior
Agreement
” means the First Amended and Restated Agreement of Limited Partnership of the Partnership dated as of August 12,
2014.
“
Pro Rata
”
means (a) when used with respect to Units (other than Series A Preferred Units) or any class or series thereof, apportioned
equally among all designated Units (other than Series A Preferred Units) in accordance with their relative Percentage Interests,
(b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with
their relative Percentage Interests and (c) when used with respect to holders of Incentive Distribution Rights or Series A
Preferred Units, apportioned equally among all holders of Incentive Distribution Rights or Series A Preferred Units in accordance
with the relative number or percentage of Incentive Distribution Rights or Series A Preferred Units, as applicable, held by
each such holder.
“
Purchase
Date
” means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner
Interests of a certain class or series (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant
to
Article XV
.
“
Quarter
”
means, unless the context requires otherwise, a fiscal quarter, or, with respect to the first fiscal quarter including the Closing
Date, the portion of such fiscal quarter after the Closing Date, of the Partnership.
“
Record
Date
” means the date established by the Board of Directors or otherwise in accordance with this Agreement for determining
(a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to
vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of
any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution
or to participate in any offer.
“
Record
Holder
” means (a) the Person in whose name a Common Unit is registered on the books of the Transfer Agent as
of the closing of business on a particular Business Day, (b) the Person in whose name a Series A Preferred Unit is registered
on the books of the Transfer Agent as of, unless otherwise set forth in
Article XVI
, the opening of business or a particular
Business Day, or (c) with respect to other Partnership Interests, the Person in whose name any such other Partnership Interest
is registered on the books that the Board of Directors has caused to be kept as of the closing of business on such Business Day
(which books may be kept, at the Board of Directors’ option, by the Transfer Agent).
“
Registration
Statement
” means the Partnership’s Registration Statement on Form F-1 (Registration No. 333-197228)
as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the
Securities Act to register the offering and sale of the Common Units in the Initial Offering.
“
Reset MQD
”
has the meaning set forth in
Section 5.10(e)
.
“
Reset
Notice
” has the meaning set forth in
Section 5.10(b)
.
“
Second
Target Distribution
” means $0.421875 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.421875 multiplied by a fraction of which the numerator is equal
to the number of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing
Date occurs), subject to adjustment in accordance with
Section 5.10
and
Section 6.4
.
“
Securities
Act
” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to
such statute.
“
Securities
Exchange Act
” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and
any successor to such statute.
“
Senior
Securities
” has the meaning set forth in
Section 16.7(c)
.
“
Series A
Distribution Payment Date
” means each February 15, May 15, August 15 and November 15, commencing
February 15, 2018;
provided
,
however
, that if any Series A Distribution Payment Date would otherwise occur
on a day that is not a Business Day, such Series A Distribution Payment Date shall instead be on the immediately succeeding
Business Day.
“
Series A
Distribution Period
” means a period of time from and including the preceding Series A Distribution Payment Date
(other than the initial Series A Distribution Period, which shall commence on and include the Series A Original Issue
Date), to but excluding the next Series A Distribution Payment Date for such Series A Distribution Period.
“
Series A
Distribution Rate
” means a rate equal to 8.75% per annum of the Stated Series A Liquidation Preference per Series A
Preferred Unit.
“
Series A
Distribution Record Date
” has the meaning set forth in
Section 16.3(b)
.
“
Series A
Distributions
” means distributions with respect to Series A Preferred Units pursuant to
Section 16.3
.
“
Series A
Holder
” means a Record Holder of the Series A Preferred Units.
“
Series A
Liquidation Preference
” means a liquidation preference for each Series A Preferred Unit initially equal to $25.00
per share, which liquidation preference shall be subject to (a) increase by the per Series A Preferred Unit amount of
any accumulated and unpaid distributions (whether or not such distributions shall have been declared) and (b) decrease upon
a distribution in connection with a Liquidation Event described in
Section 16.4
which does not result in payment in
full of the liquidation preference of such Series A Preferred Unit.
“
Series A
Original Issue Date
” means October 5, 2017.
“
Series A
Payments
” means, collectively, Series A Distributions and Series A Redemption Payments.
“
Series A
Preferred Unit
” means a Preferred Unit having the designations, preferences, rights, powers and duties set forth
in
Article XVI
.
“
Series A
Redemption Date
” has the meaning set forth in
Section 16.6
.
“
Series A
Redemption Notice
” has the meaning set forth in
Section 16.6(b)
.
“
Series A
Redemption Price
” has the meaning set forth in
Section 16.6(a)
.
“
Series A
Redemption Payments
” means payments to be made to the holders of Series A Preferred Units to redeem Series A
Preferred Units in accordance with
Section 16.6
.
“
Series
A Trigger Event
” means any time at which six quarterly Series A Distributions, whether consecutive or not, are in
Arrears.
“
Special
Approval
” means approval by a majority of the members of the Conflicts Committee.
“
Stated
Series A Liquidation Preference
” means an amount equal to $25.00 per Series A Preferred Unit.
“
Subordinated
Unit
” means a Unit representing a fractional part of the Partnership Interests of all Limited Partners and having
the rights and obligations specified with respect to Subordinated Units in this Agreement. The term “
Subordinated Unit
”
does not include a Common Unit. A Subordinated Unit that is convertible into a Common Unit shall not constitute a Common Unit until
such conversion occurs.
“
Subordination
Period
” means the period commencing on the Closing Date and ending on the first to occur of the following dates:
(a)
the
second Business Day following the distribution of Available Cash to Partners pursuant to
Section 6.1(a)
in respect
of any Quarter ending on or after June 30, 2019, in respect of which (i) (A) distributions of Available Cash from Operating
Surplus on each of the Outstanding Common Units, Subordinated Units and any other Outstanding Units that are senior or equal in
right of distribution to the Subordinated Units equaled or exceeded the sum of the Minimum Quarterly Distribution during each of
the three consecutive, non-overlapping four-Quarter periods immediately preceding such date and (B) the Adjusted Operating
Surplus for each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded
the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior
or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Weighted
Average Basis with respect to each such period and (ii) there are no Cumulative Common Unit Arrearages; and
(b)
the
date on which the General Partner is removed as general partner of the Partnership upon the requisite vote by holders of Outstanding
Units under circumstances where Cause does not exist and no Units held by the General Partner and its Affiliates are voted in favor
of such removal.
“
Subsidiary
”
means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without
regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is
owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as defined, but excluding
subsection (d)
of this definition) of such Person or a combination thereof, (b) a partnership (whether general
or limited) in which such Person or a Subsidiary (as defined, but excluding
subsection (d)
of this definition) of such
Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership
interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly
or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as defined, but excluding
subsection (d)
of this definition) of such Person, or a combination thereof, (c) any other Person (other than a corporation or a partnership)
in which such Person, one or more Subsidiaries (as defined, but excluding
subsection (d)
of this definition) of such
Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership
interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such
Person, or (d) any other Person in which such Person, one or more Subsidiaries (as defined, but excluding this
subsection (d)
of this definition) of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) less
than a majority ownership interest or (ii) less than the power to elect or direct the election of a majority of the directors
or other governing body of such Person,
provided
, that (A) such Person, one or more Subsidiaries (as defined, but excluding
this
subsection (d)
of this definition) of such Person, or a combination thereof, directly or indirectly, at the date
of the determination, has at least a 20% ownership interest in such other Person, (B) such Person accounts for such other
Person (under U.S. GAAP, as in effect on the later of the date of investment in such other Person or material expansion of the
operations of such other Person) on a consolidated or equity accounting basis, (C) such Person has directly or indirectly
material negative control rights regarding such other Person including over such other Person’s ability to materially expand
its operations beyond that contemplated at the date of investment in such other Person, and (D) such other Person is (i) formed
and maintained for the sole purpose of owning or leasing, operating and chartering vessels or liquefied natural gas infrastructure
assets and (ii) obligated under its constituent documents or as a result of unanimous agreement of its owners, to distribute
to its owners all of its income on at least an annual basis (less any cash reserves that are approved by such Person). For the
avoidance of doubt, SRV Joint Gas Ltd. and SRV Joint Gas Two Ltd. shall be deemed to be Subsidiaries.
“
Surviving
Business Entity
” has the meaning assigned to such term in
Section 14.2(b)(ii)
.
“
Third
Target Distribution
” means $0.50625 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.50625 multiplied by a fraction of which the numerator is equal
to the number of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing
Date occurs), subject to adjustment in accordance with
Section 5.10
and
Section 6.4
.
“
Trading
Day
” means, for the purpose of determining the Current Market Price of any class or series of Limited Partner Interests,
a day on which the principal National Securities Exchange on which such class or series of Limited Partner Interests is listed
or admitted for trading is open for the transaction of business or, if Limited Partner Interests of a class or series are
not listed on any National Securities Exchange, a day on which banking institutions in New York City generally are open.
“
transfer
”
or “
transfers
” has the meaning assigned to such term in
Section 4.4(a)
.
“
Transfer
Agent
” means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as
shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Common Units and the Preferred
Units;
provided
,
however
, that if no Transfer Agent is specifically designated for any other Partnership Interests,
the Partnership shall act in such capacity.
“
Underwriter
”
means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchases Common Units pursuant
thereto.
“
Underwriting
Agreement
” means the Underwriting Agreement, dated August 7, 2014, among the Underwriters, the Partnership, the General
Partner, the Operating Company and Höegh LNG, providing for the purchase of Common Units from the Partnership by such Underwriters
in connection with the Initial Offering.
“
Unit
”
means a Partnership Interest that is designated as a “
Unit
” and shall include Common Units, Preferred Units
and Subordinated Units, but shall not include (a) the General Partner Interest or (b) the Incentive Distribution Rights.
“
Unitholders
”
means the holders of Units.
“
Unit Majority
”
means (a) during the Subordination Period, (i) a majority of the Outstanding Common Units (excluding Common Units owned
by the General Partner and its Affiliates) voting as a single class and (ii) a majority of the Outstanding Subordinated Units,
voting as a single class, and (b) after the end of the Subordination Period, at least a majority of the Outstanding Common
Units, voting as a single class.
“
Unit Register
”
means the register of the Partnership for the registration and transfer of Limited Partnership Interests as provided in
Section 4.5
.
“
Unrecovered
Capital
” means at any time, with respect to a Common Unit, the Initial Unit Price less the sum of all distributions
constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed
Value of any distributions in kind) in connection with the dissolution and liquidation of the Partnership theretofore made in respect
of an Initial Common Unit, adjusted as the Board of Directors determines to be appropriate to give effect to any distribution,
subdivision or combination of such Common Units.
“
U.S. GAAP
”
means United States generally accepted accounting principles consistently applied.
“
Volume-Weighted
Average Market Price
” means, for a specified period of consecutive Trading Days for the Common Units, an amount equal
to (a) the cumulative sum of the products of (x) the sale price for each trade of Common Units occurring during such
period multiplied by (y) the number of Common Units sold at such price, divided by (b) the total number of Common Units
so traded during such period.
“
Withdrawal
Opinion of Counsel
” has the meaning assigned to such term in
Section 11.1(b)(i)
.
“
Working
Capital Borrowings
” means borrowings used solely for working capital purposes or to pay distributions to Partners
made pursuant to a credit facility, commercial paper facility or similar financing arrangement available to a Group Member,
provided
,
that when such borrowing is incurred it is the intent of the borrower to repay such borrowings within 12 months from sources
other than additional Working Capital Borrowings.
Section 1.2
Construction
.
Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references
to Articles and Sections refer to Articles and Sections of this Agreement; (c) the term “include” or “includes”
means includes, without limitation, and “including” means including, without limitation; and (d) the terms “hereof”,
“herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this
Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect
in any way the meaning or interpretation of this Agreement.
Article II
ORGANIZATION
Section 2.1
Formation
.
The General Partner and the Organizational Limited Partner previously formed the Partnership as a limited partnership pursuant
to the provisions of the Marshall Islands Act. The General Partner and the Organizational Limited Partner hereby amend and restate
the Prior Agreement in its entirety. This amendment and restatement shall become effective on the date of this Agreement. Except
as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations
of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Marshall Islands
Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes and a Partner has no interest
in specific Partnership property.
Section 2.2
Name
.
The name of the Partnership shall be “Höegh LNG Partners LP”. The Partnership’s business may be conducted
under any other name or names as determined by the Board of Directors. The words “Limited Partnership” or the letters
“LP” or similar words or letters shall be included in the Partnership’s name where necessary for the purpose
of complying with the laws of any jurisdiction that so requires. The Board of Directors may change the name of the Partnership
at any time and from time to time in compliance with the requirements of the Marshall Islands Act and shall notify the General
Partner and the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3
Registered
Office; Registered Agent; Principal Office; Other Offices
. Unless and until changed by the Board
of Directors, the registered office of the Partnership in the Marshall Islands shall be located at Trust Company Complex, Ajeltake
Island, Ajeltake Road, Majuro, Marshall Islands MH96960, and the registered agent for service of process on the Partnership in
the Marshall Islands at such registered office shall be The Trust Company of the Marshall Islands, Inc. The principal office of
the Partnership shall be located at Wessex House, 5
th
Floor, 45 Reid Street, Hamilton, HM 12, Bermuda, or such other
place as the Board of Directors may from time to time designate by notice to the General Partner and the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside the Marshall Islands as the Board of Directors
determines to be necessary or appropriate. The address of the General Partner shall be at Wessex House, 5
th
Floor,
45 Reid Street, Hamilton, HM 12, Bermuda, or such other place as the General Partner may from time to time designate by notice
to the Limited Partners.
Section 2.4
Purpose
and Business
. The purpose and nature of the business to be conducted by the Partnership shall
be to (a) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company
or other arrangement to engage indirectly in, any business activity that is approved by the Board of Directors and that lawfully
may be conducted by a limited partnership organized pursuant to the Marshall Islands Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, and
(b) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group
Member.
Section 2.5
Powers
.
The Partnership shall be empowered to do any and all acts and things necessary and appropriate for the furtherance and accomplishment
of the purposes and business described in
Section 2.4
and for the protection and benefit of the Partnership.
Section 2.6
Term
.
The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Marshall
Islands Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of
Article XII
.
The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited
Partnership as provided in the Marshall Islands Act.
Section 2.7
Title
to Partnership Assets
. Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively,
shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets
may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the
Board of Directors may determine. The General Partner hereby declares and warrants that any Partnership assets for which record
title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the
General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this
Agreement;
provided, however
,
that the General Partner shall use commercially reasonable efforts to cause record title to such assets (other than those assets
in respect of which the Board of Directors determines that the expense and difficulty of conveyancing makes transfer of record
title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; and,
provided,
further
, that, prior to the withdrawal or removal of the General Partner or as soon thereafter
as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and,
prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the Board of Directors. All Partnership
assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record
title to such Partnership assets is held.
Article III
RIGHTS
OF LIMITED PARTNERS
Section 3.1
Limitation
of Liability
. The Limited Partners shall have no liability under this Agreement except as expressly
provided in this Agreement or the Marshall Islands Act.
Section 3.2
Management
of Business
. No Limited Partner, in its capacity as such, shall participate in the operation,
management or control (within the meaning of the Marshall Islands Act) of the Partnership’s business, transact any business
in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. Any action taken by
any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of
the General Partner or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee
of a Group Member, in its capacity as such, shall not be deemed to be participation in the control of the business of the Partnership
by a limited partner of the Partnership (within the meaning of Section 30 of the Marshall Islands Act) and shall not affect,
impair or eliminate the limitations on the liability of the Limited Partners under this Agreement.
Section 3.3
Outside
Activities of the Limited Partners
. Subject to the provisions of
Section 7.13
and
the Omnibus Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons
shall also be Limited Partners, each Limited Partner shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business interests and activities in direct competition
with the Partnership Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement
in any business ventures of any Limited Partner.
Section 3.4
Rights
of Limited Partners
.
(a)
In
addition to other rights provided by this Agreement or by the Marshall Islands Act, and except as limited by
Section 3.4(b)
,
each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a Limited
Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited Partner’s
own expense, to:
(i)
have
furnished to him a current list of the name and last known business, residence or mailing address of each Partner;
(ii)
obtain
true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital
Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a
Partner;
(iii)
have
furnished to him a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto;
(iv)
obtain
true and full information regarding the status of the business and financial condition of the Partnership Group; and
(v)
obtain
such other information regarding the affairs of the Partnership as is just and reasonable.
(b)
The
Board of Directors may keep confidential from the Limited Partners, for such period of time as the Board of Directors deems reasonable,
(i) any information that the Board of Directors reasonably believes to be in the nature of trade secrets or (ii) other
information the disclosure of which the Board of Directors in good faith believes (A) is not in the best interests of the
Partnership Group, (B) could damage the Partnership Group or its business or (C) that any Group Member is required by
law or by agreement with any third party to keep confidential (other than agreements with Affiliates of the Partnership the primary
purpose of which is to circumvent the obligations set forth in this
Section 3.4
).
Article IV
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS
Section 4.1
Certificates
.
Subject to
Section 16.2(b)
with respect to Series A Preferred Units, unless the Partnership shall determine otherwise
in respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates.
Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the Board of Directors, President,
Chief Executive Officer or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any
Assistant Secretary of the Partnership. If a Transfer Agent has been appointed for a class of Partnership Interests, no Certificate
for such class of Partnership Interests shall be valid for any purpose until it has been countersigned by the Transfer Agent;
provided,
however
, that if the Partnership elects to issue Partnership Interests of such class in global
form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests
have been duly registered in accordance with the directions of the Partnership. If Common Units are evidenced by Certificates,
on or after the date on which Subordinated Units are converted into Common Units pursuant to the terms of
Section 5.6
,
the Record Holders of such Subordinated Units (a) if the Subordinated Units are evidenced by Certificates, may exchange such
Certificates for Certificates evidencing Common Units or (b) if the Subordinated Units are not evidenced by Certificates,
shall be issued Certificates evidencing Common Units.
Section 4.2
Mutilated,
Destroyed, Lost or Stolen Certificates
.
(a)
If
any mutilated Certificate is surrendered to the Transfer Agent (for Common Units or Preferred Units) or the Partnership (for Partnership
Interests other than Common Units or Preferred Units), the appropriate Officers on behalf of the Partnership shall execute, and
the Transfer Agent (for Common Units or Preferred Units) shall countersign and deliver in exchange therefor, a new Certificate
evidencing the same number and type of Partnership Interests as the Certificate so surrendered.
(b)
The
appropriate Officers on behalf of the Partnership shall execute and deliver, and the Transfer Agent (for Common Units or Preferred
Units), as applicable, shall countersign, a new Certificate in place of any Certificate previously issued, or issue uncertificated
Units, if the Record Holder of the Certificate:
(i)
makes
proof by affidavit, in form and substance satisfactory to the Partnership, that a previously issued Certificate has been lost,
destroyed or stolen;
(ii)
requests
the issuance of a new Certificate or the issuance of uncertificated Units before the Partnership has notice that the Certificate
has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
(iii)
if
requested by the Partnership, delivers to the Partnership a bond, in form and substance satisfactory to the Partnership, with surety
or sureties and with fixed or open penalty as the Board of Directors may direct to indemnify the Partnership, the Partners, the
General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft
of the Certificate; and
(iv)
satisfies
any other reasonable requirements imposed by the Board of Directors.
If a Limited Partner
fails to notify the Partnership within a reasonable period of time after he has notice of the loss, destruction or theft of a Certificate,
and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General
Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded from making any claim against
the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate or uncertificated Units.
(c)
As
a condition to the issuance of any new Certificate or uncertificated Units under this
Section 4.2
, the Partnership
may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith.
Section 4.3
Record
Holders
. The Partnership shall be entitled to recognize the Record Holder as the Partner with
respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest
in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership shall have actual or other
notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National
Securities Exchange on which such Partnership Interests are listed or admitted to trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting
as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests,
as between the Partnership on the one hand, and such other Persons on the other, such representative Person (a) shall be the
Record Holder of such Partnership Interest and (b) shall be bound by this Agreement and shall have the rights and obligations
of a Partner hereunder and as, and to the extent, provided for herein.
Section 4.4
Transfer
Generally
.
(a)
The
term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall mean a transaction (i) by
which the General Partner assigns its General Partner Interest to another Person or by which a holder of Incentive Distribution
Rights assigns its Incentive Distribution Rights to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii) by which the holder of a Limited Partner
Interest (other than an Incentive Distribution Right) assigns such Limited Partner Interest to another Person who is or becomes
a Limited Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, excluding a pledge,
encumbrance, hypothecation or mortgage, but including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or
mortgage.
(b)
No
Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in
this
Article IV
. Any transfer or purported transfer of a Partnership Interest not made in accordance with this
Article IV
shall be null and void.
(c)
Nothing
contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of the
General Partner of any or all of the shares of stock, membership interests, partnership interests or other ownership interests
in the General Partner, and the term “transfer” shall not mean any such disposition.
Section 4.5
Registration
and Transfer of Limited Partner Interests
.
(a)
The
Partnership shall keep or cause to be kept a register in which, subject to such reasonable regulations as it may prescribe and
subject to the provisions of
Section 4.5(b)
, the Partnership will provide for the registration and transfer of Limited
Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the purpose of registering Common Units
and Preferred Units and transfers of such Common Units and Preferred Units as herein provided. The Partnership shall not recognize
transfers of Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner described in this
Section 4.5
. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced
by a Certificate, and subject to the provisions of
Section 4.5(b)
, the appropriate Officers on behalf of the Partnership
shall execute and deliver, and in the case of Common Units, the Transfer Agent shall countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates
evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.
(b)
The
Partnership shall not recognize any transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner
Interests are surrendered for registration of transfer. No charge shall be imposed by the Partnership for such transfer;
provided,
however
, that as a condition to the issuance of any new Certificate under this
Section 4.5
, the Partnership may
require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.
(c)
By
acceptance of the transfer of a Limited Partner Interest in accordance with this
Section 4.5
and except as otherwise
provided in
Section 4.8
, each transferee of a Limited Partner Interest (including any nominee holder or an agent or
representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership
as a Limited Partner with respect to the Limited Partner Interests so transferred to such Person when any such transfer or admission
is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner
Interests so transferred, (ii) shall become bound, and shall be deemed to have agreed to be bound, by the terms of this Agreement,
(iii) represents that the transferee has the capacity, power and authority to enter into this Agreement and (iv) makes
the consents, acknowledgments and waivers contained in this Agreement, all with or without execution of this Agreement by such
Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment
to this Agreement.
(d)
Subject
to the provisions set forth in this
Article IV
and applicable securities laws, Limited Partner Interests shall be freely
transferable.
(e)
The
General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units, Common Units and Preferred
Units, if any, to one or more Persons.
Section 4.6
Transfer
of the General Partner’s General Partner Interest
.
(a)
Subject
to
Section 4.6(c)
below, prior to June 30, 2024, the General Partner shall not transfer all or any part of its General
Partner Interest to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders
of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates)
or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner
(other than an individual) or (B) another Person (other than an individual) in connection with (y) the merger or consolidation
of the General Partner with or into such other Person or (z) the transfer by the General Partner of all or substantially all of
its assets to such other Person.
(b)
Subject
to
Section 4.6(c)
below, on or after June 30, 2024, the General Partner may transfer all or any of its General Partner
Interest without Unitholder approval.
(c)
Notwithstanding
anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner Interest to another
Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this
Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of Counsel that such
transfer would not result in the loss of limited liability of any Limited Partner or of any limited partner or member of any other
Group Member under the laws of any such entity’s jurisdiction of formation and (iii) such transferee also agrees to
purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest of the General Partner
as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance
with this
Section 4.6
, the transferee or successor (as the case may be) shall, subject to compliance with the terms
of
Section 10.3
, be admitted to the Partnership as the General Partner immediately prior to the transfer of the General
Partner Interest, and the business of the Partnership shall continue without dissolution.
Section 4.7
Transfer
of Incentive Distribution Rights
. Prior to June 30, 2019, a holder of Incentive Distribution Rights
may transfer any or all of the Incentive Distribution Rights held by such holder without any consent of the Unitholders to (a) an
Affiliate of such holder (other than an individual) or (b) another Person (other than an individual) in connection with (i) the
merger or consolidation of such holder of Incentive Distribution Rights with or into such other Person or (ii) the transfer
by such holder of all or substantially all of its assets to such other Person. Any other transfer of the Incentive Distribution
Rights prior to June 30, 2019 shall require the prior approval of holders of at least a majority of the Outstanding Common Units
(excluding Common Units held by Höegh LNG and its Affiliates). On or after June 30, 2019, any holder of Incentive Distribution
Rights may transfer any or all of its Incentive Distribution Rights without Unitholder approval. Notwithstanding anything herein
to the contrary, (a) the transfer of Common Units issued pursuant to
Section 5.10
shall not be treated as a transfer
of all or any part of the Incentive Distribution Rights and (b) no transfer of Incentive Distribution Rights to another Person
shall be permitted unless the transferee agrees to be bound by the provisions of this Agreement. The General Partner and any transferee
or transferees of the Incentive Distribution Rights may agree in a separate instrument as to the General Partner’s exercise
of its rights with respect to the Incentive Distribution Rights under
Section 11.3
.
Section 4.8
Restrictions
on Transfers
.
(a)
Except
as provided in
Section 4.8(b)
below, but notwithstanding the other provisions of this
Article IV
, no transfer
of any Partnership Interests shall be made if such transfer would (i) violate the then applicable U.S. federal or state securities
laws, laws of the Republic of the Marshall Islands or rules and regulations of the Commission, any state securities commission
or any other governmental authority with jurisdiction over such transfer or (ii) terminate the existence or qualification
of the Partnership or any Group Member under the laws of the jurisdiction of its formation.
(b)
Nothing
contained in this
Article IV
, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests
are listed or admitted to trading.
Article V
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1
Contributions
Prior to the Closing Date
. In connection with the formation of the Partnership under the Marshall
Islands Act, the General Partner was admitted as the General Partner of the Partnership and the Organizational Limited Partner
made an initial Capital Contribution in the amount of $1,000 in exchange for a Limited Partner Interest equal to a 100% Percentage
Interest and was admitted as a Limited Partner of the Partnership. As of the Closing Date, and effective with the admission of
another Limited Partner to the Partnership, the interests of the Organizational Limited Partner were redeemed as provided in the
Contribution Agreement and the initial Capital Contribution of the Organizational Limited Partner was refunded.
Section 5.2
Initial
Unit Issuances; Tax Election
.
(a)
On
the Closing Date, pursuant to the Contribution Agreement, (i) Höegh LNG assigned and transferred to the Partnership 100%
of the equity interests in the Operating Company and the SRV and Lampung Promissory Note (as defined in the Contribution Agreement),
in exchange for (A) 13,156,060 Subordinated Units and 2,116,060 Common Units, (B) all of the Incentive Distribution Rights
and (C) the right to receive the Deferred Issuance and Distribution and (ii) the General Partner continued to own the
General Partner Interest.
(b)
On
the Closing Date and pursuant to the Underwriting Agreement, each Underwriter paid cash to the Partnership in exchange for the
issuance by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.
(c)
Upon
the exercise of the Over-Allotment Option, each Underwriter paid cash to the Partnership in exchange for the issuance by the Partnership
of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.
(d)
Effective
on or before the Closing Date, the Partnership elected to be treated as an association taxable as a corporation solely for U.S.
federal income tax purposes.
Section 5.3
Interest
and Withdrawal
. No interest shall be paid by the Partnership on Capital Contributions. No Partner
shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon dissolution of the Partnership may be considered and permitted as such by law and then only
to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have
priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or distributions.
Section 5.4
Issuances
of Additional Partnership Interests
.
(a)
Subject
to any approvals required by Series A Holders pursuant to
Section 16.5(c)(ii)
, the Partnership may issue additional
Partnership Interests and options, rights, warrants and appreciation rights relating to the Partnership Interests for any Partnership
purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the Board
of Directors shall determine, all without the approval of any Partners.
(b)
Each
additional Partnership Interest authorized to be issued by the Partnership pursuant to
Section 5.4(a)
may be issued
in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties
(which may be senior to existing classes and series of Partnership Interests), as shall be fixed by the Board of Directors, including
(i) the right to share in Partnership distributions; (ii) the rights upon dissolution and liquidation of the Partnership;
(iii) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership
Interest (including sinking fund provisions); (iv) whether such Partnership Interest is issued with the privilege of conversion
or exchange and, if so, the terms and conditions of such conversion or exchange; (v) the terms and conditions upon which each
Partnership Interest will be issued, evidenced by certificates and assigned or transferred; (vi) the method for determining
the Percentage Interest as to such Partnership Interest; and (vii) the right, if any, of each such Partnership Interest to
vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership
Interest.
(c)
The
Board of Directors shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance
of Partnership Interests and options, rights, warrants and appreciation rights relating to Partnership Interests pursuant to this
Section 5.4
, including Common Units issued in connection with the Deferred Issuance and Distribution, (ii) the
conversion of the Combined Interest into Units pursuant to the terms of this Agreement, (iii) the issuance of Common Units
pursuant to
Section 5.10
, (iv) the admission of additional Limited Partners and (v) all additional issuances
of Partnership Interests. The Board of Directors shall determine the relative rights, powers and duties of the holders of the Units
or other Partnership Interests being so issued. The Board of Directors shall do all things necessary to comply with the Marshall
Islands Act and is authorized and directed to do all things that it determines to be necessary or appropriate in connection with
any future issuance of Partnership Interests or in connection with the conversion of the Combined Interest into Units pursuant
to the terms of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other
governmental agency or any National Securities Exchange on which the Units or other Partnership Interests are listed or admitted
to trading.
Section 5.5
Limitations
on Issuance of Additional Partnership Interests
. The Partnership may issue an unlimited number
of Partnership Interests (or options, rights, warrants or appreciation rights related thereto) pursuant to
Section 5.4
without the approval of the Partners;
provided, however
, that no fractional units
shall be issued by the Partnership; and
provided, further
, that without the
approval of the General Partner, the Partnership shall not issue any equity where such issuance (as determined by the Board of
Directors) (a) is not reasonably expected to be accretive to equity within 12 months of issuance or (b) would otherwise
have a material adverse impact on the General Partner, the General Partner Interest or the ability of the Partnership to satisfy
the tests set forth in the definition of Subordination Period.
Section 5.6
Conversion
of Subordinated Units to Common Units
.
(a)
The
Subordinated Units shall convert into Common Units on a one-for-one basis upon the expiration of the Subordination Period.
(b)
Notwithstanding
any other provision of this Agreement, the Subordinated Units will automatically convert into Common Units on a one-for-one basis
as set forth in, and pursuant to the terms of,
Section 11.4
.
Section 5.7
Limited
Preemptive Right
. Except as provided in this
Section 5.7
or as otherwise provided
in a separate agreement by the Partnership, no Person shall have any preemptive, preferential or other similar right with respect
to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter created. The General Partner
shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership
Interests from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Interests to Persons other
than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner
and its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Interests;
provided,
however
, that the amount of any series of Preferred Units issued by the Partnership from time
to time that the General Partner shall have a right to purchase pursuant to this
Section 5.7
shall equal the product
of (a) the aggregate Percentage Interest of the General Partner and its Affiliates multiplied by (b) the number of Preferred
Units so issued.
Section 5.8
Splits
and Combinations
.
(a)
Subject
to
Section 5.8(d)
and
Section 6.4
(dealing with adjustments of distribution levels), the Partnership may
make a Pro Rata distribution of Partnership Interests (other than Series A Preferred Units) to all Record Holders of the same
class or series of Partnership Interests or may effect a subdivision or combination so long as, after any such event, each Partner
holding such class or series of Partnership Interests shall have the same Percentage Interest in the Partnership as before such
event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage
and including those based on the Series A Liquidation Preference or the Stated Series A Liquidation Preference) or stated
as a number of Units are proportionately adjusted.
(b)
Whenever
such a Pro Rata distribution, subdivision or combination of Partnership Interests is declared, the Board of Directors shall select
a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least
20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The
Board of Directors also may cause a firm of independent public accountants selected by it to calculate the number of Partnership
Interests to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The Board of Directors
shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.
(c)
Promptly
following any such distribution, subdivision or combination, the Partnership may issue Certificates or uncertificated Partnership
Interests to the Record Holders of Partnership Interests of the relevant class or series of Partnership Interest as of the applicable
Record Date representing the new number of Partnership Interests held by such Record Holders, or the Board of Directors may adopt
such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results
in a smaller total number of Partnership Interests Outstanding, the Partnership shall require, as a condition to the delivery to
a Record Holder of such new Certificate or uncertificated Partnership Interest, the surrender of any Certificate held by such Record
Holder immediately prior to such Record Date.
(d)
The
Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision
or combination of Units would result in the issuance of fractional Units but for the provisions of this
Section 5.8(d)
,
each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).
Section 5.9
Fully
Paid and Non-Assessable Nature of Limited Partner Interests
. All Limited Partner Interests issued
pursuant to, and in accordance with the requirements of, this
Article V
shall be fully paid and non-assessable Limited
Partner Interests in the Partnership, except as such non-assessability may be affected by the Marshall Islands Act.
Section 5.10
Issuance
of Common Units in Connection with Reset of Incentive Distribution Rights
.
(a)
Subject
to the provisions of this
Section 5.10
, the holder of the Incentive Distribution Rights (or, if there is more than
one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall
have the right, at any time when there are no Subordinated Units Outstanding and the Partnership has made a distribution pursuant
to
Section 6.2(b)(v)
for each of the four most recently completed Quarters and the amount of each such distribution
did not exceed Adjusted Operating Surplus for such Quarter, to make an election (the “
IDR Reset Election
”)
to cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of
Section 5.10(e)
and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive their
respective proportionate shares of a number of Common Units (“
IDR Reset Common Units
”) derived by
dividing (i) the average of the aggregate amount of cash distributions made by the Partnership for each of the two full Quarters
immediately preceding the giving of the Reset Notice in respect of the Incentive Distribution Rights by (ii) the average of
the cash distributions made by the Partnership in respect of each Common Unit for each of the two full Quarters immediately preceding
the giving of the Reset Notice (the number of Common Units determined by such quotient is referred to herein as the “
Aggregate
Quantity of IDR Reset Common Units
”). The making of the IDR Reset Election in the manner specified in
Section 5.10(b)
shall cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of
Section 5.10(c)
and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive IDR Reset
Common Units on the basis specified above, without any further approval required by the General Partner, the Board of Directors
or the Unitholders, at the time specified in
Section 5.10(c)
, unless the IDR Reset Election is rescinded pursuant to
Section 5.10(d)
.
(b)
To
exercise the right specified in
Section 5.10(a)
, the holder of the Incentive Distribution Rights (or, if there is more
than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights)
shall deliver a written notice (the “
Reset Notice
”) to the Partnership. Within 10 Business Days after
the receipt by the Partnership of such Reset Notice, the Partnership shall deliver a written notice to the holder or holders of
the Incentive Distribution Rights of the Partnership’s determination of the aggregate number of Common Units that each holder
of Incentive Distribution Rights will be entitled to receive.
(c)
The
holder or holders of the Incentive Distribution Rights will be entitled to receive the Aggregate Quantity of IDR Reset Common Units
on the 15
th
Business Day after receipt by the Partnership of the Reset Notice, and the Partnership may issue Certificates
for the Common Units or uncertificated Partnership Interests to the holder or holders of the Incentive Distribution Rights.
(d)
If
the principal National Securities Exchange upon which the Common Units are then traded has not approved the listing or admission
for trading of the Common Units to be issued pursuant to this
Section 5.10
on or before the 30
th
calendar
day following the Partnership’s receipt of the Reset Notice and such approval is required by the rules and regulations of
such National Securities Exchange, then the holder of the Incentive Distribution Rights (or, if there is more than one holder of
the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall have the right
to either rescind the IDR Reset Election or elect to receive other Partnership Interests having such terms as the Board of
Directors may approve, with the approval of the Conflicts Committee, that will provide (i) the same economic value, in the
aggregate, as the Aggregate Quantity of IDR Reset Common Units would have had at the time of the Partnership’s receipt of
the Reset Notice, as determined by the Board of Directors, and (ii) for the subsequent conversion (on terms acceptable to
the National Securities Exchange upon which the Common Units are then traded) of such Partnership Interests into Common Units within
not more than 12 months following the Partnership’s receipt of the Reset Notice upon the satisfaction of one or more conditions
that are reasonably acceptable to the holder of the Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights).
(e)
The
Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution shall be adjusted
at the time of the issuance of Common Units or other Partnership Interests pursuant to this
Section 5.10
such that
(i) the Minimum Quarterly Distribution shall be reset to equal to the average cash distribution amount per Common Unit for
the two Quarters immediately prior to the Partnership’s receipt of the Reset Notice (the “
Reset MQD
”),
(ii) the First Target Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second Target Distribution
shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset
MQD.
Section 5.11
Capital
Accounts
. The Partnership shall not maintain capital accounts.
Article VI
DISTRIBUTIONS
Section 6.1
Requirement
and Characterization of Distributions; Distributions to Record Holders
.
(a)
Subject
to
Section 16.3
, within 45 days following the end of each Quarter commencing with the Quarter ending on September 30,
2014, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 51 of the Marshall
Islands Act, be distributed in accordance with this
Article VI
by the Partnership to the Partners as of the Record
Date selected by the Board of Directors. All amounts of Available Cash distributed by the Partnership on any date following the
Closing Date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore
distributed by the Partnership to the Partners following the Closing Date pursuant to
Section 6.2
equals the Operating
Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed
by the Partnership on such date shall, except as otherwise provided in
Section 6.3
, be deemed to be “
Capital
Surplus
.” Notwithstanding any provision to the contrary contained in this Agreement, the Partnership shall not make
a distribution to any Partner on account of its interest in the Partnership if such distribution would violate the Marshall Islands
Act or any other applicable law. For the avoidance of doubt, the Series A Preferred Units shall not be entitled to distributions
made pursuant to this
Section 6.1(a)
.
(b)
Notwithstanding
the first three sentences of
Section 6.1(a)
, in the event of the dissolution and liquidation of the Partnership, all
receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in (a)(ii)
of the definition of Available Cash, shall be applied and distributed solely in accordance with, and subject to the terms and conditions
of,
Section 12.4
.
(c)
Each
distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through the Transfer Agent or through
any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution.
Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless
of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.
Section 6.2
Distributions
of Available Cash from Operating Surplus
.
(a)
During
Subordination Period. Available Cash with respect to any Quarter or portion thereof within the Subordination Period that is deemed
to be Operating Surplus pursuant to the provisions of
Section 6.1
or
Section 6.3
shall, subject to Section 51
of the Marshall Islands Act, be distributed as follows (subject to
Section 16.3
and except as otherwise contemplated
by
Section 5.4
in respect of other Partnership Interests issued pursuant thereto):
(i)
First
,
100% to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(ii)
Second
,
100% to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;
(iii)
Third
,
100% to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated
Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(iv)
Fourth
,
100% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to
the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(v)
Fifth
,
(A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution
over the First Target Distribution for such Quarter;
(vi)
Sixth
,
(A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution
over the Second Target Distribution for such Quarter; and
(vii)
Thereafter
,
(A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;
provided, however
, that if the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been
reduced to zero pursuant to the second sentence of
Section 6.4
, the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will be made solely in accordance with
Section 6.2(a)(vii)
.
(b)
After
Subordination Period. Available Cash with respect to any Quarter after the Subordination Period that is deemed to be Operating
Surplus pursuant to the provisions of
Section 6.1
or
Section 6.3
, shall subject to Section 51 of the
Marshall Islands Act, be distributed as follows (subject to
Section 16.3
and except as otherwise required by
Section 5.4(b)
in respect of additional Partnership Interests issued pursuant thereto):
(i)
First
,
100% to the Unitholders Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to
the Minimum Quarterly Distribution for such Quarter;
(ii)
Second
,
100% to the Unitholders Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to
the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(iii)
Third
,
(A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution
over the First Target Distribution for such Quarter;
(iv)
Fourth
,
(A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution
over the Second Target Distribution for such Quarter; and
(v)
Thereafter
,
(A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;
provided, however
, that if the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been
reduced to zero pursuant to the second sentence of
Section 6.4
, the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will be made solely in accordance with
Section 6.2(b)(v)
. For the
avoidance of doubt, the Series A Preferred Units shall not be entitled to distributions made pursuant to this
Section 6.2
.
Section 6.3
Distributions
of Available Cash from Capital Surplus
. Available Cash that is deemed to be Capital Surplus pursuant
to the provisions of
Section 6.1(a)
shall, subject to Section 51 of the Marshall Islands Act and
Section 16.3
in respect of Series A Preferred Units, be distributed, unless the provisions of
Section 6.1
require otherwise,
100% to the Unitholders (other than the Series A Holders) Pro Rata, until the Minimum Quarterly Distribution is reduced to
zero pursuant to the second sentence of
Section 6.4
. Available Cash that is deemed to be Capital Surplus shall then
be distributed 100% to the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common
Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage. Thereafter, and subject to
Section 16.3
,
all Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in accordance with
Section 6.2
.
Section 6.4
Adjustment
of Minimum Quarterly Distribution and Target Distribution Levels
. The Minimum Quarterly Distribution,
First Target Distribution, Second Target Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative Common
Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected
by a distribution payable in Units or otherwise) of Units or other Partnership Interests in accordance with
Section 5.8
.
In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly
Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be reduced in the same
proportion that the distribution had to the fair market value of the Common Units prior to the announcement of the distribution.
If the Common Units are publicly traded on a National Securities Exchange, the fair market value will be the Current Market Price
before the announcement of the distribution. If the Common Units are not publicly traded, the fair market value will be determined
by the Board of Directors.
Section 6.5
Special
Provisions Relating to the Holders of Subordinated Units
. Except with respect to the right to
vote on or approve matters requiring the vote or approval of a percentage of the holders of Outstanding Common Units and the right
to participate in distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights
and obligations of a Unitholder holding Common Units hereunder;
provided, however
,
that immediately upon the conversion of Subordinated Units into Common Units, the Unitholder holding a Subordinated Unit shall
possess all of the rights and obligations of a Unitholder holding Common Units hereunder, including the right to vote as a Common
Unitholder and the right to participate in distributions made with respect to Common Units.
Section 6.6
Special
Provisions Relating to the Holders of Incentive Distribution Rights
. Notwithstanding anything
to the contrary set forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall possess the rights
and obligations provided in this Agreement with respect to a Limited Partner pursuant to
Articles III
and
VII
and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding
Units, except as provided by law, or (ii) be entitled to any distributions other than as provided in
Sections 6.2(a)(v)
,
6.2(a)(vi)
and
6.2(a)(vii)
,
6.2(b)(iii)
,
Sections 6.2(b)(iv)
and
6.2(b)(v)
, and
Section 12.4
.
Article VII
MANAGEMENT
AND OPERATION OF BUSINESS
Section 7.1
Management
.
(a)
Except
as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership shall
be vested exclusively in the Board of Directors and, subject to the direction of the Board of Directors and in accordance with
the provisions of
Section 7.8
, the Officers. Neither the General Partner (except as otherwise expressly provided in
this Agreement), nor any Limited Partner shall have any management power or control over the business and affairs of the Partnership.
Thus, except as expressly provided in this Agreement, the business and affairs of the Partnership shall be managed by or under
the direction of the Board of Directors, and the day-to-day activities of the Partnership shall be conducted on the Partnership’s
behalf by the Officers. In order to enable the Board of Directors to manage the business and affairs of the Partnership, the General
Partner, except as otherwise expressly provided in this Agreement, hereby irrevocably delegates to the Board of Directors all management
powers over the business and affairs of the Partnership that it may now or hereafter possess under applicable law. The General
Partner further agrees to take any and all action necessary and appropriate, as determined by the Board of Directors, to effect
any duly authorized actions by the Board of Directors, including executing or filing any agreements, instruments or certificates,
delivering all documents, providing all information and taking or refraining from taking action as may be necessary or appropriate
to achieve the effective delegation of power described in this
Section 7.1(a)
. Each of the Partners and each Person
who may acquire an interest in a Partnership Interest hereby approves, consents to, ratifies and confirms such delegation. The
delegation by the General Partner to the Board of Directors of management powers over the business and affairs of the Partnership
pursuant to the provisions of this Agreement shall not cause the General Partner to cease to be a general partner of the Partnership
nor shall it cause the Board of Directors or any member thereof to be a general partner of the Partnership or to have or be subject
to the liabilities of a general partner of the Partnership.
(b)
Notwithstanding
any other provision of this Agreement, any Group Member Agreement, the Marshall Islands Act or any applicable law, rule or regulation,
each of the Partners and each other Person who may acquire an interest in Partnership Interests hereby (i) approves, consents
to, ratifies and confirms the General Partner’s delegation of management powers to the Board of Directors pursuant to this
Section 7.1
; (ii) approves, ratifies and confirms the execution, delivery and performance by the parties thereto
of this Agreement, the Underwriting Agreement, the Omnibus Agreement, the Contribution Agreement, any Group Member Agreement of
any other Group Member and the other agreements described in or filed as exhibits to the Registration Statement that are related
to the transactions contemplated by the Registration Statement; (iii) agrees that the General Partner (on behalf of the Partnership)
is authorized to execute, deliver and perform the agreements referred to in
clause (ii)
of this sentence and the other
agreements, acts, transactions and matters described in or contemplated by the Underwriting Agreement or described in or filed
as exhibits to the Registration Statement, in each case, on behalf of the Partnership without any further act, approval or vote
of the Partners or the other Persons who may acquire an interest in Partnership Interests; and (iv) agrees that the execution,
delivery or performance by the Board of Directors, the General Partner, any Group Member or any Affiliate of any of them of this
Agreement or any agreement authorized or permitted under this Agreement (including the exercise by the General Partner or any Affiliate
of the General Partner of the rights accorded pursuant to
Article XV
) shall not constitute a breach by the Board of
Directors or the General Partner of any duty that the Board of Directors or the General Partner may owe the Partnership or the
Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or
equity.
Section 7.2
The
Board of Directors; Election and Appointment; Term; Manner of Acting
.
(a)
The
Board of Directors shall consist of seven individuals, three of whom shall be Appointed Directors and four of whom shall be Elected
Directors. The Elected Directors shall be divided into four classes: Class I, comprising one Elected Director, Class II,
comprising one Elected Director, Class III, comprising one Elected Director and Class IV, comprising one Elected Director.
Any vacancy among the Appointed Directors shall be filled as if an Appointed Director had resigned, in accordance with
Section 7.6
.
The successors of the existing members of the Board of Directors shall be appointed or elected, as the case may be, as follows:
(i)
Subject
to
Section 16.5(b)
, the Appointed Directors shall be appointed by the General Partner and each Appointed Director shall
hold office until his successor is duly appointed by the General Partner and qualified or until his earlier death, resignation
or removal; and
(ii)
The
Class IV Elected Director shall next be elected at the 2018 Annual Meeting for a four-year term expiring on the date of the
fourth succeeding Annual Meeting, the Class I Elected Director shall next be elected at the 2019 Annual Meeting for a four-year
term expiring on the fourth succeeding Annual Meeting, the Class II Elected Director shall next be elected at the 2020 Annual
Meeting for a four-year term expiring on the fourth succeeding Annual Meeting and the Class III Director shall next be elected
at the 2021 Annual Meeting for a four-year term expiring on the fourth succeeding Annual Meeting, in each case by a plurality of
the votes of the Outstanding Common Units present in person or represented by proxy at the Annual Meeting with each Outstanding
Common Unit having one vote. At each subsequent Annual Meeting, Elected Directors will be elected to succeed the class of Elected
Directors whose term has expired by a plurality of the votes of the Outstanding Common Units present in person or by proxy at the
Annual Meeting with each Outstanding Common Unit having one vote.
(b)
Each
member of the Board of Directors appointed or elected, as the case may be, at an Annual Meeting shall hold office until the fourth
succeeding Annual Meeting and until his successor is duly elected or appointed, as the case may be, and qualified, or until his
earlier death, resignation or removal.
(c)
Each
member of the Board of Directors shall have one vote. The vote of the majority of the members of the Board of Directors present
at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the number of members of the
Board of Directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors,
but if less than a quorum is present at a meeting, a majority of the members of the Board of Directors present at such meeting
may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 7.3
Nominations
of Elected Directors
. The Board of Directors shall be entitled to nominate individuals to stand
for election as Elected Directors at an Annual Meeting. In addition, any Limited Partner or Group of Limited Partners that beneficially
owns 10% or more of the Outstanding Common Units shall be entitled to nominate one or more individuals to stand for election as
Elected Directors at an Annual Meeting by providing written notice thereof to the Board of Directors not more than 120 days and
not less than 90 days prior to the date of such Annual Meeting;
provided, however
,
that in the event that the date of the Annual Meeting was not publicly announced by the Partnership by mail, press release or otherwise
more than 100 days prior to the date of such meeting, such notice, to be timely, must be delivered to the Board of Directors
not later than the close of business on the 10
th
day following the date on which the date of the Annual Meeting was
announced. Such notice shall set forth (a) the name and address of the Limited Partner or Limited Partners making the nomination
or nominations, (b) the number of Common Units beneficially owned by such Limited Partner or Limited Partners, (c) such
information regarding the nominee(s) proposed by the Limited Partner or Limited Partners as would be required to be included in
a proxy statement relating to the solicitation of proxies for the election of directors filed pursuant to the proxy rules of the
Commission had the nominee(s) been nominated or intended to be nominated to the Board of Directors, (d) the written consent
of each nominee to serve as a member of the Board of Directors if so elected and (e) a certification that such nominee(s)
qualify as Elected Directors.
Section 7.4
Removal
of Members of Board of Directors
. Members of the Board of Directors may only be removed as follows:
(a)
Except
as provided in
Section 16.5(b)
, any Appointed Director may be removed at any time, (i) without Cause, only by
the General Partner and, (ii) with Cause, by (x) the General Partner, (y) by the affirmative vote of the holders
of a majority of the Outstanding Units at a properly called meeting of the Limited Partners or (z) by the affirmative vote
of a majority of the other members of the Board of Directors.
(b)
Any
Elected Director may be removed at any time, with Cause, only by the affirmative vote of a majority of the other members of the
Board of Directors or at a properly called meeting of the Limited Partners only by the affirmative vote of the holders of a majority
of the Outstanding Common Units.
Section 7.5
Resignations
of Members of the Board of Directors
. Any member of the Board of Directors may resign at any time
by giving written notice to the Board of Directors. Such resignation shall take effect at the time specified therein.
Section 7.6
Vacancies
on the Board of Directors
. Vacancies on the Board of Directors may be filled only as follows:
(a)
Subject
to
Section 16.5(b)
, if any Appointed Director is removed, resigns or is otherwise unable to serve as a member of the
Board of Directors, the General Partner shall, in its individual capacity, appoint an individual to fill the vacancy.
(b)
If
any Elected Director is removed, resigns or is unable to serve as a member of the Board of Directors, the vacancy shall be filled
by a majority of the Elected Directors then serving.
(c)
A
director appointed or elected pursuant to this
Section 7.6
to fill a vacancy shall be appointed or elected, as the
case may be, for no more than the unexpired term of his predecessor in office.
Section 7.7
Meetings;
Committees; Chairman
.
(a)
Regular
meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution
of the Board of Directors. Notice of such regular meetings shall not be required. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors and shall be called by the Secretary upon the written request of two members
of the Board of Directors, on at least 48 hours’ prior written notice to the other members. Any such notice, or waiver thereof,
need not state the purpose of such meeting except as may otherwise be required by law. Attendance of a member of the Board of Directors
at a meeting (including pursuant to the penultimate sentence of this
Section 7.7(a)
) shall constitute a waiver of notice
of such meeting, except where such member attends the meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened. Any action required or permitted to be taken at a meeting of
the Board of Directors may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, is signed by all the members of the Board of Directors. Members of the Board of Directors may
participate in and hold meetings by means of conference telephone, videoconference or similar communications equipment by means
of which all Persons participating in the meeting can hear each other, and participation in such meetings shall constitute presence
in person at the meeting. The Board of Directors may establish any additional rules governing the conduct of its meetings that
are not inconsistent with the provisions of this Agreement.
(b)
The
Board of Directors shall appoint the members of the Audit Committee and the Conflicts Committee. The Audit Committee and the Conflicts
Committee shall, in each case, perform the functions delegated to it pursuant to the terms of this Agreement and such other matters
as may be delegated to it from time to time by resolution of the Board of Directors. The Board of Directors, by a majority of the
whole Board of Directors, may appoint one or more additional committees of the Board of Directors to consist of one or more members
of the Board of Directors, which committee(s) shall have and may exercise such of the powers and authority of the Board of Directors
(including in respect of
Section 7.1
) with respect to the management of the business and affairs of the Partnership
as may be provided in a resolution of the Board of Directors. Any committee designated pursuant to this
Section 7.7(b)
shall choose its own chairman, shall keep regular minutes of its proceedings and report the same to the Board of Directors when
requested, shall fix its own rules or procedures and shall meet at such times and at such place or places as may be provided by
such rules or by resolution of such committee or resolution of the Board of Directors. At every meeting of any such committee,
the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members
present shall be necessary for the taking of any action. Any action required or permitted to be taken at a meeting of a committee
of the Board of Directors may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, is signed by all the members of the committee of the Board of Directors. Subject to the first
sentence of this
Section 7.7(b)
, the Board of Directors may designate one or more members of the Board of Directors
as alternate members of any committee who may replace any absent or disqualified member at any meeting of such committee. Subject
to the first sentence of this
Section 7.7(b)
, in the absence or disqualification of a member of a committee, the member
or members present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.
(c)
The
Appointed Directors may designate one of the members of the Board of Directors as Chairman of the Board of Directors. The Initial
Chairman of the Board of Directors shall be Sveinung Støhle. The Chairman of the Board of Directors, if any, and if present
and acting, shall preside at all meetings of the Board of Directors. In the absence of the Chairman of the Board of Directors,
another member of the Board of Directors chosen by the Appointed Directors shall preside. If, at any time, the Board of Directors
consists solely of Elected Directors, the Board of Directors may designate one of its members as Chairman of the Board of Directors
and shall, in the absence of the Chairman of the Board of Directors at a meeting of the Board of Directors, designate another member
of the Board of Directors to preside at the meeting.
Section 7.8
Officers
.
(a)
The
Board of Directors, as set forth below, shall appoint or designate agents of the Partnership, referred to as “
Officers
”
of the Partnership as described in this
Section 7.8
. Such Officers may be employed by any Group Member directly or
may be employed by one or more third parties, including Höegh LNG and its Affiliates, and designated by the Board of Directors
to perform officer functions for the benefit of the Partnership.
(b)
The
Board of Directors shall appoint or designate such Officers and agents as may from time to time appear to be necessary or advisable
in the conduct of the affairs of the Partnership, who shall hold such titles, exercise such powers and authority and perform such
duties as shall be determined from time to time by resolution of the Board of Directors. The Officers may include a Chairman of
the Board of Directors, an Executive Vice Chairman or Vice Chairman of the Board of Directors, a Chief Executive Officer, a President,
a Chief Financial Officer, any and all Vice Presidents, a Secretary, any and all Assistant Secretaries, a Treasurer, any and all
Assistant Treasurers and any other Officers appointed or designated by the Board of Directors pursuant to this
Section 7.8
.
Any person may hold two or more offices.
(c)
The
Officers, including any Officer employed by a third party and designated by the Board of Directors to perform officer services
for the benefit of the Partnership, shall be appointed by the Board of Directors at such time and for such terms as the Board of
Directors shall determine. Any Officer may be removed, with or without Cause, only by the Board of Directors. Vacancies in any
office may be filled only by the Board of Directors.
(d)
The
Board of Directors may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the
Officers and other Persons.
(e)
Unless
otherwise provided by resolution of the Board of Directors, no Officer shall have the power or authority to delegate to any Person
such Officer’s rights and powers as an Officer to manage the business and affairs of the Partnership.
Section 7.9
Compensation
of Directors
. The members of the Board of Directors who are not employees of the Partnership,
the General Partner or its Affiliates shall receive such compensation for their services as members of the Board of Directors or
members of a committee of the Board of Directors shall determine. In addition, the members of the Board of Directors shall be entitled
to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service hereunder.
Section 7.10
Certificate
of Limited Partnership
. The General Partner has caused the Certificate of Limited Partnership
to be filed with the Registrar of Corporations of the Marshall Islands as required by the Marshall Islands Act. The General Partner
shall use all commercially reasonable efforts to cause to be filed such other certificates or documents that the Board of Directors
determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership
(or a partnership or other entity in which the limited partners have limited liability) in the Marshall Islands or any other jurisdiction
in which the Partnership may elect to do business or own property. To the extent the Board of Directors determines such action
to be necessary or appropriate, the General Partner shall file or cause to be filed amendments to and restatements of the Certificate
of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity
in which the limited partners have limited liability) under the laws of the Marshall Islands or of any other jurisdiction in which
the Partnership may elect to do business or own property. Subject to the terms of
Section 3.4(a)
, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner.
Section 7.11
Restrictions
on the Authority of the Board of Directors and the General Partner
. Except as provided in
Articles XII
and
XIV
, the Board of Directors may not sell, exchange or otherwise dispose of all or substantially all of the assets of
the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (including by way of merger,
consolidation, other combination or sale of ownership interests in the Partnership’s Subsidiaries) without the approval of
holders of a Unit Majority and the General Partner;
provided, however
, that this
provision shall not preclude or limit the ability of the Board of Directors to mortgage, pledge, hypothecate or grant a security
interest in all or substantially all of the assets of the Partnership Group and shall not apply to any forced sale of any or all
of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance. The transfer
of the General Partner Interest to and the election of a successor general partner of the Partnership shall be made in accordance
with
Section 4.6
,
Section 11.1
and
Section 11.2
.
Section 7.12
Reimbursement
of the General Partner
.
(a)
Except
as provided in this
Section 7.12
and elsewhere in this Agreement, the General Partner shall not be compensated for
its services as a general partner or managing member of any Group Member.
(b)
The
General Partner shall be reimbursed on a monthly basis, or such other basis as the Board of Directors may determine, for any direct
and indirect expenses it incurs that are allocable to the Partnership Group or payments it makes on behalf of the Partnership Group
(including salary, bonus, incentive compensation and other amounts paid to any Person, including Affiliates of the General Partner,
to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group,
which amounts shall also include reimbursement for any Common Units purchased to satisfy obligations of the Partnership under any
of its equity compensation plans). The Board of Directors shall determine the expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this
Section 7.12
shall be in addition to any reimbursement to the General Partner as a
result of indemnification pursuant to
Section 7.14
.
(c)
Subject
to the applicable rules and regulations of the National Securities Exchange on which the Common Units are listed, the Board of
Directors, without the approval of the Partners (who shall have no right to vote in respect thereof), may propose and adopt on
behalf of the Partnership employee benefit plans, employee programs and employee practices (including plans, programs and practices
involving the issuance of Partnership Interests or options to purchase or rights, warrants or appreciation rights or phantom or
tracking interests relating to Partnership Interests), or cause the Partnership to issue Partnership Interests in connection with,
or pursuant to, any employee benefit plan, employee program or employee practice maintained or sponsored by the Partnership, the
General Partner or any of its Affiliates, in each case for the benefit of employees and directors of the Partnership, the General
Partner, any Group Member or any Affiliate thereof, or any of them, in respect of services performed, directly or indirectly, for
the benefit of the Partnership Group. The Partnership agrees to issue and sell to the General Partner or any of its Affiliates
any Partnership Interests that the General Partner or such Affiliates are obligated to provide to any employees and directors pursuant
to any such employee benefit plans, employee programs or employee practices. Expenses incurred by the General Partner or its Affiliates
in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of
Partnership Interests purchased by the General Partner or such Affiliates from the Partnership or otherwise to fulfill options
or awards under such plans, programs and practices) shall be reimbursed in accordance with
Section 7.12(b)
. Any and
all obligations of the General Partner or its Affiliates under any employee benefit plans, employee programs or employee practices
adopted by the General Partner as permitted by this
Section 7.12(c)
shall constitute obligations of the General Partner
hereunder and shall be assumed by any successor General Partner approved pursuant to
Section 11.1
or
Section 11.2
or the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to
Section 4.6
.
Section 7.13
Outside
Activities
.
(a)
After
the Closing Date, the General Partner, for so long as it is the general partner of the Partnership (i) agrees that its sole
business will be to act as a general partner or managing member, as the case may be, of the Partnership and any other partnership
or limited liability company of which the Partnership is, directly or indirectly, a partner or member and to undertake activities
that are ancillary or related thereto (including being a limited partner in the Partnership) and (ii) shall not engage in
any business or activity or incur any debts or liabilities except in connection with or incidental to (A) its performance
as general partner or managing member, if any, of one or more Group Members or as described in or contemplated by the Registration
Statement or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.
(b)
Höegh
LNG, the Partnership, the General Partner and the Operating Company have entered into the Omnibus Agreement, which agreement sets
forth certain restrictions on the ability of Höegh LNG and certain of its Affiliates to acquire or own any Five-Year Vessels
(as such term is defined in the Omnibus Agreement).
(c)
Except
as specifically restricted by
Section 7.13(a)
or the Omnibus Agreement, each Indemnitee (other than the General Partner)
shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and
possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated
to be engaged in by any Group Member, independently or with others, including business interests and activities in direct competition
with the business and activities of any Group Member, and none of the same shall constitute a breach of this Agreement or any duty
expressed or implied by law to any Group Member or any Partner. Notwithstanding anything to the contrary in this Agreement, (i) the
possessing of competitive interests and engaging in competitive activities by any Indemnitees (other than the General Partner)
in accordance with the provisions of this
Section 7.13
is hereby approved by the Partnership and all Partners and (ii) it
shall be deemed not to be a breach of any duty (including any fiduciary duty) or any other obligation of any type whatsoever of
the General Partner or of any Indemnitee for the Indemnitees (other than the General Partner) to engage in such business interests
and activities in preference to or to the exclusion of the Partnership.
(d)
Notwithstanding
anything to the contrary in this Agreement, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to
an Indemnitee (including the General Partner) and, subject to the terms of
Section 7.13(a)
,
Section 7.13(b)
,
Section 7.13(c)
and the Omnibus Agreement, no Indemnitee (including the General Partner) who acquires knowledge of
a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Partnership shall have any duty
to communicate or offer such opportunity to the Partnership, and, subject to the terms of
Section 7.13(a)
,
Section 7.13(b)
,
Section 7.13(c)
and the Omnibus Agreement, such Indemnitee (including the General Partner) shall not be liable to the
Partnership, to any Limited Partner or any other Person for breach of any fiduciary or other duty by reason of the fact that such
Indemnitee (including the General Partner) pursues or acquires such opportunity for itself, directs such opportunity to another
Person or does not communicate such opportunity or information to the Partnership;
provided
, that such Indemnitee (including
the General Partner) does not engage in such business or activity as a result of using confidential or proprietary information
provided by or on behalf of the Partnership to such Indemnitee (including the General Partner).
(e)
The
General Partner and each of its Affiliates may own and acquire Units or other Partnership Interests in addition to those acquired
on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise, at their option, all rights
relating to all Units or other Partnership Interests acquired by them. The term “
Affiliates
” as used in this
Section 7.13(e)
with respect to the General Partner shall not include any Group Member.
Section 7.14
Indemnification
.
(a)
To
the fullest extent permitted by the Marshall Islands Act but subject to the limitations expressly provided in this Agreement, all
Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative,
in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an
Indemnitee;
provided, however
, that the Indemnitee shall not be indemnified and held harmless if there has been a final
and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the
Indemnitee is seeking indemnification pursuant to this
Section 7.14
, the Indemnitee acted in bad faith or engaged in
fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was
unlawful; and,
provided, further
, that no indemnification pursuant to this
Section 7.14
shall be available to
the General Partner or its Affiliates (other than a Group Member) with respect to its or their obligations incurred pursuant to
the Underwriting Agreement, the Omnibus Agreement or the Contribution Agreement (other than obligations incurred by the General
Partner on behalf of the Partnership). Any indemnification pursuant to this
Section 7.14
shall be made only out of
the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification
and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.
(b)
To
the fullest extent permitted by the Marshall Islands Act, expenses (including legal fees and expenses) incurred by an Indemnitee
who is indemnified pursuant to
Section 7.14(a)
in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Partnership prior to a determination that the Indemnitee is not entitled to be indemnified upon
receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined
that the Indemnitee is not entitled to be indemnified as authorized in this
Section 7.14
.
(c)
The
indemnification provided by this
Section 7.14
shall be in addition to any other rights to which an Indemnitee may be
entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law
or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity (including
any capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased to serve in such capacity
and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
(d)
The
Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf
of the Board of Directors and the General Partner, its Affiliates and such other Persons as the Board of Directors shall determine,
against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Partnership’s
activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of this Agreement or law.
(e)
For
purposes of this
Section 7.14
, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary
of an employee benefit plan whenever the performance by the Indemnitee of its duties to the Partnership also imposes duties on,
or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee
with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of
Section 7.14(a)
; and action taken or omitted by the Indemnitee with respect to any employee benefit plan in the performance
of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan
shall be deemed to be for a purpose that is in the best interests of the Partnership.
(f)
In
no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth
in this Agreement.
(g)
An
Indemnitee shall not be denied indemnification in whole or in part under this
Section 7.14
because the Indemnitee had
an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by
the terms of this Agreement.
(h)
The
provisions of this
Section 7.14
are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other Persons.
(i)
No
amendment, modification or repeal of this
Section 7.14
or any provision hereof shall in any manner terminate, reduce
or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the
Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this
Section 7.14
as in
effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring,
in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.15
Liability
of Indemnitees
.
(a)
Notwithstanding
anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the
Limited Partners or any other Persons who have acquired Partnership Interests or are otherwise bound by this Agreement, for losses
sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted
in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was criminal.
(b)
Subject
to their obligations and duties as members of the Board of Directors or as the General Partner, respectively, set forth in
Section 7.1(a)
,
members of the Board of Directors and the General Partner may exercise any of the powers granted to them and perform any of the
duties imposed upon them hereunder either directly or by or through its agents, and the members of the Board of Directors and the
General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Board
of Directors or the General Partner in good faith.
(c)
To
the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to
the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership’s
business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this
Agreement.
(d)
Any
amendment, modification or repeal of this
Section 7.15
or any provision hereof shall be prospective only and shall
not in any way affect the limitations on the liability of the Indemnitees under this
Section 7.15
as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.16
Resolution
of Conflicts of Interest; Standards of Conduct and Modification of Duties
.
(a)
Unless
otherwise expressly provided in this Agreement or any Group Member Agreement, whenever a potential conflict of interest exists
or arises between the General Partner or any of its Affiliates, or any member of the Board of Directors, on the one hand, and the
Partnership, any Group Member or any Partner, on the other, any resolution or course of action in respect of such conflict of interest
shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of any Group Member
Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution
or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii) approved by the
vote of a majority of the Outstanding Common Units (excluding Common Units owned by the General Partner and its Affiliates), (iii) on
terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or
(iv) fair and reasonable to the Partnership, taking into account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner and the
Board of Directors may but shall not be required in connection with the resolution of such conflict of interest to seek Special
Approval of such resolution, and the General Partner or the Board of Directors, as the case may be, may also adopt a resolution
or course of action that has not received Special Approval. If Special Approval is sought, then, notwithstanding any other provision
of this Agreement or law that would otherwise apply, (x) the Conflicts Committee will be authorized in connection with its
determination of whether to provide Special Approval to consider any and all factors as it determines to be relevant or appropriate
under the circumstances and (y) it will be presumed that, in making its decision, the Conflicts Committee acted in good faith,
and if Special Approval is not sought and the Board of Directors determines that the resolution or course of action taken with
respect to a conflict of interest satisfies either of the standards set forth in
clauses (iii)
or
(iv)
above,
then it shall be presumed that, in making its decision the Board of Directors, acted in good faith, and, in either case, in any
proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership
challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption.
Notwithstanding anything to the contrary in this Agreement or any duty otherwise existing at law or equity, the existence of the
conflicts of interest described in the Registration Statement are hereby approved by all Partners and shall not constitute a breach
of this Agreement or of any duty hereunder or existing at law, in equity or otherwise.
(b)
Whenever
the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to
do so, in its capacity as the general partner of the Partnership as opposed to in its individual capacity, whether under this Agreement,
any Group Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided
for in this Agreement, the General Partner, or such Affiliates causing it to do so, shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any other or different standards imposed by this Agreement,
any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law, rule or
regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement,
the Person or Persons making such determination or taking or declining to take such other action must believe that the determination
or other action is in the best interests of the Partnership, unless the context otherwise requires.
(c)
Whenever
the General Partner makes a determination or takes or declines to take any other action in its capacity as a Partner, or any of
its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as the general partner of the Partnership,
whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then the General
Partner, or such Affiliates causing it to do so, are entitled to make such determination or to take or decline to take such other
action free of any duty (including any fiduciary duty) or obligation whatsoever to the Partnership or any Limited Partner, any
Record Holder or any other Person bound by this Agreement, and, to the fullest extent permitted by law, the General Partner, or
such Affiliates causing it to do so, shall not be required to act in good faith or pursuant to any other standard imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law,
rule or regulation or at equity. By way of illustration and not of limitation, whenever the phrase, “at the option of the
General Partner,” or some variation of that phrase, is used in this Agreement, it indicates that the General Partner is acting
in its individual capacity. For the avoidance of doubt, whenever the General Partner votes or transfers its Units, General Partner
Interest or Incentive Distribution Rights, if any, to the extent permitted under this Agreement, or refrains from voting or transferring
its Units, General Partner Interest or Incentive Distribution Rights, as appropriate, it shall be acting in its individual capacity.
The General Partner’s organizational documents may provide that determinations to take or decline to take any action in its
individual, rather than representative, capacity may or shall be determined by its members, if the General Partner is a limited
liability company, stockholders, if the General Partner is a corporation, or the members or stockholders of the General Partner’s
general partner, if the General Partner is a limited partnership.
(d)
Whenever
the Board of Directors makes a determination or takes or declines to take any other action, whether under this Agreement, any Group
Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for
in this Agreement, the Board of Directors, shall make such determination or take or decline to take such other action in good faith
and shall not be subject to any other or different standards imposed by this Agreement, any Group Member Agreement, any other agreement
contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation or at equity. In order for a determination
or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such determination
or taking or declining to take such other action must believe that the determination or other action is in the best interests of
the Partnership, unless the context otherwise requires.
(e)
Notwithstanding
anything to the contrary in this Agreement, the General Partner and its Affiliates shall have no duty or obligation, express or
implied, to (i) approve the sale or other disposition of any asset of the Partnership Group (if such approval is required
pursuant to
Section 7.11
) or (ii) permit any Group Member to use any facilities or assets of the General Partner
and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any
determination by the General Partner or any of its Affiliates to enter into such contracts shall, in each case, be at their option.
(f)
Except
as expressly set forth in this Agreement, neither the General Partner nor the Board of Directors or any other Indemnitee shall
have any duties or liabilities, including fiduciary duties, to the Partnership or any Limited Partner and the provisions of this
Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties,
of the Board of Directors or the General Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by
the Partners to replace such other duties and liabilities of the Board of Directors or the General Partner or such other Indemnitee.
Notwithstanding anything to the contrary, but subject to
Section 7.16(c)
and without reference to the definition of
“good faith” in
Section 7.16(b)
, neither the General Partner nor the Board of Directors nor any other Indemnitee
shall owe any fiduciary duties to Series A Holders other than a contractual duty of good faith and fair dealing.
(g)
The
Unitholders hereby authorize the Board of Directors, on behalf of the Partnership as a partner or member of a Group Member, to
approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken
by the Board of Directors pursuant to this
Section 7.16
.
Section 7.17
Other
Matters Concerning the General Partner and the Board of Directors
.
(a)
The
General Partner and the Board of Directors may rely and shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties.
(b)
The
General Partner and the Board of Directors may consult with legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisers selected by either of them, and any act taken or omitted to be taken in reliance upon
the advice or opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner or the Board of
Directors reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such advice or opinion.
(c)
The
General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership.
Section 7.18
Purchase
or Sale of Partnership Interests
. Subject to
Section 16.6(f)
, the Board of Directors
may cause the Partnership to purchase or otherwise acquire Partnership Interests;
provided that
the
Board of Directors may not cause any Group Member to purchase Subordinated Units during the Subordination Period. As long as Partnership
Interests are held by any Group Member, such Partnership Interests shall not be considered Outstanding for any purpose, except
as otherwise provided herein. The General Partner or any Affiliate of the General Partner may purchase or otherwise acquire and
sell or otherwise dispose of Partnership Interests for its own account, subject to the provisions of
Articles IV
and
X
and
Section 16.6(f)
.
Section 7.19
Registration
Rights of the General Partner and its Affiliates
.
(a)
If
(i) the General Partner or any Affiliate of the General Partner (including for purposes of this
Section 7.19
,
any Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate
of the General Partner) holds Partnership Interests that it desires to sell and (ii) Rule 144 of the Securities Act (or
any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder
of Partnership Interests (the “
Holder
”) to dispose of the number of Partnership Interests it desires
to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request
of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use
its commercially reasonable efforts to cause to become effective and remain effective for a period of not less than six months
following its effective date or such shorter period as shall terminate when all Partnership Interests covered by such registration
statement have been sold, a registration statement under the Securities Act registering the offering and sale of the number of
Partnership Interests specified by the Holder;
provided, however
, that the Partnership shall not be required to effect more
than three registrations in total pursuant to this
Section 7.19(a)
, no more than one of which shall be required to
be made at any time that the Partnership is not eligible to use Form F-3 (or a comparable form) for the registration under
the Securities Act of its securities; and,
provided, further
, that if the Conflicts Committee determines in good faith that
the requested registration would be materially detrimental to the Partnership and its Partners because such registration would
(x) materially interfere with a significant acquisition, merger, disposition, corporate reorganization or other similar transaction
involving the Partnership, (y) require premature disclosure of material information that the Partnership has a bona fide business
purpose for preserving as confidential or (z) render the Partnership unable to comply with requirements under applicable securities
laws, then the Partnership shall have the right to postpone such requested registration for a period of not more than six months
after receipt of the Holder’s request, such right pursuant to this
Section 7.19(a)
not to be utilized more than
once in any 12-month period. The Partnership shall use its commercially reasonable efforts to resolve any deferral with respect
to any such registration and/or filing. Except as provided in the first sentence of this
Section 7.19(a)
, the Partnership
shall be deemed not to have used all its commercially reasonable efforts to keep the registration statement effective during the
applicable period if it voluntarily takes any action that would result in Holders of Partnership Interests covered thereby not
being able to offer and sell such Partnership Interests at any time during such period, unless such action is required by applicable
law or regulations. In connection with any registration pursuant to this
Section 7.19(a)
, the Partnership shall (i) promptly
prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such registration
under the securities laws of such states as the Holder shall reasonably request (
provided, however
, that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process
or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely
as a result of such registration), and (B) such documents as may be necessary to apply for listing or to list the Partnership
Interests subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do
any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such
Partnership Interests in such states. Except as set forth in
Section 7.19(c)
, all costs and expenses of any such registration
and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by
the Holder.
(b)
If
the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of equity interests
of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use its
commercially reasonable efforts to include such number or amount of Partnership Interests held by any Holder in such registration
statement as the Holder shall request;
provided, however
, that the Partnership is not required to make any effort or take
any action to so include the Partnership Interests of the Holder once the registration statement becomes or is declared effective
by the Commission, including any registration statement providing for the offering from time to time of Partnership Interests pursuant
to Rule 415 of the Securities Act. If the proposed offering pursuant to this
Section 7.19(b)
shall be an underwritten
offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and
the Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership Interests would adversely
and materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if
any, of Partnership Interests held by the Holder that, in the opinion of the managing underwriter or managing underwriters, will
not so adversely and materially affect the offering. Except as set forth in
Section 7.19(c)
, all costs and expenses
of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership,
without reimbursement by the Holder.
(c)
If
underwriters are engaged in connection with any registration referred to in this
Section 7.19
, the Partnership shall
provide indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably
satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under
Section 7.14
,
the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors
and each Person who controls the Holder (within the meaning of the Securities Act) and any agent thereof (collectively, “
Indemnified
Persons
”) from and against any and all losses, claims, demands, actions, causes of action, assessments, damages,
liabilities (joint or several), costs and expenses (including interest, penalties and reasonable attorneys’ fees and disbursements),
resulting to, imposed upon, or incurred by the Indemnified Persons, directly or indirectly, under the Securities Act or otherwise
(hereinafter referred to in this
Section 7.19(c)
as a “
claim
” and in the plural as “
claims
”)
based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which any Partnership Interests were registered under the Securities Act or any state securities
or Blue Sky laws, in any preliminary prospectus or issuer free writing prospectus as defined in Rule 433 of the Securities
Act (if used prior to the effective date of such registration statement), or in any summary, free writing or final prospectus or
in any amendment or supplement thereto (if used during the period the Partnership is required to keep the registration statement
current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein not misleading;
provided, however
, that the Partnership
shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an
untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary,
summary, free writing or final prospectus or such amendment or supplement, in reliance upon and in conformity with written information
furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.
(d)
The
provisions of
Section 7.19(a)
and
Section 7.19(b)
shall continue to be applicable with respect to the General
Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during
a period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder
to sell all of the Partnership Interests with respect to which it has requested during such two-year period inclusion in a registration
statement otherwise filed or that a registration statement be filed;
provided, however
, that the Partnership shall not be
required to file successive registration statements covering the same Partnership Interests for which registration was demanded
during such two-year period. The provisions of
Section 7.19(c)
shall continue in effect thereafter.
(e)
The
rights to cause the Partnership to register Partnership Interests pursuant to this
Section 7.19
may be assigned (but
only with all related obligations) by a Holder to a transferee or assignee of such Partnership Interests,
provided
(i) the
Partnership is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee
or assignee and the Partnership Interests with respect to which such registration rights are being assigned, and (ii) such
transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this
Section 7.19
.
(f)
Any
request to register Partnership Interests pursuant to this
Section 7.19
shall (i) specify the Partnership Interests
intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer
such Partnership Interests for distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership
Interests, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action
as may be required in order to permit the Partnership to comply with all applicable requirements in connection with the registration
of such Partnership Interests.
Section 7.20
Reliance
by Third Parties
. Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the Board of Directors, the General Partner and any Officer authorized by
the Board of Directors to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership,
and such Person shall be entitled to deal with the Board of Directors, the General Partner or any such Officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses
or other remedies that may be available against such Person to contest, negate or disaffirm any action of the Board of Directors,
the General Partner or any such Officer in connection with any such dealing. In no event shall any Person dealing with the Board
of Directors, the General Partner or any such Officer or its representatives be obligated to ascertain that the terms of this Agreement
have been complied with or to inquire into the necessity or expedience of any act or action of the Board of Directors, the General
Partner or any such Officer or its representatives. Each and every certificate, document or other instrument executed on behalf
of the Partnership by the Board of Directors, the General Partner, the Officers or representatives of the General Partner authorized
by the General Partner or the Board of Directors shall be conclusive evidence in favor of any and every Person relying thereon
or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was
duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument
was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
Article VIII
BOOKS,
RECORDS, ACCOUNTING AND REPORTS
Section 8.1
Records
and Accounting
. The Partnership shall keep or cause to be kept at the principal office of the
Partnership appropriate books and records with respect to the Partnership’s business, including all books and records necessary
to provide to the Limited Partners any information required to be provided pursuant to
Section 3.4(a)
. Any books and
records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record
Holders of Units or other Partnership Interests, books of account and records of Partnership proceedings, may be kept on, or be
in the form of, computer disks, hard drives, magnetic tape, photographs, micrographics or any other information storage device;
provided, however
, that the books and records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with U.S. GAAP. The Partnership shall not be required to keep books on a
cash basis and the Board of Directors shall be permitted to calculate cash-based measures, including Operating Surplus and Adjusted
Operating Surplus, by making such adjustments to its accrual basis books to account for non-cash items and other adjustments as
the Board of Directors determines to be necessary or appropriate.
Section 8.2
Fiscal
Year
. The fiscal year of the Partnership shall be a fiscal year ending December 31.
Section 8.3
Reports
.
(a)
As
soon as practicable, but in no event later than 120 days after the close of each fiscal year of the Partnership, the Partnership
shall cause to be mailed or made available, by any reasonable means (including posting on or accessible through the Partnership’s
or the Commission’s website), to each Record Holder of a Unit as of a date selected by the Board of Directors, an annual
report containing financial statements of the Partnership for such fiscal year of the Partnership, presented in accordance with
U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited
by a firm of independent public accountants selected by the Board of Directors.
(b)
As
soon as practicable, but in no event later than 90 days after the close of each Quarter except the last Quarter of each fiscal
year, the Partnership shall cause to be mailed or made available, by any reasonable means (including posting on or accessible through
the Partnership’s or the Commission’s website), to each Record Holder of a Unit, as of a date selected by the Board
of Directors, a report containing unaudited financial statements of the Partnership and such other information as may be required
by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed or admitted to trading,
or as the Board of Directors determines to be necessary or appropriate.
(c)
The
Board of Directors shall be deemed to have made a report available to each Record Holder as required by this
Section 8.3
if it has either (i) filed such report with the Commission via its Electronic Data Gathering Analysis and Retrieval System
and such report is publicly available on such system or (ii) made such report on any publicly available website maintained
by the Partnership.
Article IX
TAX
MATTERS
Section 9.1
Tax
Elections and Information
.
(a)
The
Partnership is authorized and shall elect to be treated as an association taxable as a corporation for U.S. federal income tax
purposes effective on or before the Closing Date. Except as otherwise provided herein, the Board of Directors shall determine whether
the Partnership should make any other elections permitted by any applicable tax law.
(b)
The
tax information reasonably required by Record Holders for U.S. federal income tax reporting purposes with respect to a calendar
taxable year shall be furnished to them within 90 days of the close of each calendar year.
(c)
Each
Partner shall provide the Partnership with all information reasonably requested by the Partnership to enable the Partnership to
claim the exemption from U.S. federal income tax under Section 883 of the Code.
Section 9.2
Tax
Withholding
. Notwithstanding any other provision of this Agreement, the Board of Directors is
authorized to take any action that may be required or advisable to cause the Partnership and other Group Members to comply with
any withholding requirements with respect to any tax established under any U.S. federal, state or local or any non-U.S. law. To
the extent that the Partnership is required or elects to withhold and pay over to any taxing authority any amount with respect
to a distribution or payment to or for the benefit of any Partner, the Board of Directors may treat the amount withheld as a distribution
of cash to such Partner in the amount of such withholding from such Partner.
Section 9.3
Conduct
of Operations
. The Board of Directors shall use commercially reasonable efforts to conduct the
business of the Partnership and its Affiliates in a manner that does not require a holder of Common Units or Preferred Units to
file a tax return in any jurisdiction with which the holder has no contact other than through ownership of Common Units or Preferred
Units.
Article X
ADMISSION
OF PARTNERS
Section 10.1
Admission
of Initial Limited Partners
. Upon the issuance by the Partnership of Common Units, Subordinated
Units and Incentive Distribution Rights to Höegh LNG and the Underwriters as described in
Section 5.1
and
Section 5.2
,
such parties were automatically admitted to the Partnership as Initial Limited Partners in respect of the Common Units, Subordinated
Units or Incentive Distribution Rights issued to them.
Section 10.2
Admission
of Additional Limited Partners
.
(a)
From
and after the Closing Date, by acceptance of the transfer of any Limited Partner Interests in accordance with
Article IV
or the acceptance of any Limited Partner Interests issued pursuant to
Article V
or pursuant to a merger, consolidation
or conversion pursuant to
Article XIV
, each transferee of, or other such Person acquiring, a Limited Partner Interest
(including any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another
Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred
or issued to such Person when any such transfer, issuance or admission is reflected in the books and records of the Partnership
and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound,
and shall be deemed to have agreed to be bound, by the terms of this Agreement, (iii) represents that the transferee or other
recipient has the capacity, power and authority to enter into this Agreement and (iv) makes the consents, acknowledgements
and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited
Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement. A Person may
become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or approval of any of the Partners.
A Person may not become a Limited Partner until such Person acquires a Limited Partner Interest and until such Person is reflected
in the books and records of the Partnership as the Record Holder of such Limited Partner Interest.
(b)
The
name and mailing address of each Limited Partner shall be listed on the books and records of the Partnership maintained for such
purpose by the Partnership or the Transfer Agent. The General Partner shall update the books and records of the Partnership from
time to time as necessary to reflect accurately the information therein (or shall cause the Transfer Agent to do so, as applicable).
A Limited Partner Interest may be represented by a Certificate, as provided in
Section 4.1
.
(c)
Any
transfer of a Limited Partner Interest shall not entitle the transferee to receive distributions or to any other rights to which
the transferor was entitled until the transferee becomes a Limited Partner pursuant to
Section 10.2(a)
.
Section 10.3
Admission
of Successor General Partner
. A successor General Partner approved pursuant to
Section 11.1
or
Section 11.2
or the transferee of or successor to all or part of the General Partner Interest pursuant to
Section 4.6
who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the predecessor or transferring General Partner, pursuant to
Section 11.1
or
Section 11.2
or the transfer of the General Partner Interest pursuant to
Section 4.6
;
provided,
however
, that no such Person shall be admitted to the Partnership as a successor or additional
General Partner until compliance with the terms of
Section 4.6
has occurred and such Person has executed and delivered
such other documents or instruments as may be required to effect such admission. Any such successor or additional General Partner
is hereby authorized to and shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without
dissolution.
Section 10.4
Amendment
of Agreement and Certificate of Limited Partnership
. To effect the admission to the Partnership
of any Partner, the Board of Directors shall take all steps necessary or appropriate under the Marshall Islands Act to amend the
records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the Board of Directors shall prepare and file an amendment to the Certificate of Limited Partnership.
Article XI
WITHDRAWAL
OR REMOVAL OF PARTNERS
Section 11.1
Withdrawal
of the General Partner
.
(a)
The
General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each
such event herein referred to as an “
Event of Withdrawal
”):
(i)
The
General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;
(ii)
The
General Partner transfers all of its rights as General Partner pursuant to
Section 4.6
;
(iii)
The
General Partner is removed pursuant to
Section 11.2
;
(iv)
The
General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary petition in bankruptcy;
(C) files a voluntary petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization)
under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a petition
filed against the General Partner in a proceeding of the type described in
clauses (A)
,
(B)
or
(C)
of
this
Section 11.1(a)(iv)
; or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor
in possession), receiver or liquidating trustee of the General Partner or of all or any substantial part of its properties;
(v)
The
General Partner is adjudged bankrupt or insolvent, or has entered against it an order for relief in any bankruptcy or insolvency
proceeding;
(vi)
(A) in
the event the General Partner is a corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation
or the revocation of its charter and the expiration of 90 days after the date of notice to the General Partner of revocation without
a reinstatement of its charter; (B) in the event the General Partner is a partnership or a limited liability company, the
dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such
capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the event the General Partner is a
natural person, his death or adjudication of incompetency; and (E) otherwise in the event of the termination of the General
Partner.
If an Event of Withdrawal specified in
Section 11.1(a)(iv)
,
11.1(a)(v)
or
11.1(a)(vi)(A)
,
11.1(a)(vi)(B)
, 11.1(a)(vi)(C) or
11.1(a)(vi)(E)
occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The
Partners hereby agree that only the Events of Withdrawal described in this
Section 11.1
shall result in the withdrawal
of the General Partner from the Partnership.
(b)
Withdrawal
of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances:
(i)
at
any time during the period beginning on the Closing Date and ending at 12:00 midnight, prevailing Eastern Time, on June 30,
2024, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw
to the Limited Partners, such withdrawal to take effect on the date specified in the notice;
provided, however
, that prior
to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding
Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership
an Opinion of Counsel (“
Withdrawal Opinion of Counsel
”) that such withdrawal (following the selection
of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member;
(ii)
at
any time after 12:00 midnight, prevailing Eastern Time, on June 30, 2024, the General Partner voluntarily withdraws by
giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date specified in such
notice (
provided
, that, prior to the effective date of such withdrawal, the General Partner delivers to the Partnership
a Withdrawal Opinion of Counsel);
(iii)
at
any time that the General Partner ceases to be the General Partner pursuant to
Section 11.1(a)(ii)
or is removed pursuant
to
Section 11.2
; or
(iv)
notwithstanding
clause (i)
of this
Section 11.1(b)
, at any time that the General Partner voluntarily withdraws by giving
at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect
on the date specified in the notice, if at the time such notice is given one Person and its Affiliates (other than the General
Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the
General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of the
General Partner as general partner or managing member, if any, to the extent applicable, of the other Group Members. If the General
Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i)
, the holders of a Unit Majority, may, prior to
the effective date of such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall
automatically become the successor general partner or managing member, to the extent applicable, of the other Group Members of
which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner’s
withdrawal, a successor is not selected by the Unitholders as provided herein or, if applicable, the Partnership does not receive
a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 12.1
. Any successor
General Partner elected in accordance with the terms of this
Section 11.1
shall be subject to the provisions of
Section 10.3
.
Section 11.2
Removal
of the General Partner
. The General Partner may be removed if such removal is approved by the
Unitholders holding at least 75% of the Outstanding Common and Subordinated Units (including Common and Subordinated Units held
by the General Partner and its Affiliates), voting as a single class. Any such action by such holders or the Board of Directors
for removal of the General Partner must also provide for the election of a successor General Partner by the majority vote of the
outstanding Common Units and Subordinated Units, voting together as a single class. Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to
Section 10.3
. The removal of the General Partner
shall also automatically constitute the removal of the General Partner as general partner or managing member, to the extent applicable,
of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a
successor General Partner in accordance with the terms of this
Section 11.2
, such Person shall, upon admission pursuant
to
Section 10.3
, automatically become a successor general partner or managing member, to the extent applicable, of
the other Group Members of which the General Partner is a general partner or a managing member. The right of the holders of Outstanding
Common and Subordinated Units to remove the General Partner shall not exist or be exercised unless the Partnership has received
an Opinion of Counsel opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner elected
in accordance with the terms of this
Section 11.2
shall be subject to the provisions of
Section 10.3
.
Section 11.3
Interest
of Departing General Partner and Successor General Partner
.
(a)
In
the event of (i) withdrawal of the General Partner under circumstances where such withdrawal does not violate this Agreement
or (ii) removal of the General Partner by the holders of Outstanding Common and Subordinated Units under circumstances where
Cause does not exist, if the successor General Partner is elected in accordance with the terms of
Section 11.1
or
Section 11.2
,
(A) the Departing General Partner shall have the option, exercisable prior to the effective date of the departure of such
Departing General Partner, to require its successor to purchase its General Partner Interest and its or its Affiliates’ general
partner interest (or equivalent interest), if any, in the other Group Members and all of its or its Affiliates’ Incentive
Distribution Rights, if any, (collectively, the “
Combined Interest
”) in exchange for an amount in cash
equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of
its departure and (B) the other holders of the Incentive Distribution Rights shall have the option, exercisable prior to the
effective date of the departure of such Departing General Partner, to require such successor to purchase such holders’ Incentive
Distribution Rights in exchange for an amount in cash equal to the fair market value of such Incentive Distribution Rights, such
amount to be determined and payable as of the effective date of the Departing General Partner’s departure. If the General
Partner is removed by the holders of Outstanding Common and Subordinated Units under circumstances where Cause exists or if the
General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner
is elected in accordance with the terms of
Section 11.1
or
Section 11.2
(or if the business of the Partnership
is continued pursuant to
Section 12.2
and the successor General Partner is not the former General Partner), such successor
shall have the option, exercisable prior to the effective date of the departure of such Departing General Partner (or, in the event
the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the
Combined Interest in exchange for an amount in cash equal to such fair market value of such Combined Interest of the Departing
General Partner. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing
General Partner pursuant to
Section 7.12
, including any employee related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other
than any Group Member) for the benefit of the Partnership or the other Group Members.
For purposes of this
Section 11.3(a)
, the fair market value of the Combined Interest and the value of the Incentive Distribution Rights
held by holders other than the Departing General Partner shall be determined by agreement between the Departing General Partner
and its successor or, failing agreement within 30 days after the effective date of such Departing General Partner’s departure,
by an independent investment banking firm or other independent expert selected by the Departing General Partner and its successor,
which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties
cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of
such departure, then the Departing General Partner shall designate an independent investment banking firm or other independent
expert, the Departing General Partner’s successor shall designate an independent investment banking firm or other independent
expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which
third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest
and the value of the Incentive Distribution Rights held by holders other than the Departing General Partner. In making its determination,
such third independent investment banking firm or other independent expert may consider the value of the Units, including then
current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value
of the Partnership’s assets, the value of the Incentive Distribution Rights and the General Partner Interest, the rights
and obligations of the Departing General Partner and other factors it may deem relevant.
(b)
If
the Combined Interest is not purchased in the manner set forth in
Section 11.3(a)
, the Departing General Partner (or
its transferee) shall become a Limited Partner and the Combined Interest shall be converted into Common Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant to
Section 11.3(a)
, without reduction
in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor
General Partner shall indemnify the Departing General Partner (or its transferee) as to all debts and liabilities of the Partnership
arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes
of this Agreement, conversion of the Combined Interest to Common Units will be characterized as if the Departing General Partner
(or its transferee) contributed the Combined Interest to the Partnership in exchange for the newly issued Common Units.
(c)
If
a successor General Partner is elected in accordance with the terms of
Section 11.1
or
Section 11.2
(or
if the Partnership is continued pursuant to
Section 12.2
and the successor General Partner is not the former General
Partner) and the option described in
Section 11.3(a)
is not exercised by the party entitled to do so, the successor
General Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount
equal to the product of (i) the quotient obtained by dividing (A) the Percentage Interest of the General Partner Interest
of the Departing General Partner by (B) a percentage equal to 100% less the Percentage Interest of the General Partner Interest
of the Departing General Partner and (ii) the Net Agreed Value of the Partnership’s assets on such date. In such event,
such successor General Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all Partnership
allocations and distributions to which the Departing General Partner was entitled. In addition, the successor General Partner shall
cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner’s admission,
the successor General Partner’s interest in all Partnership distributions and allocations shall be its Percentage Interest.
Section 11.4
Termination
of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages
.
Notwithstanding any provision of this Agreement, if the General Partner is removed as general partner of the Partnership under
circumstances where Cause does not exist and no Units held by the General Partner and its Affiliates are voted in favor of such
removal, (a) the Subordination Period will end and all Subordinated Units will immediately and automatically convert into
Common Units on a one-for-one basis, (b) all Cumulative Common Unit Arrearages on the Common Units will be extinguished, (c) the
General Partner will have the right to convert its General Partner Interest and its Incentive Distribution Rights into Common Units
or to receive cash in exchange therefor, as provided in
Section 11.3
and (d) the other holders of the Incentive
Distribution Rights will have the right to convert their Incentive Distribution Rights into Common Units or to receive cash in
exchange therefor, as provided in
Section 11.3
.
Section 11.5
Withdrawal
of Limited Partners
. No Limited Partner shall have any right to withdraw from the Partnership;
provided, however
, that when a transferee of a Limited Partner’s Limited Partner
Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner shall cease
to be a Limited Partner with respect to the Limited Partner Interest so transferred.
Article XII
DISSOLUTION
AND LIQUIDATION
Section 12.1
Dissolution
.
The Partnership shall not be dissolved by the admission of additional Limited Partners or by the admission of a successor or additional
General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor
General Partner is elected pursuant to
Section 11.1
or
Section 11.2
, the Partnership shall not be dissolved
and the Board of Directors shall continue the business of the Partnership. The Partnership shall dissolve, and (subject to
Section 12.2
)
its affairs shall be wound up, upon:
(a)
an
election to dissolve the Partnership by the General Partner and our Board of Directors that is approved by the holders of a Unit
Majority;
(b)
at
any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the Marshall
Islands Act;
(c)
the
entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Marshall Islands Act; or
(d)
an
Event of Withdrawal of the General Partner as provided in
Section 11.1(a
) (other than
Section 11.1(a)(ii)
),
unless a successor is elected and an Opinion of Counsel is received as provided in
Section 11.1(b)
or
Section 11.2
and such successor is admitted to the Partnership pursuant to
Section 10.3
.
Section 12.2
Continuation
of the Business of the Partnership After Dissolution
. Upon (a) dissolution of the Partnership
following an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in
Section 11.1(a)(i)
or
11.1(a)(iii)
and the failure of the Partners to select a successor to such Departing General Partner pursuant to
Section 11.1
or
Section 11.2
, then within 90 days thereafter, or (b) dissolution of the Partnership upon an event constituting an
Event of Withdrawal as defined in
Section 11.1(a)(iv)
,
11.1(a)(v)
or
11.1(a)(vi)
, then, to the maximum
extent permitted by the Marshall Islands Act, within 180 days thereafter, the holders of a Unit Majority may elect in writing
to continue the business of the Partnership on the same terms and conditions set forth in this Agreement by appointing, effective
as of the date of the Event of Withdrawal, as a successor General Partner a Person approved by the holders of a Unit Majority.
Unless such an election is made within the applicable time period as set forth above, the Partnership shall dissolve and conduct
only activities necessary to wind up its affairs. If such an election is so made, then:
(i)
the
Partnership shall continue without dissolution unless earlier dissolved in accordance with this
Article XII
;
(ii)
if
the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be treated
in the manner provided in
Section 11.3
; and
(iii)
the
successor General Partner shall be admitted to the Partnership as General Partner, effective as of the Event of Withdrawal, by
agreeing in writing to be bound by this Agreement;
provided, however
, that the right of the holders of a Unit Majority to
approve a successor General Partner and to reconstitute and to continue the business of the Partnership shall not exist and may
not be exercised unless the Partnership has received an Opinion of Counsel that the exercise of the right would not result in the
loss of limited liability of any Limited Partner.
Section 12.3
Liquidating
Trustee
. Upon dissolution of the Partnership, unless the business of the Partnership is continued
pursuant to
Section 12.2
, the Board of Directors shall select one or more Persons to act as Liquidating Trustee. The
Liquidating Trustee (if other than the General Partner) shall be entitled to receive such compensation for its services as may
be approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units, voting as a single class.
The Liquidating Trustee (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior
notice and may be removed at any time, with or without cause, by notice of removal approved by holders of at least a majority of
the Outstanding Common Units and Subordinated Units, voting as a single class. Upon dissolution, removal or resignation of the
Liquidating Trustee, a successor and substitute Liquidating Trustee (who shall have and succeed to all rights, powers and duties
of the original Liquidating Trustee) shall within 30 days thereafter be approved by the holders of at least a majority of
the Outstanding Common Units and Subordinated Units, voting as a single class. The right to approve a successor or substitute Liquidating
Trustee in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidating Trustee approved
in the manner herein provided. Except as expressly provided in this
Article XII
, the Liquidating Trustee approved in
the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto,
all of the powers conferred upon the Board of Directors and the General Partner under the terms of this Agreement (but subject
to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on
sale set forth in
Section 7.11
) necessary or appropriate to carry out the duties and functions of the Liquidating Trustee
hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided
for herein.
Section 12.4
Liquidation
.
The Liquidating Trustee shall proceed to dispose of the assets of the Partnership, discharge its liabilities, and otherwise wind
up its affairs in such manner and over such period as determined by the Liquidating Trustee, subject to the Marshall Islands Act
and the following:
(a)
The
assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidating
Trustee and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall
be deemed for purposes of
Section 12.4(c)
to have received cash equal to its fair market value, and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners. The Liquidating Trustee may defer liquidation or
distribution of the Partnership’s assets for a reasonable time if it determines that an immediate sale or distribution of
all or some of the Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidating Trustee
may distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would be impractical or
would cause undue loss to the Partners.
(b)
The
Liquidating Trustee shall first satisfy the liabilities of the Partnership. Liabilities of the Partnership include amounts owed
to the Liquidating Trustee as compensation for serving in such capacity (subject to the terms of
Section 12.3
) and
amounts to Partners otherwise than in respect of their distribution rights under
Article VI
and
XVI
as applicable.
With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidating
Trustee shall either settle such claim for such amount as it deems appropriate or establish a reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.
(c)
All
property and all cash in excess of that required to discharge liabilities as provided in this
Section 12.4
shall be
distributed, subject to
Section 16.4
in respect of Series A Preferred Units, as follows:
(i)
If
the Current Market Price of the Common Units as of the date three trading days prior to the announcement of the proposed liquidation
exceeds the Unrecovered Capital for a Common Unit plus the Cumulative Common Unit Arrearage:
(A)
First,
to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to such Current Market Price of a Common Unit;
(B)
Second,
to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to such Current Market Price of a Common Unit; and
(C)
Thereafter,
(x) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (y) 50% to all Unitholders holding Common
Units and Subordinated Units, Pro Rata;
(ii)
If
the Current Market Price of the Common Units as of the date three trading days prior to the announcement of the proposed liquidation
is equal to or less than the Unrecovered Capital for a Common Unit plus the Cumulative Common Unit Arrearage:
(A)
First,
to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Unrecovered Capital for a Common Unit;
(B)
Second,
to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Cumulative Common Unit Arrearage;
(C)
Third,
to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to the Unrecovered Capital for a Common Unit (as calculated prior to the distribution specified
in
clause (ii)(A)
above); and
(D)
Thereafter,
(x) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (y) 50% to all Unitholders holding Common Units
and Subordinated Units, Pro Rata.
Distributions with respect to Series A
Preferred Units in connection with a liquidation or dissolution of the Partnership shall be made pursuant to
Section 16.4
,
rather than pursuant to
clause (i)
or
(ii)
of this
Section 12.4(c)
.
Section 12.5
Cancellation
of Certificate of Limited Partnership
. Upon the completion of the distribution of Partnership
cash and property as provided in
Section 12.4
in connection with the liquidation of the Partnership, the Certificate
of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the
Marshall Islands shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
Section 12.6
Return
of Contributions
. The General Partner shall not be personally liable for, and shall have no obligation
to contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions
of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall be made
solely from Partnership assets.
Section 12.7
Waiver
of Partition
. To the maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership property.
Article XIII
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 13.1
Amendments
to be Adopted Without Approval of the Limited Partners or the General Partner
. The General Partner
and each Limited Partner agree that the Board of Directors, without the approval of any Limited Partner or, subject to
Section 5.5
,
the General Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:
(a)
a
change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent
of the Partnership or the registered office of the Partnership;
(b)
admission,
substitution, withdrawal or removal of Partners in accordance with this Agreement;
(c)
a
change that the Board of Directors determines to be necessary or appropriate to qualify or continue the qualification of the Partnership
as a limited partnership or an entity in which the Limited Partners have limited liability under the Marshall Islands Act;
(d)
subject
to
Section 16.5
, to the extent applicable, a change that the Board of Directors determines (i) does not adversely
affect the Limited Partners (including any particular class or series of Partnership Interests as compared to other classes or
series of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements,
conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any Marshall Islands authority (including
the Marshall Islands Act) or (B) facilitate the trading of the Units or comply with any rule, regulation, guideline or requirement
of any National Securities Exchange on which the Units are or will be listed, or admitted to trading, (iii) to be necessary
or appropriate in connection with action taken by the Board of Directors pursuant to
Section 5.8
or (iv) is required
to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise
contemplated by this Agreement;
(e)
a
change in the fiscal year or taxable year of the Partnership and any other changes that the Board of Directors determines to be
necessary or appropriate as a result of a change in the fiscal year or taxable year of the Partnership including, if the Board
of Directors shall so determine, a change in the definition of “Quarter” and the dates on which distributions (other
than Series A Distributions) are to be made by the Partnership;
(f)
an
amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, the members of the Board of Directors, or the
General Partner or its or their directors, officers, trustees or agents from in any manner being subjected to the provisions of
the U.S. Investment Company Act of 1940, as amended, the U.S. Investment Advisers Act of 1940, as amended, or “plan asset”
regulations adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended, regardless of whether such
regulations are substantially similar to plan asset regulations currently applied or proposed by the United States Department of
Labor;
(g)
subject
to
Section 16.5
, an amendment that the Board of Directors, and if required by
Section 5.5
, the General
Partner, determines to be necessary or appropriate in connection with the authorization of issuance of any class or series of Partnership
Interests pursuant to
Section 5.4
;
(h)
an
amendment that the Board of Directors determines to be necessary or appropriate for the authorization of additional Partnership
Interests or rights to acquire Partnership Interests, including any amendment that the Board of Directors determines is necessary
or appropriate in connection with:
(i)
the
adjustments of the Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution
in connection with the IDR Reset Election in accordance with
Section 5.10
;
(ii)
the
implementation of the provisions relating to Höegh LNG’s right to reset its Incentive Distribution Rights in exchange
for Common Units;
(iii)
any
modification of the Incentive Distribution Rights made in connection with the issuance of additional Partnership Interests or rights
to acquire Partnership Interests,
provided
, that, with respect to this
clause (iii)
, any such modifications
to the Incentive Distribution Rights and the related issuance of Partnership Interests have received Special Approval; or
(iv)
any
amendment expressly permitted in this Agreement to be made by the Board of Directors acting alone;
(i)
an
amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with
Section 14.3
;
(j)
an
amendment that the Board of Directors determines to be necessary or appropriate to reflect and account for the formation by the
Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or
other Person, in connection with the conduct by the Partnership of activities permitted by the terms of
Section 2.4
;
(k)
a
conversion, merger or conveyance pursuant to
Section 14.3(d)
; or
(l)
any
other amendments substantially similar to the foregoing.
Section 13.2
Amendment
Procedures
. Except as provided in Section 13.1 and Section 13.3, all amendments to this
Agreement shall be made in accordance with the following requirements. Amendments to this Agreement may be proposed only by, or
with the written consent of, the Board of Directors;
provided, however
, that the
Board of Directors shall have no duty or obligation to propose any amendment to this Agreement and may decline to do so free of
any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner, any Record Holder or any other Person and,
in declining to propose an amendment, to the fullest extent permitted by applicable law shall not be required to act in good faith
or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby
or under the Marshall Islands Act or any other law, rule or regulation. Subject to
Section 16.5
, to the extent applicable,
a proposed amendment shall be effective upon its approval by the Board of Directors and, if applicable, the holders of a Unit Majority,
unless a greater or different percentage is required under this Agreement or by the Marshall Islands Act. Each proposed amendment
that requires the approval of the holders of a specified percentage of Outstanding Units shall be set forth in a writing that contains
the text of the proposed amendment. If such an amendment is proposed, the Board of Directors shall seek the written approval of
the requisite percentage of Outstanding Units or call a meeting of the Unitholders to consider and vote on such proposed amendment.
The Board of Directors shall notify all Record Holders upon final adoption of any such proposed amendments.
Section 13.3
Amendment
Requirements
.
(a)
Notwithstanding
the provisions of
Section 13.1
and
Section 13.2
, no provision of this Agreement that establishes a percentage
of Outstanding Units (including Units deemed owned by the General Partner and its Affiliates) required to take any action shall
be amended, altered, changed, repealed or rescinded in any respect that would have the effect of (i) in the case of any provision
of this Agreement other than
Section 11.2
or
Section 13.4
, reducing such percentage or (ii) in the
case of
Section 11.2
or
Section 13.4
, increasing such percentage, unless such amendment is approved by
the written consent or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less
than the voting requirement sought to be reduced.
(b)
Notwithstanding
the provisions of
Section 13.1
and
Section 13.2,
no amendment to this Agreement may (i) enlarge the
obligations of any Limited Partner without its consent, unless such enlargement shall be deemed to have occurred as a result of
an amendment approved pursuant to
Section 13.3(c)
or (ii) enlarge the obligations of, restrict in any way any
action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner
or any of its Affiliates without its consent, which consent may be given or withheld at the General Partner’s option.
(c)
Except
as provided in
Section 14.3
and subject to
Section 16.5(c)(i)
with respect to Series A Preferred Units,
and without limitation of the Board of Directors’ authority to adopt amendments to this Agreement without the approval of
any Partners as contemplated in
Section 13.1
, any amendment that would have a material adverse effect on the rights
or preferences of any class or series of Partnership Interests in relation to other classes or series of Partnership Interests
must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class or series affected.
If the Board of Directors determines an amendment does not satisfy the requirements of Section 13.1(d)(i) because it adversely
affects one or more classes of Partnership Interests, as compared to other classes of Partnership Interests, in any material respect,
such amendment shall only be required to be approved by the adversely affected class or classes.
(d)
Notwithstanding
any other provision of this Agreement, except for amendments pursuant to
Section 13.1
and except as otherwise provided
by
Section 14.3(b)
, no amendments shall become effective without the approval of the holders of at least 90% of the
Outstanding Units voting as a single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment
will not affect the limited liability of any Limited Partner under applicable law.
(e)
Except
as provided in
Section 13.1
, this
Section 13.3
shall only be amended with the approval of the holders of
at least 90% of the Outstanding Units.
Section 13.4
Special
Meetings
. All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in
the manner provided in this
Article XIII
. Special meetings of the Limited Partners may be called by the General Partner,
the Board of Directors or by Limited Partners owning 20% or more of the Outstanding Units of the class or classes or series for
which a meeting is proposed. Limited Partners shall call a special meeting by delivering to the Board of Directors one or more
requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the general or specific
purposes for which the special meeting is to be called, it being understood that the purposes of such special meeting may only
be to vote on matters that require the vote of the Unitholders pursuant to this Agreement. Within 60 days after receipt of
such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with
any statutes, rules, regulations, listing agreements or similar requirements governing the holding of a meeting or the solicitation
of proxies for use at such a meeting, the Board of Directors shall send a notice of the meeting to the Limited Partners either
directly or indirectly through the Transfer Agent. A meeting shall be held at a time and place determined by the Board of Directors
on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. Limited Partners shall not vote
on matters that would cause the Limited Partners to be deemed to be taking part in the management and control of the business and
affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the Marshall Islands Act or
the law of any other jurisdiction in which the Partnership is qualified to do business.
Section 13.5
Notice
of a Meeting
. Notice of a meeting called pursuant to
Section 13.4
shall be given to
the Record Holders of the class, classes or series of Units for which a meeting is proposed in writing by mail or other means of
written communication in accordance with
Section 17.1
at least 10 days in advance of such meeting. The notice shall
be deemed to have been given at the time when deposited in the mail or sent by other means of written communication.
Section 13.6
Record
Date
. For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting
of the Limited Partners or to give approvals without a meeting as provided in
Section 13.11
, the Board of Directors
may set a Record Date, which shall not be less than 10 nor more than 60 days before (a) the date of the meeting
(unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which
the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities
Exchange shall govern) or (b) in the event that approvals are sought without a meeting, the date by which Limited Partners
are requested in writing by the Board of Directors to give such approvals. If the Board of Directors does not set a Record Date,
then (a) the Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited
Partners shall be the close of business on the day next preceding the day on which notice is given, and (b) the Record Date
for determining the Limited Partners entitled to give approvals without a meeting shall be the date the first written approval
is deposited with the Partnership in care of the Board of Directors in accordance with
Section 13.11
.
Section 13.7
Adjournment
.
When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and a new Record Date need
not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment
shall be for more than 45 days. At the adjourned meeting, the Partnership may transact any business which might have been transacted
at the original meeting. If the adjournment is for more than 45 days or if a new Record Date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given in accordance with this
Article XIII
.
Section 13.8
Waiver
of Notice; Approval of Meeting; Approval of Minutes
. The transactions of any meeting of Limited
Partners, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy. Attendance of a Limited Partner at a meeting shall constitute
a waiver of notice of the meeting, except when the Limited Partner attends the meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened; and except
that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in
the notice of the meeting, but not so included, if the disapproval is expressly made at the meeting.
Section 13.9
Quorum
and Voting
. The holders of 33⅓% of the Outstanding Units of the class, classes or series
for which a meeting has been called (including Outstanding Units deemed owned by the General Partner and its Affiliates) represented
in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class, classes or series unless any such
action by the Limited Partners requires approval by holders of a greater percentage of such Units, in which case the quorum shall
be such greater percentage. At any meeting of the Limited Partners duly called and held in accordance with this Agreement at which
a quorum is present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a majority of the Outstanding
Units entitled to vote and present in person or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners,
unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which
case the act of the Limited Partners holding Outstanding Units that in the aggregate represent at least such greater or different
percentage shall be required. The Limited Partners present at a duly called or held meeting at which a quorum is present may continue
to transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners to leave less than a quorum,
if any action taken (other than adjournment) is approved by the required percentage of Outstanding Units specified in this Agreement
(including Outstanding Units deemed owned by the General Partner and its Affiliates). In the absence of a quorum, any meeting of
Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least a majority of the Outstanding
Units entitled to vote at such meeting (including Outstanding Units deemed owned by the General Partner and its Affiliates) and
represented either in person or by proxy, but no other business may be transacted, except as provided in
Section 13.7
.
Section 13.10
Conduct
of a Meeting
. The Board of Directors shall have full power and authority concerning the manner
of conducting any meeting of the Limited Partners or solicitation of approvals in writing, including the determination of Persons
entitled to vote, the existence of a quorum, the satisfaction of the requirements of
Section 13.4
, the conduct of voting,
the validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with
or during the meeting or voting. The Chairman of the Board of Directors shall serve as chairman of any meeting and shall further
designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Partnership maintained
by the Board of Directors. The Board of Directors may make such other regulations consistent with applicable law and this Agreement
as it may deem advisable concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in writing,
including regulations in regard to the appointment of proxies, the appointment and duties of inspectors of votes and approvals,
the submission and examination of proxies and other evidence of the right to vote, and the revocation of approvals in writing.
Section 13.11
Action
Without a Meeting
. If authorized by the Board of Directors, any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in writing setting forth the action so taken is signed
by Limited Partners owning not less than the minimum percentage of the Outstanding Units (including Units deemed owned by the General
Partner and its Affiliates) that would be necessary to authorize or take such action at a meeting at which all the Limited Partners
were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of
such National Securities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the
Limited Partners who have not approved the action in writing. The Board of Directors may specify that any written ballot submitted
to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time
period, which shall be not less than 20 days, specified by the Board of Directors. If a ballot returned to the Partnership
does not vote all of the Units held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot
for the Units that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other
than by or on behalf of the Board of Directors, the written approvals shall have no force and effect unless and until (a) they
are deposited with the Partnership in care of the Board of Directors, (b) approvals sufficient to take the action proposed
are dated as of a date not more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an
Opinion of Counsel is delivered to the Board of Directors to the effect that the exercise of such right and the action proposed
to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited
liability, and (ii) is otherwise permissible under the applicable statutes then governing the rights, duties and liabilities
of the Partnership and the Partners.
Section 13.12
Right
to Vote and Related Matters
.
(a)
Only
those Record Holders of the Units on the Record Date set pursuant to
Section 13.6
(and also subject to the limitations
contained in the definition of “Outstanding”) shall be entitled to notice of, and to vote at, a meeting of Limited
Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to act. All
references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units shall be deemed to be references
to the votes or acts of the Record Holders of such Outstanding Units.
(b)
With
respect to Units that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing), in whose name such Units are registered, such other Person shall, in
exercising the voting rights in respect of such Units on any matter, and unless the arrangement between such Persons provides otherwise,
vote such Units in favor of, and at the direction of, the Person who is the beneficial owner, and the Partnership shall be entitled
to assume it is so acting without further inquiry. The provisions of this
Section 13.12(b)
(as well as all other provisions
of this Agreement) are subject to the provisions of
Section 4.3
.
Article XIV
MERGER,
CONSOLIDATION OR CONVERSION
Section 14.1
Authority
.
The Partnership may merge or consolidate with or into one or more corporations, limited liability companies, statutory trusts or
associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general
or limited (including a limited liability partnership)) or convert into any such entity, pursuant to a written agreement of merger
or consolidation (“
Merger Agreement
”) or a written plan of conversion
(“
Plan of Conversion
”), as the case may be, in accordance
with this
Article XIV
.
Section 14.2
Procedure
for Merger, Consolidation or Conversion
.
(a)
Merger,
consolidation or conversion of the Partnership pursuant to this
Article XIV
requires the approval of the Board of Directors
and the prior consent of the General Partner;
provided, however
, that, to the fullest extent permitted by law, the General
Partner shall have no duty or obligation to consent to any merger, consolidation or conversion of the Partnership and may decline
to do so free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner and, in declining to consent
to a merger, consolidation or conversion, shall not be required to act in good faith or pursuant to any other standard imposed
by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any
other law, rule or regulation or at equity.
(b)
If
the Board of Directors and the General Partner shall determine to consent to the merger, consolidation or conversion, the Board
of Directors and the General Partner shall approve the Merger Agreement, which shall set forth:
(i)
the
names and jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate;
(ii)
the
name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation
(the “
Surviving Business Entity
”);
(iii)
the
terms and conditions of the proposed merger or consolidation;
(iv)
the
manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property
or interests, rights, securities or obligations of the Surviving Business Entity; and (A) if any interests, securities or
rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or interests,
rights, securities or obligations of the Surviving Business Entity, the cash, property or interests, rights, securities or obligations
of any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other Person (other
than the Surviving Business Entity) which the holders of such interests, securities or rights are to receive in exchange for, or
upon conversion of their interests, securities or rights, and (B) in the case of securities represented by certificates, upon
the surrender of such certificates, which cash, property or interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other Person
(other than the Surviving Business Entity), or evidences thereof, are to be delivered;
(v)
a
statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate
of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership or other similar charter
or governing document) of the Surviving Business Entity to be effected by such merger or consolidation;
(vi)
the
effective time of the merger, which may be the date of the filing of the certificate of merger pursuant to
Section 14.4
or a later date specified in or determinable in accordance with the Merger Agreement (
provided
, that if the effective time
of the merger is to be later than the date of the filing of such certificate of merger, the effective time shall be fixed at a
date or time certain at or prior to the time of the filing of such certificate of merger and stated therein); and
(vii)
such
other provisions with respect to the proposed merger or consolidation that the Board of Directors and the General Partner determine
to be necessary or appropriate.
(c)
If
the Board of Directors and the General Partner shall determine to consent to the conversion the Board of Directors and the General
Partner shall approve the Plan of Conversion, which shall set forth:
(i)
the
name of the converting entity and the converted entity;
(ii)
a
statement that the Partnership is continuing its existence in the organizational form of the converted entity;
(iii)
a
statement as to the type of entity that the converted entity is to be and the state or country under the laws of which the converted
entity is to be incorporated, formed or organized;
(iv)
the
manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property
or interests, rights, securities or obligations of the converted entity or another entity, or for the cancellation of such equity
securities;
(v)
in
an attachment or exhibit, the certificate of limited partnership of the Partnership;
(vi)
in
an attachment or exhibit, the certificate of limited partnership, certificate of formation, articles of incorporation, or other
organizational documents of the converted entity;
(vii)
the
effective time of the conversion, which may be the date of the filing of the articles of conversion or a later date specified in
or determinable in accordance with the Plan of Conversion (
provided
, that if the effective time of the conversion is to
be later than the date of the filing of such articles of conversion, the effective time shall be fixed at a date or time certain
and stated in such articles of conversion); and
(viii)
such
other provisions with respect to the proposed conversion the Board of Directors and the General Partner determines to be necessary
or appropriate.
Section 14.3
Approval
by Limited Partners of Merger, Consolidation or Conversion
.
(a)
Except
as provided in
Section 14.3(d)
and
14.3(e)
, the Board of Directors, upon its and the General Partner’s
approval of the Merger Agreement or the Plan of Conversion, as the case may be, shall direct that the Merger Agreement or the Plan
of Conversion and the merger, consolidation or conversion contemplated thereby, as applicable, be submitted to a vote of Limited
Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of
Article XIII
.
A copy or a summary of the Merger Agreement or the Plan of Conversion, as the case may be, shall be included in or enclosed with
the notice of a special meeting or the written consent.
(b)
Except
as provided in
Section 14.3(d)
and
14.3(e)
, the Merger Agreement or Plan of Conversion, as the case may be,
shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority, unless the Merger Agreement
or Plan of Conversion, as the case may be, effects an amendment to any provisions of this Agreement that, if contained in an amendment
to this Agreement adopted pursuant to
Article XIII
, would require for its approval the vote or consent of a greater
percentage of the Outstanding Units or of any class of Partnership Interests, in which case such greater percentage vote or consent
shall be required for approval of the Merger Agreement or the Plan of Conversion, as the case may be.
(c)
Except
as provided in
Section 14.3(d)
and
14.3(e)
, after such approval by vote or consent of the Limited Partners,
and at any time prior to the filing of the certificate of merger or certificate of conversion pursuant to
Section 14.4
,
the merger, consolidation or conversion may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement
or Plan of Conversion, as the case may be.
(d)
Notwithstanding
anything else contained in this
Article XIV
or in this Agreement, the Board of Directors is permitted, without Limited
Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership
or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity which shall be newly
formed and shall have no assets, liabilities or operations at the time of such conversion, merger or conveyance other than those
it receives from the Partnership or other Group Member if (i) the Board of Directors has received an Opinion of Counsel that
the conversion, merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited
Partner, (ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in the legal form of the
Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited
Partners, the General Partner and the Board of Directors with the same rights and obligations as are herein contained.
(e)
Additionally,
notwithstanding anything else contained in this
Article XIV
or in this Agreement, the Board of Directors, with the
prior consent of the General Partner, is permitted, without Limited Partner approval, to merge or consolidate the Partnership with
or into another entity if (i) the Board of Directors has received an Opinion of Counsel that the merger or consolidation,
as the case may be, would not result in the loss of the limited liability of any Limited Partner, (ii) the merger or consolidation
would not result in an amendment to this Agreement, other than any amendments that could be adopted pursuant to
Section 13.1
,
(iii) the Partnership is the Surviving Business Entity in such merger or consolidation, (iv) each Unit outstanding immediately
prior to the effective date of the merger or consolidation is to be an identical Unit of the Partnership after the effective date
of the merger or consolidation, and (v) the number of Partnership Interests to be issued by the Partnership in such merger
or consolidation does not exceed 20% of the Partnership Interests Outstanding immediately prior to the effective date of such merger
or consolidation.
Section 14.4
Certificate
of Merger or Conversion
. Upon the required approval by the Board of Directors, the General Partner
and the Unitholders of a Merger Agreement or Plan of Conversion, as the case may be, a certificate of merger or conversion, as
applicable, shall be executed and filed in conformity with the requirements of the Marshall Islands Act.
Section 14.5
Amendment
of Partnership Agreement
. Pursuant to Section 20(2) of the Marshall Islands Act, an agreement
of merger or consolidation approved in accordance with Section 20(2) of the Marshall Islands Act may (a) effect any amendment
to this Agreement or (b) effect the adoption of a new partnership agreement for a limited partnership if it is the Surviving
Business Entity. Any such amendment or adoption made pursuant to this
Section 14.5
shall be effective at the effective
time or date of the merger or consolidation.
Section 14.6
Effect
of Merger, Consolidation or Conversion
.
(a)
At
the effective time of the certificate of merger:
(i)
all
of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real,
personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to
each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be
the property of the Surviving Business Entity to the extent they were of each constituent business entity;
(ii)
the
title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not
in any way impaired because of the merger or consolidation;
(iii)
all
rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved
unimpaired; and
(iv)
all
debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced
against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
(b)
At
the effective time of the certificate of conversion, for all purposes of the laws of the Marshall Islands:
(i)
the
Partnership shall continue to exist, without interruption, but in the organizational form of the converted entity rather than in
its prior organizational form;
(ii)
all
rights, title, and interests to all real estate and other property owned by the Partnership shall remain vested in the converted
entity in its new organizational form without reversion or impairment, without further act or deed, and without any transfer or
assignment having occurred, but subject to any existing liens or other encumbrances thereon;
(iii)
all
liabilities and obligations of the Partnership shall continue to be liabilities and obligations of the converted entity in its
new organizational form without impairment or diminution by reason of the conversion;
(iv)
all
rights of creditors or other parties with respect to or against the prior interest holders or other owners of the Partnership in
their capacities as such in existence as of the effective time of the conversion will continue in existence as to those liabilities
and obligations and are enforceable against the converted entity by such creditors and obligees to the same extent as if the liabilities
and obligations had originally been incurred or contracted by the converted entity; and
(v)
the
Partnership Interests that are to be converted into partnership interests, shares, evidences of ownership, or other rights or securities
in the converted entity or cash as provided in the Plan of Conversion shall be so converted, and Partners shall be entitled only
to the rights provided in the Plan of Conversion.
Article XV
RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS
Section 15.1
Right
to Acquire Limited Partner Interests
.
(a)
Notwithstanding
any other provision of this Agreement, if at any time from and after the Closing Date the General Partner and its Affiliates hold
more than 80% of the total Limited Partner Interests of any class or series then Outstanding, except for the Series A Preferred
Units, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership
or any Affiliate of the General Partner, exercisable at its option, to purchase all, but not less than all, of such Limited Partner
Interests of such class or series then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater
of (x) the Current Market Price as of the date three days prior to the date that the notice described in
Section 15.1(b)
is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest
of such class purchased during the 90-day period preceding the date that the notice described in
Section 15.1(b)
is
mailed. Notwithstanding the foregoing, the repurchase right described in this
Article XV
shall not apply to Series A
Preferred Units.
(b)
If
the General Partner, any Affiliate of the General Partner or the Partnership elects to exercise the right to purchase Limited Partner
Interests granted pursuant to
Section 15.1(a)
, the General Partner shall deliver to the Transfer Agent notice of such
election to purchase (the “
Notice of Election to Purchase
”) and shall cause the Transfer Agent to mail
a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class or series (as of
a Record Date selected by the General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice
of Election to Purchase shall also be published for a period of at least three consecutive days in at least two daily newspapers
of general circulation printed in the English language and published in the Borough of Manhattan, New York. The Notice of Election
to Purchase shall specify the Purchase Date and the price (determined in accordance with
Section 15.1(a)
) at which
Limited Partner Interests will be purchased and state that the General Partner, its Affiliate or the Partnership, as the case may
be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner Interests,
if any, in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be
required by any National Securities Exchange on which such Limited Partner Interests are listed. Any such Notice of Election to
Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent
shall be conclusively presumed to have been given regardless of whether the owner receives such notice. On or prior to the Purchase
Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in
an amount sufficient to pay the aggregate purchase price of all of such Limited Partner Interests to be purchased in accordance
with this
Section 15.1
. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days
prior to the Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding sentence has been made
for the benefit of the holders of Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase
Date to the extent Certificates for the Limited Partner Interests are outstanding, notwithstanding that any Certificate shall not
have been surrendered for purchase, all rights of the holders of such Limited Partner Interests (including any rights pursuant
to
Articles IV
,
V
,
VI
and
XII
) shall thereupon cease, except the right to receive the applicable
purchase price (determined in accordance with
Section 15.1(a)
) for Limited Partner Interests therefor, without interest,
upon surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests, and such Limited Partner
Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the Partnership, as the case may
be, on the record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner,
or the Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the
Purchase Date and shall have all rights as the owner of such Limited Partner Interests (including all rights as owner of such Limited
Partner Interests pursuant to
Articles IV
,
V
,
VI
and
XII
).
(c)
At
any time from and after the Purchase Date, a holder of an Outstanding Limited Partner Interest subject to purchase as provided
in this
Section 15.1
may surrender his Certificate evidencing such Limited Partner Interest to the Transfer Agent in
exchange for payment of the amount described in
Section 15.1(a)
, without interest thereon.
Article XVI
SERIES A
CUMULATIVE REDEEMABLE PREFERRED UNITS
Section 16.1
Designation
.
On September 28, 2017, the Board of Directors designated and created a series of Preferred Units to be designated as “8.75%
Series A Cumulative Redeemable Preferred Units,” and fixed the preferences, rights, powers and duties of the holders
of the Series A Preferred Units as set forth in this
Article XVI
. Each Series A Preferred Unit shall be identical
in all respects to every other Series A Preferred Unit, except as to the respective dates from which the Series A Liquidation
Preference shall increase or from which Series A Distributions may begin accruing, to the extent such dates may differ. The
Series A Preferred Units represent perpetual equity interests in the Partnership and shall not give rise to a claim by the
holder for redemption thereof at a particular date.
Section 16.2
Units
.
(a)
The
authorized number of Series A Preferred Units shall be unlimited. Series A Preferred Units that are purchased or otherwise
acquired by the Partnership shall be cancelled.
(b)
The
Series A Preferred Units shall be represented by a single certificate registered in the name of the Depository or its nominee,
and no Series A Holder shall be entitled to receive a certificate evidencing such Units, unless otherwise required by law
or the Depository gives notice of its intention to resign or is no longer eligible to act as such and the Partnership shall have
not selected a substitute Depository within 60 calendar days thereafter. So long as the Depository shall have been appointed and
is serving, payments and communications made by the Partnership to Series A Holders shall be made by making payments to, and
communicating with, the Depository.
Section 16.3
Distributions
.
(a)
Distributions
on each Series A Preferred Unit shall be cumulative and shall accrue at the Series A Distribution Rate from the Series A
Original Issue Date (or, for any subsequently issued and newly Outstanding Series A Preferred Units, from the Series A
Distribution Payment Date immediately preceding the issuance date of such Units) until such time as the Partnership pays the Series A
Distribution or redeems the Series A Preferred Units in full in accordance with
Section 16.6
below, whether or
not such Series A Distributions shall have been declared. Series A Holders shall be entitled to receive Series A
Distributions from time to time out of any assets of the Partnership legally available for the payment of distributions at the
Series A Distribution Rate per Series A Preferred Unit, when, as, and if declared by the Board of Directors. Distributions,
to the extent declared by the Board of Directors to be paid by the Partnership in accordance with this
Section 16.3
,
shall be paid quarterly on each Series A Distribution Payment Date. Distributions shall accumulate in each Series A Distribution
Period from and including the preceding Series A Distribution Payment Date (other than the initial Series A Distribution
Period, which shall commence on and include the Series A Original Issue Date), to but excluding the next Series A Distribution
Payment Date for such Series A Distribution Period, and distributions shall accrue on accumulated Series A Distributions
at the Series A Distribution Rate. If any Series A Distribution Payment Date otherwise would occur on a date that is
not a Business Day, declared Series A Distributions shall be paid on the immediately succeeding Business Day without the accumulation
of additional distributions. Series A Distributions shall be payable based on a 360-day year consisting of twelve 30-day months.
(b)
Not
later than 5:00 p.m., New York City time, on each Series A Distribution Payment Date, the Partnership shall pay those Series A
Distributions, if any, that shall have been declared by the Board of Directors to Series A Holders on the Record Date for
the applicable Series A Preferred Distribution. The Record Date (the “
Series A Distribution Record Date
”)
for any Series A Distribution payment shall be the fifth Business Day immediately preceding the applicable Series A Distribution
Payment Date, except that in the case of payments of Series A Distributions in arrears, the Series A Distribution Record
Date with respect to a Series A Distribution Payment Date shall be such date as may be designated by the Board of Directors
in accordance with this
Article XVI
. No distribution shall be declared or paid or set apart for payment on any Junior
Securities (other than a distribution payable solely in Junior Securities) unless full cumulative Series A Distributions have
been or contemporaneously are being paid or provided for on all Outstanding Series A Preferred Units and any Parity Securities
through the most recent respective Series A Distribution Payment Dates. Accumulated Series A Distributions in arrears
for any past Series A Distribution Period may be declared by the Board of Directors and paid on any date fixed by the Board
of Directors, whether or not a Series A Distribution Payment Date, to Series A Holders on the record date for such payment,
which may not be more than 60 days, nor less than 15 days, before such payment date. Subject to the next succeeding sentence, if
all accumulated Series A Distributions in arrears on all Outstanding Series A Preferred Units and any Parity Securities
shall not have been declared and paid, or if sufficient funds for the payment thereof shall not have been set apart, payment of
accumulated distributions in arrears on the Series A Preferred Units and any such Parity Securities shall be made in order
of their respective distribution payment dates, commencing with the earliest. If less than all distributions payable with respect
to all Series A Preferred Units and any Parity Securities are paid, any partial payment shall be made pro rata with respect
to the Series A Preferred Units and any Parity Securities entitled to a distribution payment at such time in proportion to
the aggregate distribution amounts remaining due in respect of such Series A Preferred Units and Parity Securities at such
time. Subject to
Sections 12.4
and
16.6
, Series A Holders shall not be entitled to any distribution, whether
payable in cash, property or units, in excess of full cumulative Series A Distributions. Except insofar as distributions accrue
on the amount of any accumulated and unpaid Series A Distributions as described in
Section 16.3(a)
, no interest
or sum of money in lieu of interest shall be payable in respect of any distribution payment which may be in arrears on the Series A
Preferred Units. So long as the Series A Preferred Units are held of record by the nominee of the Depository, declared Series A
Distributions shall be paid to the Depository in same-day funds on each Series A Distribution Payment Date.
Section 16.4
Liquidation
Rights
.
(a)
Upon
the occurrence of any Liquidation Event, Series A Holders shall be entitled to receive out of the assets of the Partnership
or proceeds thereof legally available for distribution to the Partners, (i) after satisfaction of all liabilities, if any,
to creditors of the Partnership, (ii) after all applicable distributions of such assets or proceeds being made to or set aside
for the holders of any Senior Securities then Outstanding in respect of such Liquidation Event, (iii) concurrently with any
applicable distributions of such assets or proceeds being made to or set aside for holders of any Parity Securities then Outstanding
in respect of such Liquidation Event and (iv) before any distribution of such assets or proceeds is made to or set aside for
the holders of Common Units, Subordinated Units and any other classes or series of Junior Securities as to such distribution, a
liquidating distribution or payment in full redemption of such Series A Preferred Units in an amount equal to the Series A
Liquidation Preference. For purposes of clarity, upon the occurrence of any Liquidation Event, (x) the holders of then Outstanding
Senior Securities shall be entitled to receive the applicable Liquidation Preference on such Senior Securities before any distribution
shall be made to the Series A Preferred Units or any Parity Securities and (y) the Series A Holders shall be entitled
to the Series A Liquidation Preference per Series A Preferred Unit in cash concurrently with any distribution made to
the holders of Parity Securities and before any distribution shall be made to the holders of Common Units, Subordinated Units or
any other Junior Securities. Series A Holders shall not be entitled to any other amounts from the Partnership, in their capacity
as Series A Holders, after they have received the Series A Liquidation Preference. The payment of the Series A Liquidation
Preference shall be a payment in redemption of the Series A Preferred Units such that, from and after payment of the full
Series A Liquidation Preference, any such Series A Preferred Unit shall thereafter be cancelled and no longer be Outstanding.
(b)
If,
in the event of any distribution or payment described in
Section 16.4(a)
above where the Partnership’s assets
available for distribution to holders of the Outstanding Series A Preferred Units and any Parity Securities are insufficient
to satisfy the applicable Liquidation Preference for such Series A Preferred Units and Parity Securities, the Partnership’s
then remaining assets or proceeds thereof legally available for distribution to unitholders of the Partnership shall be distributed
among the holders of Outstanding Series A Preferred Units and such Parity Securities, as applicable, ratably on the basis
of their relative aggregate Liquidation Preferences. To the extent that the Series A Holders receive a partial payment of
their Series A Liquidation Preference, such partial payment shall reduce the Series A Liquidation Preference of their
Series A Preferred Units, but only to the extent of such amount paid.
(c)
After
payment of the applicable Liquidation Preference to the holders of the Outstanding Series A Preferred Units and any Parity
Securities, the Partnership’s remaining assets and funds shall be distributed among the holders of the Common Units and any
other Junior Securities then Outstanding according to their respective rights and preferences.
Section 16.5
Voting
Rights
.
(a)
Notwithstanding
anything to the contrary in this Agreement, the Series A Preferred Units shall have no voting rights except as set forth in
Section 13.3(d)
, this
Section 16.5
or as otherwise provided by non-waivable provisions of the Marshall
Islands Act.
(b)
Upon
the occurrence of a Series A Trigger Event, the Series A Holders shall have the right, voting as a class together with holders
of any Parity Securities upon which like voting rights have been conferred and are exercisable, at a meeting of the Board of Directors
called for such purpose within 30 days after receipt by the Partnership and the General Partner of a request by Series A Holders
holding a majority of the Outstanding Series A Preferred Units, to elect one member of the Board of Directors;
provided
,
however
, that the right of the Series A Holders shall not apply to the election of another director if (i) Series A Holders
and holders of Parity Securities upon which like voting rights have been conferred, voting as a class, have previously elected
a member of the Board of Directors and (ii) such director continues to serve on the Board of Directors. Upon such request, the
General Partner will promptly substitute one of the Appointed Directors for one director selected by the Series A Holders (a “
Holders’
Nominee
”) and appoint such Holders’ Nominee to the Board of Directors as an Appointed Director. Such right
of such Series A Holders to elect a member of the Board of Directors shall continue until the Partnership pays in full, or
declares and sets aside funds for the payment of, all Series A Distributions accumulated and in arrears on the Series A
Preferred Units, at which time such right shall terminate, subject to the revesting of such right in the event of each and every
subsequent Series A Trigger Event. Upon any termination of the right of the Series A Holders and, if applicable, holders of
any other Parity Securities to vote as a class for such director, the term of office of the Holders’ Nominee then in office
shall terminate immediately. Any director elected by the Series A Holders and, if applicable, any other Parity Securities
shall be entitled to one vote on any matter before the Board of Directors. Any Holders’ Nominee may be removed at any time
without Cause only by the Holders of a majority of the Outstanding Series A Preferred Units and, if applicable, the holders of
any other series of Parity Securities upon which like voting rights have been conferred and are exercisable, voting together as
a class. If any Holders’ Nominee is removed, resigns or is otherwise unable to serve as a member of the Board of Directors,
the Holders of a majority of the outstanding Series A Preferred Units and, if applicable, any other Parity Securities voting together
as a class, shall appoint an individual to fill the vacancy.
(c)
(i)
Unless
the Board of Directors shall have received the affirmative vote or consent of the holders of at least 66-2/3% of the Outstanding
Series A Preferred Units, voting as a class, the Board of Directors shall not adopt any amendment to this Agreement that would
have a material adverse effect on the existing terms of the Series A Preferred Units.
(ii)
Unless
the Board of Directors shall have received the affirmative vote or consent of the holders of at least 66-2/3% of the Outstanding
Series A Preferred Units, voting as a class together with holders of any other Parity Securities upon which like voting rights
have been conferred and are exercisable, the Partnership shall not (x) issue any Parity Securities if the cumulative dividends
payable on Outstanding Series A Preferred Units are in arrears or (y) create or issue any Senior Securities.
(d)
For
any matter described in this
Section 16.5
in which the Series A Holders are entitled to vote as a class (whether
separately or together with the holders of any Parity Securities), such Series A Holders shall be entitled to one vote per
Outstanding Series A Preferred Unit. Any Series A Preferred Units held by the Partnership or any of its subsidiaries
or Affiliates shall not be entitled to vote.
Section 16.6
Optional
Redemption
. The Partnership shall have the right at any time, and from time to time, on or after
October 5, 2022 to redeem the Series A Preferred Units, in whole or in part, from any source of funds legally available for
such purpose. Any such redemption shall occur on a date set by the Board of Directors (the “
Series A
Redemption Date
”).
(a)
The
Partnership shall effect any such redemption by paying cash for each Series A Preferred Unit to be redeemed equal to the Series A
Liquidation Preference for such Series A Preferred Unit on such Series A Redemption Date (the “
Series A
Redemption Price
”). So long as the Series A Preferred Units are held of record by the nominee of the Depository,
the Series A Redemption Price shall be paid by the Paying Agent to the Depository on the Series A Redemption Date.
(b)
The
Partnership shall give notice of any redemption by mail, postage prepaid, not less than 30 days and not more than 60 days before
the scheduled Series A Redemption Date, to the Series A Holders (as of 5:00 p.m. New York City time on the Business Day
next preceding the day on which notice is given) of any Series A Preferred Units to be redeemed as such Series A Holders’
names appear on the books of the Transfer Agent and at the address of such Series A Holders shown therein. Such notice (the
“
Series A Redemption Notice
”) shall state: (1) the Series A Redemption Date, (2) the
number of Series A Preferred Units to be redeemed and, if less than all Outstanding Series A Preferred Units are to be
redeemed, the number (and the identification) of Units to be redeemed from such Series A Holder, (3) the Series A
Redemption Price, (4) the place where the Series A Preferred Units are to be redeemed and shall be presented and surrendered
for payment of the Series A Redemption Price therefor and (5) that distributions on the Units to be redeemed shall cease
to accumulate from and after such Series A Redemption Date.
(c)
If
the Partnership elects to redeem less than all of the Outstanding Series A Preferred Units, the number of Series A Preferred
Units to be redeemed shall be determined by the Partnership, and such Series A Preferred Units shall be redeemed by such method
of selection as the Depository shall determine either Pro Rata or by lot, with adjustments to avoid redemption of fractional Series A
Preferred Units. The aggregate Series A Redemption Price for any such partial redemption of the Outstanding Series A
Preferred Units shall be allocated correspondingly among the redeemed Series A Preferred Units. The Series A Preferred
Units not redeemed shall remain Outstanding and entitled to all the rights and preferences provided in this
Article XVI
.
(d)
If
the Partnership gives or causes to be given a Series A Redemption Notice, the Partnership shall deposit with the Paying Agent
funds, sufficient to redeem the Series A Preferred Units as to which such Series A Redemption Notice shall have been
given, no later than 5:00 p.m. New York City time on the Business Day immediately preceding the Series A Redemption Date,
and shall give the Paying Agent irrevocable instructions and authority to pay the Series A Redemption Price to the Series A
Holders to be redeemed upon surrender or deemed surrender (which shall occur automatically if the certificate representing such
Series A Preferred Units is issued in the name of the Depository or its nominee) of the certificates therefor as set forth
in the Series A Redemption Notice. If the Series A Redemption Notice shall have been given, from and after the Series A
Redemption Date, unless the Partnership defaults in providing funds sufficient for such redemption at the time and place specified
for payment pursuant to the Series A Redemption Notice, all Series A Distributions on such Series A Preferred Units
to be redeemed shall cease to accumulate and all rights of holders of such Series A Preferred Units as Limited Partners with
respect to such Series A Preferred Units shall cease, except the right to receive the Series A Redemption Price, and
such Series A Preferred Units shall not thereafter be transferred on the books of the Transfer Agent or be deemed to be Outstanding
for any purpose whatsoever. The Partnership shall be entitled to receive from the Paying Agent the interest income, if any, earned
on such funds deposited with the Paying Agent (to the extent that such interest income is not required to pay the Series A
Redemption Price of the Series A Preferred Units to be redeemed), and the holders of any Series A Preferred Units so
redeemed shall have no claim to any such interest income. Any funds deposited with the Paying Agent hereunder by the Partnership
for any reason, including redemption of Series A Preferred Units, that remain unclaimed or unpaid after two years after the
applicable Series A Redemption Date or other payment date, shall be, to the extent permitted by law, repaid to the Partnership
upon its written request, after which repayment the Series A Holders entitled to such redemption or other payment shall have
recourse only to the Partnership. Notwithstanding any Series A Redemption Notice, there shall be no redemption of any Series A
Preferred Units called for redemption until funds sufficient to pay the full Series A Redemption Price of such Series A
Preferred Units shall have been deposited by the Partnership with the Paying Agent.
(e)
Any
Series A Preferred Units that are redeemed or otherwise acquired by the Partnership shall be canceled. If only a portion of
the Series A Preferred Units represented by a certificate shall have been called for redemption, upon surrender of the certificate
to the Paying Agent (which shall occur automatically if the certificate representing such Series A Preferred Units is registered
in the name of the Depository or its nominee), the Paying Agent shall issue to the Series A Holders a new certificate (or
adjust the applicable book-entry account) representing the number of Series A Preferred Units represented by the surrendered
certificate that have not been called for redemption.
(f)
Notwithstanding
anything to the contrary in this
Article XVI
, in the event that full cumulative distributions on the Series A
Preferred Units and any Parity Securities shall not have been paid or declared and set apart for payment, none of the Partnership,
the General Partner or any Affiliate of the General Partner shall be permitted to repurchase, redeem or otherwise acquire, in whole
or in part, any Series A Preferred Units or Parity Securities except pursuant to a purchase or exchange offer made on the
same terms to all Series A Holders and any Parity Securities. None of the Partnership, the General Partner or any Affiliate
of the General Partner shall be permitted to redeem, repurchase or otherwise acquire any Common Units or any other Junior Securities
unless full cumulative distributions on the Series A Preferred Units and any Parity Securities for all prior and the then-ending
Series A Distribution Periods shall have been paid or declared and set apart for payment.
Section 16.7
Rank
.
The Series A Preferred Units shall be deemed to rank:
(a)
Senior
to (i) the Common Units, (ii) the Subordinated Units and (iii) any other class or series of Partnership Securities established
after the Series A Original Issue Date by the Board of Directors, the terms of which class or series do not expressly provide
that it is made senior to or on parity with the Series A Preferred Units as to distributions and distributions upon any Liquidation
Event (collectively referred to with the Partnership’s Common Units as “
Junior Securities
”);
(b)
On
a parity with any class or series of Partnership Securities established after the Series A Original Issue Date by the Board
of Directors, the terms of which class or series are not expressly subordinated or senior to the Series A Preferred Units
as to distributions and distributions upon any Liquidation Event (collectively referred to as “
Parity Securities
”);
and
(c)
Junior
to any class or series of Partnership Securities established after the Series A Original Issue Date by the Board of Directors,
the terms of which class or series expressly provide that it ranks senior to the Series A Preferred Units as to distributions
and distributions upon any Liquidation Event (collectively referred to as “
Senior Securities
”).
The Partnership may
issue Junior Securities and, subject to any approvals required by Series A Holders pursuant to
Section 16.5(c)(ii)
,
Parity Securities, from time to time in one or more classes or series without the consent of the Series A Holders. The Board
of Directors has the authority to determine the preferences, powers, qualifications, limitations, restrictions and special or relative
rights or privileges, if any, of any such class or series before the issuance of any Partnership Securities of such class or series.
Section 16.8
No
Sinking Fund
. The Series A Preferred Units shall not have the benefit of any sinking fund.
Section 16.9
Record
Holders
. To the fullest extent permitted by applicable law, the General Partner, Partnership,
the Registrar, the Transfer Agent and the Paying Agent may deem and treat any Series A Holder as the true, lawful and absolute
owner of the applicable Series A Preferred Units for all purposes, and neither the General Partner, the Partnership nor the
Registrar, the Transfer Agent or the Paying Agent shall be affected by any notice to the contrary.
Section 16.10
Notices
.
All notices or communications in respect of the Series A Preferred Units shall be sufficiently given if given in writing and
delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this
Article XVI
,
this Agreement or by applicable law.
Section 16.11
Other
Rights; Fiduciary Duties
.
The Series A Preferred
Units shall not have any voting powers, preferences or relative, participating, optional or other special rights, or qualifications,
limitations or restrictions thereof, other than as set forth in this
Article XVI
or as provided by applicable law.
Notwithstanding anything to the contrary in this Agreement, but subject to
Section 7.16(c)
and without reference to
the definition of “good faith” in
Section 7.16(b)
, neither the General Partner nor the Board of Directors
nor any other Indemnitee shall owe any fiduciary duties to Series A Holders, other than a contractual duty of good faith and
fair dealing.
Article XVII
GENERAL
PROVISIONS
Section 17.1
Addresses
and Notices
.
(a)
Any
notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement
shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or
by other means of written communication to the Partner at the address described below. Any notice, payment or report to be given
or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice
or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such notice, payment
or report to the Record Holder of such Partnership Interests at his address as shown on the records of the Transfer Agent or as
otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an interest in such Partnership
Interests by reason of any assignment or otherwise. Notwithstanding the foregoing, if (i) a Partner shall consent to receiving
notices, demands, requests, reports or proxy materials via electronic mail or by the Internet or (ii) the rules of the Commission
shall permit any report or proxy materials to be delivered electronically or made available via the Internet, any such notice,
demand, request, report or proxy materials shall be deemed given or made when delivered or made available via such mode of delivery.
An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this
Section 17.1
executed by a member of the Board of Directors, the General Partner, the Transfer Agent or the mailing organization shall be prima
facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record
Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned
by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it, such notice,
payment or report and any subsequent notices, payments and reports shall be deemed to have been duly given or made without further
mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change in
his address) if they are available for the Partner at the principal office of the Partnership for a period of one year from the
date of the giving or making of such notice, payment or report to the other Partners. Any notice to the Partnership shall be deemed
given if received by the General Partner or the Board of Directors at the principal office of the Partnership designated pursuant
to
Section 2.3
. The General Partner and the Board of Directors may rely and shall be protected in relying on any notice
or other document from a Partner or other Person if believed by it to be genuine.
(b)
The
terms “in writing,” “written communications,” “written notice” and words of similar import
shall be deemed satisfied under this Agreement by use of e-mail and other forms of electronic communication.
Section 17.2
Further
Action
. The parties shall execute and deliver all documents, provide all information and take
or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
Section 17.3
Binding
Effect
. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors, legal representatives and permitted assigns.
Section 17.4
Integration
.
This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto, including the Prior Agreement.
Section 17.5
Creditors
.
None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 17.6
Waiver
.
No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant,
duty, agreement or condition.
Section 17.7
Counterparts
.
This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a Limited Partner
Interest, pursuant to
Section 10.2(a)
, immediately upon the acquisition of such Limited Partner Interests without execution
hereof.
Section 17.8
Applicable
Law; Forum, Venue and Jurisdiction
.
(a)
This
Agreement shall be construed in accordance with and governed by the laws of The Republic of the Marshall Islands, without regard
to the principles of conflicts of law.
(b)
Each
of the Partners and each Person holding any beneficial interest in the Partnership (whether through a broker, dealer, bank, trust
company or clearing corporation or an agent of any of the foregoing or otherwise):
(i)
irrevocably
agrees that any claims, suits, actions or proceedings (A) arising out of or relating in any way to this Agreement (including
any claims, suits or actions to interpret, apply or enforce the provisions of this Agreement or the duties, obligations or liabilities
among Partners or of Partners to the Partnership, or the rights or powers of, or restrictions on, the Partners or the Partnership),
(B) brought in a derivative manner on behalf of the Partnership, (C) asserting a claim of breach of a fiduciary duty
owed by any director, officer, or other employee of the Partnership or the General Partner, or owed by the General Partner, to
the Partnership or the Partners, (D) asserting a claim arising pursuant to any provision of the Marshall Islands Act or (E) asserting
a claim governed by the internal affairs doctrine shall be exclusively brought in the Court of Chancery of the State of Delaware
(or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject
matter jurisdiction), unless otherwise provided for by Marshall Islands law, in each case regardless of whether such claims, suits,
actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other
grounds, or are derivative or direct claims;
(ii)
irrevocably
submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court does not have subject
matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), unless otherwise
provided for by Marshall Islands law, in connection with any such claim, suit, action or proceeding;
(iii)
agrees
not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject
to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of
Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient
forum, or (C) the venue of such claim, suit, action or proceeding is improper;
(iv)
expressly
waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and
(v)
consents
to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy
thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient
service of process and notice thereof;
provided
, nothing in
clause (v)
hereof shall affect or limit any right
to serve process in any other manner permitted by law.
Section 17.9
Invalidity
of Provisions
. If any provision or part of a provision of this Agreement is or becomes for any
reason, invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
and part thereof contained herein shall not be affected thereby and this Agreement shall, to the fullest extent permitted by law,
be reformed and construed as if such invalid, illegal or unenforceable provision, or part of a provision, had never been contained
herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible.
Section 17.10
Consent
of Partners
. Each Partner hereby expressly consents and agrees that, whenever in this Agreement
it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Partners (including any
amendment to this Agreement), such action may be so taken upon the concurrence of less than all of the Partners and each Partner
shall be bound by the results of such action (including any amendment to this Agreement).
Section 17.11
Facsimile
Signatures
. The use of facsimile signatures affixed in the name and on behalf of the transfer
agent and registrar of the Partnership on certificates representing Common Units and the Series A Preferred Units is expressly
permitted by this Agreement.
Section 17.12
Third-Party
Beneficiaries
. Each Partner agrees that any Indemnitee shall be entitled to assert rights and
remedies hereunder as a third party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit
or privilege to such Indemnitee.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]
IN WITNESS WHEREOF,
the parties hereto have executed this Second Amended and Restated Agreement of Limited Partnership as a Deed as of the date first
written above.
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Höegh LNG GP LLC
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By:
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/s/ Sveinung Støhle
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Name: Sveinung Støhle
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Title: Director
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Höegh LNG Holdings Ltd.
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By:
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/s/ Camilla Nyhus-Møller
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Name: Camilla Nyhus-Møller
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Title: Attorney-in-fact
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Signature
Page to
Second Amended and Restated
Agreement of Limited Partnership
Exhibit A
to the Second Amended and Restated
Agreement of Limited Partnership of
HÖEGH LNG PARTNERS LP
Certificate Evidencing Common Units
Representing Limited Partner Interests in
HÖEGH LNG PARTNERS LP
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No. _____________
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__________ Common Units
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In accordance with
Section 4.1
of the Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP,
as amended, supplemented or restated from time to time (the “
Partnership Agreement
”), Höegh LNG
Partners LP, a Marshall Islands limited partnership (the “
Partnership
”), hereby certifies that
(the “
Holder
”) is the registered owner of the above designated number of Common Units representing limited
partner interests in the Partnership (the “
Common Units
”) transferable on the books of the Partnership,
in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. The rights, preferences and limitations
of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file
at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the Partnership
located at Wessex House, 5
th
Floor, 45 Reid Street, Hamilton, HM 12, Bermuda. Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership Agreement.
The Holder, by accepting
this Certificate, is deemed to have (a) requested admission as, and agreed to become, a Limited Partner and to have agreed
to comply with and be bound by and to have executed the Partnership Agreement, (b) represented and warranted that the Holder
has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement and (c) made
the waivers and given the consents and approvals contained in the Partnership Agreement.
This Certificate shall
not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate
shall be governed by and construed in accordance with the laws of the Marshall Islands.
Dated: ___________________
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Countersigned and Registered by:
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HÖEGH LNG PARTNERS LP
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By:
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as Transfer Agent and Registrar
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Title:
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By:
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By:
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Authorized Signature
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Secretary
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[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations,
when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations:
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TEN COM
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—
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as tenants in common
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UNIF GIFT/TRANSFERS MIN
ACT
____________ Custodian ____________
(Cust) (Minor)
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TEN ENT
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—
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as tenants by the entireties
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JT TEN
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—
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts /Transfers to CD Minors Act (State)
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Additional abbreviations, though not in
the above list, may also be used.
ASSIGNMENT OF COMMON UNITS
in
HÖEGH LNG PARTNERS LP
FOR VALUE RECEIVED,
_______________________ hereby assigns, conveys, sells and transfers unto
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(Please print or typewrite name and address of Assignee)
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(Please insert Social Security or other identifying number of Assignee)
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_________ Common Units
representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint
as its attorney-in-fact with full power of substitution to transfer the same on the books of Höegh LNG Partners LP.
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Date:
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NOTE:
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The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change.
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15
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________________________________________
(
Signature)
________________________________________
(
Signature)
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No transfer of the
Common Units evidenced hereby will be registered on the books of the Partnership, unless the Certificate evidencing the Common
Units to be transferred is surrendered for registration or transfer.
Exhibit B
to the Second Amended and Restated
Agreement of Limited Partnership of
HÖEGH LNG PARTNERS LP
Certificate Evidencing Series A
Cumulative
Redeemable Preferred Units
Representing Limited Partner Interests in
HÖEGH LNG PARTNERS LP
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No.
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Series A Preferred Units
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In accordance with
Section 4.1 of the Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP, as amended,
supplemented or restated from time to time (the
“
Partnership Agreement
”
), Höegh LNG Partners LP,
a Marshall Islands limited partnership (the
“
Partnership
”
), hereby certifies that
(the
“
Holder
”
) is the registered owner of the above designated number of 8.75% Series A Cumulative Redeemable
Preferred Units representing limited partner interests in the Partnership (the
“
Series A Preferred Units
”
)
transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The rights, preferences and limitations of the Series A Preferred Units are set forth in, and this Certificate and
the Series A Preferred Units represented hereby are issued and shall in all respects be subject to the terms and provisions
of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery
of written request to the Partnership at, the principal office of the Partnership located at Wessex House, 5
th
Floor,
45 Reid Street, Hamilton, HM 12, Bermuda. Capitalized terms used herein but not defined shall have the meanings given them
in the Partnership Agreement.
The Holder, by accepting
this Certificate, is deemed to have (a) requested admission as, and agreed to become, a Limited Partner and to have agreed
to comply with and be bound by and to have executed the Partnership Agreement, (b) represented and warranted that the Holder
has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, and (c) made
the waivers and given the consents and approvals contained in the Partnership Agreement.
This Certificate shall
not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate
will be governed by and construed in accordance with the laws of the Marshall Islands.
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Dated: ____________
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Höegh LNG Partners LP
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Countersigned and Registered by:
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By:
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as Transfer Agent and Registrar
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Title:
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By:
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By:
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Authorized Signature
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Secretary
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[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used
in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations:
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TEN COM
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—
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as tenants in common
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UNIF GIFT/TRANSFERS MIN
ACT
____________ Custodian ____________
(Cust) (Minor)
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TEN ENT
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—
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as tenants by the entireties
|
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JT TEN
|
—
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts /Transfers to CD Minors Act (State)
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Additional abbreviations, though not in
the above list, may also be used.
ASSIGNMENT OF SERIES A PREFERRED
UNITS
in
HÖEGH LNG PARTNERS LP
FOR VALUE RECEIVED, ____________________
hereby assigns, conveys, sells and transfers unto
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(Please print or typewrite name and address of Assignee)
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(Please insert Social Security or other identifying number of Assignee)
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____________ Series A Preferred Units
representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint _______________ as its attorney-in-fact with full power of substitution to transfer the same on the books
of the Partnership.
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Date: ________________
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NOTE:
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The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change.
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15
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______________________________________________
(Signature)
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_____________________________________________
_
(Signature)
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No transfer of the Series A Preferred
Units evidenced hereby will be registered on the books of the Partnership, unless the Certificate evidencing the Series A
Preferred Units to be transferred is surrendered for registration or transfer.
